Texas: Fired Employee May Not Maintain Retaliatory Discharge Action Against Non-Subscribing Employer

A Texas appellate court recently affirmed a decision by a state district court that had granted summary judgment in favor of a nursing center in a retaliatory discharge lawsuit filed against it by a former employee [Addison v. Diversified Healthcare, 2012 Tex. App. LEXIS 7269 (Aug. 28, 2012)]. The former employee, a cook, sustained a strained back while lifting some 50 pounds of food items. When the cook’s supervisor heard him complain about his injury, the supervisor told him to turn in his keys and badge and leave the building. He subsequently filed the retaliatory discharge action against the nursing home pursuant to Tex. Lab. Code § 451.001.

The defendant nursing home contended that since it was not a subscriber to the Texas Workers’ Compensation Act, it could not be liable for retaliatory discharge. Indeed, providing state-approved workers’ compensation insurance to cover employees is optional to the employer, and only employers who elect to obtain coverage are subject to the Act [Tex. Lab. Code § 406.002].

The employee contended that the nursing center held itself out as a workers’ compensation subscriber and that fact was sufficient to allow his retaliatory discharge suit. The appellate court noted that the nursing center provided an affidavit from its Texas administrator stating that it did not carry workers’ compensation insurance coverage. It also provided an “Employer Notice of No Coverage or Termination of Coverage” on file with the Texas Department of Insurance. The notice stated that the nursing center had elected not to obtain workers’ compensation insurance under the Texas Workers’ Compensation Act. The employee offered no contradictory evidence. The appellate court added that even assuming the nursing home held itself out as a subscriber would have made no difference; only subscribing employers can be subject to section § 451.001 claims.

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