Texas Court of Appeals Holds Workers Compensation Nonsubscribing Workers Compensation Employer Liable for Employees Injuries Sustained in Fall from Ladder

The benefit to Texas employers in maintaining workers compensation insurance is that they are shielded from liability to employees injured on the job. In exchange, employees are entitled to recover workers compensation benefits for injuries sustained on the job without having to prove that their employer was at fault. If an employer fails to maintain workers compensation, then the law states that the employer in essence waives common-law defenses such as contributory negligence and assumption of the risk.

In a recent Texas Court of Appeals case, an employee was injured on the job while at the top of a commercial extension ladder. The ladder slipped while the employee was at the top of it and the employee sustained serious bodily injuries from the fall. The employee alleged at trial that the ladder slipped because the employer stopped supporting the ladder at the bottom. The jury found in favor of the employee and awarded $427,818 in damages against the employer. (McMillan v. Hearne, 584 S.W.3d 505, 510 (Tex. App.—Texarkana 2019, no pet.)).

The employer appealed the verdict on the grounds that there was insufficient evidence to support the jury’s verdict that the employer was negligent. The Court of Appeals stated:

To prove negligence, evidence must be produced to establish a duty, a breach of duty, and damages proximately caused by the breach. Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004). Because McMillan is a worker’s compensation nonsubscriber, McMillan is not afforded the common-law defenses of contributory negligence, assumption of the risk, or negligence of a fellow servant. See Tex. Lab. Code Ann. § 406.033(a); Kroger Co. v. Keng, 23 S.W.3d 347, 350 (Tex. 2000). Thus, there are only two defenses available to McMillan, namely, (1) that he was not liable for negligence proximately causing Hearne’s injuries or (2) that Hearne was responsible for some act which was the sole proximate cause of the occurrence. See W. Star Transp. v. Robison, 457 S.W.3d 178, 187 (Tex. App.—Amarillo 2015). “Accordingly, if any negligent act by [McMillan] was a substantial factor in bringing about [Hearne’s] fall and subsequent injuries, and if that event was a foreseeable occurrence without which the fall and injuries would not have occurred, then liability has been established.” See id.

The Court of Appeals found that there was sufficient evidence to support the jury’s finding that the employer was negligent. However, the Court did find that the employer was entitled to an offset of $65k for medical and wage benefits provided to the employee under the employer’s employee benefit plan.

Although, workers compensation coverage can be expensive, especially in certain high risk industries like construction, it can also be catastrophic to a small business if it fails to purchase this coverage. A single on the job injury can result in hundreds of thousands or even millions of dollars in exposure driving a small business into bankruptcy. Thus, most entrepreneurs should budget for this expense before starting a new business.