Texas Health Enterprises, Inc. v. Kirkgard

Citation882 S.W.2d 630
Decision Date14 September 1994
Docket NumberNo. 09-93-334,09-93-334
PartiesTEXAS HEALTH ENTERPRISES, INC., Appellant v. Teresita Belen KIRKGARD, Thelma Jean Rogers, Jean Brown, Mercy Smith, Maria Leal, Merle Kehl, Beatrice Reyna, Melissa Mikle Kramer, and Marie Chapman, Appellees. CV.
CourtCourt of Appeals of Texas

Mark Rayburn, Strong, Pipkin, Nelson & Bissell, Beaumont and Stephen Greenberg, Small, Craig & Werkenthin, Austin, for appellant.

Lindsey B. Whisenhant and Robert M. Wood, Woodville, for appellees.

Before WALKER, C.J., and BROOKSHIRE and BURGESS, JJ.

OPINION

BURGESS, Justice.

Teresita Belen Kirkgard and Thelma Jean Rogers initiated this action, alleging Texas Health Enterprises ("T.H.E.") wrongfully terminated their employment for refusing to sign a waiver of their rights under the Texas Workers' Compensation Act. The case was removed to federal court, then remanded to state court. The federal district court's order stated: "it is untrue that Plaintiffs' allegations are necessarily federal in character in that they fall under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq." Kirkgard and Rogers obtained an interlocutory partial summary judgment on the issue of liability under TEX.REV.CIV.STAT.ANN. art. 8307c. 1 Connie Jones, Jean Brown, Mercy Smith, Maria Leal, Cathy Stewart, Merle Kehl, Beatrice Reyna, Melissa Mikle, and Marie Chapman joined the suit as plaintiffs. 2 The trial court directed a verdict of liability for violation of Article 8307c. The jury found total actual damages of $65,096 and exemplary damages of $765,000. Appellant raises fourteen points of error, which we address as grouped in appellant's brief.

T.H.E. is a non-subscriber to the Texas workers' compensation system. T.H.E. developed an employee injury benefit plan under ERISA 3. The benefits provided in the plan were not comparable to benefits provided through workers' compensation. T.H.E. demanded all its employees execute a waiver of all workers' compensation and common law rights to sue T.H.E. for on-the-job injuries. T.H.E. fired the appellees for refusing to sign the waiver. 4

The first six points of error aver:

Point of error one: The District Court erred in holding, as a matter of law, that Appellant had violated Art. 8307c. V.T.C.S., and in granting Appellees' (Plaintiffs') motion for a directed verdict of liability for violation of Art. 8307c V.T.C.S. while simultaneously finding that none of the factual prerequisites to violation of Art. 8307c had occurred.

Point of error two: The District Court erred by granting the Motion for Partial Summary Judgment of Appellees KIRKGARD and ROGERS, and by denying Appellant's Motion for Summary Judgment.

Point of error three: The District Court erred by attempting to conform its rulings on motions for instructed verdict and the instructions in the Charge to the jury with its earlier erroneous summary judgment ruling.

Point of error four: The District Court erred by denying Appellant's motions for instructed verdict.

Point of error five: The District Court erred by denying Appellant's Motion for Judgment NOV and Motion to Vacate Judgment.

Point of error six: The court committed fundamental error by erroneously instructing the jury in the charge that Defendant had violated the law, while simultaneously finding that none of the factual prerequisites to violation of Art. 8307c had occurred.

The question presented by the parties is whether former Article 8307c applies to situations where the employee of a non-subscribing employer is fired for refusing to waive her right to sue for injuries under the Texas Workers' Compensation Act. Employees of non-subscribers are immune to employer defenses of contributory negligence, assumption of the risk, and the fellow servant rule. TEX.REV.CIV.STAT.ANN. art. 8308-3.03, see now TEX. LABOR CODE ANN. § 406.033. Article 8308-3.09, now found in the Labor Code at section 406.035, provides that any agreement to waive the employee's right to compensation is void. T.H.E. not only forced its employees to waive their rights under the act, it forced its employees to waive their rights under the common law as well.

Article 8307c refers to "employees" without limitation to employees of subscribing employers. Thus, the statute applies equally to employees of subscribers and non-subscribers. Hodge v. BSB Investments, Inc., 783 S.W.2d 310 (Tex.App.--Dallas 1990, writ denied). Courts of appeal have recognized the validity of a cause of action under article 8307c where employment is terminated before the employee has actually filed a claim. Mid-South Bottling Co. v. Cigainero, 799 S.W.2d 385 (Tex.App.--Texarkana 1990, writ denied); Texas Steel Co. v. Douglas, 533 S.W.2d 111 (Tex.Civ.App.--Fort Worth 1976, writ ref'd n.r.e.). These cases recognize that evidence that an employee took steps towards instituting a proceeding under the Act is sufficient to support a finding that the employee "filed a claim." This case differs from those cited by appellees, in that the appellees did not sustain physical on-the-job injuries before they were fired. However, T.H.E.'s demands violated Article 8308-3.09, which prohibits waiver of rights under the Act. T.H.E. terminated these employees for taking steps preparatory to maintaining a proceeding under the workers compensation act. We find no error by the trial court. Points of error one through six are overruled.

Point of error seven maintains: "The District Court erred in overruling Appellant's pleas to the jurisdiction and special exception B; and the Court compounded that error and exceeded its jurisdiction by holding that Defendant's ERISA Plan is 'contrary to public policy, void and illegal.' " T.H.E. contends the trial court exceeded its jurisdiction by ruling the entire ERISA plan is void as against public policy. The court's order granting partial summary judgment contains very broad language, but the trial court clarified its ruling in the judgment, which states: "The waiver defendant imposed on its employees as a condition of employment is contrary to public policy, void, and illegal." [emphasis added] It appears the trial court actually ruled the waiver was void, rather than the ERISA plan.

Hon. Robert M. Parker, Chief Judge of the United States District Court, Eastern District of Texas, presumably resolved this issue adversely to T.H.E. when he remanded the case back to state court because "it is untrue that Plaintiffs' allegations are necessarily federal in character in that they fall under [ERISA]." In rejecting a remarkably similar argument in an unrelated case involving the same employer, another United States District judge held: "[N]othing in either ERISA's text or legislative history indicates that Congress meant to override state laws prohibiting employers from forcing employees to forego common-law rights by compelling participation in an ERISA plan." Sperling v. Texas Health Enterprises, Inc., 791 F.Supp. 662, 664 (S.D.Tex.1992). Appellees are not seeking benefits under the ERISA plan. This lawsuit concerns a waiver of statutory and common law rights, a matter which relates to the employer-employee relationship rather than appellees' relationship with T.H.E. as an ERISA plan provider or administrator. Furthermore, the waiver is an attempt to avoid liability for T.H.E.'s negligence. See Barnhart v. Kansas City, M. & O. Ry. Co. of Texas, 107 Tex. 638, 184 S.W. 176, 179 (1916); Hazelwood v. Mandrell Industries, Co., 596 S.W.2d 204 (Tex.Civ.App.--Houston [1st Dist.] 1980, writ ref'd n.r.e.). The waiver is not a material part of the ERISA plan because it involves the exercise of traditional state authority and bears only an incidental effect on the ERISA plan. Westbrook v. Beverly Enterprises, 832 F.Supp. 188 (W.D.Tex.1993). We find the trial court properly exercised jurisdiction in this case. Point of error seven is overruled.

Points of error eight through ten contend:

Point of error eight: The District Court erred by creating, and allowing retroactive recovery upon, a new and unprecedented cause of action for wrongful termination of employment....

Point of error nine: The District Court erred by overruling Defendant's special exceptions.

Point of error ten: The District Court erred by refusing to submit to the jury in the Charge substantially correct instructions regarding employment at will that Appellant submitted to the Court for inclusion in the Charge.

Appellant argues the appellees failed to state a claim for termination of employment which was an exception to the employment at will doctrine expressed in East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99 (1888). The employees recovered pursuant to Article 8307c. An employment agreement limiting a non-subscribing employer's liability for job-related injuries is void as against public...

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