What can employers opting out of workers’ comp do to minimize the threat of lawsuits? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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What can employers opting out of workers’ comp do to minimize the threat of lawsuits?

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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 decrease the likelihood of employees who receive benefits under the plan later suing the company and recovering 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 releases.

1. The release must clearly identify the rights the employees are agreeing to waive in order to obtain benefits under the employer’s injury plan (i.e., the right to sue the employer in court later).

2. The release should pertain to an identifiable injury that has already been suffered. At least one Texas court has implied that prospective nonsubscriber releases applicable to injuries that may occur in the future are not enforceable.

3. The release should only address the benefits received and the rights released by the employees 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 not essential, it would be advisable to include language that indicates that the employee:

  • Has not been forced to sign the release
  • Understands the release
  • Has had adequate time to consult an attorney if he or she so chooses.

Thus, carefully crafted post-injury releases generally will be held valid and enforceable. Have an attorney review your release.

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