Exclusive Remedy Provision
August 8, 2016
Kershner appeals a trial court summary judgment on his premises liability claim against Samsung Austin Semiconductor. This case is Kershner v. Samsung Austin Semiconductor, 2016 WL 3974783.
Samsung was acting as the general contractor of the construction project on its premises. Kershner was employed by a subcontractor, Spur Electric. Spur signed the subcontract and agreed in the contract that workers compensation insurance coverage was provided to Spur and its employees pursuant to an owner/contractor controlled insurance program (OCIP).
Kershner was injured while working on the premises and sued Samsung. Samsung sought summary judgment, contending that the exclusive remedy for recovery in this instance was workers compensation. The trial court agreed with Samsung and Kershner appealed.
The Court of Appeals of Texas, Austin, said that the exclusive remedy provision of the Texas workers comp act provided that in exchange for guaranteeing that employee injured on the job are promptly covered for medical expenses, regardless of fault, and in exchange, a subscribing employer receives immunity from tort claims of the injured employee. The court also noted that the exclusive remedy provision immunizes employers not only against the tort claims of their direct employees, but also immunizes those employers acting as general contractors that have expressly provided in writing for workers compensation coverage for subcontractors and their employees.
Kershner tried to create a fact issue about whether Spur was an independent contractor since, if that were the case, this would prohibit the application of the exclusive remedy provision. The Texas workers comp law stated that a person that performs a service for a general contractor that is an employer is an employee of that general contractor unless the person is operating as an independent contractor or is hired to perform the work as an employee of a person operating as an independent contractor. Kershner argued that this provision rendered the exclusive remedy provision void. The court did not agree.
The appeals court said that the Texas statute does provide that a subcontractor and its employees are not deemed employees of the general contractor if the subcontractor is operating as an independent contractor and has entered into a written agreement with the general contractor that evidences a relationship in which the subcontractor assumes the responsibilities of an employer for the performance of work. But, in this instance, Spur chose to participate in the workers comp coverage provided by Samsung and in fact, Spur specifically agreed in writing to be enrolled in Samsung's workers comp insurance program.
The court found that there can be no reasonable contention that Spur and Samsung would make an agreement on workers comp coverage and that then Spur would disclaim whatever benefits and protections that might ensue as a result of the agreement by claiming status as an independent contractor. The court affirmed the ruling of the trial court and granted summary judgment in favor of Samsung on the basis of its asserted exclusive remedy defense.
Editor's Note: The Court of Appeals of Texas discusses the exclusive remedy provision in the state's workers comp statute and rules that if a subcontractor signs a contract agreeing to have workers compensation coverage provided by the general contractor, employees of that subcontractor will be deemed to be employees of the general contractor. As such, those employees are subject to the exclusive remedy provision and cannot file tort claims against the general contractor if they are injured on the job.