City Employee is Limited to Workers’ Compensation Benefits, Despite Issuance of Uninsured/Underinsured Automobile Insurance Policy

In Smith v. City of Lubbock, 07-10-0466-CV, 2011 WL 4478494 (Tex. App.–Amarillo Sept. 26, 2011, pet. granted), the Amarillo Court of Appeals held that workers’ compensation  laws barred additional recovery against an employer who is a subscriber to workers’ compensation.  In this case, the additional recovery is based upon the existence of an uninsured/underinsured auto policy (the “UM Policy”) acquired by the City from St. Paul Fire and Marine Ins. Co. (“St. Paul”). 

This case arose when Smith, an employee of the City of Lubbock (the “City”) was struck by an intoxicated driver while Smith was in the course and scope of his duties for the City. Smith took the position that Texas workers’ compensation laws did not bar an employee from suing his employer on the UM Policy. The City obtained the UM Policy for its employees.  As a result of his injuries, Smith received workers’ compensation benefits; however, he also sought benefits pursuant to the UM Policy. Those benefits were denied, and Smith filed suit against the City and St. Paul. The trial court granted summary judgment on behalf of both the City and St. Paul; however, St. Paul has since conceded that it was not entitled to the granting of a summary judgment.  


Smith attempts to distinguish his claims against his employer based on common law torts from those based on a contract, which Smith asserts are not barred by the workers’ compensation laws contained in Texas Labor Code.  The Court of Appeals cited to the Texas Labor Code regarding the exclusive remedy of workers’ compensation benefits by injured employees. 

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.

Tex. Labor Code § 408.001(a).  The facts of Smith’s injuries and subsequent claim tracked the express language of this statute in that he was an “employee covered by workers’ compensation insurance” that sustained a “work-related injury”.  As such, the Court, in ruling against Smith stated:

Simply put, if an employee suffers work-related injuries and seeks their redress from an employer that subscribes to a workers’ compensation program, there is only one way to obtain them. It is through that compensation program. It does not matter if the employer provides those benefits from its own pocket or via a contract with a third party insurer; once it provides them, statute bars the employee from forcing the employer to redress the injuries through other means.

See id. at *3.  Any other reading of the statute would potentially allow an employee an additional recovery against his employer, which is prohibited by the Texas Labor Code.  

While the Court acknowledges that the outcome could be different if there were additional facts before the Court such as: (1) the employer was mandated to provide uninsured/underinsured coverage, (2) the wording of the Texas Labor Code exclusivity statute differentiated between injuries caused by the acts or omissions of a third party from the relationship of the injuries and the employee’s work, or (3) if the entire sum due under the UM Policy was to be paid by an insurance company; however, none of those is the situation here.  It is also interesting to note that the City is responsible for the first $ 500,000 worth of damages, and St. Paul is only liable for the damages exceeding that amount. 

This case reinforces that the exclusive remedy for injured workers of employers who subscribe to the workers’ compensation act are the benefits provided by same.

The Texas Supreme Court has granted a petition for review on this matter, so we may get some additional clarification on this issue in the coming months.