Texas, like most states, adopted the worker’s compensation scheme decades ago. Worker’s compensation essentially provides coverage for workers for on-the-job injuries. In return for workers compensation, workers give up the right to sue for simple negligence. But, worker’s compensation does not apply to gross negligence if death results. Gross negligence is worse than simple negligence. Gross negligence involves an employer proceeding with a known risk. It requires the employer to have some knowledge and awareness of the dangerous condition. To show gross negligence, a plaintiff must prove by clear and convincing evidence that: (1) when viewed objectively from the defendant’s standpoint at the time of the event, the act or omission involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others, and (2) the defendant had actual, subjective awareness of the risk involved, but nevertheless proceeded with conscious indifference to the rights, safety, or welfare of others.

In Goodyear Tire & Rubber Co. v. Rogers, 2017 WL 3776837 (Tex.App. Dallas 8/31/2017), the court addressed the question whether the presence of asbestos was known to the employer. The jury found the asbestos was an extreme risk known to the employer. The jury fund the employer grossly negligent in exposing its workers to asbestos. Carl Rogers, who worked at the Goodyear plant from 1994 to 2004 contracted mesothelioma, from which he died in 2008 at the age of 60. Goodyear argued that the probability of developing mesothelioma under these circumstances was only 1 in 45,000. The employer agreed that that low probability was too remote to qualify as gross negligence. The court disagreed. The court found that statistical evidence of  serious injury is not necessary to show the objective element of gross negligence. In any event, added the court, there was some evidence that the probability was much higher.

Too, the jury need not consider only the probability. It can also consider the employer’s acts and omissions. In this case, there was evidence that the employer turned a “blind eye” to the risk of mesothelioma and the magnitude of  the risk was great because mesothelioma leads to certain death. See the decision here.

 

The arbitration system is harmful to employees. ERISA is often harmful to employees. So, what happens when a case involves both arbitration and ERISA? Mucho harm to employees. That is the subject of a NPR report that address the ERISA law and worker’s compensation. See NPR report. As the report explains, Kevin Schiller was a building engineer for Macy’s in Texas. After 21 years with Macy’s, he suffered a bad fall at work. He suffered a Traumatic Brain Injury. For some time, the injury remained undiagnosed. He experienced bad headaches, memory loss, disorientation and extreme sensitivity to bright light. Macy’s thought he was faking it. One doctor said he was psychosomatic. Other doctors told him they were there to observe him, not treat him.

Like many employers in Texas, Macy’s opted out of the state worker’s compensation system. It relied on private, employer provided medical insurance. Mr. Schiller, however, could not get treatment. No one believed he had an actual illness. He lost his job, his house and his pickup. He spent $90,000 of his own money seeking treatment and eventually was diagnosed with TBI.

Because Macy’s employees were required to sign a mandatory arbitration agreement, his appeals for ERISA benefits were heard by arbitrators who were paid by Macy’s. Not surprisingly, he lost his early appeals. Eventually, in a separate proceeding, he was awarded Social Security Disability benefits.

[All I can say is big deal. Social Security disability benefits generally amount to less than $15,000 per year. So, he went from $80,000 to about $12,000 per year.]

Eventually in his appeals, he succeeded, sort of. An arbitrator did eventually award him $713,000. But, that was only because he had the resources to obtain fair and impartial medical opinions. Too, he would have received at least twice that in a lawsuit against his employer, said Ted Lyon, a Dallas attorney. Since, he was injured at the age of 52 and he would have worked until he was 65, Mr. Lyon thinks $5 million would have been possible with the right jury. He means that because of how Mr. Schiller was treated by his employer and the long delay, a jury might have awarded millions of dollars.

Much of the $713,000 award went to legal and medical bills. The rest remains in a trust. But, as Mr. Schiller adds, most of the award will be gone before he is gone.

20 years ago, Kevin Schiller would have filed a worker’s compensation claim. He would have received very little benefits, but he would;d have receive medical coverage and a very reduced income for a few years. The policy since 1901 or so has been that if an employer does not have worker’s compensation, that it can be sued for negligence. Personal injury lawsuits or worker’s compensation was always the choice for employers in the state. Now, they have a third choice: medical insurance plans that can be corrupted to avoid paying anything.

And, medical insurance, unlike worker’s compensation, pays nothing to replace lost income. Worker’s compensation would pay some small amount as lost income.

Now, with the opt-out provisions we have in Texas, the Kevin Schillers gets little to nothing. Jeff Dahl, a San Antonio lawyer, explains. The ERISA statute was originally passed on 1974 to protect fringe benefits. But, it has now become a “shield” for the employer.

National Public Radio and Propublica have been running a series on worker’s compensation systems in various states. One such state is Texas. Billy Shawn Walkup worked for Tysons Foods in Vernon, Texas. Tyson is self-insured, meaning they do not carry worker’s compensation insurance. Instead, the company itself pays for the medical care of workers injured on the job. Billy Shawn was one such worker. He fell on wet stairs at the Vernon plant in 2011. He sustained injuries to his back. About two weeks after the fall, a manager approached him with a waiver and asked him to sign it. The waiver would prevent any lawsuit against Tyson. Wanting to protect his job, Billy Shawn signed the waiver. He continued working with restrictions. The pain worsened and he missed too many days. So, the company fired him. Tyson, did, however, continue paying for his medical care for another year.

But, then his doctor determined that he had multiple disc potrusions and numbness in his legs. The numbness would cause him to collapse on occasion. So, Tyson sent him for a so-called independent medical exam. The doctor, selected by Tyson, was a 77 year old doctor who had once been disciplined for not documenting a physical exam. After a 35 minute exam and reviewing his medical records, the doctor found that his back was simply strained. No further medical care was necessary. Tyson cut off Mr. Walkup’s medical benefits. The doctor did not return Propublica’s attempts to discuss the Walkup case.

Billy Shawn now gets around with a cane a motorized wheelchair. He has applied for social security disability benefits and hopes to get surgery someday.

And, of course Tyson Foods lobbied in Texas for the law that allows employers tho offer a waiver after an injury. Previously, a waiver could not apply to prior injuries. Under the old law, the sort of waiver signed by Billy Shawn would not have applied to any injury incurred before the date of the waiver. But, in 2005, a deal was struck in which an injured worker could have ten days to see a doctor and then decide whether to sign  a waiver. The problem with that law, however, is that many injuries do not manifest themselves until long after ten days. This was Tyson’s law and it worked when the corporation needed it.

Tyson Foods is headquartered in Arkansas. Arkansas is where the worker’s compensation reform train first started back in the 1990’s. Now, Texas and Arkansas are seen by worker’s compensation opponents as the models of so-called reform. But, as I have heard from many workers, the worker’s compensation system in Texas is now heavily weighed in favor of the employer. Billy Shawn found that out the hard way.

See Propublica report.

The Texas worker’s compensation system has been broken for many years, ever since the state passed a pack full of so-called reforms in the late 1980’s. Now, we learn that Texas Mutual Insurance Company, one of the largest providers of worker’s compensation insurance in the state, has a sweetheart deal with the Travis County District Attorney’s Office. Texas Mutual refers cases to the Travis County D.A. In return, Texas Mutual pays the salaries of prosecutors and investigators within the DA’s office. As Roy Kyees found out when he was prosecuted for alleged worker’s compensation fraud, the prosecutor and investigators essentially accept whatever cases Texas Mutual refers. Mr. Kyees won his criminal case for alleged fraud. He then sued Texas Mutual for malicious prosecution. He settled his case for less than $10,000. See Texas Tribune report.

According to the news report, many insurance companies enter into deals like that with District Attorneys in various states. But, in all other states, the insurance companies enter a pooled arrangement in which their funds are pooled and then contributed to the D.A. These units prosecute complicated fraud claims, for which the local D.A. lacks resources. When Ronnie Earle first signed the contract with Texas Mutual, the agreement was to prosecute major fraud cases, not low dollar cases like worker’s compensation claims. Typically, worker’s compensation claims may involve only some $5,000 in restitution. But, unaware of the contract terms, the Travis County D.A. unit prosecutes any and all claims referred by Texas Mutual. It truly is justice for hire. The unit is called the Travis County Worker’s Compensation Fraud Unit.

I have only infrequent first-hand contact with worker’s compensation claimants. But, when I do, I notice 1) it is extremely hard to find a lawyer who represents claimants and 2) the worker’s compensation rates are incredibly low. For someone injured in the cause of his/her employer, it is very difficult to live on half your former income. And, often the claimant has to fight with the doctor’s hired by the insurance company to obtain that one-half income.

The Worker’s Compensation Fraud unit has never taken a case against Texas Mutual itself. Nor has it ever prosecuted a case involving an insurance company other than Texas Mutual. Yes, that sounds a lot like justice for hire.

Mr. Kyees settled his claim with Texas Mutual for less than $10,000. He refused to agree to a provision that would have kept the agreement confidential. Today, Texas Mutual says the system worked the way it should have. The prosecutor dropped the case when Mr. Kyees’ lawyer produced a letter showing he had had indeed reported his income from a new job. But, the scary part is that the senior prosecutor says she would not have dropped the case. The senior prosecutor says she had actually told the junior prosecutor not to drop the case against Mr. Kyees.

In February, 2015, the Texas Supreme Court ruled that persons cannot sue worker’s compensation companies for malicious prosecution. See that decision in In Re Crawford and Co., No. 14-0256 (Tex. 2/27/15) here. The decision is per curiam, meaning it was not even assigned to an author. So, there will be no more lawsuits like Roy Kyees’ lawsuit. Texas Mutual can enjoy virtual immunity from future disregard of the facts of a case.

I first wrote about this issue here.  John Gibson, a lawyer in North Texas, picked a name for his blog, www.texasworkerscomplaw.com.  The Texas Department of Insurance, Workers Compensation Division, sent him a "cease and desist" letter accusing him of violating a state statute that forbids the use of "texas" and "workers compensation" in connection with advertising.  The statute apparently dates back to the days when workers compensation was a lucrative area and some lawyers sought to advertise their expertise in workers compensation law.  Now, of course, few Texas lawyers accept workers compensation cases.

Mr. Gibson sued the state.  He argued the department’s actions violated the First Amendment.  The district court found in favor of the Division of Workers Compensation (DWC).  

But, on appeal, the Fifth Circuit in New Orleans  agreed with Mr. Gibson.  A panel of three judges found the state did not make a "serious" attempt to tailor the statute to avoid First Amendment concerns.  The court recognized that a domain name could constitute commercial speech  if the name is used "almost exclusively" for commercial purposes.  See ABA Bar Journal report.  The Fifth Circuit found that the name of the blog was not necessarily a solicitation.  Even if it is a solicitation, the blog and domain name are not necessarily related to Mr. Gibson’s law practice.  Mr. Gibson does practice workers compensation law.  But, his blog is not "directly" related to his practice.  So, attorney solicitation cases do not apply.  The court seemed to appreciate the "informational" aspect of a blog, as opposed to web sites which are more like advertising. 

The Fifth Circuit also found that there is nothing inherently deceptive about the domain name, so it is subject to First Amendment protection.   See Fifth Circuit opinion here.  A state could still regulate speech that is not inherently deceptive if the state can show a carefully tailored state interest.  But, said the court, the state of Texas could not make such a showing. 

The Division of Workers Compensation had also argued that the public could confuse the DWC with the blog.  But, found the court, DWC did not offer sufficient briefing of that sort of possible confusion. The appellate court remanded that portion of the case back to the lower court for further factual findings regarding the constitutionality of the state statute. 

Many laypersons people are familiar with the retaliation part of Title VII of the Civil Rights Act of 1964.  That anti-retaliation provision prohibits retaliation against someone who opposes discrimination.  Title VII is a federal statute.  Texas is an at-will state.  But, even so, Texas does have a few state anti-retaliation statutes.  

Texas prohibits reprisal against an employee who reports abuse or neglect of a resident at a nursing home.  Texas Health & Safety Code Sec. 242.133.  Such a lawsuit must be filed within 90 days of the alleged reprisal.  

An employee is protected against being ordered to commit an illegal act.  This claim is known as a Sabine Pilot claim, after Sabine Pilot v. Hauck, 687 SW 2d 733( Tex. 1985).   The refusal to commit an illegal act must be the sole cause of the termination.  I previously discussed an important case regarding the Sabine Pilot action here.  

An employee is also protected because he/she served on a jury.  Texas Civil Practice & Remedies Code Sec. 122.001.  An employee who believes he/she has suffered retaliation due to jury service has two years in which to bring such a claim.  The damages are limited, but still, this statute does offer some protection.  

Also, state or local government employees are protected if they report violations of law by their employer.  See Texas Government Code Sec. 554. The good faith report of the violation of law would need to be made to an appropriate law enforcement agency. This statute is known as the Texas Whistle Blower Statute.  It is only available to government employees. 

While this list is not completely exhaustive, these are the few protections we Texas employees have which actually have some teeth.  

 

Worker’s compensation protects employees who suffer on-the-job injuries.  The worker’s compensation scheme was devised back in the 1920’s and 1930’s as a way to prevent lawsuits against employers.  The intent was to provide some modest level of compensation for workers who get injured.  In return, employees would give up the right to file personal injury lawsuits against their employer.  Employers would then avoid unpredictable lawsuits which could result in large verdicts.  

Over time it became necessary to provide incentives for employers not to take action against employees who file worker’s compensation claims.  The Texas Labor Code provides for a lawsuit based on worker’s compensation retaliation.  See Sec. 451 of the Texas Labor Code.  If a worker suffers reprisal for filing a worker’s compensation claim, then that worker can sue the employee for retaliation. 

In recent years, the Texas courts have limited the worker’s comp protections.  In the 1990’s, for example, the Texas Supreme Court addressed the situation concerning employers who are not enrolled in the Texas Worker’s Compensation System but who do have some sort of health insurance for workers who get injured.  These employers are considered to be "self-insured" for purposes of worker’s comp insurance.  Would such employers be subject to the anti-retaliation provision?  No, said the Texas Supreme Court.   Such employers are not included in Sec. 451.  That is, if an employer is self-insured, they can fire an employee who files a on-the-job injury health claim.  Firing such an employee would not be retaliation under Sec. 451.  See Texas Mexican Railway Co. v. Bouchet, 963 S.w.2d 52 (Texas 1998). 

Now, the Texas Supreme Court has held that local governmental subdivisions are not covered by Sec. 451 either.  In fact, they have overruled their prior decision to the contrary, City of La Porte v. Barfield, 898 S.W.2d 288 (Tex. 1995).   In this new decision, the Supreme Court has found that Sec. 451 did not waive governmental immunity, after all.  See Travis Central Appraisal District v. Norman, No. 09-0100 (Tex. 4/29/2011).  The Court bases its decision on some amendments to Sec. 504, a companion article, which, in the view of the Court, retracted prior waiver of governmental immunity. 

Governments must waive immunity to be sued.  That is a precept as old as the United States.  So, now, according to the Texas Supreme Court, the state legislature did not waive governmental immunity.   Government workers can now suffer retaliation if they pursue their right to file a worker’s compensation claim.  

A Lubbock, Texas lawyer has filed suit against against the Texas Department of Insurance, Worker’s Compensation Division because the Texas Dept. of Insurance sent him a "cease and desist" letter.  The TDI had sent John Gibson a letter warning him to stop using the words "Texas" and "worker’s compensation" in the web address.  Mr. Gibson operates a web site called www.texasworkerscomplaw.com.  The TDI accused Mr. Gibson of violating a provision of the Texas Labor Code which prohibits use of the words "texas" and "workers compensation" in connection with advertising and solicitation for business.  In his lawsuit, Mr. Gibson argues this provision is unconstitutional as a violation of the First Amendment.  See Texas Lawyer report.  

I am sure that provision must date from the bad ole days of workers compensation litigation, which at one time was lucrative.  Workers compensation was the subject of much advertising as late as the 1980’s prior to so-called tort reform.  Now, very few lawyers practice workers compensation law.  More importantly, blogs have been seen by most observers as not advertising and more as an educational tool.  For example, law firm news letters are exempt from the advertising rules because they are seen as more educational than solicitations for business. This will be an interesting lawsuit as it explores the nature of blogs. 

 In a recent settlement with the EEOC, Sears Roebuck agreed to pay $6.2 million to resolve claims made by persons with disabilities.  Sears also agreed to enter into a consent decree, which means Sears agreed to perform many other non-monetary tasks in settlement of the claims.  The EEOC represented persons with disabilities who had worked at Sears.  In the suit, Sears allegedly maintained an inflexible leave policy which did not look at each request for leave on a case-by-case basis.  This is the largest ADA settlement ever.  Some 235 Sears employees received an average of $26,300 each.  

The EEOC also sued UPS in a class action lawsuit also for maintaining inflexible leave policies.  See report.  Delaware employment law blog reports that these leave policies concerned employers who terminate employees after six or twelve months, regardless of their individual situation.  These policies are fairly common, since they supposedly avoid claims of discrimination.  The theory is that every employee, regardless of whether their injuries stem from worker’s compensation complaints, disabilities or just simple personal injuries, is treated the same: they are fired after so many months (six or twelve typically).  If all employees with health problems are treated the same, then there is no discrimination, correct? 

No.  Wrong, because the ADA requires an individualized assessment of a person’s need.  Under the ADA, an employer must conduct a case-by-case evaluation regarding requests for accommodation.  For example, if an employee needs more time off as part of some treatment plan, the ADA would require an accommodation of more than six or twelve months of leave.  As Delaware employment law blog explains, employers with such leave policies are prime targets for lawsuits, now.  Many of us viewed such policies as unlawful.  Now, we know they are unlawful.  Employer should examine their polciies to make sure they allow for some sort of individualized evaluation whether extended leave is necessary as an accommodation.