If the Texas Workers' Compensation Act and the Texas Farm Animal Limitation of Liability Act got into a fight, who would win? The Supreme Court of Texas might have just metaphorically placed its money on the farm animals.
The Court held last week in Texas West Oaks Hosp. v. Williams, that an employee of a nonsubscriber hospital employer must comply with the procedures set forth in the Texas Medical Liability Act (i.e. the progeny of the 2003 tort reform movement), and barred the employee's claims against his employer.
If I haven’t already lost you, you are probably thinking,
Wait a minute, what is a “nonsubscriber”, and what does a case about a hospital employee have to do with the horse industry?
Bear with me, this material is sort of complicated, but I hope the point of this post will be clear to you by the time you get to the end (if you in fact make it that far!)
Nonsubscriber Status. Are you a nonsubscriber? Most Texas horse industry employers are “nonsubscribers”, at least for some of their employees. If you have employees or so-called “independent contractors” who might really be employees under the true legal definition, you should be aware if you are or are not a nonsubscriber.
Why does it matter? The Texas Workers’ Compensation Act allows employers to elect whether or not they will subscribe to worker’s compensation insurance. If an employer does subscribe and an employee is hurt during the scope of their employment, the employee is generally precluded from filing suit, and must instead pursue administrative remedies for benefits under the Workers’ Compensation Act.
But if an employer elects to forego workers’ compensation coverage, it is subject to suits at common law for injuries suffered by employees on the job. Not only that, nonsubscribers are generally not able to avail themselves of many common-law defenses to negligence claims in suits brought by employees. See this prior post for more details.
That said, I should note as an aside that some “farm or ranch employees” are excluded from the provisions of the Workers’ Compensation Act altogether (did I mention before that this is complex stuff?).
So here’s the question that remains unsettled: What if a nonsubscriber employer is sued by an employee, and the employee’s injuries arose from dangers inherent in an equine activity? Can the employer invoke the immunity from liability granted to virtually all people in the Farm Animal (formerly Equine) Limitation of Liability Act (um...we'll just call it Chapter 87)?
As we have discussed at length, the Supreme Court has not yet decided this issue. Two appellate courts have indicated a willingness to apply Chapter 87 to bar suits brought by horse industry independent contractors, but one court of appeals refused to apply Chapter 87 to bar a suit brought by a horse industry employee.
Plaintiffs’ lawyers who represent injured employees generally assert the argument that Chapter 87 was intended to apply to tourists or consumers, and not workers. They further assert that Chapter 87 cannot bar employees’ suits because it would abrogate employer duties under the Workers’ Compensation Act. The employee's lawyers in Williams made similar arguments about the Medical Liability Act.
The Williams Decision. Williams is significant to the equine industry, at least in my mind, because it shows a willingness on the part of the Supreme Court to allow “tort reform” type statutes to bar an employee’s claim against a nonsubscriber. Not unlike the Medical Liability Act, Chapter 87 is another law that was passed to limit liability for certain types of claims. Furthermore, the plain language of Chapter 87 itself does not exclude suits brought against nonsubscriber employers (though it does expressly carve out other stuff, such as activities regulated by the Texas Racing Commission). As such, I predict that if the Supreme Court of Texas ultimately takes up the issue, it is inclined to rule that Chapter 87’s immunity provisions apply to employees and other workers (subject to its exceptions, of course) .