Thomas A. Robinson notes that virtually all states have “statutory employer” (sometimes referred to as “contractor-under”) statutes that make general contractors liable for workers’ compensation benefits for the employees of subcontractors, usually conditioned upon the uninsured status of the subcontractor’s employee.  Because the general contractor in such circumstances is, in effect, made the employer for workers’ compensation purposes, immunity from tort suit is generally extended to the general contractor.  The rule is not nearly so clear in the case of premises owners who forego the use of a general contractor and who act as their own contractor for the project—contacting, contracting with, and overseeing the entire project on their own.  Do these premises owners enjoy similar immunity from tort suits filed by injured employees of a “subcontractor?”

In a recent Texas decision, Entergy Gulf States, Inc. v. Summers, 2007 Tex. LEXIS 799, 50 Tex. Sup. J. 1140 (August 31, 2007), reh’g granted, 2008 Tex. LEXIS 301 (April 4, 2008), the Supreme Court of Texas agreed to reconsider its August 2007 decision wherein it held that a premises owner can also be considered a general contractor.  Apparently surrendering to a blistering level of criticism, the high court will hear arguments (the date for re-argument has not yet been set) as to whether its Entergy decision was contrary to the clear intent of the state legislature which, in 1993, had amended the general contractor statute, but in doing so also indicated that no substantive change had been intended. 

Robinson's expert commentary analyzes the Entergy decision and the Texas statute that affords immunity in some circumstances to general contractors, surveys the applicable rules within other jurisdictions that have considered the issue, and observes that it is up to the Texas legislature to clarify its intentions on the issue. The issue is made more complex, and arguably more controversial, by the fact that workers’ compensation coverage in Texas is optional for employers and not compulsory.  This has led many within the state to view workers’ compensation as something that is imposed upon unwilling workers by strong corporate elements when in fact the workers’ compensation scheme of providing medical and disability benefits should be understood as a compromise between employer and employee, with each side giving up some rights, but also receiving benefits.  Robinson argues that, if the compromise is too one-sided, it is up to the legislature, not the courts, to strike a more appropriate solution.

To read Robinson's additional comments and practice points on this topic, see his expert commentary article.