Texas Supreme Court Clarifies Nonsubscriber Employer Defenses
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APPLIES TO Employers with Employees in TX |
EFFECTIVE April 25, 2025 |
QUESTIONS? Contact HR On-Call |
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Discussion
On April 25, 2025, the Texas Supreme Court issued a decision in In Re: East Texas Medical Center Athens, where the Court clarified that nonsubscriber employers (e.g., those who opt out of the state’s workers’ compensation system) can designate responsible third parties in employee injury lawsuits in order to reduce their liability. This decision stems from a case involving a nurse injured by a third-party EMT while working at a medical center that did not carry workers’ compensation insurance.
The Court held that the Texas proportionate-responsibility statute, which allows defendants to shift fault to third parties, applies in negligence lawsuits against nonsubscriber employers. This is because such lawsuits are not considered claims for workers’ compensation benefits under the Texas Workers’ Compensation Act (TWCA). As a result, nonsubscribers can ask juries to assign fault to third parties, potentially reducing the damages they owe, even though they remain barred from asserting defenses like contributory negligence or assumption of risk.
This ruling strengthens the legal defense options available to nonsubscriber employers and may influence more businesses to consider opting out of the workers’ compensation system. However, it also underscores the importance of thorough incident documentation and early legal involvement in workplace injury cases.
Action Items
- Review incident reporting and documentation policies.
- Consult with legal counsel to evaluate third-party involvement.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase