Texas High Court Reaffirms Controversial Entergy Workplace Ruling

April 6, 2009

After agreeing to a rare rehearing, the Texas Supreme Court on April 3 upheld its decision that – despite what some lawmakers say – a “premises owner” cannot be sued by injured employees of a contractor.

Lawyers for a contract employee who attempted to sue the owner of a work site where he was injured now must go back to the drawing board.

Turbine mechanic John Summers was injured in a 2001 accident while repairing a leak on a hydrogen generator at an Entergy Gulf States plant in Bridge City. Summers has since died of unrelated causes.

Entergy covered his injury with a workers’ compensation policy that protected the company from being sued. In its original 2007 ruling and again on April 3, the Texas Supreme Court expanded the immunity that had before been applied only to suits filed by direct employees to cover contractors as well.

The high court was split 6-3 this time around. Its 2007 ruling was unanimous.

State legislators say they never meant the workers’ compensation law to apply to contractors, and four lawmakers in December called for the court to reverse its decision.

In the written opinion, the court said current workers’ compensation law clearly favors Entergy and the only support for Summers is in proposed laws that failed to pass. According to the opinion, “the Court can attach no controlling significance to the Legislature’s failure to enact legislation.”

Galveston Democrat Rep. Craig Eiland said it was an activist majority opinion that admits to ignoring the law’s purpose.

“When the majority admits that it ignored legislative intent, you have to admit that it was legislating from the bench,” he said.

The Texas Association of Manufacturers applauded the decision, saying injured workers are already covered under workers’ compensation and protecting companies from contractor lawsuits helps keep the cost of doing business in the state reasonable.

“Sound policies like this make Texas an attractive place to do business and help grow high quality jobs that sustain our economy,” said Luke Bellsnyder, executive director of the group.

Texas Watch, a consumer advocate group, called the ruling a kick in the teeth for workers and legislators. Texas AFL-CIO called it a decision that reflected ideology and politics more than law.

“The one saving grace of today’s ruling is that three justices must have been embarrassed enough by the court’s activism that they changed their minds and conceded that the law clearly was the opposite of today’s ruling,” said Becky Moeller, president of Texas AFL-CIO.

Summers’ attorney Collyn Peddie and worker advocates say the ruling will allow other Texas companies to avoid workers’ lawsuits.

“The real problem here is that the court has basically created a road map for these industrial plant owners to avoid responsibility,” said Alex Winslow of Texas Watch. “Rather than laying out a legal scheme for companies, we should be strengthening these accountability measures to protect workers and their families.”

Families of the those killed in a 2005 BP plant explosions have also been against the court’s ruling. They say families of those injured in the explosion which killed 15 people would not have been able to sue under the decision.

The firm representing Entergy said it cannot comment on the case because of the possibility of a rehearing. Attorney Jacqueline Stroh said in court “nothing warrants any consideration” of overturning the court’s now upheld decision.

Peddie said she is disappointed in the result and may try for another rehearing, but advocates are largely looking to the Legislature for a solution.

“The Supreme Court in its opinion, I think, has made very clear that the kind of policy decision … belongs to the Legislature, and we hope that the Legislature will take up that challenge and do the right thing and restore its original intent,” Peddie said.

At least one bill that would change the language of workers’ compensation law to more clearly define who can be sued has had a public hearing this legislative session.

De Soto Republican Rep. Helen Giddings, the author of the bill, noted in a written statement that the court was no longer fully in support. She said her bill was more important than ever because “the vast majority of members of the Texas House of Representatives believe that the Court overstepped its bounds and ignored Legislative intent.”

The bill is currently pending in committee.

The workers’ comp bill is HB1657

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