Workers' Comp Concerns Raised at House Hearing

A hearing this morning on third-party liability conducted jointly by the two House committees, Business and Industry and Judiciary & Civil Jurisprudence, reflected concerns over whether benefits in Texas were adequate in the case of serious workplace injuries.

José Herrera, a worker badly burned by hot oil in an accident in a Citgo refinery in 2008, testified that his benefits (which will not last a lifetime) amounted to less than one-quarter of his former take-home pay and that his insurance has often delayed needed surgeries. "I'm in pain the day this happened to me, til now, for the rest of my life," Herrera told the committees.

Some lawmakers voiced support for reviewing benefits allotted to badly injured workers. "I would hope somewhere along the line some subcommittee would look at the adequacy of benefits," said state Rep. Jim Jackson, R-Carrollton.

Herrera's ability to sue for damages is severely constrained by a 2007 Texas Supreme Court decision. In Entergy Gulf States v. John Summers, the court ruled that plant owners can shield themselves from lawsuits by injured contract workers by purchasing workers' compensation insurance, which pays workers a portion of their wages as well as medical bills in the event of injury. Contractors — the companies that actually employ the workers — are already able to shield themselves in this way; what was new was the extension of this right to companies that own the workplace.

Trial lawyers say that the Entergy decision — which took many in the legislature by surprise but was reaffirmed in 2009 by the Texas Supreme Court — has shut off a vital option for contract workers like Herrera to recover damages. (If Texas workers die, their families can sue the plant owner that has bought workers compensation to recover punitive damages, but not if they are injured.)

 

Mike Hull, a representative of the group Texans for Lawsuit Reform, testified that he supported the Entergy decision and did not think Entergy "precludes all third-party suits." Hull said that his group was studying various aspects of workers' compensation, including how Texas compares with other states, and would have results available in a few months.

State Rep. David Leibowitz, D-San Antonio, a trial lawyer, challenged Hull repeatedly over a range of issues. Leibowitz suggested that accident-prone companies like BP — which, besides the Deepwater Horizon accident, also owns the Texas City refinery where 15 workers died in an explosion in 2005 — "externalize" their care for an injured worker, by providing insufficient benefits as to make the worker dependent on the state, through provision of food stamps or other services. "I'm not here to talk about BP," Hull said, who said earlier in the hearing that he did not know whether or not BP was a dues-paying member of TLR.

Some lawmakers suggested that the Deepwater explosion, despite occurring in federal and not Texas waters, should prompt new scrutiny of whether Texas's benefits are adequate in the case of industrial accidents.

"Can we not envision a similar situation occurring in Texas?" asked State Rep. Sylvester Turner, D-Houston.

Texas is the only state that does not require employers to purchase workers' compensation insurance. As such, 33 percent of Texas employers elect not to purchase such insurance; the committee sought information about whether that number had changed in the wake of the Entergy decision. Cathy DeWitt, vice-president for government affairs at the Texas Association of Business, testified that her group would not support making workers' comp mandatory.

The legislature is likely to look at workers' comp issues again; last year Rep. Helen Giddings, D-DeSoto, introduced a bill to rework Texas law to get around the Entergy ruling. It did not pass, but similar legislation is likely to be introduced again this session.

"I hope the Legislature will try to do the right thing," said Herrera.

 

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