Texas Supreme Court Rules On Temporary Employee Workers' Comp Case

April 11, 2005 (PLANSPONSOR.com) - The Texas Supreme Court has ruled that a temporary employment agency's client is not protected by workers compensation's exclusive remedy provision unless it explicitly establishes coverage under an insurance policy.

According to Business Insurance, in the case of a temporary worker injured after a supervisor directed him to cross a moving conveyor belt, both companies were the employee’s co-employers protected by the exclusive remedy provision.

>After the accident, the temporary worker – Jose Garza – sued both the company (Exel Logistics Inc.) and his employer (Interim Services Pacific). However, both a trial court and an appeals court found that both were co-employers under the exclusive remedy provision. Garza appealed to the State Supreme Court, which affirmed the decision of the lower court.

However, the Supreme Court did find that Exel was technically Garza’s employer when he was injured because he was working on Exel’s premises in furtherance of Exel’s business, Business Insurance reported.

Because Exel was the employer, the exclusive remedy provision only applies if it obtained workers compensation insurance. In the case, Exel had argued that it paid Interim a “markup” to obtain workers compensation coverage for temporary employees obtained through the company.

However, the Supreme Court found no evidence that an insurer contracted to “secure Exel’s liability and obligations.” It said that the Texas Workers Compensation Act “does not permit a temporary employment agency like Interim to obtain coverage for a client simply by obtaining coverage for itself,” according to Business Insurance. “There must be explicit coverage for the client.”