Workers Compensation or a Lawsuit in Texas
Texas is the only state in the country where a private employer can simply decide not to carry workers compensation. Most hands in the patch have no idea which side of that line they are on, and it changes everything about what your injury is worth.
If your employer is a subscriber, comp pays regardless of fault and you cannot sue it. If your employer opted out, it can be sued directly for negligence and it has lost most of the defences it would otherwise have. Alex Horton is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Before you sign anything a company hands you, find out which one applies.
Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Texas Super Lawyer for more than ten years. Former clerk at the Supreme Court of Texas. More about Alex Horton
This is the question that decides more about an oilfield injury claim than the injury itself does, and almost nobody asks it until it is too late to matter.
Four questions below, in the order they come up. If you already know your employer opted out, skip to what a nonsubscriber claim is worth. If you are hurt and somebody has put paperwork in front of you this week, read the traps first.
Is my employer a subscriber or a non subscriber?
You can find out in about ten minutes, and you should. A subscriber carries a real workers compensation policy. A nonsubscriber opted out and either carries nothing or runs an internal injury benefit plan of its own design.
The confusion is deliberate on the plan side. A nonsubscriber benefit plan comes with an enrollment packet, a card, a claim number and a process that looks exactly like workers compensation to somebody who has never seen either. It is not the same thing and it does not carry the same protections, for you or for the company.
Texas requires a nonsubscriber to tell the state it has opted out and to post notice where employees can see it. That means the information exists. The Texas Department of Insurance, Division of Workers Compensation keeps the record, and it can be checked directly at tdi.texas.gov rather than taken on trust from an employer with a reason to be vague about it.
Three things that give it away. A poster in the break room saying the company does not carry workers compensation insurance. An enrollment form you had to sign to be covered, which real comp never requires. And an injury reporting rule measured in hours rather than the thirty days Texas allows for a comp claim.
- Ask HR directly, in writing, and keep the reply
- Look for the posted notice at the yard or the office
- Check your enrollment paperwork for the words benefit plan
- Look up the employer through the Division of Workers Compensation
- Check who the claim was reported to and on what form
If you cannot get a straight answer, that is information too. Bring the paperwork in and we will find out.
What do I give up by accepting workers compensation?
The right to sue your employer, and every category of damages that matters most in a serious injury. What you get in exchange is certainty, because comp pays without anybody having to prove the company did anything wrong.
- Medical treatment for the compensable injury
- A percentage of your average weekly wage, capped by the state
- Impairment benefits based on a rating
- Death and burial benefits
No fault required. You do not have to prove anybody was negligent, which is the whole point of the bargain.
- Physical pain
- Mental anguish
- Physical impairment beyond the rating schedule
- Disfigurement
- Loss of consortium for your spouse
- The full difference between what you earned and what you can earn now
- Exemplary damages, however bad the conduct was
On a catastrophic injury those categories are usually most of the case, which is why the same accident can be worth wildly different amounts depending on one decision the company made years ago.
One exception worth knowing. Even where an employer is a subscriber, the surviving spouse and heirs can pursue exemplary damages against it in a death case caused by gross negligence. Comp is not an absolute shield when a worker is killed. The exclusive remedy rule sits in the Texas Labor Code at Chapter 408, and it is worth reading if a family member has died. See also can families sue for wrongful death after an oilfield accident.
Can I do both?
Against your own employer, almost never. Against everybody else on that location, yes, and that is the part most injured workers are never told. Comp bars a claim against the company that carried the policy. It does nothing to anyone else.
Comp Plus A Third Party Claim
Yes. This is the most common shape an oilfield case takes. You draw comp from your employer and sue the operator who controlled the lease, the crane company, the pumping crew, the hauler or the manufacturer of whatever failed. On a Permian pad there are usually several to choose from.
Comp Plus Suing Your Employer
No, in almost every case. That is the exclusive remedy bargain. The exceptions are narrow: an intentional act, and exemplary damages brought by the family in a gross negligence death case.
Benefit Plan Plus Suing Your Employer
Usually yes, and this catches people out. A nonsubscriber benefit plan is not comp and it does not buy the employer immunity. Taking plan benefits can trigger release language or a reimbursement claim out of your recovery, so the paperwork has to be read before you rely on it.
One thing to plan for. If you draw comp and then recover from a third party, the comp carrier has a lien and will want repaying out of your settlement. That is normal, it is negotiable, and it needs handling early rather than at the end where it quietly takes a settlement apart. More in who is liable for oilfield injuries in Texas and can I sue an oil company as a contractor in West Texas.
What is a non subscriber claim worth?
Nobody can put an honest number on it before seeing the medical records and the earnings history, and you should be careful with anyone who does it on a first phone call. What can be said is that a nonsubscriber case is built on full damages rather than a benefit schedule, and that the company starts three defences down.
What the company lost by opting out. A nonsubscriber cannot argue you were careless. It cannot argue you knew the job was dangerous and took it anyway. And it cannot blame a coworker under the fellow servant rule. Those three defences are gone by statute, which is set out in the Texas Labor Code at Chapter 406.
What you still have to prove. That the company was negligent and that its negligence caused the injury. This is the real trade. Comp pays without fault and pays less. A nonsubscriber case pays properly and you have to prove it, usually through training records, maintenance history, staffing decisions and what the company knew before it sent the crew out.
Exemplary damages sit on top where the conduct amounts to gross negligence, and Texas caps those at the greater of two hundred thousand dollars or twice the economic damages plus non economic damages up to seven hundred and fifty thousand. Compensatory damages are not capped.
- Lost earning capacity. What you can no longer do, not last year's pay
- Medical, past and future. Including the care you need in twenty years
- Physical impairment. Permanent loss of function
- Disfigurement. A separate category under Texas law
- Pain and mental anguish. Neither of which comp pays at all
- Exemplary damages. Where the company knew and sent the crew anyway
Basin earnings matter here. A hand pulling six figures with overtime who cannot return to the patch has lost decades of it.
The Paperwork Is Doing Work
Nonsubscriber benefit plans are drafted by the company that would be the defendant. Everything in the packet has a purpose, and none of it is your purpose.
The Arbitration Clause
Bundled into the enrollment form. Sign it and you have given up a jury without anybody saying that is what happened. Texas courts do enforce these, though not always, and there are real arguments against them depending on how the agreement was presented.
The Pre Injury Waiver
Different from arbitration and much weaker. An agreement signed before you were hurt, giving up the right to sue the employer for negligence, is void under Texas law. If somebody tells you a form you signed at induction ends your claim, get it looked at.
The Post Injury Release
The one that arrives with a cheque while you are still in hospital. These can be enforceable if the requirements are met, which is exactly why they turn up early, before anybody has told you what the claim is worth.
The Reporting Window
Plans routinely require the injury to be reported within twenty four hours and treatment from a company chosen doctor. Miss the window and the plan denies the benefit. It does not end your negligence claim, whatever the letter implies.
If you have already signed something, bring it in rather than assuming it is settled. A signed document is a starting point for an argument, not the end of one. See how to file a lawsuit against your oilfield employer and your rights after an oilfield injury in Texas.
Two Clocks, And They Run At Different Speeds
A negligence lawsuit in Texas generally has to be filed within two years of the injury or the death. A workers compensation claim runs on its own schedule, with notice to the employer due within thirty days and the claim filed within a year. A nonsubscriber benefit plan sets its own window, often twenty four hours, and it is the shortest of the three by a long way.
Missing the plan deadline is not the same as missing the legal one, and companies are rarely quick to explain the difference. The statute of limitations is at Chapter 16.
What To Do This Week
Find Out Which One You Are Under
Ask in writing and keep the answer. Look for the posted notice. Check the enrollment paperwork for the words benefit plan.
Keep Every Document
The enrollment packet, the claim forms, the letters, the cheque stubs. All of it, including the envelopes with dates on them.
Sign Nothing New
No recorded statement, no release, no arbitration agreement. If you already signed something, bring it in rather than assuming it is settled.
List Everybody Else On Location
Even if comp blocks a claim against your employer, it does nothing to the other companies that were there. That list is where most of the value usually sits.
Start With Your Location
This page covers the rule across Texas. The claim itself turns on what happened on your location and which companies were on it, so start with the page for where you were working.
Workers Compensation Questions
Is it legal for my employer to have no workers compensation?
Yes, for most private employers in Texas. It is the only state that allows it. There are exceptions, including public employers and contractors on certain public projects, but a private oilfield service company can opt out and many do. What it cannot do is opt out and keep the legal protections that come with being in the system.
My employer says I have to use their doctor. Do I?
Under a benefit plan the company can make its choice of provider a condition of the benefit. That is a plan rule, not a legal one, and it does not stop you seeing your own doctor or getting a second opinion. It is also worth knowing that a doctor selected and paid by the company is writing the record your case will be argued from.
I already took benefit plan payments. Have I accepted a settlement?
Usually not, though it depends entirely on what you signed to get them. Taking benefits can trigger release language or a reimbursement claim against a later recovery. Bring the packet and the paperwork in and let it be read properly before you assume the decision has been made for you.
What if I was partly at fault?
Against a nonsubscriber employer it does not matter, because it cannot raise your negligence at all. Against a third party, Texas comparative fault lets you recover as long as you are not more than fifty percent responsible, with the award reduced by your share.
I am a contractor, not an employee. Does any of this apply?
Some of it, and your position is often stronger. A contractor is usually not inside anybody's comp bargain, which leaves the operator and the other companies on location exposed to a direct negligence claim. Expect an argument that you were a borrowed servant of whoever did carry comp.
What does it cost to talk to a lawyer about this?
Nothing. The consultation is free and we take these cases on a contingency fee, so we are paid a percentage of what we recover and you owe no fee if there is no recovery. The firm advances case expenses.
Not Sure Which One You Are Under? Bring The Paperwork.
Board Certified in Personal Injury Trial Law. Free consultation, no fee unless we recover, and we come to you if you cannot travel. Bring the enrollment packet and anything the company has asked you to sign.