Texas is the only state that allows employers to completely opt out of, or “nonsubscribe” from, the traditional workers’ compensation system. Nonsubscribers can avoid high premiums and a rigid state-mandated bureaucracy and instead implement self-funded occupational injury benefits plans that are better tailored to their industry. Many nonsubscribers have realized significant savings compared to the traditional workers’ compensation system. The tradeoff for nonsubscribers, however, is that their injured employees may sue to recover damages based on the employers’ alleged negligence. In these negligence actions, nonsubscribers are barred from asserting any traditional affirmative defenses, such as the employee’s contributory negligence. In addition, the law permits an employee to file a separate suit under ERISA where an employer’s occupational injury plan is alleged to have wrongfully denied benefits.
Houston-based partners Joe Gagnon and Kevin Troutman represent many nonsubscriber employers and their benefits plan administrators in these negligence and ERISA proceedings. Prior to joining Fisher & Phillips, Joe acquired extensive experience in both employment law and personal injury litigation. Kevin, meanwhile, worked for several years as a Human Resources manager in a hospital system, developing expertise in both traditional employment law as well as benefits administration. Accordingly, Joe and Kevin are uniquely qualified to defend these types of proceedings more efficiently for a client than if the client assigned each case to a separate firm.
In one recent case, Joe and Kevin won both the ERISA and negligence lawsuits arising out of the same workplace injury. The injured employee underwent neck surgery, experienced significant complications as a result, and never returned to work. In the ERISA case, the employee alleged that the plan administrator wrongfully denied approval of and payment for her surgery. In the nonsubscriber proceeding, the employee blamed the employer for her injury by failing to provide proper equipment and failing to provide proper training and instructions. Joe and Kevin successfully obtained summary judgment as to the ERISA claim. The district court agreed with their argument that the plan administrator acted within his discretion in terminating all benefits prior to the surgical procedure in light of medical evidence suggesting the surgery was unnecessary. Joe and Kevin also prevailed in the nonsubscriber action, as the client’s strong workplace safety program enabled them to persuade a three-person arbitration panel that the client acted reasonably with respect to equipping and training its employees.