All the defenses described in this memo are available in civil court litigation matters and in out-of-court arbitrations. However, the Texas Workers’ Compensation Act ("TWCA") prevents a Non-subscriber from raising three specific common-law defenses to an employee’s negligence claim: (i) contributory negligence; (ii) assumption of the risk; and (iii) negligence of a fellow employee. TEX. LABOR CODE §406.033 (a). In 2000, the Texas Supreme Court also concluded that the comparative responsibility statute did not allow
non-subscribing employers to diminish their liability based on the Plaintiff employee's own negligence. Kroger Co. v. Keng, 23 S.W.3d 347, 352-53 (Tex. 2000). Nevertheless, in the course of defending more than 600 Texas employers in litigated workplace injury claims, we have found the following defenses and procedural mechanisms to be available and useful. In addition, mandatory, binding arbitration of workplace injury claims can be used effectively by Non-subscribers. Arbitration and ERISA Plans are each covered in a separate memo. You will find those memos and other valuable information free at our Website: www.texasatty.com.

A plaintiff employee must plead and prove three elements in a Non-subscriber negligence case, to win: (1) a legal duty owed by one person (the employer) to another (the employee); (2) a breach of that duty; and (3) damages proximately resulting from the breach. Leitch v. Hornsby, 935 S.W.2d 114, 118-119 (Tex. 1996); Werner v. Colwell, 909 S.W.2d 866, 869 (Tex.1995); J. Weingarten, Inc. v. Sandefer, 490 S.W.2d 941, 944 (Tex. Civ. App.--Beaumont 1973, writ ref’d n.r.e.).

An employer cannot be liable if the employee’s negligence was the sole proximate cause, i.e., the only cause, of an accident. Najera v. Great Atlantic & Pacific Tea Co., 207 S.W.2d 365, 371 (Tex. 1948); Holiday Hills Retirement & Nursing Center v. Yeldell, 686 S.W.2d 770, 775 (Tex. App.--Fort Worth 1985), rev’d on other grounds, 701 S.W.2d 243 (Tex. 1985). Sole proximate cause is a defense in Non-subscriber claims. Foster v. Carle, 160 S.W.2d 999, 1001 (Tex.Civ.App.--San Antonio 1942, writ ref’d).

Further, there is a well-established line of cases in Texas, which holds there is no employer negligence when an employee is injured doing the same character of work he has always done and that other employees are required to do. Werner, 909 S.W.2d at 869 (citing Great Atlantic & Pacific Tea Co. v. Evans, 175 S.W.2d 249, 250 (Tex.1943)). However, this general rule applies only when the job is not unusual or does not pose a threat of injury. Kroger Co. v. Keng, 976 S.W.2d 882, 887 (Tex. App.--Tyler 1998), aff’d on other grounds, 23 S.W.3d 347 (Tex. 2000). See also Chemicals Inc. v. Holland, 1999 Tex. App. LEXIS 7658, *12 (Tex. App.--Houston [14th Dist.] 1999, pet. denied)(not designated for publication)(indicating the employee should have performed the job more than once).

In Evans, cited above, the plaintiff alleged his grocery store employer was negligent in requiring him to lift 100-pound sacks of potatoes without someone to help him, or without providing him mechanical means to carry the potatoes. Despite evidence that the employee had not been provided assistance as requested and had been denied a request to borrow a cart, the Supreme Court held the grocery store was not negligent as a matter of law, stating:

Evans, 175 S.W.2d at 251. See also Werner, 909 S.W.2d at 869 (holding that employee had no negligence claim against employer as a matter of law).

In Southerland v. Kroger Co., 961 S.W.2d 471 (Tex. App.--Houston [1st Dist.] 1997, no writ), the court affirmed a summary judgment in favor of Non-subscriber Kroger in a back-injury lifting case. The plaintiff, a grocery checker, alleged he was injured when he reached down to pick up a box of laundry detergent from the bottom of a customer’s basket. Citing the Texas Supreme Court, the Houston appeals court stated, "It is long settled in Texas that where an employee is performing the same character of work that he had always done, and that other employees in other stores were required to do, there was no negligence." Id. at 472 (emphasis added); See also Werner, 909 S.W.2d at 869; Evans, 175 S.W 2d. at 250.

In Fields v. Burlison Packing Company, 405 S.W.2d 105, 110-111 (Tex. Civ. App.--Fort Worth 1966, writ ref’d n.r.e.), evidence concerning a Non-subscriber employer’s negligence was legally insufficient, due in part to the employee's voluntarily proceeding to do the work without assistance and the employer's failure to foresee any injury. In Fields, a female employee was injured while lifting a tub of hamburger meat weighing 40 to 45 pounds. Id. at 107. Evidence established that there was more than one safe way to perform the task, despite plaintiff’s allegation she was never instructed in a safer way. Id. at 108. Testimony established that other employees were available and could have been summoned for help. However, she made "no effort to determine whether her employer or any of her fellow employees could or would help her. Her only excuse was that no one was in the shipping room at the moment she decided to lift the tub." Id. at 107. 118867.2\9602.01\lec 2

 In affirming judgment for the employer notwithstanding the jury verdict, the court held:

In Fields, the plaintiff stressed the fact she was told to "hurry." The court was not persuaded by her argument:

Similarly, in Great Atlantic & Pacific Tea Company v. Lang, 291 S.W.2d 366 (Tex. Civ. App.--Eastland 1956, writ ref’d n.r.e.), evidence of an employer's negligence was legally insufficient because the only danger facing the employee arose from the employee's method of accomplishing the task, despite evidence the employee was given no instruction concerning how he was to perform the task. The plaintiff in Lang injured his back when he attempted to stack a carton of toilet tissue weighing 80 to 100 pounds, on top of another carton on a shopping buggy. Id. at 367. Evidence established there was no order or direction by store management as to the method of getting the toilet paper from the warehouse to the shelves--this was left entirely to the employee’s discretion. Id. at 168. In affirming the instructed verdict for the employer, the appellate court held:   118867.2\9602.01\lec 3

Finally, in Leitch v. Hornsby, 935 S.W.2d 114, 119 (Tex. 1996), the Texas Supreme Court established that the employee bears the burden of proving a causal connection between the employer’s alleged negligence and the employee’s alleged injury. The court further held that expert testimony is required in lifting cases involving claims of failure to provide proper equipment. Id. at 120. The employee can not satisfy the burden with lay opinion:

Id. (internal citations omitted).

B. Repetitive Activity Cases.

In another case, Azubuike v. Fiesta Mart, Inc., 970 S.W.2d 60 (Tex. App.-- Houston [14th] Dist.1998, no writ), the employee claimed he injured his back due to long hours of standing, walking, lifting and bending, required in his position as a front-end manager of a grocery store. The employee worked for Fiesta Mart over ten years, doing the same tasks. In his deposition, the employee admitted: "1) he did nothing out of the ordinary which may have caused his conditions, 2) he could not identify one particular incident that may have caused his injuries, and 3) he was performing the usual and customary duties that other front-end managers performed." Id. at 66. The Houston appellate court affirmed the finding of no negligence under these facts. Id.

C. Slip and Fall Cases.

In Hang On II, Inc. d/b/a Peep-N-Tom’s v. Tuckey, 978 S.W.2d 281 (Tex. App.--Fort Worth, no writ), the plaintiff fell down some stairs while working as a waitress at a bar. She alleged the defendant was negligent for failing to provide a guardrail and adequate lighting around the stairs. She testified to the following facts: the bar was dark; she could barely see the steps because of dim lighting; the steps were narrow and covered with old carpet; and, she fell after her foot missed the first step. Id. at 284. 118867.2\9602.01\lec 4

 II. OTHER DEFENSES AND CLAIMS

A. Course and Scope of Employment.

Under TEX. LABOR CODE 406.033(a), an employee must sustain his injuries "in the course and scope of the employment" in order to recover damages. See Allsup's Convenience Stores v. Warren, 934 S.W.2d 433, 435 (Tex. App.--Amarillo 1996, writ denied). Therefore, if the employee was injured while playing a sport over the weekend or injured during his personal lunch time, he cannot recover against a non-subscribing employer. Although it may be established that he was not injured in the course and scope of his employment--thus defeating his workplace negligence claim--if the employee is injured on the work premises, he may have other avenues to pursue, such as a premises defect or premises liability claims.

B. Borrowed Servant Doctrine

It may be possible for non-subscribing Defendants to use the borrowed servant doctrine under certain circumstances. This argument would most often be available in 118867.2\9602.01\lec 5 situations where there are two or more companies working at the same jobsite and an employee of one company is directed to work or perform job duties by the other company. Generally, the borrowed servant doctrine provides:

St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 537-38 (Tex. 2002)(emphasis added, internal citations omitted).

C. Intentional Act by Employee; Intoxication.

D. Statute of Limitations.

It is generally accepted that the two-year statute of limitation for negligence claims is applicable to Non-subscriber workplace claims. TEX. CIV. PRAC. & REM. CODE §16.003. There is no mention in the Labor Code of a statute of limitations for workplace negligence claims, either against a Non-subscriber or subscriber, but the clear language in § 16.003 makes it apparent that it applies to workplace injury negligence claims. See also Forrest v. Vital Earth Res., 120 S.W.3d 480, 484 (Tex. App.--Texarkana 2003, pet. denied)(applying TEX. CIV. PRAC. & REM. CODE §16.003 in a non-subscriber case). 118867.2\9602.01\lec 6

Further, it is important to note that when a plaintiff files a petition within the limitations period but does not serve the defendant until well after the limitations period expires, the filing alone does not interrupt the running of limitations. Brooks v. Tex-Pack Exp., L.P., 2004 Tex. App. LEXIS 8427 at *2 (Tex. App.--Dallas 2004, no pet.). Our firm was successful in obtaining summary judgment for our client in the Brooks case because, even though the plaintiff filed the petition within the statute of limitations, he failed to serve our client until five months after the limitation period had expired.

Additionally, the plaintiff is required to file suit against the correct entity. There is a monumental distinction between merely misnaming the correct defendant (misnomer) and naming the wrong party altogether (misidentification). Hernandez v. Furr’s Supermarkets, Inc., 924 S.W.2d 193, 196 (Tex. App.--El Paso 1996, writ denied). Texas appellate courts have held:

Ensearch Corp. v. Parker, 794 S.W.2d 2, 4-5 (Tex. 1990); Cohen v. C. H. Leavell & Co., 520 S.W.2d 793, 795 (Tex. Civ. App.--El Paso 1975, no writ). The distinction between misnomer and misidentification rests on whether the correct defendant received actual notice through service of process prior to the expiration of the statute of limitations. Hernandez, 924 S.W.2d at 196.

E. ERISA Preemption of Certain Claims.

Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. §1001 et seq., preempts all state-law claims which relate to an employee welfare benefit plan. The United States Supreme Court has consistently stated that the "relate to" language under ERISA is deliberately expansive and is to be construed broadly. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987); Waddell v. Kaiser Foundation Health Plan of Texas, 877 S.W.2d 341, 345 (Tex. App.--Dallas, 1994, writ denied). "[A]ny cause of action which arises out of a wrongful denial of benefits ‘relates to’ the employee welfare benefit plan." Waddell, 877 S.W. 2d at 345. For example, ERISA preempts the following causes of action which are sometimes filed against Non-subscribers along with the plaintiff’s negligence claim:

•  Breach of contract, misrepresentation, breach of the duty of due care and good faith, willful and wanton conduct, and failure to disclose material facts. First Nat’l Life Ins. v. Sunshine-Jr. Food Stores, 960 F.2d 1546, 1549-50 (11th Cir. 1992), cert. denied, 506 U.S. 1079 (1993); 118867.2\9602.01\lec 7

• Claims for Texas Insurance Code violations and related claims for mental anguish, and exemplary damages. Gorman v. Life Ins. Co. of N. Am., 811 S.W.2d 542, 548-49 (Tex.), cert. denied, 502 U.S. 824 (1991); Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147 (1985); see also Worthington v. Metropolitan Life Ins. Co., 688 F. Supp. 298, 300 (S.D. Tex. 1987);

• Deceptive trade practices claims. Cathey v. Metropolitan Life Ins. Co., 805 S.W.2d 387, 390-91 (Tex.), cert. denied, 501 U.S. 1232 (1991); and

• Damages (such as attorneys’ fees outside the provisions of ERISA) as a result of breach of the benefit plan. Waddell, 877 S.W. 2d at 346 (citing Novak v. Anderson Corp., 962 F.2d 757, 760 (8th Cir. 1992)).

III. STRUCTURAL ADVANTAGES FOR NON-SUBSCRIBER DEFENDANTS

The Texas Supreme Court in Texas Mexican Railway Co. v. Bouchet, 963 S.W.2d 52 (Tex. 1998), conclusively held that wrongful discharge claims brought under Texas Labor Code §451.001 (formerly, art. 8307c) are not available against Non-subscriber employers. There was a failed attempt made in the 1999 Texas Legislature to "reverse" the Supreme Court.

The dispute arose in Bouchet when Lawrence P. Bouchet injured his back in the course and scope of employment with Texas Mexican Railway Co. ("Railway"), a Non-subscriber to the Texas Workers’ Compensation Act ("TWCA"). Bouchet continued working for Railway until his condition worsened and he underwent surgery. After surgery, he returned to work on a light duty basis. Railway paid Bouchet’s medical bills, transportation costs for medical care, and salary while the parties negotiated settlement of Bouchet’s claim.

Dissatisfied with the settlement proposal, Bouchet sued Railway in state district court under the Federal Employers Liability Act ("FELA"), 45 U.S.C. §51, for the personal injuries he suffered on the job. After Bouchet filed suit, Railway terminated Bouchet’s salary and transportation payments, but continued to pay his medical expenses. Bouchet then amended his petition to include a claim for wrongful termination under the TWCA, Tex. R. Civ. Stat. art. 8307c (codified in 1993 as TEX. LABOR CODE §451.001-.003), for denying Bouchet benefits and discharging him in retaliation for filing the FELA claim.
118867.2\9602.01\lec 8

 At trial, the jury found that Railway did not wrongfully retaliate against Bouchet. The trial court entered a judgment that Bouchet take nothing on the article 8307c claim. On appeal, the court of appeals concluded that the anti-retaliation provision of article 8307c protects employees of both subscribers and Non-subscribers to the TWCA. Analyzing the case under Texas Labor Code §451.001, the appeals court reversed and remanded Bouchet’s retaliation claim and held that an employee who files a claim under FELA, or hires an attorney to assist in a FELA claim, is protected from retaliation by TEX. LABOR CODE §451.001.

The Texas Supreme Court began its analysis of the case by noting that Bouchet did not allege that he ever "(1) filed a claim under the [TWCA], (2) was ever entitled to any benefits under the [TWCA], or (3) that the Railway was a subscriber to that [TWCA]." Id. at 55 (emphasis added). The court then determined:

Id.

After considering the legislative history of article 8307c and the unmistakable intent of the Legislature, the Supreme Court held "article 8307c is intended to apply only to employees and employers who act under the [TWCA]." Id. at 386 (emphasis added). In reversing the court of appeals’ judgment and rendering judgment that Bouchet take nothing on his article 8307c claim, the court further held that "Bouchet cannot recover under either article 8307c or Texas Labor Code section 451.001." Id. at 57 (emphasis added).

A subsequent appellate case, Watkins v. Diversitech Corporation, 1999 Tex. App. LEXIS 2086 (Tex. App.--Houston [1st Dist.] March 25, 1999), also clarifies that there is no "common law" cause of action for wrongful termination against Non-subscribers. In Watkins, the plaintiff filed suit against his former Non-subscriber employer, alleging that he was discharged for filing a claim under Section 451.001 of the Texas Workers’ Compensation Act. In the alternative, Watkins asked the court to recognize his wrongful termination under the common law based on public policy considerations. The trial court granted summary judgment in favor of defendant based on the recent holding in Bouchet. Despite Watkins attempt to distinguish the holding in Bouchet and his public policy argument, the First District Court of Appeals affirmed the summary judgment ruling. Id. at *4.

118867.2\9602.01\lec 9

B. Availability of Punitive Damages.

Three provisions of TEX. CIV. PRAC. & REM. CODE § 41.003 limit the availability of punitive damages. First, "clear and convincing evidence" is required to support any award of punitive damages. This requirement is stricter than the "preponderance of the evidence" standard used to decide liability issues. Second, the claimant’s injury must result from fraud, malice, or gross negligence. Third, punitive damages may be awarded only if the jury is unanimous in finding liability and the amount of punitive damages. TEX. CIV. PRAC. & REM Code § 41.003.

Chapter 41 of the Texas Civil Practice and Remedies Code caps punitive damages in certain cases. Chapter 41 is applicable to workplace injury claims against Non-subscribers. See Beverly Enterprises of Texas, Inc. v. Leath, 829 S.W. 2d 382, 388 (Tex. App--Waco 1992, no writ).

The statutory punitive damage maximum is computed based on the type of actual damages found by the jury. A plaintiff’s compensatory damages are now divided into two categories: "non-economic" and "economic". An example of "economic" damages would be lost wages; "non-economic" damages are items like pain and suffering. A plaintiff can recover as punitive damages the greater of: (1) two times the amount of his economic damages, plus an amount equal to any non-economic damages found up to $750,000, or (2) $200,000. TEX. CIV. PRAC. & REM. CODE § 41.008. The limitations on punitive damages found in Chapter 41 should be pled in any case where punitive damages are sought.

IV. ARBITRATION

Please review Binding Arbitration for Non-subscriber Injury Claims located at www.texasatty.com for more details about how arbitration may be beneficial to you.

Employers who enter into contracts with their employees may also take advantage of pre-suit contractual jury trial waivers. Jury trial waivers are enforceable in Texas. See In re Prudential Ins. Co., 148 S.W.3d 124, 135 (Tex. 2004). In Prudential, the parties to a commercial lease agreed to waive trial by jury in any future lawsuit involving the lease, but when the tenant and its guarantors (the tenant) later sued, they demanded a jury trial. Id. at 127-28. The Supreme Court of Texas determined that the tenant’s waiver of trial by jury was knowing and voluntary as a matter of law. Id. at 134. The court emphasized that the waiver was crystal clear, and the tenant did not contend otherwise. Id. Further, despite it coming toward the end of a long document, it was not printed in small type or hidden in lengthy text. Id. In fact, the paragraph was captioned in bold type and did not divert the tenant’s attention or mislead them. Id. Therefore, the 118867.2\9602.01\lec 11 court held the waiver was enforceable. Id. at 135.

VI. OFFER OF SETTLEMENT

The principal benefit to making an offer under Chapter 42 is the potential for "fee shifting." See TEX. CIV. PRAC. & REM. CODE § 42.004. If the offer is rejected and the amount awarded in the judgment is "significantly less favorable" (by more than 20 % of the rejected offer) to the rejecting party, then the offering party is entitled to shift a portion of its litigation costs to the rejecting party. Id. Such "fee shifting," if successful, allows the Non-subscribing employee to reduce the judgment against it by the litigation costs incurred after the settlement offer is rejected by the Plaintiff, subject to certain caps tied to the amount of damages awarded to the claimant. Id. In a case where liability is clear, and the primary dispute is over damages, offers of settlement are particularly useful.

VII. OFFSET, CREDIT, AND SUBROGATION.

Policy considerations, pro and con, for the collateral source rule are these: (i) on one hand, an employer who voluntarily tries to protect itself against liability, by paying into a fund for that purpose, should not be penalized by permitting the plaintiff employee one recovery of (ERISA Plan or insurance) benefits, and another recovery of the same benefits as tort damages; but (ii) on the other hand, if the employer pays into a fund established for a different reason, or where the fund would be considered in the nature of a "fringe benefit" or "deferred compensation," the employer should not be allowed to benefit by a set off against his tort damage liability. Several Texas appellate courts, however, have specifically ruled that a Non-subscriber employer is entitled to offset the benefit amounts paid by it against any workplace injury judgment. See, e.g., Tarrant County Waste Disposal, Inc. v. Doss, 737 S.W.2d 607 (Tex. App.--Fort Worth 1987, writ denied); Castillo v. American Garment Finishers Corp., 965 S.W.2d 646 (Tex. App.--El Paso 1998, no writ); CMM Grain Co. v. Ozgunduz, 991 S.W.2d 437, 440 (Tex. App.--Fort Worth 1999, writ denied).

The leading Non-subscriber case on the issues of offset and the collateral source rule is Tarrant County Waste Disposal, Inc. v. Doss, cited above. In this case, the Fort Worth Court of Appeals held that payments received by an employee under a Non-subscriber employer’s accident policy did not constitute payments from a "collateral source," and, in the subsequent workplace negligence action brought by the employee, the employer was entitled to offset the policy proceeds received by the employee, against the employee’s negligence damages. The case turned on the fact that the accident policy was purchased in lieu of workers’ compensation insurance, and was limited to on-the-job injuries. The accident policy only provided benefits to the employees for on-the-job injuries, regardless of whether the employer’s negligence caused the injury. The employer procured the policy and paid the premiums; the employee was the direct beneficiary and received policy proceeds. The court in Tarrant County Waste Disposal, stated "we believe that the determining factor is whether the employer purchased the insurance primarily for its own protection, [and not] as a fringe benefit for the employees." Id. at 611.

VIII. DESIGNATION OF RESPONSIBLE THIRD PARTIES

Although a Non-subscribing employer may not assert the comparative responsibility of its employees as a defense, for cases filed on or after July 1, 2003, Defendants may seek to designate a non-employee as a responsible third party See TEX. CIV. PRAC. & REM. CODE § 33.004. A "responsible third party" is any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought. Id. § 33.011. Successful designation of a responsible third party allows the finder of fact to diminish the plaintiff’s recovery against the Non-subscribing employer by finding a non-employee third party is responsible for a portion 118867.2\9602.01\lec 13 of those damages. A finding of fault against a "designated party" does not impose liability on that party and may not be used in any other proceedings to impose liability. § 33.004(i).

IX. COMPARATIVE RESPONSIBILITY (NOT AVAILABLE)

Comparative responsibility is a defense under general Texas tort law which provides that if the injured party is from 0% to 50% responsible for his own injuries, his award is reduced by that percentage; similarly, if he is more than 50% responsible for his own injuries, he will receive nothing from the defendant. The possibility that this defense of "comparative responsibility" was available to Non-subscribers had arisen under earlier opinions of the Texas Supreme Court in Texas Workers’ Compensation Commission v. Garcia, 893 S.W.2d 504 (Tex. 1995) and the Amarillo Court of Appeals in Byrd v. Central Freight Lines, Inc., 976 S.W.2d 257 (Tex. App. - Amarillo 1998, pet. denied). Availability of comparative responsibility as a Non-subscriber defense came before the Texas Supreme Court in Kroger v. Keng, 23 S.W.3d 347 (Tex. 2000).

In Keng, the Texas Supreme Court held that non-subscribing Texas employers are not entitled to a jury question on the employee’s comparative responsibility for his or her own injury. This means that if the employer is negligent in any degree (failing to provide a reasonably safe place to work, for instance) the employer will be liable for all damages proved by the injured employee. The employer may not use its employee’s negligence to reduce or eliminate liability, unless the employee was the sole proximate cause of the injury.

 However, an employer is not liable if the employee’s negligence was the sole proximate cause of the injuries. The matter of sole proximate cause is, like other controverted fact issues, ordinarily submitted to the jury for determination.

X. PRE- INJURY WAIVERS (NOT AVAILABLE)

Prior to June 17, 2001, a small percentage of Non-subscribers used pre-injury claim waivers to protect themselves against common law claims. These waivers were typically executed as part of ERISA plan adoption documents prior to any injury, and provided a waiver of future claims in exchange for ERISA Plan coverage and benefits.

On March 29, 2001, with Texas appeals courts split on the issue, the Texas Supreme Court ruled that pre-injury waivers were enforceable. Lawrence v. CBD Services, Inc, 44 S.W.3d 544, 554 (Tex. 2001). The Texas Legislature immediately responded by passing a bill outlawing pre-injury waivers made thereafter. The Texas Workers’ Compensation Act now provides: "A cause of action…[to recover damages for personal injuries or death sustained by an employee in the course and scope of employment] may not be waived by an employee before the employee’s injury or death. Any agreement by an employee to waive a cause of action . . . before the employee’s injury or death is void and unenforceable." TEX. LAB. CODE § 406.033(e). This law became effective June 17, 2001 and all pre-injury waivers made after June 17, 2001 are void in Texas. A pre-injury claim waiver may be enforceable in Texas only when the waiver is signed and the injury is suffered before June 17, 2001. See Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190 (Tex. 2004); Villareal v. Steve's & Sons Doors, Inc., 139 S.W.3d 352 (Tex. App.--San Antonio 2004).

A post-injury waiver is effectively a pre-litigation settlement agreement, the consideration for which is the payment of Plan benefits, or a higher tier of benefits under the plan (i.e. 100% wage replacement rather than 70% wage replacement). Until recently, an employer could immediately approach an injured employee and seek a waiver of negligence lawsuits in return for benefits under an ERISA plan. However, recent changes to the Texas Workers’ Compensation Act have placed certain restrictions upon the use of post-injury waivers by Texas Non-subscribers. Effective September 1, 2005, post-injury waivers will not be valid unless the waiver: 1) is in writing; 2) is entered into not earlier than ten (10) business days from the date of the initial report of injury to the employer; 3) the employee, before signing the waiver, has received a medical evaluation from a non-emergency care doctor; and 4) the waiver is voluntary, conspicuous, and on the face of any written agreement. See TEXAS LABOR CODE § 406.333 (f)-(g). To be conspicuous, the waiver provisions must appear in a type 118867.2\9602.01\lec 15 118867.2\9602.01\lec 16 larger than the type contained in the body of the agreement or in contrasting colors. See TEXAS LABOR CODE § 406.333(g).

 In addition to the need for post-injury waivers to comply with the new statutory requirements, in order for the waiver to be enforceable it must also constitute a valid contract under Texas law. In Texas, for a contract to exist, there must be an offer, an acceptance, and valid consideration. Harco Energy, Inc. v. Re-Entry People, Inc., 23 S.W.3d 389, 392 (Tex. App.—Amarillo 2000, no pet.). The primary area of concern will be whether there has been consideration exchanged to form a valid and enforceable waiver (i.e. contract). The payment of a higher tier of benefits to employees who have executed waivers should provide the necessary consideration. However, take caution when considering withholding benefits altogether until a waiver is signed, as this may raise questions as to whether the waiver is supported by consideration. If the only thing of value you are offering the injured employee are plan benefits he or she is already entitled to receive under the terms of your plan, there is a strong likelihood that the waiver will lack consideration. In sum, post-injury waivers may be a strong tool when properly utilized. However, if not properly implemented, the enforceability of this type of waiver could be litigated.

While Non-subscribers lose the "exclusive remedy" provided under the Texas Workers’ Compensation Act, they do not lose the ability to defend themselves. Non-subscribers still have certain statutory and common law defenses that may apply to their particular case. Further, the burden is still on the injured employee to prove all of the elements of their claims against the non-subscribing employer. Simply put, Non-subscribers can be successfully defended in Texas courts and arbitration proceedings