Q. My company is a nonsubscriber under the Texas Workers’ Compensation Act and has its own on-the-job employee injury benefit plan. Is there any way to increase the likelihood that employees who receive benefits under the plan will not be able to later sue us to recover damages related to their injuries?
A. Yes. Texas courts have recognized that releases or waivers designed to prohibit employees of nonsubscribers from suing their employers after they have received benefits under a company-sponsored workplace injury benefit plan are valid and enforceable.
Three principles must be followed to successfully enforce such releases. The release:
- Must clearly identify the rights the employee is agreeing to waive in order to obtain benefits under the employer’s injury plan (i.e., the right to later sue the employer in court).
- Should pertain to an identifiable injury that has already been sustained. At least one Texas court has implied that prospective nonsubscriber releases applicable to injuries that may occur in the future are not enforceable.
- Should only address the benefits received and the rights released by the employee in exchange. Releases that attempt to reinvest the employer with its common law defenses to negligence should the employee attempt to sue the employer later are void.
Although it is not essential, the release language should indicate that the employee has not been forced to sign the release, understands it and has been given adequate time to consult an attorney if he or she so chooses.
Thus, carefully crafted post-injury releases will generally be held valid and enforceable.