Texas Supreme Court gives booster shot to nonsubscribers

The Texas Supreme Court just gave good news for Texas employers that bail out of workers’ compensation and provide alternative benefits for employees injured on the job.

Basics

Texas is one of the few states allowing employers to opt out of the workers’ compensation system for employees injured on the job. Recall that employers in the system are fully protected from negligence lawsuits from employees injured on the job. The sole remedy for their injuries is from workers’ compensation insurance. The deal is that employees injured on the job will always receive benefits. In exchange for this certainty, they give up their right to sue their employer for negligence. The benefit for employers? Escaping sometimes dangerous negligence lawsuits as well as greater control over injury compensation.

So, employers opting out of the system can be sued for negligence that causes on-the-job injuries. According to the Texas Department of Insurance, about 28% of private, nongovernment employers in Texas don’t have workers’ compensation. These employers are called nonsubscribers and include Amazon, McDonald’s, and Walmart.

A recent Texas Supreme Court case makes it much more attractive to opt out of the system by providing a new employer defense for a negligence lawsuit.

Lawsuit