EMPLOYMENT LAW

FALL 2009

In Re Labatt Food Service, L.P., Relator, 279 S.W.3d 640 (Tex. 2009)

Arbitration- Employee Personal Injury Cause of Action: The parents and the children or employee brought a wrongful death suit against the employer. The employer was a non-subscriber to the workers’ compensation insurance system and had its own private occupational insurance plan. To become a member, the employee must sign an agreement to participate in the plan, which also contained an agreement to arbitrate all claims. However, the employee's family did not sign the agreement. The employee was killed in an on the job accident. The beneficiaries argued that since they did not sign the agreement, they were not bound to arbitrate their wrongful death claims. The employer raised the arbitration agreement in the district court and the court refused to enforce the agreement. The employer sought a mandamus to the court of appeals which was denied and then the employer appealed to the Supreme Court of Texas. Held: The Court held that under Texas law, the arbitration provision in an agreement signed before the employee's death and requiring arbitration pursuant to the Federal Arbitration Act, required the employee's wrongful death beneficiaries to arbitrate their wrongful death claims against the employer, even though they did not sign the agreement. The Court further held that it was for the arbitrator, rather than the court, to resolve the beneficiaries' claim that the entire contract signed by the employee, including the arbitration clause, was invalid. Note: The Supreme Court followed its prior path down the slippery slope of rulings that have bound non-signatories to arbitration agreements and declined to stop the slide; thereby, holding that the family was bound to the arbitration agreement, even though they had not signed the agreement.

Travis Central Appraisal District v. Norman, 274 S.W.3d 902 (Tex. App.Austin 2008, pet. filed)

Jurisdiction- Anti-Retaliation Suit: The former employee brought a retaliatory discharge action against the Travis County Appraisal District (TCAD), which was a political subdivision, alleging that she was fired for filing a workers’ compensation claim, as prohibited by § 451 of the Texas Labor Code. TCAD filed a plea to the jurisdiction arguing that the employee was bound by TCAD's grievance policy and was required, prior to suit, to exhaust her administrative remedies. The court denied the plea and TCAD brought an interlocutory appeal. Held: The Court of Appeals recognized the principle that in the appropriate case, an employee must exhaust the administrative plan of a governmental entity prior to suit in order to confer jurisdiction upon the court. However, the Court ruled that § 451 did not require in the Act any exhaustion of remedies prior to conferring jurisdiction. The Court recognized that the legislature certainly knew how to place such provisions in the law when it desired to do so, as it had done in other statutes. The Court examined other cases in which certain courts of appeal had ruled that exhaustion was necessary in suits against independent school districts prior to suing under Labor Code § 451. The Court distinguished these cases, including a pair of Texas Supreme Court cases, by noting that the Texas Supreme Court assumed, without deciding, that exhaustion was necessary because the parties to the suit did not contest that exhaustion applied and had agreed that it did. Therefore, the Court refused to follow these contra cases and ruled that exhaustion of the grievance policy was not necessary in a § 451 claim against a governmental entity. TCAD also argued that pursuant to Tooke v City of Mexia,197 S.W.3d 325 (Tex.2006) that the Texas Supreme Court's ruling in City of LaPorte v. Barfield, 898 S.W.2d 288 (Tex.1995) holding that a political subdivision's governmental immunity had been waived by Chapter 451 has been superseded by the Tooke case. TCAD argued that Tooke required a heightened statement of the legislature's intent to waive immunity and that it was not satisfied by the Labor Code's language. The Court rejected this argument pointing out that Tooke's holding applied only to cases involving certain specific phrases used in statutes that, standing alone, were not sufficient to waive immunity. The language used in the statutes examined in Tooke was not used in the anti-retaliation portion of Chapter 451 and therefore, Tooke did not address the type of immunity waiver found in Barfield. Note: Unless you like to live dangerously and be the case that tests whether the Texas Supreme Court really was limiting their holdings in Van. Ind. Sch. Dist. V. McCarty, 165 S.W.3d 351 (Tex. 2005) and Ind. Sch. Dist. v. Sullivan, 51 S.W.3d 293 (Tex. 2001) because the parties agreed and acknowledged that exhaustion of remedies applied to the trial court's jurisdiction in a § 451 case involving an independent school district, you should be very cautious about not exhausting your administrative remedies in a § 451 case against a school district until we get a definitive ruling from the Supreme Court. Someone needs to test that ruling in order to save everyone the waste of time in exhausting their remedies in a § 451 case before a school district; however, that will probably occur by some poor soul who unknowingly fails to exhaust their remedies and then has no other choice but to fight that out in the Supreme Court.

American Protection Ins. Co. v. Leordeanu, 278 S.W.3d 881 (Tex. App.Austin 2009, pet. filed)

Workers’ Compensation - Course & Scope: A drug representative-employee of the defendant-drug company was seriously injured in a car wreck while driving to her home. The workers’ compensation insurance carrier denied liability claiming she was not in the course and scope of employment. The employee received a judgment in district court of liability against the insurer. Held: Reversed. She was not in the course and scope. The employee did not have an office except in her home. She also had a storage unit for her work rented in an area near her home. One evening, after buying meals for doctors (which was part of her job), she intended to drive to the storage unit to pick up something for her work, which was on the way to her home and near her home, then go to her home and work some more at her home doing business reports. Unfortunately on her way to the storage locker she was in a serious wreck. The Court applied the “dual purpose” rule, as set out in Tex. Lab. Code § 401.011(12)(B), which was designed to determine whether an employee was in the course and scope of employment. The rule provided that injuries incurred during travel for the dual purpose of furthering the affairs or business of the employer and the employee's own personal affairs shall not be deemed in the course of employment unless (1) the travel to the place of occurrence of the injury would have been made even had there been no personal affairs of the employee to be furthered by the travel; and (2) the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel. This meant that the travel would have occurred even if the personal purpose was removed from the analysis and the travel would not have occurred if the business purpose of the travel were removed from the analysis. The employee argued that since the accident happened during the first leg of the trip to the storage unit, she was within the course of employment. The Court did not buy this argument ruling that since the ultimate trip was to her home, and had the stop at the storage unit been removed, she would have made the trip anyway. Two justices dissented and would have ruled that the accident was in the course of employment.

Turner v. Precision Surgical, LLC, 274 S.W.3d 245 (Tex. App.Houston, 2008)

Sabine Pilot Charge: A former employee brought a suit against his former employer claiming that he was terminated for the refusal to perform an illegal act (commonly called a “Sabine Pilot” cause of action because it was created by the case, Sabine Pilot Serv., Inc v. Hauck, 687 S.W.2d 733 (Tex. 1985)). Alternatively, he plead that he was fired for making a workers’ compensation claim. An element of the Sabine Pilot cause of action was that it must be the exclusive reason for the discharge. However, the courts have held that an alternative cause of action, such as a workers’ compensation retaliation claim may be plead alternatively. Since the causes of action were mutually exclusive, the Court submitted the charge with the Sabine Pilot question first and then submitted the workers’ compensation retaliation claim conditioned on a “no” answer to the Sabine Pilot question. If the Sabine Pilot question was answered “yes”, then the jury was not to answer the retaliation question. The employee objected to the conditioning instruction. The jury found “no” to both questions. Held: The conditioning instruction was proper and also held that any error was harmless, since the jury found “no” to both questions. The employee’s Sabine Pilot claim was a novel use of this cause of action. He claimed that the illegal act the employer was requiring him to do was to not claim the injury as a workers’ compensation injury, but claim it on his personal insurance as a non-work related injury, which he believed to be false. When he refused to do this and claimed it as a workers’ compensation claim, the employee was fired. The employee claimed that this would have been insurance fraud and would have subjected him to criminal penalties.

University of Texas at El Paso v. Herrera, 281 S.W.3d 575 (Tex. App.El Paso, 2008, pet.filed)

Jurisdiction-FMLA: A former employee brought suit against the state university claiming he was terminated in retaliation for taking leave under the “self-care” provisions of the FMLA. The university filed a plea to the jurisdiction claiming that the Eleventh amendment to the U.S. Constitution protected it from this type of FMLA claim and the court had no jurisdiction over it. The Court of Appeals examined the status of the law and cases regarding jurisdiction of the FMLA over a state university as to whether Congress properly waived sovereign immunity in the passage of the FMLA. The FMLA provided protection for an employee to take off work to care for his/her family, referred to as the “family care” provision. The “self care” provision provided for an employee to take off for his/her own sickness. The Eleventh amendment prohibited federal courts from having jurisdiction over federal or state law claims against a state or state agency unless the Eleventh amendment immunity had been expressly waived by the state or abrogated by Congress pursuant to proper constitutional authority. Further, the Eleventh amendment immunity protected nonconsenting states from being sued in their own courts for federal law claims. The United States Supreme Court held in Nevada Department of Human Resources v. Hibbs, 538 U.S. 721, 726 (2003) that Congress made unmistakably clear its intention to waive the State's sovereign immunity related to FMLA family care claims. However, the Hibbs case dealt with the family care provisions and the Court did not expressly apply this ruling to the self care provisions. Therefore, the state university argued that based on this and other court cases, which have held that Congress did not unmistakably waive immunity as to self care, that the FMLA had no jurisdiction over them. The Court refused to side with the university and held that Congress did waive immunity of the states as to the self care provisions. The dissent argued that this holding was against the majority of federal cases which have ruled that the FMLA had no jurisdiction in self care cases against a state.