State News : Texas

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.

NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  

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This case should serve as a reminder for related companies to be careful how they structure their operations if they want to avoid liability for the company that is not considered the employer of the injured worker.  The deceased employee's wife sued his employer, Delta Steel, and its parent company, Reliance, for negligence in connection with his death. Delta Steel argued that the exclusive remedy defense barred the wife's ordinary negligence claims. The wife challenged the applicability of the exclusive remedy defense by disputing that Delta Steel had workers' compensation coverage even though she was receiving death benefits. Not surprisingly, the Fort Worth Court of Appeals held that the wife was estopped from denying that her husband's employer had workers' compensation coverage when she was receiving death benefits. However, the court of appeals held that the wife could maintain her ordinary negligence claim against Reliance, the parent company.  Reliance did not assert the exclusive remedy defense because it was not the deceased employee's employer. Instead, it argued that it did not owe a duty to the deceased employee and therefore, it could not be negligent since a legal duty is one of the elements of a negligence claim. The court disagreed that Reliance owed no duty to the deceased employee. It held that while parent corporations generally have no duty to control their subsidiaries, Reliance voluntarily undertook a duty to keep Delta Steel’s employees safe. The court held this duty arose because "Reliance generally controlled aspects of Delta Steel’s safety policies, specifically controlled policies concerning the inspection of cranes, had the authority to audit Delta Steel’s Fort Worth plant and to require Delta Steel to correct safety issues discovered upon an audit; audited Delta Steel’s other plants; had the authority to require Delta Steel to take a malfunctioning crane out of service; and required Delta Steel to mail monthly reports on accidents and investigations to Reliance."