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How Employers Can Avoid Liability For Employee Injuries [e202]

Nasir and Matt discuss the Texas Supreme Court decision that ruled a Texas employer was not liable for work-related injuries sustained to one of its employees.

Transcript:

NASIR: All right. Welcome to our podcast where we cover business in the news and add our legal twist to that business news. My name’s Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: Welcome. Welcome to you all.
MATT: We’re in the 200s now so I think we’ve officially made it.
NASIR: We’ve officially made it. We should have just started with Episode 200. It would have been better for our egos.
MATT: Well, what’s crazy is there’s usually not a lot of podcasting news, but there was a bigger story this week with Marc Maron when he had Obama on. He didn’t put podcasting on the map but it was like a big moment for podcasting – or so I’m told or so I heard. But the crazy thing is he’s done over 500 episodes and he only releases once a week. Maybe he used to release more frequently but, I mean, to get in the 500s releasing once a week, he had to have done multiple episodes a week in the past. I know he was really early into the game but that’s insane.
NASIR: Well, it could be, I mean, if you think about it, it’s just ten years – 2005. That’s not crazy because podcasting has been around before 2005.
MATT: Yeah, it’s been around a lot longer because that lawsuit with the guys that had like a recording system claiming they were podcasting that ended up ultimately getting dropped because they realized there’s no money in podcasting. Joke’s on them.
NASIR: Could have fooled me.
MATT: Yeah, we’re making lots of money on this so I don’t know what they’re doing wrong.
NASIR: No.
MATT: So, we’re in your backyard for this one.
NASIR: You’re in my backyard right now?
MATT: I don’t know how close you are to the Supreme Court in Texas.
NASIR: It’s in Austin.
MATT: The story was in Dallas.
NASIR: Well, the Supreme Court’s in Austin.
MATT: Okay. Well, this story was in Dallas.
NASIR: I’ve actually never been in Dallas yet. I’ve pretty much been everywhere else except Dallas.
MATT: Everywhere in Texas? That seems impossible.
NASIR: That’s right. I stand behind that.
MATT: Okay. So, ultimately, it was a decision by the Texas Supreme Court and they were clarifying some previous decisions which we can get into the procedural side of it but, basically, here’s a rundown of what happened. There was a man who worked for a Kroger and there was a situation where I believe it was some sort of oil leaked through the ventilation and it was leaking onto the floor or something and so he was told to clean up the mess. And so, it seems like this might have happened some time in the past because it’s not the first time he’s done this task, I believe. What their protocol is for this is they use this powder absorbent that they call Spill Magic to clean this up – and I’m not exactly sure what this is but that’s what they used to do it.
NASIR: Spill Magic?
MATT: Yeah, Spill Magic.
NASIR: Of course. It’s actually the Spill Magic system – whatever that means. I assume it’s just like that powder that just absorbs spills.
MATT: Is that what you deducted when I said it was a powdery absorbent?
NASIR: Yeah.
MATT: Fair enough.
NASIR: I’m just deducing from Spill Magic.
MATT: So, he’s cleaning this up and it’s going all right, no problems, and then at some point – I guess while he was mopping it up – he slips and falls and actually fractures his femur, dislocates his hip – some pretty rough injuries.
NASIR: Ouch.
MATT: Yeah, obviously not good. There’s some major medical issues. You know, there’s going to be some medical expenses involved. The kicker of this – and this is something that you can inform us about it – is Kroger didn’t have workers’ comp to cover this or there probably wouldn’t be an issue in the first place. Like I said, you can confirm this but it looks like in Texas you’re able to bypass the workers’ comp or there’s no requirement in some instances to have workers’ comp insurance.
NASIR: Yeah, those employers or businesses that are listening outside the state of Texas are pretty shocked right now because Texas is the only state in the country that allows you opt out of workers’ compensation. I mean, in fact, it’s a cost of doing business in other states and not having workers’ compensation for employees is a big huge issue and they’ll go after you for that. What that means is that these issues are very specific to Texas because it’s not often that an employee is suing an employer for an injury on the job because workers’ compensation – even this is how it works in Texas too – it’s the exclusive sole remedy for a workplace injury. And so, if you’re an employee in Texas and your employer has workers’ compensation, it works the same way. But, if you don’t, how does the law work exactly? Well, I don’t know. I think it’s pretty clear. I mean, there is some gray area here and there but, from a general perspective, there’s not a lot of case law related to it so, in this case, that suit’s precisely what they had to deal with – this premises liability issue when it comes to your employees.
MATT: Yeah. There’s a couple of things going on with this and you just touched on the premises liability aspect of it which I only remember talking about the random person that walks into your backyard and gets hurt on something that’s hazardous or something like that. I don’t remember talking about Kroger when I was in law school.
NASIR: A good example of like a grocery store is, if there is a water spill and Kroger doesn’t do anything about it and it’s just sitting there and then someone goes by a slips, usually the owner of the property – and even Kroger – could be liable. A very common one is where there’s like a lip in an entrance way that is not up to code where you trip over it or something like that and it’s somehow kind of defect. That’s the most common premises liability claim.
MATT: I’ll just get to what the decision was and that’s what they were saying. Employers still do have a duty to maintain their premises in a reasonably safe condition for their employees and they still have a duty to warn of concealed dangers but an employee’s generally not going to be able to recover against their employer for an injury that’s caused by a premises defect of which that employee was fully aware that his or her job duties required him or her to remedy. I know that was a lot of mumbo jumbo but, basically, if it’s something they’re fully aware of, they know about it and it’s not hidden and, in this instance, I guess that’s how they’re applying it. There was the oil that seeped through the ventilation system and this is something that the employee was fully aware of and was told, I’m assuming, because they were told to clean it up. The court rule is the employer should not be held liable for this slip and fall that happened by the employee which any other state workers’ comp find, like this is, from a policy perspective, this doesn’t seem right to me. There needs to be some sort of liability on the employer.
NASIR: Yeah, it is a little bit of an oddity and one of the arguments, I think there was even an amicus brief from I think it was a Texas lawyers association or something like that and an amicus brief is just basically some other third party. I think amicus means friend of the court – something to that effect, if I recall my Latin days which I never studied, I just pretended I did. Basically, they submitted some brief basically saying that, if you side with the employer on this one, then you’re actually encouraging employers to opt out of the workers’ compensation program which is kind of against public policy of what people are trying to do. I think that’s a fair argument but one thing that was notably not addressed by the Supreme Court but it was tangentially addressed which was this aspect of the negligence of not actually providing this magic powder or whatever – what was it called?
MATT: Spill Magic.
NASIR: Yeah, the Spill Magic. I like to call it magic powder myself but, you know, the fact that it wasn’t there. Is the employer negligent? One of the questions was – or at least Kroger’s argument was – “Well, if we’re not liable for premises liability, how can we be liable for this?” I think they called it instrumentality negligence which is not providing this instrument to clean and the court disagreed and said, “Well, that’s a separate issue that has to be addressed by the trial court.”
MATT: I guess that was kind of the more minor part of the decision in what they ruled on that but, still, the overarching thing is there can be situations where an employee can get injured while performing their job duties and the employer can walk away, scratch-free, with no liability – more so without the workers’ comp coverage as well. You’re exactly right – there is an incentive.
NASIR: I think incentives, maybe not as strong an incentive, but it does give some leave to those employers. By the way, there are quite a few of the big employers that actually don’t have workers’ compensation but this gives them a little wiggle room, so to speak.
MATT: Yeah. I mean, if it’s incentive, it would just be they wouldn’t have to pay more as involved with keeping up the workers’ comp. but, yeah, it would discourage participation. I do agree with that and it’s a problem. I mean, do you have any idea how many businesses or what percentage of businesses…?
NASIR: Yeah, it’s about a third of employers that don’t buy workers’ compensation insurance so they opt out. You’d be surprised – Kroger, of course. Walmart, Albertsons – some of these grocery stores – Taco Bell, Whole Foods are some of the biggest employers that actually don’t actually provide workers’ compensation and so I think they made the economics decision to avoid it. By the way, there is some risk because, by law, if you don’t subscribe to the workers’ compensation, then you’re actually barred from raising certain defenses which is including contributory negligence and assumption of the risk which basically says that your employee, even if they’re also negligent, that’s not a bar for recovery or if they knew about the risk and they assumed it, that’s also not a bar of recovery. Again, it seems a little contrary to this aspect that the Texas Supreme Court says that, if he was aware of the risk and so forth, or it was very apparent of the hazard that the employer is not liable.
MATT: You know, that makes sense though because it’s going to be those big companies I’m sure that their premiums are going to be very high – much higher than anyone else.
NASIR: Yeah.
MATT: They’re also going to be the ones that are going to be able to defend a lawsuit if it were to happen such like this one so it makes sense that those would be the companies that are not going to be opting into this or getting that workers’ comp.
NASIR: Yeah, and I think the rest are just those small just offices that you may have a few employees. You know, in general, workers’ compensation for an office job is inexpensive but, still, in the same way, it’s unlikely that some injury would occur.
MATT: I don’t know how much of an effect this is going to have outside of Texas.
NASIR: I find it strange that Texas even does this. It just shows you how completely opposite… I really feel Texas and California are on the polar opposites when it comes to how they treat their employees and it’s really fun working in both jurisdictions because, you know, everything. When it comes to non-competes, we’ve talked about how Texas pretty much allows you to do whatever you want so long as it’s reasonably tailored and so forth and they do have some exceptions for medical professionals where, in California, they outright prohibit it and they don’t have all the labor law requirements that California has. It’s pretty much nonexistent. You just basically revert back to the federal law. It’s not atypical to doing business in Texas.
MATT: Yeah. I mean, if this happened in California, the employee probably would have ended up owning the business somehow. Is Kroger based out of Texas?
NASIR: I was going to say Midwestern origin but I don’t think it’s Texas. What’s big down here is HEB which I think is an awesome grocery store. it’s like in-between a regular grocery store and a whole foods.
MATT You were right. It’s in your home state – Cincinnati.
NASIR: Yeah, I was thinking it was going to be Ohio but, you know, I know there’s like fifty Krogers just within a mile distance of my old house in Ohio so I figured it wasn’t there but I didn’t know Cincinnati. That’s good to know.
MATT: Lots of opportunities for you to slip in – well, I guess you’d have to work there first and slip and fall.
NASIR: Well, in Texas though – not in Ohio, obviously.
MATT: You could do that and have this reach a little bit further than Texas somehow because you can argue the precedent. I mean, it’s not going to work out but you know what I mean.
NASIR: You’re going to fail. Well, you know what’s funny about this guy that actually fell is that he describes – or I guess either he described or it was described – that he placed “wet floor” signs around the area and took “baby steps” as he moved through the spill. I’m just wondering, I mean, even if you’re going that slow, how do you fall? There’s something weird about that description, no?
MATT: Yeah, I didn’t think about that. It doesn’t make too much sense. I mean, if I was going to clean up some sort of oil, I definitely wouldn’t just start walking through it. It would only make sense if he had to walk through it to get to the… well, no, it wouldn’t because he said Kroger was grossly negligent and failed to provide him with the Spill Magic system so he wouldn’t have had to walk through the oil to get to anything if that’s what happened. Yeah, it makes no sense, that’s a good point.
NASIR: Yeah.
MATT: Well, I guess here’s the thing. I wonder how much his… medical expenses can be pretty high but it’s probably something that Kroger should just take care of from a PR standpoint.
NASIR: Yeah, you would think and, you know, this is where we can talk about the pros and cons of actually getting workers’ compensation because workers’ comp can actually cover also lost wages too – in part. I don’t think it fully covers it always and there’s also having employees, it’s a benefit, you know, in the sense that employees are given the assurances that, if there is some kind of weird accident or so forth, they’re going to be covered. They’re going to be taken care of and it’s just like any other benefit so, in that way, it’s not too surprising that some of these big stores like Walmart and Kroger don’t provide these kind of benefits because their business model is such to keep prices down and that’s definitely a huge cost for the employer.
MATT: And, really, Kroger is lucky because he was cleaning up in the women’s and men’s restrooms and so, if a customer goes in there, it’s going to be a big problem.
NASIR: That’s what’s ironic about his – the fact description describes he placed “wet floor” signs to prevent premises liability claims.
MATT: Yeah. Well, according to Kroger, he should have read their handbook saying they recommend the employees the Spill Magic system
NASIR: He should have used the Spill Magic system even though it wasn’t provided.
MATT: I was going to say I wonder if they even have it on the shelves there. He could have just grabbed some and used it. Lots of questions!
NASIR: Lots of questions. All right. Well, thanks for joining us. This was a good Texas-based episode.
MATT: Yeah, I think so.
NASIR: One of our second or third ones.
MATT: Someone out there can listen to all 202 – 201 or 202? And let us know how many there are.
NASIR: Yeah, thanks for joining us.
MATT: Keep it sound and keep it smart.

Nasir Pasha & Matt Staub

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The Podcast Where Nasir Pasha and Matthew Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to ask@legallysoundsmartbusiness.com.

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