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The Texas Supreme Court Recently Released its Opinion on Rehearing in Entergy Gulf States v. Summers.

Previously issued as a 9-0 opinion, there were three justices (including the Chief Justice) who dissented, and two concurring opinions were written. The Court frames the issue in the first paragraph (as the majority sees the issue);

In this workers compensation case, we decide whether a premises owner that contracts for the performance of work on its premises, and provides workers compensation insurance to the contractor's employees pursuant to that contract, is entitled to the benefit of the exclusive remedy defense generally afforded only to employers by the Texas Workers Compensation Act.

The first four words were an ominous sign for the plaintiff, as this case was brought as a third-party case by John Summers (not a workers compensation case). Summers was an employee of IMC, a maintenance contractor who performed maintenance, repair and technical services at various Entergy facilities. Pursuant to contract, Entergy provided workers compensation to the IMC employees at Entergy's own cost. When Summers was injured at an Entergy facility, he received workers comp benefits from the policy purchased by Entergy. Summers sued Entergy on a third-party negligence claim and Entergy moved for summary judgment on the ground it was a statutory employer immune from common-law tort suits pursuant to Texas Labor Code Section 408.001 (a).

The Texas Supreme Court recognized there is a "statutory employer" created under certain circumstances that allows a general contractor to avoid third-party liability exposure through the workers comp bar. It then turned to the question of whether the owner of property can fall within the Texas Labor Code's definition of "general contractor." Finding the definition does not exclude a "premises owner", the Court concluded a premises owner can be a general contractor under the definition of Texas Government Code, Section 406.121 (1), and held Summers was barred from pursuing his third-party claim against Entergy.

The dissent focused on the meaning and definition of the term "general contractor" through a different set of lenses. The dissent contended "premises owners" were not "general contractors" under the Workers Compensation Act and never had been. When the Legislature rewrote the law in 1989, the Legislature did not intend to expand the definition of "premises owners" to be a sub-set of "general contractors," as the majority did. The dissent opined the majority's reading of the Act was overly broad, causing a premises owner to become a general contractor -- although it is clear Entergy was not a general contractor as that term is commonly used in the construction/maintenance world.

Whether the dissent was better reasoned or not is a matter of debate. What is not a matter of debate is the effect of the majority's opinion in Entergy. The effect is a significant loss of protections previously afforded to everyday workers in Texas who work as subcontractors. It expands (at no additional cost to the premises owner) the workers compensation protection to premises owners like never before. It will ultimately throw the burden of caring for those seriously and permanently injured on the backs of the taxpayers of Texas, and it is hoped the Legislature works to correct this consequence.

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