Texas Legislature Applies New Standard To Non-Subscribers Seeking to Obtain Post-Injury Claim Waiver

January 4, 2006

There is a new mousetrap for the unwary non-subscriber (an employer who does not provide workers’ compensation coverage). If an employee of a non-subscriber to the Texas workers’ compensation system is injured on the job, he or she can sue their employer for negligence. By contrast, employers that carry workers’ compensation insurance generally cannot be sued for negligence; instead, their employees must seek relief through the workers’ compensation system. To prohibit non-subscribers from bullying their employees into waiving their one right of redress—filing a suit against their employer—the Texas Legislature has long prohibited non-subscribers from obtaining pre-injury suit waivers from their employees. In fact, former § 406.033(e) of the Texas Labor Code simply made pre-injury suit waivers void. However, that section did not specifically address the validity of post-injury waivers.

The Legislature recently acted to fill that void. House Bill 7, which is now in effect, places strict statutory limitations on the validity of post-injury waivers signed by employees of non-subscribers. Under the newly revised § 406.033, a non-subscriber is still prohibited from requiring an employee to waive suits against the employer before the employee’s injury or death occurs. In addition, the revised section places specific limitations on an employer’s ability to obtain post-injury waivers. Specifically, suit may be waived by an employee after the employee’s injury occurs only if all the following conditions are met: (a) the employee voluntarily enters into the waiver with an understanding of the waiver’s effect; (b) the waiver is entered into no earlier than the 10th business day after the date of the initial report of injury; (c) the employee, before signing the waiver, has received a medical evaluation from a non-emergency care doctor; (d) the waiver is in writing and the true intent of the parties is specifically stated in the document; and (e) the waiver provisions are conspicuous and appear on the face of the agreement in a type larger than the type contained in the body of the agreement or in contrasting colors.

In all likelihood, courts will construe these conditions stringently. This means non-subscribers should discard (or at least severely modify) their old form post-injury waivers. A proper post-injury waiver will—in writing—track the language of the statute by requiring the employee to specifically acknowledge (1) they are voluntarily entering into the agreement with full knowledge that they are waiving their right to sue; (2) their injury was reported more than 10 days before the waiver was signed; (3) they have seen a non-emergency room physician and obtained that physician’s medical evaluation of the injury; (4) they can read and understand the terms of the waiver and the effect of the waiver, e.g., they understand they are forever giving up their right to file suit and have a jury consider their claim.

To ensure the waiver will stand up in court, it should be written in the language of the employee (e.g., Spanish, French, etc.), in plain, easy-to-understand terminology; further, the actual waiver language must be in large, bold or other conspicuous print. Ideally, the employee’s signature on the waiver should be witnessed by a notary public. While it is not required by the statute, the waiver might also contain language stating the employee has had time to consider the waiver and consult with a lawyer of their choosing. Perhaps, the waiver might even provide a short grace period during which the employee can rescind the agreement. Of course, the employee should receive something of real value in exchange for signing the waiver.

In sum, drafting a post-injury waiver is a daunting prospect: there are many issues to consider. You should consult with knowledgeable employment counsel before entering into any binding agreement with an employee.

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