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Temporary employees can't be excluded from workers compensation policy: Court

Posted On: Jan. 31, 2012 12:00 AM CST

AUSTIN, Texas—A temporary employee who died on the job can't be excluded from an employer's workers compensation policy, the Texas Supreme Court said in a ruling that reversed a $2.7 million liability judgment for the worker's family.

In a unanimous decision Friday, the state's high court said companies that provide workers comp coverage generally cannot “split (their) workforce” by excluding different classes of workers from their policies.

Therefore, workers comp was the exclusive remedy in the death of Rafael Casados, who was killed in 2005 while working at a grain storage facility owned by Port Elevator-Brownsville L.L.C., the court said.

"Because Port Elevator had a workers compensation policy, Casados was an employee, he suffered a work-related injury, and (a) jury failed to find Port Elevator grossly negligent, the Texas Workers' Compensation Act provides that the exclusive remedy is against the employer's insurer—not the employer," the ruling reads.

Mr. Casados worked for staffing agency Staff Force Inc., which placed him in a job with Port Elevator. He suffered a fatal work injury during his third day at work, court records show.

Staff Force's workers comp insurer, Dallas Fire Insurance Co., covered burial expenses for Mr. Casados. But Port Elevator's insurer, Texas Mutual Insurance Co., denied workers comp coverage for Mr. Casados because of his employment with Staff Force. Soon after, his family sued Port Elevator for negligence and gross negligence.

Port Elevator argued that workers comp should be the exclusive remedy for Mr. Casados' family, according to court records. The family contended that Port Elevator did not pay workers comp premiums for temporary workers, and noted that Texas Mutual denied coverage for Mr. Casados.

A jury awarded $2.7 million to Mr. Casados' family and the man's estate after finding that Port Elevator was negligent in his death, but not grossly negligent. A Texas Court of Appeals upheld that decision in 2010.

However, the Texas Supreme Court reversed the ruling. It said that Mr. Casados was considered a covered employee of Port Elevator, despite his temporary employment status.

Further, the high court said that Texas Mutual was required to cover Port Elevator workers, even if the company didn't pay workers comp premiums specifically for temporary hires.

"If Port Elevator's policy had set out certain premiums solely for temporary workers and Port Elevator had not paid those premiums, Casados would still have been covered under the policy and the failure to pay premiums would be an issue between Port Elevator and Texas Mutual," the decision said.

The court noted that Texas' exclusive remedy provision only can be exempt when an employer is found grossly negligent for a worker's death. However, the previous jury ruling showed that Port Elevator was not grossly negligent in Mr. Casados' case, the ruling said.