Texas courts for decades have recognized that nonsubscriber negligence claims arise out of common law, not the Texas Workers’ Compensation Act. However, a recent decision by the Tyler Court of Appeals threw a wrench in current case law. In the case East Texas Medical, the Tyler Court incorrectly held that a nonsubscribing employer could not designate responsible third parties because a negligence claim against a nonsubscriber is “an action to collect workers’ compensation benefits” under the TWCA. In re E. Tex. Med. Ctr. Athens, No. 12-23-00263-CV (Tex. App. Nov. 21, 2023). Not only does the Tyler Court ignore decades of precedence on nonsubscriber law and misinterpret precedent, they also completely disregard the plain language of the responsible third-party statute.

The trial court in East Texas Medical granted the employee’s motion to strike the employer’s designation of responsible third parties, finding that the responsible third-party statute in Chapter 33 of the Civil Practice and Remedies Code does not apply to the case because it is an action to collect workers' compensation benefits under the TWCA. The employer filed a writ of mandamus, arguing that a common law negligence claim against a nonsubscribing employer is a wholly different cause of action than one arising from the TWCA. Nonetheless, the Tyler Court still falsely equated a TWCA action to a common law negligence action, centering their reasoning on Kroger v. Keng, 976 S.W.2d 882 (Tex. App.-Tyler 1998), aff'd, 23 S.W.3d 347 (Tex. 2000).

The Tyler Court ignores the plain language of the responsible third-party statute. The relevant portion states:

“Sec. 33.001. PROPORTIONATE RESPONSIBILITY. In an action to which this chapter applies, a claimant may not recover damages if his percentage of responsibility is greater than 50 percent.

…

(c)  This chapter does not apply to:

(1)  an action to collect workers' compensation benefits under the workers' compensation laws of this state (Subtitle A, Title 5, Labor Code)”

Subtitle A, Title 5, Labor Code is the Texas Workers’ Compensation Act itself. The statute explicitly states that proportionate responsibility does not apply to actions arising out of TWCA. That an action against a nonsubscriber may be like a TWCA claim (both suits against employers) does not make it “an action to collect workers' compensation benefits” under the law, particularly when the statute itself plainly names TWCA. Although the Tyler Court acknowledges that “the ultimate goal in any statutory construction is to give effect to the intent of the Legislature to the greatest degree possible,” they ultimately disregard the plain language of the statute. East Texas, at *7.

The Tyler Court also misinterprets the Supreme Court’s Keng decision to justify their incorrect decision in East Texas. Before the Supreme Court reviewed the matter, in Keng, the Tyler Court held that nonsubscribing employers cannot claim comparative responsibility because “when an employee files suit against a nonsubscribing employer, that suit is ‘an action to collect benefits [and damages] under the workers' compensation laws of Texas.’" Keng, at 891. The Tyler Court cites this line from its appellate opinion in the East Texas case as the basis of their ruling.

However, the Supreme Court’s decision to uphold Keng is based on a different line of reasoning. In fact, the Supreme Court stated in its decision “in resolving whether the comparative-responsibility statute applies in a nonsubscriber case, we need not determine, as Kroger urges, whether a suit under section 406.033 is ‘an action to collect workers' compensation benefits under the workers' compensation laws of this state.’” Keng, at 352.The Supreme Court ultimately found that a nonsubscribing employer could not claim comparative responsibility because “comparative responsibility…necessitates a preliminary finding that the plaintiff was in fact contributorily negligent.” Id. at 351. The Supreme Court reached the same conclusion as the Tyler Court based on wholly different reasoning. As such, the Supreme Court’s decision to uphold Keng should not be interpreted as an endorsement of the Tyler Court’s reasoning. 

Texas courts for decades have distinguished an action against a nonsubscribing employer from a TWCA action. See Am. Int'l Specialty Lines Ins. Co. v. Rentech Steel LLC, 620 F.3d 558, 565 (5th Cir. 2010) ("the right to bring a claim against a nonsubscriber for negligence remains what it has always been-a right arising under common law”); Rodriguez v. Home Depot U.S.A., Inc., No. EP-14-CV-175-PRM, 2014 WL 10183558, at *3 (W.D. Tex. Sept. 11, 2014) (“nonsubscriber claims do not arise under the TWCA”); Austin v. Kroger Texas L.P., 465 S.W.3d 193, 212 (Tex. 2015) (found that although a nonsubscriber’s defenses are limited, “it does not eliminate an employee’s burden to establish his common law claim”); Texas W. Oaks Hosp., LP v. Williams, 371 S.W.3d 171, 187 (Tex. 2012) (“[i]f an employer forgoes workers’ compensation coverage, and is a nonsubscriber to the workers’ compensation system, it is subject to suits at common law for damages”); Tex. Mex. Ry. Co. v. Bouchet, 963 S.W.2d 52, 56 (Tex. 1998) (held that the provisions of the workers’ compensation statutes do not apply unless the employer is a subscriber).

Should the East Texas Medical decision be upheld, it will uproot decades of precedence and defy the plain language of the third-party statute. The ripple effect of equating a TWCA claim to a nonsubscriber negligence claim would affect not just the third party statute, but also several other subjects where such a distinction is consequential. As such, the Supreme Court of Texas should overturn this decision and hold unequivocally that nonsubscriber negligence claims are not TWCA claims.