Summary
The Supreme Court of Texas held that liability waivers in non-subscriber workers’ compensation benefit plans must satisfy the express negligence and conspicuousness fair-notice requirements. The Court affirmed the court of appeals’ judgment because the plan’s lack of conspicuousness was conceded and a fact issue remained regarding the employee’s actual knowledge of the plan terms.
Topics
Practice areas
Questions Presented
- Whether an employer's nonsubscriber workers' compensation benefits plan must satisfy the express negligence and conspicuousness fair notice requirements before a pre-injury waiver or release of common-law negligence claims may be enforced.
- Whether summary judgment was proper when the defendants asserted actual knowledge of the plan terms but the employee submitted evidence disputing whether the plan had been explained or provided to him in English or Spanish.
Holdings
- An employer's nonsubscriber workers' compensation benefits plan must satisfy both the express negligence doctrine and the conspicuousness requirement before a pre-injury waiver or release of the employee's negligence claims may be enforced.
- A failure to satisfy the fair notice requirements does not prevent enforcement if both contracting parties had actual knowledge of the plan's terms; however, actual knowledge was disputed on this record.
- The fair notice requirements do not apply automatically to every contract that shifts any degree of risk; their application to nonsubscriber plans is a limited extension justified by the unique public policy status of workers' compensation.
Key quotations
“A contract which fails to satisfy either of the fair notice requirements when they are imposed is unenforceable as a matter of law.” (134 S.W.3d at 193)
“Thus, while this plan may not represent the same extraordinary degree of risk-shifting as an indemnity agreement, the expressed and reiterated public policy of this state justifies our imposing the fair notice requirements.” (134 S.W.3d at 194)
Factual background
Storage & Processors was a nonsubscriber to the Texas Workers' Compensation Act and offered Reyes a benefits plan providing medical care and wage-continuation benefits for workplace injuries. Reyes signed up for the plan in 1993 and was injured in 1995 when employee Leonel Guerrero drove a forklift over and severed Reyes's foot. Reyes accepted almost all available plan benefits and then sued for negligence. The defendants relied on the plan's waiver and release, while Reyes disputed whether he had actual knowledge of the plan terms.
Procedural history
Reyes was injured when Guerrero drove a forklift over and severed his foot. After accepting benefits under Storage & Processors's nonsubscriber plan, Reyes sued Storage & Processors and Guerrero for negligence. The trial court granted the defendants' initial and later renewed motions for summary judgment based on the plan's waiver and release. The court of appeals reversed and remanded, holding that the release was subject to the fair notice requirements of the express negligence doctrine and conspicuousness. The Supreme Court of Texas affirmed the court of appeals and remanded for further proceedings because a fact issue remained concerning Reyes's actual knowledge of the plan terms.
Remand instructions
The case was remanded to the trial court for further proceedings because the disputed issue of Reyes's actual knowledge of the plan terms had to be resolved at trial or otherwise in a proceeding addressing the fact issue.