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Despite ERISA workers’ comp plan, employee can still sue for negligence

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in Employee Benefits Program,Human Resources

Texas employers that opt out of the state workers’ compensation system often adopt separate insurance plans to cover employees’ on-the-job injuries. Those plans usually provide no-fault benefits and are governed by the Employee Retirement Income Security Act (ERISA). Traditionally—because ERISA preempts inconsistent state laws—employees who sue for benefits are limited to the remedies available under the ERISA plan.

That doesn’t mean, however, that employees can’t sue under other state laws, even if they are claiming damages for a workplace injury covered by an ERISA plan. As the following case shows, employees may get another bite at the apple by suing for failure to provide a safe workplace.

Recent case: Le Ann McAteer worked as a landscaper at the Holly Lake Ranch, which opted out of the Texas workers’ compensation system and instead provided no-fault benefits under an ERISA benefit plan. McAteer signed on with the plan and agreed that it would be the sole remedy for any on-the-job injuries.

McAteer hurt her back when she tripped in a parking lot while using a weed trimmer. She landed with her back on the weed trimmer and suffered a herniated disk.

McAteer sued her employer in state court, alleging that it failed to provide her with a safe place to work and failing to implement safety procedures that might have prevented the accident. Because ERISA is a federal law, her employer moved the case to federal court and tried to have the case dismissed, arguing her sole remedy was under the ERISA benefit plan.

The 5th Circuit Court of Appeals sent the case back to the state court for trial. It concluded that ERISA does not preempt state negligence claims for failing to maintain a safe workplace. (McAteer v. Silverleaf Resorts, No. 06-41725, 5th Cir., 2008)

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