Workers’ Comp Exclusive Remedy Still Applies When a Temp Agency Employee Is Injured at a Client

A Texas appellate court held that an employee of a temporary staffing company cannot pursue a lawsuit against his employer’s client for a workplace injury. In affirming the trial court’s decision, the court found that the client company had established as a matter of law that the recovery of workers’ compensation benefits was the exclusive remedy for the worker’s injury.

Background

In 2019, Sabah Waeli was employed by In-Fuse Staffing Service, a temporary employment agency. Waeli was assigned to work as a vessel fitter for In-Fuse’s client, BWFS Industries, LLC. Waeli was injured on the job when another In-Fuse employee at BWFS pushed a metal grating onto Waeli’s hand, partially amputating one of Waeli’s fingers.

Both BWFS and In-Fuse had workers’ compensation insurance. In-Fuse’s policy additionally contained an “Alternate Employer Endorsement” providing workers’ compensation coverage to BWFS for bodily injury sustained by an In-Fuse employee in the course of the employee’s temporary employment by BWFS. Waeli’s workers’ compensation benefits were paid through In-Fuse’s policy.

BWFS argued that the exclusive-remedy provision of the Texas Workers’ Compensation Act barred Waeli’s claims. The trial court sided with the defendant, a decision that was affirmed by the Fourteenth Court of Appeals.

The Decision

The appellate court stated that, based on the Texas Labor Code, “if a TES (temporary employment service) company obtains workers’ compensation insurance, then the exclusive-remedy provision applies to both the TES and its client.” BWFS moved for summary judgment, stating that the exclusive-remedy provision barred Waeli’s claims, because, at the time of Waeli’s injury, In-Fuse had an insurance policy providing workers’ compensation coverage to its employees, and the “Alternate Employer Endorsement” of In-Fuse’s policy expressly provided workers’ compensation coverage to In-Fuse’s employees injured while working at BWFS. To prevail, the court stated, BWFS need only prove that, at the time of Waeli’s injury, BWFS was a client of In-Fuse; that In-Fuse carried workers’ compensation insurance; and that Waeli was an employee covered by that policy. The court held that BWFS satisfied its burden to show that these elements were met.

The Takeaway

When a temporary staffing agency’s employee is injured while working for the temp agency’s client, and the temp agency has workers’ compensation coverage, the exclusive-remedy provision still applies to both the temp agency and the client.

Pappas Grubbs Price PC has maintained an active practice in first-party and third-party liability insurance matters for more than 20 years. To speak to an insurance lawyer about your matter, contact us.