Our firm frequently defends companies sued by employees for injuries sustained on the job. We find that not many areas of personal injury law cause as much confusion as this one.
Texas companies that don’t carry workers compensation insurance can be freely sued by employees alleging that an employer’s negligence caused an on the job injury. Purchasing workers’ compensation insurance greatly decreases a company’s risk of these lawsuits. If an employee is injured on the job, and his employer maintains workers’ comp insurance, then his exclusive remedy is to obtain statutorily defined medical and wage comp benefits. In other words, he typically can’t sue the company, although there are a couple of important exceptions.
The first exception provides that, if any employee suffers a fatal injury because (1) of an intentional act or omission of the employer or (2) of gross negligence of the employer, the deceased employee’s spouse or heirs can sue for punitive damages, even if the employer maintains comp insurance.
The second exception provides that an employee can sue the comp-covered employer for damages if the worker suffers a non-fatal injury caused by an intentional act of the employer. But a recent Houston Court of Appeals decision greatly strengthens an employer’s ability to defend “intentional conduct” cases.
In 2013 Skansa USA employee Tyler Lee was working at a Houston construction site, when a crane collapsed, pinning him and unfortunately resulting in his leg being amputated above the knee. Skansa carried workers’ comp insurance, and Lee received wage and medical benefits from it. Since Skansa maintained comp insurance, Lee was barred from suing it for negligence.
But Lee did sue Berkel & Company Contractors (Skansas’ subcontractor on the job site) claiming that its negligence, gross negligence and intentional acts caused his injury.
A Brazoria County jury found in his favor, holding that Berkel committed negligent, grossly negligent and intentional acts. It awarded Lee 35 million dollars in medical expenses, loss of earning capacity, impairment, pain and suffering and mental anguish. It also awarded him $8,500,000 in punitive damages. Berkel appealed the verdict, and the 14th Court of Appeals, sitting in Houston, reversed the jury’s decision.
The court’s opinion first held that the state workers’ compensation laws barred Lee’s negligence claim against Berkel, even though Berkel did not maintain its own workers’ comp insurance. The court found that Skansa (the general contractor and Lee’s actual employer) had agreed to provide workers compensation insurance covering all of the subcontractors and their employees. So at the job site Lee was Skansas’ actual employee and, at the same time, Berkel’s statutory “co-employee”. In other words, Skansas’ decision to purchase workers’ comp insurance for everyone on the work site effectively protected it from injury suits brought by all persons on the job, even though many were not Skansas’ actual employees.
After reversing the negligence verdict, the court addressed Lee’s argument that Berkel’s intentional acts caused his injuries and found that there was not enough evidence for the jury to have found that Berkel’s employees intentionally injured Lee.
The court held that an “intentional injury requires an intent to injure a particular person, not just a general knowledge that an activity is dangerous”. In other words, in order to prove intentional injury, the employee has to prove that the defendant “must have known that his conduct was substantially certain to result in specific consequences—i.e., in injury to a particular victim, or to someone in a small class of potential victims within a localized area.”
In the case of Mr. Lee, the court found that although Berkel employees may have intended their conduct, and known their conduct was dangerous, there was not enough evidence that they had a specific intent to harm Mr. Lee personally.
Note that this decision has not been (but probably will be) reviewed by the Texas Supreme Court, and so its precedential value is limited. But defense attorneys defending intentional tort cases need to be aware of it and rely heavily on it. The Supreme Court is very business friendly, and if it chooses to review the case, the chances are good that it will affirm it.
The lesson to be learned is that if your company is in charge of a worksite, and you choose to carry workers’ compensation insurance (though a huge number of Texas employers don’t) consider either (1) requiring your subcontractors to also maintain it or (2) purchasing comp insurance to cover the employees of all subcontractors on the site.
Call us at (832) 284-4013 if you have questions about the case, or need advice on defending employee injury claims.