EASTLAND COURT OF APPEALS UPHOLDS TRIAL COURT JUDGMENT AGAINST EMPLOYER BECAUSE EVIDENCE DID NOT CONCLUSIVELY ESTABLISH EMPLOYER’S EXCLUSIVE REMEDY DEFENSE

December 17, 2012

Recently, on December 6, 2012, the Eastland Court of Appeals upheld entry of a trial court’s judgment in favor of an injured worker, holding that trial court did not err when it ruled that the exclusive remedy provision in the Texas Worker’s Compensation Act did not bar the injured employee’s claims.  Synergy Management Group LLC, v. Thompson, C.A. No. 11–11–00229–CV, 2012 WL 6050554 (Tex. App.— Eastland Dec. 6, 2012)

 Kenneth Thompson sued Synergy Management Group, L.L.C. (“Synergy”) and Alliance Savings Co., Inc. (“Alliance Savings”) for injuries he sustained in an accident at Synergy’s facility.  At the time of the accident, Thompson was employed by Alliance.  In its answer, Synergy alleged an affirmative defense that Thompson’s claims against it were barred by the exclusive remedy provision of the Texas Workers’ Compensation  Act  (TWCA).  Synergy  filed  a  traditional  motion  for  summary  judgment  based  on  its exclusive remedy defense, which the trial court denied.  At the time of the trial, Synergy was the only remaining defendant.

 At the conclusion of trial, the jury found in Thompson’s favor on his negligence and gross negligence claims against Synergy and awarded him actual and exemplary damages. The trial court entered a judgment in accordance with the jury’s verdict.  Synergy appealed the judgment, arguing that the trial court erred when it ruled that the exclusive remedy provision in the TWCA did not bar Thompson’s claims against it.

 Synergy’s exclusive remedy defense was based on the provisions of the Staff Leasing Services Act (SLSA). Synergy argued that it proved facts to establish its exclusive remedy defense: (1) that Alliance Savings Co., Inc. was a licensed staff leasing services provider; (2) that Thompson was employed by Alliance Savings Co., Inc. and assigned to work at Synergy; and (3) that Alliance Savings Co., Inc. obtained workers’ compensation insurance that covered Thompson. Synergy argued that Thompson’s claims against it were thus barred by the exclusive remedy provision of the TWCA.

 In its appeal brief, Synergy relied on evidence it had presented to the trial court in support of its motion for summary judgment as well as some exhibits that Synergy had attached to its motion for JNOV but which were not admitted at trial. The appellate court refused to consider any evidence that had not been admitted during the trial on the merits.

After analyzing the evidence, the court concluded that the evidence did not conclusively establish Synergy’s exclusive remedy defense.  First, Synergy did not offer any evidence that Alliance Savings was a licensed staff  leasing  services  company.  Synergy  could  not,  therefore,  claim  the  benefit  of  Alliance  Savings’ workers’ compensation insurance.

Second, Synergy failed to establish that Alliance Savings was a license holder under the SLSA. During trial, Synergy introduced into evidence a copy of a Staff Leasing Services License that was issued to “Alliance Staffing Solutions, Inc.”  However, Synergy did not present evidence explaining the relationship, if any, between  Alliance  Savings  and  Alliance  Staffing  Solutions,  Inc.   The  SLSA  prohibits  a  person  from engaging in staff leasing services without a license.  In this case, Alliance Staffing Solutions, Inc. was the license holder.  The SLSA prohibits a license holder from conducting business “under any name other than that specified in the license” or “under any fictitious or assumed name without prior written authorization from the department.” It also provides that licenses issued under the SLSA are not assignable. Therefore, Alliance Staffing Solutions,  Inc.  could  not  conduct  business  under  any other name,  such  as  Alliance Savings.  Therefore, Synergy failed to meet its burden of showing that Alliance Savings Co., Inc. was a license holder under the SLSA.

The Court ultimately concluded that the evidence did not conclusively establish Synergy’s exclusive remedy defense and the trial court did not err when it denied Synergy’s motion for JNOV.