Labor Code § 406.033 – Employer Liability and Common-Law Defenses (Non-subscribing Employers)

Labor Code § 406.033 Summary

This Texas Labor Code section outlines the rules for personal injury lawsuits brought by employees against employers who do not carry workers’ compensation insurance. It significantly restricts the defenses available to these “non-subscribing” employers. Specifically, an employer cannot defend a personal injury or death claim by arguing that the injured employee was partially at fault (contributory negligence), assumed the risk of injury, or that the injury was caused by a co-worker’s negligence.

However, the statute does allow non-subscribing employers to defend themselves if they can prove the injury was intentionally caused by the employee or occurred while the employee was intoxicated. Critically, employees bringing such lawsuits must still prove that the employer or an agent of the employer was negligent. The statute also states that any attempt by an employee to waive these rights *before* an injury occurs is void and unenforceable. Waivers *after* an injury are only valid if specific, strict conditions are met, including voluntariness, a waiting period, a medical evaluation, and clear, conspicuous written terms.

Purpose of Labor Code § 406.033

The legislative intent behind this statute is to protect employees who work for companies that opt out of the Texas workers’ compensation system. Texas is unique in that it allows most private employers to choose whether or not to subscribe to the state’s workers’ compensation program. For employers who choose not to subscribe, this statute aims to level the playing field by stripping them of powerful common-law defenses that historically made it very difficult for injured employees to recover damages.

By removing defenses such as contributory negligence and assumption of risk, the law encourages non-subscribing employers to prioritize workplace safety and provides a stronger incentive for them to obtain workers’ compensation coverage. It addresses the problem of employees being left without a clear path to compensation for job-related injuries when their employer opts out of the established insurance system, ensuring a greater degree of accountability for employers who choose this path.

Real-World Example of Labor Code § 406.033

Imagine Sarah, a warehouse worker, is injured when a faulty forklift malfunctions, causing a heavy pallet to fall on her leg. Her employer, “Logistics Pro,” does not carry workers’ compensation insurance, making them a “non-subscriber” under Texas law. Sarah decides to sue Logistics Pro for her personal injuries.

Under Labor Code § 406.033, Logistics Pro cannot argue in court that Sarah was partly to blame for the accident because she might have been standing too close to the forklift (contributory negligence). They also cannot claim that Sarah, by taking a job in a warehouse, inherently “assumed the risk” of such injuries. Furthermore, if a fellow employee was operating the forklift and made a mistake, Logistics Pro cannot use that co-worker’s negligence as a defense.

However, Sarah still bears the burden of proving that Logistics Pro was negligent, perhaps by demonstrating they knew the forklift was faulty and failed to repair it, or did not properly train their employees. Logistics Pro’s only available defenses under this statute would be to prove that Sarah intentionally caused the pallet to fall on herself or that she was intoxicated at the time of the incident. This example illustrates how the statute significantly limits an uninsured employer’s ability to avoid liability for workplace injuries.

Related Statutes

• Labor Code § 406.003 – Workers’ Compensation Insurance Coverage: This is the foundational statute referenced directly within § 406.033. It outlines the options for employers regarding workers’ compensation insurance, including obtaining a policy from a licensed insurer, qualifying as a self-insurer, or participating in a governmental entity’s self-insurance fund. Understanding this section helps clarify what it means for an employer to *not* be covered by workers’ compensation insurance, thus triggering the application of § 406.033.
• Labor Code § 406.034 – Workers’ Compensation Insurance Coverage Presumption: This section establishes a presumption that an employer has workers’ compensation insurance coverage unless the employer files a notice of noncoverage. It’s related as it helps determine when an employer would fall under the “non-subscribing” category, thus making § 406.033 applicable.
• Civil Practice and Remedies Code § 33.001 et seq. – Proportionate Responsibility: While § 406.033 specifically bars contributory negligence as a defense for non-subscribers, the general rules of proportionate responsibility found in the Civil Practice and Remedies Code typically govern how fault is assigned among multiple parties in Texas personal injury cases. For non-subscriber cases, § 406.033 creates an exception to these general rules regarding the injured employee’s own negligence.

Case Law Interpreting Labor Code § 406.033

Several key court decisions have interpreted and applied Labor Code § 406.033, shaping its impact on personal injury litigation against non-subscribing employers. For instance, the Texas Supreme Court in Kroger Co. v. Elwood provided important guidance on the employer’s burden under this statute, emphasizing that while the employer loses several common-law defenses, the employee still must establish employer negligence. This case reinforced the distinct framework for non-subscriber claims.

Additionally, cases like Werner v. Wal-Mart Stores, Inc., though a Fifth Circuit case applying Texas law, have discussed the scope of the defenses available to non-subscribing employers and the proper application of the statute’s provisions regarding employee negligence and assumption of risk. These cases help clarify the practical implications of the statute’s limitations on employer defenses and the enduring requirement for the employee to prove negligence on the part of the employer.

Why Labor Code § 406.033 Matters in Personal Injury Litigation

Labor Code § 406.033 is profoundly important in Texas personal injury litigation, particularly for cases involving workplace injuries where the employer has opted out of workers’ compensation coverage. For injured employees and their legal counsel, this statute significantly strengthens their position by eliminating some of the most formidable common-law defenses traditionally used by employers: contributory negligence, assumption of risk, and the fellow-servant rule. This means an injured employee does not have to worry about their own minor fault, the inherent dangers of their job, or a co-worker’s error being used to deny or reduce their compensation.

For personal injury attorneys representing plaintiffs, understanding this statute is crucial for crafting effective legal strategies. It allows them to focus primarily on proving employer negligence, without the added complexity of defending against these abolished defenses. This streamlines the litigation process and improves the likelihood of a favorable outcome for the injured worker.

Conversely, for non-subscribing employers, this statute represents a substantial increase in potential liability. They face a more challenging defense landscape, with only a limited set of affirmative defenses related to the employee’s intentional acts or intoxication. This serves as a significant incentive for Texas employers to reconsider their decision to opt out of the workers’ compensation system, as the financial and legal risks of not having coverage are amplified by this law. For both sides, Labor Code § 406.033 fundamentally reshapes the dynamics of workplace injury claims in the absence of traditional workers’ compensation insurance.