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SCHNEIDER ELECTRIC USA, INC. d/b/a Schneider Electric, Appellant, v. Maria RAMIREZ, Appellee.
A “person” may not discharge or discriminate against an employee because the employee, among other actions, files in good faith a workers’ compensation claim. Tex.Lab.Code Ann. § 451.001(1) (Chapter 451). This permissive appeal asks how that provision applies to a temporary employee who alleges she was discharged by her staffing agency at a client company's request. More specifically, Appellee Maria Ramirez brought a Chapter 451 claim against the client company—Appellant, Schneider Electric USA, Inc. (Schneider Electric)—when it allegedly caused her discharge after she pursued a work-place injury claim. Schneider Electric moved for summary judgment claiming that while it carried workers’ compensation insurance for its own permanent employees, it did not provide its temporary workers, including Ramirez, workers’ compensation coverage. Thus, it claimed that it could not be held liable under Chapter 451 as a matter of law. The trial court denied Schneider Electric's summary judgment, but granted leave to file a permissive appeal to determine whether Schneider Electric can be held liable to Ramirez under Chapter 451. For the following reasons, we reverse and render judgment dismissing Ramirez's Chapter 451 claim against Schneider Electric.
I. Factual and Procedural Background
Schneider Electric operates a manufacturing facility in El Paso, Texas. It contracts with various staffing companies, such as Aerotek, Inc., to supply it with temporary contract personnel. Aerotek hired Ramirez in November 2017 and assigned her to work at Schneider Electric's El Paso facility. Schneider Electric trained Ramirez and had at least some authority to recommend discipline of temporary employees to Aerotek. Ramirez characterizes the relationship somewhat differently, contending that Aerotek “outsources” the personnel decision of when to end Ramirez's assignment to Schneider Electric.
On April 7, 2018, Schneider Electric's senior manufacturing supervisor, Cesar Hernandez, sent an email to Ben Diaz, its Human Resources manager, stating that Ramirez left work early because she was overwhelmed at having to torque nuts for two consecutive days (described as a very physically demanding job). Hernandez's email also stated that Ramirez was assigned that task by her two immediate supervisors, Jesus Estrada and Santiago Segovia, because she twice had failed to put on her insulated safety gloves. Schneider had adopted a strict policy against those found not wearing the required safety attire after a previous Schneider employee died from electrical shock during a testing procedure. Hernandez concluded the email, stating “After talking with Jesus and Santiago on Friday, adding the events of today and considering that her hiring timeframe is approaching, I recommend to let her go and not pursuit [sic] her hiring.” Within a few minutes of Hernandez's email, Ben Diaz emailed Aerotek's representative stating “Please end her assignment.”
The next day, Hernandez alerted Diaz that Ramirez had reported to work, but claimed she had a sore shoulder and back. He directed her to the Safety Department. On April 9th, Ramirez completed an Aerotek incident report, claiming she injured her neck, shoulder, and back on April 7 from having to “torque 65 lbs” over a two day period. By that time she had seen a physician who placed a “no work” restriction on her activities. Ramirez alleges that by April 19, both Aerotek and Schneider Electric were in receipt of a form showing that Ramirez was pursuing a workers’ compensation claim. The claim was made, however, under Aerotek's workers compensation policy. Although Schneider Electric insures its own permanent employees, it does not provide coverage under its policy to temporary personnel on assignment from one of the staffing companies. Rather, Aerotek covers its own workers under Aerotek's workers’ compensation policy while they are working for Schneider Electric, and Aerotek's policy does not name Schneider Electric as the insured.
Ramirez's employment with Aerotek was terminated on April 20th. Ramirez subsequently sued Schneider Electric and Aerotek alleging disability discrimination, sexual harassment, sex discrimination, and retaliation under the Texas Commission on Human Rights Act. She also asserted a Chapter 451 claim, contending that both companies “discriminated, retaliated against, and fired [her] for filing a Workers’ Compensation claim.” Aerotek removed the case to the U.S. District Court for the Western District of Texas, but Ramirez's Chapter 451 claims were severed and remanded to state court.
Once back in state court, both Aerotek and Schneider Electric moved for summary judgment on Ramirez's Chapter 451 claim. Aerotek's motion principally argued that it terminated Ramirez based on its belief that she violated a Schneider Electric safety rule, which it argued was a legitimate, non-retaliatory reason for her termination that she cannot show was a mere pretext for an unlawful motive. The trial court granted Aerotek's motion and dismissed the claim against Aerotek with prejudice.1
Schneider Electric filed a traditional motion for summary judgment, arguing that under the holdings in Texas Mexican Ry. Co. v. Bouchet, 963 S.W.2d 52 (Tex. 1998) and Burton v. Freescale Semiconductor, Inc., 798 F.3d 222 (5th Cir. 2015), Ramirez's Chapter 451 fails as a matter of law because Schneider Electric never provided workers’ compensation coverage to Ramirez. The trial court denied Schneider Electric's motion. But the court also allowed Schneider Electric to pursue a permissive appeal for this question: “whether Schneider Electric can be liable to Plaintiff for workers’ compensation discrimination pursuant to Chapter 451 since Schneider Electric did not provide Plaintiff workers’ compensation coverage but does provide workers’ compensation coverage to its direct employees.” We granted Schneider Electric the right to pursue a permissive appeal from the denial of its motion for summary judgment. See Tex.Civ.Prac. & Rem.Code Ann. § 51.014(d) and (f) (authorizing and setting forth standards for permissive appeals).
In its sole issue, Schneider Electric repeats its argument in its motion for summary judgment—Chapter 451 does not provide for a claim against a client company for a temporary worker who pursues workers’ compensation benefits through her staffing agency employer, and who was not covered under workers’ compensation by the client company.
A. Standard of Review
We review a trial court's order granting summary judgment de novo. Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680 (Tex. 2017). When a party with the burden of proof moves for traditional summary judgment, that party “bears the burden to conclusively establish that it is entitled to judgment as a matter of law, notwithstanding the nonmovant's response or lack thereof.” B.C. v. Steak N Shake Operations, Inc., 598 S.W.3d 256, 258-59 (Tex. 2020), citing Tex.R.Civ.P. 166a(c). A matter is conclusively established when “reasonable people could not differ in their conclusions ․” City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). We review the evidence in the light most favorable to the non-movant, indulge every reasonable inference in favor of the non-movant, and resolve any doubts against the motion. Id. at 824.
B. Applicable Law
Although Texas does not require private employers to provide workers’ compensation insurance, it incentivizes them to do so. Port Elevator-Brownsville v. Casados, 358 S.W.3d 238, 241 (Tex. 2012). Private employers lose many common-law defenses in work-injury lawsuits if they do not subscribe, and are generally protected from ordinary negligence suits if they do. Tex.Lab.Code Ann. § 406.033 (abolishing certain common-law defenses for non-subscribing employers); Id. § 408.001(a) (providing that “[r]ecovering workers’ compensation benefits is the exclusive remedy of an employee covered by workers compensation insurance coverage”). And in the unique context of temporary employees, both the staffing agency and the client company can gain the benefit of the exclusive remedy bar, because an employee may have more than one employer for the purposes of the exclusive remedy defense. See Garza v. Exel Logistics, Inc., 161 S.W.3d 473, 475-76 (Tex. 2005); Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 142 (Tex. 2003). In Garza, for instance, the court held that a temporary employee was the client's employee as a matter of law (and thus a potential beneficiary of the exclusive remedy defense) because, the “undisputed evidence” showed that at the time of injury, the temporary employee was (1) working on the client's premises, (2) in the furtherance of the client's day-to-day business, and (3) the details of his work that caused his injury were specifically directed by the client. Garza, 161 S.W.3d at 477. That said, the court reversed and remanded the case because the client company did not show that it was “covered by workers’ compensation insurance coverage” for a “work-related injury sustained by the employee,” which is a “prerequisite to the application of the exclusive remedy provision in section 408.001(a).” Id. at 481.
The Act also protects a worker's right to pursue workers’ compensation benefits. Chapter 451 acts “to protect persons entitled to benefits under the Act and to prevent them from being discharged for seeking to collect those benefits.” In re Poly-America, L.P., 262 S.W.3d 337, 350 (Tex. 2008). “Chapter 451 of the Labor Code, also known as the Anti–Retaliation Law, creates a cause of action against a ‘person’ who ‘discharge[s] or in any other manner discriminate[s] against an employee because the employee has: (1) filed a workers’ compensation claim in good faith; (2) hired a lawyer to represent the employee in a claim; (3) instituted or caused to be instituted in good faith a proceeding under [the Texas Workers’ Compensation Act]; or (4) testified or is about to testify in a proceeding under [the Act].’ ” Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 55 (Tex. 2011), quoting Tex.Lab.Code Ann. § 451.001.
Chapter 451 allows a claim against a “person.” The Texas Supreme Court limited that term in Texas Mexican Ry. Co. v. Bouchet, when it held that “employers that are nonsubscribers to the Texas Workers’ Compensation Act” cannot be sued under Chapter 451 or its substantially similar predecessor, article 8307c of the Texas Revised Civil Statutes. 963 S.W.2d at 53, 57. Because the legislature intended Chapter 451 “to protect ‘persons who bring Workmen's Compensation claims,’ ” and because Chapter 451 “is intended to apply only to employees and employers who act under the Texas Workers’ Compensation Act,” the court held that “only subscribers can be subject to [Chapter 451] claims.” Bouchet, at 56. In so doing, the court reaffirmed its prior statement that “[f]orbidding retaliation against an employee for seeking monetary benefits under the Workers’ Compensation Law presupposes that the employer is a subscriber.” Id. at 56, quoting City of LaPorte v. Barfield, 898 S.W.2d 288, 293 (Tex. 1995); see also Garza, 161 S.W.3d at 481 (holding that an employer is only “covered by workers’ compensation coverage” for the purposes of the exclusive-remedy provision if the employer's policy covers the injured employee-plaintiff).
Our question here is whether under the Bouchet rationale does Chapter 451 apply to a client company that carries workers compensation benefits for its own employees, but not for temporary employees assigned to its workplace.
On appeal, Schneider Electric argues that its motion for summary judgment should have been granted because it never provided workers’ compensation coverage to Ramirez, thus rendering Schneider Electric's liability to Ramirez under Chapter 451 impossible under Bouchet. In support, Schneider Electric directs our attention to Judge Reavley's opinion in Burton, 798 F.3d at 241-244. That case closely parallels the facts here. In Burton, a staffing agency hired out Burton temporarily to Freescale, a separate company. Burton subsequently suffered a health condition that she believed was attributable to her work at Freescale, and she filed a workers’ compensation claim through the staffing agency's policy. Id. at 225-26. Approximately two weeks later, Freescale decided to terminate Burton's assignment after she was caught using the internet, which it termed as the “final” straw in a series of claimed work-related missteps. Id. at 226. Over the staffing agency's initial opposition, Burton was terminated a month later. Id. Burton then sued Freescale and the staffing agency under the Americans with Disabilities Act (ADA) and under Chapter 451. The trial court granted both companies’ motions for summary judgment. Id.
On appeal, the Fifth Circuit first considered the ADA claim, and concluded that based on the summary judgment record, both the staffing agency and Freescale were potentially liable under the ADA. Id. at 241. Like the arguments that Ramirez asserts here, Burton successfully developed a record to show that Freescale orchestrated Burton's termination and that the stated rationale for the termination was pretextual. Id. The ADA claim was returned for trial, but relevant to this appeal, the Fifth Circuit also concluded that Freescale was an improper defendant as a matter of law for the Chapter 451 claim. Id. at 242-43. The court first recognized that no Texas case had addressed the question of whether a joint employer that does not provide a plaintiff coverage could be liable under Chapter 451; the court therefore had to make an “Erie guess” as to how a Texas court would rule. Id. at 242. Relying on Bouchet, the court concluded that “it is not enough to be a subscriber generally. Burton [could not] bring a section 451.001 retaliation claim against a defendant that did not provide her workers’ compensation benefits.” Id. Instead, “there must be an employer-employee relationship for these terms to take on meaning.” Id., citing Garza, 161 S.W.3d at 476.
The court further noted that the Texas Supreme Court “has held that employers are only ‘covered by workers’ compensation insurance coverage’ for purposes of the exclusive remedy provision if their workers’ compensation policy covers the injured plaintiff-employer.” Id. at 243, citing Garza, 161 S.W.3d at 481. “In other words, to claim immunity from a plaintiff-employee's lawsuit, it is not enough to point to coverage generally; the employer must show coverage as to the injured plaintiff-employee.” Id. (emphasis in original), citing Garza, 161 S.W.3d at 481. The court also recognized that “[f]orbidding retaliation against an employee for seeking monetary benefits under the Workers’ Compensation Act presupposes that the employer provides the employee's workers’ compensation benefits and has some stake in the claim.” Id. at 242, citing Bouchet, 963 S.W.2d at 56, and Barfield, 898 S.W.2d at 293. The court rejected Burton's proposed application of the Bouchet rule:
Under Burton's approach, despite no stake in Burton's workers’ compensation claim, Freescale would be subject to liability because it made the unrelated and legislatively “encourage[d]” decision to provide coverage for its permanent employees. Imposition of liability on this basis strikes us as purposeless and cuts against “the Act's decided bias in favor of employers electing to provide coverage for their employees.” Moreover, it is inconsistent with the reasoning employed in multiple Texas Supreme Court cases including Bouchet, Wingfoot, and Garza. Freescale did not provide workers’ compensation coverage for Burton and is not subject to her Section 451.001 retaliation claim.
Id. at 243, citing Alvarado, 111 S.W.3d at 140, 142.
In this case, Schneider Electric moved for summary judgment claiming that under Bouchet, it could not be liable under Chapter 451 because it never provided workers’ compensation coverage to Ramirez, who was instead covered by Aerotek, the staffing company that employed her. Although the record suggests that Schneider Electric provided general coverage to its own permanent employees, no evidence shows that Schneider Electric ever provided coverage under its own policy to Ramirez. Rather, only Aerotek provided coverage to Ramirez. Given that we face a similar situation here, we find Burton’s interpretation and application of Bouchet and Garza persuasive and hold that for an employer to be liable under Chapter 451, it is not enough to be a subscriber generally; rather, the employer must provide coverage to the plaintiff for her to recover under Chapter 451.2
On appeal, Ramirez principally argues that Schneider Electric was liable under Chapter 451 because it was engaged with Aerotek in a “joint enterprise” which imputes liability to Schneider Electric even though the company did not insure Ramirez under its workers’ compensation policy. We are first careful to distinguish the terms “joint enterprise” from “joint employers.” “Joint enterprise is a theory involving derivative liability whereby one enterprise participant may be held responsible for a cause of action proven against another participant.” In re Texas Dep't of Transp., 218 S.W.3d 74, 78 (Tex. 2007); see also St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 534–35 (Tex. 2002) (setting out elements of joint enterprise).3 Like any theory of liability, it must be pleaded to place it before the trial court. See Salazar v. Ramos, 361 S.W.3d 739, 751-52 (Tex.App.--El Paso 2012, pet. denied). Ramirez did not plead a claim for joint enterprise, and neither did she raise it in her response to Schneider Electric's motion for summary judgment.4 Thus, we find that claim is not properly before us. As this Court stated in Ramos: “Because Appellants failed to plead the joint-enterprise liability theory and because Appellees were not required to challenge the theory in seeking summary judgment, we find the trial court neither granted summary judgment upon a theory of joint-enterprise liability nor granted more relief to Appellees than was requested.” Id. at 752. Even aside from the pleading issue, joint enterprise was not raised in response to the motion for summary judgment which also precludes its consideration on appeal. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979) (in context of a summary judgment, a party cannot attempt to raise a fact issue on appeal that was not raised with the trial court).
Ramirez also argues that Aerotek and Schneider Electric are “co-employers” or “joint employers.” Courts use the term “joint employers” when deciding whether an employee has more than one employer for the exclusive remedy defense in the Texas Workers’ Compensation Act. See Burton, 798 F.3d at 228 n.4, & 242. But like the Burton court, we conclude that the question of whether Schneider Electric and Aerotek were joint employers of Ramirez is irrelevant. Rather, the pertinent issue is whether Schneider Electric provided coverage to Ramirez under its own coverage policy to trigger Chapter 451. Because Schneider Electric was not the subscriber responsible for covering Ramirez, we find her argument unavailing. See id. at 242 n.2 (“But since [the temporary agency's client] is not the ‘subscriber’ responsible for [the plaintiff's] workers’ compensation coverage, the question of employment is beside the point.”) (emphasis original), citing Bouchet, 963 S.W.2d at 56.
Finally, Ramirez offers policy rationales for why Schneider Electric should be responsible for her discharge. She focuses on facts that suggests Schneider Electric engineered her termination and that Aerotek effectively outsourced its personnel decisions to its client companies. The same allegations were made in Burton. Id. at 227, (“Most fundamentally, it was Freescale that decided and insisted Burton be fired.”). And just as in Burton, Ramirez points out that Aerotek and Schneider Electric are claiming the other was the relevant decision maker. Id. at 227-28. Those facts, along with proof of pretext and the other ADA elements, might present a triable case against both the staffing agency and client company under the ADA. Id. at 229-40. And the common law might also provide remedies for providing false information that injures another. See Frank B. Hall & Co., Inc. v. Buck, 678 S.W.2d 612, 617 (Tex.App.--Houston [14th Dist.] 1984 writ ref'd n.r.e.). Thus, Ramirez is not left without a remedy here. Our sole question here is whether she has an additional claim under a specific statutory cause of action. We conclude she does not have that right.
We hold that because Schneider Electric did not provide workers’ compensation coverage to Ramirez it cannot be held liable under Chapter 451 as a matter of law. Thus, the trial court erred by denying Schneider Electric's motion for summary judgment on this basis.
Schneider Electric's Issue One is sustained.
We reverse the trial court's order denying Schneider Electric's motion for summary judgment and render judgment dismissing Ramirez's Chapter 451 claim against Schneider Electric.
1. The merits of Aerotek's motion are not part of this appeal and are not before us.
2. Ramirez correctly notes that we are not bound by decisions from the Fifth Circuit. See Penrod Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993). Yet we may still find cases from the Fifth Circuit to be persuasive authority. Id. And here, we find the reasoning of Burton’s author, Judge Reavley who was formerly a Justice on the Texas Supreme Court, to be persuasive.
3. Those elements are: (1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control. Blount v. Bordens, Inc., 910 S.W.2d 931, 933 (Tex. 1995). Ramirez raises the joint enterprise argument in her brief on the merits. Schneider Electric's reply brief argued that the argument was new and should not be considered. As an alternative to that position, it also argued the evidence did not meet the elements of the theory. Ramirez has moved to dismiss the appeal, contending that Schneider Electric has injected a new issue into the appeal—namely the merits of the joint enterprise claim. Our decision is not based on the merits of the theory, and so we reaffirm our earlier decision to overrule the motion to dismiss.
4. Rather, the focus on her response to the motion for summary judgment below was based on Schneider Electric and Aerotek being “co-employers” under the Professional Employer Organization Act (PEOA). See Tex.Lab.Code Ann. § 91.001, et seq. Under that Act, certain professional license holders and their clients are considered co-employers, and proof of coverage by one co-employer is evidence of coverage for both. See id. § 91.006 and § 91.042(c). Ramirez, however, does not carry that argument forward on appeal. And this Court has held that the PEOA does not govern temporary employment relationships. Robles v. Mount Franklin Food, L.L.C., 591 S.W.3d 158, 168 (Tex.App.--El Paso 2019, pet. denied).
JEFF ALLEY, Justice
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Docket No: No. 08-21-00145-CV
Decided: August 11, 2022
Court: Court of Appeals of Texas, El Paso.
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