in Re iWORKS Personnel, Inc., Luis Trevino, and Haydee Gutierrez

• Court: Court of Appeals of Texas
• Decided: March 13, 2015
• Docket: 01-15-00235-CV
• Status: Published

Opinion

ACCEPTED 01-15-00235-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 3/13/2015 8:34:01 PM 01-15-00235-CV CHRISTOPHER PRINE CLERK

Local Rule Notice of and Assignment of Related Case in Original Proceedings FILED IN As required by the Local Rules Relating to Assignment of 1stRelated COURT OF APPEALS Cases to HOUSTON, TEXAS and Transfers of Related Cases between the First and Fourteenth Courts of 3/13/2015 8:34:01 PM Appeals, I certify that the following related appeal or original proceeding has been CHRISTOPHER A. PRINE previously filed in either the First Court of Appeals: Clerk

Guillory v. Seaton, LLC d/b/a Staff Management

Appellate Case No. 01-14-00379-CV

Trial Case No. 2012-61407A, 113th District Court, Harris County, Texas

Respectfully submitted,

/s/ David N. Anderson DAVID N. ANDERSON TBN: 00797951 THE ANDERSON LAW FIRM 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (888) 824-5624 – Fax danderson@lodna.net FILED IN st 1 COURT OF APPEALS HOUSTON, TX MAR 13, 2015 01-15-00235-CV CHRISTOPHER A. PRINE, CLERK No. __________________

IN THE COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS

In re IWORKS PERSONNEL, INC., LUIS TREVINO, AND HAYDEE GUTIERREZ,

Relators

Original Proceeding on Petition for Writ of Mandamus From the 113th District Court, Harris County, Texas Honorable Michael Landrum, Judge Presiding, Respondent Cause No. 2012-61407

PETITION FOR WRIT OF MANDAMUS

DAVID N. ANDERSON TBN: 00797951 THE ANDERSON LAW FIRM 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (888) 824-5624 – Fax danderson@lodna.net

ATTORNEY FOR DEFENDANTS IWORKS PERSONNEL, INC., LUIS TREVINO, and HAYDEE GUTIERREZ

ORAL ARGUMENT REQUESTED Identity of Parties and Counsel Relators iWORKS Personnel, Inc., Luis Trevino, and Haydee Gutierrez

Counsel for Relators David N. Anderson Texas Bar No. 00797951 THE ANDERSON LAW FIRM 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (888) 824-5624 – Fax danderson@lodna.net

Respondent The Honorable Michael Landrum 113th Judicial District Court Harris County Civil Courthouse 201 Caroline, 10th Floor Houston, TX 77002 (713) 368-6113 – Telephone

Real Parties in Interest Mose Guillory and Mary Guillory

Counsel forReal Party in Interest Bradford J. Gilde Texas Bar No. 24045941 bjg@gildelawfirm.com GILDE LAW FIRM 55 Waugh, Suite 850 Houston, TX 77007 (281) 973-2772 – Telephone (281) 973-2771 – Fax

Co-Defendant / Cross-Defendant Waste Management, Inc.

Counsel for Co-Defendant / B. Lee Wertz, Jr. Cross-Defendant Texas Bar No. 00797796 lwertz@munsch.com MUNSCH, HARDT, KOPF, AND HARR, P.C 700 Milam Street, Suite 2700 Houston, Texas 77002-2806 (713) 222-1470– Telephone (713) 222-1475– Fax

ii Table of Contents Identity of Parties and Counsel ......................................................................... ii Table of Contents ............................................................................................. iii Table of Authorities ...........................................................................................v Cases ......................................................................................................v Statutes .................................................................................................. vi Other Authorities ................................................................................... vii Rules ..................................................................................................... vii Regulations ........................................................................................... vii I. Statement of the Case................................................................................... 2 III. Issue Presented .......................................................................................... 4 Did the trial court abuse its discretion when it refused to dismiss claims over which it has no subject matter jurisdiction because the Division of Worker’s Compensation has exclusive jurisdiction and Plaintiff has not exhausted his administrative remedies? ............................................... 4 IV. Statement of Facts ...................................................................................... 4 V. Summary of Argument ................................................................................. 6 VI. Standard of Review..................................................................................... 7 VII. Argument ................................................................................................... 8 A. The trial court does not have subject matter jurisdiction and any judgment it renders is void as a matter of law. ........................................................ 8 B. The Act demonstrates the legislature’s intent that the Act provide the exclusive remedy for on-the-job injuries. ............................................... 10 C. Through its broad rule making and enforcement provisions, the Act empowers the DWC to resolve disputes, enforce compliance, and punish offenders. ................................................................................... 13 D. Real Party’s failure to exhaust his administrative remedies under the Act precludes the trial court’s exercise of jurisdiction over this matter. . 16 1. Real Party consciously chose to circumvent the Act in pursuit of common-law remedies for his work-place injury. ................................. 16 2. The laws embodied in the Act and the rules promulgated by the DWC mandate that iWORKS policy was in effect on the date that Real Party was injured at work. ............................................................................. 19 E. The DWC has exclusive jurisdiction to determine coverage. .................. 28

iii F. The newly released Crawford opinion confirms the Court’s prior findings that it is the intent of the legislature that the DWC have exclusive jurisdiction out of work-place injury claims and that even artful pleadings will not let Plaintiff’s recast their claims outside of the purview of the Act. ............................................................................................................... 34 VIII. Conclusion ............................................................................................. 37 IX. Prayer ....................................................................................................... 39 Certificate of Service ...................................................................................... 40 Verification and Certificate of Compliance ..................................................... 41 Appendix ........................................................................................................ 42

iv Table of Authorities

Cases

Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988) ........ 10, 14 Arranda v. Ins. Co. of North Amer., 748 S.W.2d 210 (Tex. 1988)................. 11, 16 Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000) ............... 7, 9 Cain v. Bain, 709 S.W.2d 175 (Tex. 1986 ........................................................... 33 Carr v. Carroll Company, 646 S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd n.r.e.) ................................................................................................................ 32 Carroll v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010) ............................................. 9 Cash Am. Int’l., Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000)........................... 17 City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2014, per curium) . 9, 17, 18 County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002) ....................... 7, 8 Cunningham Lindsey Claims Mgmt. v. Snyder, 291 S.W.3d 472, 477 (Tex.App.— Houston [14th Dist.] 2009, pet. denied) ............................................................ 18 Dubai Petrol. Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000) ....................................... 9 Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 453 (Tex., 2009) ......... 20 Gonzales v. Cigna Ins. Co. of Tex, 924 S.W.2d 183, 184-87 (Tex.App.—San Antonio 1996, write denied) ............................................................................. 36 Houston Gen. Ins. Co. v. Ass’n Cas. ins. Co., 977 S.W.3d 634, 636 (Tex.App.— Tyler 1998, no pet.) .......................................................................................... 31 Houston Gen. Ins. Co. v. Association Cas. Ins. Co., 972 S.W.2d 634, 636 (Tex.App.—Tyler 1998, no pet.) ....................................................................... 36 Huffman v. S. Underwriters, 133 Tex. 354, 128 S.W.2d 4, 6 (1939) ................... 20 Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139 S.W.3d 789, 792 (Tex. App.—Dallas 2004, no pet.). ................................................................... 11 In Re Crawford, No. 14-0256 (Tex. February 27, 2015) (per curiam) ...... 11, 37-39 In re Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004). ........................................ 4 In Re Liberty Ins. Corp., 321 S.W.3d 630 (Tex.App.—Houston [14th Dist.] 2010) (orig. proceeding) ............................................................................................. 10 In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327 329 (Tex. 2009) ................. 4, 40 In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig. proceeding) (per curiam) .............................................................................. 4, 10 In re Liberty Mutual Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009).................... 3 In Re Mid-Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex.App.—Houston [1st Dist] 2012) (orig. proceeding) ..................................................................... 15 In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex. 2008) .......................... 11, 15, 22 In Re Sw. Bell Tel. Co., 235 S.W.3d 619, 624 (Tex. 2007) ................................... 4 In Re Tex. Mut. Ins. Co. ...................................................................................... 32 In Re United Servs. Auto Ass’n, 307 S.W.3d 299, 209 (Tex. 2010)...................... 9 In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 306 (Tex.2010) ..................... 10

v Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747 (Tex.App.— Houston [14th Dist.] 2005, no pet.) ................................................................... 31 Liberty Mut. Ins. Co. v. Adcock, 412, S.W.3d 492, 495 (Tex. 2013) ................... 14 Millers' Mut. Cas. Co. v. Hoover, 235 S.W. 863, 864 (Tex. Comm'n App.1921, judgm't adopted) .............................................................................................. 22 Morales v. Liberty Mut. Sinc. Co., 241 S.W.3d 514 (Tex. 2007)....................... 31, 33 Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 805 (Tex. 1989). ...... 8 Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238 (Tex. 2012) ...... 20 Richmond v. L. D. Brinkman & Co. (Texas) Inc., 36 S.W.3d 903 (Tex. App.-Dallas 2001, pet. denied) ............................................................................................ 33 Saenz v. Fidelity & Guaranty Insurance Underwriters ........................................ 15 Scwartz v. Ins. Co. of Pa. ...................................................................................... 7 Southern Sur. Co. v. Inabnit, 1 S.W.2d 412, 413-414 (Tex.Civ.App.-Eastland 1927, no writ) ................................................................................................... 22 Subaru of Am. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) 15 Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). ...... 7 Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004) ........ 7 Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999) ............................ 7 Tex. educ. Agency v. Cypress-Fairbanks I.S.D., 830 S.w.2d 88, 90 (Tex. 1992) 18 Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 344 (Tex. 2012) ........... 16, 38, 39 Tex. Worker’s Comp. Comm’n v. Garcia, 893 S.W.2d 504, 517 n.15 (Tex. 1995) 9 Texas Workers’ Compensation Insurance Fund v. DEL Industrial, Inc., 35 S.W.3d 591 (Tex. 2000) ................................................................................................ 32 U.S. Fid. & Guar. Co. v. Goudeau, 272 S.W.3d 603, 610 (Tex. 2008) ............... 26 Waco ISD v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000) ....................................... 10

Statutes1

§ 91.001, et seq. .................................................................................................. 29 § 93.004 .............................................................................................................. 29 §§ 401.001 – 451.003 ........................................................................................... 1 § 401.011 ............................................................................................................ 32 § 401.012 ............................................................................................................ 32 § 401.013 ............................................................................................................ 36 § 402.001 ................................................................................................ 10, 21, 34 § 402.00111 ........................................................................................................ 21 § 402.00114 ........................................................................................................ 35 § 402.00117 ........................................................................................................ 21 § 402.061 ............................................................................................................ 21 § 406.002 ............................................................................................................ 21 § 406.008 ............................................................................................................ 26

1 All cites are to the Texas Labor Code. vi § 406.031 ............................................................................................................ 32 § 406.032 ............................................................................................................ 36 § 406.033 ............................................................................................................ 36 § 408.001 ...................................................................................................... 10, 13 § 409.004 ...................................................................................................... 18, 20 § 409.005 ............................................................................................................ 10 § 409.021 ............................................................................................................ 11 § 410.165 ............................................................................................................ 30 § 410.205 ............................................................................................................ 11 § 410.301 ...................................................................................................... 31, 32 § 414.002 ............................................................................................................ 35 § 415.001 ............................................................................................................ 11 § 415.002 ............................................................................................................ 11 § 415.008 ............................................................................................................ 11 § 415.021 ...................................................................................................... 11, 35 § 415.031 ............................................................................................................ 11 § 415.034 ............................................................................................................ 11

Other Authorities

Appeals Panel No. 021771 (Division of Worker’s Compensation, September 3, 2002) ................................................................................................................ 29 Appeals Panel No. 030660 (Division of Worker’s Compensation, April 28, 2003) ......................................................................................................................... 29 Appeals Panel No. 101718 (Division of Worker’s Compensation, March 21, 2011) ......................................................................................................................... 30

Rules

Tex. Rule of Civ. P. 198.3 ................................................................................... 24

Regulations

28 TEX. ADMIN. CODE § 43.10 ........................................................................ 26, 27 28 TEX. ADMIN. CODE § 110.1 .............................................................................. 27

vii No. __________________

In re IWORKS PERSONNEL, INC., LUIS TREVINO, AND HAYDEE GUTIERREZ,

Original Proceeding on Petition for Writ of Mandamus From the 113th District Court, Harris County, Texas Honorable Michael Landrum, Judge Presiding, Respondent Cause No. 2012-61407

TO THE HONORABLE FIRST COURT OF APPEALS:

This is a worker’s compensation case. Through artful pleading Plaintiff has

sought to recast this case as a non-subscriber case, a breach of contract case, a

fraud case, a third-party beneficiary case, and so on. However, the Division of

Worker’s Compensation has exclusive jurisdiction over Plaintiff’s claims, no matter

how artfully plead, and the trial court lacks subject matter jurisdiction until Plaintiff

has exhausted the administrative remedies provided by the Worker’s

Compensation Act2 (the “Act”).

2TEXAS LABOR CODE, Title V, Subtitle A (“Texas Workers’ Compensation Act), §§ 401.001 – 451.003. Unless otherwise indicated, all code references in this petition refer to the Texas Labor Code.

1 This issue is of vital importance because the carefully balanced dispute

resolution and enforcement procedures that the legislature built into the system

are lost if a claimant can circumvent the Act by refusing to pursue his administrative

remedies and simply recasting his claims as common-law or extra-statutory

causes of action. This Court should exercise its mandamus jurisdiction in this case

and order the trial court to dismiss Plaintiff’s causes of action.

I. Statement of the Case Nature of the case. Relator, iWORKS Personnel, Inc. (“iWORKS”) is a

temporary staffing company who contracted with Defendant, Waste Management,

Inc. (“WM”) to provide temporary labor at its waste processing facility. Real Party,

Mose Guillory (“Real Party”),3 was a temporary worker assigned by iWORKS to

work at WM’s facility. Real Party was injured on August 5, 2012 while working at

the WM facility. He subsequently sued iWORKS,4 WM, Inc. (“WM”), and Seaton,

LLC d/b/a Staff Management (“SM”),5 a third party administrator of WM’s

temporary labor program.

3 Real Party’s wife, Mary Guillory, is a Plaintiff in this case. Plaintiffs’ Fifth Amended Petition makes no express claims on her behalf, but it does seek damages for loss of consortium and loss of household services. Her claims are all derivative of Real Party’s claims. As used in this petition, “Real Party” refers to both Mose Guillory and Mary Guillory. 4 Plaintiff also sued iWORKS’ CEO, Luis Trevino, and President, Haydee Gutierrez, in their individual capacities. They joined iWORKS in this petition. As used in this petition, “iWORKS” refers to both the company and the two individuals. 5The trial court granted SM’s Rule 91a motion to dismiss. Plaintiff’s appeal is currently pending before this Court (No. 01-14-00379-CV).

2 Trial court. The Honorable Michael Landrum, 113th Judicial District Court of

Harris County, Texas (“Respondent” or “trial court” herein).

Proceedings in the trial court. Relators challenged the trial court’s subject

matter jurisdiction based upon the exclusive jurisdiction of the Texas Department

of Insurance, Division of Worker’s Compensation (“DWC”) and Real Party’s failure

to exhaust the administrative remedies available under the Act before the DWC.

Relators also challenged Real Party’s causes of action based on traditional and no

evidence motions for summary judgment, aside from the jurisdictional challenges.

The trial court granted Relators’ challenges to numerous of Real Party’s causes of

action, but denied Relators’ jurisdictional challenges on the remaining claims and

causes of action by Order dated February 20, 2015.6 It is from the trial court’s

assertion of jurisdiction over those remaining claims that Relators seek mandamus

relief.

II. Statement of Jurisdiction

This Court has jurisdiction pursuant to Tex. Gov’t Code § 22.002(a).

Mandamus relief is appropriate to correct a trial court’s assertion of subject

matter jurisdiction over a case that lies squarely within the exclusive jurisdiction

of an administrative agency, here the DWC over the Texas workers’

6 Tab 1

3 compensation system.7 This erroneous assertion of jurisdiction is an abuse of

discretion. Permitting the trial court to improperly assert jurisdiction results not

only in hardship to Relators, but also interferes with the “legislatively mandated

function and purpose” of the DWC, undermines the Legislature’s intent to create

a comprehensive scheme to govern workers’ compensation claims in Texas,8

and effectively abrogates the Act, leaving Relators with no adequate remedy by

appeal.9 This court can correct the trial court’s assertion of subject matter

jurisdiction here through a writ of mandamus because the underlying claims lie

within the exclusive jurisdiction of the DWC.

III. Issue Presented Did the trial court abuse its discretion when it refused to dismiss claims over which it has no subject matter jurisdiction because the Division of Worker’s Compensation has exclusive jurisdiction and Plaintiff has not exhausted his administrative remedies?

IV. Statement of Facts Real Party was severely injured on August 5, 2012 while in the course of

his employment at Waste Management’s waste reclamation facility in Houston,

Texas. Real Party was a temporary worker recruited by IWORKS and assigned

to operate a front-end loader at WM’s facility. At some point WM reassigned Real

7In re Liberty Mutual Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009), citing In Re Sw. Bell Tel. Co., 235 S.W.3d 619, 624 (Tex. 2007); In re Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004). 8 Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 344 (Tex. 2012) 9See In re Entergy, 142 SW.3d at 321; In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d at 328.

4 Party to operate a Harris Baler.10 Real Party was injured when he entered the

baler to clear a jam without depowering the machine. The baler activated and

severed his right leg below the knee and half of his left foot.

This lawsuit arises from Real Party’s attempt to recover damages for the

injuries he sustained while employed at the WM facility. Throughout this suit Real

Party has asserted various causes of action, some sounding in tort (negligence,

gross negligence, negligence per se, negligent hiring, training, and supervision,

common law fraud, fraud by non-disclosure, and negligent undertaking); some

sounding in contract (breach of contract as third-party beneficiary to the iWORKS

/ WM service agreement and breach of contract as a third-party beneficiary of the

WM / SMX agreement). Real Party has also alleged numerous theories of

vicarious liability (respondeat superior, joint enterprise, and partnership liability).

Real Party’s claims against iWORKS have been narrowed down to negligence,

negligence per se, gross negligence, negligent hiring, training, and supervision,

breach of contract, respondeat superior, partnership liability, and joint enterprise

liability.11 Regardless of how artfully or inventively labeled or recast, all of

10 A Harris Baler is essentially a gigantic trash compactor which compacts sorted refuse into dense bales. The material is fed into the baler via a conveyor belt which dumps the material into the compacting chamber. 11 The trial court denied iWORKS’ motion for summary judgment on all causes except for breach of contract, which it granted. However, the trial court declined to dismiss the same contract claims against Trevino and Gutierrez, even though they were neither parties nor signatories to the contract in their individual capacities. The trial court also dismissed Plaintiff’s negligence claims against Trevino and Gutierrez, but left the gross negligence claims against them intact. Thus, while as a matter of law Trevino and Gutierrez are not negligent, they are still subject to liability on Plaintiff’s gross negligence claims. Likewise, 5 Plaintiff’s claims flows directly from his on-the-job injury.

V. Summary of Argument

Real Party’s claims fall within the exclusive jurisdiction of the DWC, and

therefore, the trial court is without subject matter jurisdiction to consider these

claims until they have exhausted all administrative remedies provided for under

the Act. Allowing a participant in the worker’s compensation system to pursue such

claims in a civil action is incompatible with the comprehensive administrative

processes and other remedies in the Act.

Despite Real Party’s attempts to avoid the Act by creatively pleading their

complaints, the essence of their suit falls squarely under the purview of the DWC.

To hold otherwise would allow claimants to easily avoid the exclusive jurisdiction

of the Act by simply relabeling their claims as other common law or statutory

theories, even though such claims are equally incompatible with the administrative

processes and other remedies in the Act. This is precisely why the Texas Supreme

Court has repeatedly emphasized the legislative intent that there be no alternative

remedies available outside the Act.

they are also subject to same breach of contract liability that the trial court found their company, a party to the contract, not liable for as a matter of law. The trial court denied Relators’ motion to reconsider these paradoxical results.

6 VI. Standard of Review This Court set forth the proper standard of review in in this matter in Scwartz

v. Ins. Co. of Pa.12

A plea to the jurisdiction contests a trial court's subject matter jurisdiction. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999). Whether a court has subject matter jurisdiction is a matter of law. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004). Accordingly, we review a challenge to the trial court's subject matter jurisdiction de novo. Id. at 228.

When reviewing a plea to the jurisdiction, we must look to the allegations in the pleadings, construe them in the plaintiff's favor, and consider the pleader's intent. See County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). In doing so, we consider the facts alleged in the petition, and to the extent relevant to the jurisdictional issue, any evidence submitted by the parties to the trial court. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000). The plaintiff bears the burden to allege facts affirmatively demonstrating the trial court's jurisdiction to hear a case. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). If a plaintiff pleads facts that affirmatively demonstrate an absence of jurisdiction and the jurisdictional defect is incurable, then the cause is properly dismissed. Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 805 (Tex. 1989). However, when the plaintiff fails to plead facts that establish jurisdiction, but the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the plaintiff should be afforded the opportunity to amend. Brown, 80 S.W.3d at 555. Plaintiff’s Fifth Amended Petition pleads facts and cites exhibits that place this

matter squarely within the exclusive jurisdiction of the DWC. The evidence

considered by the trial court in relation iWORKS’ plea to the jurisdiction also

supports the DWC’s exclusive jurisdiction.

12 274 S.W.3d 270, 273-74 (Tex. App.—Houston [1st Dist.] 2008, pet. denied).

7 In support of this petition iWORKS has provided this Court with the following

pleadings:

1) Plaintiff’s Fifth Amended Petition;13 2) iWORKS’ Plea to the Jurisdiction;14 3) iWORKS’ Supplemental Plea to the Jurisdiction15; and 4) Plaintiff’s Response to iWORKS’ Plea to the Jurisdiction.16

All exhibits submitted with these pleadings and considered by the trial court are

found in the Appendix.17 No party offered sworn testimony at the oral hearing on

this matter. Relators have ordered a transcript of the oral argument and will

supplement the mandamus record as soon as the transcript is received from the

court reporter.

VII. Argument A. The trial court does not have subject matter jurisdiction and any judgment it renders is void as a matter of law.

The trial court erred when it exercised jurisdiction in this case because it

does not have subject-matter jurisdiction over Plaintiff’s claims related to his injury

at work. Without subject-matter jurisdiction the trial court cannot render a valid

judgment in this matter.18 “Subject matter jurisdiction is ‘essential to a court’s

13 Tab 2 (hereinafter “Petition”). 14 Tab 5 15 Tab 12 16 Tab 15 (hereinafter “Response”) 17 Real Party attached three exhibits totaling 561 pages to his Response. Real Party’s

exhibits are submitted to this Court in the same form as submitted to the trial court. 18 City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2014, per curium)

8 power to decide a case.’”19 Subject-matter jurisdiction cannot be waived, nor can

it be given or taken away by consent.20 “A judgment rendered without subject

matter jurisdiction cannot be considered final.”21

Lack of subject-matter jurisdiction makes a judgment void, not just

voidable.22 Lack of subject-matter jurisdiction is fundamental error and can be

raised at any time.23 Lack of subject-matter jurisdiction can even be raised for the

first time on appeal. “Not only may a reviewing court assess jurisdiction for the

first time on appeal, but all courts bear the affirmative obligation ‘to ascertain that

subject matter jurisdiction exists regardless of whether the parties have questioned

it.’”24 Furthermore, the failure to grant a plea to the jurisdiction for failure to exhaust

administrative remedies with the DWC is subject to this Court’s mandamus

review.25

19 Id. (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000)). 20 Carroll v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010). 21 Rhule, 417 S.W.3d at 442 (citing Dubai Petrol. Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000)). 22 In Re United Servs. Auto Ass’n, 307 S.W.3d 299, 209 (Tex. 2010). 23Tex. Worker’s Comp. Comm’n v. Garcia, 893 S.W.2d 504, 517 n.15 (Tex. 1995) (noting that a trial court can question its subject-matter jurisdiction even without a motion by either party). 24Waco ISD v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000); see Rhule, 417 S.W.3d at 442 (quoting In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 306 (Tex.2010)). 25 See In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig. proceeding) (per curiam); In Re Liberty Ins. Corp., 321 S.W.3d 630 (Tex.App.—Houston [14th Dist.] 2010) (orig. proceeding).

9 B. The Act demonstrates the legislature’s intent that the Act provide the exclusive remedy for on-the-job injuries.

The Act provides a compensation system for “personal injuries sustained

by an employee in the course and scope of his employment.”26 In exchange for

prompt remuneration of benefits to the employee with no burden of proof as to

negligence, the Act prevents employees from seeking common law remedies

against the employer, agent or employee of the employer for on-the-job

injuries.27 The Act also limits employers’ exposure to the uncertainties of

litigation costs and awards.28 Recovery under the Act is intended to be an

injured employee’s sole remedy for work-related injuries.29

The legislature empowered the DWC to administer and operate the

workers’ compensation system of Texas.30 The system’s processes are initiated

by the worker reporting an occupational injury or disease to the employer, after

which the employer must report the injury claim to the carrier. 31 Disputes

regarding general compensability and extent of injury are addressed under

26 Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988). 27Id.; see § 408.001(a); Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139 S.W.3d 789, 792 (Tex. App.—Dallas 2004, no pet.). 28See Ruttiger, 381 S.W.3d at 441, citing In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex. 2008). 29 Hulshouser, 139 S.W.3d at 792. 29 In Re Crawford at p. 9, No. 14-0256 (Tex. February 27, 2015) (per curiam) (a copy is attached to the Appendix at Tab 22). 30 § 402.001(b). 31 § 409.005(a).

10 Chapter 410 of the Texas Labor Code, while Chapter 413 controls disputes

concerning specific medical benefits, including medical fees disputes and

medical necessity disputes. This matter falls under Chapter 410

Additional safeguards are built into the workers’ compensation system to

monitor compliance with the rules and regulations in Chapter 415, entitled

“Administrative Violations,” as well as provisions in Chapters 409 and 410.32 For

example, these provisions allow fines of up to $25,000 per day, per violation for

an insurer’s conduct, including, for example:

a) making a false or misleading statement; 33 b) failing to process claims reasonably;34 c) unreasonably disputing the reasonableness and necessity of health care;35 d) conspiring to commit an act that is a violation;36 and e) other conduct violating Commission rules.37

Any system participant can initiate an investigation by the DWC of possible

administrative violations.38 Procedurally, administrative violations follow a path

similar to Chapter 413 disputes.39

32 See generally §415.001, et seq.; §409.021; §410.205. 33 §415.008. 34 §415.002(a)(11). 35 §415.002(a)(19). 36 §415.008. 37 §415.008; §415.021. 38 §415.031. 39 §415.034-5.

11 In 1989 the Texas Legislature overhauled the worker’s compensation

system to address the system’s deficiencies, to balance the interests and

concerns of the worker and the employer (or insurance carrier), and to provide

more efficient results for all parties. Prior to that time and up to this Court’s

opinion in Ruttiger, the shortcomings of the system necessitated this Court’s

acknowledgement of a common law cause of action for extra-contractual

damages. In Ruttiger, this Court set out its analysis of the respective roles of

the Legislature and this Court in relation to the Act and the worker’s

compensation system as a whole. Improvements to the pre-1989 system were

cited to include the following:

1) reduction of the disparity of bargaining power between employees and insurance carriers; 2) removal of insurers’ exclusive control over the processing of claims; 3) curtailment of insurers’ ability to refuse or unreasonably deny payment of valid claims in an arbitrary manner; 4) provision of information to employees and free assistance before the DWC process through the ombudsman program; and 5) provision of multiple remedies and penalties to enforce the parties’ rights and to regulate the parties’ conduct, up to and including revocation of a carrier’s right to do business in Texas “if on multiple occasions it fails to pay benefits promptly and as they accrue.”40 The Legislature provided injured workers with tools to which they did not previously have access. Carefully considering these improvements to the system, this Court held that common law causes of action outside the framework of the Act are no longer necessary when the Act covers the complained-of conduct or the remedy sought.41

40 Ruttiger, 381 S.W.3d at 449-450. 41 Id. at 444, 445, 451.

12 Recognizing the broad scope and encompassing remedies brought about by the

1998 revisions to the Act, the Texas Supreme Court held that “the Court should

not alter the Act’s comprehensive scheme.” 42

C. Through its broad rule making and enforcement provisions, the Act empowers the DWC to resolve disputes, enforce compliance, and punish offenders.

The Act provides a compensation system for “personal injuries sustained

by an employee in the course and scope of his employment.” 43 In exchange for

prompt remuneration of benefits to the employee with no burden of proof as to

negligence, the Act prevents employees from seeking common law remedies

against the employer, agent or employee of the employer for on-the-job

injuries.44 The Act also limits employers’ exposure to the uncertainties of

litigation costs and awards.45 Recovery under the Act is intended to be an

An agency has exclusive jurisdiction “when a pervasive regulatory scheme

indicates that Congress intended for the regulatory process to be the exclusive

42Liberty Mut. Ins. Co. v. Adcock, 412, S.W.3d 492, 495 (Tex. 2013) (explaining that “the Legislature devised a comprehensive workers’ compensation system, with specific benefits and procedures based on the public policy of the State of Texas. We concluded in Ruttiger that the Court should not alter the Act’s comprehensive scheme, and we reaffirm that principle today.”) 43 Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex. 1988). 44Id.; § 408.001(a); Hulshouser v. Texas Workers’ Compensation Ins. Fund, 139 S.W.3d 789, 792 (Tex. App.—Dallas 2004, no pet.). 45See Ruttiger, 381 S.W.3d at 441, citing In re Poly-Am., L.P., 262 S.W.3d 337, 349 (Tex. 2008).

13 means of remedying the problem to which the regulation is address.”46 “An agency

has exclusive jurisdiction . . . when a pervasive regulatory scheme reflects

legislative intent that an agency have the sole power to make the initial

determination in the dispute.”47 Exclusive jurisdiction is a question of law that turns

on statutory interpretation.48 The Texas Supreme Court held in Saenz v. Fidelity

& Guaranty Insurance Underwriters that “the Workers’ Compensation Act vests the

power to award compensation benefits solely in the [DWC]..., subject to judicial

review.”49

In Tex. Mut. Ins. Co. v. Ruttiger50 the Texas Supreme Court discussed the

significant changes the Legislature made to the Act in 1989.51 It noted that the

“amendments included significant reforms, among which were changes in how to

calculating benefits for injured workers, the amount of income benefits workers

could recover, the dispute resolution process, the addition of an ombudsman

program to provide assistance for injured workers who had disputes with insurers,

46 Subaru of Am. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) 47In Re Mid-Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex.App.—Houston [1st Dist.] 2012) (orig. proceeding) 48 See Rhule, 417 S.W.3d at 442 (citing Subaru, 84 S.W.3d at 221). 49 925 S.W.2d 607, 612 (Tex. 1996) 50 381 S.W.3d 430 (Tex. 2012). 51 The Ruttiger opinion addressed the viability of a common-law cause of action for breach of the duty of good faith and fair dealing against a worker’s compensation carrier, a cause of action previously approved of by the Texas Supreme Court in Arranda v. Ins. Co. of North Amer., 748 S.W.2d 210 (Tex. 1988). The Ruttiger court held that the 1989 amendments to the Act manifested the Legislatures’ intent to vitiate the need for such a cause of action and expressly overruled Arranda. Id., 381 S.W.3d at 438-56.

14 and increasing sanctions for violations of the Act.”52 The Ruttiger court stated that

“[t]he purpose of the Act is to provide employees with certainty that their medical

bills and lost wages will be covered if they are injured.” Id. at 441.

To accomplish these purposes, the Act provides detailed notice and administrative dispute resolution proceedings that include specific deadlines and incorporate a “conveyor-belt” approach. That is, once the administrative dispute resolution process is initiated, a dispute continues through the process until the dispute is resolved either by the parties or by a binding decision through the resolution procedures.

Id. at 441.

The Ruttiger opinion provides a lengthy description of “the detailed notice

and administrative dispute resolution proceedings” encompassed by the Act. 53 In

describing the pervasiveness of the Act the Ruttiger court noted that the Act affords

the DWC significant power to enforce the Act against the various parties in the

worker’s compensation system. Id. The Ruttiger court concluded:

It is apparent that the Act prescribes detailed, WCD-supervised, time- compressed processes for carriers to handle claims and for dispute resolution. It has multiple, sometimes redundant but sometimes additive, penalty and sanction provisions for enforcing compliance with its requirements.54

The court recognized that allowing an employee to circumvent the act by asserting

common law causes of action would be “inconsistent with the Act’s goals and

legislative intent exhibited in the act” and could also “result in rewarding an

52 Id., 381 S.W.2d at 433. 53 Id. at 441-43. 54 Id. at 443.

15 employee who is dilatory in utilizing the Act’s detailed dispute resolution

procedures, regardless of whether the delay was intentional or inadvertent,

because whether and when the dispute resolution begins is by and large

dependent on the employee.” Id.

D. Real Party’s failure to exhaust his administrative remedies under the Act precludes the trial court’s exercise of jurisdiction over this matter.

When an agency has exclusive jurisdiction a party must exhaust its

administrative remedies before seeking recourse through judicial review. 55 “If an

agency has exclusive jurisdiction... a party must first exhaust all administrative

remedies before a trial court has subject matter jurisdiction.”56 “Absent exhaustion

of administrative remedies, a trial court must dismiss the case.”57

1. Real Party consciously chose to circumvent the Act in pursuit of common-law remedies for his work-place injury.

There is no question that Real Party not exhausted his administrative

remedies through the DWC. He readily admits this.58 Real Party claims that it is

55Rhule, 417 S.W.2d at 442 (citing Cash Am. Int’l., Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000)). 56Cunningham Lindsey Claims Mgmt. v. Snyder, 291 S.W.3d 472, 477 (Tex.App.— Houston [14th Dist.] 2009, pet. denied). 57Rhule, 417 S.W.2d at 442 (citing Tex. educ. Agency v. Cypress-Fairbanks I.S.D., 830 S.w.2d 88, 90 (Tex. 1992). 58 Tab 15, p. 18, ¶ 80. Real Party states: In accordance with the Texas Labor Code Ch. 409, Plaintiffs did previously file their DWC 41 form on the 1-year anniversary of the injury in question. However, Plaintiffs did so solely to preserve their right to seek benefits in the event that this Court or the Court of Appeals later determined that iWorks Defendants and/or WM Defendants were workers’ compensation subscribers. Plaintiffs are not seeking workers’ compensation benefits from 16 justified in foregoing the Texas Workers’ Compensation System because both

iWORKS and WM are nonsubscribers.59 However, an examination of the Plaintiff’s

allegations and the evidence submitted in connection with Relator’s Plea to the

Jurisdiction demonstrate that Relator was a subscriber the Act.

Real Party was injured on August 5, 2012.60 On August 30, 2012 he

executed a DWC-041 form61 requesting compensation for a work-related injury.62

On that form he stated that he was represented by Bradford J. Gilde (“Gilde”).63

Thus, fifteen days after his work-related injury (over 2 ½ years ago) Real Party was

at a minimum aware of the potential availability of benefits under the Act. It is also

fair to assume that his attorney knew (or had the ability to find out) how to obtain

those benefits.

Nearly a year later on August 12, 2013, Gilde sent a letter to the DWC.64 It

was styled as a “Notice, Stay, and Preservation Letter.” Although litigation was

ongoing and both iWORKS and Waste Management were represented by

any provider, and are surely not attempting to get blood from the turnip that is iWorks Defendants’ cancelled policy. 59 Tab 2, Petition, p. 6, ¶¶ 19-20. 60 Id. at p. 13, ¶ 36. 61“Employee’s Claim for Compensation for a Work Related Injury or Occupational Disease.” 62 Tab 10. 63 Id. 64 Tab 14.

17 counsel,65 neither Defendant was copied on this correspondence. Gilde attached

two separate DWC-041 forms to the letter. One names iWORKS as Real Party’s

employer and the other names WM as his employer. Thus, as of the date of his

letter to the DWC, Real Party’s counsel had actual knowledge of two separate

worker’s compensation policies which would potentially provide benefits to his

client. He consciously chose to forego pursuing his client’s benefits under either

one of the policies in lieu of proceeding with his claims in the trial court. 66

Gilde’s letter to the DWC states that it:

“is submitted: (1) as a notice of claim for compensation...as a preservation of right to file and seek a claim for compensation...and pursuant to Tex. Labor Code §409.004.”67

The letter further states that “this letter...is not an election or denial of a claim

for coverage.”68 Real Party cannot hedge his bets with the DWC while seeking a

judicial remedy in the trial court without first exhausting his administrative

65 At that time attorney Aric Garza was counsel for iWORKS. 66On information and belief, as of the filing of this petition Real Party has still not sought benefits under WM’s worker’s compensation policy even though the trial court dismissed his claims against WM pursuant to the “comp bar” defense. Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238 (Tex. 2012) held that for purposes of the Act a temporary staffing company and its client are both co-employers and that the client company cannot exclude or segregate temporary workers from its worker’s compensation coverage. Simply put, the state of Texas wants all workers covered. Thus, a temporary staffing employee typically has two different worker’s compensation policies which can cover him for on-the-job injuries. Which policy actually covers the worker is usually a matter of contract between the staffing company and its client. 67 Tab 14 (emphasis in original). 68 Id.

18 remedies. His failure to do so in this matter, despite knowing the administrative

requirements set forth in the Act, deprives the trial court of subject-matter

jurisdiction over his claims.

Gilde’s letter to the DWC purports to reserve Real Party’s right to seek relief

from the DWC in the event he was unsuccessful in in the trial court. This approach

turns the purpose of the entire worker’s compensation system on its head. This

letter demonstrates that Real Party was well aware of the requirements under the

Texas Labor Code yet consciously chose to attempt to circumvent that process in

hopes of a common law verdict. This is not the public policy of Texas. As the

Ruttiger court observed, “the extra-statutory cause of action provides incentive for

an injured worker to delay using the avenues for immediate relief that the

Legislature painstakingly built into the law” and “distorts the balances struck in the

Act and frustrates the Legislature’s intent to have disputes resolved quickly and

objectively.”69

2. The laws embodied in the Act and the rules promulgated by the DWC mandate that iWORKS policy was in effect on the date that Real Party was injured at work.

iWORKS is a subscriber under the Act. iWORKS purchased a worker’s

compensation policy from Texas Mutual with the effective dates of 09/04/2011

through 09/04/2012.70 That iWORKS actually purchased this policy is not disputed

69 Ruttiger, 381 S.W.3d at 451. 70 Tab 6.

19 by Real Party. Rather, Real Party argues that the policy was terminated prior to

his August 5, 2012 injury.71 To support this claim he cites to a Notice of Dismissal

purportedly issued by Texas Mutual72 and discovery responses from Texas Mutual

and Lette Insurance Company, iWORKS’ insurance agent who procured the

policy.73

But it has long been ‘the settled policy of this State to construe liberally the provisions of the [Act] in order to effectuate the purposes for which it was enacted.’ Coverage is a fundamental purpose of the Act.74

Real Party’s contentions and the evidence offered to support them do not comport

with the statutory provisions provided for in the Act and only serve to thwart the

fundamental purpose of the Act, coverage.

71 Tab 15, p. 5-9, ¶¶ 28-39. 72 Id. 73 Id. 74Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 453 (Tex., 2009) (J. Hecht concurring) (emphasis added) (quoting Huffman v. S. Underwriters, 133 Tex. 354, 128 S.W.2d 4, 6 (1939) (quoted in In re Poly-America, L.P., 262 S.W.3d 337, 350 (Tex. 2008)). In support of his proposition that the Act has historically been interpreted by the courts as broadly as possible so as to find coverage, Justice Hecht cites Citing Millers' Mut. Cas. Co. v. Hoover, 235 S.W. 863, 864 (Tex. Comm'n App.1921, judgm't adopted) (“It has been thought, inasmuch as the [Act] is in derogation of the common law, that it should be given a strict construction, but the courts have very generally held that a spirit of liberality should characterize its interpretations, for the reason that it is to be classed as remedial legislation.” (quotation omitted)); Southern Sur. Co. v. Inabnit, 1 S.W.2d 412, 413-414 (Tex.Civ.App.-Eastland 1927, no writ) (“The leading authorities ... agree that Workmen's Compensation Laws came into existence in response to a general acceptation of the broad economic theory that industrial accidents should properly be chargeable as a part of the overhead expenses of the industries. These laws are remedial in their nature, and should be liberally construed with the view of promoting their objects. The early tendency of our courts to construe them strictly because they were thought to be in derogation of common law has long since given place to a liberal rule of construction. The rule now prevailing prevents the restriction of the scope of the laws by exceptions and exact definitions not in harmony with their spirit.”).

20 In 2005 the DWC was established as a division of the Texas Department

Insurance, replacing the abolished Texas Workers’ Compensation Commission.75

The DWC is administered by the commissioner of workers’ compensation who is

appointed by the governor for a two-year term.76 The Act gives the commissioner

authority to “adopt rules as necessary for the implementation and enforcement of

this sub-title [the Act].”77 These rules are codified in the Texas Administrative

Code.78 The Labor Code and the Texas Administrative Code (“TAC”) establish the

statutory and regulatory provisions by which an employer can elect to submit to

the Act by purchasing workers’ compensation insurance and, more importantly in

this case, the manner, effectiveness, and effect of the termination of workers’

compensation insurance by a carrier.

Under the Act an employer “may elect to obtain worker’s compensation

insurance coverage” and is thereby “subject to this subtitle [the Act].” 79 It is

undisputed that iWORKS elected to obtain workers’ compensation insurance

coverage and thereby subject itself to the Act. 80 iWORKS purchased a workers’

75 §402.001(b). 76 §402.00111; §402.00117. 77 §402.061; §402.00111 78See generally Title 28 Tex. Admin. Code, Part II. (“Texas Department of Insurance, Division of Workers’ Compensation”). 79 §406.002. 80Even Plaintiff’s Petition states that “[a]s is clear, in addition to supplying client companies with leased employees or temporary workers, IWORKS DEFENDANTS also have the duty and responsibility to provide worker’s compensation.” Tab 2, p. 10, ¶ 24; 21 compensation policy from Texas Mutual effective 09/04/2011 through

09/04/2012.81 Luis Trevino, owner of iWORKS, testified that iWORKS subscribed

to worker’s compensation insurance from its inception and that this is the normal

course of business for a temporary staffing company. 82 Furthermore, the Service

Agreement between iWORKS and WM required that iWORKS carry workers’

compensation insurance.83 It is not Real Party’s contention that iWORKS was a

non-subscriber, rather, he contends that the Texas Mutual policy was cancelled

several weeks before his injury.84 As is discussed below, this contention is

unsupported by the Pleadings and the evidence.

In opposition to iWORKS’ Plea to the Jurisdiction, Real Party relied upon

four single-page documents85 as well as discovery responses from Texas Mutual

and Lette Insurance Company.86 The primary document he relies upon is a “Notice

of Termination.”87 However, this document has no probative value. There is no

but see Id., p. 6, ¶¶ 19-21 where Real Party makes the global allegation (without factual support) that both iWORKS and WM are non-subscribers. 81 Tab 6. 82 Tab 11; Trevino testified: “Since it has been in business iWORKS has continuously subscribed to Worker’s Compensation insurance and has covered all of its temporary employees that it sends out on assignment. This is the standard course of business for a temporary staffing company.” 83 Tab 3. 84 Tab 15, pp. 5-8, ¶¶ 25-32. 85 Real Party attached 560 pages of documents to his response (Tabs 16-18). 86Tabs 16 and 17. For the sake of simplicity, Relator has separated the evidence specifically cited in Real Party’s response and has combined it under Tab 19 in the Appendix. 87 Tab 19 The same document was produced by both Texas Mutual and Lette Ins.

22 evidence that this Notice was ever sent to iWORKS. Luis Trevino testified that

iWORKS never received notice of termination.88 He stated:

The first knowledge that iWORKS had of an alleged gap in its worker’s compensation coverage was when Mose Guillory’s attorney made that allegation during my deposition in this case. Although Guillory’s attorney presented what appeared to be a notice of termination, I had no knowledge of such notice. During that alleged period of time we had never missed a premium payment, we had received no communication from our broker regarding any termination, we had received no denial of any claims, and we never had problems obtaining Certificates of Insurance.

The testimony is uncontroverted. The notice relied upon by Real Party purports to

have been sent by certified mail which begs the question – where is the green card

or the unclaimed envelope?

The only other evidence offered by Real Party is the self-serving discovery

responses from Texas Mutual. Texas Mutual’s canned response to almost all of

the questions posed by Real Party (subject to objection) was:

Texas Mutual insurance policy no. STA_0001244473 301 10904 (“The Policy”) was issued to Preferred Staffing Company, LLC d/b/a iWorks Personnel (“Preferred Staffing”) for the coverage period of 09/04/2011 to 09/04/2012. The Policy was cancelled, effective 07/16/2012 (See Notice of Cancellation, document Bates No. TXM00318). Texas Mutual Insurance’s Company’s actions regarding issuance of The Policy and subsequent cancellation were conducted pursuant to and in accordance with the Rules set by the Texas Department of Insurance Division of Workers’ Compensation and the Texas Worker’s Compensation Act.89

88 Tab 11. 89 Tab 19.

23 Real Party also relies upon admissions submitted by Texas Mutual “admitting” that

1) the policy “was cancelled prior to August 5, 2012”, and 2) that “iWORKS was a

‘nonsubscriber,’ under Texas law to your [Texas Mutual’s] knowledge and

definition of “nonsubscriber.”90 Notwithstanding the fact that these admissions are

conclusory and lack any evidentiary foundation, these admissions have no

evidentiary value as they cannot be used against iWORKS.91

What Texas Mutual’s evidence does show is that iWORKS did indeed have

a policy covering the date of Real Party’s injury. What it does not show is any

evidence that the policy was properly terminated pursuant to the Labor Code and

the rules established by the DWC. Again, where is the green card? Where is the

unclaimed envelope? It is not in any of the documents submitted by Real Party.

Texas Mutual’s testimony also supports the exclusive jurisdiction of the DWC when

it claims that it has adhered to all of the requirements of the Act and the DWC rules

appurtenant thereto. It is solely within the DWC’s province to determine Texas

Mutual’s actual compliance and solely within the DWC’s administrative power to

punish and sanction Texas Mutual for violations of the Act and/or the DWC rules.

Real Party also referenced an August 24, 2012 letter written by Texas

Mutual to show cancellation of the policy.92 Again there is no evidence to show

90 Tab 19. 91Tex. Rule of Civ. P. 198.3; see U.S. Fid. & Guar. Co. v. Goudeau, 272 S.W.3d 603, 610 (Tex. 2008). 92 Tab 19.

24 that this was actually sent to iWORKS or that iWORKS ever received it. Nor is

there any mention of termination in this letter. However, the very next document

in Real Party’s exhibit does show that iWORKS paid Texas Mutual just under

$44,000.00 in premiums for that policy period.93

The only other document offered by Real Party in opposition to iWORKS

Plea to the Jurisdiction is an “Appointment Confirmation” dated October 18, 2012 94

that Real Party offered as proof that iWORKS “was in direct contact with Texas

Mutual during this cancellation period.”95 Notwithstanding the same issues of

delivery and receipt, this letter makes no mention of termination even though it is

dated over three months since the policy was supposed to have been cancelled.

The very next two documents in Real Party’s exhibit shows that on November 12,

2012 a copy of an “Incomplete Final Audit Notification” allegedly sent to iWORKS96

was also faxed to Lette Insurance. What is interesting about this document is that

it states

To prevent cancellation of your current coverage, please contact the Premium Audit department promptly.97

93 Tab 20. 94 Tab 19. 95 Tab 15, p. 9, ¶ 38. 96Tab 21; Again, Real Party provides no evidence that this letter was actually sent to or received by iWORKS. 97 Id.

25 This begs the question, if iWORKS’ coverage was terminated in July, 2012, how

could its current coverage in November, 2012 be subject to cancellation? This

court, looking at this evidence de novo, should find that the evidence submitted by

Real Party to show the trial court’s jurisdiction in this matter is of no probative effect

at all. However, even had the trial court (or this Court) given any weight to the

evidence submitted by Real Party, the laws of the Act and the Rules of the DWC

still confer exclusive jurisdiction to the DWC.

The Act and the rules enacted by the DWC have very specific requirements

governing the termination of a workers’ compensation policy. The Act provides that

an insurance company that terminates a policy “shall deliver notice of the

cancellation... by certified mail or in person to the employer and the division” at

least thirty days prior to the effective date of the cancellation. 98 If the insurance

company does not give notice as required, then the policy is extended until proper

notice is provided.99

Pursuant to the rule making authority given to it in the Act, the DWC has

promulgated additional rules for the termination of a worker’s compensation policy

which are codified in the TAC.100 Chapter 43 provides that “[r]ejection of the

workers’ compensation system [o]ccurs when a subscriber terminates coverage or

98 §406.008. 99 Id. 100 See 28 TEX. ADMIN. CODE, Chapter 43.

26 fails or refuses to purchase a policy of workers’ compensation insurance.”101 Thus,

there is no allegation that iWORKS “rejected” the workers’ compensation system.

Under the DWC’s rules a carrier must give the employer written notice of

termination at least thirty days before the effective date of termination. 102 Notice

must be by certified mail; there is no provision for personal delivery.103 The

effective date of the termination under Chapter 43 is “the latest of the following

dates: (A) on the 31st day after the carrier notifies the subscriber as provided in

subsection (c) . . . ; (B) the day the carrier files notice of termination with the board

. . .; or (C) the actual termination date recited on the notice.”104

Chapter 110 provides substantially more protection for both the employer

and the employee. It provides that:

f) Cancellation or non-renewal of a workers' compensation insurance policy by an insurance company takes effect on the later of:

(1) the end of the workers' compensation insurance policy period; or

(2) the date the division and the employer receive the notification from the insurance company of coverage cancellation or non- renewal and the later of:

(A) the date 30 days after receipt of the notice required by Labor Code, §406.008(a)(1);

(B) the date 10 days after receipt of the notice required by Labor Code, §406.008(a)(2); or

101 Id., § 43.10(a)(2). 102 Id., § 43.10(c)(1-3) 103 Id. 104 Id., § 43.10(d)(1)

27 (C) the effective date of the cancellation if later than the date in paragraph (1) or (2) of this subsection.105

The rules promulgated by the DWC and codified in the TAC reflect the driving

intent of the State of Texas that its workers be covered.

How do these laws and regulations apply in this case? Under Rule 110.1,

regardless of when or how or if iWORKS was provided with notice of cancellation

by Texas Mutual, the effective date of termination would be at the end of the policy

period on September 4, 2012. Under Rule 43.10 the effective date of termination

would be on the 31st day after iWORKS received notice of cancellation from Texas

Mutual through certified mail. Under Section 408.10, the termination date is

extended until Texas Mutual provides notice of cancellation to iWORKS through

either certified mail or personal delivery. Since iWORKS never received notice of

cancellation through certified mail, under both Rule 43.10 and Section 408.10 the

policy terminated under its own terms on September 4, 2012. Real Party was

injured on August 5, 2012. Thus he falls under the coverage of iWORKS’ workers’

compensation policy.

105 Id., § 110.1(f) (emphasis added).

28 E. The DWC has exclusive jurisdiction to determine coverage.

The DWC routinely addresses the issues raised in this case through its

administrative proceedings.106 For example, in Appeals Panel No. 030660 107

(Division of Worker’s Compensation, April 28, 2003) the DWC appeals panel

addressed a temporary staffing situation and determined which employer was

liable, the proper application of the Staff Leasing Services Act108 (“SLSA”), and

approved the use of the borrowed servant doctrine in determining liability.

In Appeals Panel No. 021771 (Division of Worker’s Compensation,

September 3, 2002) the appeals panel addressed a matter factually similar to this

case analyzing the interplay between the contractual obligations between a staffing

106 See e.g. Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747 (Tex.App.— Houston [14th Dist.] 2005, no pet.) (“Though we are not bound by the decisions [of the DWC], we find them instructive . . . . “); Houston Gen. Ins. Co. v. Ass’n Cas. ins. Co., 977 S.W.3d 634, 636 (Tex.App.—Tyler 1998, no pet.) (noting that administrative decisions, while not binding, are entitled to substantial weight). DWC Appeals Panel decisions are available on the Texas Department of Insurance website at http://www.tdi.texas.gov/appeals. Copies of the Appeals Panel decisions cited herein are found in the Appendix at Tab 22. 107 Tab 22. 108 TEX. LABOR CODE, Chapter 91 (“STAFF LEASING SERVICES”). The Texas Legislature amended Chapter 91 in 2013 renaming it “PROFESSIONAL EMPLOYMENT ORGANIZATIONS”. This amendment supports iWORKS’ opposition to Real Party’s continuing assertion that iWORKS is a staff leasing company. Rather, iWORKS temporary employment service as set forth in Chapter 93 of the TEXAS LABOR CODE. Furthermore, effective September 1, 2013, TEX. LABOR CODE § 93.004(a) holds that a Certificate of Insurance “constitutes proof of workers’ compensation insurance coverage for the temporary employment service and the client of the temporary employment service with respect to all employees of the temporary employment services assigned to the client.” Subsection (a) further holds that “[t]he state or political subdivision of the state shall accept a certificate of insurance coverage described by this section as proof of worker’s compensation coverage under Chapter 406.”

29 company and its client company, the applicability of the SLSA, and the application

of the borrowed servant doctrine to determine coverage. The appeals panel upheld

the hearing officer’s determination that the client company was responsible for the

worker’s injury rather than the staffing company. The panel held that:

Texas courts have recognized that a general employee of one employer may become the borrowed servant of another employer. The determinative question then becomes which employer had the right of control of the details and manner in which the employee performed the necessary services. Carr v. Carroll Company, 646 S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd n.r.e.). We note that in Texas Workers’ Compensation Insurance Fund v. DEL Industrial, Inc., 35 S.W.3d 591 (Tex. 2000), the court held that the Staff Services Leasing Act (SSLA), Texas Labor Code Chapter 91, supersedes the common law right-of-control test in determining employer status of leased employees for workers’ compensation purposes. However, (Employer 2) was not licensed under the SSLA. The hearing officer determined that on the date of injury, (Employer 2) was a licensed provider of temporary common workers under Chapter 92 of the Texas Labor Code, entitled Temporary Common Worker Employers (TCWE). In Richmond v. L. D. Brinkman & Co. (Texas) Inc., 36 S.W.3d 903 (Tex. App.-Dallas 2001, pet. denied), the court determined that the common law right-of-control test is not superseded by Chapter 92 (TCWE) of the Texas Labor Code. The hearing officer is the sole judge of the weight and credibility of the evidence. Section 410.165(a). We conclude that the hearing officer did not err in applying the right- of-control test and in determining that at the time of the injury, the claimant was the borrowed servant of (Employer 1). The hearing officer’s decision is supported by sufficient evidence and is not so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175 (Tex. 1986).

Id. at p. 1-2. The client company also argued that the staffing company should be

responsible because the client company paid fees to the staffing company which

went towards worker’s compensation coverage for the temporary employees. The

panel rejected these arguments. Id. 30 In Appeals Panel No. 101718 (Division of Worker’s Compensation, March

21, 2011) the appeals panel examined a complex claim involving a contractor, a

subcontractor, a PEO, and a temporary staffing company. In finding that the

employee did not suffer a compensable injury the panel had to address issues

related to coverage (including whether or not the temporary staffing company’s

carrier properly terminated coverage), contractual duties between the parties,

liability issues between three different worker’s compensation insurance providers,

employment status of the claimant, and other related issues.

The legal issues discussed above are all issues that are in play in this case.

These are issues that the DWC routinely addresses through its administration of

the Act. These are issues that fall squarely within the exclusive jurisdiction of the

DWC. The trial court does not have subject-matter jurisdiction over these matters

until all of the administrative remedies available through the Act have been

exhausted in the same manner as demonstrated in the DWC opinions cited above.

In Morales v. Liberty Mut. Sinc. Co.,109 the Texas Supreme Court addressed

the issue of the relationship between compensability under the Texas Worker’s

Compensation Act (“the Act”), employee status, and subscriber status.110 The

109 241 S.W.3d 514 (Tex. 2007). 110 The Morales Court addressed these issues in the context of determining which standard of review set forth in the Act should apply to judicial review of a final decision from a DWC appeals panel. If the issues being appealed involve “compensability” then the standard of review is the “modified de novo” standard established by §410.301. Issues that do not address compensability are reviewed under a “substantial-evidence” standard. 31 Court held that issues of coverage such as the one in this case fall within the rubric

of the existence of a compensable injury which is properly resolved through the

Act. Morales was killed while repairing a roof on a motel.111 His wife sought death-

benefits under the act claiming he was injured while in the course and scope of his

employment with three different employers.112 Two of the employers were insured

under separate worker’s compensation policies, and the third was a

nonsubscriber.113 The court explained that:

The existence of a compensable injury is the threshold requirement for payment of benefits under the Act. See TEX. LAB.CODE §§ 401.011(5), 406.031(a). And there are various elements that affect whether an injury is compensable, including the worker's employment status as an employee or independent contractor at the time of injury, whether the worker was injured in the course and scope of employment, who controlled the employee's work when the injury occurred, and whether a particular employer has an insurance policy in effect. See id. §§ 401.011(12), (18), 401.012(a). ....

A dispute about any of these elements regards “compensability or eligibility for . . . benefits” and is subject to judicial review under section 410.301.114

In In Re Tex. Mut. Ins. Co.115 the court addressed the DWC’s exclusive

jurisdiction in the context of common law breach of contract claims and disputed

Morales, 241 at 516-17. The outcome of this question of compensability also effects venue and the appropriate scope of judicial review. Id. 111 Id. at 515. 112 Id. 113 Id. 114 Id. at 519. 115 157 S.W.3d 75 (Tex.App.—Austin 2004, orig. proceeding).

32 coverage. The Court held that the Fodge decision mandated that the claimant’s

breach-of-contract claim “is within the Commission’s exclusive jurisdiction.”116 The

Court also held that:

We likewise reject [Claimant’s] assertions that the Commission’s exclusive jurisdiction over worker’s compensation benefits claims does not extend to determining whether coverage existed at the time of [Claimant’s] injury. The legislature has granted the Commission exclusive jurisdiction over claims for policy benefits. Fodge, 63 S.W.3d at 805. In adjudicating such claims, the Commission will necessarily have to interpret compensation policies and determine the period in which coverage existed. Indeed, it appears to routinely do so. See, e.g., Gonzales v. Cigna Ins. Co. of Tex, 924 S.W.2d 183, 184-87 (Tex.App.—San Antonio 1996, write denied); Houston Gen. Ins. Co. v. Association Cas. Ins. Co., 972 S.W.2d 634, 636 (Tex.App.—Tyler 1998, no pet.). Moreover, [Claimant’s] argument would imply that whenever the Commission, in the exercise of its exclusive jurisdiction, encounters a coverage issue that can be characterized as going to "policy formation," the agency must abate its proceedings pending judicial resolution of the "formation" issue. We doubt that the legislature, in conferring exclusive jurisdiction upon the Commission to determine compensation benefits claims, intended such an absurd result that seemingly turns traditional concepts of exclusive jurisdiction on their head.117

116 Id. at 80. 117 Id.

33 F. The newly released Crawford opinion confirms the Court’s prior findings that it is the intent of the legislature that the DWC have exclusive jurisdiction out of work-place injury claims and that even artful pleadings will not let Plaintiff’s recast their claims outside of the purview of the Act.

One week after the trial court denied iWORKS’ plea, the Texas Supreme

Court issued its opinion in In Re Crawford & Co.118 The Supreme Court held that

the DWC has exclusive jurisdiction over the Plaintiff’s claims and that the Act

provided the exclusive remedies, even over plaintiff’s common law claims. The

Crawford Court reversed the Amarillo Court of Appeals and dismissed the

Plaintiff’s district court claims.

The Crawford opinion both clarifies and expands the Supreme Court’s

holding in Ruttiger.119 In Crawford the Plaintiff sued his employer’s worker’s

compensation carrier alleging that it improperly denied him benefits from a 1998

injury. He argued that the carrier engaged in conduct that gave rise to liability

independent from and unrelated to worker’s compensation and, thus, did not fall

under the exclusive jurisdiction of the DWC. The Supreme Court rejected this

argument. The critical distinction between this case and Crawford is that the

Crawford plaintiff had already invoked the DWC’s jurisdiction, while the Real Party

has refused to invoke the DWC’s jurisdiction claiming that Relator is a non-

118No. 14-0256 (Tex. February 27, 2015) (per curiam) (a copy is attached to the Appendix at Tab 23). 119“We agree with Crawford that the court of appeals read Ruttiger too narrowly.” Crawford at p. 7.

34 subscriber under the Texas Labor Code. However, the seminal messages from

the Texas Supreme Court in Crawford are equally commanding in this case.

The first seminal message from Crawford is that it is the clearly established

intent of the legislature “that the current Act with its definitions, detailed

procedures, and dispute resolution processes” be the exclusive remedy for work-

place injuries, and, moreover, that this “demonstrates legislative intent for there to

be no alternative remedies.”120 The Court observed that:

The Act designates the Department of Insurance as the administrative agency responsible “[for overseeing] the workers’ compensation system of this state” and establishes the Division of Workers’ Compensation within the Department to “administer and operate” that system. TEX. LAB. CODE § 402.001. It is the Division’s duty to “(1) regulate and administer the business of workers’ compensation in this state; and (2) ensure that [the Act] and other laws regarding workers’ compensation are executed.” Id. § 402.00114. The Division must monitor insurance carriers, employers, and others “for compliance with commissioner rules, this subtitle, and other laws relating to workers’ compensation.” Id. § 414.002(a). The Division or its commissioner may impose an array of sanctions against those who fail to comply, including a cease-and-desist order and administrative penalties up to $25,000 per day per occurrence. Id. § 415.021(a). As we explained in Ruttiger, the Act, as substantially revised in 1989, “prescribes detailed, [Division]supervised, time-compressed processes for carriers to handle claims and for dispute resolution” and “has multiple, sometimes redundant but sometimes additive, penalty and sanction provisions for enforcing compliance with its requirements.” 381 S.W.3d at 443121.

120 Crawford at p. 9 (quotes and citations omitted). 121 Crawford at p. 4. 35 Thus, the broad scope and powerful enforcement provisions provided to the DWC

by the 1989 revisions to the Act evince the legislature’s unequivocal intent that the

DWC be the forum for which work-place injuries are resolved.

The second seminal message from Crawford is that it is the substance of

the claims and not the label of the cause of action asserted which determines the

exclusively jurisdiction of the DWC.

Whether the Act provides the exclusive process and remedies, therefore, does not depend on the label of the cause of action asserted. As we have often explained, claimants may not recast claims to avoid statutory requirements or to qualify for statutory protections. [citations omitted] Instead, in assessing whether a claim falls within the Division’s exclusive jurisdiction, courts must look at the substance of the claim.122

Thus, Real Party’s creative and questionable assertion of causes of action

putatively beyond the scope of the Act are of no consequence. The substance of

this claim is that Real Party was injured at work and is seeking damages for those

injuries. The Crawford opinion and its predecessors hold that resolution of these

claims falls under the exclusive jurisdiction of the DWC. Therefore, the trial court

cannot exercise its jurisdiction in this matter until Real Party has exhausted his

administrative remedies. If is fundamental error for it to do so.

The crux of Real Party’s adamant disavowal of the DWC’s exclusive

jurisdiction is twofold. First is its contention that iWORKS is a non-subscriber. By

making this assertion Real Party not only seeks access to the potentially much

122 Crawford at p. 8.

36 greater recovery provided by common law remedies, but he also seeks the tactical

advantage conferred by the Act which would strip away most if Relator’s common-

law affirmative defenses, particularly contributory negligence.123 Second is the fact

that Real Party tested positive for marijuana immediately following his work-place

injury. The Act provides that an employee that tests positive for marijuana is

presumed intoxicated and that the burden is on that employee to rebut that

presumption.124 The Act further provides that an employee is not entitled to benefits

under the Act if the injury occurred while he was intoxicated. 125 Thus, Real Party

has an incredibly strong incentive to avoid the DWC at all costs, both on the upside

(potentially greater remedies) and on the downside (denial of benefits due to

intoxication). “[P]arties cannot avoid exhaustion of administrative remedies

because they fear they might not prevail.” In Re Liberty Mut. Fire Ins. Co., 295

S.W.3d 327 329 (Tex. 2009).

VIII. Conclusion This Court should grant Relator’s request for mandamus relief and dismiss

Real Party’s claims. The trial court does not have subject matter jurisdiction. The

Legislature has made clear through the Act that the DWC has exclusive jurisdiction

over Real Party’s claims and that Real Party must exhaust all of his administrative

123 § 406.033 (a). 124 § 401.013(c). 125 § 406.032(1)(A).

37 remedies as set forth in the Act. Real Party has intentionally tried to circumvent

the act by recasting his work-place injury claims under various common law tort

and contract claims. He has done this in the hope of obtaining more generous

common law remedies and out of fear that he will not prevail in the administrative

proceedings due to his presumed intoxication. Creative pleadings notwithstanding,

Real Party’s failure to exhaust his administrative remedies through the DWC

precludes the trial court from exercising subject matter jurisdiction. The trial court

erred by doing so.

Real Party’s contention that Relator is a nonsubscriber also has no merit. It

is not supported by the pleadings and the evidence offered to the trial court. Even

if the trial court had taken Real Party’s unsupported claims as true, the Labor Code

and the Administrative Act both mandate as a matter of law that Relator’s policy

was in effect at the time of Real Party’s on-the-job injury. The Texas Supreme

Court has made abundantly clear from Ruttiger through Crawford that it is the

public policy of the State of Texas that the Act be interpreted so as to provide

coverage. Furthermore, in this matter the question of whether or not Texas Mutual

properly terminated Relator’s policy goes to compensability and is something that

the DWC resolves on a regular basis. Thus, it has no impact on the DWC’s

exclusive jurisdiction and, rather, further compels such jurisdiction.

38 IX. Prayer Relator asks this Court to grant this petition for mandamus relief and dismiss

Real Party’s claims for lack of jurisdiction.

/s/ David N. Anderson

DAVID N. ANDERSON TBN: 00797951 THE ANDERSON LAW FIRM 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (888) 824-5624 – Fax danderson@lodna.net

ATTORNEY FOR DEFENDANTS IWORKS PERSONNEL, INC., LUIS TREVINO, and HAYDEE GUTIERREZ

39 Certificate of Service

As required by Texas Rule of Appellate Procedure 6.3 and 9.5(b), (d), (e), and 52.7(c), I certify that on March 13, 2015 I have served this Petition for Writ of Mandamus on all other parties listed below through the Texas eFile system as follows:

The Honorable Michael Landrum 113th Judicial District Court Harris County Civil Courthouse 201 Caroline, 10th Floor Houston, TX 77002 Respondent

Bradford J. Gilde Texas Bar No. 24045941 bjg@gildelawfirm.com GILDE LAW FIRM 55 Waugh, Suite 850 Houston, TX 77007 Counsel for Real Parties in Interest Mose Guillory and Mary Guillory

B. Lee Wertz, Jr. Texas Bar No. 00797796 lwertz@munsch.com MUNSCH, HARDT, KOPF, AND HARR, P.C 700 Milam Street, Suite 2700 Houston, Texas 77002-2806 Counsel for Defendant, Waste Management, Inc.

__/s/ David N. Anderson______________ David N. Anderson

40 Appendix

Tab 1 – Order denying iWORKS’ Plea to the Jurisdiction

Tab 2 – Plaintiff’s Fifth Amended Petition

Tab 3 – Master Service Agreement

Tab 4 – Hold Harmless Agreement

Tab 5 – iWORKS’ Plea to the Jurisdiction

Tab 6 – iWORKS’ WC Policy

Tab 7 – Waste Management’s WC Policy

Tab 8 – Employer’s First Report of Injury or Illness (DWC-001)

Tab 9 – Hold Harmless Agreement

Tab 10 – Employee’s Claim for Compensation (DWC-041)

Tab 11 – Affidavit of Luis Trevino

Tab 12 – iWORKS’ Supplemental Plea to the Jurisdiction

Tab 13 – Texas Mutual’s Receipt of Claim

Tab 14 – Gilde’s Correspondence to DWC and Employee’s Notice of Claim

Tab 15 – Plaintiffs’ Response to iWORKS’ Plea to the Jurisdiction

Tab 16 – Texas Mutual Insurance Discovery Responses

Tab 17 – Lette Insurance Company Discovery Responses

Tab 18 – Master Service Agreement (incomplete copy of Tab 2)

Tab 19 – Documents cited in Plaintiff’s Response

Tab 20 – Final Audit Statement

Tab 21 – Incomplete Final Audit Notification

Tab 22 – DWC Review Board Decisions

42 Tab 23 – In Re Crawford, No. 14-0256 (Tex. February 27, 2015) (per curiam)

Tab 24 – Texas Administrative Code Rule 43.10 and 110.1

Tab 25 – TEXAS LABOR CODE, Chapter 401

Tab 26 – TEXAS LABOR CODE, Chapter 402

Tab 27 – TEXAS LABOR CODE, Chapter 406

Tab 28 – TEXAS LABOR CODE, Chapter 408

Tab 29 – TEXAS LABOR CODE, Chapter 409

Tab 30 – TEXAS LABOR CODE, Chapter 410

Tab 31 – TEXAS LABOR CODE, Chapter 414

Tab 32 – TEXAS LABOR CODE, Chapter 415

43 CAUSE NO. 2012-­‐61407

MOSE A. GUILLORY and

§ IN THE DISTRICT COURT

MARY GUILLORY, §

Plaintiffs §

§

v. § OF HARRIS COUNTY, TEXAS

IWORKS PERSONNEL, INC.; §

WASTE MANAGEMENT, INC.; §

WASTE MANAGEMENT OF TEXAS, INC.;

WM RECYCLE AMERICA, LLC; §

LUIS TREVINO; and §

HAYDEE GUTIERREZ. §

Defendants. § 113 JUDICIAL DISTRICT

th

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE

I. INTRODUCTION

“Few problems in the law have given greater variety of application and conflict in

results than the cases arising in the borderland between what is clearly an

employer-­‐employee relationship and what is clearly one of independent,

entrepreneurial dealing.”

See NLRB v. Hearst Publ’ns, Inc., 322 U.S. 111, 121 (1944)

(quoting U.S. Supreme Court Justice Wiley Blount Rutledge).

1. Plaintiffs MOSE A. GUILLORY and MARY GUILLORY (hereinafter collectively referred to as

“PLAINTIFFS”), complain of the above-­‐named Defendants’, IWORKS PERSONNEL, INC.; LUIS TREVINO;

and HAYDEE GUTIERREZ; (hereinafter collectively referred to as “IWORKS” or “IWORKS DEFENDANTS”);

and WASTE MANAGEMENT, INC.; WASTE MANAGEMENT OF TEXAS, INC.; WM RECYCLE AMERICA, LLC

(hereinafter collectively referred to as “WM” or “WM DEFENDANTS”) incompetence, inter alia, which

incompetence proximately caused Plaintiff Mose Guillory’s injuries and PLAINTIFFS’ damages – to wit:

IWORKS was an incompetent employer/entity when it failed to subscribe to Texas Workers

Compensation Insurance Coverage for Plaintiff Mose Guillory and was incompetent when it failed to train

Plaintiff Mose Guillory.

WM, as confirmed by OSHA, was an equally incompetent employer/entity who

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 1

likewise failed to train Plaintiff Mose Guillory and was an incompetent employer/entity when it failed to

ensure Texas Workers Compensation Insurance Coverage for Plaintiff Mose Guillory, by virtue of its Staff

Leasing Agreement with IWORKS.

2. U.S. Supreme Court Justice Wiley Blount Rutledge’s “borderland” of liability is evidenced in the

legal issues involved in this case that include Contract Law, Employment Law, and Tort Law.

Defendants architected this “borderland” of liability through their contractual agreements in an

effort to skirt around employment obligations that ultimately resulted in the conduct that

proximately caused PLAINTIFFS’ injuries and damages.

That is, Defendants’ contractual agreements

were designed to obscure employment responsibility thereby setting the stage for work-­‐related accidents

without civil redress to the victims (Plaintiffs herein) and resulting in an economic windfall to the

victimizer (Defendants herein).

3. This is not a simple case of who has coverage – the holder of which entitles that party or all parties

to a comp-­‐bar defense.

Rather and unfortunately, it is a complicated case.

IWORKS Defendants would

have this Court and our jury believe that it is not responsible for obtaining workers compensation

coverage and not responsible for training its leased employees by virtue of a contract with WM

Defendants – absolving IWORKS Defendants of any and all liability.

WM Defendants would have this

Court and our jury believe that its workers compensation coverage policy entitles it to a comp-­‐bar

defense – absolving WM Defendants of civil liability in the present action, so that WM Defendants can

later deny workers compensation coverage by pointing to IWORKS Defendants’ obligation to secure same

by virtue of a contract with IWORKS Defendants in a subsequent action – absolving WM Defendants of

any and all liability.

4. Based on Defendants’ incompetence, inter alia, PLAINTIFFS hereby bring this their latest live

pleading and would respectfully show unto this honorable Court the following:

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 2

II. DISCOVERY CONTROL PLAN

5. PLAINTIFFS intend to conduct discovery under Level 3 of Texas Rule of Civil Procedure 190.4.

Given the introduction of SEATON, L.L.C.’S (d/b/a STAFF MANAGEMENT), Defendants’ dispositive motion

practice, and other issues concerning discovery, PLAINTIFFS have requested discovery under Level 3 and

have submitted to the Court Plaintiffs’ Proposed Docket Control Order.

III. PARTIES

6. Plaintiff MOSE A. GUILLORY, an individual, is a resident and citizen of Fort Bend County, Texas.

7. Plaintiff MARY GUILLORY, an individual, is the wife of MOSE A. GUILLORY and is a resident and

citizen of Fort Bend County, Texas.

8. Defendant IWORKS PERSONNEL, INC. purports to be a Texas corporation organized and existing

under the laws of the state of Texas, whose principal office is P.O. Box 100111, San Antonio, Bexar

County, Texas 78201-­‐1411.

Defendant IWORKS PERSONNEL, INC. has filed its Answer and appeared

herein.

9. Defendant WASTE MANAGEMENT, INC. is a Texas corporation organized and existing under the

laws of the state of Texas, whose principal office is 1001 Fannin, Suite 4000, Houston, Harris County,

Texas 77002.

Defendant WASTE MANAGEMENT, INC. has filed its Answer and appeared herein.

10. Defendant WASTE MANAGEMENT OF TEXAS, INC. is a Texas corporation organized and existing

under the laws of the state of Texas, whose principal office is 1001 Fannin, Suite 4000, Houston, Harris

County, Texas 77002.

Defendant WASTE MANAGEMENT OF TEXAS, INC. has filed its Answer and

appeared herein.

11. Defendant WM RECYCLE AMERICA, LLC is a Texas corporation organized and existing under the

laws of the state of Texas, whose principal office is 1001 Fannin, Suite 4000, Houston, Harris County,

Defendant WM RECYCLE AMERICA, LLC has filed its Answer and appeared herein.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 3

12. Defendant LUIS TREVINO, an individual, may be served with process at Defendant’s usual place

of abode, 217 Country Meadow Dr., Boerne, Kendall County, Texas 78006.

Defendant LUIS TREVINO has

filed his Answer and appeared herein.

13. Defendant HAYDEE GUTIERREZ, and individual, may be serve with process at Defendants’ usual

place of business, IWORKS PERSONNEL, INC., 6653 San Pedro Ave, San Antonio, Bexar County, Texas

78216.

Defendant HAYDEE GUTIERREZ has filed her Answer and appeared herein.

IV. JURISDICTION

14. This Court has jurisdiction over the lawsuit because the District Court’s jurisdiction begins at $500

and has no upper limits.

The amount in controversy in this case is within the jurisdictional limits of this

court.

In addition, this Court has jurisdiction over Defendants because Defendants purposefully availed

themselves of the privileges and benefits of conducting business in Texas by engaging in business in the

State of Texas.

Finally, this Court has jurisdiction over Defendants because Defendants committed torts

in whole or in part in Texas, which torts are the subject of this suit and which are set forth more fully

below.

V. VENUE

15. Venue is proper in Harris County, Texas under Texas Civil Practice & Remedies Code section

15.002 because all or a substantial part of the events or omissions giving rise to this suit occurred in

Harris County, Texas.

See TEX. CIV. PRAC. & REM. CODE §15.002(a)(1).

That is, PLAINTIFFS’ injuries and

damages were caused by Defendants’ actions and/or inactions that arose out of an incident that occurred

at 4939 Gasmer Dr., Houston, Harris County, Texas 77035.

Venue is proper in Harris County, Texas under

Texas Civil Practice & Remedies Code section 15.002 because one or more defendant corporations

maintain its principal office in Harris County, Texas. See Tex. Civ. Prac. & Rem. Code §15.002(a)(3).

Finally, venue in Harris County, Texas is proper pursuant to §15.002 because the venue facts show the

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 4

convenience of the parties, witnesses, and in the interest of justice, Harris County, Texas is proper venue.

Maintenance of this action in Harris County, Texas would not work an injustice to any party and the

balanced interests of all parties predominate in favor of the action being brought within Harris County,

Texas.

VI. NO BASIS FOR REMOVAL

16. There is no basis for removal of this case to federal court.

There is no federal question at issue

pursuant to 28 U.S.C. §1441(b).

There is no total diversity of citizenship pursuant to 28 U.S.C. §1441 and

28 U.S.C. §1332, because one or more of the Defendants is a citizen of the state of Texas.

See 28 U.S.C.

§1441(b), §1332(c).

PLAINTIFFS are not asserting any claims against any Defendant whom was acting

as/under any officer of the United States or any such agency thereof, or person acting under him, or for

any act under color of such office, or against any Defendant during a time period when this facility was a

federal enclave.

Accordingly, there is no basis for removal of this case to federal court, and any attempt

to do so by any Defendant will be met with an immediate motion to remand and a motion for sanctions.

VII. EXHIBITS

17. PLAINTIFFS hereby incorporate by reference, as though set forth fully herein, the following

attached exhibits – to wit:

• EXHIBIT A: WM DEFENDANTS’ Master Agreement

• EXHIBIT B: Heavy Equipment Operator Agreement

18. PLAINTIFFS’ exhibits are “written instruments” constituting, “in whole or in part,” the claim sued

upon, pursuant to TRCP 59.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 5

VIII. IWORKS DEFENDANTS & WM DEFENDANTS ARE NON-­‐SUBSCRIBER’S

TO THE WORKERS’ COMPENSATION ACT

19. IWORKS DEFENDANTS did not maintain a workers’ compensation insurance policy in accordance

with the Workers’ Compensation Act and/or did not maintain a workers’ compensation insurance policy

that covered MOSE GUILLORY at the time of the incident, which failure makes IWORKS DEFENDANTS a

nonsubscriber.

TEXAS LABOR CODE §408.001(a).

Because IWORKS DEFENDANTS are nonsubscribers and

their employee, PLAINTIFF MOSE GUILLORY, was injured on the job and by their negligence and/or gross

negligence, the Workers’ Compensation Act does not shield IWORKS DEFENDANTS from suit.

See TEX.

LAB. CODE §§406.033, 408.001

20. Upon information and belief, WM DEFENDANTS did not maintain a workers’ compensation

insurance policy in accordance with the Workers’ Compensation Act, did not maintain a workers’

compensation insurance policy that covered MOSE GUILLORY, and/or cannot claim “subscriber” status

under Texas law at the time of the incident, which failure makes WM DEFENDANTS a nonsubscriber.

Because WM DEFENDANTS are nonsubscribers and their employee,

PLAINTIFF MOSE GUILLORY, was injured on the job and by their negligence and/or gross negligence, the

Workers’ Compensation Act does not shield WM DEFENDANTS from suit.

See TEX. LAB. CODE §§406.033,

408.001.

21. Additionally, by virtue of being nonsubscribers, IWORKS DEFENDANTS and WM DEFENDANTS

are precluded from asserting the following defenses in answering, responding, or defending this

lawsuit: (1) contributory negligence; (2) assumption of the risk; (3) negligence of a fellow employee;

and (4) pre-­‐injury waiver of liability. See TEX. LAB. CODE §406.033(a), (e).

IX. FACTS

22. LEGAL ISSUES INVOLVED – BACKGROUND.

The legal issues involved in this case include

Contract Law, Employment Law, and Tort Law.

A brief historical analysis of the interplay of these legal

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 6

issues is important in understanding Defendants’ motivation and Defendants’ “borderland” of liability.

Employment law looks at “Who is the Employee?” and “Who is the Employer?” – the latter of which is

critical in assessing who is responsible for employment benefits under various federal and state

employment laws (e.g. worker misclassification – where the misclassification or wrongful classification of

an employee as a “contractor” would essentially deny an employee of most federal employment law

benefits – collective bargaining for example 1 ) 2 .

Although seemingly simple, determining this

“employment relationship” is often times difficult, under the law3.

In determining this “employment

relationship,” employers have taken great strides in blurring the lines of the employment relationship in

an effort to operate outside federal and state employment laws – to operate in the “borderland”4 of

liability.

The objective is obvious – when the employment relationship is unclear, employment rights are

unclear5; and, as a result, a financial windfall is reaped by the employer who blurred the lines6.

This

1 http://mynlrb.nlrb.gov/link/document.aspx/09031d4580022ea1

2 See WHD News Release 11-­‐1373-­‐NAT, Labor Secretary, IRS Commissioner Sign Memorandum of Understanding to Improve

Agencies’ Coordination on Employee Misclassification Compliance and Education (Sept. 19, 2011). Deputy Secretary of Labor

Seth Harris explained the significance of the problem of worker misclassification in his testimony before Congress:

“Misclassification” seems to suggest a technical violation or a paperwork error. But “worker

misclassification” actually describes workers being illegally deprived of labor and employment law

protections, as well as public benefits programs like unemployment insurance and workers’

compensation because such programs generally apply only to “employees” rather than workers in

general. . . . Misclassification is no mere technical violation. It is a serious threat to workers and the fair

application of the laws Congress has enacted to assure workers have good, safe jobs.

Leveling the Playing Field: Protecting Workers and Businesses Affected by Misclassification Before the S. Comm. On Health,

Education, Labor and Pensions, 111th Cong. (2010) (statement of Seth Harris, Deputy Sec’y of Labor).

3 The Supreme Court, for example, has referred to the definition of an employee under the Americans with Disabilities Act as a

“mere ‘nominal definition,’” Clackamas Gastroenterology Assocs. v. Wells, 538 U.S. 440, 444 (2003), and has stated that the

definition of an employee under the Employee Retirement Income Security Act is “completely circular and explains nothing,”

Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992).

4 See NLRB v. Hearst Publ’ns, Inc., 322 U.S. 111, 121 (1944) (quoting U.S. Supreme Court Justice Wiley Blount Rutledge).

5 See Mitchell H. Rubinstein, Our Nation’s Forgotten Workers: The Unprotected Volunteers, 9 U. OF PA. J. LAB. & EMP. L. 147, 151

(2006) (citing Seattle Opera v. NLRB, 292 F.3d 757, 759 (D.C. Cir. 2002)) (holding that an individual was an employee under

NLRA even though he was not paid the minimum wage and did not receive tax form W-­‐2); see also Hopkins v. Cornerstone Am,

545 F.3d 338, 347 (5th Cir. 2008) (stating that it is not inconsistent to be considered an employee under the FLSA, but an

independent contractor under other statutes); City Cab Co. of Orlando, 285 N.L.R.B. 1191, 1193 (1987) (holding that employee

status determinations of other governmental agencies are not controlling, but should be given consideration by the NLRB); see

BWI Taxi Mgmt, No. 5-­‐RC-­‐4836874, 2010 WL 4836874, at *9 n.15 (NLRB Reg. Dir. Sept. 16, 2010) (stating that the petitioner

received a letter saying he was an independent contractor under the EEOC, but was considered an employee under the NLRA);

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 7

financial windfall and danger to the American worker has seen its greatest rise in the “contingent

workforce” and in recent years – to wit:

• U.S. Labor Department reports that in 2013, the nation had more temp workers than ever

before: 2.7 million

temp workers in U.S.7.

• Since the recession ended in mid-­‐2009, 20% of job growth has been the temp sector8.

• Temp work is roaring back 10x faster than private-­‐sector employment9.

• On average, temps earn 25% less than permanent workers.

• African Americans make up 11% of the overall workforce but 20% of the temp

workforce.

• U.S. Government does not keep statistics on injuries among temp workers.

• Study shows that temp workers in construction and manufacturing were 2x as likely to be

injured as regular staff doing the same work10.

• OSHA announced an initiative to get better information on temp-­‐worker safety – stating:

“Employers, we think, do not have the same commitment to providing a safe workplace,

to providing the proper training, to a worker who they may only be paying for a few

weeks…

I mean, we’ve seen just ghastly situations.11”

• Adding to the “Who is the Employer” confusion -­‐ 33 states have statutes or regulations

that address employee leasing and its effect on which entity is the actual employer,

while 17 states and the District of Columbia make such decisions by Court opinions.

Seattle Opera, 292 F.3d at 761–62 (holding individual was an employee even though he was treated as an independent

contractor for tax purposes in that he did not receive a W-­‐2 tax form).

See also Richard R. Carlson, Why the Law Still Can’t Tell

an Employee When It Sees One and How It Ought to Stop Trying, 22 BERKELEY J. EMP. & LAB. L. 295, 296 (2001) (describing

statutory definitions of employee status as “baffling”).

6 It has been estimated that classifying individuals as independent contractors instead of as employees might result in a

savings of twenty to forty percent of labor costs to the quasi-­‐employer.

See Jenna Amato Moran, Note, Independent Contractor

or Employee? Misclassification of Workers and Its Effect on the State, 28 BUFF. PUB. INT. L.J. 105, 121 (2010).

7 See http://www.bls.gov/news.release/empsit.t17.htm

8 Id.

9 American Staffing Association

10 http://www.ncbi.nlm.nih.gov/pubmed/19618410

11 http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=23994 (quoting David

Michaels, OSHA Director).

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 8

• Recently, temp firms have successfully lobbied to change laws or regulatory

interpretations in 31 states, so that workers who lose their temp assignments and are

out of work cannot get unemployment benefits12.

As is clear, the “contingent workforce” is larger than ever at 2.7 million temp workers, growing ten times

faster than private sector employment, and is made up of minorities whom earn a quarter less, get

injured twice as much, and are less likely to understand or be able to exercise their employment rights

under the law.

That is, cases like Plaintiffs’ case are expected to rise with this horrific trend.

Applying the

above to the case at bar, it is no wonder the incident involving Plaintiff Mose Guillory happened

necessitating this lawsuit.

23. PLAINTIFFS.

Plaintiffs complain of Defendants IWORKS DEFENDANTS and WM DEFENDANTS,

for their actions and inactions, both singularly, in combination, and/or collectively, for breaching their

duties of safety, safety training, and workers’ compensation coverage/compliance to and for the benefit

of Plaintiff Mose Guillory, inter alia, which breaches proximately caused Plaintiffs’ damages, as set forth

more fully below.

24. IWORKS DEFENDANTS.

Defendant IWORKS PERSONNEL, INC. is owned and operated by LUIS

TREVINO and HAYDEE GUTIERREZ.

IWORKS PERSONNEL, INC. is in the business of leasing employees

for skilled jobs in many different industries, including but not limited to: “construction, manufacturing,

warehousing, retail, events and hospitality, waste, recycling, transportation, and disaster relief.”

See

http://www.iworkspersonnel.com.

Regarding the type of services provided to its leased employees and

to client companies, Defendant IWORKS PERSONNEL, INC. also states the following – to wit:

How does iWORKS PERSONNEL help solve your people issues?

***

*

We offer free Basic PPE (Personal Protective Equipment)

Basic Safety Training (not site specific)

12 http://www.workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2013/nonmonetary.pdf

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 9

WE PAY ALL PAYROLL TAXES and file them

WE PAY ALL UNEMPLOYMENT TAXES and file them

WE PROVIDE WORKERS COMPENSATION

WE PROVIDE 1 worker or hundreds, for the day or as long as you need them

(minimum 4 hours)

See http://iworkspersonnel.com/clientsolution.aspx (emphasis added).

As is clear, in addition to

supplying client companies with leased employees or temporary workers, IWORKS DEFENDANTS also

have the duty and responsibility to provide worker’s compensation.

25. WM DEFENDANTS.

Defendants WASTE MANAGEMENT, INC., WASTE MANAGEMENT OF TEXAS,

INC., and WM RECYCLE AMERICA, LLC are hereinafter sometimes referred to as “WASTE MANAGEMENT”

or “WM DEFENDANTS.”

Upon information and belief, WASTE MANAGEMENT, INC. is a holding company

and WASTE MANAGEMENT OF TEXAS, INC. and WM RECYCLE AMERICA, LLC are its subsidiaries, which

operate Defendants WASTE MANAGEMENT’s Facility at 4939 Gasmer Dr., Houston, Harris County, Texas

77035 (“Facility”) and which provide collection, transfer, recycling, and disposal services, under the

direction and control of Defendant WASTE MANAGEMENT, INC.

WM DEFENDANTS claim the following

about itself as a corporation(s) and about its safety policies – to wit:

Waste Management is the largest environmental solutions provider in North America,

serving more than 20 million customers in the U.S., Canada and Puerto Rico….

As North

America’s largest residential recycler, we expect to manage more than 20 million tons

every year by 2020, up from the more than 12 million tons we handled in 2012.

See http://www.wm.com/about/index.jsp (emphasis added).

At Waste Management, safety is a core value and a cornerstone of operational

excellence. This philosophy is embedded in the way we work, the decisions we make and

the actions we take….

Our plan of action is called Mission to Zero (M2Z), which means zero

tolerance for unsafe actions, unsafe decisions, unsafe conditions, unsafe equipment

and unsafe attitudes.

The cornerstone of M2Z is training, which provides classroom

and on-­‐the-­‐job site instruction in safety fundamentals for supervisors, drivers and

helpers. Operations Rule Book, Driving Science Series videos and Electronic Observation

Behavior Assessments are just a few of the tools available to our frontline managers to help

them to develop our employees….

Waste Management sites continuously monitor and

measure safety performance….

Through established safety processes and procedures,

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 10

our goal of zero accidents and injuries is transformed into measurable results that have a

positive impact on thousands of people.

See http://investors.wm.com/phoenix.zhtml?c=119743&p=irol-­‐govhighlights (“Safety Policy” download)

(emphasis added).

As is clear, WM DEFENDANTS, combined, are a large corporation who, given its size

and breadth, recognize their duty and responsibility to provide safety, training, and monitoring of safety

and training.

26. DEFENDANTS’ Relationships.

At all times material hereto, DEFENDANTS entered into

contractual agreements and relationships with one another for the performance of their duties, as it

pertains to Plaintiff Mose Guillory, which contractual agreements were entered into prior to July 9, 2012.

See Exhibit A (WM DEFENDANTS’ Master Agreement with IWORKS DEFENDANTS) and Exhibit B (Heavy

Equipment Operator Agreement between WM DEFENDANTS and IWORKS DEFENDANTS).

27. Plaintiff Mose Guillory – Employed by IWORKS DEFENDANTS and Leased to WM

DEFENDANTS.

On or about the morning of July 9, 2012, Plaintiff MOSE GUILLORY applied for a job at

IWORKS’s Houston, Texas office.

Shortly after filling out an application at IWORKS’s Houston, Texas

office, PLAINTIFF MOSE GUILLORY received a call from IWORKS, wherein IWORKS informed PLAINTIFF

MOSE GUILLORY that he was hired and that he was being assigned to WASTE MANAGEMENT at its

facility located at 4939 Gasmer Dr., Houston, Harris County, Texas 77035 (“Facility” or “Gasmer MRF”).

28. MOSE GUILLORY was leased to Gasmer MRF to perform tasks involving “a particular skill; . . .

training in a particular occupation, craft, or trade; . . . or practical knowledge of the principles or

processes of an art, science, craft, or trade.” See Tex. Lab. Code §92.002(3)(a)-­‐(c).

29. Plaintiff Mose Guillory – Employed by WM DEFENDANTS.

At or around 12:00 pm on July 9,

2012, Plaintiff MOSE GUILLORY reported to the WASTE MANAGEMENT Facility where he was instructed

to drive a front-­‐end loader while a maintenance employee, Abraham Hernandez, observed.

After a short

demonstration, Abraham Hernandez was satisfied that PLAINTIFF MOSE GUILLORY had the requisite

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 11

skill to drive and operate the front-­‐end loader at WASTE MANAGEMENT and instructed PLAINTIFF MOSE

GUILLORY to report for work the next morning – July 10, 2012.

30. For the first week of his employment, from roughly July 10, 2012—July 16, 2012, PLAINTIFF

MOSE GUILLORY worked on the day shift at WASTE MANAGEMENT’s Facility.

This shift was from

approximately 5:00 a.m. until 4:30 p.m., approximately seven days per week.

During that time,

PLAINTIFF MOSE GUILLORY’S primary job duty was to drive and operate a front-­‐end loader.

Thereafter,

approximately one or two weeks after starting work at WASTE MANAGEMENT’s Facility, PLAINTIFF

MOSE GUILLORY was re-­‐scheduled to work the night shift from 4:30 p.m. until 5:00 a.m.

31. Upon joining the night shift and sometime thereafter, PLAINTIFF MOSE GUILLORY was instructed

to operate a Harris Centurion Baler.

32. Harris Baler.

The product in question, a Harris Centurion Baler, is a piece of “heavy equipment”

or industrial machinery used in recycling facilities primarily for baling metal, plastic, cardboard, or paper

for transport.

The product is designed to operate in the following manner: the user stands on a platform

in front of a control port and activates a conveyor belt that carries loose product (paper, plastic, metal,

etc.) into the baler; then, the user engages the baler’s hydraulic rams, which compresses the material

loaded into compact, transportable bales.

33. The Harris Baler is sold with a 25-­‐minute training video that addresses safety and a 200-­‐page

“Operator/Service Manual” that must be read and understood before operation.

Before operating the

Harris Centurion Baler, one must have received OSHA-­‐mandated “Lockout-­‐Tagout” (“LOTO”) training.

See 29 C.F.R. 1910.147. LOTO requires that hazardous power sources be “isolated and rendered

inoperative” before any maintenance or servicing work is performed to prevent serious injury or death.

34. No Training on the Harris Baler.

At no point was PLAINTIFF MOSE GUILLORY shown any

training video detailing how to safely operate the Harris Baler.

At no point was PLAINTIFF MOSE

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 12

GUILLORY told about or given any operator’s manual detailing how to safely operate the Harris Baler.

At

no point was PLAINTIFF MOSE GUILLORY given any training or exposed to any material whatsoever,

whether in audio, video, written, electronic, or other format, detailing how to safely operate the Harris

Baler.

At no point was PLAINTIFF MOSE GUILLORY provided any OSHA-­‐mandated “Lockout-­‐Tagout”

(“LOTO”) training.

See 29 C.F.R. 1910.147.

35. No Training on the Harris Baler -­‐ Carlos.

Instead, the full extent of PLAINTIFF MOSE

GUILLORY’S “training” (which Plaintiffs dispute) was observations from a coworker named Carlos.

Carlos is a Hispanic man whose first language is Spanish.

Carlos cannot fluently speak or understand

English well.

PLAINTIFF MOSE GUILLORY’S first language is English.

PLAINTIFF MOSE GUILLORY

cannot speak or understand Spanish. Regardless, Carlos demonstrated that, at certain times, the baler

operator must disengage the baler, climb onto the conveyor, walk up to the top of the conveyor near the

baler mouth, and use a pole to sweep product down onto the conveyor belt from various bins adjacent to

the baler.

Little more was provided to PLAINTIFF MOSE GUILLORY on how to safely operate the Harris

And, at no time did Carlos ever instruct PLAINTIFF MOSE GUILLORY on proper OSHA

Lockout/Tagout procedures.

36. August 5, 2012 – Incident at Issue.

On August 5, 2012, PLAINTIFF MOSE GUILLORY reported for

work on the night shift and began to operate the Harris Baler, as instructed.

At that time, PLAINTIFF

MOSE GUILLORY had only operated the Harris Baler approximately three to four times total.

Sometime

after beginning to operate the Harris Baler, PLAINTIFF MOSE GUILLORY disengaged the baler/conveyor

and climbed onto the conveyor and then into the baler, as he had seen Carlos do before.

Suddenly, and

without warning, the Harris Baler turned on and the baler rams engaged.

The baler rams severed

PLAINTIFF MOSE GUILLORY’S right leg just below the knee and severed all toes and a portion of his left

foot.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 13

37. Plaintiff Mose Guillory – Hospitalized.

PLAINTIFF MOSE GUILLORY was taken by ambulance to

Memorial Hermann Hospital in the Houston Medical Center.

There, PLAINTIFF MOSE GUILLORY

underwent multiple surgeries lasting several hours.

These surgeries were required to complete the full

amputation of PLAINTIFF MOSE GUILLORY’S right leg below the knee as well as all toes and a portion of

his left foot.

As a result of the aforementioned events, Plaintiff MOSE GUILLORY was hospitalized for

roughly seventeen (17) days.

38. While in the hospital and while in ICU, PLAINTIFF MOSE GUILLORY was heavily medicated.

During this time, he was approached by agents of IWORKS whom presented him with various papers,

authorizations, and/or releases to obtain information without his informed consent.

In an incapacitated

state, PLAINTIFF MOSE GUILLORY signed documents for IWORKS DEFENDANTS and/or WM

39. IWORKS and WM DEFENDANTS’ Cover-­‐Up.

Upon information and belief following the incident,

IWORKS DEFENDANTS and WM DEFENDANTS took steps to cover up the incident including, among

others, firing employees, which former employees have advised counsel for PLAINTIFFS that Defendant

WASTE MANAGEMENT is and was taking steps to cover up the incident.

40. iWorks did not think it was iWorks’ obligation to train employees before sending them to Gasmer

MRF.

iWorks claims it did not know WM DEFENDANTS were expecting it (IWORKS) to train.

WM

DEFENDANTS did not know that iWorks was not training or qualifying employees it (IWORKS) was

sending over.

Accordingly, WM DEFENDANTS did not train.

Instead, due to the break down in

communications, Mose Guillory received zero training from either iWorks or WM DEFENDANTS.

In fact,

the failure to train Mose Guillory on lock-­‐out/tag-­‐out (“LO/TO”) and to ensure that he did not operate the

Harris Baler without proper LO/TO training resulted in violations of OSHA regulations and hefty fines

imposed on the site owner, WM DEFENDANTS.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 14

41. As further evidence of the communication (“conduit”) breakdown, Plaintiffs offer the deposition

testimony Defendant LUIS TREVINO, CEO and part owner of iWorks.

Mr. Trevino testified, inter alia, that

Defendant iWorks “[does not] provide site-­‐specific training.”

Mr. Trevino then unequivocally stated the

following:

p. 69

18. Q. You don't. So if -­‐-­‐ if Waste Management or

19 somebody at Gasmer had given y'all a DVD of

20 site-­‐specific training to provide to iWorks employees

21 who are temporary laborers and going out there, then you

22 wouldn't have done it?

23 MR. GARZA: Objection, form.

24 A. We never received one, nor would I have played

25 it.

Next, LUIS TREVINO was asked about iWorks’s obligation under the “Master Services Agreement”

executed between iWorks and WM Defendants – to wit:

p. 70

16 Q. "Contractor is obligated to ensure that

17 Personnel supplied to Waste Management are fully

18 qualified and trained for the jobs they are being

19 supplied to perform and they have been given safety

20 training that meets or exceeds the training Waste

21 Management provides to its employees for the same or

22 similar jobs."

23 Okay. So you're telling me that that is

24 not something that you did with any of the workers that

25 were sent to Waste Management.

p. 71

1 A. I don't know Waste Management policy and

2 procedure. How could I train them on Waste Management

3 policy or procedure, safety rules, machinery[?]

4 Q. Okay. But if -­‐-­‐ but if that information had

5 been provided to you or provided to the folks in the

6 field in Houston, then they should have done that,

7 right?

8 A. It wasn't provided, and I would not have done

9 it.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 15

42. As further evidence of the communication (“Conduit”) breakdown, Plaintiffs offer the deposition

testimony Steve Hasley, former Recycling Director of WM DEFENDANTS. On the issue of training and

safety, Steve Hasley directly contradicts the testimony of Luis Trevino – to wit:

p. 86

A.

Yes.

Q.

Okay.

Is there any document that identifies that

this training topic, everything that's above Environmental

Protection Orientation Training, was to be conducted by the

temp agency?

I have not seen one.

That was supposedly in the contract.

But I've

never seen the contract.

So I don't -­‐-­‐ I can't say for

sure.

And what contract are you speaking of?

The contract that Staff Management had with the

temp labor provider.

Why would Waste Management allow someone else to

perform this orientation training?

MS. SCHADLE:

Objection; form.

Well, it all -­‐-­‐ it all depends on the site and

what you got going.

If you got a lot of employees and

you're bringing in a lot of employees, then it does relieve

the burden off the -­‐-­‐ the management at the site, the

supervision to have to sit down for, you know, two hours to

go through this DVD and discussion and all that kind of

thing.

And that's why it's done at some sites like that,

why the temp labor provider does it.

(BY MR. GILDE) Can you identify all the sites in

p. 87

Texas where the temp laborer provider performs this

training?

I don't know all of them.

I know that they do it

at Arlington and I know that they do it at -­‐-­‐ at Brittmoore.

(BY MR. GILDE) At Brittmoore?

And also at Gasmer?

I think -­‐-­‐ yes, I think they do it at Gasmer, too.

Anywhere else?

Not that I can think of.

I don't know.

They may

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 16

be doing it.

Where JG is at, any place JG is at, I think

they're doing -­‐-­‐ they do it for their temp employees.

(BY MR. GILDE) Okay.

And what is the basis for

that opinion?

Because that's part of their service that they

offer within their rate.

(BY MR. GILDE) Is there -­‐-­‐ it's not going to be

your testimony that it would be impossible to perform safety

orientation training at the 4939 Gasmer Drive facility?

MR. GARZA:

Same objection.

It would not be impossible.

That's something Waste

Management could do?

That's something that the plant site personnel

could -­‐-­‐ could do.

And in this case Waste

Management chose not to do that, true?

Yeah.

In this case the plant site was contracted

p. 105

through Staff Management for the temporary service provider

to conduct this training.

As is clear, WM DEFENDANTS didn’t know what IWORKS DEFENDANTS were doing and vice versa with

respect to training and safety.

WM DEFENDANTS point the finger at IWORKS DEFENDANTS and IWORKS

DEFENDANTS point the finger at WM DEFENDANTS.

43. Defendants’ Liability and Vicarious Liability.

Defendants’ actions and/or inactions and

breaches of duties to Plaintiffs were effectuated by Defendants’ employees, agents, service providers,

officers, directors, assigns, and/or individuals under the control or direction of Defendants.

As such,

Defendants, each of them, are responsible/liable for the following claims and causes of action detailed

below and herein, which responsibility/liability includes but is not limited to: Aiding & Abetting;

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 17

Assisting & Participating; Concert of Action; Respondeat Superior; Nondelegable Duty; Partnership; and

Joint Enterprise theories of liability.

44. Due to Defendants’ actions and/or inactions and breaches of duties to Plaintiffs, Plaintiffs bring

the following claims and causes of action against Defendants – to wit

X. RESPONDEAT SUPERIOR (ALL DEFENDANTS )

45. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

46. Plaintiff MOSE GUILLORY was injured and PLAINTIFFS have suffered damages, as a result of the

torts detailed below.

47. IWORKS DEFENDANTS and WM DEFENDANTS are employer-­‐tortfeasors whom employed

tortfeasor-­‐employees that breached duties to PLAINTIFFS, which resulted in Plaintiff MOSE GUILLORY’s

injuries and PLAINTIFFS’ damages, as detailed more fully below.

48. DEFENDANTS’ tortfeasor-­‐employees committed torts while said tortfeasor-­‐employees were

acting within the scope of their employment.

That is, their acts were: (i) within the tortfeasor-­‐employees’

general authority; (ii) in furtherance of DEFENDANTS’ business; and (iii) for the accomplishment of the

object for which tortfeasor-­‐employees were hired.

XI.PARTNERSHIP LIABILITY (IWORKS PERSONNEL, INC., LUIS TREVINO, and

HAYDEE GUTIERREZ)

49. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

50. IWORKS PERSONNEL, INC. appears to have been duly incorporated under the laws of the State of

Texas on February 26, 2007.

However, IWORKS PERSONNEL, INC. has forfeited its corporate status

numerous times pursuant to TEXAS TAX CODE § 171.309, the last of which occurred on or about May 16,

2012 and certainly no later than February 8, 2013.

At present, the Texas Secretary of State lists IWORKS

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 18

PERSONNEL, INC.’s corporate status as “forfeited existence,” meaning it no longer exist as a “de jure

corporation.”

Regardless, IWORKS PERSONNEL, INC. was not operating as a corporation under the laws

of the State of Texas at the time of the incident at issue.

51. Defendants LUIS TREVINO and HAYDEE GUTIERREZ are personally liable for the debts and acts of

each other and of IWORKS PERSONNEL, INC. because LUIS TREVINO and HAYDEE GUTIERREZ operated

and continue to operate IWORKS PERSONNEL, INC. (d/b/a “Preferred Staffing, L.L.C.”) as a partnership.

Specifically, LUIS TREVINO and HAYDEE GUTIERREZ:

a. Incorporated Preferred Staffing, L.L.C. under the laws of the State of Texas on or about July 18,

2005.

However, upon information and belief, Preferred Staffing, L.L.C. forfeited its corporate

status pursuant to TEXAS TAX CODE § 171.309 on or about July 24, 2009.

At present, the Texas

Secretary of State lists Preferred Staffing, L.L.C.’s corporate status as “forfeited existence”;

b. Incorporated IWORKS PERSONNEL, INC. under the laws of the State of Texas on or about

February 26, 2007.

However, upon information and belief, IWORKS PERSONNEL, INC.

thereafter forfeited its corporate status on multiple occasions pursuant to TEXAS TAX CODE §

171.309.

At present, the Texas Secretary of State lists IWORKS PERSONNEL, INC.’s corporate

status as “forfeited existence”;

c. Shared or have the right to share profits of IWORKS PERSONNEL, INC.

Upon information and

belief, both LUIS TREVINO and HAYDEE GUTIERREZ intended that IWORKS PERSONNEL, INC.

be operated as a corporation and believed this to be the case.

LUIS TREVINO maintains 60%

ownership of IWORKS PERSONNEL, INC. and HAYDEE GUTIERREZ maintains 40 % ownership;

d. Expressed an intent to be partners in the business, as evidenced by their deposition testimony

and exhibits attached thereto (i.e. Articles of Incorporation) to that effect;

e. Participate and/or have the right to participate in control of the business.

Specifically, LUIS

TREVINO is Chief Executive Officer who allegedly oversees operations while HAYDEE

GUTIERREZ is President and allegedly oversees marketing, sales, and client relations;

f. Shared and/or agreed to share in the losses and liabilities of the business;

g. Contributed and/or agreed to contribute money or property to the business;

h. Co-­‐owned property; and

i. Shared or had a right to share gross returns and/or revenues of the business.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 19

52. At the time of the events and incidents at issue herein, LUIS TREVINO and HAYDEE GUTIERREZ

were committing various acts and omissions while in the ordinary course of business and with the

authority of the partnership.

53. Specifically, the decisions made, policies enacted, contracts signed, and all other negligent acts or

omissions committed by LUIS TREVINO and HAYDEE GUTIERREZ, were done so while LUIS TREVINO and

HAYDEE GUTIERREZ were acting in the ordinary course of business and with the authority of the

partnership, IWORKS PERSONNEL, INC. (d/b/a Preferred Staffing).

XII. JOINT-­‐ENTERPRISE LIABILITY (IWORKS PERSONNEL, INC., LUIS TREVINO, and

54. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

55. At the time of the events and incidents at issue herein, LUIS TREVINO and HAYDEE GUTIERREZ

were engaged in a joint enterprise.

Defendants LUIS TREVINO and HAYDEE GUTIERREZ had an

agreement, a common purpose, a community of pecuniary interest in that common purpose, and an equal

right to direct and control various aspects of the enterprise (i.e. IWORKS PERSONNEL, INC.).

56. Thus, Defendants LUIS TREVINO and HAYDEE GUTIERREZ are personally liable for each other’s

acts and for the acts of employees of IWORKS PERSONNEL, INC. (d/b/a Preferred Staffing).

57. At the time of the decisions made, policies enacted, contracts signed, and all other negligent acts or

omissions committed regarding the incident in question, LUIS TREVINO, HAYDEE GUTIERREZ, and other

IWORKS PERSONNEL, INC. employees were acting within the scope of the enterprise.

XIII. COUNT 1: NEGLIGENCE (IWORKS DEFENDANTS and WM DEFENDANTS )

58. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

59. IWORKS DEFENDANTS and WM DEFENDANTS are liable to PLAINTIFFS for negligence.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 20

60. IWORKS DEFENDANTS and WM DEFENDANTS owed a legal duty to PLAINTIFFS in hiring,

employing, training, and supervising PLAINTIFF MOSE GUILLORY, which duties include but are not

limited the following duties and nondelegable duties – to wit:

a. An employer has a nondelegable duty to provide a safe workplace for its employees;

b. An employer has a nondelegable duty to provide rules and regulations for the safety of its

employees;

c. An employer has a nondelegable duty to furnish reasonably safe machinery or tools for its

employees; and

d. An employer has a nondelegable duty to select careful and competent employees.

e. An employer has a duty to train its employees regarding hazards and safety.

f. An employer has a duty to supervise its employees.

g. An employer has the duty to act as a reasonably prudent employer in the same field and under

the same circumstances.

61. Defendants breached their duty through their negligent employment, actions, and/or inactions, in

the following non-­‐exclusive ways:

a. Failing to provide a reasonably safe workplace;

b. Failing to establish rules and regulations for PLAINTIFF MOSE GUILLORY’S safety;

c. Failing to warn PLAINTIFF MOSE GUILLORY of the hazards of his employment;

d. Failing to train PLAINTIFF MOSE GUILLORY;

e. Failing to train PLAINTIFF MOSE GUILLORY in the purpose and use of energy control

procedures (i.e. “Lockout/Tagout” Procedures);

f. Failing to certify and/or conduct periodic inspections of energy control procedures;

g. Exposing PLAINTIFF MOSE GUILLORY to unknown hazards in the workplace;

h. Failing to furnish reasonably safe machinery or instrumentalities;

i. Failing to provide equipment with proper safety mechanisms;

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 21

j. Failing to provide equipment with proper guards to prevent employees from entering the

machinery;

k. Failing to inspect equipment for defects, disabled safety mechanisms, lack of safety

mechanisms, removed guards, or lack of guards;

l. Failing to repair unsafe equipment;

m. Failing to provide equipment with proper safety mechanisms in working order or which were

adequate for PLAINTIFF MOSE GUILLORY to do his job;

n. Failing to supervise PLAINTIFF MOSE GUILLORY while he was operating the baler;

o. Failing to provide PLAINTIFF MOSE GUILLORY adequate help in the performance of work;

p. Failing to prevent an employee from causing an unreasonable risk of harm to PLAINTIFF MOSE

GUILLORY;

q. Failing to keep PLAINTIFF MOSE GUILLORY in a position for which he was qualified and

instead ordering PLAINTIFF MOSE GUILLORY to operate a machine he had not been trained to

operate;

r. Failing to adequately train PLAINTIFF MOSE GUILLORY on how to safely operate the Harris

Baler;

s. Failing to adopt proper policies and procedures regarding maintenance of the equipment that

would require employees to fix disabled safety mechanisms and guards;

t. Failing to adopt proper policies and procedures for safely un-­‐jamming or dislodging lodged

product from the bins;

u. Failing to adopt proper policies and procedures for safely extracting additional product from

the bins and/or the baler;

v. Failing to provide PLAINTIFF with safe equipment and/or safety equipment;

w. Failing to provide English-­‐speaking employees to train and advise PLAINTIFF on how to safely

operate the Harris Baler; and

x. Failure to identify, employee, contract-­‐with, delegate, supervise, and manage competent

vendor management and/or employee-­‐leasing/employee-­‐staffing companies in the

performance of their duties.

62. IWORKS DEFENDANTS’ and WM DEFENDANTS’ negligent acts directly and proximately caused

injury to Plaintiff MOSE GUILLORY, which resulted in PLAINTIFFS’ damages detailed below.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 22

63. PLAINTIFFS seek unliquidated damages within the jurisdictional limits of this Court.

XIV. COUNT 2: NEGLIGENT HIRING, TRAINING, SUPERVISION, and/or RETENTION

(IWORKS DEFENDANTS and WM DEFENDANTS )

64. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

65. IWORKS DEFENDANTS and WM DEFENDANTS are liable to PLAINTIFFS for negligent hiring,

training, supervision, and/or retention.

66. Additionally, IWORKS DEFENDANTS and WM DEFENDANTS had a legal duty to hire, train,

supervise, and/or retain competent employees.

IWORKS DEFENDANTS and WM DEFENDANTS also had

a legal duty to terminate incompetent employees.

67. IWORKS DEFENDANTS and WM DEFENDANTS breached their duties when IWORKS

DEFENDANTS and WM DEFENDANTS negligently hired, trained, and supervised IWORKS DEFENDANTS’

and WM DEFENDANTS’ tortfeasor-­‐employees whom breached duties to PLAINTIFFS, which resulted in

Plaintiff MOSE GUILLORY injuries and PLAINTIFFS’ damages, as detailed more fully below.

68. IWORKS DEFENDANTS and WM DEFENDANTS also breached their duties when Defendants

terminated competent employees whom could have prevented the incident and/or negligently retained

incompetent employees whom failed to prevent the incident, which resulted in Plaintiff MOSE GUILLORY

injuries and PLAINTIFFS’ damages, as detailed more fully below.

69. IWORKS DEFENDANTS’ and WM DEFENDANTS’ negligent acts directly and proximately caused

injury to Plaintiff MOSE GUILLORY, which resulted in PLAINTIFFS’ damages detailed below.

PLAINTIFFS seek unliquidated damages within the jurisdictional limits of this Court.

XV. COUNT 3: NEGLIGENCE PER SE (IWORKS DEFENDANTS and WM DEFENDANTS)

70. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 23

71. IWORKS DEFENDANTS and WM DEFENDANTS are liable to PLAINTIFFS for negligence per se.

72. Additionally, IWORKS DEFENDANTS’ and WM DEFENDANTS’ negligence violated various statutes,

ordinances, and/or administrative regulations. Specifically, IWORKS DEFENDANTS and WM

DEFENDANTS violated various statutes and provisions pertaining to the Occupational Safety & Health

Administration (“OSHA”) Act of 1970—to wit:

a. OSHA Regulation 1926.20(b)(3), which provides that “[t]he use of any machinery, tool,

material, or equipment that is not in compliance with any applicable requirement of 29 C.F.R.

1926 is prohibited.

Such machinery, tool, material, or equipment shall either be identified as

unsafe by tagging or locking the controls to render them inoperable or shall be physically

removed from its place of operation.” 29 C.F.R. 1926.20(b)(3).

b. OSHA Regulation 1926.20(b)(4), which provides that the “employer shall permit only those

employees qualified by training or experience to operate equipment and machinery”. 29

C.F.R. 1926.20(c) (emphasis added).

c. OSHA Regulation 1926.21(b)(2), which provides that the employer “shall instruct each

employee in the recognition and avoidance of unsafe conditions and the regulations

applicable to his work environment”. 29 C.F.R. 1926.21(b)(2) (emphasis added).

d. OSHA Regulation 1910.145(f)(3), which provides that “[t]ags shall be used as a means to

prevent accidental injury or illness to employees who are exposed to hazardous or

potentially hazardous conditions, equipment, or operations which are out of the ordinary,

unexpected, or not readily apparent.” 29 C.F.R. 1910.145(f)(3) (emphasis added).

e. OSHA Regulation 1910.147, et seq., which mandates the use of lockout and tagout

procedures and provide that the employer “shall establish a program consisting of energy

control procedures, employee training and periodic inspections to ensure that before any

employee performs any servicing or maintenance on a machine or equipment where the

unexpected energizing, startup or release of stored energy could occur and cause injury,

the machine or equipment shall be isolated from the energy source and rendered

inoperative.” 29 C.F.R. 1910.147(c)(1) (emphasis added).

f. OSHA Regulation 1910.147(c)(7)(i)(B), which mandates that “[e]ach affected employee

shall be instructed in the purpose and use of the energy control procedure” so as to avoid

exposing employees to unknown hazards.”

See 29 C.F.R. 1910.147(c)(7)(i)(B).

g. OSHA Regulations 1910.147(c)(6), et seq., which mandate the following:

i. The employer shall conduct a periodic inspection of the energy control procedure at least

annually to ensure that the procedure and the requirements of this standard are being

followed.

1910.147(c)(6)(i).

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 24

ii. The periodic inspection shall be performed by an authorized employee other than the

ones(s) utilizing the energy control procedure being inspected.

1910.147(c)(6)(i)(A).

iii. The periodic inspection shall be conducted to correct any deviations or inadequacies

identified.

1910.147(c)(6)(i)(B).

iv. Where lockout is used for energy control, the periodic inspection shall include a review,

between the inspector and each authorized employee, of that employee's responsibilities

under the energy control procedure being inspected.

1910.147(c)(6)(i)(C).

v. Where tagout is used for energy control, the periodic inspection shall include a review,

between the inspector and each authorized and affected employee, of that employee's

responsibilities under the energy control procedure being inspected, and the elements set

forth in paragraph (c)(7)(ii) of this section.

1910.147(c)(6)(i)(D).

vi. The employer shall certify that the periodic inspections have been performed. The

certification shall identify the machine or equipment on which the energy control

procedure was being utilized, the date of the inspection, the employees included in the

inspection, and the person performing the inspection.

1910.147(c)(6)(ii).

73. The aforementioned OSHA regulations are designed to protect a class of persons to which

PLAINTIFF MOSE GUILLORY belongs (i.e. employees or persons working at a job site) against the type of

on-­‐the-­‐job injury suffered by PLAINTIFF MOSE GUILLORY.

74. Each regulation is of the type that imposes tort liability.

75. IWORKS DEFENDANTS’ and WM DEFENDANTS’ violations of the above-­‐mentioned regulations

were without legal excuse.

76. IWORKS DEFENDANTS’ and WM DEFENDANTS’ breach of the duty imposed by the above-­‐

mentioned regulations proximately caused injury to Plaintiff MOSE GUILLORY, which resulted in

PLAINTIFFS’ damages detailed below.

77. PLAINTIFFS seek unliquidated damages within the jurisdictional limits of this Court.

XVI. COUNT 4: GROSS NEGLIGENCE (IWORKS DEFENDANTS and WM DEFENDANTS)

78. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 25

79. ALL DEFENDANTS are liable to PLAINTIFFS for gross negligence.

80. Defendants owed legal duties to PLAINTIFFS, as detailed in the Negligent-­‐based counts supra, inter

alia.

81. Defendants breached their duties owed to PLAINTIFFS through Defendants’ negligent activities,

actions, and/or inactions, as detailed in the Negligence-­‐based counts supra, inter alia.

82. Defendants consciously and/or deliberately engaged in recklessness, oppression, willfulness,

wantonness and/or malice through Defendants’ actions and/or inactions, which entitles PLAINTIFFS to

punitive and exemplary damages under Texas Civil Practice & Remedies Code section 41.003(a).

83. DEFENDANTS’ grossly negligent acts and/or omissions directly and proximately caused injury to

Plaintiff MOSE GUILLORY, which resulted in PLAINTIFFS’ damages detailed below.

84. Accordingly, Defendants should be held liable for punitive and exemplary damages to PLAINTIFFS.

85. PLAINTIFFS also seek unliquidated damages within the jurisdictional limits of this court.

XVII. COUNT 5: BREACH OF CONTRACT (IWORKS DEFENDANTS AND WM DEFENDANTS)

86. PLAINTIFFS re-­‐allege all of the allegations in the previous paragraphs, as though set forth fully

87. IWORKS DEFENDANTS and WM DEFENDANTS are liable to PLAINTIFFS for breach of contract.

88. On September 22, 2010 and July 24, 2012, respectively, IWORKS DEFENDANTS and WM

DEFENDANTS executed valid and enforceable written contracts. See Exhibits A and B.

89. The contracts provided that IWORKS DEFENDANTS would lease employees to perform work for

WM DEFENDANTS.

The contracts at issue also expressly or impliedly provided that WM DEFENDANTS

and IWORKS DEFENDANTS would:

a. Provide a reasonably safe workplace;

b. Establish rules and regulations for worker safety;

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 26

c. Warn workers of the hazards of his employment;

d. Properly train workers;

e. Ensure that workers had been properly trained before assigning them to a task;

f. Certify and/or conduct periodic inspections of energy control procedures;

g. Provide equipment with proper guards and safety mechanisms that were adequate and in

working order;

h. Supervise workers while they were performing tasks, including the operation of machinery;

i. Ensure that workers had adequate help in the performance of work;

j. Ensure that workers are assigned a task they are qualified and trained to perform;

k. Ensure that workers are trained in the safe and proper operation of all heavy equipment

operated in the worker’s assigned task; and

l.Identify, employ, contract-­‐with, delegate, supervise, and manage competent vendor

management and/or employee-­‐leasing/employee-­‐staffing companies in the performance of

their duties.

90. When entering into the contracts at issue, IWORKS DEFENDANTS and WM DEFENDANTS

intended to secure a benefit for PLAINTIFF MOSE GUILLORY and entered into the contracts for the

benefit of MOSE GUILLORY and his coworkers.

Thus, PLAINTIFF MOSE GUILLORY has standing to

enforce the aforementioned contracts executed by IWORKS DEFENDANTS and WM DEFENDANTS

because PLAINTIFF MOSE GUILLORY is a third-­‐party beneficiary of those contracts.

91. IWORKS DEFENDANTS and WM DEFENDANTS each breached the contracts at issue in the

following non-­‐exclusive ways:

a. Failing to provide MOSE GUILLORY a reasonably safe workplace;

b. Failing to establish rules and regulations for MOSE GUILLORY’s safety;

c. Failing to warn MOSE GUILLORY of the hazards of his employment;

d. Failing to properly train MOSE GUILLORY;

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 27

e. Failing to ensure that MOSE GUILLORY had been properly trained before assigning him to a

task;

f. Failing to certify and/or conduct periodic inspections of energy control procedures for MOSE

GUILLORY’s safety;

g. Failing to provide MOSE GUILLORY equipment with proper guards and safety mechanisms that

were adequate and in working order;

h. Failing to supervise MOSE GUILLORY while he was performing tasks, including operating the

Harris Centurion Baler;

i. Failing to ensure that MOSE GUILLORY had adequate help in the performance of his work;

j. Failing to ensure that MOSE GUILLORY was assigned to a task he qualified and trained to

perform;

k. Failing to ensure that MOSE GUILLORY was trained in the safe and proper operation of all

heavy equipment operated in MOSE GUILLORY’s assigned task, including the Harris Centurion

Baler; and

l. Failing to identify, employ, contract-­‐with, delegate, supervise, and manage competent vendor

management and/or employee-­‐leasing/employee-­‐staffing companies in the performance of

92. IWORKS DEFENDANTS and WM DEFENDANTS were unjustly enriched by IWORKS DEFENDANTS’

and WM DEFENDANTS’ breaches.

93. IWORKS DEFENDANTS’ and WM DEFENDANTS’ breaches proximately caused injury to Plaintiff

MOSE GUILLORY, which resulted in PLAINTIFFS’ damages detailed below.

94. PLAINTIFFS seek unliquidated damages within the jurisdictional limits of this Court.

95. PLAINTIFF MOSE GUILLORY is entitled to recover reasonable attorney fees under Texas Civil

Practice & Remedies Code Chapter 38 because this suit is for breach of written contracts. PLAINTIFF

MOSE GUILLORY retained counsel, who presented PLAINTIFF’s claim to IWORKS DEFENDANTS and WM

DEFENDANTS. DEFENDANTS did not tender the amount owed within 30 days of when the claim was

presented.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 28

XVIII. DAMAGES

96. DEFENDANTS’ activities, actions, and/or inactions, as detailed above, directly and/or proximately

caused injury to PLAINTIFFS, which include the following:

a. Pain and suffering in the past and future

b. Mental anguish in the past and future.

c. Physical disfigurement in the past and future.

d. Physical impairment in the past and future.

e. Medical expenses in the past and future.

f. Loss of past earning capacity.

g. Loss of future earning capacity.

h. Loss of consortium in the past and future.

i. Loss of household services in the past and future.

j. Consequential and/or incidental damages.

k. Other unliquidated damages within the jurisdictional limits of this Court.

l. Exemplary damages under Texas Civil Practice & Remedies Code section 41.003(a).

m. Contract damages including but not limited to restitution and profit disgorgement.

n. Nominal damages.

o. Attorneys’ fees, as permitted by law.

p. Pre-­‐judgment interest and post-­‐judgment interest. TEXAS FINANCE CODE §304.001, et seq., and

any other applicable law.

XIX. JURY DEMAND

97. PLAINTIFFS demand a jury trial and tender the appropriate fee with this petition.

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 29

XX. CONDITIONS PRECEDENT

98. All conditions precedent to PLAINTIFFS’ claims for relief have been performed or have occurred.

XXI. REQUEST FOR DISCLOSURE

99. Under Texas Rule of Civil Procedure 194, PLAINTIFFS request that DEFENDANTS disclose the

information or material described in Rule 194.2.

XXII. PRAYER

100. WHEREFORE, PREMISES CONSIDERED, PLAINTIFFS ask that Defendants be cited to appear and

answer and, on final trial, that PLAINTIFFS be awarded a judgment against IWORKS PERSONNEL, INC.,

LUIS TREVINO, HAYDEE GUTIERREZ, and WM DEFENDANTS for PLAINTIFFS’ damages and for all other

relief to which PLAINTIFFS are entitled at law and in equity.

GILDE LAW FIRM

________________________________________________

BRADFORD J. GILDE

TSB#: 24045941

NICHOLAS A. HOMAN

TSB#: 24083194

55 Waugh Dr., Suite 850

Houston, TX 77007

281-­‐973-­‐2771 – facsimile

281-­‐973-­‐2772 – phone

bjg@gildelawfirm.com

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 30

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been served to all counsel of

record via TexFile on this 13th day of June, 2014.

______________________________________________

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 31

EXHIBIT

A

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 32

WMRA 000022 WMRA 000023 WMRA 000024 WMRA 000025 WMRA 000026 WMRA 000027 WMRA 000028 WMRA 000029 WMRA 000030 WMRA 000031 WMRA 000032 WMRA 000033 WMRA 000034

B

PLAINTIFFS’ FIFTH AMENDED PETITION & REQUESTS FOR DISCLOSURE 33

iWorks Personnel Inc. Resp to P RFP00002 Case No. 201261407

MOSE A. GUILLORY AND MARY § IN THE DISTRICT COURT OF GUILLORY § § HARRIS COUNTY, TEXAS V. § § IWORKS PERSONNEL, INC, ET AL. § 113TH JUDICIAL DISTRICT

IWORKS PERSONNEL, INC.’S PLEA TO THE JURISDICTION

DEFENDANTS, iWORKS PERSONNEL, INC., LUIS TREVINO, and HAYDEE

GUTIERREZ (hereinafter “IWORKS”) file this Plea to the Jurisdiction. In support thereof

it would show this honorable Court the following:

This is a worker’s compensation case. IWORKS has prefaced almost every

pleading it has filed with this assertion. This is because, to date, the great bulk of legal

efforts expended in this case are the direct result of Plaintiffs’ numerous and continued

attempts to circumvent the Texas Labor Code in the face of well settled law and clear

public policy dictating otherwise. For well over a year Plaintiff’s counsel has had two

separate worker’s compensation policies which would provide him with worker’s

compensation coverage. See Exhibit A (iWORKS’) and Exhibit B (Waste Management’s).

Nevertheless, Plaintiff has refused to file a claim on either policy even though he would

begin receiving benefits within fifteen days and despite the fact that this is what is required

by the Texas Labor Code.

iWORKS has consistently asserted that 1) it is a subscriber to worker’s

compensation insurance, and 2) that Waste Management is responsible for the worker’s

compensation coverage for Guillory because a) it executed a hold harmless agreement related to Guillory’s employment, and b) it is solely responsible for moving Guillory from

the duties he was assigned to perform by iWORKS (operation of a front-end loader) and

placing him in operation of a machine (the Harris Baler) without any notice to iWORKS,

for failing to provide Guillory with the training and supervision necessary to operate the

Harris Baler safely, and for controlling the scope, manner and details of Guillory’s work in

a negligent fashion. For these reasons, iWORKS did not initiate a worker’s compensation

claim related to Guillory’s work-place injury. Moreover, to the best knowledge of iWORKS,

Waste Management has not filed an Employer’s First Report of Injury or Illness (Form

DWC-001) with its worker’s compensation carrier, Indemnity Insurance Company of North

America (“IICNA”).

In order to put this matter on the administrative path it should have been on from

its inception, iWORKS has filed an Employers First Report of Injury or Illness (Claim #

1420000952677) with its worker’s compensation carrier, Texas Mutual Insurance

Company (“TMIC”).1 See Exhibit C. The compensability of Guillory’s injury is now being

determined by TMIC claims adjuster Patricia Westin. It is very likely that Texas Mutual

will seek some form of contribution from IICNA. In the event of an adverse compensability

finding iWORKS will instigate a Benefit Review Conference with the Texas Department

of Insurance – Division of Worker’s Compensation (“DWC”)2, the first step in exhausting

the administrative remedies necessary to pursue judicial review.

1 By filing a claim on its worker’s compensation insurance, iWORKS does NOT waive or otherwise retreat from its position that Guillory’s injury is the sole responsibility of Waste Management and/or Guillory and expressly reserves its rights to raise these issues in the administrative proceedings (if any) and any judicial review of any administrative determinations.

2 In 2005, the Legislature abolished the Texas Workers’ Compensation Commission and transferred its functions to the Texas Department of Insurance-Division of Worker’s Compensation. See Act of May 29, 2005, 70th Leg., R.A., ch. 265, § 8.001, 2005 Tex. Gen. Laws 469, 607-08. For ease of reference Movant

2 The DWC has exclusive jurisdiction over this matter. Plaintiffs’ have not exhausted

their administrative remedies. Thus, this Court lacks subject-matter jurisdiction and

should dismiss Plaintiffs’ causes of action.

II. Evidence in Support of iWORKS’ Plea to the Jurisdiction

Exhibit A – iWORKS’ Workers’ Compensation Policy

Exhibit B – Waste Management’s Workers’ Compensation Policy.

Exhibit C – Employer’s First Report of Injury or Illness (DWC-001) filed by

Exhibit D – Hold Harmless Agreement

Exhibit E – Employee’s Claim for Compensation for a Work-Related Injury or Occupational Disease (DWC-041) executed Guillory

Exhibit F – Affidavit of Luis Trevino

III. Factual Background

IWORKS is a temporary staffing company based out of San Antonio, Texas. It

provides temporary employees to companies throughout Texas for assignments as short

as one day or as long as six months. IWORKS’ duty is to recruit, screen, interview, and

assign its employees to perform the type of work requested by its clients. The work is to

be performed at its client’s facilities and under its client’s direct supervision. IWORKS

also pays the employee’s wages, pays, withholds and transmits payroll taxes, provides

unemployment insurance and worker’s compensation benefits, and handles any

unemployment and worker’s compensation claims for employees we assign to its clients.

IWORKS is not licensed as a staff leasing agency and has never offered staff leasing

will refer to any reference to the Division of Worker’s Compensation or any of its predecessor agencies as “DWC.”

3 services. Nor has it ever provided any PEO services. Its sole business is recruiting and

assigning temporary workers as required by its clients. IWORKS provides no site specific

training to the temporary workers that it provides to its clients. IWORKS does not

supervise any of the work performed at its client’s sites. IWORKS has no control over its

client’s facilities or equipment.

One of IWORKS’ clients was Waste Management, Inc. (“Waste Management”).

In July 2012, Waste Management contacted IWORKS’ Houston branch requesting a

temporary employee who was qualified to operate a front-end loader at Waste

Management’s Gasmer facility. The provision of heavy equipment operators is not an

area in which IWORKS does a lot of business. Therefore, as a condition of procuring

such employees for Waste Management, IWORKS and Waste Management agreed that

IWORKS would locate temporary employees who had experience operating front-end

loaders, but that it would be Waste Management’s responsibility to ensure that

employees supplied by IWORKS were trained in the safe and proper operation of all

heavy equipment to be operated in their assigned task. IWORKS and Waste

Management also agreed that Waste Management would be solely responsible for any

damages related to the operation of the heavy machinery at the Waste Management

facility by an IWORKS temporary employee, and that Waste Management would hold

IWORKS harmless in the event there was a claim made against them related to the

operation of heavy machinery by an IWORKS temporary employee. See Exhibit D.

Mose Guillory applied for temporary work with IWORKS and indicated that he had

experience operating a front-end loader. IWORKS instructed him to report to Waste

Management’s Gasmer facility to be evaluated. Waste Management reported to

4 IWORKS that Guillory had sufficient skill and experience operating a front-end loader

and Guillory began working at the Waste Management Gasmer facility. From that point

forward IWORKS sole responsibility was to pay Guillory based upon the time sheets

submitted by Guillory’s Waste Management supervisors.

IWORKS did not control any aspect whatsoever of Guillory’s work at the Waste

Management facility; Waste Management had sole control over the manner and details

of Guillory’s work. IWORKS did not control or even participate in evaluating whether or

not Guillory possessed sufficient skill to operate a front-end loader; Waste Management

had sole control in determining whether or not Guillory possessed sufficient skill.

IWORKS did not control any site-specific training for Guillory; Waste Management had

sole control over any site-specific training that Guillory may have needed to perform his

duties at Waste Management’s Gasmer facility.

The following undisputed facts are alleged in Plaintiff’s Fifth Amended Original

Petition:

 Waste Management hired IWORKS to locate temporary employees to work at Waste Management’s Gasmer facility. Petition3, p. 11, ¶26; Petition, Exhibit A

 As a condition of procuring such employees IWORKS and Waste Management executed an agreement which specified that Waste Management was solely responsible for ensuring that the candidates were sufficiently trained in the operation of the heavy machinery. Id., p. 11, ¶26; Petition, Exhibit B

 On July 9, 2012 Guillory applied for a job at IWORKS. Id., p. 11, ¶ 27.

 Guillory was assigned to operate a front-end loader at the Waste Management facility located at 4939 Gasmer Dr., Houston, Texas. Id., p. 11, ¶ 29.

 iWORKS does not provide site specific training as that is the duty of the client company. Id., p. 15, ¶ 41. 3 Unless otherwise indicated, “Petition” refers to Plaintiff’s Fifth Amended Petition.

5  When Guillory reported to the Gasmer facility on July 9th he was required to demonstrate his proficiency in driving a front-end loader to a Waste Management employee. Id.

 Waste Management was responsible for determining whether or not Guillory had sufficient experience, training, and skill to operate a front-end loader at Waste Management’s Gasmer facility. Id., p. 11, ¶ 29, p. 14, ¶¶ 40-41.

 Waste Management employee Abraham Hernandez determined that Guillory was sufficiently skilled in operating a front-end loader and instructed him to report for work on July 10, 2012. Id.

 Guillory operated the front-end loader at the Gasmer facility on the day shift from roughly July 10, 2012 to July16, 2012. Id., p. 12, ¶ 30.

 Soon thereafter Guillory moved to the night shift at the Gasmer facility. Id.

 While working on the night shift Waste Management instructed Guillory to operate a Harris Baler. Id., ¶ 31.

 On August 5, 2012 Guillory reported for work on the night shift and began to operate the Harris Baler. Petition, p. 13, ¶ 36.

 During this shift Guillory climbed into the baler which engaged while he was in there, severing his right leg below the knee and severing a portion of his left foot. Id.

IV. Arguments & Authorities

A. This Court does not have subject-matter jurisdiction.

This Court does not have subject-matter jurisdiction over Plaintiffs’ claims related

to his injury at work. Without subject-matter jurisdiction this Court cannot render a valid

judgment in this matter. City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2014, per

curium) (“Subject matter jurisdiction is ‘essential to a court’s power to decide a case’”

quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000)). Subject-

matter jurisdiction cannot be waived, nor can it be given or taken away by consent. Carroll

v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010); see Rhule, 417 S.W.3d at 442 (“A judgment

6 rendered without subject matter jurisdiction cannot be considered final” citing Dubai

Petrol. Co. v. Kazi, 12 S.W.3d 71, 76 (Tex.2000)).

Lack of subject-matter jurisdiction makes a judgment void, not just voidable. In Re

United Servs. Auto Ass’n, 307 S.W.3d 299, 209 (Tex. 2010). Lack of subject-matter

jurisdiction is fundamental error and can be raised at any time. Tex. Worker’s Comp.

Comm’n v. Garcia, 893 S.W.2d 504, 517 n.15 (Tex. 1995) (noting that a trial court can

question its subject-matter jurisdiction even without a motion by either party). Lack of

subject-matter jurisdiction can even be raised for the first time on appeal. Waco ISD v.

Gibson, 22 S.W.3d 849, 851 (Tex. 2000); see Rhule, 417 S.W.3d at 442 (“Not only may

a reviewing court assess jurisdiction for the first time on appeal, but all courts bear the

affirmative obligation ‘to ascertain that subject matter jurisdiction exists regardless of

whether the parties have questioned it.’” quoting In re United Servs. Auto. Ass'n, 307

S.W.3d 299, 306 (Tex.2010)). Furthermore, the failure to grant a plea to the jurisdiction

for failure to exhaust administrative remedies with the DWC is subject to mandamus

review. In Re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328 (Tex. 2009) (orig.

proceeding) (per curiam); In Re Liberty Ins. Corp., 321 S.W.3d 630 (Tex.App.—Houston

[14th Dist.] 2010) (orig. proceeding).

B. The Division of Workers’ Compensation has exclusive jurisdiction.

This is a worker’s compensation case and falls under the exclusive jurisdiction of

the Texas Department of Insurance – Division of Worker’s Compensation. As such, this

court lacks subject-matter jurisdiction to adjudicate Plaintiffs’ claims until Plaintiffs have

exhausted their administrative remedies through the DWC.

7 An agency has exclusive jurisdiction “when a pervasive regulatory scheme

indicates that Congress intended for the regulatory process to be the exclusive means of

remedying the problem to which the regulation is address.” Subaru of Am. v. David

McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002); In Re Mid-Century Ins. Co. of

Tex., 426 S.W.3d 169, 172 (Tex.App.—Houston [1st Dist] 2012) (orig. proceeding) (“An

agency has exclusive jurisdiction . . . when a pervasive regulatory scheme reflects

legislative intent that an agency have the sole power to make the initial determination in

the dispute.”) Exclusive jurisdiction is a question of law that turns on statutory

interpretation. See Rhule, 417 S.W.3d at 442 (citing Subaru, 84 S.W.3d at 221. The

Texas Supreme Court held in Saenz v. Fidelity & Guaranty Insurance Underwriters4 that

“the Workers’ Compensation Act vests the power to award compensation benefits solely

in the [DWC]. . ., subject to judicial review.” Saenz, 925 S.W.2d at 612.

In Tex. Mut. Ins. Co. v. Ruttiger5 the Texas Supreme Court discussed the

significant changes the Legislature made to the Worker’s Compensation Act6 (“Act”) in

19897. It noted that the “amendments included significant reforms, among which were

changes in how to calculating benefits for injured workers, the amount of income benefits

workers could recover, the dispute resolution process, the addition of an ombudsman

program to provide assistance for injured workers who had disputes with insurers, and

increasing sanctions for violations of the Act.” Id., 381 S.W.2d at 433. The Ruttiger court

4 925 S.W.2d 607 (Tex. 1996) 5 381 S.W.3d 430 (Tex. 2012). 6 Tex. Lab. Code §§ 401.001 – 506.002. 7 The Ruttiger opinion addressed the viability of a common-law cause of action for breach of the duty of

good faith and fair dealing against a worker’s compensation carrier, a cause of action previously approved of by the Texas Supreme Court in Arranda v. Ins. Co. of North Amer., 748 S.W.2d 210 (Tex. 1988). The Ruttiger court held that the 1989 amendments to the Act manifested the Legislatures’ intent to vitiate the need for such a cause of action and expressly overruled Arranda. Id., 381 S.W.3d at 438-56.

8 stated that “[t]he purpose of the Act is to provide employees with certainty that their

medical bills and lost wages will be covered if they are injured.” Id. at 441.

To accomplish these purposes, the Act provides detailed notice and administrative dispute resolution proceedings that include specific deadlines and incorporate a “conveyor-belt” approach. That is, once the administrative dispute resolution process is initiated, a dispute continues through the process until the dispute is resolved either by the parties or by a binding decision through the resolution procedures.

The Ruttiger opinion provides a lengthy description of “the detailed notice and

administrative dispute resolution proceedings” encompassed by the Act. Id. at 441-43.

In describing the pervasiveness of the Act the Ruttiger court noted that the Act affords the

DWC significant power to enforce the Act against the various parties in the worker’s

compensation system. Id. The Ruttiger court concluded:

It is apparent that the Act prescribes detailed, WCD-supervised, time- compressed processes for carriers to handle claims and for dispute resolution. It has multiple, sometimes redundant but sometimes additive, penalty and sanction provisions for enforcing compliance with its requirements.

Id. at 443. The court recognized that allowing an employee to circumvent the act by

asserting common law causes of action would be “inconsistent with the Act’s goals and

legislative intent exhibited in the act” and could also “result in rewarding an employee who

is dilatory in utilizing the Act’s detailed dispute resolution procedures, regardless of

whether the delay was intentional or inadvertent, because whether and when the dispute

resolution begins is by and large dependent on the employee.” Id.

The number of appellate decisions recognizing the DWC’s exclusive jurisdiction

over work-place injuries is voluminous. Both Houston Courts of Appeal have recognized

the DWC’s exclusive jurisdiction. The Fourteenth held that “[t]he Workers’ Compensation

9 Act vests the Workers’ Compensation Division with exclusive jurisdiction to determine a

claimant’s entitlement to medical benefits.” In Re Liberty Insurance Corporation, 321

S.W.3d 630, 636 (Tex.App.—Houston [14th Dist.] 2010, orig. proceeding) (granting

Relator’s petition for mandamus relief and dismissing Plaintiff’s case for lack of

jurisdiction). Likewise, the First District held that “[t]he Worker’s Compensation Act gives

the DWC exclusive jurisdiction over certain workers’ compensation disputes relating to

entitlement to medical benefits, preauthorization of medical care and reimbursement of

medical expenses.” In Re Mid-Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex.App.—

Houston [1st Dist.] 2012, orig. proceeding) (granting Relator’s petition for mandamus).

C. Plaintiff has not exhausted his administrative remedies.

When an agency has exclusive jurisdiction a party must exhaust its administrative

remedies before seeking recourse through judicial review. Rhule, 417 S.W.2d at 442

(citing Cash Am. Int’l., Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000); Cunningham

Lindsey Claims Mgmt. v. Snyder, 291 S.W.3d 472, 477 (Tex.App.—Houston [14th Dist.]

2009, pet. denied) (“If an agency has exclusive jurisdiction. . . a party must first exhaust

all administrative remedies before a trial court has subject matter jurisdiction.”). “Absent

exhaustion of administrative remedies, a trial court must dismiss the case.” Rhule, 417

S.W.2d at 442 (citing Tex. educ. Agency v. Cypress-Fairbanks I.S.D., 830 S.w.2d 88, 90

(Tex. 1992). There is no question that Guillory has not exhausted his administrative

remedies through the DWC. The question before this court is, “Why?”

Guillory was injured on August 5, 2012. Approximately two weeks later, he

executed a claim form requesting compensation for a work-related injury. See Exhibit E.

On that form he stated that he was represented by Bradford J. Gilde. Id. Thus, fifteen

10 days after his work-related injury (over 2 ½ years ago) Guillory was at a minimum aware

of the potential availability of worker’s compensation benefits. It is also fair to assume

that his legal representative knew (or had the ability to find out) how to obtain those

benefits. As was stated above, for almost two years Guillory has had two separate

worker’s compensation policies by which he could have sought benefits. Yet he has made

no effort to invoke his rights under either policy.

This court has found as a matter of law that Guillory’s claims against Waste

Management are barred by the “comp bar” defense, yet Guillory still refuses to file a claim

on Waste Management’s worker’s compensation policy. The Texas Supreme Court held

in Port Elevator-Brownsville, L.L.C. v. Casados, 358 S.W.3d 238 (Tex., 2012) that a

company cannot segregate its temporary employees and permanent employees for

purposes of coverage under its worker’s compensation policy. The Casados court further

noted that:

[P]remiums are an issue between the employer and the insurer; they do not affect the employee's coverage. Tex. Emp'rs' Ins. Ass'n v. Stanton, 140 S.W.2d 337, 339–40 (Tex.Civ.App.-Amarillo 1940, writ. ref'd) (“[T]he failure to pay the premiums which may be due upon a policy is a matter of no importance as between the insurer and the employee but only concerns the insurer and the employer.”). If Port Elevator's policy had set out certain premiums solely for temporary workers and Port Elevator had not paid those premiums, Casados would still have been covered under the policy and the failure to pay premiums would be an issue between Port Elevator and Texas Mutual. See Coal Operators Cas. Co. v. Richardson, 414 S.W.2d 735, 738 (Tex.Civ.App.—Beaumont 1967, writ ref'd n.r.e.) (“This [workers' compensation] protection to plaintiff was not lost because his employer failed to pay the proper premium to the insurance company.”).

Id. at 243-44. Thus, Guillory is covered under Waste Management’s worker’s

compensation policy as a matter of law. This may be another reason why Waste

11 Management has failed to invoke its rights under the Act. See discussion, infra, n. 8

(below).

The only plausible explanation for Guillory’s failure to even try to claim his benefits

under the Texas Workers’ Compensation Act is that he and his counsel decided early in

the course of this litigation to try and circumvent the worker’s compensation system in an

attempt to recover common law damages. Given the extreme nature of Guillory’s injury

it is understandable why he would prefer common law remedies. However, this approach

flies in the face of long standing legal precedence and well-established public policy. As

the Ruttiger court stated, “the extra-statutory cause of action provides incentive for an

injured worker to delay using the avenues for immediate relief that the Legislature

painstakingly built into the law” and “distorts the balances struck in the Act and frustrates

the Legislature’s intent to have disputes resolved quickly and objectively.” Ruttiger, 381

S.W.3d at 451. That is what happened in this case.8

This is not a factually complicated matter; the basic underlying facts are, for the

most part, undisputed. However, in his attempt to circumvent the worker’s compensation

system, Guillory has had to assert highly questionable causes of action and include

parties that simply have no business being in this litigation. As a result this litigation has

burgeoned into an unnecessarily complicated and contentious morass. It has even

resulted in an award of substantial attorney fees being assessed against Guillory, himself.

Nevertheless, Guillory continues down this untenable path fearing that any recognition by

8 Fairness demands that the same inquiry be directed at both iWORKS and Waste Management: why didn’t either one of them file a claim with their worker’s compensation carrier? iWORKS’ position is stated, supra, at p. 1-2. iWORKS’ understanding of Waste Management’s position is that the Hold Harmless Agreement is unenforceable and that iWORKS has a contractual duty to provide the worker’s compensation coverage for Guillory. This question is now moot given that iWORKS has filed a claim with TMIC and has begun the administrative process required by the Act.

12 him of a viable worker’s compensation claim will preclude him from his questionable

attempt at recovering common law damages for his work-place injury. This is not how

the State of Texas wants work-place injuries to be resolved. “[P]arties cannot avoid

exhaustion of administrative remedies because they fear they might not prevail.” In Re

Liberty Mut. Fire Ins. Co., 295 S.W.3d 327 329 (Tex. 2009).

The Corpus Christi Court of Appeals provides a concise description of the

administrative process required to exhaust the DWC administrative remedies.

The Texas Workers' Compensation Act provides a four-tiered system for the disposition of claims by the DWC. See TEX. LAB. CODE ANN. §§ 410.021– .308 (West 2006 & Supp. 2010). In the first tier, the parties participate in a “benefit review conference” conducted by a “benefit review officer.” TEX. LAB. CODE ANN. §§ 410.021–.034 (West 2006 & Supp.2010). The conference, which is a “nonadversarial, informal dispute resolution proceeding,” is designed to inform the parties regarding the procedures regarding a claim, discuss the facts and issues pertaining to the claim, and “mediate and resolve disputed issues by agreement of the parties.” Id. § 410.021(3) (West 2006). “A dispute may be resolved either in whole or in part at a benefit review conference.” Id. § 410.029(a) (West 2006). If the conference results in the resolution of disputed issues or in a settlement, the benefit review officer reduces the agreement to writing and the parties and the officer sign the agreement. Id. § 410.029(b) (West 2006). If the parties fail to resolve all parts of a dispute at the benefit review conference, the benefit review officer similarly prepares a written report that delineates the status of the case. Id. § 410.031 (West 2006).

In the second tier, “[i]f issues remain unresolved after a benefit review conference,” the parties may agree to arbitrate, and absent such an agreement, the parties may seek relief at a “contested case” hearing. Id. §§ 410.104, 410.151–.169 (West 2006). In the third tier, a party may seek review by an administrative appeals panel. Id. §§ 410.201–.208 (West 2006). Finally, in the fourth tier, a party that has exhausted its administrative remedies may seek judicial review. Id. §§ 410.251–.308 (West 2006).

In Re New Hampshire Ins. Co., 360 S.W.3d 597 (Tex. App.—Corpus Christi 2011, pet.

denied). This is the process that Guillory must exhaust. Only after Guillory has availed

himself of these administrative remedies may he seek redress in this Court.

13 D. The DWC has exclusive jurisdiction to determine coverage in this matter. Guillory claims that both iWORKS and Waste Management are non-subscribers.

See Petition, p. 6, ¶¶ 19-20. iWORKS contends that it had a worker’s compensation policy

in effect at the time of Guillory’s injury. See Exhibit F.9 By raising this coverage issue

Plaintiff hopes to thwart the “worker’s comp bar”10 and avoid resolution of this matter

through the DWC. However, this approach does not comport with Texas law. The DWC

has both the exclusive authority and the administrative ability to resolve these issues.

The DWC routinely addresses these types of issues through its administrative

proceedings. See e.g. Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747

(Tex.App.—Houston [14th Dist.] 2005, no pet.) (“Though we are not bound by the

decisions [of the DWC], we find them instructive . . . . “); Houston Gen. Ins. Co. v. Ass’n

Cas. ins. Co., 977 S.W.3d 634, 636 (Tex.App.—Tyler 1998, no pet.) (noting that

administrative decisions, while not binding, are entitled to substantial weight).

In Appeals Panel No. 03066011 (Division of Worker’s Compensation, April 28,

2003) the DWC appeals panel addressed a temporary staffing situation and determined

which employer was liable, the proper application of the Staff Leasing Services Act12

(“SLSA”), and approved the use of the borrowed servant doctrine in determining liability.

9 Exhibit F is the Affidavit of Luis Trevino which is incorporated by reference as if set forth in full herein. 10 The Texas Workers' Compensation Act provides that the "exclusive remedy of an employee covered by workers' compensation insurance coverage" for a work-related injury is "recovery of workers' compensation benefits" as provided under the Act. TEX. LAB. CODE ANN. § 408.001(a). 11 DWC Appeals Panel decisions are available on the Texas Department of Insurance website at

http://www.tdi.texas.gov/appeals. Copies of the Appeals Panel decisions cited in this brief are attached hereto in an Appendix. 12 TEX. LABOR CODE, Chapter 91 (“STAFF LEASING SERVICES”). The Texas Legislature amended Chapter 91

in 2013 renaming it “PROFESSIONAL EMPLOYMENT ORGANIZATIONS”. This amendment supports iWORKS’ opposition to Plaintiff’s proposition that it is a staff leasing company. Rather, iWORKS temporary

14 In Appeals Panel No. 021771 (Division of Worker’s Compensation, September 3,

2002) the appeals panel addressed a matter factually similar to this case analyzing the

interplay between the contractual obligations between a staffing company and its client

company, the applicability of the SLSA, and the application of the borrowed servant

doctrine to determine coverage. The appeals panel upheld the hearing officer’s

determination that the client company was responsible for the worker’s injury rather than

the staffing company. The panel held that:

Texas courts have recognized that a general employee of one employer may become the borrowed servant of another employer. The determinative question then becomes which employer had the right of control of the details and manner in which the employee performed the necessary services. Carr v. Carroll Company, 646 S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd n.r.e.). We note that in Texas Workers’ Compensation Insurance Fund v. DEL Industrial, Inc., 35 S.W.3d 591 (Tex. 2000), the court held that the Staff Services Leasing Act (SSLA), Texas Labor Code Chapter 91, supersedes the common law right-of-control test in determining employer status of leased employees for workers’ compensation purposes. However, (Employer 2) was not licensed under the SSLA. The hearing officer determined that on the date of injury, (Employer 2) was a licensed provider of temporary common workers under Chapter 92 of the Texas Labor Code, entitled Temporary Common Worker Employers (TCWE). In Richmond v. L. D. Brinkman & Co. (Texas) Inc., 36 S.W.3d 903 (Tex. App.-Dallas 2001, pet. denied), the court determined that the common law right-of-control test is not superseded by Chapter 92 (TCWE) of the Texas Labor Code. The hearing officer is the sole judge of the weight and credibility of the evidence. Section 410.165(a). We conclude that the hearing officer did not err in applying the right-of-control test and in determining that at the time of the injury, the claimant was the borrowed servant of (Employer 1). The hearing officer’s decision is supported by sufficient evidence and is not so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175 (Tex. 1986).

employment service as set forth in Chapter 93 of the TEXAS LABOR CODE. Furthermore, effective September 1, 2013, TEX. LABOR CODE § 93.004(a) holds that a Certificate of Insurance “constitutes proof of workers’ compensation insurance coverage for the temporary employment service and the client of the temporary employment service with respect to all employees of the temporary employment services assigned to the client.” Subsection (a) further holds that “[t]he state or political subdivision of the state shall accept a certificate of insurance coverage described by this section as proof of worker’s compensation coverage under Chapter 406.”

15 Id. at p. 1-2. The client company also argued that the staffing company should be

responsible because the client company paid fees to the staffing company which went

towards worker’s compensation coverage for the temporary employees. The panel

rejected these arguments. Id.

In Appeals Panel No. 101718 (Division of Worker’s Compensation, March 21,

2011) the appeals panel examined a complex claim involving a contractor, a

subcontractor, a PEO, and a temporary staffing company. In finding that the employee

did not suffer a compensable injury the panel had to address issues related to coverage

(including whether or not the temporary staffing company’s carrier properly terminated

coverage), contractual duties between the parties, liability issues between three different

worker’s compensation insurance providers, employment status of the claimant, and

other related issues.

The legal issues discussed above are all issues that are in play in this case. These

are issues that the DWC routinely addresses through its administration of the Act. These

are issues that fall squarely within the exclusive jurisdiction of the DWC. This court does

not have subject-matter jurisdiction over these matters until all of the administrative

remedies available through the Act have been exhausted.

In Morales v. Liberty Mut. Sinc. Co.13, the Texas Supreme Court addressed the

issue of the relationship between compensability under the Texas Worker’s

13 241 S.W.3d 514 (Tex. 2007).

16 Compensation Act (“the Act”), employee status, and subscriber status.14 The Court held

that issues of coverage such as the one in this case fall within the rubric of the existence

of a compensable injury which is properly resolved through the Act. Morales was killed

while repairing a roof on a motel. Id. at 515. His wife sought death-benefits under the

act claiming he was injured while in the course and scope of his employment with three

different employers. Id. Two of the employers were insured under separate worker’s

compensation policies, and the third was a nonsubscriber. Id.

The existence of a compensable injury is the threshold requirement for payment of benefits under the Act. See TEX. LAB.CODE §§ 401.011(5), 406.031(a). And there are various elements that affect whether an injury is compensable, including the worker's employment status as an employee or independent contractor at the time of injury, whether the worker was injured in the course and scope of employment, who controlled the employee's work when the injury occurred, and whether a particular employer has an insurance policy in effect. See id. §§ 401.011(12), (18), 401.012(a).

....

A dispute about any of these elements regards “compensability or eligibility for . . . benefits” and is subject to judicial review under section 410.301.

Morales v. Liberty Mut. Ins. Co., 241 S.W.3d at 519. iWORKS has consistently claimed

that it has a worker’s compensation policy and that Waste Management controlled the

Guillory’s work when his injury occurred. These are issues within the purview of the Act

and over which the DWC has exclusive jurisdiction.

14 The Morales Court addressed these issues in the context of determining which standard of review set forth in the Act should apply to judicial review of a final decision from a DWC appeals panel. If the issues being appealed involve “compensability” then the standard of review is the “modified de novo” standard established by §410.301. Issues that do not address compensability are reviewed under a “substantial- evidence” standard. Morales, 241 at 516-17. The outcome of this question of compensability also effects venue and the appropriate scope of judicial review. Id.

17 In In Re Tex. Mut. Ins. Co.15 the court addressed the DWC’s exclusive jurisdiction

in the context of common law breach of contract claims and disputed coverage. The Court

held that the Fodge decision mandated that the claimant’s breach-of-contract claim “is

within the Commission’s exclusive jurisdiction.” Id., 157 S.W.3d at 80. The Court also

held that:

We likewise reject [Claimant’s] assertions that the Commission’s exclusive jurisdiction over worker’s compensation benefits claims does not extend to determining whether coverage existed at the time of [Claimant’s] injury. The legislature has granted the Commission exclusive jurisdiction over claims for policy benefits. Fodge, 63 S.W.3d at 805. In adjudicating such claims, the Commission will necessarily have to interpret compensation policies and determine the period in which coverage existed. Indeed, it appears to routinely do so. See, e.g., Gonzales v. Cigna Ins. Co. of Tex, 924 S.W.2d 183, 184-87 (Tex.App.—San Antonio 1996, write denied); Houston Gen. Ins. Co. v. Association Cas. Ins. Co., 972 S.W.2d 634, 636 (Tex.App.—Tyler 1998, no pet.). Moreover, [Claimant’s] argument would imply that whenever the Commission, in the exercise of its exclusive jurisdiction, encounters a coverage issue that can be characterized as going to "policy formation," the agency must abate its proceedings pending judicial resolution of the "formation" issue. We doubt that the legislature, in conferring exclusive jurisdiction upon the Commission to determine compensation benefits claims, intended such an absurd result that seemingly turns traditional concepts of exclusive jurisdiction on their head. Id. at p.

Nor does iWORKS’ delay in reporting Guillory’s injury to its insurance carrier

preclude it from invoking the administrative procedures of the Act. See Hand v. SGS

Control Servs., Inc., 409 S.W.3d 743, 749 (Tex.App.—Houston [1st Dist.] 2013). The court

held that “[the employer] ‘invoked” its workers’ compensation insurance coverage when

it initially obtained the coverage; it was not required to take an specific action to ‘invoke’

15 157 S.W.3d 75 (Tex.App.—Austin 2004, orig. proceeding).

18 that coverage after [Plaintiff] was injured, and it did not forfeit its protections under the

Workers’ Compensation Act when it failed to notify its insurance carrier of Reagan’s injury

in a timely manner.” Id.

V. Conclusion

This is a workers’ compensation case which should have been filed with the DWC

over two years ago. For the various reasons discussed above, none of the parties were

eager to do so. iWORKS’ has relented and filed a claim with its worker’s compensation

carrier. This will start the administrative process necessary to exhaust the remedies

provided by the DWC. However, until those remedies are fully exhausted this Court lacks

subject-matter jurisdiction. Therefore, this Court must dismiss Plaintiffs’ claims as a

matter of law.

VI. Prayer

Defendants iWORKS, Trevino, and Gutierrez pray that the Court grant the relief

requested herein and for any and all other relief to which they are entitled in law or equity.

___/s/_David N. Anderson___________ David N. Anderson TBN: 00797951 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (866) 524-4294 – Fax danderson@lodna.net

ATTORNEY FOR DEFENDANTS IWORKS PERSONNEL, INC., LUIS TREVINO, and HAYDEE GUTIERREZ

19 NOTICE OF HEARING

The foregoing motion will be heard by the Court on Friday, February 20, 2015 at

9:00 a.m.

_/s/_David N. Anderson___________ David N. Anderson

I certify that on February 13, 2015 all parties were served a copy of the foregoing via eFILE in accordance with the Texas Rules of Civil Procedure, to whit:

Bradford J. Gilde Nicholas A. Homan Texas Bar No. 24045941 Texas Bar No. 24083194 bjg@gildelawfirm.com nah@gildelawfirm.com

GILDE LAW FIRM 55 Waugh, Suite 850 Houston, TX 77007 (281) 973-2772 – phone (281) 973-2771 –facsimile Attorneys for Plaintiffs

B. Lee Wertz, Jr. Carrie Schadle Texas Bar No. 00797796 Texas Bar No. 24051618 lee.wertz@harrisonbettis.com carrie.schadle@harrisonbettis.com

HARRISON, BETTIS, STAFF, MCFARLAND & W EEMS, L.L.P. 1415 Louisiana, 37th Floor Houston, Texas 77002 (713) 843-7900 – phone (713) 843-7901 – facsimile Attorneys for Defendant Waste Management, Inc., et al.

/s/ David N. Anderson__________ David N. Anderson

20 Case No. 201261407

MOSE A. GUILLORY AND MARY § IN THE DISTRICT COURT OF GUILLORY § § HARRIS COUNTY, TEXAS V. § § IWORKS PERSONNEL, INC, ET AL. § 113TH JUDICIAL DISTRICT

IWORKS PERSONNEL, INC.’S SUPPLEMENT TO iWORKS’ PLEA TO THE JURISDICTION

GUTIERREZ (hereinafter “IWORKS”) file this Supplement to iWORKS’ Plea to the

Jurisdiction. In support thereof it would show this honorable Court the following:

I.

iWORKS files this Supplement to iWORKS’ Plea to the Jurisdiction in order to

present to the Court additional evidence, recently obtained, which supports its Plea to the

Jurisdiction.

A. Exhibit G – Texas Mutual Claim

Exhibit G is Texas Mutual Insurance Company’s acknowledgement of a claim for

Mose Guillory. This shows that there is a pending matter subject to the exclusive

jurisdiction of the Texas Department of Insurance – Division of Workers’ Compensation

(“DWC”). Until this administrative process has run its course and Plaintiff has exhausted

all of his administrative remedies, this Court lacks subject-matter-jurisdiction.

B. Exhibit H – Correspondence from Gilde to the DWC

Exhibit H is correspondence that was produced this week by Plaintiff’s counsel.

This is a letter from Brad Gilde to the DWC dated August 12, 2013. It is styled as a

“Notice, Stay, and Preservation Letter.” Although litigation was ongoing and both iWORKS and Waste Management were represented by counsel,1 neither Defendant was

copied on this correspondence. Plaintiff attached two separate DWC-041 (“Employee’s

Claim for Compensation for a Work-Related Injury of Occupational Disease”) forms to the

letter. One names iWORKS as Plaintiff’s employer and the other names Waste

Management as his employer. Thus, Plaintiff’s counsel recognized that Plaintiff had a

claim for compensation under two separate worker’s compensation policies and elected

to forego pursuing those claims.

Gilde’s letter to the DWC purports to reserve Plaintiff’s right to seek relief from the

DWC in the event he is unsuccessful in this Court. This approach turns the purpose of

the entire worker’s compensation system on its head. This letter demonstrates that

Plaintiff was well aware of the requirements under the Texas Labor Code yet consciously

chose to attempt to circumvent that process in hopes of a common law verdict. This is

not the public policy of Texas.

This letter to the DWC admits that it “is submitted: (1) as a notice of claim for

compensation . . . (3) as a preservation of right to file and seek a claim for compensation

. . . and (5) pursuant to Tex. Labor Code §409.004.” Ex. G (emphasis in original). The

letter further states that “. . . this letter . . . is not an election or denial of a claim for

coverage.” Id. Plaintiff cannot hedge his bets with the administrative agency while

improperly seeking a judicial remedy in this Court without first exhausting his

administrative remedies. His failure to do so in this matter, despite knowing the

administrative requirements set forth in the Texas Labor Code, deprives this Court of

subject-matter jurisdiction over Plaintiff’s claims.

II.

1 At that time Aric Garza was counsel for iWORKS. Prayer

Defendants iWORKS, Trevino, and Gutierrez pray that the Court grant the relief

requested in their Plea to the Jurisdiction and for any and all other relief to which they are

entitled in law or equity.

___/s/_David N. Anderson___________ David N. Anderson TBN: 00797951 4309 Yoakum Houston, TX 77006 (713) 521-6563 - Telephone (866) 524-4294 – Fax danderson@lodna.net

ATTORNEY FOR DEFENDANTS IWORKS PERSONNEL, INC., LUIS TREVINO, and HAYDEE GUTIERREZ CERTIFICATE OF SERVICE

I certify that on February 19, 2015 all parties were served a copy of the foregoing via eFILE in accordance with the Texas Rules of Civil Procedure as follows:

Bradford J. Gilde Nicholas A. Homan Texas Bar No. 24045941 Texas Bar No. 24083194 bjg@gildelawfirm.com nah@gildelawfirm.com

GILDE LAW FIRM 55 Waugh, Suite 850 Houston, TX 77007 (281) 973-2772 – phone (281) 973-2771 –facsimile Attorneys for Plaintiffs

B. Lee Wertz, Jr. Carrie Schadle Texas Bar No. 00797796 Texas Bar No. 24051618 lee.wertz@harrisonbettis.com carrie.schadle@harrisonbettis.com

HARRISON, BETTIS, STAFF, MCFARLAND & W EEMS, L.L.P. 1415 Louisiana, 37th Floor Houston, Texas 77002 (713) 843-7900 – phone (713) 843-7901 – facsimile Attorneys for Defendant Waste Management, Inc., et al.

/s/ David N. Anderson__________ David N. Anderson CAUSE NO. 2012-­‐61407

MOSE A. GUILLORY and MARY GUILLORY, § IN THE DISTRICT COURT

IWORKS PERSONNEL, INC.; et al. §

Defendants § 113th JUDICIAL DISTRICT

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION

COME NOW, MOSE A. GUILLORY and MARY GUILLORY and file this PLAINTIFFS’ RESPONSE TO

IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION (hereinafter “Response”) asking the Court to

DENY iWorks Defendants’ Plea to the Jurisdiction, and in support of same, Plaintiffs respectfully show

this Court as follows:

“[A] negligence claim is outside the [Workers’ Compensation]

Commission’s exclusive jurisdiction. The Commission’s exclusive

jurisdiction extends to claims for benefits under workers’ compensation

insurance policies.”

In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.—Austin 2004, pet. denied) (orig.

proceeding) (citing Tex. Lab. Code Ann. § 408.001(a)).

The Commission’s exclusive jurisdiction, however, does not extend to all

cases that touch on workers’ compensation issues. The district courts

decide disputes about whether the Act’s exclusive remedy provision

applies as a defense to an injured worker's personal injury suit.

AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d 30, 38-­‐39 (Tex. App.—Houston [1st Dist.]

2011, pet. denied) (emphasis added) (citing Garza v. Excel Logistics, Inc., 161 S.W.3d 473, 481 (Tex. 2005)

(holding that company did not establish that it was covered by workers’ compensation insurance for

temporary employee’s injury because, even if temporary worker agency was contractually obligated to

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 1

provide workers’ compensation insurance that named company as insured, company produced no

evidence of such policy); Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 149 (Tex. 2003)).

I. INTRODUCTORY FACTS

1. iWorks Defendants’ PTJ begins by claiming that “the great bulk of legal efforts expended in this

case are the direct result of Plaintiffs’ numerous and continued attempts to circumvent the Texas Labor

Code in the face of well settled law and clear public policy dictating otherwise.”

This is but one of many

brazenly false statements advanced by iWorks Defendants in their meritless Plea to the Jurisdiction.

2. Never mind the fact that iWorks Defendants have claimed to be workers’ compensation

subscribers for 2 ½ years but they have NEVER produced a valid workers’ compensation policy or

produced proof of a valid workers’ compensation policy.

In fact, iWorks Defendants claimed to be

workers’ compensation subscribers for 2 ½ years before taking any action to initiate a workers’

compensation claim for Mose Guillory on an invalid, terminated policy.

3. Nonetheless, Plaintiffs can only hope that this Plea to the Jurisdiction is truly iWorks Defendants’

last ditch effort in a desperate pattern of dilatory tactics designed to forestall the inevitable trial in this

case—to wit:

4. On August 21, 2014, the Court signed a “Second Partial Summary Judgment” Order largely

denying iWorks Defendants’ summary judgment motions.

The result of the summary judgment motion

practice revealed that iWorks Defendants are Non-­‐Subscribers.

5. Immediately following the Court’s denial of iWorks Defendants’ summary judgment

motions, iWorks Defendants took a number of actions – the effect of which delayed or were

designed to delay the impending trial.

6. DILATORY ACTION #1: On September 2, 2014, iWorks Defendants filed a Motion for

Continuance seeking a 90-­‐day trial continuance based on the health of counsel.

On, September 29, 2014,

the Court signed an order granting iWorks’ Motion for Continuance and gave Counsel for iWorks

Defendants a 168-­‐day trial continuance.

7. DILATORY ACTION #2: On November 3, 2014, forty-­‐two (42) days after Counsel for iWorks

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 2

Defendants’ scheduled back surgery, iWorks Defendants’ filed a Motion to Reconsider the NEMSJs and

TMSJs ruled on in this Court’s 2nd Partial Summary Judgment Order.

8. On December 4, 2014, this Court signed an Order denying iWorks Defendants’ Motion to

Reconsider.

9. DILATORY ACTION #3: On December 8, 2014, iWorks Defendants filed their Third Amended

Answer and Cross-­‐Claims against WM Defendants.

iWorks Defendants’ cross-­‐claims contain Declaratory

Judgment and Breach of Contract claims against WM Defendants.

10. This lawsuit was filed on October 17, 2012, nearly 2 ½ years ago.

Yet, iWorks Defendants

participated fully in pre-­‐trial activities for over 2 years before they decided to assert non-­‐compulsory

cross-­‐claims only 3 months before trial.

11. DILATORY ACTION #4: On December 12, 2014, the Court held an oral hearing on WM

Defendants’ Motion to Sever.

At that hearing, Counsel for iWorks orally represented that he intended to

file a Motion to Abate trial until any alleged workers’ compensation claim is resolved.

12. On January 28, 2015, Waste Management, Inc. (“WM”) filed a Traditional Motion for Summary

Judgment against iWorks Personnel, Inc. and its newly asserted cross-­‐claims.

WM Defendants’ TMSJ is

set for hearing on March 27, 2015.

13. Plaintiffs and WM Defendants seem to be in some agreement that Plaintiffs’ claims against iWorks

Defendants ought to be tried separately from iWorks Defendants’ cross-­‐claims against WM Defendants.

14. As such, on February 9, 2015, Plaintiffs filed their Partially Unopposed Motion for Separate Trials

asking the Court to separate the trial of Plaintiffs’ claims and iWorks Defendants’ cross-­‐claims, thereby

avoiding any further delay of Plaintiffs’ day in court.

Plaintiffs set their Motion for Separate Trials for

hearing on February 20, 2015.

15. DILATORY ACTION #5: Plaintiffs attempted to confer with Counsel Defendants regarding

Plaintiffs’ Motion for Separate Trials.

WM Defendants indicated they were “unopposed.” Plaintiffs

received no response from iWorks Defendants.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 3

16. DILATORY ACTION #6: On February 7, 2015, iWorks Defendants served a letter and an

unsigned, undated, DWC Form-­‐001 (Notice of Injury).

This was done in an attempt to create a doomed

workers’ compensation claim on an insurance policy that had been cancelled at time of the incident in

question.

17. DILATORY ACTION #7: On February 13, 2015, iWorks Defendants filed their improper Plea to

the Jurisdiction asking this Court to hold that a non-­‐subscribing employer may invoke Division of

Workers’ Compensation (hereinafter “DWC”) jurisdiction and gain dismissal simply by filing a claim on a

workers’ compensation policy that was ineffective and invalid on the injury date.

18. As is clear from the pattern of actions summarized above, iWorks Defendants’ PTJ is but their

latest attempt to have this Court delay Plaintiffs’ day in Court and reward iWorks for being a non-­‐

subscribing company that, quoting CEO Luis Trevino, “JUST BLEW IT” and “DIDN’T DO ITS JOB.” See

Deposition of Luis Trevino.

II. FACTS RELEVANT TO PLAINTIFFS’ RESPONSE

19. On or about July 9, 2012, Plaintiff was hired by Defendant IWORKS PERSONNEL, INC. (“iWorks” or

“IWORKS”) and was assigned to work for the WM Defendants at a “Material Recovery Facility” located at

4939 Gasmer Drive, Houston Texas 77035 (hereinafter “Facility” or “Gasmer MRF”).

20. On August 5, 2012, after working at the Gasmer MRF for approximately one month, Plaintiff Mose

Guillory was catastrophically injured while operating a Harris Centurion Baler in the performance of his

job for Defendants.

21. Prior to August 5, 2012, Plaintiff had not received any training, instruction, manuals or guidelines

on how to properly and safely operate the baler.

Moreover, as evidenced by the OSHA Citations issued to

WM Defendants, Plaintiff Mose Guillory was never provided any training on proper Lock Out/Tag Out

procedures.

22. On page 4 of their PTJ, iWorks Defendants readily admit: “IWORKS provides no site specific

training to the temporary workers’ that it provides to its clients.” See iWorks PTJ at p. 4.

However, the

“Master Agreement” between iWorks Defendants and WM Defendants provided that iWorks was

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 4

“obligated to ensure that Personnel supplied to Waste Management are fully qualified and trained

for the jobs they are being supplied to perform and that they have been given safety training that

meets or exceeds the training Waste Management provides its employees for the same or similar

jobs.”

See EXHIBIT C at p. 2.

23. Therefore, on October 17, 2012, Plaintiffs filed their Original Petition against Defendant iWorks

and WM Defendants.

24. In its PTJ, iWorks Defendants claim that “Plaintiff’s counsel has had two separate worker’s

compensation policies which would provide [Mose Guillory] with worker’s compensation coverage.” See

iWorks PTJ at p. 1.

THIS IS FALSE.

25. First, the “policy” iWorks Defendants are referring to, and which they attach as Exhibit A to their

PTJ, is not a policy at all. Exhibit A to iWorks Defendants’ PTJ is an “Information Page” and it references

an insurance policy with Texas Mutual belonging to “Preferred Staffing Company, LLC.” See iWorks PTJ,

Exhibit A.

In 2 ½ years of litigation, iWorks Defendants have NEVER produced a workers’

compensation policy allegedly covering iWorks Personnel, Inc.

26. The Texas Mutual information page references policy number “STA-­‐0001204473 20110904.”

See iWorks PTJ, Exhibit A.

Counsel for iWorks Defendants attempted to initiate a claim on this policy on

our about February 5, 2015, as seen in Exhibit C to iWorks PTJ.

27. However, on October 31, 2013, Plaintiffs executed a Deposition by Written Questions on 2

entities: Texas Mutual Insurance Co. and Lette Insurance Agency.

Texas Mutual is the carrier on iWorks

Defendants’ purported insurance policy and Lette Insurance is the agency through which iWorks

Defendants attempted to procure same.

28. Regarding iWorks Defendants’ policy number STA-­‐0001204473 20110904, Texas Mutual

testified as follows:

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 5

See EXHIBIT A at p. 6.

29. Regarding iWorks Defendants ineffective policy, Texas Mutual further testified as follows:

See EXHIBIT A at p. 10.

30. Finally, Texas Mutual confirmed that iWorks Defendants were non-­‐subscribers on the date

of the incident in question—to wit:

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 6

See EXHIBIT A at pp. 10-­‐11.

31. The foregoing testimony was sworn and is admissible under the Texas Rules of Evidence—to wit:

See EXHIBIT A at p. 16.

32. In relevant part, Texas Mutual’s “NOTICE OF CANCELLATION” of iWorks Defendants’ purported

workers’ compensation insurance policy reads as follows:

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 7

EXHIBIT A, Bates No. TXM00318 (p. 340 of 418).

33. When presented with this information at a summary judgment hearing, Your Honor inquired as to

whether there was any evidence proving that iWorks Defendants had cured their violations and renewed

their cancelled policy prior to Mose Guillory’s incident on August 5, 2012.

The answer is “NO.”

deficiency letter dated August 24, 2012 proves that iWorks Defendant had not revived their cancelled

policy and were still non-­‐subscribers on August 5, 2012.

See EXHIBIT A, Bates No. TXM00355–360 (p.

377-­‐418).

34. In their PTJ, iWorks Defendants claim “[t]he only plausible explanation for Guillory’s failure to

even try to claim his benefits under the Texas Workers’ Compensation Act is that he and his counsel

decided early in the course of this litigation to try and circumvent the worker’s compensation system in

an attempt to recover common law damages.” iWorks PTJ at p. 12.

35. What truly happened is the following: Counsel for Plaintiffs attempted to confirm workers’

compensation coverage for iWorks or Preferred Staffing through the Texas Department of Insurance

website—there was no coverage.

Counsel for Plaintiffs then called the Texas Department of Insurance to

confirm coverage for iWorks or Preferred Staffing—there was no coverage.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 8

36. Plaintiffs then filed this lawsuit and served Requests for Disclosures in October of 2012.

However,

Counsel for iWorks did not produce the cancelled policy information page until Luis Trevino’s deposition

in August of 2013.

Thereafter, one brief phone call to the DWC casted serious doubt as to the

effectiveness of the policy underlying iWorks’s policy information page.

At last, the foregoing deposition

testimony from Texas Mutual and Lette Insurance put the final nail in the coffin regarding iWorks

Defendants’ status as non-­‐subscribers.

37. iWorks Defendants have been in possession of the foregoing testimony and documents since

October of 2013.

The Texas Mutual and Lette Insurance’s responses to DWQ clearly disprove iWorks

Defendants’ untenable position that they are workers’ compensation “subscribers.”

iWorks Defendants

only attempt to disprove the foregoing comes in the form of Luis Trevino’s Affidavit, attached as Exhibit F

to iWorks PTJ.

38. In his affidavit, Luis Trevino claims that Texas Mutual’s cancellation of coverage was incorrect

because he never received notice.

The Notice of Cancellation above shows that it was sent via certified

mail to iWorks Personnel, Inc.’s registered address.

See EXHIBIT A, Bates No. TXM00318 (p. 340 of

418).

Lette Insurance’s responses to DWQ prove that they were in receipt of the required Notices of

Cancellation as iWorks Defendants’ insurance agent.

See EXHIBIT B, Bates No. 000008 (p. 48 of 138).

Moreover, documents produced by Lette Insurance in response to DWQ prove that iWorks President

Haydee Gutierrez was in direct contact with Texas Mutual during this cancellation period.

See EXHIBIT

B, Bates No. 000015 (p. 55 of 138).

39. This all leads to one, indisputable conclusion:

IWORKS DEFENDANTS ARE NON-­‐SUBSCRIBERS AS TO MOSE GUILLORY.

40. Plaintiffs Mose and Mary Guillory have endured indescribable suffering and despair to reach this

point in their case.

The road has been hard fought, and their day in court is well earned.

iWorks

Defendants now seek to rob the Guillory’s of their Constitutional Right to try their case to a jury by

disingenuously filing a claim on a dead workers’ compensation policy.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 9

41. Texas Mutual confirms that iWorks Defendants were non-­‐subscribers as to Mose Guillory, and

there will never be workers’ compensation benefits paid under policy number STA-­‐0001204473

20110904.

What’s worse is that iWorks Defendants and their Counsel know the policy at issue was

ineffective on the date of the incident in question and they know that the claim would be denied even

before it was filed.

42. Because iWorks Defendants’ PTJ is untimely, improper, and meritless, Plaintiffs ask this Court to

DENY iWorks Defendants’ PTJ.

III. PLEA TO THE JURISDICTION STANDARD

43. Plaintiffs incorporate all preceding paragraphs by reference as though fully set forth herein.

44. When a defendant asks the court to dismiss for lack of subject-­‐matter jurisdiction, the court must

overrule the motion unless the pleadings and the parties’ evidence clearly demonstrate that the court

lacks jurisdiction. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000); see, e.g., State v.

Sledge, 36 S.W.3d 152, 155 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (trial court conducted

hearing and received oral testimony, affidavits, exhibits, and stipulations).

45. In ruling on the motion, the court is required to construe the pleadings in the plaintiff’s favor. See

Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).

The plea to the jurisdiction

standard mirrors the summary-­‐judgment procedure under TRCP 166a(c).

Mission Consol. ISD v.

Garcia, 372 S.W.3d 629, 635 (Tex. 2012).

46. DEFENDANTS’ BURDEN.

A defendant is entitled to summary judgment ONLY when he/she/it, as

a matter of law, disproves one or more of the essential elements of each of the plaintiff's causes of action

or pleads and conclusively establishes each essential element of an affirmative defense, thereby rebutting

the plaintiff’s cause of action. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991) (emphasis

added); Peeler v. Hughes & Luce, 868 S.W.2d 823, 827 (Tex. App.—Dallas 1993), aff'd, 909 S.W.2d 494

(Tex. 1995); International Union UAW Local 119 v. Johnson Controls, Inc., 813 S.W.2d 558, 563 (Tex.

App.—Dallas 1991, writ denied); Traylor v. Unitedbank Orange, 675 S.W.2d 802, 804 (Tex. App.—

Beaumont 1984, writ ref'd n.r.e.).

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 10

47. DEFENDANTS’ BURDEN – CONT.

A matter is conclusively established if ordinary minds cannot

differ as to the conclusion to be drawn from the summary judgment proof.

Triton Oil & Gas Corp. v.

Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982) (emphasis added).

48. DEFENDANTS’ BURDEN – CONT.

When evaluating a Traditional Motion for Summary Judgment

based on summary judgment evidence, the trial court MUST do the following:

a. Assume ALL of the nonmovant’s proof is true. Limestone Prods. Distrib., Inc. v.

McNamara, 71 S.W.3d 308, 311 (Tex. 2002); Shah v. Moss, 67 S.W.3d 836, 842 (Tex.

2001); M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000); Nixon

v. Mr. Prop. Mgmt., 690 S.W.2d 546, 548-­‐49 (Tex. 1985) (emphasis added).

b. Make EVERY reasonable inference in favor of the nonmovant.

Provident Life & Acc. Ins.

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); M.D. Anderson Hosp. & Tumor Inst. v.

Willrich, 28 S.W.3d 22, 23 (Tex. 2000); Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910,

911 (Tex. 1997); Nixon v. Mr. Prop. Mgmt., 690 S.W.2d 546, 549 (Tex. 1985) (emphasis

added).

c. Resolve ALL doubts about the existence of a genuine issue of material fact against the

movant.

M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000);

Johnson Cty. Sheriff’s Posse, Inc. v. Endsley, 926 S.W.2d 284, 285 (Tex. 1996); Nixon v. Mr.

Prop. Mgmt., 690 S.W.2d 546, 548-­‐49 (Tex. 1985).

See also Rhône-­‐Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Collins v. County of El Paso, 954

S.W.2d 137, 145 (Tex. App.—El Paso 1997, pet. denied).

49. DEFENDANTS’ BURDEN – CONT.

Regarding the “Exclusive Remedy” defense, the defendant

must (1) conclusively prove that it was the plaintiff’s employer within the meaning of the TWCA, (2)

conclusively prove that it subscribed to workers’ compensation insurance as to the injured employee.

Western Steel Co. v. Altenburg, 206 S.W.3d 121, 123 (Tex. 2006); see also Port Elevator-­‐Brownsville v.

Casados, 358 S.W.3d 238 (Tex. 2012).

50. PLAINTIFFS’ BURDEN.

When the movant does not meet its burden of proof, the burden does

not shift to the nonmovant.

M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000);

City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex. 1979).

A nonmovant in a

traditional summary-­‐judgment proceeding is not required to produce summary-­‐judgment evidence

until after the movant establishes it is entitled to summary judgment as a matter of law.

Casso v. Brand,

776 S.W.2d 551, 556 (Tex. 1989) (emphasis added).

After the movant has established conclusively as a

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 11

matter of law that movant is entitled to summary judgment, only then shall a nonmovant be responsible

for producing summary judgment evidence to raise a fact issue in a response.

51. PLAINTIFFS’ RESPONSE.

Once the movant establishes that he is entitled to summary judgment,

the burden shifts to the non-­‐movant to show why summary judgment should be avoided in the non-­‐

movant’s response.

Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989).

The response may be filed by

mailing it on the day it is due, and it is timely filed even if it is reaches the court less than seven days

before the hearing, as long as it is received by the clerk no more than ten days after the due date.

TRCP 5,

21a; Geiselman v. Cramer Fin. Grp., 965 S.W.2d 532, 535 (Tex. App.—Houston [14th Dist.] 1997, no writ);

Clendennen v. Williams, 898 S.W.2d 257, 259 (Tex. App.—Texarkana 1995, no writ).

52. In TRCP 21a, the three-­‐day rule does not require the non-­‐movant to mail the response ten days

before the hearing.

Holmes v. Ottawa Truck, Inc., 960 S.W.2d 866, 869 (Tex. App.—El Paso 1997, pet.

denied).

What’s more, the trial court must render a summary judgment on the pleadings on file at the

time of the hearing.

TRCP 166a(c); Cluett v. Medical Prot. Co., 829 S.W.2d 822, 826-­‐26 (Tex. App.—Dallas

1992, writ denied) (holding that a party may file an amended pleading after it files its motion or

response).

53. If the facts are disputed, the court cannot grant the plea to jurisdiction, and the issue must be

resolved by the fact-­‐finder at trial.

Mission Consol., 372 S.W.3d at 635; University of Tex. v. Hayes, 327

S.W.3d 113, 116 (Tex. 2010).

54. EVIDENCE.

The trial court may consider evidence in ruling on a plea to the jurisdiction and must

consider evidence when necessary to resolve the jurisdictional issue raised.

Bland ISD v. Blue, 34 S.W.3d

547, 555 (Tex. 2000).

When jurisdiction involves the merits of the case, the trial court must review the

evidence to determine whether there is a fact issue.

Texas Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d

217, 227 (Tex. 2004).

IV. PLEA TO THE JURISDICTION – EVIDENCE ATTACHED

• EXHIBIT A: DWQ Responses from Texas Mutual Insurance Company

• EXHIBIT B: DWQ Responses from Lette Insurance Agency

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 12

• EXHIBIT C: Pages from WM and iWorks “Master Agreement” (WMRA 000022–23)

V. ARGUMENT & AUTHORITIES

55. Plaintiffs incorporate all preceding paragraphs by reference as though fully set forth herein.

56. iWorks Defendants’ PTJ is meritless and should be denied for a at least three reasons.

The bolded,

centered case quotations above are enough for this Court to summarily deny iWork Defendants’ baseless

Plea to the Jurisdiction.

However, Plaintiffs provide additional reasons and support for this Court’s denial

of iWorks Defendants’ PTJ, as specified below.

57. First, the Court should deny iWorks Defendants’ PTJ because the DWC does not have exclusive

jurisdiction over an injured employee’s suit for common-­‐law damages.

iWorks Defendants’ entire PTJ is

based on one premise—that the Division of Workers’ Compensation has exclusive jurisdiction over

Plaintiffs’ claims simply because iWorks Defendants filed a notice of injury against a workers’

compensation policy that was invalid, ineffective, and terminated on the date of the injury.

However, as

explained below, this argument is unavailing and this Court should deny iWorks Defendants’ PTJ.

58. Second, the Court should deny iWorks Defendants’ PTJ because iWorks Defendants have failed to

conclusively prove that they were workers’ compensation subscribers at the time of the incident in

iWorks Defendants cannot invoke the jurisdiction of the DWC without proving that they have

some, effective workers’ compensation insurance coverage.

This Court should deny iWorks Defendants’

PTJ because it seeks dismissal so that the DWC can determine whether there are benefits under a policy

that was invalid, ineffective, and terminated long before the incident in question.

59. Third, in the alternative, this Court should deny iWorks Defendants’ PTJ because Plaintiffs’ claims

fall under the exceptions to exhaustion of administrative remedies.

a. THE COURT SHOULD DENY IWORKS DEFENDANTS’ PTJ BECAUSE THE DWC DOES NOT HAVE

EXCLUSIVE JURISDICTION OVER AN INJURED EMPLOYEE’S SUIT FOR COMMON-­‐LAW

DAMAGES AGAINST HIS NON-­‐SUBSCRIBING EMPLOYER.

60. DISTRICT COURTS HAVE GENERAL JURISDICTION. Trial courts are courts of general

jurisdiction. Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 75 (Tex. 2000).

Article V, Section 8 of the Texas

Constitution provides that a district court has jurisdiction over “all actions, proceedings, and remedies,

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 13

except in cases where exclusive, appellate, or original jurisdiction may be conferred by this Constitution

or other law on some other court, tribunal, or administrative body.” Tex. Const. art V, § 8.

61. Absent a contrary showing, courts of general jurisdiction (i.e. Trial Courts) are presumed to have

subject matter jurisdiction. AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d 30, 37 (Tex. App.—

Houston [1st Dist.] 2011, pet. denied) (citing Dubai Petroleum Co., 12 S.W.3d at 75). There is no similar

presumption that administrative agencies are authorized to resolve disputes. Subaru of Am., 84 S.W.3d at

220.

62. DWC EXCLUSIVE JURISDICTION.

Whether an agency has exclusive jurisdiction depends upon

statutory interpretation, and is a question of law to be reviewed de novo. Subaru of Am., Inc. v. David

McDavid Nissan, Inc., 84 S.W.3d 212, 222 (Tex. 2002).

63. Multiple Texas courts have examined the DWC’s exclusive jurisdiction and have universally held

that it extends only to claims for benefits under workers’ compensation insurance policies.

See In re

Texas Mut. Ins. Co., 157 S.W.3d 75, 78 (Tex. App.—Austin 2004, pet. denied); (DWC does not have

exclusive jurisdiction over employee’s negligence claim); Nat’l Am. Ins. Co. v. Tex. Prop. & Cas. Ins. Guar.

Ass’n for Paula Ins. Co., 2013 Tex. App. LEXIS 10865, 15 (Tex. App.—Austin 2013, no pet.) (DWC’s

exclusive jurisdiction does not extend to the right to reimbursement for a claim paid by a carrier.); see

also AMS Constr. Co., 357 S.W.3d at 39.

The Commission’s exclusive jurisdiction . . . does not extend to all cases that touch on

workers’ compensation issues. The district courts decide disputes about whether the

Act’s exclusive remedy provision applies as a defense to an injured worker's

personal injury suit.”

AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d at 38-­‐39.

64. As such, the only civil claims the DWC has jurisdiction over are those involving claims for wrongful

deprivation of workers’ compensation benefits.

AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357

S.W.3d at 38; (citing Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d at 804 (holding that a claim for wrongful

deprivation of workers’ compensation benefits brought by an injured worker against an insurance carrier

fall within the Commission’s exclusive jurisdiction.); In re Liberty Mut. Fire Ins. Co., 295 S.W.3d 327, 328

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 14

(Tex. 2009) (holding that trial court did not have jurisdiction to adjudicate injured worker’s bad-­‐faith suit

against his workers’ compensation carrier for denying medical benefits because Commission had

exclusive jurisdiction to determine claimant's entitlement to medical benefits); Henry v. Dillard Dept.

Stores, Inc., 70 S.W.3d 808, 809 (Tex. 2002) (holding that trial court did not have jurisdiction to

adjudicate injured worker’s suit against self-­‐insured employer for bad faith denial of reasonable and

timely benefits); Macias v. Schwedler, 135 S.W.3d 826, 830 (Tex. App.—Houston [1st Dist.] 2004, pet.

denied) (holding that trial court did not have jurisdiction to adjudicate wrongful death action against

workers’ compensation carrier because the claims depended on determination that worker sustained

compensable injury)).

65. Moreover, iWorks Defendants cannot cite this Court to one Texas court opinion holding that the

DWC has exclusive jurisdiction over common-­‐law negligence claims like Plaintiffs or contractual

indemnity claims like iWorks Defendants’.

See, e.g. In re Texas Mut. Ins. Co., 157 S.W.3d at 81.

66. That is because Texas law is clear that the DWC does not have exclusive jurisdiction over

common-­‐law claims that are not seeking workers’ compensation benefits:

“[A] negligence claim is outside the [Workers’ Compensation] Commission’s

exclusive jurisdiction. The Commission’s exclusive jurisdiction extends to claims for

benefits under workers’ compensation insurance policies.”

In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.—Austin 2004, pet. denied) (orig. proceeding)

(citing Tex. Lab. Code Ann. § 408.001(a)).1

67. In addition to common-­‐law tort claims, “[c]ourts regularly preside over the hashing out of the

contractual relationships between staff leasing companies, their client companies, and even on occasion

their carriers.” AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d at 39.

For example, in Tex.

Workers' Compensation Fund v. Del Indus. Inc., the supreme court held that the workers leased from a staff

leasing company to a client company were not the client company’s employees for the purposes of

1 The quote above was taken directly from a case that iWorks Defendants cited in their PTJ.

In fact, the quoted text is located

only 4 paragraphs after an excerpt cited by iWorks Defendants in their PTJ.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 15

computing the premiums for the client company’s own workers’ compensation insurance.

35 S.W.3d 591,

596 (Tex. 2000).

68. In re Texas Mut. Ins. Co., 157 S.W.3d 75 (Tex. App.—Austin 2004, pet. denied).

In In re Texas

Mut., an employer brought two claims against Texas Mutual Insurance Company: (1) breach of the

insurance contract by refusing to provide coverage during the disputed period; and in the alternative (2)

negligence in causing the insured to have a coverage gap.

157 S.W.3d at 77.

69. Not long into its discussion of exclusive jurisdiction, the court in In re Tex. Mut. Ins. Co. explained

that the Workers’ Compensation Commission has exclusive jurisdiction over one thing—the award of

workers’ compensation benefits.

157 S.W.3d at 78.

Specifically, the court said “[t]he [Texas Workers’

Compensation] Act ‘vests the power to award compensation benefits solely in the Workers’ Compensation

Commission (formerly the Industrial Accident Board), subject to judicial review.” Id. (citing American

Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 803 (Tex. 2001) (emphasis added).

70. On the other hand, the DWC does not have exclusive jurisdiction over claims that do not seek an

award of workers’ compensation benefits.

Id. at 81.

71. The Court in In re Tex. Mut. ultimately held that the DWC had exclusive jurisdiction over the

plaintiff’s breach of contract claims because they (1) presupposed “the existence of a workers’

compensation insurance policy,” and (2) “quite plainly [sought] benefits due under that policy.” Id. at 80-­‐

81 (citing Fodge, 63, S.W.3d at 803).

72. By contrast, the plaintiff’s negligence claim presupposed that no workers’ compensation insurance

policy was in effect at the time of the plaintiff’s injuries.

Id. at 81-­‐82.

Thus, the DWC did not have

exclusive jurisdiction over the plaintiff’s negligence claim.

Id.

Moreover, the Court swiftly rejected any

attempts to characterize the plaintiff’s “negligence damages claim” as one “seeking the specific workers’

compensation benefits of which [plaintiffs] were negligently deprived.” Id. at 81-­‐82.

73. AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d 30 (Tex. App.—Houston [1st

Dist.] 2011, pet. denied).

AMS Constr. Co. v. K.H.K. Scaffolding Hous., Inc. is factually analogous to the

case at bar.

There, a leased employee sued the client company for negligence and gross negligence after

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 16

sustaining work-­‐related injuries.

Id. at 35.

The client company then asserted cross-­‐claims against the

staff leasing company regarding its failure to maintain workers’ compensation insurance.

The staff

leasing company contended that the trial court lacked subject matter jurisdiction to enter a judgment

against it on the client company’s breach of contract claim because it loosely involved the issue of

workers’ compensation coverage.

Id. at 37.

74. In denying the leasing company’s plea to the jurisdiction, the Court held that “[t]his case does not

involve a dispute about workers’ compensation benefits from a carrier under an insurance policy.” 357

S.W.3d at 39. Instead, the dispute was whether AMS was contractually obligated to obtain workers’

compensation benefits for a leased employee from an insurance carrier, and the consequence of its

failure to do so.

75. The Court in AMS Constr. Co. denied the plea to the jurisdiction for the same reasons that this

Court should deny iWorks Defendants’ PTJ—to wit:

(1) “Neither AMS nor KHK was seeking workers’ compensation benefits as a claimant or a

subclaimant under an insurance policy.” = Neither iWorks nor WM are seeking workers’

compensation benefits as a claimant or subclaimant under any policy;

(2) “[The employee] sued KHK as a non-­‐subscriber.” = Plaintiffs are suing iWorks as a non-­‐ subscriber;

(3) “The insurance company that issued AMS’s workers’ compensation insurance policy denied

him coverage.” = Texas Mutual has given sworn deposition testimony indicating that it

will deny coverage on iWorks’s terminated policy (see EXHIBIT A); and

(4) “AMS never produced a policy that covers [plaintiff] or KHK.” = iWorks has never produced a

workers’ compensation policy that covers Mose Guillory or WM.

AMS Constr. Co., 357 S.W.3d at 39.

76. APPLICATION.

Like in In re Texas Mut. Ins. Co., this Court should deny iWorks PTJ because

Plaintiff’s personal injury claims do not seek an award of workers’ compensation benefits.

157 S.W.3d at

81.

To the contrary, much like the negligence claims asserted in In re Tex. Mut., Plaintiffs’ claims here

presuppose that no workers’ compensation insurance was in effect at the time of the Mose Guillory’s

injuries.

See id. at 81-­‐82.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 17

77. Further, as in AMS Constr. Co., “[t]his case does not involve a dispute about workers’ compensation

benefits from a carrier under an insurance policy.” 357 S.W.3d at 39.

Plaintiffs are not seeking workers’

compensation insurance benefits from WM Defendants or iWorks Defendants.

Instead, Plaintiffs are

seeking compensatory damages under common-­‐law tort principles.

78. On February 19, 2015, iWorks Defendants filed a supplement to their PTJ pointing out 2

immaterial facts: (1) that Texas Mutual created a claim number for iWorks Defendants’ phantom

workers’ compensation claim on their non-­‐existent policy; and (2) that Plaintiffs served a DWC 41 Notice

of Injury Form on the one-­‐year anniversary of Mose Guillory’s injury.

79. As to the first point, iWorks Defendants provide no argument or authority explaining how Texas

Mutual’s creation of a claim prejudices Plaintiff’s right to sue his non-­‐subscribing employer.

As to the

second point, iWorks Defendants claim that “Plaintiff cannot hedge his bets with the administrative

agency while improperly seeking a judicial remedy in this Court[.]” iWorks Supp. to PTJ at p. 2.

80. First, iWorks Defendants provide no authority for this proposition—it is merely Counsel for

iWorks’s unfounded opinion.

In accordance with the Texas Labor Code Ch. 409, Plaintiffs did previously

file their DWC 41 form on the 1-­‐year anniversary of the injury in question.

However, Plaintiffs did so

solely to preserve their right to seek benefits in the event that this Court or the Court of Appeals later

determined that iWorks Defendants and/or WM Defendants were workers’ compensation subscribers.

Plaintiffs are not seeking workers’ compensation benefits from any provider, and are surely not

attempting to get blood from the turnip that is iWorks Defendants’ cancelled policy.

81. Moreover, Plaintiffs’ direct this Court to Footnote 1 on page 2 of iWorks Defendants’ PTJ, which

reads as follows:

“By filing a claim on its worker’s compensation insurance, iWORKS does NOT waive or

otherwise retreat from its position that Guillory’s injury is the sole responsibility of Waste

Management and/or Guillory and expressly reserves its rights to raise these issues in the

administrative proceedings (if any) and any judicial review of any administrative

determinations.”

iWorks PTJ, p. 1, n. 1.

That sounds an awful lot like hedging one’s bets with the administrative agency

while waiting for the judicial review to play out.

What’s good for the goose is good for the gander.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 18

82. AMS Constr. Co., In re Tex. Mut., and Fodge illustrate that the DWC’s exclusive jurisdiction does not

apply to Plaintiffs’ claims here because Plaintiffs’ claims have nothing to do with the payment of or claims

for workers’ compensation benefits.

Plaintiffs have never made a claim for workers’ compensation

benefits from any provider in this case.

83. Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012) and Morales v. Liberty Mut. Sinc. Co.,

241 S.W.3d 514 (Tex. 2007) are inapposite and neither case aids iWorks Defendants with regard to

their unsustainable argument.

Ruttiger and Morales are inapplicable here because the Texas Supreme

Court merely confirmed that the DWC’s exclusive jurisdiction and the requirement for exhausting

administrative remedies only apply to claims for the payment or non-­‐payment of workers’ compensation

benefits.

Ruttiger, 381 S.W.3d at 436-­‐37; Morales, 241 S.W.3d at 519.

84. Additionally, in its citation to Ruttiger, Counsel for iWorks is blatantly attempting to mislead the

Counsel for iWorks cherry picks and manipulates the Court’s holding as follows: “The court

recognized that allowing an employee to circumvent the act by asserting common law causes of action

would be ‘inconsistent with the Act’s goals and legislative intent’.”

iWorks PTJ at p. 9.

85. In the preceding sentence, the Ruttiger Court expressly stated that its holding did not apply to

common-­‐law claims—to wit:

Permitting a workers’ compensation claimant to additionally recover by simply suing

under general provisions of Insurance Code section 541.060 would be inconsistent with

the structure and detailed processes of the Act.

Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 443 (Tex. 2012).

Thus, the analysis in Ruttiger does not avail

iWorks because it pertained to bad-­‐faith insurance lawsuits over the denial of insurance benefits—not

common-­‐law personal injury claims.

86. Many of the other cases cited by iWorks Defendants similarly disprove iWorks’ PTJ on their face.

iWorks Defendants cite In re Liberty Ins. Corp. for the proposition that “[t]he Workers’ Compensation Act

vests the Workers’ Compensation Division with exclusive jurisdiction to determine a claimant's

entitlement to medical benefits.” 321 S.W.3d 630, 636 (Tex. App.—Houston 14th [Dist.] 2010, orig.

proceeding).

iWorks Defendants also cite In Re Mid-­‐Century Ins. Co. of Tex. for the proposition that “[t]he

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 19

Worker’s Compensation Act gives the DWC exclusive jurisdiction over certain workers’ compensation

disputes relating to entitlement to medical benefits, preauthorization of medical care and reimbursement

of medical expenses.” In Re Mid-­‐Century Ins. Co. of Tex., 426 S.W.3d 169, 172 (Tex. App.—Houston [1st

Dist.] 2012, orig. proceeding).

87. These holdings are irrelevant because Plaintiffs are not suing iWorks Defendants for medical

benefits under workers’ compensation—Plaintiffs are suing for compensatory damages under tort law.

88. iWorks Defendants also improperly cite and rely on Port Elevator-­‐Brownsville, L.L.C. v. Casados,

358 S.W.3d 238 (Tex. 2012). There, it was undisputed that the employer had a valid workers’

compensation policy, but the question was whether or not it covered temporary workers.

Id. at 243.

89. The Court held that “a client company is entitled to the exclusive remedy defense upon showing

that it was the plaintiff’s employer and that it was covered by a workers’ compensation policy.”

In

Casados, the employer could assert the exclusive remedy defense against a temporary common worker

even though its workers’ compensation policy purported to exclude such workers and even though it

never paid premiums to cover such workers.

Id. at 243-­‐244.

90. iWorks Defendants are using that holding to argue that a company can cease paying premiums

altogether, allow its workers’ compensation policy to be cancelled, yet continue to reap the benefits of

being a subscriber.

Such an absurd result cannot be extrapolated from the opinion in Casados.

91. Finally, the DWC Appeals Panel Decisions cited in iWorks’ motion are inapposite.

Those decisions

resulted from contested case hearings regarding the payment or non-­‐payment of workers’ compensation

insurance benefits.

It bears repeating that Plaintiffs’ claims are common-­‐law tort claims—Negligence;

Negligent Hiring, Training, Supervision, Retention; Negligence Per Se; and Gross Negligence.

Thus,

Plaintiffs’ claims have NOTHING to do with entitlement, request, award, payment, or non-­‐payment of

92. Like the common-­‐law claims in AMS Constr. Co., the DWC lacks exclusive jurisdiction over

Plaintiffs’ claims and this Court should deny iWorks PTJ accordingly.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 20

b. THE COURT SHOULD DENY IWORKS DEFENDANTS’ PTJ BECAUSE IWORKS DEFENDANTS

HAVE FAILED TO CONCLUSIVELY PROVE THEY WERE WORKERS’ COMPENSATION

“SUBSCRIBERS”.

93. In their PTJ, iWorks Defendants spend much time and effort apparently attempting to educate the

Court on the administrative procedures followed within the workers’ compensation claims process.

iWorks PTJ at pp. 8-­‐11, 13.

However, before launching into their gratuitous diatribe on administrative

protocol, iWorks Defendants conveniently neglect to address the threshold issue—i.e. the existence of an

active, applicable workers’ compensation policy.

94. If the case law makes anything clear, it is that the Court does not even reach the issue of the DWC’s

exclusive jurisdiction and the exhaustion administrative remedies if it determines that iWorks

Defendants are “non-­‐subscribers” as to Mose Guillory.

95. The Court in Port Elevator-­‐Brownsville, L.L.C. v. Casados begins and ends its analysis with this

essential element—the existence of worker’s compensation coverage.

358 S.W.3d 238 (Tex. 2012).

fact, the Texas Supreme Court’s holding in Casados begins as follows: “Because Port Elevator had a

workers’ compensation policy[.]”

Id. at 239.

96. Moreover, the Texas Supreme Court has made it abundantly clear that the fundamental

prerequisite for the exclusive-­‐remedy defense is the existence of a valid, effective workers’ compensation

policy existing at the time of the incident in question.

For example, the Court in Casados noted that

“employer” under the Texas Workers’ Compensation Act means “a person who makes a contract of hire,

employs one or more employees, and has workers’ compensation insurance coverage.” Casados, 358

S.W.3d at 241 (emphasis added).

97. One page later, the Court held that “each employer who subscribes to workers’ compensation

insurance may raise the exclusive-­‐remedy provision as a bar to claims about the injury.”

Casados, 358

S.W.3d at 242 (emphasis added) (citing Garza v. Excel Logistics, Inc., 161 S.W.3d 473, 475-­‐76 (Tex. 2005)

(stating that client company could assert exclusive-­‐remedy defense to claims by temporary employee if it

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 21

was covered by workers’ compensation insurance); Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 143 (Tex.

2003).

98. It is important to note that the Court in Casados used the present tense form of the verbs “has”

and “subscribes” instead of the past tense (“had,” “subscribed”) or the future tense (“will have,” “will

subscribe.”).

Thus, an employer’s status as a workers’ compensation “subscriber” has nothing to do with

whether it maintained some workers’ compensation policy in the past (as iWorks did here) or whether it

plans to obtain workers’ compensation in the future.

99. If that were the case, every Texas business could obtain a workers’ compensation policy, cancel it

after one month, and still be considered a “subscriber” in perpetuity merely because it had workers’

compensation coverage at some irrelevant point in the past.

Such an illogical result was clearly not the

intent of the Texas Legislature when fashioning the Workers’ Compensation Act.

100. Additionally, an employer’s status as a “subscriber” has nothing to do with whether the employer

intended to have coverage or whether it plans to obtain coverage in the future.

Only the employer who

“has” or “subscribes” to workers’ compensation insurance may raise the exclusive-­‐remedy provision as a

bar to claims about the injury.

Casados, 358 S.W.3d at 242.

For iWorks Defendants to have had workers’

compensation coverage in this case, they needed a valid workers’ compensation policy that was effective

on the date of the incident in question.

As confirmed by the DWQ responses attached hereto as EXHIBIT

A and EXHIBIT B, iWorks Defendants failed to meet this requirement.

101. The Court in Casados also explained why the “Exclusive Remedy” provision is obviously

inequitable if there is no valid workers’ compensation policy covering the incident in question.

The first,

basic premise behind the Workers’ Compensation Act is that Texas employers are permitted to choose

whether or not to maintain workers’ compensation insurance.

Casados, 358 S.W.3d at 241.

In response,

employees of subscribing employers can choose whether to accept such coverage or opt out and retain

their common-­‐law rights. Id. (citing Tex. Lab. Code § 406.034; Lawrence v. CDB Servs., Inc., 44 S.W.3d 544,

552 (Tex. 2001)).

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 22

102. The Court in Casados goes on to explain the intention of the Texas Legislature and the rationale

that justifies this law:

“The Legislature intended the TWCA to benefit both employees and employers. For

employees, the TWCA allows them to recover workers’ compensation benefits for

injuries in the course and scope of employment without proving fault by the

employer and without regard to their negligence . . . For employers, their liability to

employees is limited.”

Id. at 241 (citing Tex. Lab. Code § 406.031).

103. It is clear that the rationale of the Texas Legislature and Texas Supreme Court assumes the

existence of workers’ compensation insurance coverage, and it must.

Otherwise, what is the employee

being forced to give up his common law rights for?

104. It cannot be argued that the Texas Legislature intended for this Court to dismiss Mose Guillory’s

claims against iWorks, only to have iWorks then hand him the same, expired, terminated policy

information page and say: “Sorry, you don’t get workers’ compensation coverage because I DIDN’T DO

MY JOB . . . I BLEW IT.”

That was not, and is not, the intent behind the workers’ compensation act and this

Court should not follow iWorks Defendants down this non-­‐sensical path.

See Casados at 241 (citing Tex.

Lab. Code § 406.031).

c. ALTERNATIVELY, THIS COURT SHOULD DENY IWORKS DEFENDANTS’ PTJ BECAUSE

PLAINTIFFS’ CLAIMS FALL UNDER AN EXCEPTION TO THE RULE REGARDING EXHAUSTION

OF REMEDIES.

105. Plaintiffs incorporate all preceding paragraphs by reference as though fully set forth herein.

106. In the unlikely event that this Court agrees with iWorks Defendants’ argument, the Court should

still deny iWorks Defendants’ PTJ because Plaintiffs’ claims fall within the recognized exceptions to

exhaustion of remedies.

107. Texas courts have recognized four exceptions to the exhaustion requirement: (1) exhausting

agency procedures would cause irreparable harm; (2) the agency cannot grant the requested relief, such

as with constitutional claims; (3) the cause of action involves a pure question of law and the facts are

undisputed; and (4) the agency has acted beyond its jurisdiction. Tex. Educ. Agency v. Cypress-­‐Fairbanks

Indep. Sch. Dist., 830 S.W.2d 88, 90-­‐91 (Tex. 1992); Houston Fed. of Teachers v. Houston Indep. Sch. Dist.,

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 23

730 S.W.2d 644, 646 (Tex. 1987); Janik v. Lamar Consol. Indep. Sch. Dist., 961 S.W.2d 322, 324 (Tex.

App.—Houston [1st Dist.] 1997, pet. denied).

108. Plaintiffs have already incurred the time and expense of litigating this lawsuit for nearly 2 ½

years.

During that time, Mose and Mary Guillory have endured the tremendous hardship of Mr. Guillory’s

disabilities and his inability to work.

Moreover, the 2-­‐year statute of limitations on Plaintiffs’ tort claims

has run.

As such, it would cause irreparable harm were this Court to force Plaintiffs to incur the

additional time and expense of the administrative gauntlet only to have the DWC tell Plaintiffs what they

already know—iWorks Defendants are non-­‐subscribers.

109. The DWC cannot grant all of Plaintiffs’ requested relief.

The Texas Workers’ Compensation Act

places caps on the pecuniary benefits that may be awarded and does not provide for non-­‐pecuniary

damages such as pain and suffering, mental anguish, etc.

These are damages that Plaintiffs are seeking

and which the DWC cannot provide.

110. Based on the foregoing, this Court should deny iWorks PTJ because Plaintiffs’ claims fall within

recognized exceptions to the requirement for exhaustion of remedies.

VI. CONCLUSION

111. Plaintiffs incorporate all preceding paragraphs by reference as though fully set forth herein.

112. iWorks Defendants are asking this Court to take unprecedented action that directly contradicts

binding precedent handed down from the 1st District Court of Appeals only 4 years ago.

See AMS Constr.

Co., 357 S.W.3d at 39.

In effect, iWorks Defendants are asking this Court to re-­‐write the Texas Labor Code

so as to extend the DWC’s exclusive jurisdiction to common-­‐law claims over which it has no jurisdiction.

113. More than that, iWorks Defendants are asking this Court to strip away its general jurisdiction to

hear common-­‐law tort claims.

The only way such action is permitted is if iWorks Defendants

conclusively prove their entitlement to the “Exclusive Remedy” defense.

However, iWorks Defendants

are not entitled to the “Exclusive Remedy” defense because iWorks Defendants are non-­‐subscribers.

114. Because plaintiff’s pleadings establish the court’s jurisdiction, and defendant’s factual allegations

disputing jurisdiction are untrue, the court should retain plaintiff’s suit on the court’s docket.

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 24

VII. PRAYER

115. For these reasons, Plaintiffs pray that this Court DENY iWorks Defendants Plea to the Jurisdiction

and grant Plaintiffs such other and further relief to which they have shown themselves justly entitled.

___________________________________

55 Waugh Dr., Ste. 800

nah@gildelawfirm.com

MATTHEWS & ASSOCIATES

DAVID P. MATTHEWS

2905 Sackett Street

Houston, TX 77098

713-­‐522-­‐5250 – phone

713-­‐535-­‐7136 – facsimile

THE GALLAGHER LAW FIRM, LLP

MIKE GALLAGHER

713-­‐238-­‐7705 – phone

713-­‐222-­‐0066 – facsimile

ATTORNEYS FOR PLAINTIFFS

I hereby certify that a true and correct copy of the foregoing has been served to all counsel of

record via facsimile and/or eTexFile on February 19, 2015.

Respectfully

1. submitted,

PLAINTIFFS’ RESPONSE TO IWORKS DEFENDANTS’ PLEA TO THE JURISDICTION 25

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C

WMRA 000022 WMRA 000023 000318 000008 000355 000015 000356 000016 000017 IN THE SUPREME COURT OF TEXAS ════════════ NO. 14-0256 ════════════

IN RE CRAWFORD & COMPANY, CRAWFORD & COMPANY HEALTHCARE MANAGEMENT, INC., PATSY HOGAN AND OLD REPUBLIC INSURANCE COMPANY, RELATORS

══════════════════════════════════════════ ON PETITION FOR WRIT OF MANDAMUS ══════════════════════════════════════════

PER CURIAM

Relators in this mandamus proceeding contend that the trial court abused its discretion

when it refused to dismiss claims over which the Division of Workers’ Compensation has

exclusive jurisdiction. Because all of the claims arise out of relators’ investigation, handling, and

settling of claims for workers’ compensation benefits, we agree.

In 1998, Glenn Johnson suffered traumatic and debilitating injuries while working for

ASARCO. The parties do not dispute that Johnson was severely injured or that he is entitled to

receive lifetime workers’ compensation benefits. Disputes over the details and amounts of those

benefits, however, led Johnson to request a benefit review conference in 2008, which led to a

contested case hearing the following year. It appears from the parties’ briefs that the suit for

judicial review of that decision remains pending in the district court.

Meanwhile, separate from the administrative proceedings, Johnson and his wife, Natalie,

filed the underlying suit against ASARCO’s workers’ compensation insurance provider Old

Republic Insurance Company; its claims services contractors Crawford & Company and Crawford

& Company Healthcare Management, Inc.; and their employee Patsy Hogan (collectively, Crawford). The Johnsons allege that, over a period of nearly ten years, Crawford engaged in “a

battle plan to delay, discourage and deny” benefits that the Johnsons were entitled to receive.

Specifically, the Johnsons contend that Crawford (a) wrongfully disputed, denied, and delayed

medical benefits, (b) misrepresented which benefits were and were not covered, (c) failed to

provide required notices and other information, (d) repeatedly agreed to pay for benefits and

services but then refused to do so, (e) performed inadequate and misleading investigations into the

Johnsons’ claim for benefits, and (f) falsely accused the Johnsons of insurance fraud, leading to

their wrongful arrests and a two-year prosecution that ultimately terminated in the Johnsons’ favor.

In short, the Johnsons allege that, “[r]ather than manage the claim” and adjust it “in a fair and

reasonable manner,” Crawford “resorted to combat tactics to wreak havoc on Glenn’s and

Natalie’s lives.”

Based on these allegations, the Johnsons pled numerous causes of action, some sounding

in tort (negligence; gross negligence; negligent, fraudulent, and intentional misrepresentation;

fraud; fraud by non-disclosure; fraudulent inducement; intentional infliction of emotional distress;

malicious prosecution; and conspiracy); some sounding in contract (breach of contract; quantum

meruit; and breach of the common law duty of good faith and fair dealing); and some alleging

violations of statutory duties (under the Texas Insurance Code and the Texas Deceptive Trade

Practices Act). The Johnsons sought relief in the form of actual damages for physical injuries,

mental injuries, loss of income, and loss of reputation; exemplary damages; statutory damages;

and injunctive relief prohibiting Crawford from continuing to engage in such “extreme and

outrageous” conduct.

The Johnsons specifically pled that the Texas Workers’ Compensation Act does not require

them to pursue their claims through its administrative procedures or otherwise exhaust

2 administrative remedies because (1) the Act’s administrative procedures do not apply to some of

their claims; (2) Crawford’s “subterfuge” of the workers’ compensation system relieves the

Johnsons from any duties under that system; and (3) the Johnsons are seeking to recover for

“independent injuries . . . that are unrelated to [Glenn’s] workers[’] compensation injuries and the

benefits that he is entitled to under that system.” While the Johnsons agree that they must pursue

their claims for workers’ compensation benefits through the administrative process, they contend

that they can pursue these claims for additional, independent, and “unrelated” damages in the

courts.

Crawford disagreed and filed a plea to the jurisdiction and motion for summary judgment.

Relying primarily on our decision in Texas Mutual Insurance Co. v. Ruttiger, 381 S.W.3d 430

(Tex. 2012), Crawford argued that the Texas Department of Insurance Division of Workers’

Compensation has exclusive jurisdiction over all of the Johnsons’ claims because they arise out of

the workers’ compensation claims-handling process. Conceding that the claims for malicious

prosecution and for intentional infliction of emotional distress could “arguably survive the

landmark decision in Ruttiger,” Crawford alternatively asserted that no evidence supported those

claims. The trial court dismissed the Johnsons’ claims for breach of the common law duty of good

faith and fair dealing and for violations of the Texas Insurance Code but refused to dismiss any of

the other claims. The court of appeals denied Crawford’s petition for mandamus relief.1

1 ___ S.W.3d ___. The court of appeals concluded that Crawford is not entitled to mandamus relief because (1) “one could interpret” Crawford’s five-month delay in filing its petition for writ of mandamus, shortly before trial, as an “effort to further hinder the timely adjudication of the Johnsons’ claims”; (2) even if the court could review the denial of Crawford’s plea to the jurisdiction by mandamus, Crawford has not shown that “unrelated topics appearing in the motion for summary judgment may also be reviewed via the same proceeding”; (3) the Johnsons created a fact issue by certifying through their counsel that they had exhausted all administrative remedies; and (4) “claims of malicious prosecution inherently involve activity or misconduct outside the administrative avenues created by the workers’ compensation laws,” nothing in the Act “purports to regulate such conduct or remedy . . . damages unrelated to the amount of workers’ compensation benefits to which an employee may be entitled,” and “because at least one

3 We conclude that the Division of Workers’ Compensation has exclusive jurisdiction over

the Johnsons’ claims and the Workers’ Compensation Act provides their exclusive remedies. The

Act designates the Department of Insurance as the administrative agency responsible “[for

overseeing] the workers’ compensation system of this state” and establishes the Division of

Workers’ Compensation within the Department to “administer and operate” that system. TEX. LAB.

CODE § 402.001. It is the Division’s duty to “(1) regulate and administer the business of workers’

compensation in this state; and (2) ensure that [the Act] and other laws regarding workers’

compensation are executed.” Id. § 402.00114. The Division must monitor insurance carriers,

employers, and others “for compliance with commissioner rules, this subtitle, and other laws

relating to workers’ compensation.” Id. § 414.002(a). The Division or its commissioner may

impose an array of sanctions against those who fail to comply, including a cease-and-desist order

and administrative penalties up to $25,000 per day per occurrence. Id. § 415.021(a). As we

explained in Ruttiger, the Act, as substantially revised in 1989, “prescribes detailed, [Division]-

supervised, time-compressed processes for carriers to handle claims and for dispute resolution”

and “has multiple, sometimes redundant but sometimes additive, penalty and sanction provisions

for enforcing compliance with its requirements.” 381 S.W.3d at 443.

In light of the Act’s comprehensive system for resolving workers’ compensation claims 2

and the Division’s role in that process, we concluded in Ruttiger that the Act provides the exclusive

procedures and remedies for claims alleging that a workers’ compensation carrier has improperly

cause of action continues to exist, despite Ruttiger, we cannot say that the trial court abused its discretion in refusing to dismiss all the causes of action.” Id. at ___.

2 See Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492, 495 (Tex. 2013) (explaining that “the Legislature devised a comprehensive workers’ compensation system, with specific benefits and procedures based on the public policy of the State of Texas. We concluded in Ruttiger that the Court should not alter the Act’s comprehensive scheme, and we reaffirm that principle today.”).

4 investigated, handled, or settled a workers’ claim for benefits. Specifically, we held that the worker

in that case could not recover against the carrier for violations of section 541.060 of the Texas

Insurance Code, which prohibits all insurance carriers generally (not just workers’ compensation

carriers) from engaging in “unfair settlement practices with respect to a claim by an insured.” TEX.

INS. CODE § 541.060(a). “Permitting a workers’ compensation claimant to additionally recover by

simply suing under general provisions of Insurance Code section 541.060,” we explained, “would

be inconsistent with the structure and detailed processes of the Act.” Ruttiger, 381 S.W.3d at 443.

We concluded that the Act’s “provisions for dispute resolution and remedies for failing to comply

with those provisions in the workers’ compensation context are exclusive of those in section

541.060.” Id. at 444.3

We also held that the claimant in Ruttiger could not recover on his claims under section

542.003(a)(3) of the Insurance Code, which requires insurers to “adopt and implement reasonable

standards for the prompt investigation of claims arising under the insurer’s policies.” TEX. INS.

CODE § 542.003(a)(3). “[I]n light of the specific substantive and procedural requirements built into

the Act,” we concluded, “and the detrimental effects on carriers flowing from penalties that can be

imposed for failing to comply with those requirements, the Legislature did not intend for workers’

compensation claimants to have a cause of action against the carrier under the general provision

of section 542.003.” Ruttiger, 381 S.W.3d at 445.

For the same reasons, we also overruled our precedent that pre-dated the current version of

the Act and held that “an injured employee may not assert a common-law claim for breach of the

duty of good faith and fair dealing against a workers’ compensation carrier.” Id. at 433 (overruling

Aranda v. Ins. Co. of N. Am., 748 S.W.2d 210 (Tex. 1988)). We reasoned that allowing the carrier

3 We likewise held that the claimant could not recover on his DTPA claim because that claim, “as pled and submitted to the jury[,] depended on the validity of his Insurance Code claim[s].” Ruttiger, 381 S.W.3d at 446.

5 to risk common law liability in addition to liability under the Act “distorts the balances struck in

the Act and frustrates the Legislature’s intent to have disputes resolved quickly and objectively.”

Id. at 451. “Recognizing and respecting the Legislature’s prime position in enacting, studying,

analyzing, and reforming the system, and its efforts in having done that,” we concluded that “[t]he

Act effectively eliminates the need for a judicially imposed cause of action outside the

administrative processes and other remedies in the Act.” Id.

We did not hold in Ruttiger, however, that the Act bars every statutory and common law

claim that can be asserted against a workers’ compensation carrier. To the contrary, we concluded

that the Act did not bar a claim under section 541.061 of the Insurance Code, which makes it

unlawful for an insurer to “misrepresent an insurance policy.” Id. at 445–46; see also TEX. INS.

CODE § 541.061. We explained that, “[u]nlike section 541.060,” which prohibits unfair settlement

practices, “section 541.061 does not specify that it applies in the context of settling claims.”

Ruttiger, 381 S.W.3d at 446. We held that because section 541.061’s prohibition against

misrepresentation of an insurance policy “does not evidence intent that it be applied in regard to

settling claims, it is not at odds with the dispute resolution process of the workers’ compensation

system.” Id. We ultimately concluded, however, that there was no evidence to support the section

541.061 claim in that case because there was no evidence of an “untrue statement made by [the

insurer] regarding the policy or any statement about the policy that misled [the plaintiff-insured].”

In summary, we held in Ruttiger that workers’ compensation carriers cannot be liable under

the Insurance Code for unfair claims settlement practices or for failing to adopt reasonable

standards for investigating claims, or under the common law for breach of a duty of good faith and

fair dealing, because these claims “simply are not compatible with amended detailed procedural

6 and substantive provisions of the new Act.” Id. at 456. Although we agreed that “the new Act’s

language does not purport to preclude all types of claims against workers’ compensation insurers,”

we concluded that, for claims arising out of the claims-settlement process, “the current Act with

its definitions, detailed procedures, and dispute resolution process demonstrate[s] legislative intent

for there to be no alternative remedies.” Id. at 444, 456.

In this case, the parties dispute whether and how Ruttiger applies to causes of action that

we did not specifically address in that case. The court of appeals concluded that it “is not as clear”

that we “vitiated the existence of” any other claims in Ruttiger because we “said nothing of” them.

___ S.W.3d ___. The court read our Ruttiger decision to focus on whether the claims are

“inconsistent with the current legislative/administrative workers’ compensation scheme,” and

concluded that neither Ruttiger nor Crawford explains how a malicious prosecution claim asserting

“baseless criminal proceedings by an insurer against an employee and the amelioration of damages

caused by such misconduct fits in the legislative/administrative workers’ compensation scheme.”

Id. at ___. The court concluded that a malicious prosecution claim “does not serve to protect,

secure or timely resolve disputes involving the availability of workers’ compensation benefits due

a claimant,” and “because at least one cause of action continues to exist, despite Ruttiger, [the

court could not] say that the trial court abused its discretion in refusing to dismiss all the causes of

action.” Id.

We agree with Crawford that the court of appeals read Ruttiger too narrowly. As other

courts of appeals have recognized,4 the rule we applied in Ruttiger is that the Act provides the

4 See, e.g., Davis v. Am. Cas. Co. of Reading, Pa., No. 07-13-00190-CV, 2014 WL 2553379, at *2 (Tex. App.—Amarillo June 4, 2014, pet. denied) (holding that Ruttiger precludes claims for breach of contract, breach of the duty of good faith and fair dealing, Insurance Code and DTPA violations, and negligence because all claims “arise out of [the carrier’s] handling of [the] workers’ compensation claim”); Hopper v. Argonaut Ins. Co., No. 03-12-00734- CV, 2013 WL 5853747, at *4 (Tex. App.—Austin Oct. 18, 2013, no pet.) (mem. op.) (holding that Ruttiger “eliminates” claims because there is no evidence of any “conduct that does not implicate the claim-settlement process” and all claims “are limited to complaints about delays, claim handling, and disputes regarding entitlement to benefits”);

7 exclusive process and remedies for claims arising out of a carrier’s investigation, handling, or

settling of a claim for workers’ compensation benefits. We held that the Act bars claims for breach

of the duty of good faith and fair dealing and claims under sections 541.060 and 542.003, not

because those are the only claims the Act bars, but because those claims are necessarily based on

the investigation and settlement of benefit claims. Ruttiger, 381 S.W.3d at 443–45. Similarly, we

held that the Act did not bar the claim under section 541.061, not because that is the only claim

the Act does not bar, but because that section does not address misrepresentations made “in regard

to settling claims” for benefits. Id. at 446.

Whether the Act provides the exclusive process and remedies, therefore, does not depend

on the label of the cause of action asserted. As we have often explained, claimants may not recast

claims to avoid statutory requirements or to qualify for statutory protections. See Diversicare Gen.

Partner, Inc. v. Rubio, 185 S.W.3d 842, 851 (Tex. 2005) (focusing on the essence of plaintiff’s

claim and finding it had to meet MLIIA requirements) (citing MacGregor Med. Ass’n v. Campbell,

985 S.W.2d 38, 38 (Tex. 1998); Gormley v. Stover, 907 S.W.2d 448, 450 (Tex. 1995) (per curiam)

(finding that plaintiff’s pleading was an attempt to recast malpractice claim as a DTPA action);

Sorokolit v. Rhodes, 889 S.W.2d 239, 242 (Tex. 1994) (emphasizing that health care liability claim

could not be re-cast as a different claim)). Instead, in assessing whether a claim falls within the

Division’s exclusive jurisdiction, courts must look at the substance of the claim. Id.

Bean v. Tex. Mut. Ins. Co., No. 09-11-00123-CV, 2012 WL 5450826, at *1 (Tex. App.—Beaumont Nov. 8, 2012, no pet.) (mem. op.) (holding that claims “are within the exclusive jurisdiction of the Texas Department of Insurance” because they “concern[] the claims handling process”); Carpenter v. Sw. Med. Examination Servs., Inc., 381 S.W.3d 583, 585–87 (Tex. App.—Eastland 2012, no pet.) (applying Ruttiger to hold that the Act precludes claims for common-law bad faith, statutory bad faith, fraud, and conspiracy to commit fraud based on allegations that carrier delayed paying benefits and concealed the nature of its relationship with reviewing doctor because the claims related to “the manner in which the carrier had handled the processing of [the] workers’ compensation claim”).

8 Nor does the Ruttiger rule depend on the nature of the relief the claimant seeks. The

Johnsons contend that the Act does not bar their claims because they are seeking damages that are

“unrelated” to workers’ compensation benefits and based on injuries that are “independent” of

harm the Act is intended to prevent. As we noted in Ruttiger, however, “the current Act with its

definitions, detailed procedures, and dispute resolution process demonstrat[es] legislative intent

for there to be no alternative remedies.” 381 S.W.3d at 444.

Applying the Ruttiger rule to this case, we first conclude that the Act bars the Johnsons’

claims for negligence, gross negligence, breach of contract, quantum meruit, breach of the duty of

good faith and fair dealing, and statutory violations. In support of these causes of action, the

Johnsons allege that Crawford failed to act reasonably in responding to the Johnsons’ claims for

benefits and made and then breached promises and representations that it would pay certain

benefits. Because all of these claims arise out of Crawford’s investigation, handling, and settling

of the Johnsons’ claim for workers’ compensation benefits, the Act provides the exclusive

procedures and remedies for these claims.

We reach the same conclusion regarding all of the Johnsons’ common law and statutory

causes of action based on allegations of deception, fraud, and misrepresentation. Because we held

in Ruttiger that the Act does not necessarily bar a claim for misrepresenting an insurance policy

under section 541.061 of the Insurance Code, our analysis on these claims is a bit more complex.

The Johnsons contend that our holding in Ruttiger confirms that they can pursue all of their claims

for misrepresentation and fraud. But we based our holding in Ruttiger on the fact that “section

541.061 does not specify that it applies in the context of settling claims.” Ruttiger, 381 S.W.3d at

446. We held that, because section 541.061 “does not evidence intent that it be applied in regard

9 to settling claims, it is not at odds with the dispute resolution process of the workers’ compensation

system.” Id.

This case presents a question we did not expressly address in Ruttiger: whether the Division

has exclusive jurisdiction over a claim for “misrepresentation of an insurance policy” when the

alleged misrepresentation occurs within the claims-settlement context. We hold that it does.5 The

Act specifically addresses and prohibits a carrier from making misrepresentations, including

misrepresentations “to an employee” regarding the Act’s provisions and “the reason for not paying

benefits or terminating or reducing the payment of benefits.” TEX. LAB. CODE

§ 415.002(a)(1), (13). The Act’s comprehensive system for resolving workers’ compensation

claims encompasses prohibitions against fraud and misrepresentations made within the claims-

settlement context, and grants the Division authority to regulate and sanction any such conduct.

Because all of the Johnsons’ misrepresentation-based claims complain of misrepresentations that

Crawford allegedly made in connection with its investigation, handling, and settling of the

Johnsons’ claims for workers’ compensation benefits,6 we hold that the Division had exclusive

jurisdiction to address those claims.

5 At least two courts of appeals have reached this same conclusion. See Hopper, 2013 WL 5853747, at *1, 4 (holding that carrier was entitled to summary judgment on claim regarding “false statements” that claimants “were not entitled to coverage” because the claim was “limited to complaints about delays, claim handling, and disputes regarding entitlement to benefits”); Bean, 2012 WL 5450826, at *1 (holding that misrepresentation claims were within the Division’s exclusive jurisdiction because those claims “concern[] the claims handling process,” and worker “did not claim that the terms of the insurance policy covering his employer had been misrepresented to his employer”). As the Hopper court explained, we stated in Ruttiger “that section 541.061 applies to misrepresentations of a policy’s terms, not misrepresentations about whether a specific claim is factually within a policy’s terms.” Hopper, 2013 WL 5853747, at *3. The alleged misrepresentations in that case “concerned statements about whether [the worker’s] death resulted from a compensable injury and whether the Hoppers were his true beneficiaries,” and “[a]lthough Ruttiger did not specifically involve common-law claims of fraudulent and negligent misrepresentation or unconscionability, these claims fail in the present case because there is no evidence here of any fraudulent, negligent, or unconscionable conduct that does not implicate the claim-settlement process.” Id. at *3–*4. 6 The Johnsons allege, for example, that Crawford “made blatantly false statements to avoid coverage and to avoid paying both income and medical benefits”; made “clearly untrue statements of material facts, including withholding proper home healthcare and paying the injured worker and his spouse directly to arrange and provide necessary care”; and “failed to state and to disclose known material facts that the lifetime income benefits were payable.”

10 We now turn to the Johnsons’ claims for malicious prosecution and intentional infliction

of emotional distress, which are both based on allegations that Crawford falsely reported to a

district attorney that the Johnsons committed insurance fraud by requesting mileage

reimbursements for travel that had not occurred. We hold that the Division has exclusive

jurisdiction over these claims because they also arise out of Crawford’s investigation, handling,

and settling of the Johnsons’ claims for workers’ compensation benefits. The mileage

reimbursements at issue were part of the Johnsons’ medical benefits under the Act, and carriers

are required to report suspected fraud to the Department or to an authorized governmental entity

as part of their claims-handling responsibilities. TEX. INS. CODE § 701.051(a). If a carrier

knowingly and intentionally makes a false or misleading statement with the intent to deny the

payment of a benefit, as the Johnsons allege Crawford did in this case, the Act provides the

claimant with remedies, including criminal penalties. TEX. LAB. CODE §§ 415.008, 418.001.

Because the Johnsons’ causes of action for malicious prosecution and intentional infliction of

emotional distress arise out of Crawford’s investigation, handling, and settling of a workers’

compensation claim, we hold that the Division had exclusive jurisdiction over those complaints.7

Finally, we turn to the Johnsons’ argument that Natalie Johnson is not seeking relief as an

ASARCO employee and thus her claims are independent of the Act and therefore not barred by it.

7 Because the Act’s grant of exclusive jurisdiction bars the courts from exercising jurisdiction over the claims, we reject the Johnsons’ complaints that Crawford waived its argument that the Act bars the claims for malicious prosecution and is judicially estopped from raising them on mandamus. The Johnsons contend that Crawford’s counsel “judicially admitted” in the trial court that the malicious prosecution claim “is outside of comp,” and “[c]omp has nothing to do with malicious prosecution and we’re not arguing that it does.” We need not decide whether these statements could constitute a waiver, judicial admission, or the basis for judicial estoppel, because even if they could, such doctrines cannot create subject-matter jurisdiction where it does not otherwise exist. Wilmer-Hutchins Indep. Sch. Dist. v. Sullivan, 51 S.W.3d 293, 294 (Tex. 2001) (“As a general rule, a court cannot acquire subject-matter jurisdiction by estoppel.”); Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000) (“[S]ubject-matter jurisdiction is a power that ‘exists by operation of law only, and cannot be conferred upon any court by consent or waiver’ . . . .”) (quoting Federal Underwriters Exch. v. Pugh, 141 Tex. 539, 174 S.W.2d 598, 600 (1943)).

11 Specifically, the Johnsons argue that Natalie “has causes of action for malicious prosecution,

intentional infliction of emotional distress, quantum meruit, and breach of contract all of

which . . . do not arise under the Act because she was not an employee of ASARCO.” But Natalie’s

claims, like Glenn’s, arise out of Crawford’s conduct in investigating, handling, and settling

Glenn’s claim for workers’ compensation benefits. Specifically, she complains that Crawford

breached promises to pay her to provide services to Glenn and that Crawford maliciously caused

her to be prosecuted for insurance fraud. We have held that an employee’s spouse cannot bring a

separate action alleging claims under the Act. See Rodriguez v. Naylor Indus., Inc., 763 S.W.2d

411, 412 (Tex. 1989) (recognizing that any claims compensable under the Act could not be brought

by non-employee spouse except for intentional tort claims). The only noted exception to this rule

is if a spouse is pursuing a loss of consortium claim where there is evidence that the employer’s

intentional tort caused the employee’s injury. Id. (“Therefore, Mrs. Rodriguez’ suit for loss of

consortium is barred by the Workers’ Compensation Act unless she can establish that the injury

caused her husband was intentional.”); see also Reed Tool Co. v. Copelin, 610 S.W.2d 736, 738–

39 (Tex. 1980). We conclude that, even if Natalie Johnson has standing to assert her claims, they

fall within the Division’s exclusive jurisdiction.

Having concluded that the Division has exclusive jurisdiction over the Johnsons’ claims

against Crawford, we further conclude that Crawford is entitled to mandamus relief. In re Sw. Bell

Tel. Co., L.P., 235 S.W.3d 619, 624 (Tex. 2007) (granting mandamus to require dismissal of claims

over which Public Utility Commission had exclusive jurisdiction because “[a]llowing the trial

court to proceed if the PUC has exclusive jurisdiction would disrupt the orderly processes of

government”); In re Entergy Corp., 142 S.W.3d 316, 321 (Tex. 2004) (same). Because the

Johnsons’ claims arise out of Crawford’s investigation, handling, and settling of workers’

12 compensation claims, they fall within the Division’s exclusive jurisdiction and the Act provides

the sole process and remedies for those claims. Because the Johnsons failed to exhaust their

administrative remedies under the Act prior to filing this action, the trial court lacked jurisdiction

and should have dismissed it. See City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013)

(“Absent exhaustion of administrative remedies, a trial court must dismiss the case.”).

Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral arguments,

we conditionally grant mandamus relief and direct the 108th District Court to withdraw its order

denying Crawford’s plea to the jurisdiction and dismiss the Johnsons’ claims for lack of subject-

matter jurisdiction. Our writ will issue only if the court fails to act in accordance with this opinion.

Opinion Delivered: February 27, 2015

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TITLE 28 INSURANCE PART 2 TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS' COMPENSATION CHAPTER 43 INSURANCE COVERAGE RULE §43.10 Termination of Coverage

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Termination of coverage--Occurs when either party withdraws from a policy of workers' compensation insurance, either by canceling the policy in the middle of its term, or by declining to renew the policy on its anniversary date. (2) Rejection of the workers' compensation system--Occurs when a subscriber terminates coverage and fails or refuses to purchase a policy of workers' compensation insurance. (b) Carrier's notice to the Industrial Accident Board. The carrier shall notify the board when coverage is terminated by filing Board Form IAB-9, "Cancellation or Non-Renewal Notice." The notice shall be: (1) filed in person or by certified mail; and (2) filed on or before the effective date of termination. (c) Carrier's notice to subscriber. The carrier shall notify the subscriber when the carrier terminates coverage. No notice is required when the subscriber terminates coverage. Notice to the subscriber shall be: (1) in writing; (2) sent by certified mail; and (3) mailed no later than the 30th day before the effective date of termination; or (4) mailed no later than the 10th day before the effective date of termination if termination is due to: (A) fraud in obtaining coverage; (B) failure to pay a premium when payment is due; (C) an increase in the hazard for which the subscriber seeks coverage that results from an action or omission of the subscriber and that would produce an increase in the rate; or (D) a determination by the commissioner of insurance that coverage would be illegal or hazardous to the interests of subscribers, creditors, or the general public. (d) Effective date of termination of coverage. (1) Termination by the carrier shall be effective on the latest of the following dates: (A) on the 31st day after the carrier notifies the subscriber as provided in subsection (c) of this section, or, if the termination is due to one of the conditions set out in subsection (c)(4) of this section, on the 11th day after the carrier notifies the subscriber as provided in subsection (c) of this section; (B) the day the carrier files notice of termination with the board, as provided in subsection (b) of this section; or (C) the actual termination date recited on the notice. (2) Termination by the subscriber shall be effective on the actual termination date recited on the notice. (3) Termination shall be deemed effective on the date a subsequent carrier files notice of inception of coverage for the subscriber. (e) Duties of a subscriber who terminates coverage and rejects the workers' compensation system. (1) A subscriber who terminates coverage and rejects the workers' compensation system shall, on or before the effective date of termination: (A) post copies of notice of noncoverage, on a board-prescribed form, in three places around each work site affected; and (B) file a copy of the notice of noncoverage with the board. (2) Failure to comply renders the subscriber liable for statutory benefits to injured employees. Source Note: The provisions of this §43.10 adopted to be effective December 21, 1989, 14 TexReg 6419.

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TITLE 28 INSURANCE PART 2 TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS' COMPENSATION CHAPTER 110 REQUIRED NOTICES OF COVERAGE SUBCHAPTER A CARRIER NOTICES RULE §110.1 Requirements for Notifying the Commission of Insurance Coverage Historical Texas Register

(a) An approved insurance policy, as referenced in Texas Labor Code §401.011(44)(A), includes a binder, which serves as evidence of a temporary agreement that legally provides workers' compensation insurance coverage until the approved insurance policy is issued or the binder is canceled. (b) As used in this section, "insurance coverage information" includes information regarding whether or not an employer has workers' compensation insurance coverage and, if so, information about the means of insurance coverage used. (c) This rule applies to employers whose employees are not exempt from coverage under the Workers' Compensation Act (the Act), and to insurance carriers. It does not apply to employers whose only employees are exempt from coverage under the Act. Certified Self Insurers are also subject to requirements specified in Chapter 114 of this title (relating to Self-Insurance). (d) Employers and insurance carriers shall submit to the commission, or its designee, insurance coverage information in the form and manner prescribed by the commission. The commission may designate and contract with a data collection agency to collect and maintain insurance coverage information. (e) Employers who do not have workers' compensation insurance coverage are required to provide insurance coverage information in the form of a notice of non-coverage, in accordance with subsection (d) of this section as follows: (1) if the employer elects not to be covered by workers' compensation insurance, the earlier of the following: (A) 30 days after receiving a commission request for the filing of a notice of non-coverage and annually thereafter on the anniversary date of the original filing; (B) 30 days after hiring an employee who is subject to coverage under the Act, and annually thereafter on the anniversary date of the original filing; (2) if the employer cancels coverage without purchasing a new policy or becoming a certified self-insurer, within ten days after notifying the insurance carrier and annually thereafter on the anniversary of the cancellation date of the workers' compensation policy; or (3) if the employer is principally located outside of Texas, within ten days after receiving a written request from the commission for information about the coverage status of its Texas operations. (f) When an employer elects to cancel coverage, the effective date of that cancellation shall be the later of: (1) 30 days after filing the notice of non-coverage with the commission; or (2) the cancellation date of the policy. (g) The workers' compensation insurance coverage shall be extended until the effective date of withdrawal as established in subsection (f) of this section, and the employer is obligated to pay premiums which accrue during this period. (h) Insurance carriers are required to provide insurance coverage information for insured Texas employers in accordance with subsection (d) of this rule as follows: (1) within ten days after the effective date of coverage or endorsement and annually thereafter no later than ten days after the anniversary date of coverage; (2) 30 days prior to the date on which cancellation or non-renewal becomes effective if the insurance carrier cancels the workers' compensation insurance coverage, does not renew the workers' compensation insurance coverage on the anniversary date, or cancels a binder before it issues a policy; (3) ten days prior to the date on which the cancellation becomes effective if the insurance carrier cancels an employer's workers' compensation coverage in accordance with Texas Labor Code, §406.008(a)(2); or (4) within ten days after receiving notice of the effective date of cancellation from the covered employer because the employer switched workers' compensation insurance carriers. (i) Workers' compensation insurance coverage remains in effect until the later of: (1) the end of the policy period, or (2) the date the commission and the employer receive the notification from the insurance carrier of coverage cancellation or non-renewal and the later of: (A) the date 30 days after receipt of the notice required by Texas Labor Code, §406.008(a)(1); (B) the date ten days after receipt of the notice required by Texas Labor Code, §406.008(a)(2); or (C) the effective date of the cancellation if later than the date in paragraphs (1) or (2) of this subsection. (j) "Claim administration contact" as it applies to this chapter is the person responsible for identifying or confirming an employer's coverage information with the commission. Each insurance carrier shall file a notice with the commission of their designated claim administration contact not later than the 10th day after the date on which the coverage or claim administration agreement takes effect. A single administration address for the purpose of identifying or confirming an employer's coverage status shall be provided. If the single claims administration contact address changes, the insurance carrier shall provide the new address to the commission at least 30 days in advance of the change taking effect. This information shall be filed in the form and manner prescribed by the commission. (k) An insurance carrier may elect to have a servicing agent process and file all coverage information, but the insurance carrier remains responsible for meeting all filing requirements of this rule. (l) Notwithstanding the other provisions of this section, if an employer switches workers' compensation insurance carriers, the original policy is considered canceled as of the date the new coverage takes effect. Employers shall notify the prior insurance carrier of the cancellation date of the original policy, in writing, within ten days of the effective date.

Source Note: The provisions of this §110.1 adopted to be effective September 15, 1993, 18 TexReg 5884; amended to be effective March 13, 2000, 25 TexReg 2080; amended to be effective June 5, 2003, 28 TexReg 4284 LABOR CODE

TITLE 5. WORKERS ’ COMPENSATION

SUBTITLE A. TEXAS WORKERS ’ COMPENSATION ACT

CHAPTER 401. GENERAL PROVISIONS

SUBCHAPTER A. SHORT TITLE; APPLICATION OF SUNSET ACT

Sec.A401.001.AASHORT TITLE. This subtitle may be cited as

the Texas Workers ’ Compensation Act.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec.A401.003.AAACTIVITIES OF THE STATE AUDITOR. (a) The

division is subject to audit by the state auditor in accordance with

Chapter 321, Government Code.AAThe state auditor may audit:

(1)AAthe structure and internal controls of the

division;

(2)AAthe level and quality of service provided by the

division to employers, injured employees, insurance carriers,

self-insured governmental entities, and other participants;

(3)AAthe implementation of statutory mandates by the

(4)AAemployee turnover;

(5)AAinformation management systems, including public

access to nonconfidential information;

(6)AAthe adoption and implementation of administrative

rules by the commissioner; and

(7)AAassessment of administrative violations and the

penalties for those violations.

(b)AANothing in this section limits the authority of the

state auditor under Chapter 321, Government Code.

Added by Acts 2001, 77th Leg., ch. 1456, Sec. 7.02, eff. June 17,

2001.

Amended by:

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.002, eff.

September 1, 2005.

SUBCHAPTER B. DEFINITIONS

1 Sec.A401.011.AAGENERAL DEFINITIONS. In this subtitle:

(1)AA"Adjuster" means a person licensed under Chapter

4101, Insurance Code.

(2)AA"Administrative violation" means a violation of

this subtitle, a rule adopted under this subtitle, or an order or

decision of the commissioner that is subject to penalties and

sanctions as provided by this subtitle.

(3)AA"Agreement" means the resolution by the parties to

a dispute under this subtitle of one or more issues regarding an

injury, death, coverage, compensability, or compensation. The term

does not include a settlement.

(4)AA"Alien" means a person who is not a citizen of the

United States.

(5)AA"Benefit" means a medical benefit, an income

benefit, a death benefit, or a burial benefit based on a compensable

injury.

(5-a)AA"Case management" means a collaborative process

of assessment, planning, facilitation, and advocacy for options and

services to meet an individual ’s health needs through communication

and application of available resources to promote quality,

cost-effective outcomes.

(6)AA"Certified self-insurer" means a private employer

granted a certificate of authority to self-insure, as authorized by

this subtitle, for the payment of compensation.

(7)AA"Child" means a son or daughter. The term includes

an adopted child or a stepchild who is a dependent of the employee.

(8)AA"Commissioner" means the commissioner of workers ’

compensation.

(9)AA"Commute" means to pay in a lump sum.

(10)AA"Compensable injury" means an injury that arises

out of and in the course and scope of employment for which

compensation is payable under this subtitle.

(11)AA"Compensation" means payment of a benefit.

(12)AA"Course and scope of employment" means an

activity of any kind or character that has to do with and originates

in the work, business, trade, or profession of the employer and that

2 is performed by an employee while engaged in or about the

furtherance of the affairs or business of the employer. The term

includes an activity conducted on the premises of the employer or at

other locations. The term does not include:

(A)AAtransportation to and from the place of

employment unless:

(i)AAthe transportation is furnished as a

part of the contract of employment or is paid for by the employer;

(ii)AAthe means of the transportation are

under the control of the employer; or

(iii)AAthe employee is directed in the

employee ’s employment to proceed from one place to another place;

or

(B)AAtravel by the employee in the furtherance of

the affairs or business of the employer if the travel is also in

furtherance of personal or private affairs of the employee unless:

(i)AAthe travel to the place of occurrence of

the injury would have been made even had there been no personal or

private affairs of the employee to be furthered by the travel; and

(ii)AAthe travel would not have been made had

there been no affairs or business of the employer to be furthered by

the travel.

(12-a)AA"Credentialing" has the meaning assigned by

Chapter 1305, Insurance Code.

(13)AA"Death benefit" means a payment made under this

subtitle to a legal beneficiary because of the death of an employee.

(13-a)AA"Department" means the Texas Department of

Insurance.

(14)AA"Dependent" means an individual who receives a

regular or recurring economic benefit that contributes

substantially to the individual ’s welfare and livelihood if the

individual is eligible for distribution of benefits under Chapter

408.

(15)AA"Designated doctor" means a doctor appointed by

mutual agreement of the parties or by the division to recommend a

resolution of a dispute as to the medical condition of an injured

employee.

3 (16)AA"Disability" means the inability because of a

compensable injury to obtain and retain employment at wages

equivalent to the preinjury wage.

(16-a)AA"Division" means the division of workers ’

compensation of the department.

(17)AA"Doctor" means a doctor of medicine, osteopathic

medicine, optometry, dentistry, podiatry, or chiropractic who is

licensed and authorized to practice.

(18)AA"Employer" means, unless otherwise specified, a

person who makes a contract of hire, employs one or more employees,

and has workers ’ compensation insurance coverage. The term

includes a governmental entity that self-insures, either

individually or collectively.

(18-a)AA"Evidence-based medicine" means the use of

current best quality scientific and medical evidence formulated

from credible scientific studies, including peer-reviewed medical

literature and other current scientifically based texts, and

treatment and practice guidelines in making decisions about the

care of individual patients.

(19)AA"Health care" includes all reasonable and

necessary medical aid, medical examinations, medical treatments,

medical diagnoses, medical evaluations, and medical services.AAThe

term does not include vocational rehabilitation.AAThe term

includes:

(A)AAmedical, surgical, chiropractic, podiatric,

optometric, dental, nursing, and physical therapy services

provided by or at the direction of a doctor;

(B)AAphysical rehabilitation services performed

by a licensed occupational therapist provided by or at the

direction of a doctor;

(C)AApsychological services prescribed by a

doctor;

(D)AAthe services of a hospital or other health

care facility;

(E)AAa prescription drug, medicine, or other

remedy; and

(F)AAa medical or surgical supply, appliance,

4 brace, artificial member, or prosthetic or orthotic device,

including the fitting of, change or repair to, or training in the

use of the appliance, brace, member, or device.

(20)AA"Health care facility" means a hospital,

emergency clinic, outpatient clinic, or other facility providing

health care.

(21)AA"Health care practitioner" means:

(A)AAan individual who is licensed to provide or

render and provides or renders health care; or

(B)AAa nonlicensed individual who provides or

renders health care under the direction or supervision of a doctor.

(22)AA"Health care provider" means a health care

facility or health care practitioner.

(22-a)AA"Health care reasonably required" means health

care that is clinically appropriate and considered effective for

the injured employee ’s injury and provided in accordance with best

practices consistent with:

(A)AAevidence-based medicine; or

(B)AAif that evidence is not available, generally

accepted standards of medical practice recognized in the medical

community.

(23)AA"Impairment" means any anatomic or functional

abnormality or loss existing after maximum medical improvement that

results from a compensable injury and is reasonably presumed to be

permanent.

(24)AA"Impairment rating" means the percentage of

permanent impairment of the whole body resulting from a compensable

(25)AA"Income benefit" means a payment made to an

employee for a compensable injury. The term does not include a

medical benefit, death benefit, or burial benefit.

(25-a)AA"Independent review organization" has the same

meaning as in Section 1305.004(a)(11), Insurance Code.

(26)AA"Injury" means damage or harm to the physical

structure of the body and a disease or infection naturally

resulting from the damage or harm. The term includes an

occupational disease.

5 (27)AA"Insurance carrier" means:

(A)AAan insurance company;

(B)AAa certified self-insurer for workers ’

compensation insurance;

(C)AAa certified self-insurance group under

Chapter 407A; or

(D)AAa governmental entity that self-insures,

either individually or collectively.

(28)AA"Insurance company" means a person authorized and

admitted by the Texas Department of Insurance to do insurance

business in this state under a certificate of authority that

includes authorization to write workers ’ compensation insurance.

(29)AA"Legal beneficiary" means a person entitled to

receive a death benefit under this subtitle.

(30)AA"Maximum medical improvement" means the earlier

of:

(A)AAthe earliest date after which, based on

reasonable medical probability, further material recovery from or

lasting improvement to an injury can no longer reasonably be

anticipated;

(B)AAthe expiration of 104 weeks from the date on

which income benefits begin to accrue; or

(C)AAthe date determined as provided by Section

408.104.

(31)AA"Medical benefit" means payment for health care

reasonably required by the nature of a compensable injury and

intended to:

(A)AAcure or relieve the effects naturally

resulting from the compensable injury, including reasonable

expenses incurred by the employee for necessary treatment to cure

and relieve the employee from the effects of an occupational

disease before and after the employee knew or should have known the

nature of the disability and its relationship to the employment;

(B)AApromote recovery; or

(C)AAenhance the ability of the employee to return

to or retain employment.

(31-a)AA"Network" or "workers ’ compensation health care

6 network" means an organization that is:

(A)AAformed as a health care provider network to

provide health care services to injured employees;

(B)AAcertified in accordance with Chapter 1305,

Insurance Code, and rules of the commissioner of insurance; and

(C)AAestablished by, or operates under contract

with, an insurance carrier.

(32)AA"Objective" means independently verifiable or

confirmable results that are based on recognized laboratory or

diagnostic tests, or signs confirmable by physical examination.

(33)AA"Objective clinical or laboratory finding" means

a medical finding of impairment resulting from a compensable

injury, based on competent objective medical evidence, that is

independently confirmable by a doctor, including a designated

doctor, without reliance on the subjective symptoms perceived by

the employee.

(34)AA"Occupational disease" means a disease arising

out of and in the course of employment that causes damage or harm to

the physical structure of the body, including a repetitive trauma

injury. The term includes a disease or infection that naturally

results from the work-related disease. The term does not include an

ordinary disease of life to which the general public is exposed

outside of employment, unless that disease is an incident to a

compensable injury or occupational disease.

(34-a)AA"Orthotic device" means a custom-fitted or

custom-fabricated medical device that is applied to a part of the

human body to correct a deformity, improve function, or relieve

symptoms related to a compensable injury or occupational disease.

(35)AA"Penalty" means a fine established by this

subtitle.

(35-a)AA"Prosthetic device" means an artificial device

designed to replace, wholly or partly, an arm or leg.

(36)AA"Repetitive trauma injury" means damage or harm

to the physical structure of the body occurring as the result of

repetitious, physically traumatic activities that occur over time

and arise out of and in the course and scope of employment.

(37)AA"Representative" means a person, including an

7 attorney, authorized by the commissioner to assist or represent an

employee, a person claiming a death benefit, or an insurance

carrier in a matter arising under this subtitle that relates to the

payment of compensation.

(38)AA"Research center" means the research functions of

the Texas Department of Insurance required under Chapter 405.

(38-a)AA"Retrospective review" means the utilization

review process of reviewing the medical necessity and

reasonableness of health care that has been provided to an injured

(39)AA"Sanction" means a penalty or other punitive

action or remedy imposed by the commissioner on an insurance

carrier, representative, employee, employer, or health care

provider for an act or omission in violation of this subtitle or a

rule, order, or decision of the commissioner.

(40)AA"Settlement" means a final resolution of all the

issues in a workers ’ compensation claim that are permitted to be

resolved under the terms of this subtitle.

(41)AA"Subjective" means perceivable only by an

employee and not independently verifiable or confirmable by

recognized laboratory or diagnostic tests or signs observable by

physical examination.

(42)AA"Treating doctor" means the doctor who is

primarily responsible for the employee ’s health care for an injury.

(42-a)AA"Utilization review" has the meaning assigned

by Chapter 4201, Insurance Code.

(42-b)AA"Utilization review agent" has the meaning

assigned by Chapter 4201, Insurance Code.

(42-c)AA"Violation" means an administrative violation

subject to penalties and sanctions as provided by this subtitle.

(43)AA"Wages" includes all forms of remuneration

payable for a given period to an employee for personal services.

The term includes the market value of board, lodging, laundry,

fuel, and any other advantage that can be estimated in money that

the employee receives from the employer as part of the employee ’s

remuneration.

(44)AA"Workers ’ compensation insurance coverage"

8 means:

(A)AAan approved insurance policy to secure the

payment of compensation;

(B)AAcoverage to secure the payment of

compensation through self-insurance as provided by this subtitle;

(C)AAcoverage provided by a governmental entity to

secure the payment of compensation.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1443, Sec. 1, eff. Sept. 1, 1997; Acts

2003, 78th Leg., ch. 275, Sec. 2, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.003, eff.

Acts 2007, 80th Leg., R.S., Ch. 133 (H.B. 1003), Sec. 1, eff.

September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch. 134 (H.B. 1006), Sec. 1, eff.

Acts 2007, 80th Leg., R.S., Ch. 147 (S.B. 458), Sec. 1, eff.

Acts 2009, 81st Leg., R.S., Ch. 1330 (H.B. 4290), Sec. 13,

eff. September 1, 2009.

Sec.A401.012.AADEFINITION OF EMPLOYEE. (a) In this

subtitle, "employee" means each person in the service of another

under a contract of hire, whether express or implied, or oral or

written.

(b)AAThe term "employee" includes:

(1)AAan employee employed in the usual course and scope

of the employer ’s business who is directed by the employer

temporarily to perform services outside the usual course and scope

of the employer ’s business;

(2)AAa person, other than an independent contractor or

the employee of an independent contractor, who is engaged in

construction, remodeling, or repair work for the employer at the

premises of the employer; and

(3)AAa person who is a trainee under the Texans Work

9 program established under Chapter 308.

(c)AAThe term "employee" does not include:

(1)AAa master of or a seaman on a vessel engaged in

interstate or foreign commerce; or

(2)AAa person whose employment is not in the usual

course and scope of the employer ’s business.

(d)AAA person who is an employee for the purposes of this

subtitle and engaged in work that otherwise may be legally

performed is an employee despite:

(1)AAa license, permit, or certificate violation

arising under state law or municipal ordinance; or

(2)AAa violation of a law regulating wages, hours, or

work on Sunday.

(e)AAThis section may not be construed to relieve from fine

or imprisonment any individual, firm, or corporation employing or

performing work or a service prohibited by a statute of this state

or a municipal ordinance.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 456, Sec. 6, eff. Sept. 1, 1997.

Sec.A401.013.AADEFINITION OF INTOXICATION. (a) In this

subtitle, "intoxication" means the state of:

(1)AAhaving an alcohol concentration to qualify as

intoxicated under Section 49.01(2), Penal Code; or

(2)AAnot having the normal use of mental or physical

faculties resulting from the voluntary introduction into the body

(A)AAan alcoholic beverage, as defined by Section

1.04, Alcoholic Beverage Code;

(B)AAa controlled substance or controlled

substance analogue, as defined by Section 481.002, Health and

Safety Code;

(C)AAa dangerous drug, as defined by Section

483.001, Health and Safety Code;

(D)AAan abusable glue or aerosol paint, as defined

by Section 485.001, Health and Safety Code; or

(E)AAany similar substance, the use of which is

10 regulated under state law.

(b)AAThe term "intoxication" does not include the loss of

normal use of mental or physical faculties resulting from the

introduction into the body of a substance:

(1)AAtaken under and in accordance with a prescription

written for the employee by the employee ’s doctor; or

(2)AAlisted under Subsection (a) by inhalation or

absorption incidental to the employee ’s work.

(c)AAOn the voluntary introduction into the body of any

substance listed under Subsection (a)(2)(B), based on a blood test

or urinalysis, it is a rebuttable presumption that a person is

intoxicated and does not have the normal use of mental or physical

faculties.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 14.48, eff. Sept. 1, 1995;

Acts 1999, 76th Leg., ch. 1426, Sec. 1, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.004, eff.

SUBCHAPTER C. MISCELLANEOUS PROVISIONS

Sec. 401.021.AAAPPLICATION OF OTHER ACTS. Except as

otherwise provided by this subtitle:

(1)AAa proceeding, hearing, judicial review, or

enforcement of a commissioner order, decision, or rule is governed

by the following subchapters and sections of Chapter 2001,

Government Code:

(A)AASubchapters A, B, D, E, G, and H, excluding

Sections 2001.004(3) and 2001.005;

(B)AASections 2001.051, 2001.052, and 2001.053;

(C)AASections 2001.056 through 2001.062; and

(D)AASection 2001.141(c);

(2)AAa proceeding, hearing, judicial review, or

enforcement of a commissioner order, decision, or rule is governed

by Subchapters A and B, Chapter 2002, Government Code, excluding

Sections 2002.001(3) and 2002.023;

11 (3)AAChapter 551, Government Code, applies to a

proceeding under this subtitle, other than:

(A)AAa benefit review conference;

(B)AAa contested case hearing;

(C)AAa proceeding of the appeals panel;

(D)AAarbitration; or

(E)AAanother proceeding involving a determination

on a workers ’ compensation claim; and

(4)AAChapter 552, Government Code, applies to a

workers ’ compensation record of the division, the department, or

the office of injured employee counsel.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.92, 5.95(82), (88), eff.

Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.005, eff.

Sec.A401.022.AADISCRIMINATION PROHIBITED. (a) This

subtitle may not be applied to discriminate because of race, sex,

national origin, or religion.

(b)AAThis section does not prohibit consideration of an

anatomical difference in application of the impairment guidelines

under Chapter 408 in rating an injury or a disease such as, but not

limited to, breast cancer or an inguinal hernia. If an impairment

rating assigns different values to the same injury for males and

females, the higher value shall be applied.

Sec.A401.023.AAINTEREST OR DISCOUNT RATE. (a) Interest or a

discount under this subtitle shall be computed at the rate provided

by this section.

(b)AAThe division shall compute and publish the interest and

discount rate quarterly, using the treasury constant maturity rate

for one-year treasury bills issued by the United States government,

as published by the Federal Reserve Board on the 15th day preceding

the first day of the calendar quarter for which the rate is to be

12 effective, plus 3.5 percent.AAFor this purpose, calendar quarters

begin January 1, April 1, July 1, and October 1.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 2, eff. Oct. 1, 1999; Acts

2001, 77th Leg., ch. 1456, Sec. 15.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.006, eff.

Sec.A401.024.AATRANSMISSION OF INFORMATION. (a) In this

section, "electronic transmission" means the transmission of

information by facsimile, electronic mail, electronic data

interchange, or any other similar method.

(b)AANotwithstanding another provision of this subtitle that

specifies the form, manner, or procedure for the transmission of

specified information, the commissioner by rule may permit or

require the use of an electronic transmission instead of the

specified form, manner, or procedure.AAIf the electronic

transmission of information is not authorized or permitted by rule,

the transmission of that information is governed by any applicable

statute or rule that prescribes the form, manner, or procedure for

the transmission, including standards adopted by the Department of

Information Resources.

(c)AAThe commissioner may designate and contract with one or

more data collection agents to fulfill the data collection

requirements of this subtitle.AATo qualify as a data collection

agent, an organization must demonstrate at least five years of

experience in data collection, data maintenance, data quality

control, accounting, and related areas.

(d)AAThe commissioner may prescribe the form, manner, and

procedure for transmitting any authorized or required electronic

transmission, including requirements related to security,

confidentiality, accuracy, and accountability.

(e)AAA data collection agent may collect from a reporting

insurance carrier, other than a governmental entity, any fees

necessary for the agent to recover the necessary and reasonable

costs of collecting data from that reporting insurance carrier.

13 (f)AAA reporting insurance carrier, other than a

governmental entity, shall pay the fee to the data collection agent

for the data collection services provided by the data collection

agent.

(g)AAThe commissioner may adopt rules necessary to implement

this section.

Added by Acts 1999, 76th Leg., ch. 954, Sec. 1, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.007, eff.

Acts 2011, 82nd Leg., R.S., Ch. 410 (S.B. 800), Sec. 1, eff.

June 17, 2011.

Sec. 401.025.AAREFERENCES TO COMMISSION AND EXECUTIVE

DIRECTOR. (a) A reference in this code or other law to the Texas

Workers ’ Compensation Commission or the executive director of that

commission means the division or the commissioner as consistent

with the respective duties of the commissioner and the division

under this code and other workers ’ compensation laws of this state.

(b)AAA reference in this code or other law to the executive

director of the Texas Workers ’ Compensation Commission means the

commissioner.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.008, eff.

14 LABOR CODE

CHAPTER 402. OPERATION AND ADMINISTRATION OF WORKERS ’ COMPENSATION

SYSTEM

SUBCHAPTER A. GENERAL ADMINISTRATION OF SYSTEM; WORKERS ’

COMPENSATION DIVISION

Sec. 402.001.AAADMINISTRATION OF SYSTEM:AATEXAS DEPARTMENT

OF INSURANCE; WORKERS ’ COMPENSATION DIVISION. (a) Except as

provided by Section 402.002, the Texas Department of Insurance is

the state agency designated to oversee the workers ’ compensation

system of this state.AA

(b)AAThe division of workers ’ compensation is established as

a division within the Texas Department of Insurance to administer

and operate the workers ’ compensation system of this state as

provided by this title.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.02, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.003, eff.

Sec. 402.00111.AARELATIONSHIP BETWEEN COMMISSIONER OF

INSURANCE AND COMMISSIONER OF WORKERS ’ COMPENSATION; SEPARATION OF

AUTHORITY; RULEMAKING. (a) The division is administered by the

commissioner of workers ’ compensation as provided by this

subchapter.AAExcept as otherwise provided by this title, the

commissioner of workers ’ compensation shall exercise all executive

authority, including rulemaking authority, under this title.

(b)AAThe commissioner of insurance may delegate to the

commissioner of workers ’ compensation or to that person ’s designee

and may redact any delegation, and the commissioner of workers ’

compensation may delegate to the commissioner of insurance or to

that person ’s designee, any power or duty regarding workers ’

compensation imposed on the commissioner of insurance or the

1 commissioner of workers ’ compensation under this title, including

the authority to make final orders or decisions.AAA delegation made

under this subsection must be made in writing.

(c)AAThe commissioner of insurance shall develop and

implement policies that clearly separate the respective

responsibilities of the department and the division.

(d)AAThe commissioner of insurance may provide advice,

research, and comment regarding the adoption of rules by the

commissioner of workers ’ compensation under this subtitle.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00112.AAINVESTIGATION OF DIVISION. The department

shall investigate the conduct of the work of the division.AAFor

that purpose, the department shall have access at any time to all

division books and records and may require an officer or employee of

the division to furnish written or oral information.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00113.AAADMINISTRATIVE ATTACHMENT TO DEPARTMENT.

(a) The division of workers ’ compensation is administratively

attached to the department.

(b)AAThe department shall provide the staff and facilities

necessary to enable the division to perform the duties of the

division under this title, including:

(1)AAadministrative assistance and services to the

division, including budget planning and purchasing;

(2)AApersonnel and financial services; and

(3)AAcomputer equipment and support.

(c)AAThe commissioner of workers ’ compensation and the

commissioner of insurance may enter into agreements as necessary to

implement this title.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00114.AADUTIES OF DIVISION; SINGLE POINT OF

2 CONTACT. (a) In addition to other duties required under this

title, the division shall:

(1)AAregulate and administer the business of workers ’

compensation in this state; and

(2)AAensure that this title and other laws regarding

workers ’ compensation are executed.

(b)AATo the extent determined feasible by the commissioner,

the division shall establish a single point of contact for injured

employees receiving services from the division.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00115.AACOMPOSITION OF DIVISION. The division is

composed of the commissioner of workers ’ compensation and other

officers and employees as required to efficiently implement:

(1)AAthis title;

(2)AAother workers ’ compensation laws of this state;

and

(3)AAother laws granting jurisdiction or applicable to

the division or the commissioner.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00116.AACHIEF EXECUTIVE. (a) The commissioner of

workers ’ compensation is the division ’s chief executive and

administrative officer.AAThe commissioner shall administer and

enforce this title, other workers ’ compensation laws of this state,

and other laws granting jurisdiction to or applicable to the

division or the commissioner.AAExcept as otherwise specifically

provided by this title, a reference in this title to the

"commissioner" means the commissioner of workers ’ compensation.

(b)AAThe commissioner has the powers and duties vested in the

division by this title and other workers ’ compensation laws of this

state.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

3 Sec. 402.00117.AAAPPOINTMENT; TERM. (a) The governor, with

the advice and consent of the senate, shall appoint the

commissioner.AAThe commissioner serves a two-year term that

expires on February 1 of each odd-numbered year.

(b)AAThe governor shall appoint the commissioner without

regard to the race, color, disability, sex, religion, age, or

national origin of the appointee.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00118.AAQUALIFICATIONS. The commissioner must:

(1)AAbe a competent and experienced administrator;

(2)AAbe well-informed and qualified in the field of

workers ’ compensation; and

(3)AAhave at least five years of experience as an

executive in the administration of business or government or as a

practicing attorney, physician, or certified public accountant.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00119.AAINELIGIBILITY FOR PUBLIC OFFICE. The

commissioner is ineligible to be a candidate for a public elective

office in this state unless the commissioner has resigned and the

governor has accepted the resignation.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00120.AACOMPENSATION. The commissioner is entitled

to compensation as provided by the General Appropriations Act.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00121.AAGROUNDS FOR REMOVAL. (a) It is a ground for

removal from office that the commissioner:

(1)AAdoes not have at the time of appointment the

qualifications required by Section 402.00118;

(2)AAdoes not maintain during service as commissioner

4 the qualifications required by Section 402.00118;

(3)AAviolates a prohibition established by Section

402.00122, 402.00124, 402.00125, or 402.00126; or

(4)AAcannot because of illness or incapacity discharge

the commissioner ’s duties for a substantial part of the

commissioner ’s term.

(b)AAThe validity of an action of the commissioner or the

division is not affected by the fact that it is taken when a ground

for removal of the commissioner exists.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00122.AAPROHIBITED GIFTS; ADMINISTRATIVE

VIOLATION. (a) The commissioner or an employee of the division may

not accept a gift, a gratuity, or entertainment from a person having

an interest in a matter or proceeding pending before the division.

(b)AAA violation of Subsection (a) is an administrative

violation and constitutes a ground for removal from office or

termination of employment.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00123.AACIVIL LIABILITY OF COMMISSIONER. The

commissioner is not liable in a civil action for an act performed in

good faith in the execution of duties as commissioner.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00124.AACONFLICT OF INTEREST. (a) In this section,

"Texas trade association" means a cooperative and voluntarily

joined statewide association of business or professional

competitors in this state designed to assist its members and its

industry or profession in dealing with mutual business or

professional problems and in promoting their common interest.

(b)AAA person may not be the commissioner and may not be a

division employee employed in a "bona fide executive,

administrative, or professional capacity" as that phrase is used

5 for purposes of establishing an exemption to the overtime

provisions of the federal Fair Labor Standards Act of 1938 (29

U.S.C. Section 201 et seq.) if:

(1)AAthe person is an officer, employee, or paid

consultant of a Texas trade association in the field of workers ’

compensation; or

(2)AAthe person ’s spouse is an officer, manager, or paid

consultant of a Texas trade association in the field of workers ’

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00125.AAPROHIBITION ON CERTAIN EMPLOYMENT OR

REPRESENTATION. (a) A former commissioner or former employee of

the division involved in hearing cases under this title may not:

(1)AAbe employed by an insurance carrier that was

subject to the scope of the commissioner ’s or employee ’s official

responsibility while the commissioner or employee was associated

with the division; or

(2)AArepresent a person before the division or a court

in a matter:

(A)AAin which the commissioner or employee was

personally involved while associated with the division; or

(B)AAthat was within the commissioner ’s or

employee ’s official responsibilities while the commissioner or

employee was associated with the division.

(b)AAThe prohibition under Subsection (a)(1) applies until

the:

(1)AAsecond anniversary of the date the commissioner

ceases to serve as the commissioner; and

(2)AAfirst anniversary of the date the employee ’s

employment with the division ceases.

(c)AAThe prohibition under Subsection (a)(2) applies to a

current commissioner or employee of the division while the

commissioner or employee is involved in hearing cases under this

title and at any time thereafter.

(d)AAA person commits an offense if the person violates this

6 section.AAAn offense under this section is a Class A misdemeanor.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00126.AALOBBYING ACTIVITIES. A person may not serve

as commissioner or act as general counsel to the commissioner if the

person is required to register as a lobbyist under Chapter 305,

Government Code, because of the person ’s activities for

compensation related to the operation of the department or the

division.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00127.AATRAINING PROGRAM FOR COMMISSIONER. (a)

NotAAlater than the 90th day after the date on which the

commissioner takes office, the commissioner shall complete a

training program that complies with this section.

(b)AAThe training program must provide the commissioner with

information regarding:

(1)AAthe legislation that created the division;

(2)AAthe programs operated by the division;

(3)AAthe role and functions of the division;

(4)AAthe rules of the commissioner of insurance

relating to the division, with an emphasis on the rules that relate

to disciplinary and investigatory authority;

(5)AAthe current budget for the division;

(6)AAthe results of the most recent formal audit of the

(7)AAthe requirements of:

(A)AAthe open meetings law, Chapter 551,

Government Code;

(B)AAthe public information law, Chapter 552,

(C)AAthe administrative procedure law, Chapter

2001, Government Code; and

(D)AAother laws relating to public officials,

including conflict-of-interest laws; and

7 (8)AAany applicable ethics policies adopted by the

division or the Texas Ethics Commission.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.00128.AAGENERAL POWERS AND DUTIES OF COMMISSIONER.

(a) The commissioner shall conduct the daily operations of the

division and otherwise implement division policy.

(b)AAThe commissioner or the commissioner ’s designee may:

(1)AAinvestigate misconduct;

(2)AAhold hearings;

(3)AAissue subpoenas to compel the attendance of

witnesses and the production of documents;

(4)AAadminister oaths;

(5)AAtake testimony directly or by deposition or

interrogatory;

(6)AAassess and enforce penalties established under

this title;

(7)AAenter appropriate orders as authorized by this

title;

(8)AAinstitute an action in the division ’s name to

enjoin the violation of this title;

(9)AAinitiate an action under Section 410.254 to

intervene in a judicial proceeding;

(10)AAprescribe the form, manner, and procedure for the

transmission of information to the division;

(11)AAcorrect clerical errors in the entry of orders;

(12)AAexercise other powers and perform other duties as

necessary to implement and enforce this title.

(c)AAThe commissioner is the agent for service of process on

out-of-state employers.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.004, eff.

Sec. 402.002.AAADMINISTRATION OF SYSTEM:AAOFFICE OF INJURED

EMPLOYEE COUNSEL. The office of injured employee counsel

8 established under Chapter 404 shall perform the functions regarding

the provision of workers ’ compensation benefits in this state

designated by this subtitle as under the authority of that office.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 1170, Sec. 47.01, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.005, eff.

SUBCHAPTER B. SYSTEM GOALS; GENERAL ADMINISTRATION OF SYSTEM

Sec. 402.021.AAGOALS; LEGISLATIVE INTENT; GENERAL WORKERS ’

COMPENSATION MISSION OF DEPARTMENT. (a) The basic goals of the

workers ’ compensation system of this state are as follows:

(1)AAeach employee shall be treated with dignity and

respect when injured on the job;

(2)AAeach injured employee shall have access to a fair

and accessible dispute resolution process;

(3)AAeach injured employee shall have access to prompt,

high-quality medical care within the framework established by this

subtitle; and

(4)AAeach injured employee shall receive services to

facilitate the employee ’s return to employment as soon as it is

considered safe and appropriate by the employee ’s health care

provider.

(b)AAIt is the intent of the legislature that, in

implementing the goals described by Subsection (a), the workers ’

compensation system of this state must:

(1)AApromote safe and healthy workplaces through

appropriate incentives, education, and other actions;

(2)AAencourage the safe and timely return of injured

employees to productive roles in the workplace;

(3)AAprovide appropriate income benefits and medical

benefits in a manner that is timely and cost-effective;

(4)AAprovide timely, appropriate, and high-quality

medical care supporting restoration of the injured employee ’s

physical condition and earning capacity;

9 (5)AAminimize the likelihood of disputes and resolve

them promptly and fairly when identified;

(6)AApromote compliance with this subtitle and rules

adopted under this subtitle through performance-based incentives;

(7)AApromptly detect and appropriately address acts or

practices of noncompliance with this subtitle and rules adopted

under this subtitle;

(8)AAeffectively educate and clearly inform each person

who participates in the system as a claimant, employer, insurance

carrier, health care provider, or other participant of the person ’s

rights and responsibilities under the system and how to

appropriately interact within the system; and

(9)AAtake maximum advantage of technological advances

to provide the highest levels of service possible to system

participants and to promote communication among system

participants.

(c)AAThis section may not be construed as:

(1)AAcreating a cause of action; or

(2)AAestablishing an entitlement to benefits to which a

claimant is not otherwise entitled by this subtitle.

(d)AAAs provided by this subtitle, the division shall work to

promote and help ensure the safe and timely return of injured

employees to productive roles in the workforce.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1098, Sec. 7, eff. Sept. 1, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.0065, eff.

Sec. 402.0215.AAREFERENCE TO COMMISSION DIVISIONS. A

reference in this title or any other law to the division of workers ’

health and safety, the division of medical review, the division of

compliance and practices, the division of hearings, and the

division of self-insurance regulation of the former Texas Workers ’

Compensation Commission means the division of workers ’

compensation of the Texas Department of Insurance.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.001, eff.

10 September 1, 2005.

Sec. 402.022.AAPUBLIC INTEREST INFORMATION. (a) The

commissioner shall prepare information of public interest

describing the functions of the division and the procedures by

which complaints are filed with and resolved by the division.

(b)AAThe commissioner shall make the information available

to the public and appropriate state agencies.

(c)AAThe commissioner by rule shall ensure that each division

form, standard letter, and brochure under this subtitle:

(1)AAis written in plain language;

(2)AAis in a readable and understandable format; and

(3)AAcomplies with all applicable requirements

relating to minimum readability requirements.

(d)AAThe division shall make informational materials

described by this section available in English and Spanish.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.002, eff.

Sec.AA402.023.AACOMPLAINT INFORMATION. (a) The

commissioner shall:

(1)AAadopt rules regarding the filing of a complaint

under this subtitle against an individual or entity subject to

regulation under this subtitle; and

(2)AAensure that information regarding the complaint

process is available on the division ’sAAInternet website.

(b)AAThe rules adopted under this section must, at a minimum:

(1)AAensure that the division clearly defines in rule

the method for filing a complaint; and

(2)AAdefine what constitutes a frivolous complaint

under this subtitle.

(c)AAThe division shall develop and post on the division ’s

Internet website:

(1)AAa simple standardized form for filing complaints

under this subtitle; and

11 (2)AAinformation regarding the complaint filing

process.

(c-1)AAThe division shall adopt a policy outlining the

division ’s complaint process from receipt of the initial complaint

to the complaint ’s disposition.

(d)AAThe division shall keep an information file about each

written complaint filed with the division under this subtitle that

is unrelated to a specific workers ’ compensation claim, including a

complaint regarding the administration of the workers ’

compensation system.AAThe information must include:

(1)AAthe date the complaint is received;

(2)AAthe name of the complainant;

(3)AAthe subject matter of the complaint;

(4)AAa record of all persons contacted in relation to

the complaint;

(5)AAa summary of the results of the review or

investigation of the complaint; and

(6)AAfor complaints for which the division took no

action, an explanation of the reason the complaint was closed

without action.

(e)AAFor each written complaint that is unrelated to a

specific workers ’ compensation claim that the division has

authority to resolve, the division shall provide to the person

filing the complaint and the person about whom the complaint is made

information about the division ’s policies and procedures under this

subtitle relating to complaint investigation and resolution.AAThe

division, at least quarterly and until final disposition of the

complaint, shall notify those persons about the status of the

complaint unless the notice would jeopardize an undercover

investigation.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.08, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.003, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 6, eff.

September 1, 2011.

12 Sec. 402.0231.AADOCUMENTATION AND ANALYSIS OF COMPLAINTS.

(a)AAThe division shall develop procedures to formally document and

analyze complaints received by the division.

(b)AAThe division shall compile detailed statistics on all

complaints received and analyze complaint information trends,

including:

(1)AAthe number of complaints;

(2)AAthe source of each complaint;

(3)AAthe types of complaints;

(4)AAthe length of time from the receipt of the

complaint to its disposition; and

(5)AAthe disposition of complaints.

(c)AAThe division shall further analyze the information

compiled under Subsection (b) by field office and by program.

(d)AAThe division shall report the information compiled and

analyzed under Subsections (b) and (c) to the commissioner at

regular intervals.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 7,

eff. September 1, 2011.

Sec. 402.0235.AAPRIORITIES FOR COMPLAINT INVESTIGATIONS.

(a) The division shall assign priorities to complaint

investigations under this subtitle based on risk.AAIn developing

priorities under this section, the division shall develop a formal,

risk-based complaint investigation system that considers:

(1)AAthe severity of the alleged violation;

(2)AAwhether the alleged violator showed continued or

wilful noncompliance; and

(3)AAwhether a commissioner order has been violated.

(b)AAThe commissioner may develop additional risk-based

criteria as determined necessary.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.003, eff.

Sec. 402.024.AAPUBLIC PARTICIPATION. (a) The commissioner

shall develop and implement policies that provide the public with a

13 reasonable opportunity to appear before the division and to speak

on issues under the general jurisdiction of the division.

(b)AAThe division shall comply with federal and state laws

related to program and facility accessibility.

(c)AAIn addition to compliance with Subsection (a), the

commissioner shall prepare and maintain a written plan that

describes how a person who does not speak English may be provided

reasonable access to the division ’s programs and services.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.09, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.004, eff.

SUBCHAPTER C. PERSONNEL

Sec. 402.041.AAAPPOINTMENTS. (a) Subject to the General

Appropriations Act or other law, the commissioner shall appoint

deputies, assistants, and other personnel as necessary to carry out

the powers and duties of the commissioner and the division under

this title, other workers ’ compensation laws of this state, and

other laws granting jurisdiction or applicable to the division or

the commissioner.

(b)AAA person appointed under this section must have the

professional, administrative, and workers ’ compensation experience

necessary to qualify the person for the position to which the person

is appointed.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.10, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 1.007, eff.

Sec. 402.042.AADIVISION OF RESPONSIBILITIES. The

commissioner shall develop and implement policies that clearly

define the respective responsibilities of the commissioner and the

staff of the division.

14 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 402.043.AACAREER LADDER; ANNUAL PERFORMANCE

EVALUATIONS. (a) The commissioner or the commissioner ’s designee

shall develop an intra-agency career ladder program that addresses

opportunities for mobility and advancement for employees within the

division.AAThe program shall require intra-agency postings of all

positions concurrently with any public posting.

(b)AAThe commissioner or the commissioner ’s designee shall

develop a system of annual performance evaluations that are based

on documented employee performance.AAAll merit pay for division

employees must be based on the system established under this

subsection.

Sec. 402.044.AAEQUAL EMPLOYMENT OPPORTUNITY POLICY

STATEMENT. (a) The commissioner or the commissioner ’s designee

shall prepare and maintain a written policy statement to ensure

implementation of a program of equal employment opportunity under

which all personnel transactions are made without regard to race,

color, disability, sex, religion, age, or national origin.AAThe

policy statement must include:

(1)AApersonnel policies, including policies related to

recruitment, evaluation, selection, appointment, training, and

promotion of personnel that are in compliance with the requirements

of Chapter 21;

(2)AAa comprehensive analysis of the division work

force that meets federal and state guidelines;

(3)AAprocedures by which a determination can be made of

significant underuse in the division work force of all persons for

whom federal or state guidelines encourage a more equitable

15 balance; and

(4)AAreasonable methods to appropriately address those

areas of underuse.

(b)AAA policy statement prepared under this section must:

(1)AAcover an annual period;

(2)AAbe updated annually;

(3)AAbe reviewed by the civil rights division of the

Texas Workforce Commission for compliance with Subsection (a)(1);

(4)AAbe filed with the Texas Workforce Commission.

(c)AAThe Texas Workforce Commission shall deliver a biennial

report to the legislature based on the information received under

Subsection (b).AAThe report may be made separately or as part of

other biennial reports made to the legislature.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.11, eff. Sept. 1, 1995.

SUBCHAPTER D. GENERAL POWERS AND DUTIES OF DIVISION AND

COMMISSIONER

Sec. 402.061.AAADOPTION OF RULES. The commissioner shall

adopt rules as necessary for the implementation and enforcement of

this subtitle.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.006, eff.

Sec.A402.062.AAACCEPTANCE OF GIFTS, GRANTS, AND DONATIONS.

(a) The division may accept gifts, grants, or donations as provided

by rules adopted by the commissioner.

(b)AARepealed by Acts 2005, 79th Leg., Ch. 265, Sec.

7.01(15), eff. September 1, 2005.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

16 by Acts 1999, 76th Leg., ch. 1426, Sec. 4, eff. Sept. 1, 1999; Acts

2001, 77th Leg., ch. 1195, Sec. 2.08, eff. Sept. 1, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.007, eff.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 7.01(15), eff.

Sec. 402.064.AAFEES. In addition to fees established by this

subtitle, the commissioner shall set reasonable fees for services

provided to persons requesting services from the division,

including services provided under Subchapter E.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.008, eff.

Sec. 402.065.AAEMPLOYMENT OF COUNSEL. Notwithstanding

Article 1.09-1, Insurance Code, or any other law, the commissioner

may employ counsel to represent the division in any legal action the

division is authorized to initiate.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.009, eff.

Sec. 402.066.AARECOMMENDATIONS TO LEGISLATURE. (a) The

commissioner shall consider and recommend to the legislature

changes to this subtitle, including any statutory changes required

by an evaluation conducted under Section 402.074.

(b)AAThe commissioner shall forward the recommended changes

to the legislature not later than December 1 of each even-numbered

year.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.010, eff.

17 Sec. 402.0665.AALEGISLATIVE OVERSIGHT. The legislature may

adopt requirements relating to legislative oversight of the

division and the workers ’ compensation system of this state.AAThe

division shall comply with any requirements adopted by the

legislature under this section.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.13, eff. Sept. 1,

1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.011, eff.

Sec. 402.067.AAADVISORY COMMITTEES. The commissioner may

appoint advisory committees as the commissioner considers

necessary.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.012, eff.

Sec. 402.068.AADELEGATION OF RIGHTS AND DUTIES. Except as

expressly provided by this subtitle, the division may not delegate

rights and duties imposed on it by this subchapter.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.14, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.013, eff.

Sec. 402.069.AAQUALIFICATIONS AND STANDARDS OF CONDUCT

INFORMATION. The commissioner or the commissioner ’s designee shall

provide to division employees, as often as necessary, information

regarding their:

(1)AAqualifications for office or employment under this

(2)AAresponsibilities under applicable law relating to

standards of conduct for state officers or employees.

18 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.15, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.014, eff.

Sec.A402.071.AAREPRESENTATIVES. (a) The commissioner shall

establish qualifications for a representative and shall adopt rules

establishing procedures for authorization of representatives.

(b)AAA representative may receive a fee for providing

representation under this subtitle only if the representative is:

(1)AAan adjuster representing an insurance carrier; or

(2)AAlicensed to practice law.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.015, eff.

Sec. 402.073.AACOOPERATION WITH STATE OFFICE OF

ADMINISTRATIVE HEARINGS. (a)AAThe commissioner and the chief

administrative law judge of the State Office of Administrative

Hearings shall adopt a memorandum of understanding governing

administrative procedure law hearings under this subtitle

conducted by the State Office of Administrative Hearings in the

manner provided for a contested case hearing under Chapter 2001,

Government Code.AAThe memorandum of understanding must address the

payment of costs by parties to a medical fee dispute under Section

413.0312.

(b)AAIn a case in which a hearing is conducted by the State

Office of Administrative Hearings under Section 413.031 or 413.055,

the administrative law judge who conducts the hearing for the State

Office of Administrative Hearings shall enter the final decision in

the case after completion of the hearing.

(c)AAIn a case in which a hearing is conducted in conjunction

with Section 402.072, 407.046, 408.023, or 415.034, and in other

cases under this subtitle that are not subject to Subsection (b),

the administrative law judge who conducts the hearing for the State

19 Office of Administrative Hearings shall propose a decision to the

commissioner for final consideration and decision by the

(d)AAThe notice of the commissioner ’s order must include a

statement of the right of the person to judicial review of the

order.

(e)AAIn issuing an order under this section, the commissioner

shall comply with the requirements applicable to a state agency

under Section 2001.058, Government Code.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.17, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 955, Sec. 1, eff. Sept.

1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.017, eff.

Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 3, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 8, eff.

Sec. 402.074.AASTRATEGIC MANAGEMENT; EVALUATION. The

commissioner shall implement a strategic management plan that:

(1)AArequires the division to evaluate and analyze the

effectiveness of the division in implementing:

(A)AAthe statutory goals adopted under Section

402.021, particularly goals established to encourage the safe and

timely return of injured employees to productive work roles; and

(B)AAthe other standards and requirements adopted

under this code, the Insurance Code, and other applicable laws of

this state; and

(2)AAmodifies the organizational structure and

programs of the division as necessary to address shortfalls in the

performance of the workers ’ compensation system of this state.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.018, eff.

Sec. 402.075.AAINCENTIVES; PERFORMANCE-BASED OVERSIGHT. (a)

20 The commissioner by rule shall adopt requirements that:

(1)AAprovide incentives for overall compliance in the

workers ’ compensation system of this state; and

(2)AAemphasize performance-based oversight linked to

regulatory outcomes.

(b)AAThe commissioner shall develop key regulatory goals to

be used in assessing the performance of insurance carriers and

health care providers.AAThe goals adopted under this subsection

must align with the general regulatory goals of the division under

this subtitle, such as improving workplace safety and

return-to-work outcomes, in addition to goals that support timely

payment of benefits and increased communication.

(c)AAAt least biennially, the division shall assess the

performance of insurance carriers and health care providers in

meeting the key regulatory goals.AAThe division shall examine

overall compliance records and dispute resolution and complaint

resolution practices to identify insurance carriers and health care

providers who adversely impact the workers ’ compensation system and

who may require enhanced regulatory oversight.AAThe division shall

conduct the assessment through analysis of data maintained by the

division and through self-reporting by insurance carriers and

health care providers.

(d)AABased on the performance assessment, the division shall

develop regulatory tiers that distinguish among insurance carriers

and health care providers who are poor performers, who generally

are average performers, and who are consistently high performers.

The division shall focus its regulatory oversight on insurance

carriers and health care providers identified as poor performers.

(e)AAThe commissioner by rule shall develop incentives

within each tier under Subsection (d) that promote greater overall

compliance and performance. The regulatory incentives may include

modified penalties, self-audits, or flexibility based on

performance.

(f)AAThe division shall:

(1)AAensure that high-performing entities are publicly

recognized; and

(2)AAallow those entities to use that designation as a

21 marketing tool.

(g)AAIn conjunction with the division ’s accident prevention

services under Subchapter E, Chapter 411, the division shall

conduct audits of accident prevention services offered by insurance

carriers based on the comprehensive risk assessment. The division

shall periodically review those services, but may provide

incentives for less regulation of carriers based on performance.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.018, eff.

Sec. 402.076.AAGENERAL DUTIES; FUNDING. (a) The division

shall perform the workforce education and safety functions of the

workers ’ compensation system of this state.AA

(b)AAThe operations of the division under this section are

funded through the maintenance tax assessed under Section 403.002.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.018, eff.

Sec. 402.077.AAEDUCATIONAL PROGRAMS. (a) The division shall

provide education on best practices for return-to-work programs and

workplace safety.

(b)AAThe division shall evaluate and develop the most

efficient, cost-effective procedures for implementing this

section.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.018, eff.

Sec. 402.078.AAREGIONAL OFFICES. The department shall

operate regional offices throughout this state as necessary to

implement the duties of the division and the department under this

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.018, eff.

SUBCHAPTER E. RECORDS AND EMPLOYEE INFORMATION

Sec. 402.081.AADIVISION RECORDS. (a) The commissioner is

22 the custodian of the division ’s records and shall perform the

duties of a custodian required by law, including providing copies

and the certification of records.

(b)AAThe division shall comply with records retention

schedules as provided by Chapter 441.185, Government Code.

(c)AAA record maintained by the division may be preserved in

any format permitted by Chapter 441, Government Code, and rules

adopted by the Texas State Library and Archives Commission under

that chapter.

(d)AAThe division may charge a reasonable fee for making

available for inspection any of its information that contains

confidential information that must be redacted before the

information is made available.AAHowever, when a request for

information is for the inspection of 10 or fewer pages, and a copy

of the information is not requested, the division may charge only

the cost of making a copy of the page from which confidential

information must be redacted.AAThe fee for access to information

under Chapter 552, Government Code, shall be in accord with the

rules of the attorney general that prescribe the method for

computing the charge for copies under that chapter.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1270, Sec. 1 eff. June 20, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.019, eff.

Acts 2005, 79th Leg., Ch. 329 (S.B. 727), Sec. 13, eff.

Acts 2005, 79th Leg., Ch. 716 (S.B. 452), Sec. 11, eff.

Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 10.003,

eff. September 1, 2007.

Sec. 402.082.AAINJURY INFORMATION MAINTAINED BY DIVISION.

(a) The division shall maintain information on every compensable

injury as to the:

(1)AArace, ethnicity, and sex of the claimant;

(2)AAclassification of the injury;

23 (3)AAidentification of whether the claimant is

receiving medical care through a workers ’ compensation health care

network certified under Chapter 1305, Insurance Code;

(4)AAamount of wages earned by the claimant before the

injury; and

(5)AAamount of compensation received by the claimant.

(b)AAOn request from the office of injured employee counsel,

the division shall provide to the office the identity, claim

number, and contact information of claimants receiving assistance

from the office.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.020, eff.

Acts 2011, 82nd Leg., R.S., Ch. 289 (H.B. 1774), Sec. 5, eff.

Sec.A402.083.AACONFIDENTIALITY OF INJURY INFORMATION. (a)

Information in or derived from a claim file regarding an employee is

confidential and may not be disclosed by the division except as

provided by this subtitle or other law.

(b)AAInformation concerning an employee who has been finally

adjudicated of wrongfully obtaining payment under Section 415.008

is not confidential.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.42, 14.49, eff. Sept. 1,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.021, eff.

Sec.A402.084.AARECORD CHECK; RELEASE OF INFORMATION. (a)

The division shall perform and release a record check on an

employee, including current or prior injury information, to the

parties listed in Subsection (b) if:

(1)AAthe claim is:

(A)AAopen or pending before the division;

24 (B)AAon appeal to a court of competent

jurisdiction; or

(C)AAthe subject of a subsequent suit in which the

insurance carrier or the subsequent injury fund is subrogated to

the rights of the named claimant; and

(2)AAthe requesting party requests the release on a

form prescribed by the division for this purpose and provides all

required information.

(b)AAInformation on a claim may be released as provided by

Subsection (a) to:

(1)AAthe employee or the employee ’s legal beneficiary;

(2)AAthe employee ’s or the legal beneficiary ’s

representative;

(3)AAthe employer at the time of injury;

(4)AAthe insurance carrier;

(5)AAthe Texas Certified Self-Insurer Guaranty

Association established under Subchapter G, Chapter 407, if that

association has assumed the obligations of an impaired employer;

(6)AAthe Texas Property and Casualty Insurance Guaranty

Association, if that association has assumed the obligations of an

impaired insurance company;

(7)AAa third-party litigant in a lawsuit in which the

cause of action arises from the incident that gave rise to the

injury; or

(8)AAwith regard to information described by Subsection

(c-3), an insurance carrier that has adopted an antifraud plan

under Subchapter B, Chapter 704, Insurance Code, or the authorized

representative of such an insurance carrier.

(c)AAThe requirements of Subsection (a)(1) do not apply to a

request from a third-party litigant described by Subsection (b)(7).

(c-1)AAFor purposes of this section only, "insurance

carrier" means:

(1)AAa certified self-insurer; or

(2)AAan entity authorized under the Insurance Code or

another insurance law of this state that provides health insurance

coverage or health benefits in this state, including:

(A)AAan insurance company, including an insurance

25 company that holds a certificate of authority issued by the

commissioner of insurance to engage in the business of workers ’

compensation insurance in this state;

(B)AAa group hospital service corporation under

Chapter 842, Insurance Code;

(C)AAa health maintenance organization under

Chapter 843, Insurance Code;

(D)AAa stipulated premium company under Chapter

884, Insurance Code;

(E)AAa fully self-insured plan, as described by

the Employee Retirement Income Security Act of 1974 (29 U.S.C.

Section 1001 et seq.);

(F)AAa governmental plan, as defined by Section

3(32), Employee Retirement Income Security Act of 1974 (29 U.S.C.

Section 1002(32));

(G)AAan employee welfare benefit plan, as defined

by Section 3(1), Employee Retirement Income Security Act of 1974

(29 U.S.C. Section 1002(1)); and

(H)AAan insurer authorized by the Texas Department

of Insurance to offer disability insurance in this state.

(c-2)AAAn insurance carrier is not required to demonstrate

that a subclaim exists in order to obtain information under

Subsection (b)(8).

(c-3)AAAn insurance carrier described by Subsection (b)(8)

or an authorized representative of the insurance carrier may submit

to the commission on a monthly basis a written request for claims

information.AAThe request must contain a list of the names of

persons about whom claims information is requested.AAThe insurance

carrier must certify in the carrier ’s request that each person

listed is, or has been, an insured under the carrier ’s insurance

program.AAThe commission shall examine the commission ’s records to

identify all claims related to the listed persons.AAIf a claims

record exists for a listed person, the commission promptly shall

provide information on each workers ’ compensation claim filed by

that person to the carrier or the carrier ’s representative in an

electronic format.AAThe information provided under this subsection

must include, if available:

26 (1)AAthe full name of the workers ’ compensation

claimant;

(2)AAthe social security number of the workers ’

compensation claimant;

(3)AAthe date of birth of the workers ’ compensation

(4)AAthe name of the employer of the workers ’

(5)AAthe date of the injury;

(6)AAa description of the type of injury or the body

part affected, including the workers ’ compensation claimant ’s

description of how the injury occurred;

(7)AAthe name of the treating doctor;

(8)AAthe name, address, and claim number of the

insurance carrier handling the claim;

(9)AAthe name of the insurance adjustor handling the

claim; and

(10)AAthe identifying number assigned to the claim by

the commission and the commission field office handling the claim.

(c-4)AAA potential subclaim identified by an insurance

carrier described by Subsection (b)(8) or an authorized

representative of the insurance carrier may form the basis for the

identification and filing of a subclaim against an insurance

carrier under this subtitle.

(c-5)AAInformation received under this section by an

insurance carrier described by Subsection (b)(8) or an authorized

representative of the insurance carrier remains subject to

confidentiality requirements of this subtitle while in the

possession of the insurance carrier or representative.AAHowever,

the following laws do not prohibit the commission from disclosing

full information regarding a claim as necessary to determine if a

valid subclaim exists:

(1)AAChapter 552, Government Code;

(2)AAChapter 159, Occupations Code; or

(3)AAany other analogous law restricting disclosure of

health care information.

(c-6)AAThe commission may not redact claims records produced

27 in an electronic data format under a request made under this

(c-7)AAAn insurance carrier and its authorized

representative may request full claims data under Subsection

(b)(8), and the records shall be produced once each month.AAFor

purposes of this subsection, "full claims data" means an electronic

download or tape in an electronic data format of the information

listed in Subsection (c-3) on all cases relating to the workers ’

compensation claimants listed as insureds of the requesting

insurance carrier.

(d)AA The commissioner by rule may establish a reasonable

fee, not to exceed five cents for each claimant listed in an

information request, for all information requested by an insurance

representative of the insurance carrier in an electronic data

format. The commissioner shall adopt rules under Section

401.024(d) to establish:

(1)AAreasonable security parameters for all transfers

of information requested under this section in electronic data

format; and

(2)AArequirements regarding the maintenance of

electronic data in the possession of an insurance carrier described

by Subsection (b)(8) or an authorized representative of the

(e)AAThe insurance carrier or the carrier ’s authorized

representative must execute a written agreement with the commission

before submitting the carrier ’s first request under Subsection

(c-3).AAThe agreement must contain a provision by which the carrier

and the representative agree to comply with the commission ’s rules

governing security parameters applicable to the transfer of

information under Subsection (d)(1) and the maintenance of

electronic data under Subsection (d)(2).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1033, Sec. 5, eff. Sept. 1, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.022, eff.

28 Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.132, eff.

Acts 2005, 79th Leg., Ch. 1190 (H.B. 251), Sec. 1, eff. June

18, 2005.

Sec. 402.085.AAEXCEPTIONS TO CONFIDENTIALITY. (a)AAThe

division shall release information on a claim to:

(1)AAthe Texas Department of Insurance for any

statutory or regulatory purpose, including a research purpose under

Chapter 405;

(2)AAa legislative committee for legislative purposes;

(3)AAa state or federal elected official requested in

writing to provide assistance by a constituent who qualifies to

obtain injury information under Section 402.084(b), if the request

for assistance is provided to the division;

(4)AAthe attorney general or another entity that

provides child support services under Part D, Title IV, Social

Security Act (42 U.S.C. Section 651 et seq.), relating to:

(A)AAestablishing, modifying, or enforcing a

child support or medical support obligation; or

(B)AAlocating an absent parent; or

(5)AAthe office of injured employee counsel for any

statutory or regulatory purpose that relates to a duty of that

office as provided by Section 404.111(a).

(b)AAThe division may release information on a claim to a

governmental agency, political subdivision, or regulatory body to

use to:

(1)AAinvestigate an allegation of a criminal offense or

licensing or regulatory violation;

(2)AAprovide:

(A)AAunemployment compensation benefits;

(B)AAcrime victims compensation benefits;

(C)AAvocational rehabilitation services; or

(D)AAhealth care benefits;

(3)AAinvestigate occupational safety or health

violations;

(4)AAverify income on an application for benefits under

29 an income-based state or federal assistance program; or

(5)AAassess financial resources in an action, including

an administrative action, to:

(A)AAestablish, modify, or enforce a child support

or medical support obligation;

(B)AAestablish paternity;

(C)AAlocate an absent parent; or

(D)AAcooperate with another state in an action

authorized under Part D, Title IV, Social Security Act (42 U.S.C.

Section 651 et seq.), or Chapter 231, Family Code.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.43(a), eff. Sept. 1, 1995;

Acts 1999, 76th Leg., ch. 1426, Sec. 5, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.023, eff.

Acts 2011, 82nd Leg., R.S., Ch. 289 (H.B. 1774), Sec. 6, eff.

Sec.A402.086.AATRANSFER OF CONFIDENTIALITY. (a)

Information relating to a claim that is confidential under this

subtitle remains confidential when released to any person, except

when used in court for the purposes of an appeal.

(b)AAThis section does not prohibit an employer from

releasing information about a former employee to another employer

with whom the employee has applied for employment, if that

information was lawfully acquired by the employer releasing the

information.

Sec.A402.087.AAINFORMATION AVAILABLE TO PROSPECTIVE

EMPLOYERS. (a) A prospective employer who has workers ’

compensation insurance coverage and who complies with this

subchapter is entitled to obtain information on the prior injuries

of an applicant for employment if the employer obtains written

authorization from the applicant before making the request.

(b)AAThe employer must make the request by telephone or file

30 the request in writing not later than the 14th day after the date on

which the application for employment is made.

(c)AAThe request must include the applicant ’s name, address,

and social security number.

(d)AAIf the request is made in writing, the authorization

must be filed simultaneously. If the request is made by telephone,

the employer must file the authorization not later than the 10th day

after the date on which the request is made.

Sec.A402.088.AAREPORT OF PRIOR INJURY. (a) On receipt of a

valid request made under and complying with Section 402.087, the

division shall review its records.

(b)AAIf the division finds that the applicant has made two or

more general injury claims in the preceding five years, the

division shall release the date and description of each injury to

the employer.

(c)AAThe information may be released in writing or by

telephone.

(d)AAIf the employer requests information on three or more

applicants at the same time, the division may refuse to release

information until it receives the written authorization from each

applicant.

(e)AAIn this section, "general injury" means an injury other

than an injury limited to one or more of the following:

(1)AAan injury to a digit, limb, or member;

(2)AAan inguinal hernia; or

(3)AAvision or hearing loss.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.024, eff.

Sec. 402.089.AAFAILURE TO FILE AUTHORIZATION. An employer

who receives information by telephone from the division under

Section 402.088 and who fails to file the necessary authorization

in accordance with Section 402.087 commits an administrative

31 violation.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.025, eff.

Sec. 402.090.AASTATISTICAL INFORMATION. The division, the

Texas Department of Insurance, or any other governmental agency may

prepare and release statistical information if the identity of an

employee is not explicitly or implicitly disclosed.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.026, eff.

Sec.A402.091.AAFAILURE TO MAINTAIN CONFIDENTIALITY;

OFFENSE; PENALTY. (a) A person commits an offense if the person

knowingly, intentionally, or recklessly publishes, discloses, or

distributes information that is confidential under this subchapter

to a person not authorized to receive the information directly from

the division.

(b)AAA person commits an offense if the person knowingly,

intentionally, or recklessly receives information that is

confidential under this subchapter and that the person is not

authorized to receive.

(c)AAAn offense under this section is a Class A misdemeanor.

(d)AAAn offense under this section may be prosecuted in a

court in the county where the information was unlawfully received,

published, disclosed, or distributed.

(e)AAA district court in Travis County has jurisdiction to

enjoin the use, publication, disclosure, or distribution of

confidential information under this section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.18, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.027, eff.

32 Sec. 402.092.AAINVESTIGATION FILES CONFIDENTIAL; DISCLOSURE

OF CERTAIN INFORMATION. (a) In this section, "investigation file"

means any information compiled or maintained by the division with

respect to a division investigation authorized under this subtitle

or other workers ’ compensation law.AAThe term does not include

information or material acquired by the division that is relevant

to an investigation by the insurance fraud unit and subject to

Section 701.151, Insurance Code.

(b)AAInformation maintained in the investigation files of

the division is confidential and may not be disclosed except:

(1)AAin a criminal proceeding;

(2)AAin a hearing conducted by the division;

(3)AAon a judicial determination of good cause;

(4)AAto a governmental agency, political subdivision,

or regulatory body if the disclosure is necessary or proper for the

enforcement of the laws of this or another state or of the United

States; or

(5)AAto an insurance carrier if the investigation file

relates directly to a felony regarding workers ’ compensation or to

a claim in which restitution is required to be paid to the insurance

carrier.

(c)AADivision investigation files are not open records for

purposes of Chapter 552, Government Code.

(d)AAInformation in an investigation file that is

information in or derived from a claim file, or an employer injury

report or occupational disease report, is governed by the

confidentiality provisions relating to that information.

(e)AAThe division, upon request, shall disclose the identity

of a complainant under this section if the division finds:

(1)AAthe complaint was groundless or made in bad faith;

(2)AAthe complaint lacks any basis in fact or evidence;

(3)AAthe complaint is frivolous; or

(4)AAthe complaint is done specifically for competitive

or economic advantage.

(f)AAUpon completion of an investigation in which the

division determines a complaint is described by Subsection (e), the

33 division shall notify the person who was the subject of the

complaint of its finding and the identity of the complainant.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.19, eff. Sept. 1,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.028, eff.

SUBCHAPTER F. COOPERATION WITH OFFICE OF INJURED EMPLOYEE COUNSEL

Sec. 402.251.AACOOPERATION; FACILITIES. (a) The department

and the division shall cooperate with the office of injured

employee counsel in providing services to claimants under this

(b)AAThe department shall provide facilities to the office of

injured employee counsel in each regional office operated to

administer the duties of the division under this subtitle.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 2.029, eff.

34 LABOR CODE

CHAPTER 406. WORKERS ’ COMPENSATION INSURANCE COVERAGE

SUBCHAPTER A. COVERAGE ELECTION; SECURITY PROCEDURES

Sec.A406.001.AADEFINITION. In this subchapter, "employer"

means a person who employs one or more employees.

Sec.A406.002.AACOVERAGE GENERALLY ELECTIVE. (a) Except for

public employers and as otherwise provided by law, an employer may

elect to obtain workers ’ compensation insurance coverage.

(b)AAAn employer who elects to obtain coverage is subject to

Sec.A406.003.AAMETHODS OF OBTAINING COVERAGE. An employer

may obtain workers ’ compensation insurance coverage through a

licensed insurance company or through self-insurance as provided by

Sec. 406.004.AAEMPLOYER NOTICE TO DIVISION. (a) An employer

who does not obtain workers ’ compensation insurance coverage shall

notify the division in writing, in the time and as prescribed by

commissioner rule, that the employer elects not to obtain coverage.

(b)AAThe commissioner shall prescribe forms to be used for

the employer notification and shall require the employer to provide

reasonable information to the division about the employer ’s

business.

(c)AAThe division may contract with the Texas Workforce

Commission or the comptroller for assistance in collecting the

notification required under this section.AAThose agencies shall

cooperate with the division in enforcing this section.

(d)AAThe employer notification filing required under this

1 section shall be filed with the division in accordance with Section

406.009.

(e)AAAn employer commits an administrative violation if the

employer fails to comply with this section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.47(a), eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.023, eff.

Sec.A406.005.AAEMPLOYER NOTICE TO EMPLOYEES; ADMINISTRATIVE

VIOLATION. (a) An employer shall notify each employee as provided

by this section whether or not the employer has workers ’

compensation insurance coverage.

(b)AAThe employer shall notify a new employee of the

existence or absence of workers ’ compensation insurance coverage at

the time the employee is hired.

(c)AAEach employer shall post a notice of whether the

employer has workers ’ compensation insurance coverage at

conspicuous locations at the employer ’s place of business as

necessary to provide reasonable notice to the employees.AAThe

commissioner may adopt rules relating to the form and content of the

notice.AAThe employer shall revise the notice when the information

contained in the notice is changed.

(d)AAAn employer who obtains workers ’ compensation insurance

coverage or whose coverage is terminated or canceled shall notify

each employee that the coverage has been obtained, terminated, or

canceled not later than the 15th day after the date on which the

coverage, or the termination or cancellation of the coverage, takes

effect.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.024, eff.

2 Sec.A406.006.AAINSURANCE COVERAGE AND CLAIM ADMINISTRATION

REPORTING REQUIREMENTS; ADMINISTRATIVE VIOLATION. (a) An

insurance company from which an employer has obtained workers ’

compensation insurance coverage, a certified self-insurer, a

workers ’ compensation self-insurance group under Chapter 407A, and

a political subdivision shall file notice of the coverage and claim

administration contact information with the division not later than

the 10th day after the date on which the coverage or claim

administration agreement takes effect, unless the commissioner

adopts a rule establishing a later date for filing.AACoverage takes

effect on the date on which a binder is issued, a later date and time

agreed to by the parties, on the date provided by the certificate of

self-insurance, or on the date provided in an interlocal agreement

that provides for self-insurance.AAThe commissioner may adopt

rules that establish the coverage and claim administration contact

information required under this subsection.

(b)AAThe notice required under this section shall be filed

with the division in accordance with Section 406.009.

(c)AAAn insurance company, a certified self-insurer, a

workers ’ compensation self-insurance group under Chapter 407A, or a

political subdivision commits an administrative violation if the

person fails to file notice with the division as provided by this

(d)AAIn this section, "political subdivision" has the

meaning assigned by Section 504.001.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.48(a), eff. Sept. 1, 1995;

Acts 1999, 76th Leg., ch. 954, Sec. 2.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.025, eff.

Sec.A406.007.AATERMINATION OF COVERAGE BY EMPLOYER; NOTICE.

(a) An employer who terminates workers ’ compensation insurance

coverage obtained under this subtitle shall file a written notice

with the division by certified mail not later than the 10th day

after the date on which the employer notified the insurance carrier

3 to terminate the coverage.AAThe notice must include a statement

certifying the date that notice was provided or will be provided to

affected employees under Section 406.005.

(c)AATermination of coverage takes effect on the later of:

(1)AAthe 30th day after the date of filing of notice

with the division under Subsection (a); or

(2)AAthe cancellation date of the policy.

(d)AAThe coverage shall be extended until the date on which

the termination of coverage takes effect, and the employer is

obligated for premiums due for that period.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.49(a), eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.026, eff.

Sec. 406.008.AACANCELLATION OR NONRENEWAL OF COVERAGE BY

INSURANCE COMPANY; NOTICE. (a) An insurance company that cancels a

policy of workers ’ compensation insurance or that does not renew

the policy by the anniversary date of the policy shall deliver

notice of the cancellation or nonrenewal by certified mail or in

person to the employer and the division not later than:

(1)AAthe 30th day before the date on which the

cancellation or nonrenewal takes effect; or

(2)AAthe 10th day before the date on which the

cancellation or nonrenewal takes effect if the insurance company

cancels or does not renew because of:

(A)AAfraud in obtaining coverage;

(B)AAmisrepresentation of the amount of payroll

for purposes of premium calculation;

(C)AAfailure to pay a premium when due;

(D)AAan increase in the hazard for which the

employer seeks coverage that results from an act or omission of the

employer and that would produce an increase in the rate, including

an increase because of a failure to comply with:

4 (i)AAreasonable recommendations for loss

control; or

(ii)AArecommendations designed to reduce a

hazard under the employer ’s control within a reasonable period; or

(E)AAa determination made by the commissioner of

insurance that the continuation of the policy would place the

insurer in violation of the law or would be hazardous to the

interest of subscribers, creditors, or the general public.

with the division.

(c)AAFailure of the insurance company to give notice as

required by this section extends the policy until the date on which

the required notice is provided to the employer and the division.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.50(a), eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.027, eff.

Sec. 406.009.AACOLLECTING AND MAINTAINING INFORMATION;

MONITORING AND ENFORCING COMPLIANCE. (a) The division shall

collect and maintain the information required under this subchapter

and shall monitor compliance with the requirements of this

subchapter.

(b)AAThe commissioner may adopt rules as necessary to enforce

this subchapter.

(c)AAThe commissioner may designate a data collection agent,

implement an electronic reporting and public information access

program, and adopt rules as necessary to implement the data

collection requirements of this subchapter.AAThe commissioner may

establish the form, manner, and procedure for the transmission of

information to the division.AAA data collection agent designated

under this subsection must be qualified and may collect fees in the

manner described by Section 401.024.

(d)AAThe division may require an employer or insurance

carrier subject to this subtitle to identify or confirm an

employer ’s coverage status and claim administration contact

5 information as necessary to achieve the purposes of this subtitle.

(e)AAAn employer or insurance carrier commits an

administrative violation if that person fails to comply with

Subsection (d).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.51(a), eff. Sept. 1, 1995;

Acts 1999, 76th Leg., ch. 954, Sec. 3, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.028, eff.

Acts 2011, 82nd Leg., R.S., Ch. 410 (S.B. 800), Sec. 2, eff.

Sec.A406.010.AACLAIMS SERVICE; ADMINISTRATIVE VIOLATION.

(a) An insurance carrier shall provide claims service:

(1)AAthrough offices of the insurance carrier located

in this state; or

(2)AAby other resident representatives with full power

to act for the insurance carrier.

(b)AAEach insurance carrier shall designate persons to

provide claims service in sufficient numbers and at appropriate

locations to reasonably service policies written by the

carrier.AAIf an insurance carrier uses the services of a person

required to hold a certificate of authority under Chapter 4151,

Insurance Code, the carrier must comply with the requirements of

(c)AAThe commissioner by rule shall further specify the

requirements of this section.

(d)AAA person commits an administrative violation if the

person violates a rule adopted under this section.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.029, eff.

Acts 2007, 80th Leg., R.S., Ch. 1176 (H.B. 472), Sec. 3.01,

6 Sec. 406.011.AAAUSTIN REPRESENTATIVE; ADMINISTRATIVE

VIOLATION. (a) The commissioner by rule may require an insurance

carrier to designate a representative in Austin to act as the

insurance carrier ’s agent before the division in Austin.AANotice to

the designated agent constitutes notice to the insurance carrier.

(b)AAA person commits an administrative violation if the

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.030, eff.

Sec.A406.012.AAENFORCEMENT OF SUBCHAPTER. The commission

shall enforce the administrative penalties established under this

subchapter in accordance with Chapter 415.

SUBCHAPTER B. COVERAGE REQUIREMENTS

Sec.A406.031.AALIABILITY FOR COMPENSATION. (a) An

insurance carrier is liable for compensation for an employee ’s

injury without regard to fault or negligence if:

(1)AAat the time of injury, the employee is subject to

this subtitle; and

(2)AAthe injury arises out of and in the course and

scope of employment.

(b)AAIf an injury is an occupational disease, the employer in

whose employ the employee was last injuriously exposed to the

hazards of the disease is considered to be the employer of the

employee under this subtitle.

Sec.A406.032.AAEXCEPTIONS. An insurance carrier is not

liable for compensation if:

(1)AAthe injury:

(A)AAoccurred while the employee was in a state of

intoxication;

7 (B)AAwas caused by the employee ’s wilful attempt

to injure himself or to unlawfully injure another person;

(C)AAarose out of an act of a third person intended

to injure the employee because of a personal reason and not directed

at the employee as an employee or because of the employment;

(D)AAarose out of voluntary participation in an

off-duty recreational, social, or athletic activity that did not

constitute part of the employee ’s work-related duties, unless the

activity is a reasonable expectancy of or is expressly or impliedly

required by the employment; or

(E)AAarose out of an act of God, unless the

employment exposes the employee to a greater risk of injury from an

act of God than ordinarily applies to the general public; or

(2)AAthe employee ’s horseplay was a producing cause of

the injury.

Sec.A406.033.AACOMMON-LAW DEFENSES; BURDEN OF PROOF.

(a)AAIn an action against an employer by or on behalf of an employee

who is not covered by workers ’ compensation insurance obtained in

the manner authorized by Section 406.003 to recover damages for

personal injuries or death sustained by an employee in the course

and scope of the employment, it is not a defense that:

(1)AAthe employee was guilty of contributory

negligence;

(2)AAthe employee assumed the risk of injury or death;

(3)AAthe injury or death was caused by the negligence of

a fellow employee.

(b)AAThis section does not reinstate or otherwise affect the

availability of defenses at common law, including the defenses

described by Subsection (a).

(c)AAThe employer may defend the action on the ground that

the injury was caused:

(1)AAby an act of the employee intended to bring about

the injury; or

(2)AAwhile the employee was in a state of intoxication.

8 (d)AAIn an action described by Subsection (a), the plaintiff

must prove negligence of the employer or of an agent or servant of

the employer acting within the general scope of the agent ’s or

servant ’s employment.

(e)AAA cause of action described in Subsection (a) may not be

waived by an employee before the employee ’s injury or death. Any

agreement by an employee to waive a cause of action or any right

described in Subsection (a) before the employee ’s injury or death

is void and unenforceable.

(f)AAA cause of action described by Subsection (a) may not be

waived by an employee after the employee ’s injury unless:

(1)AAthe employee voluntarily enters into the waiver

with knowledge of the waiver ’s effect;

(2)AAthe waiver is entered into not earlier than the

10th business day after the date of the initial report of injury;

(3)AAthe employee, before signing the waiver, has

received a medical evaluation from a nonemergency care doctor; and

(4)AAthe waiver is in a writing under which the true

intent of the parties is specifically stated in the document.

(g)AAThe waiver provisions required under Subsection (f)

must be conspicuous and appear on the face of the agreement.AATo be

conspicuous, the waiver provisions must appear in a type larger

than the type contained in the body of the agreement or in

contrasting colors.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 16.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.031, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1108 (S.B. 1714), Sec. 1, eff.

Sec.A406.034.AAEMPLOYEE ELECTION. (a) Except as otherwise

provided by law, unless the employee gives notice as provided by

Subsection (b), an employee of an employer waives the employee ’s

right of action at common law or under a statute of this state to

recover damages for personal injuries or death sustained in the

9 course and scope of the employment.

(b)AAAn employee who desires to retain the common-law right

of action to recover damages for personal injuries or death shall

notify the employer in writing that the employee waives coverage

under this subtitle and retains all rights of action under common

law. The employee must notify the employer not later than the fifth

day after the date on which the employee:

(1)AAbegins the employment; or

(2)AAreceives written notice from the employer that the

employer has obtained workers ’ compensation insurance coverage if

the employer is not a covered employer at the time of the employment

but later obtains the coverage.

(c)AAAn employer may not require an employee to retain

common-law rights under this section as a condition of employment.

(d)AAAn employee who elects to retain the right of action or a

legal beneficiary of that employee may bring a cause of action for

damages for injuries sustained in the course and scope of the

employment under common law or under a statute of this

state.AANotwithstanding Section 406.033, the cause of action is

subject to all defenses available under common law and the statutes

of this state unless the employee has waived coverage in connection

with an agreement with the employer.

Acts 2011, 82nd Leg., R.S., Ch. 1108 (S.B. 1714), Sec. 2, eff.

Sec.A406.035.AAWAIVER OF COMPENSATION PROHIBITED. Except as

provided by this subtitle, an agreement by an employee to waive the

employee ’s right to compensation is void.

SUBCHAPTER C. COVERAGE THROUGH COMMERCIAL INSURANCE

Sec.A406.051.AASECURITY BY COMMERCIAL INSURANCE. (a) An

insurance company may contract to secure an employer ’s liability

and obligations and to pay compensation by issuing a workers ’

10 compensation insurance policy under this subchapter.

(b)AAThe contract for coverage must be written on a policy

and endorsements approved by the Texas Department of Insurance.

(c)AAThe employer may not transfer:

(1)AAthe obligation to accept a report of injury under

Section 409.001;

(2)AAthe obligation to maintain records of injuries

under Section 409.006;

(3)AAthe obligation to report injuries to the insurance

carrier under Section 409.005;

(4)AAliability for a violation of Section 415.006 or

415.008 or of Chapter 451; or

(5)AAthe obligation to comply with a commissioner

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 954, Sec. 4, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.032, eff.

Sec.A406.052.AAEFFECT OF OTHER INSURANCE COVERAGE. (a) A

contract entered into to indemnify an employer from loss or damage

resulting from an injury sustained by an employee that is

compensable under this subtitle is void unless the contract also

covers liability for payment of compensation under this subtitle.

(b)AAThis section does not prohibit an employer who is not

required to have workers ’ compensation insurance coverage and who

has elected not to obtain workers ’ compensation insurance coverage

from obtaining insurance coverage on the employer ’s employees if

the insurance is not represented to any person as providing

workers ’ compensation insurance coverage authorized under this

Sec.A406.053.AAALL STATES COVERAGE. The Texas Department of

Insurance shall coordinate with the appropriate agencies of other

states to:

11 (1)AAshare information regarding an employer who

obtains all states coverage; and

(2)AAensure that the department has knowledge of an

employer who obtains all states coverage in another state but fails

to file notice with the department.

SUBCHAPTER D. EXTRATERRITORIAL COVERAGE

Sec.A406.071.AAEXTRATERRITORIAL COVERAGE. (a) An employee

who is injured while working in another jurisdiction or the

employee ’s legal beneficiary is entitled to all rights and remedies

under this subtitle if:

(1)AAthe injury would be compensable if it had occurred

in this state; and

(2)AAthe employee has significant contacts with this

state or the employment is principally located in this state.

(b)AAAn employee has significant contacts with this state if

the employee was hired or recruited in this state and the employee:

(1)AAwas injured not later than one year after the date

of hire; or

(2)AAhas worked in this state for at least 10 working

days during the 12 months preceding the date of injury.

Sec.A406.072.AAPRINCIPAL LOCATION. The principal location

of a person ’s employment is where:

(1)AAthe employer has a place of business at or from

which the employee regularly works; or

(2)AAthe employee resides and spends a substantial part

of the employee ’s working time.

Sec.A406.073.AAAGREEMENT ON PRINCIPAL LOCATION;

ADMINISTRATIVE VIOLATION. (a) An employee whose work requires

regular travel between this state and at least one other

jurisdiction may agree in writing with the employer on the

12 principal location of the employment.

(b)AAThe employer shall file the agreement with the division

on request.

(c)AAA person commits an administrative violation if the

person violates Subsection (b).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.033, eff.

Sec.A406.074.AAINTERJURISDICTIONAL AGREEMENTS. (a) The

commissioner may enter into an agreement with an appropriate agency

of another jurisdiction with respect to:

(1)AAconflicts of jurisdiction;

(2)AAassumption of jurisdiction in a case in which the

contract of employment arises in one state and the injury is

incurred in another;

(3)AAprocedures for proceeding against a foreign

employer who fails to comply with this subtitle; and

(4)AAprocedures for the appropriate agency to use to

proceed against an employer of this state who fails to comply with

the workers ’ compensation laws of the other jurisdiction.

(b)AAAn executed agreement that has been adopted as a rule by

the commissioner binds all subject employers and employees.

(c)AAIn this section, "appropriate agency" means an agency of

another jurisdiction that administers the workers ’ compensation

laws of that jurisdiction.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.034, eff.

Sec.A406.075.AAEFFECT OF COMPENSATION PAID IN OTHER

JURISDICTION. (a) An injured employee who elects to pursue the

employee ’s remedy under the workers ’ compensation laws of another

jurisdiction and who recovers benefits under those laws may not

recover under this subtitle.

13 (b)AAThe amount of benefits accepted under the laws of the

other jurisdiction without an election under Subsection (a) shall

be credited against the benefits that the employee would have

received had the claim been made under this subtitle.

SUBCHAPTER E. APPLICATION OF COVERAGE TO CERTAIN EMPLOYEES

Sec.A406.091.AAEXEMPT EMPLOYEES; VOLUNTARY COVERAGE. (a)

The following employees are not subject to this subtitle:

(1)AAa person employed as a domestic worker or a casual

worker engaged in employment incidental to a personal residence;

(2)AAa person covered by a method of compensation

established under federal law; or

(3)AAexcept as provided by Subchapter H, a farm or ranch

(b)AAAn employer may elect to obtain workers ’ compensation

insurance coverage for an employee or classification of employees

exempted from coverage under Subsection (a)(1) or (a)(3).

Obtaining that coverage constitutes acceptance by the employer of

the rights and responsibilities imposed under this subtitle as of

the effective date of the coverage for as long as the coverage

remains in effect.

(c)AAAn employer who does not obtain coverage for exempt

employees is not deprived of the common-law defenses described by

Section 406.033, but this section does not reinstate or otherwise

affect the availability of those or other defenses at common law.

Sec.A406.092.AAALIEN EMPLOYEES AND BENEFICIARIES. (a) A

resident or nonresident alien employee or legal beneficiary is

entitled to compensation under this subtitle.

(b)AAA nonresident alien employee or legal beneficiary, at

the election of the employee or legal beneficiary, may be

represented officially by a consular officer of the country of

which the employee or legal beneficiary is a citizen. That officer

may receive benefit payments for distribution to the employee or

14 legal beneficiary. The receipt of the payments constitutes full

discharge of the insurance carrier ’s liability for those payments.

Sec.A406.093.AALEGALLY INCOMPETENT EMPLOYEES. (a) The

guardian of an injured employee who is a minor or is otherwise

legally incompetent may exercise on the employee ’s behalf the

rights and privileges granted to the employee under this subtitle.

(b)AAThe commissioner by rule shall adopt procedures

relating to the method of payment of benefits to legally

incompetent employees.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.035, eff.

Sec.A406.094.AACERTAIN PERSONS LICENSED BY TEXAS REAL ESTATE

COMMISSION. (a) An employer who elects to provide workers ’

compensation insurance coverage may include in the coverage a real

estate salesperson or broker who is:

(1)AAlicensed under Chapter 1101, Occupations Code;

(2)AAcompensated solely by commissions.

(b)AAIf coverage is elected by the employer, the insurance

policy must specifically name the salesperson or broker. The

coverage continues while the policy is in effect and the named

salesperson or broker is endorsed on the policy.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.788, eff. Sept. 1, 2003.

Sec.A406.095.AACERTAIN PROFESSIONAL ATHLETES. (a) A

professional athlete employed under a contract for hire or a

collective bargaining agreement who is entitled to benefits for

medical care and weekly benefits that are equal to or greater than

the benefits provided under this subtitle may not receive benefits

under this subtitle and the equivalent benefits under the contract

or collective bargaining agreement. An athlete covered by such a

15 contract or agreement who sustains an injury in the course and scope

of the athlete ’s employment shall elect to receive either the

benefits available under this subtitle or the benefits under the

contract or agreement.

(b)AAThe commissioner by rule shall establish the procedures

and requirements for an election under this section.

(c)AAIn this section, "professional athlete" means a person

employed as a professional athlete by a franchise of:

(1)AAthe National Football League;

(2)AAthe National Basketball Association;

(3)AAthe American League of Professional Baseball

Clubs;

(4)AAthe National League of Professional Baseball

(5)AAthe International Hockey League;

(6)AAthe National Hockey League; or

(7)AAthe Central Hockey League.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 668, Sec. 1, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.036, eff.

Acts 2005, 79th Leg., Ch. 815 (S.B. 742), Sec. 1, eff.

Sec.A406.096.AAREQUIRED COVERAGE FOR CERTAIN BUILDING OR

CONSTRUCTION CONTRACTORS. (a) A governmental entity that enters

into a building or construction contract shall require the

contractor to certify in writing that the contractor provides

workers ’ compensation insurance coverage for each employee of the

contractor employed on the public project.

(b)AAEach subcontractor on the public project shall provide

such a certificate relating to coverage of the subcontractor ’s

employees to the general contractor, who shall provide the

subcontractor ’s certificate to the governmental entity.

(c)AAA contractor who has a contract that requires workers ’

compensation insurance coverage may provide the coverage through a

16 group plan or other method satisfactory to the governing body of the

governmental entity.

(d)AAThe employment of a maintenance employee by an employer

who is not engaging in building or construction as the employer ’s

primary business does not constitute engaging in building or

construction.

(e)AAIn this section:

(1)AA"Building or construction" includes:

(A)AAerecting or preparing to erect a structure,

including a building, bridge, roadway, public utility facility, or

related appurtenance;

(B)AAremodeling, extending, repairing, or

demolishing a structure; or

(C)AAotherwise improving real property or an

appurtenance to real property through similar activities.

(2)AA"Governmental entity" means this state or a

political subdivision of this state. The term includes a

municipality.

Sec.A406.097.AAEXECUTIVE EMPLOYEES OF CERTAIN BUSINESS

ENTITIES. (a) A sole proprietor, partner, or corporate executive

officer of a business entity that elects to provide workers ’

compensation insurance coverage is entitled to benefits under that

coverage as an employee unless the sole proprietor, partner, or

corporate executive officer is specifically excluded from coverage

through an endorsement to the insurance policy or certificate of

authority to self-insure.

(b)AAThe dual capacity doctrine does not apply to a corporate

executive officer with an equity ownership in the covered business

entity of at least 25 percent and will not invalidate the exclusion

of such a corporate executive officer from coverage under

Subsection (a).

(c)AAA sole proprietor or partner of a covered business

entity or a corporate officer with an equity ownership in a covered

business entity of at least 25 percent may be excluded from coverage

under this section notwithstanding Section 406.096.

17 Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.20, eff. Sept. 1,

Sec.A406.098.AAVOLUNTEER EMERGENCY SERVICE MEMBERS AND

PERSONNEL. (a) An emergency service organization which is not a

political subdivision or which is separate from any political

subdivision may elect to obtain workers ’ compensation insurance

coverage for its named volunteer members who participate in the

normal functions of the organization. A person covered under this

subsection is entitled to full medical benefits and the minimum

compensation payments under the law.

(b)AAIn this section, unless a different meaning is plainly

required by law:

(1)AA"Emergency service organization" means any

organization established to provide for the general public:

(A)AAfire prevention and suppression;

(B)AAhazardous materials response operations; or

(C)AAemergency medical services.

(2)AA"Volunteer members" means individuals who are

carried on the membership list of the organization as active

participants and who receive no remuneration for their services.

(3)AA"Normal functions" means any response to,

participation in, or departure from an incident scene; training;

meetings; performance of equipment maintenance; or organizational

functions.

(4)AA"Political subdivision" means a county,

municipality, special district, school district, junior college

district, housing authority, community center for mental health and

mental retardation services established under Subchapter A,

Chapter 534, Health and Safety Code, or any other legally

constituted political subdivision of the state.

(c)AAThe commissioner of insurance shall adopt rules

governing the method of calculating premiums for workers ’

compensation insurance coverage for volunteer members who are

covered pursuant to this section.

Added by Acts 1995, 74th Leg., ch. 849, Sec. 1, eff. Aug. 28, 1995.

Renumbered from Labor Code Sec. 406.097 by Acts 1997, 75th Leg., ch.

18 165, Sec. 31.01(63), eff. Sept. 1, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.037, eff.

SUBCHAPTER F. COVERAGE OF CERTAIN INDEPENDENT CONTRACTORS

Sec.A406.121.AADEFINITIONS. In this subchapter:

(1)AA"General contractor" means a person who undertakes

to procure the performance of work or a service, either separately

or through the use of subcontractors. The term includes a

"principal contractor," "original contractor," "prime contractor,"

or other analogous term. The term does not include a motor carrier

that provides a transportation service through the use of an owner

operator.

(2)AA"Independent contractor" means a person who

contracts to perform work or provide a service for the benefit of

another and who ordinarily:

(A)AAacts as the employer of any employee of the

contractor by paying wages, directing activities, and performing

other similar functions characteristic of an employer-employee

relationship;

(B)AAis free to determine the manner in which the

work or service is performed, including the hours of labor of or

method of payment to any employee;

(C)AAis required to furnish or to have employees,

if any, furnish necessary tools, supplies, or materials to perform

the work or service; and

(D)AApossesses the skills required for the

specific work or service.

(3)AA"Motor carrier" means a person who operates a

motor vehicle over a public highway in this state to provide a

transportation service or who contracts to provide that service.

(4)AA"Owner operator" means a person who provides

transportation services under contract for a motor carrier. An

owner operator is an independent contractor.

(5)AA"Subcontractor" means a person who contracts with

19 a general contractor to perform all or part of the work or services

that the general contractor has undertaken to perform.

(6)AA"Transportation service" means providing a motor

vehicle, with a driver under contract, to transport passengers or

property.

Sec.A406.122.AASTATUS AS EMPLOYEE. (a) For purposes of

workers ’ compensation insurance coverage, a person who performs

work or provides a service for a general contractor or motor carrier

who is an employer under this subtitle is an employee of that

general contractor or motor carrier, unless the person is:

(1)AAoperating as an independent contractor; or

(2)AAhired to perform the work or provide the service as

an employee of a person operating as an independent contractor.

(b)AAA subcontractor and the subcontractor ’s employees are

not employees of the general contractor for purposes of this

subtitle if the subcontractor:

(1)AAis operating as an independent contractor; and

(2)AAhas entered into a written agreement with the

general contractor that evidences a relationship in which the

subcontractor assumes the responsibilities of an employer for the

performance of work.

(c)AAAn owner operator and the owner operator ’s employees are

not employees of a motor carrier for the purposes of this subtitle

if the owner operator has entered into a written agreement with the

motor carrier that evidences a relationship in which the owner

operator assumes the responsibilities of an employer for the

Sec.A406.123.AAELECTION TO PROVIDE COVERAGE; ADMINISTRATIVE

VIOLATION. (a) A general contractor and a subcontractor may enter

into a written agreement under which the general contractor

provides workers ’ compensation insurance coverage to the

subcontractor and the employees of the subcontractor.

(b)AAIf a general contractor has workers ’ compensation

20 insurance to protect the general contractor ’s employees and if, in

the course and scope of the general contractor ’s business, the

general contractor enters into a contract with a subcontractor who

does not have employees, the general contractor shall be treated as

the employer of the subcontractor for the purposes of this subtitle

and may enter into an agreement for the deduction of premiums paid

in accordance with Subsection (d).

(c)AAA motor carrier and an owner operator may enter into a

written agreement under which the motor carrier provides workers ’

compensation insurance coverage to the owner operator and the

employees of the owner operator.

(d)AAIf a general contractor or a motor carrier elects to

provide coverage under Subsection (a) or (c), then, notwithstanding

Section 415.006, the actual premiums, based on payroll, that are

paid or incurred by the general contractor or motor carrier for the

coverage may be deducted from the contract price or other amount

owed to the subcontractor or owner operator by the general

contractor or motor carrier.

(e)AAAn agreement under this section makes the general

contractor the employer of the subcontractor and the

subcontractor ’s employees only for purposes of the workers ’

compensation laws of this state.

(f)AAA general contractor shall file a copy of an agreement

entered into under this section with the general contractor ’s

workers ’ compensation insurance carrier not later than the 10th day

after the date on which the contract is executed.AAIf the general

contractor is a certified self-insurer, the copy must be filed with

(g)AAA general contractor who enters into an agreement with a

subcontractor under this section commits an administrative

violation if the contractor fails to file a copy of the agreement as

required by Subsection (f).

(h)AANotwithstanding Subsection (b), a person who performs

work or provides a service for an oil or gas well operator and who is

an independent contractor that has no employees shall be treated in

the same manner as an independent contractor with employees and is

not entitled to coverage under the general contractor ’s workers ’

21 compensation insurance policy unless the independent contractor

and the general contractor enter into an agreement under this

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 88, Sec. 1, eff. Sept. 1, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.038, eff.

Sec.A406.124.AACAUSE OF ACTION. If a person who has workers ’

compensation insurance coverage subcontracts all or part of the

work to be performed by the person to a subcontractor with the

intent to avoid liability as an employer under this subtitle, an

employee of the subcontractor who sustains a compensable injury in

the course and scope of the employment shall be treated as an

employee of the person for purposes of workers ’ compensation and

shall have a separate right of action against the subcontractor.

The right of action against the subcontractor does not affect the

employee ’s right to compensation under this subtitle.

Sec.A406.125.AARESTRICTION OF UNSAFE WORK PRACTICES

UNAFFECTED. This subchapter does not prevent a general contractor

from directing a subcontractor or the employees of a subcontractor

to stop or change an unsafe work practice.

Sec.A406.126.AAEXEMPTION. This subchapter does not apply to

farm or ranch employees.

Sec.A406.127.AAEFFECT OF CERTAIN CONTRACTS OF HIRE. An

insurance company may not demand an insurance premium from an

employer for coverage of an independent contractor or an employee

of an independent contractor if the independent contractor is under

a contract of hire with the employer.

22 SUBCHAPTER G. COVERAGE OF CERTAIN BUILDING AND CONSTRUCTION WORKERS

Sec.A406.141.AADEFINITIONS. In this subchapter:

(1)AA"Hiring contractor" means a general contractor or

subcontractor who, in the course of regular business, subcontracts

all or part of the work to be performed to other persons.

contracts to perform work or provide a service for the benefit of

another and who:

(A)AAis paid by the job and not by the hour or some

other time-measured basis;

(B)AAis free to hire as many helpers as desired and

may determine the pay of each helper; and

(C)AAis free to, while under contract to the

hiring contractor, work for other contractors or is free to send

helpers to work for other contractors.

Sec.A406.142.AAAPPLICATION. This subchapter applies only to

contractors and workers preparing to construct, constructing,

altering, repairing, extending, or demolishing:

(1)AAa residential structure;

(2)AAa commercial structure that does not exceed three

stories in height or 20,000 square feet in area; or

(3)AAan appurtenance to a structure described by

Subdivision (1) or (2).

Sec.A406.143.AAPROVISION OF WORKERS ’ COMPENSATION

INSURANCE; INDEPENDENT CONTRACTOR WITHOUT EMPLOYEES. (a) Unless

the independent contractor and hiring contractor enter into an

agreement under Section 406.144, the independent contractor is

responsible for any workers ’ compensation insurance coverage

provided to an employee of the independent contractor, and the

independent contractor ’s employees are not entitled to workers ’

compensation insurance coverage from the hiring contractor.

23 (b)AAAn independent contractor without employees shall be

treated in the same manner as an independent contractor with

employees and is not entitled to coverage under the hiring

contractor ’s workers ’ compensation insurance policy unless the

independent contractor and hiring contractor enter into an

agreement under Section 406.144.

Sec.A406.144.AAELECTION TO PROVIDE COVERAGE; AGREEMENT.

(a) Except as provided by this section, a hiring contractor is not

responsible for providing workers ’ compensation insurance coverage

for an independent contractor or the independent contractor ’s

employee, helper, or subcontractor. An independent contractor and

a hiring contractor may enter into a written agreement under which

the independent contractor agrees that the hiring contractor may

withhold the cost of workers ’ compensation insurance coverage from

the contract price and that, for the purpose of providing workers ’

compensation insurance coverage, the hiring contractor is the

employer of the independent contractor and the independent

contractor ’s employees.

(b)AAA hiring contractor and independent contractor may

enter into an agreement under Subsection (a) even if the

independent contractor does not have an employee.

(c)AAAn agreement under this section shall be filed with the

division either by personal delivery or by registered or certified

mail and is considered filed on receipt by the division.

(d)AAThe hiring contractor shall send a copy of an agreement

under this section to the hiring contractor ’s workers ’ compensation

insurance carrier on filing of the agreement with the division.

(e)AAAn agreement under this section makes the hiring

contractor the employer of the independent contractor and the

independent contractor ’s employees only for the purposes of the

workers ’ compensation laws of this state.

(f)AAThe deduction of the cost of the workers ’ compensation

insurance coverage from the independent contractor ’s contract

price is permitted notwithstanding Section 415.006.

24 Amended by:

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.039, eff.

Sec.A406.145.AAJOINT AGREEMENT. (a) A hiring contractor and

an independent subcontractor may make a joint agreement declaring

that the subcontractor is an independent contractor as defined in

Section 406.141(2) and that the subcontractor is not the employee

of the hiring contractor.AAIf the joint agreement is signed by both

the hiring contractor and the subcontractor and filed with the

division, the subcontractor, as a matter of law, is an independent

contractor and not an employee, and is not entitled to workers ’

compensation insurance coverage through the hiring contractor

unless an agreement is entered into under Section 406.144 to

provide workers ’ compensation insurance coverage.AAThe

commissioner shall prescribe forms for the joint agreement.

(b)AAA joint agreement shall be delivered to the division by

personal delivery or registered or certified mail and is considered

filed on receipt by the division.

(c)AAThe hiring contractor shall send a copy of a joint

agreement signed under this section to the hiring contractor ’s

workers ’ compensation insurance carrier on filing of the joint

agreement with the division.

(d)AAThe division shall maintain a system for accepting and

maintaining the joint agreements.

(e)AAA joint agreement signed under this section applies to

each hiring agreement between the hiring contractor and the

independent contractor until the first anniversary of its filing

date, unless a subsequent hiring agreement expressly states that

the joint agreement does not apply.

(f)AAIf a subsequent hiring agreement is made to which the

joint agreement does not apply, the hiring contractor and

independent contractor shall notify the division and the hiring

contractor ’s workers ’ compensation insurance carrier in writing.

(g)AAIf a hiring contractor and an independent contractor

have filed a joint agreement under this section, an insurance

company may not require the payment of an insurance premium by a

25 hiring contractor for coverage of an independent contractor or an

independent contractor ’s employee, helper, or subcontractor other

than under an agreement entered into in compliance with Section

406.144.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.040, eff.

Sec.A406.146.AAWRONGFUL INDUCEMENT PROHIBITED. (a) A

hiring contractor may not:

(1)AAwrongfully induce an employee to enter into a

joint agreement under Section 406.145 stating that the employee is

an independent contractor; or

(2)AAexert controls over an independent contractor or

an employee of an independent contractor sufficient to make that

person an employee under common-law tests.

(b)AAA hiring contractor does not exert employer-like

controls over an independent contractor or an independent

contractor ’s employee solely because of:

(1)AAcontrolling the hours of labor, if that control is

exercised only to:

(A)AAestablish the deadline for the completion of

the work called for by the contract;

(B)AAschedule work to occur in a logical sequence

and to avoid delays or interference with the work of other

contractors; or

(C)AAschedule work to avoid disturbing neighbors

during night or early morning hours or at other times when the

independent contractor ’s activities would unreasonably disturb

activities in the neighborhood; or

(2)AAstopping or directing work solely to prevent or

correct an unsafe work practice or condition or to control work to

ensure that the end product is in compliance with the contracted for

result.

26 SUBCHAPTER H. COVERAGE OF FARM AND RANCH EMPLOYEES

Sec.A406.161.AADEFINITIONS. In this subchapter:

(1)AA"Agricultural labor" means the planting,

cultivating, or harvesting of an agricultural or horticultural

commodity in its unmanufactured state.

(2)AA"Family" means persons related within the third

degree by consanguinity or affinity.

(3)AA"Labor agent" means a person who:

(A)AAis a farm labor contractor for purposes of

the Migrant and Seasonal Agricultural Worker Protection Act (29

U.S.C. Section 1801 et seq.); or

(B)AAotherwise recruits, solicits, hires,

employs, furnishes, or transports migrant or seasonal agricultural

workers who work for the benefit of a third party.

(4)AA"Migrant worker" means an individual who is:

(A)AAemployed in agricultural labor of a seasonal

or temporary nature; and

(B)AArequired to be absent overnight from the

worker ’s permanent place of residence.

(5)AA"Seasonal worker" means an individual who is:

(A)AAemployed in agricultural or ranch labor of a

seasonal or temporary nature; and

(B)AAnot required to be absent overnight from the

(6)AA"Truck farm" means a farm on which fruits, garden

vegetables for human consumption, potatoes, sugar beets, or

vegetable seeds are produced for market. The term includes a farm

primarily devoted to one of those crops that also has incidental

acreage of other crops.

Sec.A406.162.AASCOPE. (a) This subtitle applies to an

action to recover damages for personal injuries or death sustained

by a farm or ranch employee who is:

(1)AAa migrant worker;

(2)AAa seasonal worker:

27 (A)AAemployed on a truck farm, orchard, or

vineyard;

(B)AAemployed by a person with a gross annual

payroll for the preceding year in an amount not less than the

greater of the required payroll for the year preceding that year,

adjusted for inflation, or $25,000; or

(C)AAworking for a farmer, ranch operator, or

labor agent who employs a migrant worker and doing the same work at

the same time and location as the migrant worker; or

(3)AAan employee, other than a migrant or seasonal

worker:

(A)AAfor years before 1991, employed by a person

with a gross annual payroll for the preceding year of at least

$50,000; and

(B)AAfor 1991 and subsequent years, employed by a

person:

(i)AAwith a gross annual payroll in an amount

required for coverage of seasonal workers under Subdivision (2)(B);

(ii)AAwho employs three or more farm or ranch

employees other than migrant or seasonal workers.

(b)AAThe comptroller shall prepare a consumer price index for

this state and shall certify the applicable index factor to the

division before October 1 of each year.AAThe division shall adjust

the gross annual payroll requirement under Subsection (a)(2)(B)

accordingly.

(c)AAFor the purposes of this section, the gross annual

payroll of a person includes any amount paid by the person to a

labor agent for the agent ’s services and for the services of migrant

or seasonal workers but does not include wages paid to:

(1)AAthe person or a member of the person ’s family, if

the person is a sole proprietor;

(2)AAa partner in a partnership or a member of the

partner ’s family; or

(3)AAa shareholder of a corporation in which all

shareholders are family members or a member of the shareholder ’s

family.

28 (d)AAThis subchapter does not affect the application or

interpretation of this subtitle as it relates to persons engaged in

activities determined before January 1, 1985, not to be farm or

ranch labor.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.041, eff.

Sec.A406.163.AALIABILITY OF LABOR AGENT; JOINT AND SEVERAL

LIABILITY. (a) A labor agent who furnishes a migrant or seasonal

worker is liable under this subtitle as if the labor agent were the

employer of the worker, without regard to the right of control or

other factors used to determine an employer-employee relationship.

(b)AAIf the labor agent does not have workers ’ compensation

insurance coverage, the person with whom the labor agent contracts

for the services of the migrant or seasonal worker is jointly and

severally liable with the labor agent in an action to recover

damages for personal injuries or death suffered by the migrant or

seasonal worker as provided by this subtitle, and, for that

purpose, the migrant or seasonal worker is considered the employee

of the person with whom the labor agent contracts and that person

may obtain workers ’ compensation insurance coverage for that worker

as provided by this subtitle. If a migrant or seasonal worker is

covered by workers ’ compensation insurance coverage, the person

with whom the labor agent contracts is not liable in a separate

action for injury or death except to the extent provided by this

(c)AAA labor agent shall notify each person with whom the

agent contracts of whether the agent has workers ’ compensation

insurance coverage. If the agent does have workers ’ compensation

insurance coverage, the agent shall present evidence of the

coverage to each person with whom the agent contracts.

Sec.A406.164.AAELECTIVE COVERAGE OF EMPLOYER AND FAMILY

MEMBERS. (a) A person who purchases a workers ’ compensation

29 insurance policy covering farm or ranch employees may cover the

person, a partner, a corporate officer, or a family member in that

policy. The insurance policy must specifically name the individual

to be covered.

(b)AAThe elective coverage continues while the policy is in

effect and the named individual is endorsed on the policy.

(c)AAA member of an employer ’s family is exempt from coverage

under the policy unless an election for that coverage is made under

Sec.A406.165.AANOT APPLICABLE TO INDEPENDENT CONTRACTORS.

(a) A farm or ranch employee who performs work or provides a

service for a farm or ranch employer subject to this subchapter is

an employee of that employer unless the employee is hired to perform

the work or provide the service as an employee of an independent

contractor.

(b)AAIn this section, "independent contractor" means a

person, other than a labor agent, who contracts with a farm or ranch

employer to perform work or provide a service for the benefit of the

employer and who ordinarily:

(1)AAacts as the employer of the employee by paying

wages, directing activities, and performing other similar

functions characteristic of an employer-employee relationship;

(2)AAis free to determine the manner in which the work

or service is performed, including the hours of labor or the method

of payment;

(3)AAis required to furnish necessary tools, supplies,

or materials to perform the work or service; and

(4)AApossesses skills required for the specific work or

service.

30 LABOR CODE

CHAPTER 408. WORKERS ’ COMPENSATION BENEFITS

SUBCHAPTER A. GENERAL PROVISIONS

Sec.A408.001.AAEXCLUSIVE REMEDY; EXEMPLARY DAMAGES. (a)

Recovery of workers ’ compensation benefits is the exclusive remedy

of an employee covered by workers ’ compensation insurance coverage

or a legal beneficiary against the employer or an agent or employee

of the employer for the death of or a work-related injury sustained

by the employee.

(b)AAThis section does not prohibit the recovery of exemplary

damages by the surviving spouse or heirs of the body of a deceased

employee whose death was caused by an intentional act or omission of

the employer or by the employer ’s gross negligence.

(c)AAIn this section, "gross negligence" has the meaning

assigned by Section 41.001, Civil Practice and Remedies Code.

(d)AAA determination under Section 406.032, 409.002, or

409.004 that a work-related injury is noncompensable does not

adversely affect the exclusive remedy provisions under Subsection

(a).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.077, eff.

Sec.A408.002.AASURVIVAL OF CAUSE OF ACTION. A right of

action survives in a case based on a compensable injury that results

in the employee ’s death.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1991.

Sec.A408.003.AAREIMBURSABLE EMPLOYER PAYMENTS; SALARY

CONTINUATION; OFFSET AGAINST INCOME BENEFITS; LIMITS. (a) After

an injury, an employer may:

(1)AAinitiate benefit payments, including medical

1 benefits; or

(2)AAon the written request or agreement of the

employee, supplement income benefits paid by the insurance carrier

by an amount that does not exceed the amount computed by subtracting

the amount of the income benefit payments from the employee ’s net

preinjury wages.

(b)AAIf an injury is found to be compensable and an insurance

carrier initiates compensation, the insurance carrier shall

reimburse the employer for the amount of benefits paid by the

employer to which the employee was entitled under this subtitle.

Payments that are not reimbursed or reimbursable under this section

may be reimbursed under Section 408.127.

(c)AAThe employer shall notify the division and the insurance

carrier on forms prescribed by the commissioner of the initiation

of and amount of payments made under this section.

(d)AAEmployer payments made under this section:

(1)AAmay not be construed as an admission of

compensability; and

(2)AAdo not affect the payment of benefits from another

source.

(e)AAIf an employer does not notify the insurance carrier of

the injury in compliance with Section 409.005, the employer waives

the right to reimbursement under this section.

(f)AASalary continuation payments made by an employer for an

employee ’s disability resulting from a compensable injury shall be

considered payment of income benefits for the purpose of

determining the accrual date of any subsequent income benefits

(g)AAIf an employer is subject to a contractual obligation

with an employee or group of employees, such as a collective

bargaining agreement or a written agreement or policy, under which

the employer is required to make salary continuation payments, the

employer is not eligible for reimbursement under this section for

those payments.

(h)AAPayments made as salary continuation or salary

supplementation do not affect the exclusive remedy provisions of

Section 408.001.

2 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 954, Sec. 5, eff. Sept. 1, 1999; Acts

1999, 76th Leg., ch. 1003, Sec. 1, 2, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.078, eff.

Sec.A408.004.AAREQUIRED MEDICAL EXAMINATIONS;

ADMINISTRATIVE VIOLATION. (a) The commissioner may require an

employee to submit to medical examinations to resolve any question

aboutAAthe appropriateness of the health care received by the

(a-1)AAA doctor, other than a chiropractor, who performs a

required medical examination under this section is subject to

Section 408.0043.AAA chiropractor who performs a required medical

examination under this section is subject to Section 408.0045.

(b)AAThe commissioner may require an employee to submit to a

medical examination at the request of the insurance carrier, but

only after the insurance carrier has attempted and failed to

receive the permission and concurrence of the employee for the

examination.AAExcept as otherwise provided by this subsection, the

insurance carrier is entitled to the examination only once in a

180-day period.AAThe commissioner may adopt rules that require an

employee to submit to not more than three medical examinations in a

180-day period under specified circumstances, including to

determine whether there has been a change in the employee ’s

condition and whether it is necessary to change the employee ’s

diagnosis.AAThe commissioner by rule shall adopt a system for

monitoring requests made under this subsection by insurance

carriers.AAThat system must ensure that good cause exists for any

additional medical examination allowed under this subsection that

is not requested by the employee.AAA subsequent examination must be

performed by the same doctor unless otherwise approved by the

(c)AAThe insurance carrier shall pay for:

(1)AAan examination required under Subsection (a) or

(b); and

3 (2)AAthe reasonable expenses incident to the employee

in submitting to the examination.

(d)AAAn injured employee is entitled to have a doctor of the

employee ’s choice present at an examination required by the

division at the request of an insurance carrier.AAThe insurance

carrier shall pay a fee set by the commissioner to the doctor

selected by the employee.

(e)AAAn employee who, without good cause as determined by the

commissioner, fails or refuses to appear at the time scheduled for

an examination under Subsection (a) or (b) commits an

administrative violation.AA The commissioner by rule shall ensure

that an employee receives reasonable notice of an examination and

that the employee is provided a reasonable opportunity to

reschedule an examination missed by the employee for good cause.

(f)AAThis section does not apply to health care provided

through a workers ’ compensation health care network established

under Chapter 1305, Insurance Code.

(g)AAAn insurance carrier who makes a frivolous request for a

medical examination under Subsection (b), as determined by the

commissioner, commits an administrative violation.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1133, Sec. 1, 2, eff. Sept. 1, 1999;

Acts 1999, 76th Leg., ch. 1426, Sec. 8, eff. Jan. 1, 2000; Acts

2001, 77th Leg., ch. 1456, Sec. 5.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.079, eff.

Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 2, eff.

Sec. 408.0041.AADESIGNATED DOCTOR EXAMINATION. (a) At the

request of an insurance carrier or an employee, or on the

commissioner ’s own order, the commissioner may order a medical

examination to resolve any question about:

(1)AAthe impairment caused by the compensable injury;

(2)AAthe attainment of maximum medical improvement;

(3)AAthe extent of the employee ’s compensable injury;

4 (4)AAwhether the injured employee ’s disability is a

direct result of the work-related injury;

(5)AAthe ability of the employee to return to work; or

(6)AAissues similar to those described by Subdivisions

(1)-(5).

(b)AAExcept as provided by Section 408.1225(f), a medical

examination requested under Subsection (a) shall be performed by

the next available doctor on the division ’s list of certified

designated doctors whose credentials are appropriate for the area

of the body affected by the injury and the injured employee ’s

diagnosis as determined by commissioner rule.AA The division shall

assign a designated doctor not later than the 10th day after the

date on which the request under Subsection (a) is approved, and the

examination must be conducted not later than the 21st day after the

date on which the commissioner issues the order under Subsection

(a).AAAn examination under this section may not be conducted more

frequently than every 60 days, unless good cause for more frequent

examinations exists, as defined by commissioner rules.

(b-1)AAA designated doctor, other than a chiropractor, is

subject to Section 408.0043.AAA designated doctor who is a

chiropractor is subject to Section 408.0045.AATo the extent of a

conflict between this section and Section 408.0043 or 408.0045,

this section controls.

(c)AAThe treating doctor and the insurance carrier are both

responsible for sending to the designated doctor all of the injured

employee ’s medical records relating to the issue to be evaluated by

the designated doctor that are in their possession.AAThe treating

doctor and insurance carrier may send the records without a signed

release from the employee.AAThe designated doctor is authorized to

receive the employee ’s confidential medical records to assist in

the resolution of disputes.AAThe treating doctor and insurance

carrier may also send the designated doctor an analysis of the

injured employee ’s medical condition, functional abilities, and

return-to-work opportunities.

(d)AATo avoid undue influence on a person selected as a

designated doctor under this section, and except as provided by

Subsection (c), only the injured employee or an appropriate member

5 of the division ’s staff may communicate with the designated doctor

about the case regarding the injured employee ’s medical condition

or history before the examination of the injured employee by the

designated doctor.AAAfter that examination is completed,

communication with the designated doctor regarding the injured

employee ’s medical condition or history may be made only through

appropriate division staff members.AAThe designated doctor may

initiate communication with any doctor or health care provider who

has previously treated or examined the injured employee for the

work-related injury or with peer reviewers identified by the

(e)AAThe designated doctor shall report to the

division.AAThe report of the designated doctor has presumptive

weight unless the preponderance of the evidence is to the

contrary.AAAn employer may make a bona fide offer of employment

subject to Sections 408.103(e) and 408.144(c) based on the

designated doctor ’s report.

(f)AAUnless otherwise ordered by the commissioner, the

insurance carrier shall pay benefits based on the opinion of the

designated doctor during the pendency of any dispute. If an

insurance carrier is not satisfied with the opinion rendered by a

designated doctor under this section, the insurance carrier may

request the commissioner to order an employee to attend an

examination by a doctor selected by the insurance carrier.

(f-1)AAThe subsequent injury fund shall reimburse an

insurance carrier for any overpayment of benefits made by the

insurance carrier under Subsection (f) based on an opinion rendered

by a designated doctor if that opinion is reversed or modified by a

final arbitration award or a final order or decision of the

commissioner or a court.AAThe commissioner shall adopt rules to

provide for a periodic reimbursement schedule, providing

reimbursement at least annually.

(f-2)AAAn employee required to be examined by a designated

doctor may request a medical examination to determine maximum

medical improvement and the employee ’s impairment rating from the

treating doctor or from another doctor to whom the employee is

referred by the treating doctor if:

6 (1)AAthe designated doctor ’s opinion is the employee ’s

first evaluation of maximum medical improvement and impairment

rating; and

(2)AAthe employee is not satisfied with the designated

doctor ’s opinion.

(f-3)AAThe commissioner shall provide the insurance carrier

and the employee with reasonable time to obtain and present the

opinion of a doctor selected under Subsection (f) or (f-2) before

the commissioner makes a decision on the merits of the issue.

(f-4)AAThe commissioner by rule shall adopt guidelines

prescribing the circumstances under which an examination by the

employee ’s treating doctor or another doctor to whom the employee

is referred by the treating doctor to determine any issue under

Subsection (a), other than an examination under Subsection (f-2),

may be appropriate.

(g)AAExcept as otherwise provided by this subsection, an

injured employee is entitled to have a doctor of the employee ’s

choice present at an examination requested by an insurance carrier

under Subsection (f).AAThe insurance carrier shall pay a fee set by

the commissioner to the doctor selected by the employee.AAIf the

injured employee is subject to a workers ’ compensation health care

network under Chapter 1305, Insurance Code, the doctor must be the

employee ’s treating doctor.

(h)AAThe insurance carrier shall pay for:

(1)AAan examination required under Subsection (a), (f),

or (f-2), unless otherwise prohibited by this subtitle or by an

order or rule of the commissioner; and

(2)AAthe reasonable expenses incident to the employee

(i)AAAn employee who, without good cause as determined by the

commissioner, fails or refuses to appear at the time scheduled for

an examination under Subsection (a) or (f) commits an

administrative violation.AAAn injured employee may not be fined

more than $10,000 for a violation of this subsection.

(j)AAAn employee is not entitled to temporary income

benefits, and an insurance carrier is authorized to suspend the

payment of temporary income benefits, during and for a period in

7 which the employee fails to submit to an examination required by

Subsection (a) or (f) unless the commissioner determines that the

employee had good cause for the failure to submit to the

examination.AAThe commissioner may order temporary income benefits

to be paid for the period for which the commissioner determined that

the employee had good cause.AAThe commissioner by rule shall ensure

that:

(1)AAan employee receives reasonable notice of an

examination and the insurance carrier ’s basis for suspension; and

(2)AAthe employee is provided a reasonable opportunity

to reschedule an examination for good cause.

(k)AAIf the report of a designated doctor indicates that an

employee has reached maximum medical improvement or is otherwise

able to return to work immediately, the insurance carrier may

suspend or reduce the payment of temporary income benefits

immediately.

(l)AAA person who makes a frivolous request for a medical

examination under Subsection (a) or (f), as determined by the

Added by Acts 2001, 77th Leg., ch. 1456, Sec. 5.02, eff. June 17,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.080, eff.

Acts 2007, 80th Leg., R.S., Ch. 1150 (S.B. 1169), Sec. 1, eff.

Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 3, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 11,

Sec. 408.0042.AAMEDICAL EXAMINATION BY TREATING DOCTOR TO

DEFINE COMPENSABLE INJURY. (a) The division shall require an

injured employee to submit to a single medical examination to

define the compensable injury on request by the insurance carrier.

(b)AAA medical examination under this section shall be

performed by the employee ’s treating doctor.AAThe insurance

8 carrier shall pay the costs of the examination.

(c)AAAfter the medical examination is performed, the

treating doctor shall submit to the insurance carrier a report that

details all injuries and diagnoses related to the compensable

injury, on receipt of which the insurance carrier shall:

(1)AAaccept all injuries and diagnoses as related to

the compensable injury; or

(2)AAdispute the determination of specific injuries and

diagnoses.

(d)AAAny treatment for an injury or diagnosis that is not

accepted by the insurance carrier under Subsection (c) as

compensable at the time of the medical examination under Subsection

(a) must be preauthorized before treatment is rendered. If the

insurance carrier denies preauthorization because the treatment is

for an injury or diagnosis unrelated to the compensable injury, the

injured employee or affected health care provider may file an

extent of injury dispute.

(e)AAAny treatment for an injury or diagnosis that is

compensable at the time of the medical examination under Subsection

(a) may not be reviewed for compensability, but may be reviewed for

medical necessity.

(f)AAThe commissioner may adopt rules relating to

requirements for a report under this section, including

requirements regarding the contents of a report.

(g)AAThis section does not limit an injured employee or

insurance carrier ’s ability to request an examination under Section

408.004 or 408.0041, as provided by those sections.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.0805, eff.

Sec. 408.0043.AAPROFESSIONAL SPECIALTY CERTIFICATION

REQUIRED FOR CERTAIN REVIEW. (a) This section applies to a person,

other than a chiropractor or a dentist, who performs health care

services under this title as:

(1)AAa doctor performing peer review;

(2)AAa doctor performing a utilization review of a

9 health care service provided to an injured employee;

(3)AAa doctor performing an independent review of a

health care service provided to an injured employee;

(4)AAa designated doctor;

(5)AAa doctor performing a required medical

examination; or

(6)AAa doctor serving as a member of the medical quality

review panel.

(b)AAA person described by Subsection (a) who reviews a

specific workers ’ compensation case must hold a professional

certification in a health care specialty appropriate to the type of

health care that the injured employee is receiving.

Added by Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 1,

Acts 2009, 81st Leg., R.S., Ch. 1330 (H.B. 4290), Sec. 14,

Sec. 408.0044.AAREVIEW OF DENTAL SERVICES. (a) This section

applies to a dentist who performs dental services under this title

as:

(1)AAa doctor performing peer review of dental

services;

dental service provided to an injured employee;

dental service provided to an injured employee; or

(4)AAa doctor performing a required dental examination.

dental service provided in conjunction with a specific workers ’

compensation case must be licensed to practice dentistry.

Added by Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 1,

Acts 2009, 81st Leg., R.S., Ch. 1330 (H.B. 4290), Sec. 15,

10 Sec. 408.0045.AAREVIEW OF CHIROPRACTIC SERVICES. (a) This

section applies to a chiropractor who performs chiropractic

(1)AAa doctor performing peer review of chiropractic

chiropractic service provided to an injured employee;

(4)AAa designated doctor providing chiropractic

(6)AAa chiropractor serving as a member of the medical

quality review panel.

chiropractic service provided in conjunction with a specific

workers ’ compensation case must be licensed to engage in the

practice of chiropractic.

Added by Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 1,

Acts 2009, 81st Leg., R.S., Ch. 1330 (H.B. 4290), Sec. 16,

Sec. 408.0046.AARULES. The commissioner may adopt rules as

necessary to determine which professional health practitioner

specialties are appropriate for treatment of certain compensable

injuries.AAThe rules adopted under this section must require an

entity requesting a peer review to obtain and provide to the doctor

providing peer review services all relevant and updated medical

records.

Added by Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 1,

Sec.A408.005.AASETTLEMENTS AND AGREEMENTS. (a) A

settlement may not provide for payment of benefits in a lump sum

11 except as provided by Section 408.128.

(b)AAAn employee ’s right to medical benefits as provided by

Section 408.021 may not be limited or terminated.

(c)AAA settlement or agreement resolving an issue of

impairment:

(1)AAmay not be made before the employee reaches

maximum medical improvement; and

(2)AAmust adopt an impairment rating using the

impairment rating guidelines described by Section 408.124.

(d)AAA settlement must be signed by the commissioner and all

parties to the dispute.

(e)AAThe commissioner shall approve a settlement if the

commissioner is satisfied that:

(1)AAthe settlement accurately reflects the agreement

between the parties;

(2)AAthe settlement reflects adherence to all

appropriate provisions of law and the policies of the division; and

(3)AAunder the law and facts, the settlement is in the

best interest of the claimant.

(f)AAA settlement that is not approved or rejected before the

16th day after the date the settlement is submitted to the

commissioner is considered to be approved by the commissioner on

that date.

(g)AAA settlement takes effect on the date it is approved by

(h)AAA party to a settlement may withdraw acceptance of the

settlement at any time before its effective date.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.081, eff.

Sec.A408.006.AAMENTAL TRAUMA INJURIES. (a) It is the

express intent of the legislature that nothing in this subtitle

shall be construed to limit or expand recovery in cases of mental

trauma injuries.

(b)AAA mental or emotional injury that arises principally

12 from a legitimate personnel action, including a transfer,

promotion, demotion, or termination, is not a compensable injury

Sec.A408.007.AADATE OF INJURY FOR OCCUPATIONAL DISEASE. For

purposes of this subtitle, the date of injury for an occupational

disease is the date on which the employee knew or should have known

that the disease may be related to the employment.

Sec.A408.008.AACOMPENSABILITY OF HEART ATTACKS. A heart

attack is a compensable injury under this subtitle only if:

(1)AAthe attack can be identified as:

(A)AAoccurring at a definite time and place; and

(B)AAcaused by a specific event occurring in the

course and scope of the employee ’s employment;

(2)AAthe preponderance of the medical evidence

regarding the attack indicates that the employee ’s work rather than

the natural progression of a preexisting heart condition or disease

was a substantial contributing factor of the attack; and

(3)AAthe attack was not triggered solely by emotional

or mental stress factors, unless it was precipitated by a sudden

stimulus.

SUBCHAPTER B. MEDICAL BENEFITS

Sec.A408.021.AAENTITLEMENT TO MEDICAL BENEFITS. (a) An

employee who sustains a compensable injury is entitled to all

health care reasonably required by the nature of the injury as and

when needed. The employee is specifically entitled to health care

(1)AAcures or relieves the effects naturally resulting

from the compensable injury;

(2)AApromotes recovery; or

(3)AAenhances the ability of the employee to return to

13 or retain employment.

(b)AAMedical benefits are payable from the date of the

compensable injury.

(c)AAExcept in an emergency, all health care must be approved

or recommended by the employee ’s treating doctor.

(d)AAAn insurance carrier ’s liability for medical benefits

may not be limited or terminated by agreement or settlement.

Sec.A408.022.AASELECTION OF DOCTOR. (a) Except in an

emergency, the division shall require an employee to receive

medical treatment from a doctor chosen from a list of doctors

approved by the commissioner.AAA doctor may perform only those

procedures that are within the scope of the practice for which the

doctor is licensed.AAThe employee is entitled to the employee ’s

initial choice of a doctor from the division ’s list.

(b)AAIf an employee is dissatisfied with the initial choice

of a doctor from the division ’s list, the employee may notify the

division and request authority to select an alternate doctor.AAThe

notification must be in writing stating the reasons for the change,

except notification may be by telephone when a medical necessity

exists for immediate change.

(c)AAThe commissioner shall prescribe criteria to be used by

the division in granting the employee authority to select an

alternate doctor.AAThe criteria may include:

(1)AAwhether treatment by the current doctor is

medically inappropriate;

(2)AAthe professional reputation of the doctor;

(3)AAwhether the employee is receiving appropriate

medical care to reach maximum medical improvement; and

(4)AAwhether a conflict exists between the employee and

the doctor to the extent that the doctor-patient relationship is

jeopardized or impaired.

(d)AAA change of doctor may not be made to secure a new

impairment rating or medical report.

(e)AAFor purposes of this section, the following is not a

selection of an alternate doctor:

14 (1)AAa referral made by the doctor chosen by the

employee if the referral is medically reasonable and necessary;

(2)AAthe receipt of services ancillary to surgery;

(3)AAthe obtaining of a second or subsequent opinion

only on the appropriateness of the diagnosis or treatment;

(4)AAthe selection of a doctor because the original

doctor:

(A)AAdies;

(B)AAretires; or

(C)AAbecomes unavailable or unable to provide

medical care to the employee; or

(5)AAa change of doctors required because of a change of

residence by the employee.

(f)AAThis section does not apply to requirements regarding

the selection of a doctor under a workers ’ compensation health care

network established under Chapter 1305, Insurance Code, except as

provided by that chapter.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.082, eff.

Sec. 408.0221.AAREQUEST FOR DESCRIPTION OF EMPLOYMENT. (a)

This section applies only to an employee of an employer who has 10

or more employees.

(b)AATo facilitate an injured employee ’s return to

employment as soon as it is considered safe and appropriate by the

injured employee ’s treating doctor, the treating doctor may request

that the injured employee ’s employer provide the treating doctor

with the information described by Subsection (d) on the form

adopted under that subsection.

(c)AAInformation provided to a treating doctor under

Subsection (b) does not constitute:

(1)AAa request by the employer that the injured

employee return to the employment;

(2)AAan offer of employment by the employer for the

injured employee to return to employment; or

15 (3)AAan admission of the compensability of the injury

of the employee.

(d)AAThe commissioner shall prescribe a form to provide

information from an employer to a treating doctor concerning the

functions and physical responsibilities of an injured employee ’s

job.AATo the extent possible, the form prescribed under this

subsection shall be one page, use a check box format as appropriate,

and be compatible with electronic mail.AAThe form must include:

(1)AAthe name and address of the employer and the

contact information and availability of the individual

representing the employer who has knowledge of the injured

employee ’s job;

(2)AAthe scope of the injured employee ’s employment,

including any specific tasks, job duties, or work activities that

the injured employee was required to perform at the time the

employee sustained the injury; and

(3)AAan area for additional comments or informationAAby

the employer or individual representing the employer concerning:

(A)AAthe injured employee ’s job; or

(B)AAthe availability, if any, of other jobs that

the employer may have that the employer would like the treating

doctor to consider in determining whether an injured employee is

able to return to work.

(e)AAThe commissioner may adopt rules as necessary to

implement this section and to facilitate communication between the

employer and the treating doctor regarding return-to-work

opportunities.

Added by Acts 2009, 81st Leg., R.S., Ch. 456 (H.B. 2547), Sec. 1,

Sec. 408.023.AALIST OF APPROVED DOCTORS; DUTIES OF TREATING

DOCTORS. (a) The division shall develop a list of doctors licensed

in this state who are approved to provide health care services under

this subtitle.AAA doctor is eligible to be included on the

division ’s list of approved doctors if the doctor:

(1)AAregisters with the division in the manner

prescribed by commissioner rules; and

16 (2)AAcomplies with the requirements adopted by the

commissioner under this section.

(b)AAThe commissioner by rule shall establish reasonable

requirements for training for doctors as a prerequisite for

inclusion on the list.AAExcept as otherwise provided by this

section, the requirements adopted under this subsection apply to

doctors and other health care providers who:

(1)AAprovide health care services as treating doctors;

(2)AAprovide health care services as authorized by this

chapter;

(3)AAperform medical peer review under this subtitle;

(4)AAperform utilization review of medical benefits

provided under this subtitle; or

(5)AAprovide health care services on referral from a

treating doctor, as provided by commissioner rule.

(c)AAThe division shall issue to a doctor who is approved by

the commissioner a certificate of registration.AAIn determining

whether to issue a certificate of registration, the commissioner

may consider and condition approval on any practice restrictions

applicable to the applicant that are relevant to services provided

under this subtitle.AAThe commissioner may also consider the

practice restrictions of an applicant when determining appropriate

sanctions under Section 408.0231.

(d)AAA certificate of registration issued under this section

is valid, unless revoked, suspended, or revised, for the period

provided by commissioner rule and may be renewed on application to

the division.AAThe division shall provide notice to each doctor on

the approved doctor list of the pending expiration of the doctor ’s

certificate of registration not later than the 60th day before the

date of expiration of the certificate.

(e)AANotwithstanding other provisions of this section, a

doctor not licensed in this state but licensed in another state or

jurisdiction who treats employees or performs utilization review of

health care for an insurance carrier may apply for a certificate of

registration under this section to be included on the division ’s

list of approved doctors.

(f)AAExcept in an emergency or for immediate post-injury

17 medical care as defined by commissioner rule, or as provided by

Subsection (h), (i), or (j), each doctor who performs functions

under this subtitle, including examinations under this chapter,

must hold a certificate of registration and be on the division ’s

list of approved doctors in order to perform services or receive

payment for those services.

(g)AAThe commissioner by rule shall modify registration and

training requirements for doctors who infrequently provide health

care or who perform utilization review or peer review functions for

insurance carriers as necessary to ensure that those doctors are

informed of the regulations that affect health care benefit

delivery under this subtitle.

(h)AANotwithstanding Section 4201.152, Insurance Code, a

utilization review agent or an insurance carrier that uses doctors

to perform reviews of health care services provided under this

subtitle, including utilization review, may only use doctors

licensed to practice in this state.

(i)AAThe commissioner may grant exceptions to the

requirement imposed under Subsection (f) as necessary to ensure

(1)AAemployees have access to health care; and

(2)AAinsurance carriers have access to evaluations of

an employee ’s health care and income benefit eligibility as

provided by this subtitle.

(j)AAA doctor who contracts with a workers ’ compensation

health care network certified under Chapter 1305, Insurance Code,

is not subject to the registration requirements of Subsections

(a)-(i) for the purpose of providing health care services under

that network contract.AAThe doctor is subject to the requirements

of Subsections (l)-(p), and Subsection (q) applies to health care

services and functions provided by a doctor who contracts with a

certified workers ’ compensation health care network.

(k)AAThe requirements of Subsections (a)-(g) and Subsection

(i) expire September 1, 2007.AABefore that date, the commissioner

may waive the application of the provisions of Subsections (a)-(g)

and Subsection (i) that require doctors to hold a certificate of

registration and to be on the list of approved doctors if the

18 commissioner determines that:

(1)AAinjured employees have adequate access to health

care providers who are willing to treat injured employees for

compensable injuries through workers ’ compensation health care

networks certified under Chapter 1305, Insurance Code; or

(2)AAinjured employees who are not covered by a workers ’

compensation health care network certified under Chapter 1305,

Insurance Code, do not have adequate access to health care

providers who are willing to treat injured employees for

compensable injuries.

(l)AAThe injured employee ’s treating doctor is responsible

for the efficient management of medical care as required by Section

408.025(c) and commissioner rules.AAThe division shall collect

(1)AAreturn-to-work outcomes;

(2)AApatient satisfaction; and

(3)AAcost and utilization of health care provided or

authorized by a treating doctor on the list of approved doctors.

(m)AAThe commissioner may adopt rules to define the role of

the treating doctor and to specify outcome information to be

collected for a treating doctor.

(n)AAThe commissioner by rule shall establish reasonable

requirements for doctors, and health care providers financially

related to those doctors, regarding training, impairment rating

testing, and disclosure of financial interests as required by

Section 413.041, and for monitoring of those doctors and health

care providers as provided by Sections 408.0231, 413.0511, and

413.0512.

(o)AAA doctor, including a doctor who contracts with a

workers ’ compensation health care network, shall:

(1)AAcomply with the requirements established by

commissioner rule under Subsections (l) and (m) and with Section

413.041 regarding the disclosure of financial interests; and

(2)AAif the doctor intends to provide certifications of

maximum medical improvement or assign impairment ratings, comply

with the impairment rating training and testing requirements

established by commissioner rule under Subsection (n).

19 (p)AAA person required to comply with Subsection (o),

including a doctor who contracts with a workers ’ compensation

health care network, who does not comply with that section commits

an administrative violation.

(q)AAAn insurance carrier may not use, for the purpose of

suspending temporary income benefits or computing impairment

income benefits, a certification of maximum medical improvement or

an impairment rating assigned by a doctor, including a doctor who

contracts with a workers ’ compensation health care network

certified under Chapter 1305, Insurance Code, who fails to comply

with Subsection (o)(2).

(r)AANotwithstanding the waiver or expiration of Subsections

(a)-(g) and (i), there may be no direct or indirect provision of

health care under this subtitle and rules adopted under this

subtitle, and no direct or indirect receipt of remuneration under

this subtitle and rules adopted under this subtitle by a doctor who:

(1)AAbefore September 1, 2007:

(A)AAwas removed or deleted from the list of

approved doctors either by action of the Texas Workers ’

Compensation Commission or the division or by agreement with the

(B)AAwas not admitted to the list of approved

doctors either by action of the Texas Workers ’ Compensation

Commission or the division or by agreement with the doctor;

(C)AAwas suspended from the list of approved

Commission or the division or by agreement with the doctor; or

(D)AAhad the doctor ’s license to practice

suspended by the appropriate licensing agency, including a

suspension that was stayed, deferred, or probated, or voluntarily

relinquished the license to practice; and

(2)AAwas not reinstated or restored by the Texas

Workers ’ Compensation Commission or the division to the list of

approved doctors before September 1, 2007.

(s)AAThe waiver or expiration of Subsections (a)-(g) and (i)

do not limit the division ’s ability to impose sanctions as provided

by this subtitle and commissioner rules.

20 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.25, eff. Sept. 1, 1995;

Acts 2001, 77th Leg., ch. 1456, Sec. 1.01, eff. Sept. 1, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.083, eff.

Acts 2007, 80th Leg., R.S., Ch. 134 (H.B. 1006), Sec. 2, eff.

Acts 2009, 81st Leg., R.S., Ch. 1330 (H.B. 4290), Sec. 17,

Sec. 408.0231.AAMAINTENANCE OF LIST OF APPROVED DOCTORS;

SANCTIONS AND PRIVILEGES RELATING TO HEALTH CARE. (a) The

commissioner shall delete from the list of approved doctors a

(1)AAwho fails to register with the division as

provided by this chapter and commissioner rules;

(2)AAwho is deceased;

(3)AAwhose license to practice in this state is

revoked, suspended, or not renewed by the appropriate licensing

authority; or

(4)AAwho requests to be removed from the list.

(b)AAThe commissioner by rule shall establish criteria for:

(1)AAdeleting or suspending a doctor from the list of

approved doctors;

(2)AAimposing sanctions on a doctor or an insurance

carrier as provided by this section;

(3)AAmonitoring of utilization review agents, as

provided by a memorandum of understanding between the division and

the Texas Department of Insurance; and

(4)AAauthorizing increased or reduced utilization

review and preauthorization controls on a doctor.

(c)AARules adopted under Subsection (b) are in addition to,

and do not affect, the rules adopted under Section 415.023(b).AAThe

criteria for deleting a doctor from the list or for recommending or

imposing sanctions may include anything the commissioner considers

relevant, including:

21 (1)AAa sanction of the doctor by the commissioner for a

violation of Chapter 413 or Chapter 415;

(2)AAa sanction by the Medicare or Medicaid program

for:

(A)AAsubstandard medical care;

(B)AAovercharging;

(C)AAoverutilization of medical services; or

(D)AAany other substantive noncompliance with

requirements of those programs regarding professional practice or

billing;

(3)AAevidence from the division ’s medical records that

the applicable insurance carrier ’s utilization review practices or

the doctor ’s charges, fees, diagnoses, treatments, evaluations, or

impairment ratings are substantially different from those the

commissioner finds to be fair and reasonable based on either a

single determination or a pattern of practice;

(4)AAa suspension or other relevant practice

restriction of the doctor ’s license by an appropriate licensing

authority;

(5)AAprofessional failure to practice medicine or

provide health care, including chiropractic care, in an acceptable

manner consistent with the public health, safety, and welfare;

(6)AAfindings of fact and conclusions of law made by a

court, an administrative law judge of the State Office of

Administrative Hearings, or a licensing or regulatory authority; or

(7)AAa criminal conviction.

(d)AAThe commissioner by rule shall establish procedures

under which a doctor may apply for:

(1)AAreinstatement to the list of approved doctors; or

(2)AArestoration of doctor practice privileges removed

by the commissioner based on sanctions imposed under this section.

(e)AAThe commissioner shall act on a recommendation by the

medical advisor selected under Section 413.0511 and, after notice

and the opportunity for a hearing, may impose sanctions under this

section on a doctor or an insurance carrier or may recommend action

regarding a utilization review agent.AAThe commissioner and the

commissioner of insurance shall enter into a memorandum of

22 understanding to coordinate the regulation of insurance carriers

and utilization review agents as necessary to ensure:

(1)AAcompliance with applicable regulations; and

(2)AAthat appropriate health care decisions are reached

under this subtitle and under Chapter 4201, Insurance Code.

(f)AAThe sanctions the commissioner may recommend or impose

under this section include:

(1)AAreduction of allowable reimbursement;

(2)AAmandatory preauthorization of all or certain

health care services;

(3)AArequired peer review monitoring, reporting, and

audit;

(4)AAdeletion or suspension from the approved doctor

list and the designated doctor list;

(5)AArestrictions on appointment under this chapter;

(6)AAconditions or restrictions on an insurance carrier

regarding actions by insurance carriers under this subtitle in

accordance with the memorandum of understanding adopted under

Subsection (e); and

(7)AAmandatory participation in training classes or

other courses as established or certified by the division.

(g)AAThe commissioner shall adopt rules regarding doctors

who perform peer review functions for insurance carriers.AAThose

rules may include standards for peer review, imposition of

sanctions on doctors performing peer review functions, including

restriction, suspension, or removal of the doctor ’s ability to

perform peer review on behalf of insurance carriers in the workers ’

compensation system, and other issues important to the quality of

peer review, as determined by the commissioner.AAA doctor who

performs peer review under this subtitle must hold the appropriate

professional license issued by this state.AAA doctor, other than a

chiropractor or a dentist, who performs peer review is subject to

Section 408.0043.AAA dentist who performs a peer review of a dental

service provided to an injured employee is subject to Section

408.0044.AAA chiropractor who performs a peer review of a

chiropractic service provided to an injured employee is subject to

Section 408.0045.

23 Added by Acts 2001, 77th Leg., ch. 1456, Sec. 1.01, eff. June 17,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.084, eff.

Acts 2007, 80th Leg., R.S., Ch. 134 (H.B. 1006), Sec. 3, eff.

Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 4, eff.

Sec. 408.024.AANONCOMPLIANCE WITH SELECTION REQUIREMENTS.

Except as otherwise provided, and after notice and an opportunity

for hearing, the commissioner may relieve an insurance carrier of

liability for health care that is furnished by a health care

provider or another person selected in a manner inconsistent with

the requirements of this subchapter.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.085, eff.

Sec.A408.025.AAREPORTS AND RECORDS REQUIRED FROM HEALTH CARE

PROVIDERS. (a) The commissioner by rule shall adopt requirements

for reports and records that are required to be filed with the

division or provided to the injured employee, the employee ’s

attorney, or the insurance carrier by a health care provider.

(b)AAThe commissioner by rule shall adopt requirements for

reports and records that are to be made available by a health care

provider to another health care provider to prevent unnecessary

duplication of tests and examinations.

(c)AAThe treating doctor is responsible for maintaining

efficient utilization of health care.

(d)AAOn the request of an injured employee, the employee ’s

attorney, or the insurance carrier, a health care provider shall

furnish records relating to treatment or hospitalization for which

compensation is being sought.AAThe division may regulate the charge

for furnishing a report or record, but the charge may not be less

24 than the fair and reasonable charge for furnishing the report or

record.AAA health care provider may disclose to the insurance

carrier of an affected employer records relating to the diagnosis

or treatment of the injured employee without the authorization of

the injured employee to determine the amount of payment or the

entitlement to payment.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 9, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.086, eff.

Sec. 408.0251.AAELECTRONIC BILLING REQUIREMENTS. (a) The

commissioner, by rule and in cooperation with the commissioner of

insurance, shall adopt rules regarding the electronic submission

and processing of medical bills by health care providers to

insurance carriers.

(b)AAInsurance carriers shall accept medical bills submitted

electronically by health care providers in accordance with

commissioner rule.

(c)AAThe commissioner shall by rule establish criteria for

granting exceptions to insurance carriers and health care providers

who are unable to submit or accept medical bills electronically.

(d)AAOn or after January 1, 2008, the commissioner may adopt

rules regarding the electronic payment of medical bills by

insurance carriers to health care providers.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.087, eff.

Sec. 408.0252.AAUNDERSERVED AREAS. The commissioner by rule

may identify areas of this state in which access to health care

providers is less available and may adopt appropriate standards,

guidelines, and rules regarding the delivery of health care in

those areas.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.087, eff.

25 Sec. 408.026.AASPINAL SURGERY. Except in a medical

emergency, an insurance carrier is liable for medical costs related

to spinal surgery only as provided by Section 413.014 and

commissioner rules.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 4.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.088, eff.

Sec. 408.027.AAPAYMENT OF HEALTH CARE PROVIDER. (a) A

health care provider shall submit a claim for payment to the

insurance carrier not later than the 95th day after the date on

which the health care services are provided to the injured

employee.AAFailure by the health care provider to timely submit a

claim for payment constitutes a forfeiture of the provider ’s right

to reimbursement for that claim for payment.

(b)AAThe insurance carrier must pay, reduce, deny, or

determine to audit the health care provider ’s claim not later than

the 45th day after the date of receipt by the carrier of the

provider ’s claim.AAThe carrier may request additional

documentation necessary to clarify the provider ’s charges at any

time during the 45-day period.AAIf the insurance carrier requests

additional documentation under this subsection, the health care

provider must provide the requested documentation not later than

the 15th day after the date of receipt of the carrier ’s request.AAIf

the insurance carrier elects to audit the claim, the carrier must

complete the audit not later than the 160th day after the date of

receipt by the carrier of the health care provider ’s claim, and, not

later than the 160th day after the receipt of the claim, must make a

determination regarding the relationship of the health care

services provided to the compensable injury, the extent of the

injury, and the medical necessity of the services provided.AAIf the

insurance carrier chooses to audit the claim, the insurance carrier

must pay to the health care provider not later than the 45th day

after the date of receipt by the carrier of the provider ’s claim 85

percent of:

26 (1)AAthe amount for the health care service established

under the fee guidelines authorized under this subtitle if the

health care service is not provided through a workers ’ compensation

health care network under Chapter 1305, Insurance Code; or

(2)AAthe amount of the contracted rate for that health

care service if the health care service is provided through a

workers ’ compensation health care network under Chapter 1305,

Insurance Code.

(c)AAIf the health care services provided are determined to

be appropriate, the insurance carrier shall pay the health care

provider the remaining 15 percent of the claim not later than the

160th day after the date of receipt by the carrier of the health

care provider ’s documentation of the claim.AAAn insurance carrier

commits an administrative violation if the carrier, in violation of

Subsection (b), fails to:

(1)AApay, reduce, deny, or notify the health care

provider of the intent to audit the claim by the 45th day after the

date of receipt by the carrier of the health care provider ’s claim;

(2)AApay, reduce, or deny an audited claim by the 160th

day after the date of receipt of the claim.

(d)AAIf an insurance carrier contests the compensability of

an injury and the injury is determined not to be compensable, the

carrier may recover the amounts paid for health care services from

the employee ’s accident or health benefit plan, or any other person

who may be obligated for the cost of the health care services.AAIf

an accident or health insurance carrier or other person obligated

for the cost of health care services has paid for health care

services for an employee for an injury for which a workers ’

compensation insurance carrier denies compensability, and the

injury is later determined to be compensable, the accident or

health insurance carrier or other person may recover the amounts

paid for such services from the workers ’ compensation insurance

carrier.AAIf an accident or health insurance carrier or other

person obligated for the cost of health care services has paid for

health care services for an employee for an injury for which the

workers ’ compensation insurance carrier or the employer has not

27 disputed compensability, the accident or health insurance carrier

or other person may recover reimbursement from the insurance

carrier in the manner described by Section 409.009 or 409.0091, as

applicable.

(e)AAIf an insurance carrier disputes the amount of payment

or the health care provider ’s entitlement to payment, the insurance

carrier shall send to the division, the health care provider, and

the injured employee a report that sufficiently explains the

reasons for the reduction or denial of payment for health care

services provided to the employee.AAThe insurance carrier is

entitled to a hearing as provided by Section 413.031(d).

(f)AAExcept as provided by Section 408.0281 or 408.0284, any

payment made by an insurance carrier under this section shall be in

accordance with the fee guidelines authorized under this subtitle

if the health care service is not provided through a workers ’

compensation health care network under Chapter 1305, Insurance

Code, or at a contracted rate for that health care service if the

health care service is provided through a workers ’ compensation

health care network under Chapter 1305, Insurance Code.

(g)AANotwithstanding any other provision in this subtitle or

Chapter 1305, Insurance Code, this section and Section 408.0271

apply to health care provided through a workers ’ compensation

health care network established under Chapter 1305, Insurance

Code.AAThe commissioner shall adopt rules as necessary to implement

the provisions of this section and Section 408.0271.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 10, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.089, eff.

Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 4, eff.

Acts 2011, 82nd Leg., R.S., Ch. 705 (H.B. 528), Sec. 1, eff.

Acts 2013, 83rd Leg., R.S., Ch. 1202 (S.B. 1322), Sec. 1, eff.

September 1, 2013.

28 Sec. 408.0271.AAREIMBURSEMENT BY HEALTH CARE PROVIDER. (a)

If the health care services provided to an injured employee are

determined by the insurance carrier to be inappropriate, the

insurance carrier shall:

(1)AAnotify the health care provider in writing of the

carrier ’s decision; and

(2)AAdemand a refund by the health care provider of the

portion of payment on the claim that was received by the health care

provider for the inappropriate services.

(b)AAThe health care provider may appeal the insurance

carrier ’s determination under Subsection (a).AAThe health care

provider must file an appeal under this subsection with the

insurance carrier not later than the 45th day after the date of the

insurance carrier ’s request for the refund.AAThe insurance carrier

must act on the appeal not later than the 45th day after the date on

which the provider files the appeal.

(c)AAA health care provider shall reimburse the insurance

carrier for payments received by the provider for inappropriate

charges not later than the 45th day after the date of the carrier ’s

notice.AAThe failure by the health care provider to timely remit

payment to the carrier constitutes an administrative violation.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.0895, eff.

Sec. 408.0272.AACERTAIN EXCEPTIONS FOR UNTIMELY SUBMISSION

OF CLAIM. (a) In this section:

(1)AA"Group accident and health insurance" has the

meaning assigned by Chapter 1251, Insurance Code.

(2)AA"Health maintenance organization" has the meaning

assigned by Chapter 843, Insurance Code.

(b)AANotwithstanding Section 408.027, a health care provider

who fails to timely submit a claim for payment to the insurance

carrier under Section 408.027(a) does not forfeit the provider ’s

right to reimbursement for that claim for payment solely for

failure to submit a timely claim if:

(1)AAthe provider submits proof satisfactory to the

commissioner that the provider, within the period prescribed by

29 Section 408.027(a), erroneously filed for reimbursement with:

(A)AAan insurer that issues a policy of group

accident and health insurance under which the injured employee is a

covered insured;

(B)AAa health maintenance organization that

issues an evidence of coverage under which the injured employee is a

covered enrollee; or

(C)AAa workers ’ compensation insurance carrier

other than the insurance carrier liable for the payment of benefits

under this title; or

(2)AAthe commissioner determines that the failure

resulted from a catastrophic event that substantially interfered

with the normal business operations of the provider.

(c)AANotwithstanding Subsection (b), a health care provider

who erroneously submits a claim for payment to an entity described

by Subdivision (1) of that subsection forfeits the provider ’s right

to reimbursement for that claim if the provider fails to submit the

claim to the correct workers ’ compensation insurance carrier within

95 days after the date the provider is notified of the provider ’s

erroneous submission of the claim.

(d)AANotwithstanding any other provision of this section or

Section 408.027, the period for submitting a claim for payment may

be extended by agreement of the parties.

Added by Acts 2007, 80th Leg., R.S., Ch. 459 (H.B. 1005), Sec. 1,

Sec.A408.028.AAPHARMACEUTICAL SERVICES. (a) A physician

providing care to an employee under this subchapter shall prescribe

for the employee any necessary prescription drugs, and order

over-the-counter alternatives to prescription medications as

clinically appropriate and applicable, in accordance with

applicable state law and as provided by Subsection (b). A doctor

providing care may order over-the-counter alternatives to

prescription medications, when clinically appropriate, in

accordance with applicable state law and as provided by Subsection

(b).

(b)AAThe commissioner by rule shall require the use of

30 generic pharmaceutical medications and clinically appropriate

over-the-counter alternatives to prescription medications unless

otherwise specified by the prescribing doctor, in accordance with

applicable state law.AAThe commissioner by rule shall adopt a

closed formulary under Section 413.011.AARules adopted by the

commissioner shall allow an appeals process for claims in which a

treating doctor determines and documents that a drug not included

in the formulary is necessary to treat an injured employee ’s

(c)AAExcept as otherwise provided by this subtitle, an

insurance carrier may not require an employee to use pharmaceutical

services designated by the carrier.

(d)AAThe commissioner shall adopt rules to allow an employee

to purchase over-the-counter alternatives to prescription

medications prescribed or ordered under Subsection (a) or (b) and

to obtain reimbursement from the insurance carrier for those

medications.

(e)AANotwithstanding Subsection (b), the commissioner by

rule shall allow an employee to purchase a brand name drug rather

than a generic pharmaceutical medication or over-the-counter

alternative to a prescription medication if a health care provider

prescribes a generic pharmaceutical medication or an

over-the-counter alternative to a prescription medication.AAThe

employee shall be responsible for paying the difference between the

cost of the brand name drug and the cost of the generic

pharmaceutical medication or of an over-the-counter alternative to

a prescription medication.AAThe employee may not seek

reimbursement for the difference in cost from an insurance carrier

and is not entitled to use the medical dispute resolution

provisions of Chapter 413 with regard to the prescription.AAA

payment described by this subsection by an employee to a health care

provider does not violate Section 413.042.AAThis subsection does

not affect the duty of a health care provider to comply with the

requirements of Subsection (b) when prescribing medications or

ordering over-the-counter alternatives to prescription

(f)AANotwithstanding any other provision of this title, the

31 commissioner by rule shall adopt a fee schedule for pharmacy and

pharmaceutical services that will:

(1)AAprovide reimbursement rates that are fair and

reasonable;

(2)AAassure adequate access to medications and services

for injured workers;

(3)AAminimize costs to employees and insurance

carriers; and

(4)AAtake into consideration the increased security of

payment afforded by this subtitle.

(g)AASection 413.011(d) and the rules adopted to implement

that subsection do not apply to the fee schedule adopted by the

commissioner under Subsection (f).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 6.01, eff. June 17, 2001;

Acts 2003, 78th Leg., ch. 468, Sec. 1, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.090, eff.

Acts 2011, 82nd Leg., R.S., Ch. 705 (H.B. 528), Sec. 2, eff.

Sec. 408.0281.AAREIMBURSEMENT FOR PHARMACEUTICAL SERVICES;

ADMINISTRATIVE VIOLATION. (a)AAIn this section:

(1)AA"Informal network" means a network that:

(A)AAis established under a contract between an

insurance carrier or an insurance carrier ’s authorized agent and a

health care provider for the provision of pharmaceutical services;

(B)AAincludes a specific fee schedule.

(2)AA"Voluntary network" means a voluntary workers ’

compensation health care delivery network established under former

Section 408.0223, as that section existed before repeal by Chapter

265 (H.B. 7), Acts of the 79th Legislature, Regular Session, 2005,

by an insurance carrier for the provision of pharmaceutical

services.

(b)AANotwithstanding any provision of Chapter 1305,

32 Insurance Code, or Section 504.053 of this code, prescription

medication or services, as defined by Section 401.011(19)(E):

(1)AAmay be reimbursed in accordance with the fee

guidelines adopted by the commissioner or at a contract rate in

accordance with this section; and

(2)AAmay not be delivered through:

(A)AAa workers ’ compensation health care network

under Chapter 1305, Insurance Code; or

(B)AAa contract described by Section

504.053(b)(2).

(c)AANotwithstanding any other provision of this title,

including Section 408.028(f), or any provision of Chapter 1305,

Insurance Code, an insurance carrier may pay a health care provider

fees for pharmaceutical services that are inconsistent with the fee

guidelines adopted by the commissioner only if the carrier has a

contract with the health care provider and that contract includes a

specific fee schedule.AAAn insurance carrier or the carrier ’s

authorized agent may use an informal or voluntary network to obtain

a contractual agreement that provides for fees different from the

fees authorized under the fee guidelines adopted by the

commissioner for pharmaceutical services.AAIf a carrier or the

carrier ’s authorized agent chooses to use an informal or voluntary

network to obtain a contractual fee arrangement, there must be a

contractual arrangement between:

(1)AAthe carrier or authorized agent and the informal

or voluntary network that authorizes the network to contract with

health care providers for pharmaceutical services on the carrier ’s

behalf; and

(2)AAthe informal or voluntary network and the health

care provider that includes a specific fee schedule and complies

with the notice requirements of this section.

(d)AAAn informal or voluntary network, or the carrier or the

carrier ’s authorized agent, as appropriate, shall, at least

quarterly, notify each health care provider of any person, other

than an injured employee, to which the network ’s contractual fee

arrangements with the health care provider are sold, leased,

transferred, or conveyed.AANotice to each health care provider:

33 (1)AAmust include:

(A)AAthe contact information for the network,

including the name, physical address, and toll-free telephone

number at which a health care provider with which the network has a

contract may contact the network; and

(B)AAin the body of the notice:

(i)AAthe name, physical address, and

telephone number of any person, other than an injured employee, to

which the network ’s contractual fee arrangement with the health

care provider is sold, leased, transferred, or conveyed; and

(ii)AAthe start date and any end date of the

period during which any person, other than an injured employee, to

which the network ’s contractual fee arrangement with the health

(2)AAmay be provided:

(A)AAin an electronic format, if a paper version

is available on request by the division; and

(B)AAthrough an Internet website link, but only if

the website:

(i)AAcontains the information described by

Subdivision (1); and

(ii)AAis updated at least monthly with

current and correct information.

(e)AAAn informal or voluntary network, or the carrier or the

carrier ’s authorized agent, as appropriate, shall document the

delivery of the notice required under Subsection (d), including the

method of delivery, to whom the notice was delivered, and the date

of delivery.AAFor purposes of Subsection (d), a notice is

considered to be delivered on, as applicable:

(1)AAthe fifth day after the date the notice is mailed

via United States Postal Service; or

(2)AAthe date the notice is faxed or electronically

delivered.

(f)AAAn insurance carrier, or the carrier ’s authorized agent

or an informal or voluntary network at the carrier ’s request, shall

provide copies of each contract described by Subsection (c) to the

division on the request of the division.AAInformation included in a

34 contract under Subsection (c) is confidential and is not subject to

disclosure under Chapter 552, Government Code.AANotwithstanding

Subsection (c), the insurance carrier may be required to pay fees in

accordance with the division ’s fee guidelines if:

(1)AAthe contract:

(A)AAis not provided to the division on the

division ’s request;

(B)AAdoes not include a specific fee schedule

consistent with Subsection (c); or

(C)AAdoes not clearly state that the contractual

fee arrangement is between the health care provider and the named

insurance carrier or the carrier ’s authorized agent; or

(2)AAthe carrier or the carrier ’s authorized agent does

not comply with the notice requirements under Subsection (d).

(g)AAFailure to provide documentation described by

Subsection (e) to the division on the request of the division or

failure to provide notice as required under Subsection (d) creates

a rebuttable presumption in an enforcement action under this

subtitle and in a medical fee dispute under Chapter 413 that a

health care provider did not receive the notice.

(h)AAAn insurance carrier or the carrier ’s authorized agent

commits an administrative violation if the carrier or agent

violates any provision of this section.AAAny administrative

penalty assessed under this subsection shall be assessed against

the carrier, regardless of whether the carrier or agent committed

the violation.

(i)AANotwithstanding Section 1305.003(b), Insurance Code, in

the event of a conflict between this section and Section 413.016 or

any other provision of Chapter 413 of this code or Chapter 1305,

Insurance Code, this section prevails.

Added by Acts 2011, 82nd Leg., R.S., Ch. 705 (H.B. 528), Sec. 3,

eff. June 17, 2011.

Sec. 408.0282.AAREQUIREMENTS FOR CERTAIN INFORMAL OR

VOLUNTARY NETWORKS. (a)AAEach informal or voluntary network

described by Section 408.0281 or 408.0284 shall, not later than the

30th day after the date the network is established, report the

35 following information to the division:

(1)AAthe name of the informal or voluntary network and

federal employer identification number;

(2)AAan executive contact for official correspondence

for the informal or voluntary network;

(3)AAa toll-free telephone number by which a health

care provider may contact the informal or voluntary network;

(4)AAa list of each insurance carrier with whom the

informal or voluntary network contracts, including the carrier ’s

federal employer identification number; and

(5)AAa list of, and contact information for, each

entity with which the informal or voluntary network has a contract

or other business relationship that benefits or is entered into on

behalf of an insurance carrier, including an insurance carrier ’s

authorized agent or a subsidiary or other affiliate of the network.

(b)AAEach informal or voluntary network shall report any

changes to the information provided under Subsection (a) to the

division not later than the 30th day after the effective date of the

change.

(c)AAAn informal or voluntary network shall submit a report

required under this section, including a report of changes required

under Subsection (b), to the division through the division ’s online

reporting system available through the division ’s Internet

website.

(d)AAAn informal or voluntary network commits an

administrative violation if the informal or voluntary network

violates any provision of this section.

Added by Acts 2011, 82nd Leg., R.S., Ch. 705 (H.B. 528), Sec. 3,

Acts 2013, 83rd Leg., R.S., Ch. 1202 (S.B. 1322), Sec. 2, eff.

Sec. 408.0284.AAREIMBURSEMENT FOR DURABLE MEDICAL EQUIPMENT

AND HOME HEALTH CARE SERVICES; ADMINISTRATIVE VIOLATION. (a)AAIn

this section:

(1)AA"Durable medical equipment" includes prosthetics

36 and orthotic devices and related medical equipment and

supplies.AAThe term does not include:

(A)AAan object or device that is surgically

implanted, embedded, inserted, or otherwise applied;

(B)AArelated equipment necessary to operate,

program, or recharge the object or device described by Paragraph

(A); or

(C)AAan intrathecal pump.

(2)AA"Informal network" means a network that:

insurance carrier or an insurance carrier ’s authorized agent and a

health care provider for the provision of durable medical equipment

or home health care services; and

(3)AA"Voluntary network" means a voluntary workers ’

compensation health care delivery network established under former

Section 408.0223, as that section existed before repeal by Chapter

265 (House Bill No. 7), Acts of the 79th Legislature, Regular

Session, 2005, by an insurance carrier for the provision of durable

medical equipment or home health care services.

Insurance Code, or Section 504.053 of this code, durable medical

equipment and home health care services may be reimbursed in

accordance with the fee guidelines adopted by the commissioner or

at a voluntarily negotiated contract rate in accordance with this

(c)AANotwithstanding any other provision of this title or any

provision of Chapter 1305, Insurance Code, an insurance carrier may

pay a health care provider fees for durable medical equipment or

home health care services that are inconsistent with the fee

guidelines adopted by the commissioner only if the carrier or the

carrier ’s authorized agent has a contract with the health care

provider and that contract includes a specific fee schedule.AAAn

insurance carrier or the carrier ’s authorized agent may use an

informal or voluntary network to obtain a contractual agreement

that provides for fees different from the fees authorized under the

fee guidelines adopted by the commissioner for durable medical

37 equipment or home health care services.AAIf a carrier or the

carrier ’s authorized agent chooses to use an informal or voluntary

network to obtain a contractual fee arrangement, there must be a

or voluntary network that authorizes the network to contract with

health care providers for durable medical equipment or home health

care services on the carrier ’s behalf; and

care provider that includes a specific fee schedule and complies

carrier ’s authorized agent shall, at least quarterly, notify each

health care provider of any person, other than an injured employee,

to which the network ’s contractual fee arrangements with the health

care provider are sold, leased, transferred, or conveyed.AANotice

to each health care provider:

(1)AAmust include:

including the name, physical address, and toll-free telephone

number at which a health care provider with which the network has a

telephone number of any person, other than an injured employee, to

which the network ’s contractual fee arrangement with the health

period during which the network ’s contractual fee arrangement with

the health care provider is sold, leased, transferred, or conveyed;

38 Subdivision (1); and

carrier ’s authorized agent, as appropriate, shall document the

delivery of the notice required under Subsection (d), including the

method of delivery, to whom the notice was delivered, and the date

(f)AAAn insurance carrier, or the carrier ’s authorized agent

or an informal or voluntary network at the carrier ’s request, shall

provide copies of each contract described by Subsection (c) to the

division on the request of the division.AAInformation included in a

contract under Subsection (c) is confidential and is not subject to

disclosure under Chapter 552, Government Code.AANotwithstanding

Subsection (c), the insurance carrier may be required to pay fees in

fee arrangement is between the health care provider and the named

not comply with the notice requirements under Subsection (d).

Subsection (e) to the division on the request of the division or

failure to provide notice as required under Subsection (d) creates

subtitle and in a medical fee dispute under Chapter 413 that a

39 (h)AAAn insurance carrier or the carrier ’s authorized agent

penalty assessed under this subsection shall be assessed against

the carrier, regardless of whether the carrier or agent committed

the event of a conflict between this section and Section 413.016 or

any other provision of Chapter 413 of this code or Chapter 1305,

Added by Acts 2013, 83rd Leg., R.S., Ch. 1202 (S.B. 1322), Sec. 3,

eff. September 1, 2013.

Sec.A408.029.AANURSE FIRST ASSISTANT SERVICES. An insurance

carrier may not refuse to reimburse a health care practitioner

solely because that practitioner is a nurse first assistant, as

defined by Section 301.1525, Occupations Code, for a covered

service that a physician providing health care services under this

subtitle has requested the nurse first assistant to perform.

Added by Acts 2001, 77th Leg., ch. 812, Sec. 9, eff. Sept. 1, 2001.

Sec. 408.030.AAREPORTS OF PHYSICIAN VIOLATIONS. If the

division discovers an act or omission by a physician that may

constitute a felony, a misdemeanor involving moral turpitude, a

violation of a state or federal narcotics or controlled substance

law, an offense involving fraud or abuse under the Medicare or

Medicaid program, or a violation of this subtitle, the division

shall immediately report that act or omission to the Texas State

Board of Medical Examiners.

Added by Acts 2003, 78th Leg., ch. 202, Sec. 38, eff. June 10, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.091, eff.

Sec. 408.031.AAWORKERS ’ COMPENSATION HEALTH CARE NETWORKS.

(a) Notwithstanding any other provision of this chapter, an

injured employee may receive benefits under a workers ’ compensation

40 health care network established under Chapter 1305, Insurance Code,

in the manner provided by that chapter.

(b)AAIn the event of a conflict between this title and

Chapter 1305, Insurance Code, as to the provision of medical

benefits for injured employees, the establishment and regulation of

fees for medical treatments and services, the time frames for

payment of medical bills, the operation and regulation of workers ’

compensation health care networks, the regulation of the health

care providers who contract with those networks, or the resolution

of disputes regarding medical benefits provided through those

networks, Chapter 1305, Insurance Code, prevails.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.092, eff.

Sec. 408.032.AASTUDY ON INTERDISCIPLINARY PAIN

REHABILITATION PROGRAM AND FACILITY ACCREDITATION REQUIREMENT.

The division shall study the issue of required accreditation of

interdisciplinary pain rehabilitation programs or

interdisciplinary pain rehabilitation treatment facilities that

provide services to injured employees and shall report to the

legislature regarding any statutory changes that the division

considers necessary to require that accreditation.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.093, eff.

SUBCHAPTER C. COMPUTATION OF AVERAGE WEEKLY WAGE

Sec.A408.041.AAAVERAGE WEEKLY WAGE. (a) Except as otherwise

provided by this subtitle, the average weekly wage of an employee

who has worked for the employer for at least the 13 consecutive

weeks immediately preceding an injury is computed by dividing the

sum of the wages paid in the 13 consecutive weeks immediately

preceding the date of the injury by 13.

(b)AAThe average weekly wage of an employee whose wage at the

time of injury has not been fixed or cannot be determined or who has

worked for the employer for less than the 13 weeks immediately

preceding the injury equals:

41 (1)AAthe usual wage that the employer pays a similar

employee for similar services; or

(2)AAif a similar employee does not exist, the usual

wage paid in that vicinity for the same or similar services provided

for remuneration.

(c)AAIf Subsection (a) or (b) cannot reasonably be applied

because the employee ’s employment has been irregular or because the

employee has lost time from work during the 13-week period

immediately preceding the injury because of illness, weather, or

another cause beyond the control of the employee, the commissioner

may determine the employee ’s average weekly wage by any method that

the commissioner considers fair, just, and reasonable to all

parties and consistent with the methods established under this

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.094, eff.

Sec.A408.042.AAAVERAGE WEEKLY WAGE FOR PART-TIME EMPLOYEE OR

EMPLOYEE WITH MULTIPLE EMPLOYMENT. (a) The average weekly wage of

a part-time employee who limits the employee ’s work to less than a

full-time workweek as a regular course of that employee ’s conduct

is computed as provided by Section 408.041.

(b)AAFor part-time employees not covered by Subsection (a),

the average weekly wage:

(1)AAfor determining temporary income benefits is

computed as provided by Section 408.041; and

(2)AAfor determining impairment income benefits,

supplemental income benefits, lifetime income benefits, and death

benefits is computed as follows:

(A)AAif the employee has worked for the employer

for at least the 13 weeks immediately preceding the date of the

injury, the average weekly wage is computed by dividing the sum of

the wages paid in the 13 consecutive weeks immediately preceding

the date of the injury by 13 and adjusting that amount to the weekly

wage level the employee would have attained by working a full-time

42 workweek at the same rate of pay; or

(B)AAif the employee has worked for the employer

for less than 13 weeks immediately preceding the date of the injury,

the average weekly wage is equal to:

(i)AAthe weekly wage that the employer pays a

similar employee for similar services based on a full-time

workweek; or

(ii)AAif a similar employee does not exist,

the usual wage paid in that vicinity for the same or similar

services based on a full-time workweek.

(c)AAFor employees with multiple employment, the average

weekly wage for determining temporary income benefits, impairment

income benefits, supplemental income benefits, lifetime income

benefits, and death benefits, is computed as follows:

(1)AAthe average weekly wage for an employee with

multiple employment is equal to the sum of the average weekly wages

computed under Subdivisions (2) and (3);

(2)AAfor each of the employers for whom the employee has

worked for at least the 13 weeks immediately preceding the date of

injury, the average weekly wage is equal to the sum of the wages

paid by that employer to the employee in the 13 weeks immediately

preceding the injury divided by 13;

(3)AAfor each of the employers for whom the employee has

worked for less than the 13 weeks immediately preceding the date of

the injury, the average weekly wage is equal to:

(A)AAthe weekly wage that employer pays similar

employees for similar services; or

(B)AAif a similar employee does not exist, the

usual weekly wage paid in that vicinity for the same or similar

services; and

(4)AAthe average weekly wage of an employee with

multiple employment who limits the employee ’s work to less than a

full-time workweek, but does not do so as a regular course of that

employee ’s conduct, is adjusted to the weekly wage level the

employee would have attained by working a full-time workweek at the

employee ’s average rate of pay.

(d)AAThe commissioner shall:

43 (1)AAprescribe a form to collect information regarding

the wages of employees with multiple employment; and

(2)AAby rule, determine the manner by which the

division collects and distributes wage information to implement

(e)AAFor an employee with multiple employment, only the

employee ’s wages that are reportable for federal income tax

purposes may be considered. The employee shall document and verify

wage payments subject to this section.

(f)AAIf the commissioner determines that computing the

average weekly wage for an employee as provided by Subsection (c) is

impractical or unreasonable, the commissioner shall set the average

weekly wage in a manner that more fairly reflects the employee ’s

average weekly wage and that is fair and just to both parties or is

in the manner agreed to by the parties.AAThe commissioner by rule

may define methods to determine a fair and just average weekly wage

consistent with this section.

(g)AAAn insurance carrier is entitled to apply for and

receive reimbursement at least annually from the subsequent injury

fund for the amount of income and death benefits paid to a worker

under this section that are based on employment other than the

employment during which the compensable injury occurred.AAThe

commissioner may adopt rules that govern the documentation,

application process, and other administrative requirements

necessary to implement this subsection.

(h)AAIn this section:

(1)AA"Employee with multiple employment" means an

employee who has more than one employer.

(2)AA"Full-time workweek" means a 40-hour workweek.

(3)AA"Part-time employee" means an employee who, at the

time of the injury, was working less than a full-time workweek for

the employer for whom the employee was working when the compensable

injury occurred.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 10.03, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.095, eff.

44 September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch. 1150 (S.B. 1169), Sec. 2, eff.

Sec.A408.043.AAAVERAGE WEEKLY WAGE FOR SEASONAL EMPLOYEE.

(a) For determining the amount of temporary income benefits of a

seasonal employee, the average weekly wage of the employee is

computed as provided by Section 408.041 and is adjusted as often as

necessary to reflect the wages the employee could reasonably have

expected to earn during the period that temporary income benefits

are paid.

(b)AAFor determining the amount of impairment income

benefits, supplemental income benefits, lifetime income benefits,

or death benefits of a seasonal employee, the average weekly wage of

the employee is computed by dividing the amount of total wages

earned by the employee during the 12 months immediately preceding

the date of the injury by 50.

(c)AAIf, for good reason, the commissioner determines that

computing the average weekly wage for a seasonal employee as

provided by this section is impractical, the commissioner shall

compute the average weekly wage as of the time of the injury in a

manner that is fair and just to both parties.

(d)AAIn this section, "seasonal employee" means an employee

who, as a regular course of the employee ’s conduct, engages in

seasonal or cyclical employment that does not continue throughout

the entire year.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.096, eff.

Sec.A408.044.AAAVERAGE WEEKLY WAGE FOR MINOR, APPRENTICE,

TRAINEE, OR STUDENT. (a) For computing impairment income

benefits, supplemental income benefits, lifetime income benefits,

or death benefits, the average weekly wage of an employee shall be

adjusted to reflect the level of expected wages during the period

that the benefits are payable if:

45 (1)AAthe employee is a minor, apprentice, trainee, or

student at the time of the injury;

(2)AAthe employee ’s employment or earnings at the time

of the injury are limited primarily because of apprenticeship,

continuing formal training, or education intended to enhance the

employee ’s future wages; and

(3)AAthe employee ’s wages would reasonably be expected

to change because of a change of employment during that period.

(b)AAAn adjustment under Subsection (a) may not consider

expected wage levels for a period occurring after the third

anniversary of the date of the injury.

Sec.A408.0445.AAAVERAGE WEEKLY WAGE FOR MEMBERS OF STATE

MILITARY FORCES AND TEXAS TASK FORCE 1. (a)AAFor purposes of

computing income benefits or death benefits under Section 437.227,

Government Code, the average weekly wage of a member of the state

military forces as defined by Section 437.001, Government Code, who

is engaged in authorized training or duty is an amount equal to the

sum of the member ’s regular weekly wage at any employment the member

holds in addition to serving as a member of the state military

forces, disregarding any period during which the member is not

fully compensated for that employment because the member is engaged

in authorized military training or duty, and the member ’s regular

weekly wage as a member of the state military forces, except that

the amount may not exceed 100 percent of the state average weekly

wage as determined under Section 408.047.

(b)AAFor purposes of computing income benefits or death

benefits under Section 88.303, Education Code, the average weekly

wage of a Texas Task Force 1 member, as defined by Section 88.301,

Education Code, who is engaged in authorized training or duty is an

amount equal to the sum of the member ’s regular weekly wage at any

employment, including self-employment, that the member holds in

addition to serving as a member of Texas Task Force 1, except that

the amount may not exceed 100 percent of the state average weekly

wage as determined under Section 408.047.AAA member for whom an

average weekly wage cannot be computed shall be paid the minimum

46 weekly benefit established by the division.

Added by Acts 1999, 76th Leg., ch. 1205, Sec. 4, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 644, Sec. 2, eff. June 20,

2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.097, eff.

Acts 2013, 83rd Leg., R.S., Ch. 1217 (S.B. 1536), Sec. 3.14,

Sec.A408.0446.AAAVERAGE WEEKLY WAGE; SCHOOL DISTRICT

EMPLOYEE. (a) For determining the amount of temporary income

benefits of a school district employee under Chapter 504, the

average weekly wage is computed on the basis of wages earned in a

week rather than on the basis of wages paid in a week. The wages

earned in any given week are equal to the amount that would be

deducted from an employee ’s salary if the employee were absent from

work for one week and the employee did not have personal leave

available to compensate the employee for lost wages for that week.

(b)AAAn insurance carrier may adjust a school district

employee ’s average weekly wage as often as necessary to reflect the

wages the employee reasonably could expect to earn during the

period for which temporary income benefits are paid. In adjusting a

school district employee ’s average weekly wage under this

subsection, the insurance carrier may consider any evidence of the

employee ’s reasonable expectation of earnings.

(c)AAFor determining the amount of impairment income

benefits, supplemental income benefits, lifetime income benefits,

or death benefits of a school district employee under Chapter 504,

the average weekly wage of the employee is computed by dividing the

total amount of wages earned by the employee during the 12 months

immediately preceding the date of the injury by 50.

(d)AAIf the commissioner determines that computing the

average weekly wage of a school district employee as provided by

this section is impractical because the employee did not earn wages

during the 12 months immediately preceding the date of the injury,

the commissioner shall compute the average weekly wage in a manner

47 that is fair and just to both parties.

(e)AAThe commissioner shall adopt rules as necessary to

implement this section.

Added by Acts 2001, 77th Leg., ch. 1456, Sec. 10.04, eff. June 17,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.098, eff.

Sec. 408.045.AANONPECUNIARY WAGES. The division may not

include nonpecuniary wages in computing an employee ’s average

weekly wage during a period in which the employer continues to

provide the nonpecuniary wages.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.099, eff.

Sec.A408.046.AASIMILAR EMPLOYEES, SERVICES, OR EMPLOYMENT.

For purposes of this subchapter and Subchapter D, the determination

as to whether employees, services, or employment are the same or

similar must include consideration of:

(1)AAthe training and experience of the employees;

(2)AAthe nature of the work; and

(3)AAthe number of hours normally worked.

Sec. 408.047.AASTATE AVERAGE WEEKLY WAGE. (a) On and after

October 1, 2006, the state average weekly wage is equal to 88

percent of the average weekly wage in covered employment computed

by the Texas Workforce Commission under Section 207.002(c).

(b) Expired.

(c)AANotwithstanding Subsection (a), the commissioner by

rule may increase the state average weekly wage to an amount not to

exceed 100 percent of the average weekly wage in covered employment

computed by the Texas Workforce Commission under Section

207.002(c).

48 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 963, Sec. 6, eff. June 20, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.100, eff.

SUBCHAPTER D. COMPUTATION OF BENEFITS

Sec.A408.061.AAMAXIMUM WEEKLY BENEFIT. (a) A weekly

temporary income benefit may not exceed 100 percent of the state

average weekly wage under Section 408.047 rounded to the nearest

whole dollar.

(b)AAA weekly impairment income benefit may not exceed 70

percent of the state average weekly wage rounded to the nearest

(c)AAA weekly supplemental income benefit may not exceed 70

percent of the state average weekly wage rounded to the nearest

(d)AAA weekly death benefit may not exceed 100 percent of the

state average weekly wage rounded to the nearest whole dollar.

(e)AAA weekly lifetime income benefit may not exceed 100

percent of the state average weekly wage rounded to the nearest

(f)AAThe division shall compute the maximum weekly income

benefits for each state fiscal year not later than October 1 of each

(g)AAThe maximum weekly income benefit in effect on the date

of injury is applicable for the entire time that the benefit is

payable.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.101, eff.

Sec.A408.062.AAMINIMUM WEEKLY INCOME BENEFIT. (a) The

minimum weekly income benefit is 15 percent of the state average

weekly wage as determined under Section 408.047, rounded to the

49 nearest whole dollar.

(b)AAThe division shall compute the minimum weekly income

benefit for each state fiscal year not later than October 1 of each

(c)AAThe minimum weekly income benefit in effect on the date

of injury is applicable for the entire time that income benefits are

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.102, eff.

Sec.A408.063.AAWAGE PRESUMPTIONS; ADMINISTRATIVE

VIOLATION. (a) To expedite the payment of income benefits, the

commissioner may by rule establish reasonable presumptions

relating to the wages earned by an employee, including the

presumption that an employee ’s last paycheck accurately reflects

the employee ’s usual wage.

(b)AANot later than the 30th day after the date the employer

receives notice of an injury to the employee, the employer shall

file a wage statement showing the amount of all wages paid to the

(c)AAAn employer who fails to file a wage statement in

accordance with Subsection (b) commits an administrative

violation.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.103, eff.

Sec.A408.064.AAINTEREST ON ACCRUED BENEFITS. (a) An order

to pay income or death benefits accrued but unpaid must include

interest on the amount of compensation due at the rate provided by

Section 401.023.

(b)AAAccrued but unpaid compensation and interest shall be

paid in a lump sum.

50 SUBCHAPTER E. INCOME BENEFITS IN GENERAL

Sec.A408.081.AAINCOME BENEFITS. (a)AAAn employee is

entitled to timely and accurate income benefits as provided in this

chapter.

(b)AAExcept as otherwise provided by this section or this

subtitle, income benefits shall be paid weekly as and when they

accrue without order from the commissioner.AAInterest on accrued

but unpaid benefits shall be paid, without order of the

commissioner, at the time the accrued benefits are paid.

(c)AAThe commissioner by rule shall establish requirements

for agreements under which income benefits may be paid

monthly.AAIncome benefits may be paid monthly only:

(1)AAon the request of the employee and the agreement of

the employee and the insurance carrier; and

(2)AAin compliance with the requirements adopted by the

(d)AAAn employee ’s entitlement to income benefits under this

chapter terminates on the death of the employee. An interest in

future income benefits does not survive after the employee ’s death.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 11, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.104, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1153 (H.B. 2089), Sec. 1, eff.

Sec. 408.0815.AARESOLUTION OF OVERPAYMENT OR UNDERPAYMENT OF

INCOME BENEFITS. (a)AAThe commissioner by rule shall establish a

procedure by which an insurance carrier:

(1)AAmay recoup an overpayment of income benefits from

future income benefit payments that are not reimbursable under

Section 410.209; and

(2)AAshall pay an underpayment of income benefits,

including interest on accrued but unpaid benefits, in accordance

51 with this subtitle.

(b)AAThe procedure under Subsection (a) must include:

(1)AAa process by which an injured employee may notify

the insurance carrier of an underpayment;

(2)AAthe time frame and methodology by which an

insurance carrier shall pay to an injured employee an underpayment;

(3)AAa process by which an insurance carrier shall

notify an injured employee of an overpayment of income benefits;

(4)AAthe time frame and methodology by which an

insurance carrier may recoup an overpayment through the reduction

of a future income benefit payment; and

(5)AAa method for coordinating overpayments that may be

recouped from future income benefits and reimbursements described

by Section 410.209.

(c)AAThe procedure for recouping overpayments under

Subsection (a)(1) must take into consideration the cause of the

overpayment and minimize the financial hardship to the injured

Added by Acts 2011, 82nd Leg., R.S., Ch. 1153 (H.B. 2089), Sec. 2,

Sec.A408.082.AAACCRUAL OF RIGHT TO INCOME BENEFITS. (a)

Income benefits may not be paid under this subtitle for an injury

that does not result in disability for at least one week.

(b)AAIf the disability continues for longer than one week,

weekly income benefits begin to accrue on the eighth day after the

date of the injury. If the disability does not begin at once after

the injury occurs or within eight days of the occurrence but does

result subsequently, weekly income benefits accrue on the eighth

day after the date on which the disability began.

(c)AAIf the disability continues for two weeks or longer

after the date it begins, compensation shall be computed from the

date the disability begins.

(d)AAThis section does not preclude the recovery of medical

benefits as provided by Subchapter B.

52 Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.105, eff.

Sec.A408.083.AATERMINATION OF RIGHT TO TEMPORARY INCOME,

IMPAIRMENT INCOME, AND SUPPLEMENTAL INCOME BENEFITS. (a) Except

as provided by Subsection (b), an employee ’s eligibility for

temporary income benefits, impairment income benefits, and

supplemental income benefits terminates on the expiration of 401

weeks after the date of injury.

(b)AAIf an employee incurs an occupational disease, the

employee ’s eligibility for temporary income benefits, impairment

income benefits, and supplemental income benefits terminates on the

expiration of 401 weeks after the date on which benefits began to

accrue.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.26, eff. Sept. 1, 1995.

Sec.A408.084.AACONTRIBUTING INJURY. (a) At the request of

the insurance carrier, the commissioner may order that impairment

income benefits and supplemental income benefits be reduced in a

proportion equal to the proportion of a documented impairment that

resulted from earlier compensable injuries.

(b)AAThe commissioner shall consider the cumulative impact

of the compensable injuries on the employee ’s overall impairment in

determining a reduction under this section.

(c)AAIf the combination of the compensable injuries results

in an injury compensable under Section 408.161, the benefits for

that injury shall be paid as provided by Section 408.162.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.106, eff.

Sec. 408.085.AAADVANCE OF BENEFITS FOR HARDSHIP. (a) If

there is a likelihood that income benefits will be paid, the

commissioner may grant an employee suffering financial hardship

advances as provided by this subtitle against the amount of income

53 benefits to which the employee may be entitled.AAAn advance may be

ordered before or after the employee attains maximum medical

improvement.AAAn insurance carrier shall pay the advance ordered.

(b)AAAn employee must apply to the division for an advance on

a form prescribed by the commissioner.AAThe application must

describe the hardship that is the grounds for the advance.

(c)AAAn advance under this section may not exceed an amount

equal to four times the maximum weekly benefit for temporary income

benefits as computed in Section 408.061.AAThe commissioner may not

grant more than three advances to a particular employee based on the

same injury.

(d)AAThe commissioner may not grant an advance to an employee

who is receiving, on the date of the application under Subsection

(b), at least 90 percent of the employee ’s net preinjury wages under

Section 408.003 or 408.129.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.107, eff.

Sec. 408.086.AADIVISION DETERMINATION OF EXTENDED

UNEMPLOYMENT OR UNDEREMPLOYMENT. (a) During the period that

impairment income benefits or supplemental income benefits are

being paid to an employee, the commissioner shall determine at

least annually whether any extended unemployment or

underemployment is a direct result of the employee ’s impairment.

(b)AATo make this determination, the commissioner may

require periodic reports from the employee and the insurance

carrier and, at the insurance carrier ’s expense, may require

physical or other examinations, vocational assessments, or other

tests or diagnoses necessary to perform the commissioner ’s duty

under this section and Subchapter H.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.108, eff.

54 SUBCHAPTER F. TEMPORARY INCOME BENEFITS

Sec.A408.101.AATEMPORARY INCOME BENEFITS. (a) An employee

is entitled to temporary income benefits if the employee has a

disability and has not attained maximum medical improvement.

(b)AAOn the initiation of compensation as provided by Section

409.021, the insurance carrier shall pay temporary income benefits

as provided by this subchapter.

Sec.A408.102.AADURATION OF TEMPORARY INCOME BENEFITS. (a)

Temporary income benefits continue until the employee reaches

maximum medical improvement.

(b)AAThe commissioner by rule shall establish a presumption

that maximum medical improvement has been reached based on a lack of

medical improvement in the employee ’s condition.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.109, eff.

Sec.A408.103.AAAMOUNT OF TEMPORARY INCOME BENEFITS. (a)

Subject to Sections 408.061 and 408.062, the amount of a temporary

income benefit is equal to:

(1)AA70 percent of the amount computed by subtracting

the employee ’s weekly earnings after the injury from the employee ’s

average weekly wage; or

(2)AAfor the first 26 weeks, 75 percent of the amount

computed by subtracting the employee ’s weekly earnings after the

injury from the employee ’s average weekly wage if the employee

earns less than $8.50 an hour.

(b)AAA temporary income benefit under Subsection (a)(2) may

not exceed the employee ’s actual earnings for the previous

year.AAIt is presumed that the employee ’s actual earnings for the

previous year are equal to:

(1)AAthe sum of the employee ’s wages as reported in the

most recent four quarterly wage reports to the Texas Workforce

55 Commission divided by 52;

(2)AAthe employee ’s wages in the single quarter of the

most recent four quarters in which the employee ’s earnings were

highest, divided by 13, if the commissioner finds that the

employee ’s most recent four quarters ’ earnings reported in the

Texas Workforce Commission wage reports are not representative of

the employee ’s usual earnings; or

(3)AAthe amount the commissioner determines from other

credible evidence to be the actual earnings for the previous year if

the Texas Workforce Commission does not have a wage report

reflecting at least one quarter ’s earnings because the employee

worked outside the state during the previous year.

(c)AAA presumption under Subsection (b) may be rebutted by

other credible evidence of the employee ’s actual earnings.

(d)AAThe Texas Employment Commission shall provide

information required under this section in the manner most

efficient for transferring the information.

(e)AAFor purposes of Subsection (a), if an employee is

offered a bona fide position of employment that the employee is

reasonably capable of performing, given the physical condition of

the employee and the geographic accessibility of the position to

the employee, the employee ’s weekly earnings after the injury are

equal to the weekly wage for the position offered to the employee.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.110, eff.

Sec.A408.104.AAMAXIMUM MEDICAL IMPROVEMENT AFTER SPINAL

SURGERY. (a) On application by either the employee or the

insurance carrier, the commissioner by order may extend the

104-week period described by Section 401.011(30)(B) if the employee

has had spinal surgery, or has been approved for spinal surgery

under Section 408.026 and commissioner rules, within 12 weeks

before the expiration of the 104-week period.AAIf an order is

issued under this section, the order shall extend the statutory

period for maximum medical improvement to a date certain, based on

56 medical evidence presented to the commissioner.

(b)AAEither the employee or the insurance carrier may dispute

an application for extension made under this section. A dispute

under this subsection is subject to Chapter 410.

(c)AAThe commissioner shall adopt rules to implement this

section, including rules establishing procedures for requesting

and disputing an extension.

Added by Acts 1997, 75th Leg., ch. 1443, Sec. 5, eff. Jan. 1, 1998.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.111, eff.

Sec.A408.105.AASALARY CONTINUATION IN LIEU OF TEMPORARY

INCOME BENEFITS. (a) In lieu of payment of temporary income

benefits under this subchapter, an employer may continue to pay the

salary of an employee who sustains a compensable injury under a

contractual obligation between the employer and employee, such as a

collective bargaining agreement, written agreement, or policy.

(b)AASalary continuation may include wage supplementation

if:

(1)AAemployer reimbursement is not sought from the

carrier as provided by Section 408.127; and

(2)AAthe supplementation does not affect the employee ’s

eligibility for any future income benefits.

Added by Acts 1999, 76th Leg., ch. 1003, Sec. 3, eff. Sept. 1, 1999.

SUBCHAPTER G. IMPAIRMENT INCOME BENEFITS

Sec.A408.121.AAIMPAIRMENT INCOME BENEFITS. (a) An

employee ’s entitlement to impairment income benefits begins on the

day after the date the employee reaches maximum medical improvement

and ends on the earlier of:

(1)AAthe date of expiration of a period computed at the

rate of three weeks for each percentage point of impairment; or

(2)AAthe date of the employee ’s death.

(b)AAThe insurance carrier shall begin to pay impairment

income benefits not later than the fifth day after the date on which

57 the insurance carrier receives the doctor ’s report certifying

maximum medical improvement. Impairment income benefits shall be

paid for a period based on the impairment rating, unless that rating

is disputed under Subsection (c).

(c)AAIf the insurance carrier disputes the impairment rating

used under Subsection (a), the carrier shall pay the employee

impairment income benefits for a period based on the carrier ’s

reasonable assessment of the correct rating.

Sec. 408.122.AAELIGIBILITY FOR IMPAIRMENT INCOME BENEFITS.

A claimant may not recover impairment income benefits unless

evidence of impairment based on an objective clinical or laboratory

finding exists.AAIf the finding of impairment is made by a doctor

chosen by the claimant and the finding is contested, a designated

doctor or a doctor selected by the insurance carrier must be able to

confirm the objective clinical or laboratory finding on which the

finding of impairment is based.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.27, eff. Sept. 1, 1995;

Acts 2001, 77th Leg., ch. 1456, Sec. 5.03, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.112, eff.

Sec. 408.1225.AADESIGNATED DOCTOR. (a)AATo be eligible to

serve as a designated doctor, a doctor must maintain an active

certification by the division.

(a-1)AAThe commissioner by rule shall develop a process for

the certification of a designated doctor.

(a-2)AAThe rules adopted by the commissioner under

Subsection (a-1) must:

(1)AArequire the division to evaluate the qualification

of designated doctors for certification using eligibility

requirements, including:

(A)AAeducational experience;

(B)AAprevious training; and

58 (C)AAdemonstrated ability to perform the specific

designated doctor duties described by Section 408.0041; and

(2)AArequire standard training and testing to be

completed in accordance with policies and guidelines developed by

(a-3)AAThe division shall develop guidelines for

certification training programs for certification of a designated

doctor under Subsection (a-1) to ensure a designated doctor ’s

competency and continued competency in providing assessments,

(1)AAa standard curriculum;

(2)AAstandard course materials; and

(3)AAtesting criteria.

(a-4)AAThe division shall develop and implement a procedure

to periodically review and update the guidelines developed under

Subsection (a-3).

(a-5)AAThe division may authorize an independent training

and testing provider to conduct the certification program for the

division under the guidelines developed under Subsection (a-3).

(b)AAThe commissioner shall ensure the quality of designated

doctor decisions and reviews through active monitoring of the

decisions and reviews, and may take action as necessary to:

(1)AArestrict the participation of a designated doctor;

(2)AAdeny renewal of a designated doctor ’s

certification; or

(3)AArevoke a designated doctor ’s certification under

Section 413.044.

(c)AAThe report of the designated doctor has presumptive

weight, and the division shall base its determination of whether

the employee has reached maximum medical improvement on the report

unless the preponderance of the other medical evidence is to the

contrary.

(d)AAThe commissioner shall develop rules to ensure that a

designated doctor called on to conduct an examination under Section

408.0041 has no conflict of interest in serving as a designated

doctor in performing any examination.

(e)AAA designated doctor, other than a chiropractor, is

59 subject to Section 408.0043.AAA designated doctor who is a

chiropractor is subject to Section 408.0045.AATo the extent of a

conflict between this section and Section 408.0043 or 408.0045,

(f)AAA designated doctor shall continue providing services

related to a case assigned to the designated doctor, including

performing subsequent examinations or acting as a resource for

division disputes, unless the division authorizes the designated

doctor to discontinue providing services.AAThe commissioner by

rule shall prescribe the circumstances under which a designated

doctor is permitted to discontinue providing services, including:

(1)AAthe doctor decides to stop practicing in the

workers ’ compensation system; or

(2)AAthe doctor relocates the doctor ’s residence or

practice.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.112, eff.

Acts 2007, 80th Leg., R.S., Ch. 1218 (H.B. 2004), Sec. 5, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 12,

Sec. 408.123.AACERTIFICATION OF MAXIMUM MEDICAL IMPROVEMENT;

EVALUATION OF IMPAIRMENT RATING. (a) After an employee has been

certified by a doctor as having reached maximum medical

improvement, the certifying doctor shall evaluate the condition of

the employee and assign an impairment rating using the impairment

rating guidelines described by Section 408.124.AAIf the

certification and evaluation are performed by a doctor other than

the employee ’s treating doctor, the certification and evaluation

shall be submitted to the treating doctor, and the treating doctor

shall indicate agreement or disagreement with the certification and

evaluation.

(b)AAA certifying doctor shall issue a written report

certifying that maximum medical improvement has been reached,

stating the employee ’s impairment rating, and providing any other

60 information required by the commissioner to:

(1)AAthe division;

(2)AAthe employee; and

(3)AAthe insurance carrier.

(c)AAThe commissioner shall adopt a rule that provides that,

at the conclusion of any examination in which maximum medical

improvement is certified and any impairment rating is assigned by

the treating doctor, written notice shall be given to the employee

that the employee may dispute the certification of maximum medical

improvement and assigned impairment rating.AAThe notice to the

employee must state how to dispute the certification of maximum

medical improvement and impairment rating.

(d)AAIf an employee is not certified as having reached

maximum medical improvement before the expiration of 102 weeks

after the date income benefits begin to accrue, the division shall

notify the treating doctor of the requirements of this subchapter.

(e)AAExcept as otherwise provided by this section, an

employee ’s first valid certification of maximum medical

improvement and first valid assignment of an impairment rating is

final if the certification or assignment is not disputed before the

91st day after the date written notification of the certification

or assignment is provided to the employee and the carrier by

verifiable means.

(f)AAAn employee ’s first certification of maximum medical

improvement or assignment of an impairment rating may be disputed

after the period described by Subsection (e) if:

(1)AAcompelling medical evidence exists of:

(A)AAa significant error by the certifying doctor

in applying the appropriate American Medical Association

guidelines or in calculating the impairment rating;

(B)AAa clearly mistaken diagnosis or a previously

undiagnosed medical condition; or

(C)AAimproper or inadequate treatment of the

injury before the date of the certification or assignment that

would render the certification or assignment invalid; or

(2)AAother compelling circumstances exist as

prescribed by commissioner rule.

61 (g)AAIf an employee has not been certified as having reached

maximum medical improvement before the expiration of 104 weeks

after the date income benefits begin to accrue or the expiration

date of any extension of benefits under Section 408.104, the

impairment rating assigned after the expiration of either of those

periods is final if the impairment rating is not disputed before the

91st day after the date written notification of the certification

verifiable means.AAA certification or assignment may be disputed

after the 90th day only as provided by Subsection (f).

(h)AAIf an employee ’s disputed certification of maximum

medical improvement or assignment of impairment rating is finally

modified, overturned, or withdrawn, the first certification or

assignment made after the date of the modification, overturning, or

withdrawal becomes final if the certification or assignment is not

disputed before the 91st day after the date notification of the

certification or assignment is provided to the employee and the

carrier by verifiable means.AAA certification or assignment may be

disputed after the 90th day only as provided by Subsection (f).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 278, Sec. 1, eff. June 18, 2003; Acts

2003, 78th Leg., ch. 1190, Sec. 1, eff. June 20, 2003; Acts 2003,

78th Leg., ch. 1323, Sec. 2, eff. June 21, 2003.

Reenacted and amended by Acts 2005, 79th Leg., Ch. 265 (H.B. 7),

Sec. 3.113, eff. September 1, 2005.

Sec. 408.124.AAIMPAIRMENT RATING GUIDELINES. (a) An award

of an impairment income benefit, whether by the commissioner or a

court, must be based on an impairment rating determined using the

impairment rating guidelines described by this section.

(b)AAFor determining the existence and degree of an

employee ’s impairment, the division shall use "Guides to the

Evaluation of Permanent Impairment," third edition, second

printing, dated February 1989, published by the American Medical

Association.

(c)AANotwithstanding Subsection (b), the commissioner by

rule may adopt the fourth edition of the "Guides to the Evaluation

62 of Permanent Impairment," published by the American Medical

Association, or a subsequent edition of those guides, for

determining the existence and degree of an employee ’s impairment.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 12, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.114, eff.

Sec.A408.125.AADISPUTE AS TO IMPAIRMENT RATING. (a) If an

impairment rating is disputed, the commissioner shall direct the

employee to the next available doctor on the division ’s list of

designated doctors, as provided by Section 408.0041.

(b)AAThe designated doctor shall report in writing to the

(c)AAThe report of the designated doctor shall have

presumptive weight, and the division shall base the impairment

rating on that report unless the preponderance of the other medical

evidence is to the contrary.AAIf the preponderance of the medical

evidence contradicts the impairment rating contained in the report

of the designated doctor chosen by the division, the division shall

adopt the impairment rating of one of the other doctors.

designated doctor under this section, only the injured employee or

an appropriate member of the staff of the division may communicate

with the designated doctor about the case regarding the injured

employee ’s medical condition or history before the examination of

the injured employee by the designated doctor.AAAfter that

examination is completed, communication with the designated doctor

regarding the injured employee ’s medical condition or history may

be made only through appropriate division staff members.AAThe

designated doctor may initiate communication with any doctor who

has previously treated or examined the injured employee for the

work-related injury.

(e)AANotwithstanding Subsection (d), the treating doctor and

the insurance carrier are both responsible for sending to the

designated doctor all the injured employee ’s medical records that

63 are in their possession and that relate to the issue to be evaluated

by the designated doctor. The treating doctor and the insurance

carrier may send the records without a signed release from the

employee. The designated doctor is authorized to receive the

employee ’s confidential medical records to assist in the resolution

of disputes. The treating doctor and the insurance carrier may also

send the designated doctor an analysis of the injured employee ’s

medical condition, functional abilities, and return-to-work

(f)AAA violation of Subsection (d) is an administrative

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.28, eff. Sept. 1, 1995;

Acts 2001, 77th Leg., ch. 1456, Sec. 5.04, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.115, eff.

Sec.A408.126.AAAMOUNT OF IMPAIRMENT INCOME BENEFITS.

Subject to Sections 408.061 and 408.062, an impairment income

benefit is equal to 70 percent of the employee ’s average weekly

wage.

Sec.A408.127.AAREDUCTION OF IMPAIRMENT INCOME BENEFITS. (a)

An insurance carrier shall reduce impairment income benefits to an

employee by an amount equal to employer payments made under Section

408.003 that are not reimbursed or reimbursable under that section.

(b)AAThe insurance carrier shall remit the amount of a

reduction under this section to the employer who made the payments.

(c)AAThe commissioner shall adopt rules and forms to ensure

the full reporting and the accuracy of reductions and

reimbursements made under this section.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.116, eff.

64 Sec.A408.128.AACOMMUTATION OF IMPAIRMENT INCOME BENEFITS.

(a) An employee may elect to commute the remainder of the

impairment income benefits to which the employee is entitled if the

employee has returned to work for at least three months, earning at

least 80 percent of the employee ’s average weekly wage.

(b)AAAn employee who elects to commute impairment income

benefits is not entitled to additional income benefits for the

Sec.A408.129.AAACCELERATION OF IMPAIRMENT INCOME BENEFITS.

(a) On approval by the commissioner of a written request received

from an employee, an insurance carrier shall accelerate the payment

of impairment income benefits to the employee.AAThe accelerated

payment may not exceed a rate of payment equal to that of the

employee ’s net preinjury wage.

(b)AAThe commissioner shall approve the request and order the

acceleration of the benefits if the commissioner determines that

the acceleration is:

(1)AArequired to relieve hardship; and

(2)AAin the overall best interest of the employee.

(c)AAThe duration of the impairment income benefits to which

the employee is entitled shall be reduced to offset the increased

payments caused by the acceleration taking into consideration the

discount for present payment computed at the rate provided under

(d)AAThe commissioner may prescribe forms necessary to

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.117, eff.

SUBCHAPTER H. SUPPLEMENTAL INCOME BENEFITS

Sec. 408.141.AAAWARD OF SUPPLEMENTAL INCOME BENEFITS. An

65 award of a supplemental income benefit, whether by the commissioner

or a court, shall be made in accordance with this subchapter.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.118, eff.

Sec. 408.1415.AAWORK SEARCH COMPLIANCE STANDARDS. (a) The

commissioner by rule shall adopt compliance standards for

supplemental income benefit recipients that require each recipient

to demonstrate an active effort to obtain employment.AATo be

eligible to receive supplemental income benefits under this

chapter, a recipient must provide evidence satisfactory to the

division of:

(1)AAactive participation in a vocational

rehabilitation program conducted by the Department of Assistive and

Rehabilitative Services or a private vocational rehabilitation

provider;

(2)AAactive participation in work search efforts

conducted through the Texas Workforce Commission; or

(3)AAactive work search efforts documented by job

applications submitted by the recipient.

(b)AAIn adopting rules under this section, the commissioner

shall:

(1)AAestablish the level of activity that a recipient

should have with the Texas Workforce Commission and the Department

of Assistive and Rehabilitative Services;

(2)AAdefine the number of job applications required to

be submitted by a recipient to satisfy the work search

requirements; and

(3)AAconsider factors affecting the availability of

employment, including recognition of access to employment in rural

areas, economic conditions, and other appropriate employment

availability factors.

(c)AAThe commissioner may consult with the Texas Workforce

Commission, the Department of Assistive and Rehabilitative

Services, and other appropriate entities in adopting rules under

66 this section.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.119, eff.

Sec.A408.142.AASUPPLEMENTAL INCOME BENEFITS. (a) An

employee is entitled to supplemental income benefits if on the

expiration of the impairment income benefit period computed under

Section 408.121(a)(1) the employee:

(1)AAhas an impairment rating of 15 percent or more as

determined by this subtitle from the compensable injury;

(2)AAhas not returned to work or has returned to work

earning less than 80 percent of the employee ’s average weekly wage

as a direct result of the employee ’s impairment;

(3)AAhas not elected to commute a portion of the

impairment income benefit under Section 408.128; and

(4)AAhas complied with the requirements adopted under

Section 408.1415.

(b)AAIf an employee is not entitled to supplemental income

benefits at the time of payment of the final impairment income

benefit because the employee is earning at least 80 percent of the

employee ’s average weekly wage, the employee may become entitled to

supplemental income benefits at any time within one year after the

date the impairment income benefit period ends if:

(1)AAthe employee earns wages for at least 90 days that

are less than 80 percent of the employee ’s average weekly wage;

(2)AAthe employee meets the requirements of Subsections

(a)(1), (3), and (4); and

(3)AAthe decrease in earnings is a direct result of the

employee ’s impairment from the compensable injury.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.1195, eff.

Sec.A408.143.AAEMPLOYEE STATEMENT. (a) After the

commissioner ’s initial determination of supplemental income

benefits, the employee must file a statement with the insurance

67 carrier stating:

(1)AAthat the employee has earned less than 80 percent

of the employee ’s average weekly wage as a direct result of the

employee ’s impairment;

(2)AAthe amount of wages the employee earned in the

filing period provided by Subsection (b); and

(3)AAthat the employee has complied with the

requirements adopted under Section 408.1415.

(b)AAThe statement required under this section must be filed

quarterly on a form and in the manner provided by the

commissioner.AAThe commissioner may modify the filing period as

appropriate to an individual case.

(c)AAFailure to file a statement under this section relieves

the insurance carrier of liability for supplemental income benefits

for the period during which a statement is not filed.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.120, eff.

Sec.A408.144.AACOMPUTATION OF SUPPLEMENTAL INCOME BENEFITS.

(a) Supplemental income benefits are calculated quarterly and paid

monthly.

(b)AASubject to Section 408.061, the amount of a supplemental

income benefit for a week is equal to 80 percent of the amount

computed by subtracting the weekly wage the employee earned during

the reporting period provided by Section 408.143(b) from 80 percent

of the employee ’s average weekly wage determined under Section

408.041, 408.042, 408.043, 408.044, 408.0445, or 408.0446.

(c)AAFor the purposes of this subchapter, if an employee is

offered a bona fide position of employment that the employee is

capable of performing, given the physical condition of the employee

and the geographic accessibility of the position to the employee,

the employee ’s weekly wages are considered to be equal to the weekly

wages for the position offered to the employee.

68 Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.1205, eff.

Sec.A408.145.AAPAYMENT OF SUPPLEMENTAL INCOME BENEFITS. An

insurance carrier shall pay supplemental income benefits beginning

not later than the seventh day after the expiration date of the

employee ’s impairment income benefit period and shall continue to

pay the benefits in a timely manner.

Sec.A408.146.AATERMINATION OF SUPPLEMENTAL INCOME BENEFITS;

REINITIATION. (a) If an employee earns wages that are at least 80

percent of the employee ’s average weekly wage for at least 90 days

during a time that the employee receives supplemental income

benefits, the employee ceases to be entitled to supplemental income

benefits for the filing period.

(b)AASupplemental income benefits terminated under this

section shall be reinitiated when the employee:

(1)AAsatisfies the conditions of Section 408.142(b);

(2)AAfiles the statement required under Section

408.143.

(c)AANotwithstanding any other provision of this section, an

employee who is not entitled to supplemental income benefits for 12

consecutive months ceases to be entitled to any additional income

benefits for the compensable injury.

Sec.A408.147.AACONTEST OF SUPPLEMENTAL INCOME BENEFITS BY

INSURANCE CARRIER; ATTORNEY ’S FEES. (a) An insurance carrier may

request a benefit review conference to contest an employee ’s

entitlement to supplemental income benefits or the amount of

supplemental income benefits.

(b)AAIf an insurance carrier fails to make a request for a

benefit review conference within 10 days after the date of the

expiration of the impairment income benefit period or within 10

days after receipt of the employee ’s statement, the insurance

69 carrier waives the right to contest entitlement to supplemental

income benefits and the amount of supplemental income benefits for

that period of supplemental income benefits.

(c)AAIf an insurance carrier disputes the commissioner ’s

determination that an employee is entitled to supplemental income

benefits or the amount of supplemental income benefits due and the

employee prevails on any disputed issue, the insurance carrier is

liable for reasonable and necessary attorney ’s fees incurred by the

employee as a result of the insurance carrier ’s dispute and for

supplemental income benefits accrued but not paid and interest on

that amount, according to Section 408.064.AAAttorney ’s fees

awarded under this subsection are not subject to Sections

408.221(b), (f), and (i).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 9.53, eff. Sept. 1, 1995; Acts

2001, 77th Leg., ch. 1456, Sec. 8.02, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.121, eff.

Sec. 408.148.AAEMPLOYEE DISCHARGE AFTER TERMINATION. The

commissioner may reinstate supplemental income benefits to an

employee who is discharged within 12 months of the date of losing

entitlement to supplemental income benefits under Section

408.146(c) if the commissioner finds that the employee was

discharged at that time with the intent to deprive the employee of

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.122, eff.

Sec. 408.149.AASTATUS REVIEW; BENEFIT REVIEW CONFERENCE.

(a) Not more than once in each period of 12 calendar months, an

employee and an insurance carrier each may request the commissioner

to review the status of the employee and determine whether the

employee ’s unemployment or underemployment is a direct result of

70 impairment from the compensable injury.

(b)AAEither party may request a benefit review conference to

contest a determination of the commissioner at any time, subject

only to the limits placed on the insurance carrier by Section

408.147.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.123, eff.

Sec. 408.150.AAVOCATIONAL REHABILITATION. (a) The division

shall refer an employee to the Department of Assistive and

Rehabilitative Services with a recommendation for appropriate

services if the division determines that an employee could be

materially assisted by vocational rehabilitation or training in

returning to employment or returning to employment more nearly

approximating the employee ’s preinjury employment.AAThe division

shall also notify insurance carriers of the need for vocational

rehabilitation or training services.AAThe insurance carrier may

provide services through a private provider of vocational

rehabilitation services under Section 409.012.

(b)AAAn employee who refuses services or refuses to cooperate

with services provided under this section by the Department of

Assistive and Rehabilitative Services or a private provider loses

entitlement to supplemental income benefits.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 956, Sec. 1, eff. Sept. 1, 1999; Acts

1999, 76th Leg., ch. 1426, Sec. 13, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.124, eff.

Sec. 408.151.AAMEDICAL EXAMINATIONS FOR SUPPLEMENTAL INCOME

BENEFITS. (a) On or after the second anniversary of the date the

commissioner makes the initial award of supplemental income

benefits, an insurance carrier may not require an employee who is

receiving supplemental income benefits to submit to a medical

71 examination more than annually if, in the preceding year, the

employee ’s medical condition resulting from the compensable injury

has not improved sufficiently to allow the employee to return to

work.

(b)AAIf a dispute exists as to whether the employee ’s medical

condition has improved sufficiently to allow the employee to return

to work, the commissioner shall direct the employee to be examined

by a designated doctor chosen by the division.AAThe designated

doctor shall report to the division.AAThe report of the designated

doctor has presumptive weight, and the division shall base its

determination of whether the employee ’s medical condition has

improved sufficiently to allow the employee to return to work on

that report unless the preponderance of the other medical evidence

is to the contrary.

Added by Acts 1999, 76th Leg., ch. 850, Sec. 1, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.125, eff.

SUBCHAPTER I. LIFETIME INCOME BENEFITS

Sec.A408.161.AALIFETIME INCOME BENEFITS. (a) Lifetime

income benefits are paid until the death of the employee for:

(1)AAtotal and permanent loss of sight in both eyes;

(2)AAloss of both feet at or above the ankle;

(3)AAloss of both hands at or above the wrist;

(4)AAloss of one foot at or above the ankle and the loss

of one hand at or above the wrist;

(5)AAan injury to the spine that results in permanent

and complete paralysis of both arms, both legs, or one arm and one

leg;

(6)AAa physically traumatic injury to the brain

resulting in incurable insanity or imbecility; or

(7)AAthird degree burns that cover at least 40 percent

of the body and require grafting, or third degree burns covering the

majority of either both hands or one hand and the face.

(b)AAFor purposes of Subsection (a), the total and permanent

72 loss of use of a body part is the loss of that body part.

(c)AASubject to Section 408.061, the amount of lifetime

income benefits is equal to 75 percent of the employee ’s average

weekly wage. Benefits being paid shall be increased at a rate of

three percent a year notwithstanding Section 408.061.

(d)AAAn insurance carrier may pay lifetime income benefits

through an annuity if the annuity agreement meets the terms and

conditions for annuity agreements adopted by the commissioner by

rule.AAThe establishment of an annuity under this subsection does

not relieve the insurance carrier of the liability under this title

for ensuring that the lifetime income benefits are paid.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1443, Sec. 7, eff. Sept. 1, 1997; Acts

1999, 76th Leg., ch. 1426, Sec. 14, eff. Sept. 1, 1999; Acts 2001,

77th Leg., ch. 1456, Sec. 9.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.126, eff.

Sec.A408.162.AASUBSEQUENT INJURY FUND BENEFITS. (a) If a

subsequent compensable injury, with the effects of a previous

injury, results in a condition for which the injured employee is

entitled to lifetime income benefits, the insurance carrier is

liable for the payment of benefits for the subsequent injury only to

the extent that the subsequent injury would have entitled the

employee to benefits had the previous injury not existed.

(b)AAThe subsequent injury fund shall compensate the

employee for the remainder of the lifetime income benefits to which

the employee is entitled.

SUBCHAPTER J. DEATH AND BURIAL BENEFITS

Sec.A408.181.AADEATH BENEFITS. (a) An insurance carrier

shall pay death benefits to the legal beneficiary if a compensable

injury to the employee results in death.

(b)AASubject to Section 408.061, the amount of a death

73 benefit is equal to 75 percent of the employee ’s average weekly

for agreements under which death benefits may be paid

monthly.AADeath benefits may be paid monthly only:

(1)AAon the request of the legal beneficiary and the

agreement of the legal beneficiary and the insurance carrier; and

(d)AAAn insurance carrier may pay death benefits through an

annuity if the annuity agreement meets the terms and conditions for

annuity agreements adopted by the commissioner by rule.AAThe

establishment of an annuity under this subsection does not relieve

the insurance carrier of the liability under this title for

ensuring that the death benefits are paid.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 15, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.127, eff.

Sec.A408.182.AADISTRIBUTION OF DEATH BENEFITS. (a) If there

is an eligible child or grandchild and an eligible spouse, half of

the death benefits shall be paid to the eligible spouse and half

shall be paid in equal shares to the eligible children. If an

eligible child has predeceased the employee, death benefits that

would have been paid to that child shall be paid in equal shares per

stirpes to the children of the deceased child.

(b)AAIf there is an eligible spouse and no eligible child or

grandchild, all the death benefits shall be paid to the eligible

spouse.

(c)AAIf there is an eligible child or grandchild and no

eligible spouse, the death benefits shall be paid to the eligible

children or grandchildren.

(d)AAIf there is no eligible spouse, no eligible child, and

no eligible grandchild, the death benefits shall be paid in equal

shares to surviving dependents of the deceased employee who are

74 parents, stepparents, siblings, or grandparents of the deceased.

(d-1)AAIf there is no eligible spouse, no eligible child, and

no eligible grandchild, and there are no surviving dependents of

the deceased employee who are parents, siblings, or grandparents of

the deceased, the death benefits shall be paid in equal shares to

surviving eligible parents of the deceased.AAA payment of death

benefits made under this subsection may not exceed one payment per

household.AATotal payments under this section may not exceed 104

weeks regardless of the number of surviving eligible parents.

(d-2)AAExcept as otherwise provided by this subsection,AAto

be eligible to receive death benefits under Subsection (d-1), an

eligible parent must file with the division a claim for those

benefits not later than the first anniversary of the date of the

injured employee ’s death from the compensable injury.AAThe claim

must designate all eligible parents and necessary information for

payment to the eligible parents.AAThe insurance carrier is not

liable for payment to any eligible parent not designated on the

claim.AAFailure to file a claim in the time required bars the claim

unless good cause exists for the failure to file a claim under this

(e)AAIf an employee is not survived by legal beneficiaries or

eligible parents, the death benefits shall be paid to the

subsequent injury fund under Section 403.007.

(f)AAIn this section:

(1)AA"Eligible child" means a child of a deceased

employee if the child is:

(A)AAa minor;

(B)AAenrolled as a full-time student in an

accredited educational institution and is less than 25 years of

age; or

(C)AAa dependent of the deceased employee at the

time of the employee ’s death.

(2)AA"Eligible grandchild" means a grandchild of a

deceased employee who is a dependent of the deceased employee and

whose parent is not an eligible child.

(3)AA"Eligible spouse" means the surviving spouse of a

deceased employee unless the spouse abandoned the employee for

75 longer than the year immediately preceding the death without good

cause, as determined by the division.

(4)AA"Eligible parent" means the mother or the father

of a deceased employee, including an adoptive parent or a

stepparent.AAThe term does not include a parent whose parental

rights have been terminated.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.128, eff.

Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 5, eff.

Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 6, eff.

Acts 2009, 81st Leg., R.S., Ch. 344 (H.B. 1058), Sec. 1, eff.

September 1, 2009.

Sec.A408.183.AADURATION OF DEATH BENEFITS. (a) Entitlement

to death benefits begins on the day after the date of an employee ’s

death.

(b)AAAn eligible spouse is entitled to receive death benefits

for life or until remarriage.AAOn remarriage, the eligible spouse

is entitled to receive 104 weeks of death benefits, commuted as

provided by commissioner rule.

(c)AAA child who is eligible for death benefits because the

child is a minor on the date of the employee ’s death is entitled to

receive benefits until the child attains the age of 18.

(d)AAA child eligible for death benefits under Subsection (c)

who at age 18 is enrolled as a full-time student in an accredited

educational institution or a child who is eligible for death

benefits because on the date of the employee ’s death the child is

enrolled as a full-time student in an accredited educational

institution is entitled to receive or to continue to receive, as

appropriate, benefits until the earliest of:

(1)AAthe date the child ceases, for a second

consecutive semester, to be enrolled as a full-time student in an

accredited educational institution;

76 (2)AAthe date the child attains the age of 25; or

(3)AAthe date the child dies.

(e)AAA child who is eligible for death benefits because the

child is a dependent of the deceased employee on the date of the

employee ’s death is entitled to receive benefits until the earlier

(1)AAthe date the child dies; or

(2)AAif the child is dependent:

(A)AAbecause the child is an individual with a

physical or mental disability, the date the child no longer has the

disability; or

(B)AAbecause of a reason other than a physical or

mental disability, the date of the expiration of 364 weeks of death

benefit payments.

(f)AAAn eligible grandchild is entitled to receive death

benefits until the earlier of:

(1)AAthe date the grandchild dies; or

(2)AAif the grandchild is:

(A)AAa minor at the time of the employee ’s death,

the date the grandchild ceases to be a minor; or

(B)AAnot a minor at the time of the employee ’s

death, the date of the expiration of 364 weeks of death benefit

payments.

(f-1)AAAn eligible parent who is not a surviving dependent of

the deceased employee is entitled to receive death benefits until

the earlier of:

(1)AAthe date the eligible parent dies; or

(2)AAthe date of the expiration of 104 weeks of death

(g)AAAny other person entitled to death benefits is entitled

to receive death benefits until the earlier of:

(1)AAthe date the person dies; or

(2)AAthe date of the expiration of 364 weeks of death

(h)AASection 401.011(16) does not apply to the use of the

term "disability" in this section.

77 Amended by:

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.129, eff.

Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 7, eff.

Sec.A408.184.AAREDISTRIBUTION OF DEATH BENEFITS. (a) If a

legal beneficiary dies or otherwise becomes ineligible for death

benefits, benefits shall be redistributed to the remaining legal

beneficiaries as provided by Sections 408.182 and 408.183.

(b)AAIf a spouse ceases to be eligible because of remarriage,

the benefits payable to the remaining legal beneficiaries remain

constant for 104 weeks. After the 104th week, the spouse ’s share of

benefits shall be redistributed as provided by Sections 408.182 and

408.183.

(c)AAIf all legal beneficiaries, other than the subsequent

injury fund, cease to be eligible and the insurance carrier has not

made 364 weeks of full death benefit payments, including the

remarriage payment, the insurance carrier shall pay to the

subsequent injury fund an amount computed by subtracting the total

amount paid from the amount that would be paid for 364 weeks of

death benefits.

Sec.A408.185.AAEFFECT OF BENEFICIARY DISPUTE; ATTORNEY ’S

FEES. On settlement of a case in which the insurance carrier admits

liability for death benefits but a dispute exists as to the proper

beneficiary or beneficiaries, the settlement shall be paid in

periodic payments as provided by law, with a reasonable attorney ’s

fee not to exceed 25 percent of the settlement, paid periodically,

and based on time and expenses.

Sec.A408.186.AABURIAL BENEFITS. (a) If the death of an

employee results from a compensable injury, the insurance carrier

shall pay to the person who incurred liability for the costs of

burial the lesser of:

78 (1)AAthe actual costs incurred for reasonable burial

expenses; or

(2)AA$6,000.

(b)AAIf the employee died away from the employee ’s usual

place of employment, the insurance carrier shall pay the reasonable

cost of transporting the body, not to exceed the cost of

transporting the body to the employee ’s usual place of employment.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 1426, Sec. 16, eff. Sept. 1, 1999.

Sec.A408.187.AAAUTOPSY. (a) If in a claim for death

benefits based on an occupational disease an autopsy is necessary

to determine the cause of death, the commission may, after

opportunity for hearing, order the legal beneficiaries of a

deceased employee to permit an autopsy.

(b)AAA legal beneficiary is entitled to have a representative

present at an autopsy ordered under this section.

(c)AAThe commissioner shall require the insurance carrier to

pay the costs of a procedure ordered under this section.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.130, eff.

SUBCHAPTER K. PROTECTION OF RIGHTS TO BENEFITS

Sec.A408.201.AABENEFITS EXEMPT FROM LEGAL PROCESS. Benefits

are exempt from:

(1)AAgarnishment;

(2)AAattachment;

(3)AAjudgment; and

(4)AAother actions or claims.

Sec. 408.202.AAASSIGNABILITY OF BENEFITS. Benefits are not

assignable, except a legal beneficiary may, with the commissioner ’s

approval, assign the right to death benefits.

79 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.131, eff.

Sec.A408.203.AAALLOWABLE LIENS. (a) An income or death

benefit is subject only to the following lien or claim, to the

extent the benefit is unpaid on the date the insurance carrier

receives written notice of the lien or claim, in the following order

of priority:

(1)AAan attorney ’s fee for representing an employee or

legal beneficiary in a matter arising under this subtitle;

(2)AAcourt-ordered child support; or

(3)AAa subrogation interest established under this

(b)AAA benefit that is subject to a lien or claim for payment

of court-ordered child support shall be paid as required by an order

or writ of income withholding under Chapter 158, Family Code.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 165, Sec. 7.53, eff. Sept. 1, 1997;

Acts 2003, 78th Leg., ch. 610, Sec. 22, eff. Sept. 1, 2003.

SUBCHAPTER L. ATTORNEY ’S FEES IN WORKERS ’ COMPENSATION BENEFIT

MATTERS

Sec.A408.221.AAATTORNEY ’S FEES PAID TO CLAIMANT ’S COUNSEL.

(a) An attorney ’s fee, including a contingency fee, for

representing a claimant before the division or court under this

subtitle must be approved by the commissioner or court.

(b)AAExcept as otherwise provided, an attorney ’s fee under

this section is based on the attorney ’s time and expenses according

to written evidence presented to the division or court.AAExcept as

provided by Subsection (c) or Section 408.147(c), the attorney ’s

fee shall be paid from the claimant ’s recovery.

(c)AAAn insurance carrier that seeks judicial review under

Subchapter G, Chapter 410, of a final decision of the appeals panel

regarding compensability or eligibility for, or the amount of,

80 income or death benefits is liable for reasonable and necessary

attorney ’s fees as provided by Subsection (d) incurred by the

claimant as a result of the insurance carrier ’s appeal if the

claimant prevails on an issue on which judicial review is sought by

the insurance carrier in accordance with the limitation of issues

contained in Section 410.302.AAIf the carrier appeals multiple

issues and the claimant prevails on some, but not all, of the issues

appealed, the court shall apportion and award fees to the

claimant ’s attorney only for the issues on which the claimant

prevails.AAIn making that apportionment, the court shall consider

the factors prescribed by Subsection (d).AAThis subsection does not

apply to attorney ’s fees for which an insurance carrier may be

liable under Section 408.147.AAAn award of attorney ’s fees under

this subsection is not subject to commissioner rules adopted under

Subsection (f).

(d)AAIn approving an attorney ’s fee under this section, the

commissioner or court shall consider:

(1)AAthe time and labor required;

(2)AAthe novelty and difficulty of the questions

involved;

(3)AAthe skill required to perform the legal services

properly;

(4)AAthe fee customarily charged in the locality for

similar legal services;

(5)AAthe amount involved in the controversy;

(6)AAthe benefits to the claimant that the attorney is

responsible for securing; and

(7)AAthe experience and ability of the attorney

performing the services.

(e)AAThe commissioner by rule or the court may provide for

the commutation of an attorney ’s fee, except that the attorney ’s fee

shall be paid in periodic payments in a claim involving death

benefits if the only dispute is as to the proper beneficiary or

beneficiaries.

(f)AAThe commissioner by rule shall provide guidelines for

maximum attorney ’s fees for specific services in accordance with

81 (g)AAAn attorney ’s fee may not be allowed in a case involving

a fatal injury or lifetime income benefit if the insurance carrier

admits liability on all issues and tenders payment of maximum

benefits in writing under this subtitle while the claim is pending

before the division.

(h)AAAn attorney ’s fee shall be paid to the attorney by

separate draft.

(i)AAExcept as provided by Subsection (c) or Section 408.

147(c), an attorney ’s fee may not exceed 25 percent of the

claimant ’s recovery.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 8.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.132, eff.

Sec. 408.222.AAATTORNEY ’S FEES PAID TO DEFENSE COUNSEL. (a)

The amount of an attorney ’s fee for defending an insurance carrier

in a workers ’ compensation action brought under this subtitle must

be approved by the division or court and determined by the division

or court to be reasonable and necessary.

(b)AAIn determining whether a fee is reasonable under this

section, the division or court shall consider issues analogous to

those listed under Section 408.221(d).AAThe defense counsel shall

present written evidence to the division or court relating to:

(1)AAthe time spent and expenses incurred in defending

the case; and

(2)AAother evidence considered necessary by the

division or court in making a determination under this section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 8.03, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.133, eff.

82 LABOR CODE

CHAPTER 409. COMPENSATION PROCEDURES

SUBCHAPTER A. INJURY REPORTS, CLAIMS, AND RECORDS

Sec.A409.001.AANOTICE OF INJURY TO EMPLOYER. (a) An

employee or a person acting on the employee ’s behalf shall notify

the employer of the employee of an injury not later than the 30th

day after the date on which:

(1)AAthe injury occurs; or

(2)AAif the injury is an occupational disease, the

employee knew or should have known that the injury may be related to

the employment.

(b)AAThe notice required under Subsection (a) may be given

to:

(1)AAthe employer; or

(2)AAan employee of the employer who holds a

supervisory or management position.

(c)AAIf the injury is an occupational disease, for purposes

of this section, the employer is the person who employed the

employee on the date of last injurious exposure to the hazards of

the disease.

Sec. 409.002.AAFAILURE TO FILE NOTICE OF INJURY. Failure to

notify an employer as required by Section 409.001(a) relieves the

employer and the employer ’s insurance carrier of liability under

this subtitle unless:

(1)AAthe employer, a person eligible to receive notice

under Section 409.001(b), or the employer ’s insurance carrier has

actual knowledge of the employee ’s injury;

(2)AAthe division determines that good cause exists for

failure to provide notice in a timely manner; or

(3)AAthe employer or the employer ’s insurance carrier

does not contest the claim.

1 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.134, eff.

Sec. 409.003.AACLAIM FOR COMPENSATION. An employee or a

person acting on the employee ’s behalf shall file with the division

a claim for compensation for an injury not later than one year after

the date on which:

(1)AAthe injury occurred; or

employee knew or should have known that the disease was related to

the employee ’s employment.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.135, eff.

Sec. 409.004.AAEFFECT OF FAILURE TO FILE CLAIM FOR

COMPENSATION. Failure to file a claim for compensation with the

division as required under Section 409.003 relieves the employer

and the employer ’s insurance carrier of liability under this

subtitle unless:

(1)AAgood cause exists for failure to file a claim in a

timely manner; or

(2)AAthe employer or the employer ’s insurance carrier

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.136, eff.

Sec.A409.005.AAREPORT OF INJURY; MODIFIED DUTY PROGRAM

NOTICE; ADMINISTRATIVE VIOLATION. (a) An employer shall report to

the employer ’s insurance carrier if:

(1)AAan injury results in the absence of an employee of

that employer from work for more than one day; or

2 (2)AAan employee of the employer notifies that employer

of an occupational disease under Section 409.001.

(b)AAThe report under Subsection (a) must be made not later

than the eighth day after:

(1)AAthe employee ’s absence from work for more than one

day due to an injury; or

(2)AAthe day on which the employer receives notice

under Section 409.001 that the employee has contracted an

(c)AAThe employer shall deliver a written copy of the report

under Subsection (a) to the injured employee at the time that the

report is made to the insurance carrier.

(d)AAThe insurance carrier shall file the report of the

injury on behalf of the policyholder.AAExcept as provided by

Subsection (e), the insurance carrier must electronically file the

report with the division not later than the seventh day after the

date on which the carrier receives the report from the employer.

(e)AAThe commissioner may waive the electronic filing

requirement under Subsection (d) and allow an insurance carrier to

mail or deliver the report to the division not later than the

seventh day after the date on which the carrier receives the report

from the employer.

(f)AAA report required under this section may not be

considered to be an admission by or evidence against an employer or

an insurance carrier in a proceeding before the division or a court

in which the facts set out in the report are contradicted by the

employer or insurance carrier.

(g)AAIn addition to any information required under

Subsection (h), the report provided to the injured employee under

Subsection (c) must contain a summary written in plain language of

the employee ’s statutory rights and responsibilities under this

(h)AAThe commissioner may adopt rules relating to:

(1)AAthe information that must be contained in a report

required under this section, including the summary of rights and

responsibilities required under Subsection (g); and

(2)AAthe development and implementation of an

3 electronic filing system for injury reports under this section.

(i)AAAn employer and insurance carrier shall file subsequent

reports as required by commissioner rule.

(j)AAThe employer shall, on the written request of the

employee, a doctor, the insurance carrier, or the division, notify

the employee, the employee ’s treating doctor if known to the

employer, and the insurance carrier of the existence or absence of

opportunities for modified duty or a modified duty return-to-work

program available through the employer.AAIf those opportunities or

that program exists, the employer shall identify the employer ’s

contact person and provide other information to assist the doctor,

the employee, and the insurance carrier to assess modified duty or

return-to-work options.

(k)AAThis section does not prohibit the commissioner from

imposing requirements relating to return-to-work under other

authority granted to the division in this subtitle.

(l)AAA person commits an administrative violation if the

person fails to comply with this section unless good cause exists.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.29, eff. Sept. 1, 1995;

Acts 2001, 77th Leg., ch. 1456, Sec. 3.01, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.137, eff.

Sec.A409.006.AARECORD OF INJURIES; ADMINISTRATIVE

VIOLATION. (a) An employer shall maintain a record of each

employee injury as reported by an employee or otherwise made known

to the employer.

(b)AAThe record shall be available to the division at

reasonable times and under conditions prescribed by the

(c)AAThe commissioner may adopt rules relating to the

information that must be contained in an employer record under this

(d)AAInformation contained in a record maintained under this

section is not an admission by the employer that:

4 (1)AAthe injury did in fact occur; or

(2)AAa fact maintained in the record is true.

(e)AAA person commits an administrative violation if the

person fails to comply with this section.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.138, eff.

Sec.A409.007.AADEATH BENEFIT CLAIMS. (a) A person must file

a claim for death benefits with the division not later than the

first anniversary of the date of the employee ’s death.

(b)AAFailure to file in the time required by Subsection (a)

bars the claim unless:

(1)AAthe person is a minor or incompetent; or

(2)AAgood cause exists for the failure to file a claim

under this section.

(c)AAA separate claim must be filed for each legal

beneficiary unless the claim expressly includes or is made on

behalf of another person.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.139, eff.

Sec.A409.008.AAFAILURE TO FILE EMPLOYER REPORT OF INJURY;

LIMITATIONS TOLLED. If an employer or the employer ’s insurance

carrier has been given notice or has knowledge of an injury to or

the death of an employee and the employer or insurance carrier

fails, neglects, or refuses to file the report under Section

409.005, the period for filing a claim for compensation under

Sections 409.003 and 409.007 does not begin to run against the claim

of an injured employee or a legal beneficiary until the day on which

the report required under Section 409.005 has been furnished.

Sec. 409.009.AASUBCLAIMS. A person may file a written claim

5 with the division as a subclaimant if the person has:

(1)AAprovided compensation, including health care

provided by a health care insurer, directly or indirectly, to or for

an employee or legal beneficiary; and

(2)AAsought and been refused reimbursement from the

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.140, eff.

Sec. 409.0091.AAREIMBURSEMENT PROCEDURES FOR CERTAIN

ENTITIES. (a) In this section, "health care insurer" means an

insurance carrier and an authorized representative of an insurance

carrier, as described by Section 402.084(c-1).

(b)AAThis section applies only to a request for reimbursement

by a health care insurer.

(c)AAHealth care paid by a health care insurer may be

reimbursable as a medical benefit.

(d)AAExcept as provided by Subsection (e), this section does

not prohibit or limit a substantive defense by a workers ’

compensation insurance carrier that the health care paid for by the

health care insurer was not a medical benefit or not a correct

payment.AAA subclaimant may not be reimbursed for payment for any

health care that was previously denied by a workers ’ compensation

insurance carrier under:

(1)AAa preauthorization review of the specific service

or medical procedure; or

(2)AAa medical necessity review that determined the

service was not medically necessary for the treatment of a

(e)AAIt is not a defense to a subclaim by a health care

insurer that:

(1)AAthe subclaimant has not sought reimbursement from

a health care provider or the subclaimant ’s insured;

(2)AAthe subclaimant or the health care provider did

not request preauthorization under Section 413.014 or rules adopted

6 under that section; or

(3)AAthe health care provider did not bill the workers ’

compensation insurance carrier, as provided by Section 408.027,

before the 95th day after the date the health care for which the

subclaimant paid was provided.

(f)AASubject to the time limits under Subsection (n), the

health care insurer shall provide, with any reimbursement request,

the tax identification number of the health care insurer and the

following to the workers ’ compensation insurance carrier, in a form

prescribed by the division:

(1)AAinformation identifying the workers ’ compensation

case, including:

(A)AAthe division claim number;

(B)AAthe name of the patient or claimant;

(C)AAthe social security number of the patient or

claimant; and

(D)AAthe date of the injury; and

(2)AAinformation describing the health care paid by the

health care insurer, including:

(A)AAthe name of the health care provider;

(B)AAthe tax identification number of the health

care provider;

(C)AAthe date of service;

(D)AAthe place of service;

(E)AAthe ICD-9 code;

(F)AAthe CPT, HCPCS, NDC, or revenue code;

(G)AAthe amount charged by the health care

provider; and

(H)AAthe amount paid by the health care insurer.

(g)AAThe workers ’ compensation insurance carrier shall

reduce the amount of the reimbursable subclaim by any payments the

workers ’ compensation insurance carrierAApreviously made to the

same health care provider for the provision of the same health care

on the same dates of service.AAIn making such a reduction in

reimbursement to the subclaimant, the workers ’ compensation

insurance carrier shall provide evidence of the previous payments

made to the provider.

7 (h)AAFor each medical benefit paid, the workers ’

compensation insurance carrier shall pay to the health care insurer

the lesser of the amount payable under the applicable fee guideline

as of the date of service or the actual amount paid by the health

care insurer.AAIn the absence of a fee guideline for a specific

service paid, the amount per service paid by the health care insurer

shall be considered in determining a fair and reasonable payment

under rules under this subtitle defining fair and reasonable

medical reimbursement.AAThe health care insurer may not recover

interest as a part of the subclaim.

(i)AAOn receipt of a request for reimbursement under this

section, the workers ’ compensation insurance carrier shall respond

to the request in writing not later than the 90th day after the date

on which the request is received.AAIf additional information is

requested under Subsection (j), the workers ’ compensation

insurance carrier shall respond not later than the 120th day unless

the time is extended under Subsection (j).

(j)AAIf the workers ’ compensation insurance carrier requires

additional information from the health care insurer, the workers ’

compensation insurance carrier shall send notice to the health care

insurer requesting the additional information. The health care

insurer shall have 30 days to provide the requested

information.AAThe workers ’ compensation insurance carrier and the

health care insurer may establish additional periods for compliance

with this subsection by written mutual agreement.

(k)AAUnless the parties have agreed to an extension of time

under Subsection (j), the health care insurer must file a written

subclaim under this section not later than the 120th day after:

(1)AAthe workers ’ compensation insurance carrier fails

to respond to a request for reimbursement; or

(2)AAreceipt of the workers ’ compensation insurance

carrier ’s notice of denial to pay or reduction in reimbursement.

(l)AAAny dispute that arises from a failure to respond to or a

reduction or denial of a request for reimbursement of services that

form the basis of the subclaim must go through the appropriate

dispute resolution process under this subtitle and division

rules.AAThe commissioner of insurance and the commissioner of

8 workers ’ compensation shall modify rules under this subtitle as

necessary to allow the health care insurer access as a subclaimant

to the appropriate dispute resolution process.AARules adopted or

amended by the commissioner of insurance and the commissioner of

workers ’ compensation must recognize the status of a subclaimant as

a party to the dispute.AARules modified or adopted under this

section should ensure that the workers ’ compensation insurance

carrier is not penalized, including not being held responsible for

costs of obtaining the additional information, if the workers ’

compensation insurance carrier denies payment in order to move to

dispute resolution to obtain additional information to process the

request.

(m)AAIn a dispute filed under Chapter 410 that arises from a

subclaim under this section, a hearing officer may issue an order

regarding compensability or eligibility for benefits and order the

workers ’ compensation insurance carrier to reimburse health care

services paid by the health care insurer as appropriate under this

subtitle.AAAny dispute over the amount of medical benefits owed

under this section, including medical necessity issues, shall be

determined by medical dispute resolution under Sections 413.031 and

413.032.

(n)AAExcept as provided by Subsection (s), a health care

insurer must file a request for reimbursement with the workers ’

compensation insurance carrier not later than six months after the

date on which the health care insurer received information under

Section 402.084(c-3) and not later than 18 months after the health

care insurer paid for the health care service.

(o)AAThe commissioner and the commissioner of insurance

shall amend or adopt rules to specify the process by which an

employee who has paid for health care services described by Section

408.027(d) may seek reimbursement.

(p)AAUntil September 1, 2011, a workers ’ compensation

insurance carrier is exempt from any department and division data

reporting requirements affected by a lack of information caused by

reimbursement requests or subclaims under this section.AAIf data

reporting is required after that date, the requirement is

prospective only and may not require any data to be reported between

9 September 1, 2007, and the date required reporting is

reinstated.AAThe department and the division may make legislative

recommendations to the 82nd Legislature for the collection of

reimbursement request and subclaim data.

(q)AAAn action or failure to act by a workers ’ compensation

insurance carrier under this section may not serve as the basis for

an examination or administrative action by the department or the

division, or for any cause of action by any person, except for

judicial review under this subtitle.

(r)AAThe commissioner of insurance and the commissioner of

workers ’ compensation may adopt additional rules to clarify the

processes required by, fulfill the purpose of, or assist the

parties in the proper adjudication of subclaims under this section.

(s)AAOn or after September 1, 2007, from information provided

to a health care insurer before January 1, 2007, under Section

402.084(c-3), the health care insurer may file not later than March

1, 2008:

(1)AAa subclaim with the division under Subsection (l)

if a request for reimbursement has been presented and denied by a

workers ’ compensation insurance carrier; or

(2)AAa request for reimbursement under Subsection (f)

if a request for reimbursement has not previously been presented

and denied by the workers ’ compensation insurance carrier.

Added by Acts 2007, 80th Leg., R.S., Ch. 1007 (H.B. 724), Sec. 8,

Sec. 409.010.AAINFORMATION PROVIDED TO EMPLOYEE OR LEGAL

BENEFICIARY. Immediately on receiving notice of an injury or death

from any person, the division shall mail to the employee or legal

beneficiary a clear and concise description of:

(1)AAthe services provided by:

(A)AAthe division; and

(B)AAthe office of injured employee counsel,

including the services of the ombudsman program;

(2)AAthe division ’s procedures; and

(3)AAthe person ’s rights and responsibilities under

10 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.141, eff.

Sec.A409.011.AAINFORMATION PROVIDED TO EMPLOYER; EMPLOYER ’S

RIGHTS. (a) Immediately on receiving notice of an injury or death

from any person, the division shall mail to the employer a

description of:

(1)AAthe services provided by the division and the

office of injured employee counsel;

(3)AAthe employer ’s rights and responsibilities under

(b)AAThe information must include a clear statement of the

following rights of the employer:

(1)AAthe right to be present at all administrative

proceedings relating to an employee ’s claim;

(2)AAthe right to present relevant evidence relating to

an employee ’s claim at any proceeding;

(3)AAthe right to report suspected fraud;

(4)AAthe right to contest the compensability of an

injury if the insurance carrier accepts liability for the payment

of benefits;

(5)AAthe right to receive notice, after making a

written request to the insurance carrier, of:

(A)AAa proposal to settle a claim; or

(B)AAan administrative or a judicial proceeding

relating to the resolution of a claim; and

(6)AAthe right to contest the failure of the insurance

carrier to provide accident prevention services under Subchapter E,

Chapter 411.

(c)AAThe division is not required to provide the information

to an employer more than once during a calendar year.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.142, eff.

11 September 1, 2005.

Sec. 409.012.AAVOCATIONAL REHABILITATION INFORMATION. (a)

The division shall analyze each report of injury received from an

employer under this chapter to determine whether the injured

employee would be assisted by vocational rehabilitation.

(b)AAIf the division determines that an injured employee

would be assisted by vocational rehabilitation, the division shall

notify:

(1)AAthe injured employee in writing of the services

and facilities available through the Department of Assistive and

Rehabilitative Services and private providers of vocational

rehabilitation; and

(2)AAthe Department of Assistive and Rehabilitative

Services and the affected insurance carrier that the injured

employee has been identified as one who could be assisted by

vocational rehabilitation.

(c)AAThe division shall cooperate with the office of injured

employee counsel, the Department of Assistive and Rehabilitative

Services, and private providers of vocational rehabilitation in the

provision of services and facilities to employees by the Department

of Assistive and Rehabilitative Services.

(d)AAA private provider of vocational rehabilitation

services may register with the division.

(e)AAThe commissioner by rule may require that a private

provider of vocational rehabilitation services maintain certain

credentials and qualifications in order to provide services in

connection with a workers ’ compensation insurance claim.

(f)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1083, Sec.

25(127), eff. June 17, 2011.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 956, Sec. 2, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.143, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1083 (S.B. 1179), Sec.

12 Sec. 409.013.AAPLAIN LANGUAGE INFORMATION; NOTIFICATION OF

INJURED EMPLOYEE. (a) The division shall develop information for

public dissemination about the benefit process and the compensation

procedures established under this chapter.AAThe information must

be written in plain language and must be available in English and

Spanish.

(b)AAOn receipt of a report under Section 409.005, the

division shall contact the affected employee by mail or by

telephone and shall provide the information required under

Subsection (a) to that employee, together with any other

information that may be prepared by the office of injured employee

counsel or the division for public dissemination that relates to

the employee ’s situation, such as information relating to back

injuries or occupational diseases.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.30, eff. Sept. 1,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.144, eff.

SUBCHAPTER B. PAYMENT OF BENEFITS

Sec.A409.021.AAINITIATION OF BENEFITS; INSURANCE CARRIER ’S

REFUSAL; ADMINISTRATIVE VIOLATION. (a) An insurance carrier

shall initiate compensation under this subtitle promptly.AANot

later than the 15th day after the date on which an insurance carrier

receives written notice of an injury, the insurance carrier shall:

(1)AAbegin the payment of benefits as required by this

subtitle; or

(2)AAnotify the division and the employee in writing of

its refusal to pay and advise the employee of:

(A)AAthe right to request a benefit review

conference; and

(B)AAthe means to obtain additional information

from the division.

(a-1)AAAn insurance carrier that fails to comply with

13 Subsection (a) does not waive the carrier ’s right to contest the

compensability of the injury as provided by Subsection (c) but

commits an administrative violation subject to Subsection (e).

(a-2)AAAn insurance carrier is not required to comply with

Subsection (a) if the insurance carrier has accepted the claim as a

compensable injury and income or death benefits have not yet

accrued but will be paid by the insurance carrier when the benefits

accrue and are due.

(b)AAAn insurance carrier shall notify the division in

writing of the initiation of income or death benefit payments in the

manner prescribed by commissioner rules.

(c)AAIf an insurance carrier does not contest the

compensability of an injury on or before the 60th day after the date

on which the insurance carrier is notified of the injury, the

insurance carrier waives its right to contest compensability. The

initiation of payments by an insurance carrier does not affect the

right of the insurance carrier to continue to investigate or deny

the compensability of an injury during the 60-day period.

(d)AAAn insurance carrier may reopen the issue of the

compensability of an injury if there is a finding of evidence that

could not reasonably have been discovered earlier.

(e)AAAn insurance carrier commits an administrative

violation if the insurance carrier does not initiate payments or

file a notice of refusal as required by this section.

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 939, Sec. 1

(f)AAFor purposes of this section, "written notice" to a

certified self-insurer occurs only on written notice to the

qualified claims servicing contractor designated by the certified

self-insurer under Section 407.061(c).

Text of subsec. (f) as added by Acts 2003, 78th Leg., ch. 1100, Sec.

(f)AAFor purposes of this section:

(1)AAa certified self-insurer receives notice on the

14 date the qualified claims servicing contractor designated by the

certified self-insurer under Section 407.061(c) receives notice;

(2)AAa political subdivision that self-insures under

Section 504.011, either individually or through an interlocal

agreement with other political subdivisions, receives notice on the

date the intergovernmental risk pool or other entity responsible

for administering the claim for the political subdivision receives

notice.

(j)AAEach insurance carrier shall establish a single point of

contact in the carrier ’s office for an injured employee for whom the

carrier receives a notice of injury.

Added by Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 2003, 78th Leg., ch. 939, Sec. 1, eff. Sept. 1,

2003; Acts 2003, 78th Leg., ch. 1100, Sec. 1, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.145, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 13,

Sec.A409.022.AAREFUSAL TO PAY BENEFITS; NOTICE;

ADMINISTRATIVE VIOLATION. (a) An insurance carrier ’s notice of

refusal to pay benefits under Section 409.021 must specify the

grounds for the refusal.

(b)AAThe grounds for the refusal specified in the notice

constitute the only basis for the insurance carrier ’s defense on

the issue of compensability in a subsequent proceeding, unless the

defense is based on newly discovered evidence that could not

reasonably have been discovered at an earlier date.

(c)AAAn insurance carrier commits an administrative

violation if the insurance carrier does not have reasonable grounds

for a refusal to pay benefits, as determined by the commissioner.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.146, eff.

15 Sec.A409.023.AAPAYMENT OF BENEFITS; ADMINISTRATIVE

VIOLATION. (a) An insurance carrier shall continue to pay benefits

promptly as and when the benefits accrue without a final decision,

order, or other action of the commissioner, except as otherwise

provided.

(b)AABenefits shall be paid solely to the order of the

employee or the employee ’s legal beneficiary.

violation if the insurance carrier fails to comply with this

(d)AAAn insurance carrier that commits multiple violations

of this section commits an additional administrative violation and

is subject to:

(1)AAthe sanctions provided under Section 415.023; and

(2)AArevocation of the right to do business under the

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.147, eff.

Sec.A409.0231.AAPAYMENT BY ELECTRONIC FUNDS TRANSFER. (a)

An insurance carrier shall offer employees entitled to the payment

of benefits for a period of sufficient duration the option of

receiving the payments by electronic funds transfer. The insurance

carrier shall provide the necessary forms to an employee who

requests that benefits be paid by electronic funds transfer.

(b)AAThe commissioner shall adopt rules in consultation with

the Texas Department of Information Resources as necessary to

implement this section, including rules prescribing a period of

benefits that is of sufficient duration to allow payment by

electronic funds transfer.

Added by Acts 1999, 76th Leg., ch. 690, Sec. 1, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.148, eff.

16 Sec.A409.0232.AATIMELINESS OF PAYMENTS. An insurance

carrier is considered to have paid benefits in a timely manner if a

payment:

(1)AAis made by electronic funds transfer and is

deposited in the employee ’s account on or before the benefit

payment due date;

(2)AAis made by mail and is mailed in time for the

payment to be postmarked on or before the benefit payment due date;

(3)AAis to be picked up by the employee and the payment

is made available to the employee during regular business hours not

later than the opening of business on the benefit payment due date.

Added by Acts 1999, 76th Leg., ch. 690, Sec. 1, eff. June 18, 1999.

Sec. 409.024.AATERMINATION OR REDUCTION OF BENEFITS; NOTICE;

ADMINISTRATIVE VIOLATION. (a) An insurance carrier shall file

with the division a notice of termination or reduction of benefits,

including the reasons for the termination or reduction, not later

than the 10th day after the date on which benefits are terminated or

reduced.

(b)AAAn insurance carrier commits an administrative

violation if the insurance carrier does not have reasonable grounds

to terminate or reduce benefits, as determined by the commissioner.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.149, eff.

17 LABOR CODE

CHAPTER 410. ADJUDICATION OF DISPUTES

Sec. 410.002.AALAW GOVERNING LIABILITY PROCEEDINGS. A

proceeding before the division to determine the liability of an

insurance carrier for compensation for an injury or death under

this subtitle is governed by this chapter.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.150, eff.

Sec.A410.003.AAAPPLICATION OF ADMINISTRATIVE PROCEDURE AND

TEXAS REGISTER ACT. Except as otherwise provided by this chapter,

Chapter 2001, Government Code does not apply to a proceeding under

this chapter.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995.

Sec.A410.005.AAVENUE FOR ADMINISTRATIVE PROCEEDINGS. (a)

Unless the division determines that good cause exists for the

selection of a different location, a benefit review conference or a

contested case hearing may not be conducted at a site more than 75

miles from the claimant ’s residence at the time of the injury.

(b)AAUnless the assigned arbitrator determines that good

cause exists for the selection of a different location, arbitration

may not be conducted at a site more than 75 miles from the

claimant ’s residence at the time of the injury.

(c)AAAll appeals panel proceedings shall be conducted in

Travis County.

(d)AANotwithstanding Subsection (a), the division may

conduct a benefit review conference telephonically on agreement by

the injured employee.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.151, eff.

Sec.A410.006.AAREPRESENTATION AT ADMINISTRATIVE

PROCEEDINGS. (a) A claimant may be represented at a benefit review

conference, a contested case hearing, or arbitration by an attorney

or may be assisted by an individual of the claimant ’s choice who

does not work for an attorney or receive a fee. An employee of an

attorney may represent a claimant if that employee:

(1)AAis a relative of the claimant; and

(2)AAdoes not receive a fee.

(b)AAAn insurance carrier may be represented by an attorney

or adjuster.

Sec. 410.007.AAINFORMATION LIST. (a) The division shall

determine the type of information that is most useful to parties to

help resolve disputes regarding income benefits. That information

may include:

(1)AAreports regarding the compensable injury;

(2)AAmedical information regarding the injured

employee; and

(3)AAwage records.

(b)AAThe division shall publish a list developed from the

information described under Subsection (a) in appropriate media,

including the division ’s Internet website, to provide guidance to a

party to a dispute regarding the type of information the party

should have available at a benefit review conference or a contested

case hearing.

(c)AAAt the time a benefit review conference or contested

case hearing is scheduled, the division shall make available a copy

of the list developed under Subsection (b) to each party to the

dispute.

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.152, eff.

2 SUBCHAPTER B. BENEFIT REVIEW CONFERENCE

Sec. 410.021.AAPURPOSE. A benefit review conference is a

nonadversarial, informal dispute resolution proceeding designed

(1)AAexplain, orally and in writing, the rights of the

respective parties to a workers ’ compensation claim and the

procedures necessary to protect those rights;

(2)AAdiscuss the facts of the claim, review available

information in order to evaluate the claim, and delineate the

disputed issues; and

(3)AAmediate and resolve disputed issues by agreement

of the parties in accordance with this subtitle and the policies of

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.153, eff.

Sec.A410.022.AABENEFIT REVIEW OFFICERS; QUALIFICATIONS.

(a) A benefit review officer shall conduct a benefit review

conference.

(b)AAA benefit review officer must:

(1)AAbe an employee of the division;

(2)AAbe trained in the principles and procedures of

dispute mediation; and

(3)AAhave documentation satisfactory to the

commissioner that evidences the completion by the officer of at

least 40 classroom hours of training in dispute resolution

techniques from an alternative dispute resolution organization

recognized by the commissioner.

(c)AAThe division shall institute and maintain an education

and training program for benefit review officers and shall consult

or contract with the Federal Mediation and Conciliation Service or

other appropriate organizations for this purpose.

3 Amended by:

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.154, eff.

Sec. 410.023.AAREQUEST FOR BENEFIT REVIEW CONFERENCE. (a)

On receipt of a request from a party or on its own motion, the

division may direct the parties to a disputed workers ’ compensation

claim to meet in a benefit review conference to attempt to reach

agreement on disputed issues involved in the claim.

(b)AAThe division shall require the party requesting the

benefit review conference to provide documentation of efforts made

to resolve the disputed issues before the request was submitted.

(c)AAThe commissioner by rule shall:

(1)AAadopt guidelines regarding the type of information

necessary to satisfy the requirements of Subsection (b); and

(2)AAestablish a process through which the division

evaluates the sufficiency of the documentation provided under

Subsection (b).

(d)AAThe division may deny a request for a benefit review

conference if the party requesting the benefit review conference

does not provide the documentation required under Subsection (b).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.155, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 14,

Sec. 410.024.AABENEFIT REVIEW CONFERENCE AS PREREQUISITE TO

FURTHER PROCEEDINGS ON CERTAIN CLAIMS. (a) Except as otherwise

provided by law or commissioner rule, the parties to a disputed

compensation claim are not entitled to a contested case hearing or

arbitration on the claim unless a benefit review conference is

conducted as provided by this subchapter.

(b)AAThe commissioner by rule shall adopt guidelines

relating to claims that do not require a benefit review conference

and may proceed directly to a contested case hearing or

4 arbitration.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.156, eff.

Sec. 410.025.AASCHEDULING OF BENEFIT REVIEW CONFERENCE;

NOTICE. (a) The commissioner by rule shall prescribe the time

within which a benefit review conference must be scheduled.

(b)AAThe division shall schedule a contested case hearing to

be held not later than the 60th day after the date of the benefit

review conference if the disputed issues are not resolved at the

benefit review conference.

(c)AAThe division shall send written notice of the benefit

review conference to the parties to the claim and the employer.

(d)AAThe commissioner by rule shall provide for expedited

proceedings in cases in which compensability or liability for

essential medical treatment is in dispute.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.157, eff.

Sec.A410.026.AAPOWERS AND DUTIES OF BENEFIT REVIEW OFFICER.

(a) A benefit review officer shall:

(1)AAmediate disputes between the parties and assist in

the adjustment of the claim consistent with this subtitle and the

policies of the division;

(2)AAthoroughly inform all parties of their rights and

responsibilities under this subtitle, especially in a case in which

the employee is not represented by an attorney or other

(3)AAensure that all documents and information relating

to the employee ’s wages, medical condition, and any other

information pertinent to the resolution of disputed issues are

contained in the claim file at the conference, especially in a case

in which the employee is not represented by an attorney or other

5 representative; and

(4)AAprepare a written report that details each issue

that is not resolved at the benefit review conference, as required

under Section 410.031, including any issue raised for the first

time at the conclusion of an additional benefit review conference

conducted under Subsection (b).

(b)AAA benefit review officer may schedule an

additionalAAbenefit review conference if:

(1)AAthe benefit review officer determines that any

available information pertinent to the resolution of disputed

issues was not produced at the initial benefit review conference;

(2)AAa second benefit review conference has not already

been conducted.

(c)AAA benefit review officer may not take testimony but may

direct questions to an employee, an employer, or a representative

of an insurance carrier to supplement or clarify information in a

claim file.

(d)AAA benefit review officer may not make a formal record.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.158, eff.

Sec.A410.027.AARULES. (a) The commissioner shall adopt

rules for conducting benefit review conferences.

(b)AAA benefit review conference is not subject to common law

or statutory rules of evidence or procedure.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.159, eff.

Sec. 410.028.AAFAILURE TO ATTEND; ADMINISTRATIVE VIOLATION.

(a)AAA scheduled benefit review conference shall be conducted even

though a party fails to attend unless the benefit review officer

determines that good cause, as defined by commissioner rule, exists

6 to reschedule the conference.

(b)AAIf a party to a benefit review conference under Section

410.023 requests that the benefit review conference be rescheduled

under this section, the party must submit a request in the same

manner as an initial request under Section 410.023.AAThe division

shall evaluate a request for a rescheduled benefit review

conference received under this section in the same manner as an

initial request received under Section 410.023.

(c)AAIf a party fails to request that a benefit review

conference be rescheduled in the time required by commissioner rule

or fails to attend a benefit review conference without good cause as

defined by commissioner rule, the party forfeits the party ’s

entitlement to attend a benefit review conference on the issue in

dispute, unless a benefit review officer is authorized to schedule

an additional benefit review conference under Section 410.026(b).

(d)AAThe commissioner shall adopt rules necessary to

implement and enforce this section, including rules that:

(1)AAdefine good cause; and

(2)AAestablish deadlines for requesting that a benefit

review conference be rescheduled under Subsection (b).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.160, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 15,

Sec.A410.029.AARESOLUTION AT BENEFIT REVIEW CONFERENCE;

WRITTEN AGREEMENT. (a) A dispute may be resolved either in whole

or in part at a benefit review conference.

(b)AAIf the conference results in the resolution of some

disputed issues by agreement or in a settlement, the benefit review

officer shall reduce the agreement or the settlement to writing.

The benefit review officer and each party or the designated

representative of the party shall sign the agreement or settlement.

(c)AAA settlement takes effect on the date it is approved by

the director in accordance with Section 408.005.

7 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 410.030.AABINDING EFFECT OF AGREEMENT. (a) An

agreement signed in accordance with Section 410.029 is binding on

the insurance carrier through the conclusion of all matters

relating to the claim, unless the division or a court, on a finding

of fraud, newly discovered evidence, or other good and sufficient

cause, relieves the insurance carrier of the effect of the

agreement.

(b)AAThe agreement is binding on the claimant, if represented

by an attorney, to the same extent as on the insurance carrier.AAIf

the claimant is not represented by an attorney, the agreement is

binding on the claimant through the conclusion of all matters

relating to the claim while the claim is pending before the

division, unless the commissioner for good cause relieves the

claimant of the effect of the agreement.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.161, eff.

Sec. 410.031.AAINCOMPLETE RESOLUTION; REPORT. (a) If a

dispute is not entirely resolved at a benefit review conference,

the benefit review officer shall prepare a written report that

details each issue that is not resolved at the conference.

(b)AAThe report must also include:

(1)AAa statement of each resolved issue;

(2)AAa statement of each issue raised but not resolved;

(3)AAa statement of the position of the parties

regarding each unresolved issue;

(4)AA a statement of the procedures required to request

a contested case hearing or arbitration and a complete explanation

of the differences in those proceedings and the rights of the

parties to subsequent review of the determinations made in those

proceedings; and

(5)AAthe date of the contested case hearing scheduled

in accordance with Section 410.025(b).

8 Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.162, eff.

Text of section as amended by Acts 2007, 80th Leg., R.S., Ch. 1177

(H.B. 473), Sec. 1

For text of section as amended by Acts 2007, 80th Leg., R.S., Ch.

1150 (S.B. 1169), Sec. 4, see other Sec. 410.032.

Sec. 410.032. PAYMENT OF BENEFITS UNDER INTERLOCUTORY ORDER.

(a) The benefit review officer who presides at the benefit review

conference shall consider a request for an interlocutory order and

shall give the opposing party the opportunity to respond before

issuing an interlocutory order.

(b)AAThe interlocutory order may address the payment or

suspension of accrued benefits, future benefits, or both accrued

benefits and future benefits.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 955, Sec. 2, eff. Sept. 1, 1999.

Acts 2007, 80th Leg., R.S., Ch. 1177 (H.B. 473), Sec. 1, eff.

Text of section as amended by Acts 2007, 80th Leg., R.S., Ch. 1150

(S.B. 1169), Sec. 4

For text of section as amended by Acts 2007, 80th Leg., R.S., Ch.

1177 (H.B. 473), Sec. 1, see other Sec. 410.032.

Sec. 410.032.AAPAYMENT OF BENEFITS UNDER INTERLOCUTORY

ORDER. (a) The benefit review officer who presides at the benefit

review conference shall:

(1)AAconsider a written or verbal request for an

interlocutory order for the payment of benefits; and

(2)AAif the benefit review officer determines that

issuance of an interlocutory order is appropriate, issue the

interlocutory order not later than the third day after the date of

9 receipt of the request under Subdivision (1).

(b)AAThe interlocutory order may address accrued benefits,

future benefits, or both accrued benefits and future benefits.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 955, Sec. 2, eff. Sept. 1, 1999.

Acts 2007, 80th Leg., R.S., Ch. 1150 (S.B. 1169), Sec. 4, eff.

Sec.A410.033.AAMULTIPLE CARRIERS. (a) If there is a dispute

as to which of two or more insurance carriers is liable for

compensation for one or more compensable injuries, the commissioner

may issue an interlocutory order directing each insurance carrier

to pay a proportionate share of benefits due pending a final

decision on liability.AAThe proportionate share is computed by

dividing the compensation due by the number of insurance carriers

involved.

(b)AAOn final determination of liability, an insurance

carrier determined to be not liable for the payment of benefits is

entitled to reimbursement for the share paid by the insurance

carrier from any insurance carrier determined to be liable.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.163, eff.

Sec. 410.034.AAFILING OF AGREEMENT AND REPORT. (a) The

benefit review officer shall file the signed agreement and the

report with the division.

(b)AAThe commissioner by rule shall prescribe the times

within which the agreement and report must be filed.

(c)AAThe division shall furnish a copy of the file-stamped

report to:

(1)AAthe claimant;

(2)AAthe employer; and

10 (3)AAthe insurance carrier.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.164, eff.

SUBCHAPTER C. ARBITRATION

Sec.A410.101.AAPURPOSE. The purpose of arbitration is to:

(1)AAenter into formal, binding stipulations on issues

on which the parties agree;

(2)AAresolve issues on which the parties disagree; and

(3)AArender a final award with respect to all issues in

Sec. 410.102.AAARBITRATORS; QUALIFICATIONS. (a) An

arbitrator must be an employee of the division, except that the

division may contract with qualified arbitrators on a determination

of special need.

(b)AAAn arbitrator must:

(1)AAbe a member of the National Academy of

Arbitrators;

(2)AAbe on an approved list of the American Arbitration

Association or Federal Mediation and Conciliation Service; or

(3)AAmeet qualifications established by the

commissioner by rule.

(c)AAThe division shall require that each arbitrator have

appropriate training in the workers ’ compensation laws of this

state.AAThe commissioner shall establish procedures to carry out

this subsection.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.165, eff.

Sec. 410.103.AADUTIES OF ARBITRATOR. An arbitrator shall:

11 (1)AAprotect the interests of all parties;

(2)AAensure that all relevant evidence has been

disclosed to the arbitrator and to all parties; and

(3)AArender an award consistent with this subtitle and

the policies of the division.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.166, eff.

Sec.A410.104.AAELECTION OF ARBITRATION; EFFECT. (a) If

issues remain unresolved after a benefit review conference, the

parties, by agreement, may elect to engage in arbitration in the

manner provided by this subchapter. Arbitration may be used only to

resolve disputed benefit issues and is an alternative to a

contested case hearing. A contested case hearing scheduled under

Section 410.025(b) is canceled by an election under this

(b)AATo elect arbitration, the parties must file the election

with the division not later than the 20th day after the last day of

the benefit review conference.AAThe commissioner shall prescribe a

form for that purpose.

(c)AAAn election to engage in arbitration under this

subchapter is irrevocable and binding on all parties for the

resolution of all disputes arising out of the claims that are under

the jurisdiction of the division.

(d)AAAn agreement to elect arbitration binds the parties to

the provisions of Chapter 408 relating to benefits, and any award,

agreement, or settlement after arbitration is elected must comply

with that chapter.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.167, eff.

Sec. 410.105.AALISTS OF ARBITRATORS. (a) The division shall

establish regional lists of arbitrators who meet the qualifications

12 prescribed under Sections 410.102(a) and (b).AAEach regional list

shall be initially prepared in a random name order, and subsequent

additions to a list shall be added chronologically.

(b)AAThe commissioner shall review the lists of arbitrators

annually and determine if each arbitrator is fair and impartial and

makes awards that are consistent with and in accordance with this

subtitle and the rules of the commissioner.AAThe commissioner shall

remove an arbitrator if, after the review, the commissioner

determines that the arbitrator is not fair and impartial or does not

make awards consistent with this subtitle and commissioner rules.

(c)AAThe division ’s lists are confidential and are not

subject to disclosure under Chapter 552, Government Code.AAThe

lists may not be revealed by any division employee to any person who

is not a division employee.AAThe lists are exempt from discovery in

civil litigation unless the party seeking the discovery establishes

reasonable cause to believe that a violation of the requirements of

this section or Section 410.106, 410.107, 410.108, or 410.109(b)

occurred and that the violation is relevant to the issues in

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.168, eff.

Sec. 410.106.AASELECTION OF ARBITRATOR. The division shall

assign the arbitrator for a particular case by selecting the next

name after the previous case ’s selection in consecutive order.AAThe

division may not change the order of names once the order is

established under this subchapter, except that once each arbitrator

on the list has been assigned to a case, the names shall be randomly

reordered.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.169, eff.

13 Sec.A410.107.AAASSIGNMENT OF ARBITRATOR. (a) The division

shall assign an arbitrator to a pending case not later than the 30th

day after the date on which the election for arbitration is filed

(b)AAWhen an arbitrator has been assigned to a case under

Subsection (a), the parties shall be notified immediately.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.170, eff.

Sec.A410.108.AAREJECTION OF ARBITRATOR. (a) Each party is

entitled, in its sole discretion, to one rejection of the

arbitrator in each case.AAIf a party rejects the arbitrator, the

division shall assign another arbitrator as provided by Section

410.106.

(b)AAA rejection must be made not later than the third day

after the date of notification of the arbitrator ’s assignment.

(c)AAWhen all parties have exercised their right of rejection

or if no rejection is registered, the assignment is final.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.171, eff.

Sec. 410.109.AASCHEDULING OF ARBITRATION. (a) The

arbitrator shall schedule arbitration to be held not later than the

30th day after the date of the arbitrator ’s assignment and shall

notify the parties and the division of the scheduled date.

(b)AAIf an arbitrator is unable to schedule arbitration in

accordance with Subsection (a), the division shall appoint the next

arbitrator on the applicable list.AAEach party is entitled to

reject the arbitrator appointed under this subsection in the manner

provided under Section 410.108.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.172, eff.

14 September 1, 2005.

Sec.A410.110.AACONTINUANCE. (a) A request by a party for a

continuance of the arbitration to another date must be directed to

the director. The director may grant a continuance only if the

director determines, giving due regard to the availability of the

arbitrator, that good cause for the continuance exists.

(b)AAIf the director grants a continuance under this section,

the rescheduled date may not be later than the 30th day after the

original date of the arbitration.

(c)AAWithout regard to whether good cause exists, the

director may not grant more than one continuance to each party.

Sec. 410.111.AARULES. The commissioner shall adopt rules for

arbitration consistent with generally recognized arbitration

principles and procedures.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.173, eff.

Sec.A410.112.AAEXCHANGE AND FILING OF INFORMATION;

ADMINISTRATIVE VIOLATION. (a) Not later than the seventh day

before the first day of arbitration, the parties shall exchange and

file with the arbitrator:

(1)AAall medical reports and other documentary evidence

not previously exchanged or filed that are pertinent to the

resolution of the claim; and

(2)AAinformation relating to their proposed resolution

of the disputed issues.

(b)AAA party commits an administrative violation if the

party, without good cause as determined by the arbitrator, fails to

comply with Subsection (a).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.174, eff.

15 September 1, 2005.

Sec.A410.113.AADUTIES OF PARTIES AT ARBITRATION;

ATTENDANCE; ADMINISTRATIVE VIOLATION. (a) Each party shall

attend the arbitration prepared to set forth in detail its position

on unresolved issues and the issues on which it is prepared to

stipulate.

(b)AAA party commits an administrative violation if the party

does not attend the arbitration unless the arbitrator determines

that the party had good cause not to attend.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.175, eff.

Sec.A410.114.AATESTIMONY; RECORD. (a) The arbitrator may

require witnesses to testify under oath and shall require testimony

under oath if requested by a party.

(b)AAThe division shall make an electronic recording of the

proceeding.

(c)AAAn official stenographic record is not required, but any

party may at the party ’s expense make a stenographic record of the

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.176, eff.

Sec.A410.115.AAEVIDENCE. (a) The parties may offer evidence

as they desire and shall produce additional evidence as the

arbitrator considers necessary to an understanding and

determination of the dispute.

(b)AAThe arbitrator is the judge of the relevance and

materiality of the evidence offered. Conformity to legal rules of

evidence is not required.

16 Sec.A410.116.AACLOSING STATEMENTS; BRIEFS. The parties may

present closing statements as they desire, but the record may not

remain open for written briefs unless requested by the arbitrator.

Sec.A410.117.AAEX PARTE CONTACTS PROHIBITED. A party and an

arbitrator may not communicate outside the arbitration unless the

communication is in writing with copies provided to all parties or

relates to procedural matters.

Sec.A410.118.AAAWARD. (a) The arbitrator shall enter the

arbitrator ’s award not later than the seventh day after the last day

of arbitration.

(b)AAThe arbitrator shall base the award on the facts

established at arbitration, including stipulations of the parties,

and on the law as properly applied to those facts.

(c)AAThe award must:

(1)AAbe in writing;

(2)AAbe signed and dated by the arbitrator; and

(3)AAinclude a statement of the arbitrator ’s decision

on the contested issues and the parties ’ stipulations on

uncontested issues.

(d)AAThe arbitrator shall file a copy of the award as part of

the permanent claim file at the division and shall notify the

parties in writing of the decision.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.177, eff.

Sec.A410.119.AAEFFECT OF AWARD. (a) An arbitrator ’s award

is final and binding on all parties. Except as provided by Section

410.121, there is no right to appeal.

(b)AAAn arbitrator ’s award is a final order of the division.

17 Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.178, eff.

Sec.A410.120.AACLERICAL ERROR. For the purpose of

correcting a clerical error, an arbitrator retains jurisdiction of

the award for 20 days after the date of the award.

Sec.A410.121.AACOURT VACATING AWARD. (a) On application of

an aggrieved party, a court of competent jurisdiction shall vacate

an arbitrator ’s award on a finding that:

(1)AAthe award was procured by corruption, fraud, or

misrepresentation;

(2)AAthe decision of the arbitrator was arbitrary and

capricious; or

(3)AAthe award was outside the jurisdiction of the

(b)AAIf an award is vacated, the case shall be remanded to the

division for another arbitration proceeding.

(c)AAA suit to vacate an award must be filed not later than

the 30th day after:

(1)AAthe date of the award; or

(2)AAthe date the appealing party knew or should have

known of a basis for suit under this section, but in no event later

than 12 months after an order denying compensation or after the

expiration of the income or death benefit period.

(d)AAVenue for a suit to vacate an award is in the county in

which the arbitration was conducted.

(e)AAIn a suit to vacate an arbitrator ’s award, only the

court may make determinations, including findings of fact or

conclusions of law.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.179, eff.

SUBCHAPTER D. CONTESTED CASE HEARING

18 Sec.A410.151.AACONTESTED CASE HEARING; SCOPE. (a) If

arbitration is not elected under Section 410.104, a party to a claim

for which a benefit review conference is held or a party eligible to

proceed directly to a contested case hearing as provided by Section

410.024 is entitled to a contested case hearing.

(b)AAAn issue that was not raised at a benefit review

conference or that was resolved at a benefit review conference may

not be considered unless:

(1)AAthe parties consent; or

(2)AAif the issue was not raised, the commissioner

determines that good cause existed for not raising the issue at the

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.180, eff.

Sec.A410.152.AAHEARING OFFICERS; QUALIFICATIONS. (a) A

hearing officer shall conduct a contested case hearing.

(b)AAA hearing officer must be licensed to practice law in

this state.

Sec. 410.153.AAAPPLICATION OF ADMINISTRATIVE PROCEDURE ACT.

Chapter 2001, Government Code, applies to a contested case hearing

to the extent that the commissioner finds appropriate, except that

the following do not apply:

(1)AASection 2001.054;

(2)AASections 2001.061 and 2001.062;

(3)AASection 2001.202; and

(4)AASubchapters F, G, I, and Z, except for Section

2001.141(c).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.93, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.181, eff.

19 September 1, 2005.

Sec. 410.154.AASCHEDULING OF HEARING. The division shall

schedule a contested case hearing in accordance with Section

410.024 or 410.025(b).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.182, eff.

Sec. 410.155.AACONTINUANCE. (a) A written request by a

party for a continuance of a contested case hearing to another date

must be directed to the division.

(b)AAThe division may grant a continuance only if the

division determines that there is good cause for the continuance.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.183, eff.

Sec.A410.156.AAATTENDANCE REQUIRED; ADMINISTRATIVE

VIOLATION. (a) Each party shall attend a contested case hearing.

party, without good cause as determined by the hearing officer,

does not attend a contested case hearing.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.184, eff.

Sec. 410.157.AARULES. The commissioner shall adopt rules

governing procedures under which contested case hearings are

conducted.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.185, eff.

20 Sec.A410.158.AADISCOVERY. (a) Except as provided by Section

410.162, discovery is limited to:

(1)AAdepositions on written questions to any health

(2)AAdepositions of other witnesses as permitted by the

hearing officer for good cause shown; and

(3)AAinterrogatories as prescribed by the

(b)AADiscovery under Subsection (a) may not seek information

that may readily be derived from documentary evidence described in

Section 410.160. Answers to discovery under Subsection (a) need

not duplicate information that may readily be derived from

documentary evidence described in Section 410.160.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.186, eff.

Sec. 410.159.AASTANDARD INTERROGATORIES. (a) The

commissioner by rule shall prescribe standard form sets of

interrogatories to elicit information from claimants and insurance

carriers.

(b)AAStandard interrogatories shall be answered by each

party and served on the opposing party within the time prescribed by

commissioner rule, unless the parties agree otherwise.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.187, eff.

Sec. 410.160.AAEXCHANGE OF INFORMATION. Within the time

prescribed by commissioner rule, the parties shall exchange:

(1)AAall medical reports and reports of expert

witnesses who will be called to testify at the hearing;

(2)AAall medical records;

(3)AAany witness statements;

21 (4)AAthe identity and location of any witness known to

the parties to have knowledge of relevant facts; and

(5)AAall photographs or other documents that a party

intends to offer into evidence at the hearing.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.188, eff.

Sec. 410.161.AAFAILURE TO DISCLOSE INFORMATION. A party who

fails to disclose information known to the party or documents that

are in the party ’s possession, custody, or control at the time

disclosure is required by Sections 410.158-410.160 may not

introduce the evidence at any subsequent proceeding before the

division or in court on the claim unless good cause is shown for not

having disclosed the information or documents under those sections.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.189, eff.

Sec.A410.162.AAADDITIONAL DISCOVERY. For good cause shown,

a party may obtain permission from the hearing officer to conduct

additional discovery as necessary.

Sec.A410.163.AAPOWERS AND DUTIES OF HEARING OFFICER. (a) At

a contested case hearing the hearing officer shall:

(1)AAswear witnesses;

(2)AAreceive testimony;

(3)AAallow examination and cross-examination of

witnesses;

(4)AAaccept documents and other tangible evidence; and

(5)AAallow the presentation of evidence by affidavit.

(b)AAA hearing officer shall ensure the preservation of the

rights of the parties and the full development of facts required for

the determinations to be made. A hearing officer may permit the use

22 of summary procedures, if appropriate, including witness

statements, summaries, and similar measures to expedite the

proceedings.

Sec.A410.164.AARECORD. (a) The proceedings of a contested

case hearing shall be recorded electronically. A party may request

a transcript of the proceeding and shall pay the reasonable cost of

the transcription.

(b)AAA party may request that the proceedings of the

contested case hearing be recorded by a court reporter. The party

making the request shall bear the cost.

(c)AAAt each contested case hearing, as applicable, the

insurance carrier shall file with the hearing officer and shall

deliver to the claimant a single document stating the true

corporate name of the insurance carrier and the name and address of

the insurance carrier ’s registered agent for service of process.

The document is part of the record of the contested case hearing.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 11.01, eff. June 17, 2001.

Sec.A410.165.AAEVIDENCE. (a) The hearing officer is the

sole judge of the relevance and materiality of the evidence offered

and of the weight and credibility to be given to the evidence.

Conformity to legal rules of evidence is not necessary.

(b)AAA hearing officer may accept a written statement signed

by a witness and shall accept all written reports signed by a health

care provider.

Sec.A410.166.AASTIPULATIONS. A written stipulation or

agreement of the parties that is filed in the record or an oral

stipulation or agreement of the parties that is preserved in the

record is final and binding.

Sec.A410.167.AAEX PARTE CONTACTS PROHIBITED. A party and a

23 hearing officer may not communicate outside the contested case

hearing unless the communication is in writing with copies provided

to all parties or relates to procedural matters.

Sec.A410.168.AADECISION. (a) The hearing officer shall

issue a written decision that includes:

(1)AAfindings of fact and conclusions of law;

(2)AAa determination of whether benefits are due; and

(3)AAan award of benefits due.

(b)AAThe decision may address accrued benefits, future

benefits, or both accrued benefits and future benefits.

(c)AAThe hearing officer may enter an interlocutory order for

the payment of all or part of medical benefits or income benefits.

The order may address accrued benefits, future benefits, or both

accrued benefits and future benefits. The order is binding during

the pendency of an appeal to the appeals panel.

(d)AAOn a form that the commissioner by rule prescribes, the

hearing officer shall issue a separate written decision regarding

attorney ’s fees and any matter related to attorney ’s fees.AAThe

decision regarding attorney ’s fees and the form may not be made

known to a jury in a judicial review of an award, including an

appeal.

(e)AAThe commissioner by rule shall prescribe the times

within which the hearing officer must file the decisions with the

(f)AAThe division shall send a copy of the decision to each

party.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 955, Sec. 3, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.190, eff.

Sec.A410.169.AAEFFECT OF DECISION. A decision of a hearing

officer regarding benefits is final in the absence of a timely

appeal by a party and is binding during the pendency of an appeal to

24 the appeals panel.

SUBCHAPTER E. APPEALS PANEL

Sec.A410.201.AAAPPEALS JUDGES; QUALIFICATIONS. (a)

Appeals judges, in a three-member panel, shall conduct

administrative appeals proceedings.

(b)AAAn appeals judge must be licensed to practice law in

(c)AAAn appeals judge may not conduct a benefit review

conference or a contested case hearing.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.191, eff.

Sec.A410.202.AAREQUEST FOR APPEAL; RESPONSE. (a) To appeal

the decision of a hearing officer, a party shall file a written

request for appeal with the appeals panel not later than the 15th

day after the date on which the decision of the hearing officer is

received from the division and shall on the same date serve a copy

of the request for appeal on the other party.

(b)AAThe respondent shall file a written response with the

appeals panel not later than the 15th day after the date on which

the copy of the request for appeal is served and shall on the same

date serve a copy of the response on the appellant.

(c)AAA request for appeal or a response must clearly and

concisely rebut or support the decision of the hearing officer on

each issue on which review is sought.

(d)AASaturdays and Sundays and holidays listed in Section

662.003, Government Code, are not included in the computation of

the time in which a request for an appeal under Subsection (a) or a

response under Subsection (b) must be filed.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 12.01, eff. June 17, 2001.

25 Sec. 410.203.AAPOWERS AND DUTIES OF APPEALS PANEL; PRIORITY

OF HEARING ON REMAND. (a) The appeals panel shall consider:

(1)AAthe record developed at the contested case

hearing; and

(2)AAthe written request for appeal and response filed

with the appeals panel.

(b)AAThe appeals panel may:

(1)AAreverse the decision of the hearings officer and

render a new decision;

(2)AAreverse the decision of the hearings officer and

remand the case to the hearing officer for further consideration

and development of evidence; or

(3)AAaffirm the decision of the hearings officer in a

case described by Section 410.204(a-1).

(c)AAThe appeals panel may not remand a case under Subsection

(b)(2) more than once.

(d)AAA hearing on remand shall be accelerated and the

commissioner shall adopt rules to give priority to the hearing over

other proceedings.

(e)AAThe appeals panel shall issue and maintain a precedent

manual.AAThe precedent manual shall be composed of

precedent-establishing decisions and may include other information

as identified by the appeals panel.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.192, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 16,

Sec.A410.204.AADECISION. (a)AAThe appeals panel shall

review each request and issue a written decision on each reversed or

remanded case.AAThe appeals panel may issue a written decision on

an affirmed case as described by Subsection (a-1). The decision

must be in writing and shall be issued not later than the 45th day

after the date on which the written response to the request for

appeal is filed.AAThe appeals panel shall file a copy of the

26 decision with the commissioner.

(a-1)AAAn appeals panel may only issue a written decision in

a case in which the panel affirms the decision of a hearings officer

if the case:

(1)AAis a case of first impression;

(2)AAinvolves a recent change in law; or

(3)AAinvolves errors at the contested case hearing that

require correction but do not affect the outcome of the hearing,

(A)AAfindings of fact for which insufficient

evidence exists;

(B)AAincorrect conclusions of law;

(C)AAfindings of fact or conclusions of law

regarding matters that were not properly before the hearings

officer; and

(D)AAlegal errors not otherwise described by this

subdivision.

(b)AAA copy of the decision of the appeals panel shall be sent

to each party not later than the seventh day after the date the

decision is filed with the division.

(c)AAIf the appeals panel does not issue a decision in

accordance with this section, the decision of the hearing officer

becomes final and is the final decision of the appeals panel.

(d)AAEach final decision of the appeals panel shall conclude

with a separate paragraph stating: "The true corporate name of the

insurance carrier is (NAME IN BOLD PRINT) and the name and address

of its registered agent for service of process is (NAME AND ADDRESS

IN BOLD PRINT)."

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 11.02, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.193, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 17,

Sec.A410.205.AAEFFECT OF DECISION. (a) A decision of the

27 appeals panel regarding benefits is final in the absence of a timely

appeal for judicial review.

(b)AAThe decision of the appeals panel regarding benefits is

binding during the pendency of an appeal under Subchapter F or G.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1999, 76th Leg., ch. 955, Sec. 4, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.194, eff.

Sec. 410.206.AACLERICAL ERROR. The division may revise a

decision in a contested case hearing on a finding of clerical error.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.195, eff.

Sec. 410.207.AACONTINUATION OF DIVISION JURISDICTION.

During judicial review of the appeals panel decision on any

disputed issue relating to a workers ’ compensation claim, the

division retains jurisdiction of all other issues related to the

claim.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.196, eff.

Sec. 410.208.AAJUDICIAL ENFORCEMENT OF ORDER OR DECISION;

ADMINISTRATIVE VIOLATION. (a) If a person refuses or fails to

comply with an interlocutory order, final order, or decision of the

commissioner, the division may bring suit in Travis County to

enforce the order or decision.

(b)AAIf an insurance carrier refuses or fails to comply with

an interlocutory order, a final order, or a decision of the

commissioner, the claimant may bring suit in the county of the

claimant ’s residence at the time of the injury, or death if the

employee is deceased, or, in the case of an occupational disease, in

28 the county in which the employee resided on the date disability

began or any county agreed to by the parties.

(c)AAIf the division brings suit to enforce an interlocutory

order, final order, or decision of the commissioner, the division

is entitled to reasonable attorney ’s fees and costs for the

prosecution and collection of the claim, in addition to a judgment

enforcing the order or decision and any other remedy provided by

law.

(d)AAA claimant who brings suit to enforce an interlocutory

order, final order, or decision of the commissioner is entitled to a

penalty equal to 12 percent of the amount of benefits recovered in

the judgment, interest, and reasonable attorney ’s fees for the

prosecution and collection of the claim, in addition to a judgment

enforcing the order or decision.

person fails or refuses to comply with an interlocutory order,

final order, or decision of the commissioner within 20 days after

the date the order or decision becomes final.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 397, Sec. 1, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.197, eff.

Sec. 410.209.AAREIMBURSEMENT FOR OVERPAYMENT. The

subsequent injury fund shall reimburse an insurance carrier for any

overpayments of benefits made under an interlocutory order or

decision if that order or decision is reversed or modified by final

arbitration, order, or decision of the commissioner or a

court.AAThe commissioner shall adopt rules to provide for a

periodic reimbursement schedule, providing for reimbursement at

least annually.

Added by Acts 1999, 76th Leg., ch. 955, Sec. 5, eff. Sept. 1, 1999.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.198, eff.

29 SUBCHAPTER F. JUDICIAL REVIEW--GENERAL PROVISIONS

Sec.A410.251.AAEXHAUSTION OF REMEDIES. A party that has

exhausted its administrative remedies under this subtitle and that

is aggrieved by a final decision of the appeals panel may seek

judicial review under this subchapter and Subchapter G, if

Sec.A410.252.AATIME FOR FILING PETITION; VENUE. (a) A

party may seek judicial review by filing suit not later than the

45th day after the date on which the division mailed the party the

decision of the appeals panel.AAFor purposes of this section, the

mailing date is considered to be the fifth day after the date the

decision of the appeals panel was filed with the division.

(b)AAThe party bringing suit to appeal the decision must file

a petition with the appropriate court in:

(1)AAthe county where the employee resided at the time

of the injury or death, if the employee is deceased; or

(2)AAin the case of an occupational disease, in the

county where the employee resided on the date disability began or

any county agreed to by the parties.

(c)AAIf a suit under this section is filed in a county other

than the county described by Subsection (b), the court, on

determining that it does not have jurisdiction to render judgment

on the merits of the suit, shall transfer the case to a proper court

in a county described by Subsection (b). Notice of the transfer of

a suit shall be given to the parties. A suit transferred under this

subsection shall be considered for all purposes the same as if

originally filed in the court to which it is transferred.

(d)AAIf a suit is initially filed within the 45-day period in

Subsection (a), and is transferred under Subsection (c), the suit

is considered to be timely filed in the court to which it is

transferred.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 663, Sec. 1, eff. Sept. 1, 2003.

30 Acts 2009, 81st Leg., R.S., Ch. 1200 (H.B. 4545), Sec. 1, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1066 (S.B. 809), Sec. 1, eff.

Sec. 410.253.AASERVICE; NOTICE. (a) A party seeking

judicial review shall simultaneously:

(1)AAfile a copy of the party ’s petition with the court;

(2)AAserve any opposing party to the suit; and

(3)AAprovide written notice of the suit or notice of

appeal to the division.

(b)AAA party may not seek judicial review under Section

410.251 unless the party has provided written notice of the suit to

the division as required by this section.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2003, 78th Leg., ch. 397, Sec. 2, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.199, eff.

Sec. 410.254.AAINTERVENTION. On timely motion initiated by

the commissioner, the division shall be permitted to intervene in

any judicial proceeding under this subchapter or Subchapter G.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.200, eff.

Sec.A410.255.AAJUDICIAL REVIEW OF ISSUES OTHER THAN

COMPENSABILITY OR INCOME OR DEATH BENEFITS. (a) For all issues

other than those covered under Section 410.301(a), judicial review

shall be conducted in the manner provided for judicial review of a

contested case under Subchapter G, Chapter 2001, Government Code.

(b)AAJudicial review conducted under this section is

governed by the substantial evidence rule.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(53), eff. Sept. 1, 1995.

31 Sec.A410.256.AACOURT APPROVAL OF SETTLEMENT. (a) A claim or

issue may not be settled contrary to the provisions of the appeals

panel decision issued on the claim or issue unless a party to the

proceeding has filed for judicial review under this subchapter or

Subchapter G.AAThe trial court must approve a settlement made by

the parties after judicial review of an award is sought and before

the court enters judgment.

(b)AAThe court may not approve a settlement except on a

finding that:

(2)AAthe settlement adheres to all appropriate

provisions of the law; and

(c)AAA settlement may not provide for:

(1)AApayment of any benefits in a lump sum except as

provided by Section 408.128; or

(2)AAlimitation or termination of the claimant ’s right

to medical benefits under Section 408.021.

(d)AAA settlement or agreement that resolves an issue of

impairment may not be made before the claimant reaches maximum

medical improvement and must adopt one of the impairment ratings

under Subchapter G, Chapter 408.

(e)AAA party proposing a settlement before judgment is

entered by the trial court may petition the court orally or in

writing for approval of the settlement.

(f)AASettlement of a claim or issue under this section does

not constitute a modification or reversal of the decision awarding

benefits for the purpose of Section 410.209.

(g)AASettlement of a claim or issue must be in compliance

with all appropriate provisions of the law, including this section

and Section 410.258 of this subchapter. A settlement which on its

face does not comply with this section is void.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1997, 75th Leg., ch. 1267, Sec. 1, eff. Sept. 1, 1997; Acts

32 2003, 78th Leg., ch. 397, Sec. 3, eff. Sept. 1, 2003.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.2001, eff.

Sec.A410.257.AAJUDGMENT AFTER JUDICIAL REVIEW. (a) A

judgment entered by a court on judicial review of the appeals panel

decision under this subchapter or Subchapter GAAmust comply with

all appropriate provisions of the law.

(b)AAA judgment under this section may not provide for:

(1)AApayment of benefits in a lump sum except as

(2)AAthe limitation or termination of the claimant ’s

right to medical benefits under Section 408.021.

(c)AAA judgment that resolves an issue of impairment may not

be entered before the date the claimant reaches maximum medical

improvement. The judgment must adopt an impairment rating under

Subchapter G, Chapter 408, except to the extent Section 410.307

applies.

(d)AAA judgment under this section may not order

reimbursement from the subsequent injury fund.

(e)AAA judgment under this section based on default or on an

agreement of the parties does not constitute a modification or

reversal of a decision awarding benefits for the purpose of Section

410. 209.

(f)AAA judgment that on its face does not comply with this

section is void.

Added by Acts 1997, 75th Leg., ch. 1267, Sec. 2, eff. Sept. 1, 1997.

Amended by Acts 2003, 78th Leg., ch. 397, Sec. 4, eff. Sept. 1,

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.2002, eff.

Sec. 410.258.AANOTIFICATION OF DIVISION OF PROPOSED

JUDGMENTS AND SETTLEMENTS; RIGHT TO INTERVENE. (a) The party who

initiated a proceeding under this subchapter or Subchapter G must

33 file any proposed judgment or settlement made by the parties to the

proceeding, including a proposed default judgment, with the

division not later than the 30th day before the date on which the

court is scheduled to enter the judgment or approve the

settlement.AAThe proposed judgment or settlement must be mailed to

the division by certified mail, return receipt requested.

(b)AAThe division may intervene in a proceeding under

Subsection (a) not later than the 30th day after the date of receipt

of the proposed judgment or settlement.

(c)AAThe commissioner shall review the proposed judgment or

settlement to determine compliance with all appropriate provisions

of the law.AAIf the commissioner determines that the proposal is

not in compliance with the law, the division may intervene as a

matter of right in the proceeding not later than the 30th day after

the date of receipt of the proposed judgment or settlement.AAThe

court may limit the extent of the division ’s intervention to

providing the information described by Subsection (e).

(d)AAIf the division does not intervene before the 31st day

after the date of receipt of the proposed judgment or settlement,

the court shall enter the judgment or approve the settlement if the

court determines that the proposed judgment or settlement is in

compliance with all appropriate provisions of the law.

(e)AAIf the division intervenes in the proceeding, the

commissioner shall inform the court of each reason the commissioner

believes the proposed judgment or settlement is not in compliance

with the law.AAThe court shall give full consideration to the

information provided by the commissioner before entering a judgment

or approving a settlement.

(f)AAA judgment entered or settlement approved without

complying with the requirements of this section is void.

Added by Acts 1997, 75th Leg., ch. 1267, Sec. 2, eff. Sept. 1, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.201, eff.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.202, eff.

34 SUBCHAPTER G. JUDICIAL REVIEW OF ISSUES REGARDING COMPENSABILITY OR

INCOME OR DEATH BENEFITS

Sec.A410.301.AAJUDICIAL REVIEW OF ISSUES REGARDING

COMPENSABILITY OR INCOME OR DEATH BENEFITS. (a) Judicial review of

a final decision of the appeals panel regarding compensability or

eligibility for or the amount of income or death benefits shall be

(b)AAA determination of benefits before a court shall be in

accordance with this subtitle.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.203, eff.

Sec. 410.302.AAADMISSIBILITY OF RECORDS; LIMITATION OF

ISSUES. (a) The records of a contested case hearing conducted

under this chapter are admissible in a trial under this subchapter

in accordance with the Texas Rules of Evidence.

(b)AAA trial under this subchapter is limited to issues

decided by the appeals panel and on which judicial review is

sought.AAThe pleadings must specifically set forth the

determinations of the appeals panel by which the party is

aggrieved.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.204, eff.

Sec.A410.303.AABURDEN OF PROOF. The party appealing the

decision on an issue described in Section 410.301(a) has the burden

of proof by a preponderance of the evidence.

Sec. 410.304.AACONSIDERATION OF APPEALS PANEL DECISION. (a)

In a jury trial, the court, before submitting the case to the jury,

shall inform the jury in the court ’s instructions, charge, or

35 questions to the jury of the appeals panel decision on each disputed

issue described by Section 410.301(a) that is submitted to the

jury.

(b)AAIn a trial to the court without a jury, the court in

rendering its judgment on an issue described by Section 410.301(a)

shall consider the decision of the appeals panel.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.205, eff.

Sec.A410.305.AACONFLICT WITH RULES OF CIVIL PROCEDURE. (a)

To the extent that this subchapter conflicts with the Texas Rules of

Civil Procedure or any other rules adopted by the supreme court,

this subchapter controls.

(b)AANotwithstanding Section 22.004, Government Code, or any

other law, the supreme court may not adopt rules in conflict with or

inconsistent with this subchapter.

Sec.A410.306.AAEVIDENCE. (a) Evidence shall be adduced as

in other civil trials.

(b)AAThe division on payment of a reasonable fee shall make

available to the parties a certified copy of the division ’s

record.AAAll facts and evidence the record contains are admissible

to the extent allowed under the Texas Rules of Evidence.

(c)AAExcept as provided by Section 410.307, evidence of

extent of impairment shall be limited to that presented to the

division.AAThe court or jury, in its determination of the extent of

impairment, shall adopt one of the impairment ratings under

Subchapter G, Chapter 408.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.206, eff.

Sec.A410.307.AASUBSTANTIAL CHANGE OF CONDITION. (a)

36 Evidence of the extent of impairment is not limited to that

presented to the division if the court, after a hearing, finds that

there is a substantial change of condition.AAThe court ’s finding of

a substantial change of condition may be based only on:

(1)AAmedical evidence from the same doctor or doctors

whose testimony or opinion was presented to the division;

(2)AAevidence that has come to the party ’s knowledge

since the contested case hearing;

(3)AAevidence that could not have been discovered

earlier with due diligence by the party; and

(4)AAevidence that would probably produce a different

result if it is admitted into evidence at the trial.

(b)AAIf substantial change of condition is disputed, the

court shall require the designated doctor in the case to verify the

substantial change of condition, if any. The findings of the

designated doctor shall be presumed to be correct, and the court

shall base its finding on the medical evidence presented by the

designated doctor in regard to substantial change of condition

unless the preponderance of the other medical evidence is to the

(c)AAThe substantial change of condition must be confirmable

by recognized laboratory or diagnostic tests or signs confirmable

by physical examination.

(d)AAIf the court finds a substantial change of condition

under this section, new medical evidence of the extent of

impairment must be from and is limited to the same doctor or doctors

who made impairment ratings before the division under Section

408.123.

(e)AAThe court ’s finding of a substantial change of condition

may not be made known to the jury.

(f)AAThe court or jury in its determination of the extent of

impairment shall adopt one of the impairment ratings made under

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.207, eff.

37 Sec.A410.308.AACERTIFIED COPY OF NOTICE SECURING

COMPENSATION. (a) The division shall furnish any interested party

in the claim with a certified copy of the notice of the employer

securing compensation with the insurance carrier, filed with the

(b)AAThe certified copy of the notice is admissible in

evidence on trial of the claim pending and is prima facie proof of

the facts stated in the notice unless the facts are denied under

oath by the opposing party.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.208, eff.

38 LABOR CODE

CHAPTER 414. ENFORCEMENT OF COMPLIANCE AND PRACTICE REQUIREMENTS

Sec.A414.002.AAMONITORING DUTIES. (a) The division shall

monitor for compliance with commissioner rules, this subtitle, and

other laws relating to workers ’ compensation the conduct of persons

subject to this subtitle.AAPersons to be monitored include:

(1)AApersons claiming benefits under this subtitle;

(2)AAemployers;

(3)AAinsurance carriers;

(4)AAattorneys and other representatives of parties;

(5)AAhealth care providers.

(b)AAThe division shall monitor conduct described by

Sections 415.001, 415.002, and 415.003 and refer persons engaging

in that conduct to the division of hearings.

(c)AAThe division shall monitor payments made to health care

providers on behalf of workers ’ compensation claimants who receive

medical services to ensure that the payments are made on time as

required by Section 408.027.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.260, eff.

Sec. 414.003.AACOMPILATION AND USE OF INFORMATION. (a) The

division shall compile and maintain statistical and other

information as necessary to detect practices or patterns of conduct

by persons subject to monitoring under this chapter that:

(1)AAviolate this subtitle, commissioner rules, or a

commissioner order or decision; or

(2)AAotherwise adversely affect the workers ’

compensation system of this state.

(b)AAThe commissioner shall use the information compiled

under this section to impose appropriate penalties and other

1 sanctions under Chapters 415 and 416.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.261, eff.

Sec.A414.004.AAPERFORMANCE REVIEW OF INSURANCE CARRIERS.

(a) The division shall review regularly the workers ’ compensation

records of insurance carriers as required to ensure compliance with

(b)AAEach insurance carrier, the carrier ’s agents, and those

with whom the carrier has contracted to provide, review, or monitor

services under this subtitle shall:

(1)AAcooperate with the division;

(2)AAmake available to the division any records or

other necessary information; and

(3)AAallow the division access to the information at

reasonable times at the person ’s offices.

(c)AAThe insurance carrier, other than a governmental

entity, shall pay the reasonable expenses, including travel

expenses, of an auditor who audits the workers ’ compensation

records at the office of the insurance carrier.

Sec. 414.005.AAINVESTIGATION UNIT. (a)AAThe division shall

maintain an investigation unit to conduct investigations relating

to alleged violations of this subtitle, commissioner rules, or a

commissioner order or decision, with particular emphasis on

violations of Chapters 415 and 416.

(b)AAAs often as the commissioner considers necessary, the

commissioner or the investigation unit may review the operations of

a person regulated by the division, including an agent of the person

performing functions regulated by the division, to determine

compliance with this subtitle.

(c)AAThe review described by Subsection (b) may include

on-site visits to the person ’s premises.AAThe commissioner is not

required to announce an on-site visit in advance.

2 (d)AADuring an on-site visit, a person regulated by the

division shall make available to the division all records relating

to the person ’s participation in the workers ’ compensation system.

(e)AAThe commissioner by rule shall prescribe the procedures

to be used for both announced and unannounced on-site visits

authorized under this section, including specifying the types of

records subject to inspection.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.262, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 26,

Sec. 414.006.AAREFERRAL TO OTHER AUTHORITIES. For further

investigation or the institution of appropriate proceedings, the

division may refer the persons involved in a case subject to an

investigation toAAother appropriate authorities, including

licensing agencies, district and county attorneys, or the attorney

general.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.263, eff.

Sec. 414.007.AAMEDICAL REVIEW. The division shall review

information concerning alleged violations of this subtitle

regarding the provision of medical benefits, commissioner rules, or

a commissioner order or decision, and, under Sections 414.005 and

414.006 and Chapters 415 and 416, may conduct investigations, make

referrals to other authorities, and initiate administrative

violation proceedings.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.264, eff.

3 LABOR CODE

CHAPTER 415. ADMINISTRATIVE VIOLATIONS

SUBCHAPTER A. PROHIBITED ACTS

Sec. 415.001.AAADMINISTRATIVE VIOLATION BY REPRESENTATIVE OF

EMPLOYEE OR LEGAL BENEFICIARY. A representative of an employee or

legal beneficiary commits an administrative violation if the

(1)AAfails without good cause to attend a dispute

resolution proceeding within the division;

(2)AAattends a dispute resolution proceeding within the

division without complete authority or fails to exercise authority

to effectuate an agreement or settlement;

(3)AAcommits an act of barratry under Section 38.12,

Penal Code;

(4)AAwithholds from the employee ’s or legal

beneficiary ’s weekly benefits or from advances amounts not

authorized to be withheld by the division;

(5)AAenters into a settlement or agreement without the

knowledge, consent, and signature of the employee or legal

beneficiary;

(6)AAtakes a fee or withholds expenses in excess of the

amounts authorized by the division;

(7)AArefuses or fails to make prompt delivery to the

employee or legal beneficiary of funds belonging to the employee or

legal beneficiary as a result of a settlement, agreement, order, or

award;

(8)AAviolates the Texas Disciplinary Rules of

Professional Conduct of the State Bar of Texas;

(9)AAmisrepresents the provisions of this subtitle to

an employee, an employer, a health care provider, or a legal

(10)AA violates a commissioner rule; or

(11)AAfails to comply with this subtitle.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.265, eff.

Sec. 415.002.AAADMINISTRATIVE VIOLATION BY INSURANCE

CARRIER. (a) An insurance carrier or its representative commits an

administrative violation if that person:

(1)AAmisrepresents a provision of this subtitle to an

employee, an employer, a health care provider, or a legal

(2)AAterminates or reduces benefits without

substantiating evidence that the action is reasonable and

authorized by law;

(3)AAinstructs an employer not to file a document

required to be filed with the division;

(4)AAinstructs or encourages an employer to violate a

claimant ’s right to medical benefits under this subtitle;

(5)AAfails to tender promptly full death benefits if a

legitimate dispute does not exist as to the liability of the

insurance carrier;

(6)AAallows an employer, other than a self-insured

employer, to dictate the methods by which and the terms on which a

claim is handled and settled;

(7)AAfails to confirm medical benefits coverage to a

person or facility providing medical treatment to a claimant if a

(8)AAfails, without good cause, to attend a dispute

(9)AAattends a dispute resolution proceeding within the

division without complete authority or fails to exercise authority

to effectuate agreement or settlement;

(10)AAadjusts a workers ’ compensation claim in a manner

contrary to license requirements for an insurance adjuster,

including the requirements of Chapter 4101, Insurance Code, or the

rules of the commissioner of insurance;

2 (11)AAfails to process claims promptly in a reasonable

and prudent manner;

(12)AAfails to initiate or reinstate benefits when due

if a legitimate dispute does not exist as to the liability of the

(13)AAmisrepresents the reason for not paying benefits

or terminating or reducing the payment of benefits;

(14)AAdates documents to misrepresent the actual date

of the initiation of benefits;

(15)AAmakes a notation on a draft or other instrument

indicating that the draft or instrument represents a final

settlement of a claim if the claim is still open and pending before

the division;

(16)AAfails or refuses to pay benefits from week to week

as and when due directly to the person entitled to the benefits;

(17)AAfails to pay an order awarding benefits;

(18)AAcontroverts a claim if the evidence clearly

indicates liability;

(19)AAunreasonably disputes the reasonableness and

necessity of health care;

(20)AAviolates a commissioner rule;

(21)AAmakes a statement denying all future medical care

for a compensable injury; or

(22)AAfails to comply with a provision of this

(b)AAAn insurance carrier or its representative does not

commit an administrative violation under Subsection (a)(6) by

allowing an employer to:

(1)AAfreely discuss a claim;

(2)AAassist in the investigation and evaluation of a

claim; or

(3)AAattend a proceeding of the division and

participate at the proceeding in accordance with this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.266, eff.

3 September 1, 2005.

Sec. 415.003.AAADMINISTRATIVE VIOLATION BY HEALTH CARE

PROVIDER. A health care provider commits an administrative

violation if the person:

(1)AAsubmits a charge for health care that was not

furnished;

(2)AAadministers improper, unreasonable, or medically

unnecessary treatment or services;

(3)AAmakes an unnecessary referral;

(4)AAviolates the division ’s fee and treatment

guidelines;

(5)AAviolates a commissioner rule; or

(6)AAfails to comply with a provision of this subtitle.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.267, eff.

Sec.A415.0035.AAADDITIONAL VIOLATIONS BY INSURANCE CARRIER

OR HEALTH CARE PROVIDER. (a) An insurance carrier or its

representative commits an administrative violation if that person:

(1)AAfails to submit to the division a settlement or

agreement of the parties;

(2)AAfails to timely notify the division of the

termination or reduction of benefits and the reason for that

action; or

(3)AAdenies preauthorization in a manner that is not in

accordance with rules adopted by the commissioner under Section

413.014.

(b)AAA health care provider commits an administrative

violation if that person:

(1)AAfails or refuses to timely file required reports

or records; or

(2)AAfails to file with the division the annual

disclosure statement required by Section 413.041.

4 (c)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1162, Sec.

37(2), eff. September 1, 2011.

(d)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1162, Sec.

(e)AAA person regulated by the division under this title

commits an administrative violation if the person violates this

subtitle or a rule, order, or decision of the commissioner.

(f)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1162, Sec.

Added by Acts 1995, 74th Leg., ch. 980, Sec. 1.45, eff. Sept. 1,

1995. Amended by Acts 2001, 77th Leg., ch. 1456, Sec. 6.06, eff.

June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.268, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 27,

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 37(2),

Sec. 415.0036.AAADMINISTRATIVE VIOLATION BY PERSON

PERFORMING CERTAIN CLAIM SERVICES. (a) This section applies to an

insurance adjuster, case manager, or other person who has authority

under this title to request the performance of a service affecting

the delivery of benefits to an injured employee or who actually

performs such a service, including peer reviews, performance of

required medical examinations, or case management.

(b)AAA person described by Subsection (a) commits an

administrative violation if the person offers to pay, pays,

solicits, or receives an improper inducement relating to the

delivery of benefits to an injured employee or improperly attempts

to influence the delivery of benefits to an injured employee,

including through the making of improper threats. This section

applies to each person described by Subsection (a) who is a

participant in the workers ’ compensation system of this state and

to an agent of such a person.

(c)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1162, Sec.

5 37(3), eff. September 1, 2011.

Added by Acts 2007, 80th Leg., R.S., Ch. 198 (H.B. 34), Sec. 1, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 37(3),

Sec.A415.005.AAOVERCHARGING BY HEALTH CARE PROVIDERS

PROHIBITED; ADMINISTRATIVE VIOLATION. (a) A health care provider

commits a violation if the person charges an insurance carrier an

amount greater than that normally charged for similar treatment to

a payor outside the workers ’ compensation system, except for

mandated or negotiated charges.

(b)AAA violation under this section is an administrative

violation.AAA health care provider may be liable for an

administrative penalty regardless of whether a criminal action is

initiated under Section 413.043.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.269, eff.

Sec.A415.006.AAEMPLOYER CHARGEBACKS PROHIBITED;

ADMINISTRATIVE VIOLATION. (a) An employer may not collect from an

employee, directly or indirectly, a premium or other fee paid by the

employer to obtain workers ’ compensation insurance coverage,

except as provided by Sections 406.123 and 406.144.

(b)AAAn employee or legal beneficiary of an employee has a

right of action to recover damages against an employer who violates

person violates Subsection (a).

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.270, eff.

6 Sec.A415.007.AALOANS BY ATTORNEYS PROHIBITED. (a) An

attorney who represents a claimant before the division may not lend

money to the claimant during the pendency of the workers ’

compensation claim.

(b)AAThe attorney may assist the claimant in obtaining

financial assistance from another source if the attorney is not

personally liable for the credit extended to the claimant.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.271, eff.

Sec.A415.008.AAFRAUDULENTLY OBTAINING OR DENYING BENEFITS;

ADMINISTRATIVE VIOLATION. (a)AAA person commits an administrative

violation if the person, to obtain or deny a payment of a workers ’

compensation benefit or the provision of a benefit for the person or

another, knowingly or intentionally:

(1)AAmakes a false or misleading statement;

(2)AAmisrepresents or conceals a material fact;

(3)AAfabricates, alters, conceals, or destroys a

document; or

(4)AAconspires to commit an act described by

Subdivision (1), (2), or (3).

(b)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1162, Sec.

37(5), eff. September 1, 2011.

(c)AAA person who has obtained an excess payment in violation

of this section is liable for full repayment plus interest computed

at the rate prescribed by Section 401.023. If the person is an

employee or person claiming death benefits, the repayment may be

redeemed from future income or death benefits to which the person is

otherwise entitled.

(d)AAAn employer who has committed an act described by

Subsection (a) that results in denial of payments is liable for the

past benefit payments that would otherwise have been payable by the

insurance carrier during the period of denial, plus interest

computed at the rate prescribed by Section 401.023. The insurance

carrier is not liable for benefit payments during the period of

7 denial.

(e)AAIf an administrative violation proceeding is pending

under this section against an employee or person claiming death

benefits, the division may not take final action on the person ’s

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.272, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 28,

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 37(5),

Sec. 415.009.AAFRIVOLOUS ACTIONS; ADMINISTRATIVE

VIOLATION.AA A person commits an administrative violation if the

person brings, prosecutes, or defends an action for benefits under

this subtitle or requests initiation of an administrative violation

proceeding that does not have a basis in fact or is not warranted by

existing law or a good faith argument for the extension,

modification, or reversal of existing law.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.273, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 29,

Sec. 415.010.AABREACH OF AGREEMENT; ADMINISTRATIVE

VIOLATION.AA A party to an agreement approved by the division

commits an administrative violation if the person breaches a

provision of the agreement.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.274, eff.

8 eff. September 1, 2011.

Sec. 415.011.AANOTICE OF PROFESSIONAL EMPLOYER ORGANIZATION

WORKERS ’ COMPENSATION CLAIM AND PAYMENT INFORMATION;

ADMINISTRATIVE VIOLATION. (a)AAIn this section, "license holder"

has the meaning assigned by Section 91.001.

(a-1)AAExcept as provided by Subsection (c), a license holder

commits a violation if the license holder fails to provide the

information required by Sections 91.042(g) and (h).

(b)AAA violation under Subsection (a) is an administrative

(c)AAA license holder does not commit an administrative

violation under this section if the license holder requested the

information required by Sections 91.042(g) and (h) from the license

holder ’s workers ’ compensation insurance provider and the provider

does not provide the information to the license holder within the

required time.AAA license holder shall notify the Texas Department

of Insurance of a provider ’s failure to comply with the

requirements of Section 2051.151, Insurance Code.

Added by Acts 2011, 82nd Leg., R.S., Ch. 477 (H.B. 625), Sec. 3,

Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 20, eff.

Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 21, eff.

SUBCHAPTER B. SANCTIONS

Sec. 415.021.AAASSESSMENT OF ADMINISTRATIVE PENALTIES.

(a)AAIn addition to any other provisions in this subtitle relating

to violations, a person commits an administrative violation if the

person violates, fails to comply with, or refuses to comply with

this subtitle or a rule, order, or decision of the commissioner,

including an emergency cease and desist order issued under Section

415.0211.AAIn addition to any sanctions, administrative penalty,

or other remedy authorized by this subtitle, the commissioner may

9 assess an administrative penalty against a person who commits an

administrative violation.AAThe administrative penalty shall not

exceed $25,000 per day per occurrence.AAEach day of noncompliance

constitutes a separate violation.AAThe commissioner ’s authority

under this chapter is in addition to any other authority to enforce

a sanction, penalty, fine, forfeiture, denial, suspension, or

revocation otherwise authorized by law.

(b)AAThe commissioner may enter a cease and desist order

against a person who:

(1)AAcommits repeated administrative violations;

(2)AAallows, as a business practice, the commission of

repeated administrative violations; or

(3)AAviolates an order or decision of the commissioner.

(c)AAIn assessing an administrative penalty:

(1)AAthe commissioner shall consider:

(A)AAthe seriousness of the violation, including

the nature, circumstances, consequences, extent, and gravity of the

prohibited act;

(B)AAthe history and extent of previous

administrative violations;

(C)AAthe demonstrated good faith of the violator,

including actions taken to rectify the consequences of the

(D)AAthe penalty necessary to deter future

violations; and

(E)AAother matters that justice may require; and

(2)AAthe commissioner shall, to the extent reasonable,

consider the economic benefit resulting from the prohibited act.

(d)AAA penalty may be assessed only after the person charged

with an administrative violation has been given an opportunity for

a hearing under Subchapter C.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 6.07, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.275, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 31,

10 eff. September 1, 2011.

Sec. 415.0211.AAEMERGENCY CEASE AND DESIST ORDER. (a)AAThe

commissioner ex parte may issue an emergency cease and desist order

(1)AAthe commissioner believes a person regulated by

the division under this title is engaging in conduct violating a

law, rule, or order; and

(2)AAthe commissioner believes that the alleged conduct

under Subdivision (1) will result in harm to the health, safety, or

welfare of another person.

(b)AAOn issuance of an order under Subsection (a), the

commissioner shall serve on the affected person an order that

contains a statement of the charges and requires the person

immediately to cease and desist from the acts, methods, or

practices stated in the order.AAThe commissioner shall serve the

order by registered or certified mail, return receipt requested, to

the affected person ’s last known address.AAThe order is final on

the 31st day after the date the affected person receives the order,

unless the affected person requests a hearing under Subsection (c).

(c)AAA person affected by an order is entitled to request a

hearing to contest the order.AAThe affected person must request the

hearing not later than the 30th day after the date the person

receives the order required by Subsection (b).AAA request to

contest an order must:

(2)AAbe directed to the commissioner; and

(3)AAstate the grounds for the request to set aside or

modify the order.

(d)AAOn receiving a request for a hearing, the commissioner

shall serve notice of the time and place of the hearing.AAThe

hearing is subject to the procedures for a contested case under

Chapter 2001, Government Code.AAThe hearing shall be held not later

than the 10th day after the date the commissioner receives the

request for a hearing unless the parties mutually agree to a later

hearing date.AAAt the hearing, the person requesting the hearing is

entitled to show cause why the order should not be

11 affirmed.AAFollowing receipt of the proposal for decision from the

State Office of Administrative Hearings regarding the hearing, the

commissioner shall wholly or partly affirm, modify, or set aside

the order.

(e)AAPending a hearing under this section, an order continues

in effect unless the order is stayed by the commissioner.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 32,

Sec. 415.0215.AASANCTIONS. (a)AAThe division may impose

sanctions against any person regulated by the division under this

(b)AAOnly the commissioner may impose:

(1)AAa sanction that deprives a person of the right to

practice before the division or of the right to receive

remuneration under this subtitle for a period exceeding 30 days; or

(2)AAanother sanction suspending for more than 30 days

or revoking a license, certification, or permit required for

practice in the field of workers ’ compensation.

(c)AAA sanction imposed by the division is binding pending

Transferred and redesignated from Labor Code, Section 402.072 by

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 33, eff.

Sec.A415.023.AACOMMISSION OF WRONGFUL ACT AS MATTER OF

PRACTICE; ADMINISTRATIVE VIOLATION. (a) A person who commits an

administrative violation under Section 415.001, 415.002, 415.003,

or 415.0035 as a matter of practice is subject to an applicable rule

adopted under Subsection (b) in addition to the penalty assessed

for the violation.

(b)AAThe commissioner may adopt rules providing for:

(1)AAa reduction or denial of fees;

(2)AApublic or private reprimand by the commissioner;

(3)AAsuspension from practice before the division;

(4)AArestriction, suspension, or revocation of the

right to receive reimbursement under this subtitle; or

12 (5)AAreferral and petition to the appropriate licensing

authority for appropriate disciplinary action, including the

restriction, suspension, or revocation of the person ’s license.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 2001, 77th Leg., ch. 1456, Sec. 6.08, eff. June 17, 2001.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.276, eff.

Sec. 415.024.AABREACH OF SETTLEMENT AGREEMENT;

ADMINISTRATIVE VIOLATION. A material and substantial breach of a

settlement agreement that establishes a compliance plan is an

administrative violation.AAIn determining the amount of the

penalty, the commissioner shall consider the total volume of claims

handled by the insurance carrier.

Added by Acts 1997, 75th Leg., ch. 1443, Sec. 9, eff. Sept. 1, 1997.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.277, eff.

Sec. 415.025.AAREFERENCES TO A CLASS OF VIOLATION OR

PENALTY.AAA reference in this code or other law, or in rules of the

former Texas Workers ’ Compensation Commission or the commissioner,

to a particular class of violation, administrative violation, or

penalty shall be construed as a reference to an administrative

penalty.AAAn administrative penalty may not exceed $25,000 per day

per occurrence.AAEach day of noncompliance constitutes a separate

Added by Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.278, eff.

Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 34,

SUBCHAPTER C. PROCEDURES

Sec. 415.031.AAINITIATION OF ADMINISTRATIVE VIOLATION

13 PROCEEDINGS. Any person may request the initiation of

administrative violation proceedings by filing a written

allegation with the division.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.279, eff.

Sec. 415.032.AANOTICE OF POSSIBLE ADMINISTRATIVE VIOLATION;

RESPONSE. (a)AAIf investigation by the division indicates that an

administrative violation has occurred, the division shall notify

the person alleged to have committed the violation in writing of:

(1)AAthe charge;

(2)AAthe proposed sanction;

(3)AAthe right to consent to the charge and the

sanction; and

(4)AAthe right to request a hearing.

(b)AANot later than the 20th day after the date on which

notice is received, the charged party shall:

(1)AAremit the amount of the sanction to the division or

otherwise consent to the imposed sanction; or

(2)AAsubmit to the division a written request for a

hearing.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.280, eff.

Sec. 415.033.AAFAILURE TO RESPOND.AAIf, without good cause,

a charged party fails to respond as required under Section 415.032,

the division shall initiate enforcement proceedings.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.281, eff.

14 Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 34,

Sec. 415.034.AAHEARING PROCEDURES.AA On the request of the

charged party or the commissioner, the State Office of

Administrative Hearings shall set a hearing.AAThe hearing shall be

conducted in the manner provided for a contested case under Chapter

2001, Government Code (the administrative procedure law).

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995;

Acts 1995, 74th Leg., ch. 980, Sec. 1.46, eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.282, eff.

Sec.A415.035.AAJUDICIAL REVIEW. (a) A decision under

Section 415.034 is subject to judicial review in the manner

provided for judicial review under Chapter 2001, Government Code.

(b)AAIf an administrative penalty is assessed, the person

charged shall:

(1)AAforward the amount of the penalty to the division

for deposit in an escrow account; or

(2)AApost with the division a bond for the amount of the

penalty, effective until all judicial review of the determination

is final.

(c)AAFailure to comply with Subsection (b) results in a

waiver of all legal rights to contest the violation or the amount of

the penalty.

(d)AAIf the court determines that the penalty should not have

been assessed or reduces the amount of the penalty, the division

(1)AAremit the appropriate amount, plus accrued

interest, if the administrative penalty was paid; or

(2)AArelease the bond.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993. Amended

15 by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995.

Acts 2005, 79th Leg., Ch. 265 (H.B. 7), Sec. 3.283, eff.

Sec. 415.036.AASTANDARD OF JUDICIAL REVIEW OF COMMISSIONER ’S

ORDER.AAAn order of the commissioner is subject to judicial review

under the substantial evidence rule.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1162 (H.B. 2605), Sec. 35,