Waste Mgmt. of Tex., Inc. v. Stevenson

622 S.W.3d 273

WASTE MANAGEMENT OF TEXAS, INC. and Rigoberto Zelaya, Petitioners,

v.Robert STEVENSON, Respondent

No. 19-0282

Supreme Court of Texas.

Argued October 28, 2020

OPINION DELIVERED: April 30, 2021

Mary A. Keeney, Mary Barrow Nichols, Austin, Jackie M. Kenyon, Shannon Simmons Pounds, for Amicus Curiae Texas Mutual Isuarance Company.

Ronald Wardell, Houston, James Christian Marrow, Jeffrey Leo Befort, Richard P. Hogan Jr., Houston, S. Grant Dorfman, Bellaire, Jennifer Bruch Hogan, Houston, for Respondent.

Barry Lee Wertz Jr., David M. Gunn, Houston, Caroline C. Schadle, Constance H. Pfeiffer, Joshua S. Smith, Houston, for Petitioners.

Justice Blacklock delivered the opinion of the Court, in which Chief Justice Hecht, Justice Guzman, Justice Lehrmann, Justice Devine, Justice Busby, Justice Bland, and Justice Huddle joined.

An employee of a temporary staffing agency was injured while on assignment to a client of the agency. He recovered workers compensation benefits through the staffing agency and then sued the client for whom he performed the work. The Court must decide whether the injured worker can proceed with a tort claim against the client defendant, who argues that the plaintiff qualifies as its employee under the Workers’ Compensation Act. If the plaintiff is the defendant's employee, then the Act's exclusive-remedy provision bars the plaintiff's claims. Because we conclude that the plaintiff qualifies as the defendant's employee under the Workers’ Compensation Act, we reverse the court of appeals’ judgment and render judgment for the defendant.

I. Background

Robert Stevenson was hired by Taylor Smith Consulting, LLC, a temporary labor supplier. Taylor Smith assigned Stevenson to work on a temporary basis for Waste Management of Texas, Inc. ("Waste Management" or "Waste Management Texas"). Waste Management operates garbage trucks, and Stevenson worked on one of those trucks.

The assignment of Stevenson to Waste Management Texas was subject to the "Master Agreement," a contract between Taylor Smith and Waste Management National Services, Inc. Although Waste Management Texas is not a party to the Master Agreement, Taylor Smith has assigned hundreds of workers to Waste Management Texas under the Master Agreement. The parties agree that Waste Management Texas and Waste Management National Services are affiliated corporations, though the briefing and record never precisely explain the legal relationship between the two.

In May 2014, Stevenson was working on a Waste Management garbage truck. The truck was on one of its usual garbage-collection routes. Rigoberto Zelaya, a Waste Management employee, drove the truck. Zelaya accidentally backed the truck over Stevenson's leg and foot, seriously injuring Stevenson.

Both Waste Management and Taylor Smith carried workers compensation insurance for their employees. Stevenson applied for benefits under Taylor Smith's workers compensation policy. He also sued Waste Management and Zelaya, alleging common-law negligence. The defendants¹ moved for summary judgment, arguing that the exclusive-remedy provision of the Workers’ Compensation Act barred Stevenson's claims. The defendants argued that Stevenson was, for workers compensation purposes, Waste Management's employee at the time of the accident. Stevenson argued in a cross-motion for summary judgment that no evidence existed that he was Waste Management's employee. Stevenson relied primarily on the Master Agreement, which states that temporary laborers like Stevenson "shall be independent contractors in respect of Waste Management." The trial court granted summary judgment for Waste Management.

The court of appeals reversed and remanded, holding that a genuine fact issue existed on whether Stevenson was Waste Management's employee. Stevenson v. Waste Mgmt. of Tex., Inc. , 572 S.W.3d 707, 715 (Tex. App.—Houston [14th Dist.] 2019).

II. Analysis

A. Employer-Employee Status Under the Workers’ Compensation Act

"Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage ... 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. LAB. CODE § 408.001(a). There is no dispute that Waste Management had workers compensation insurance coverage for its employees. Stevenson's claims against Waste Management and Zelaya are therefore barred if Stevenson was "an employee covered by [Waste Management's] workers’ compensation insurance coverage." The dispositive question in this case is whether, for workers compensation purposes, Stevenson was Waste Management's employee.

The Workers’ Compensation Act defines "employee" as "each person in the service of another under a contract of hire, whether express or implied, or oral or written." Id. § 401.012(a). An "employer" is "a person who makes a contract of hire, employs one or more employees, and has workers’ compensation insurance coverage." Id. § 401.011(18).² Although determining whether a plaintiff is the defendant's employee is ultimately a matter of applying these statutory definitions, courts have not often found the definitions alone to be dispositive. Frequent litigation over the exclusive-remedy provision has yielded a large body of case law, including several decisions of this Court, addressing whether the plaintiff was the defendant's employee for workers compensation purposes. Under those cases, "[t]he test to determine whether a worker is an employee rather than an independent contractor is whether the employer has the right to control the progress, details, and methods of operations of the work." Limestone Prods. Distrib., Inc. v. McNamara , 71 S.W.3d 308, 312 (Tex. 2002) (per curiam). The parties agree that this "right-to-control" test arises from this Court's decisions, but they disagree about what "right to control" means and whether Waste Management had it.

Several previous decisions of this Court under similar facts help to answer those questions. All involved plaintiff workers provided by employment agencies to the client defendant. In Wingfoot Enterprises v. Alvarado , 111 S.W.3d 134 (Tex. 2003), the plaintiff Alvarado was hired by Wingfoot Enterprises, a temporary staffing agency. Alvarado was assigned to work at a manufacturing facility owned by Web Assembly, Inc., where he was injured. Alvarado sued Wingfoot, alleging negligence and gross negligence under several theories. Wingfoot argued that it was Alvarado's employer and that the exclusive-remedy provision of the Workers’ Compensation Act barred the claims. We agreed with Wingfoot and held that "[a]n employee injured while working under the direct supervision of a client company is conducting the business of both the [employment agency] and that employer's client." Id. at 143.

In Garza v. Exel Logistics, Inc. , 161 S.W.3d 473 (Tex. 2005), the plaintiff Garza was hired by an employment agency and assigned to work at Exel's premises. Garza was injured on the job while following the instructions of an Exel employee. Id. at 477. He sued both the employment agency and its client, Exel. We stated that "in determining if a general employee of a temporary employment agency is also an employee of a client company for purposes of the Act, we consider traditional indicia, such as the exercise of actual control over the details of the work that gave rise to the injury." Id. at 477. We held that Exel was Garza's employer because the "undisputed evidence establishes that at the time Garza was injured, he was working on Exel's premises, in the furtherance of Exel's day-to-day business, and the details of his work that caused his injury were specifically directed by Exel." Id.

Finally, in City of Bellaire v. Johnson , 400 S.W.3d 922 (Tex. 2013) (per curiam), we revisited the issue under facts nearly identical to those before us today. Magnum Staffing employed plaintiff Johnson and provided him to the City of Bellaire as a garbage collector. Johnson was injured working on a truck driven by a City employee. Both Magnum and the City had workers compensation coverage. Johnson sued the City, which asserted the exclusive-remedy provision of the Workers’ Compensation Act. This Court applied the standard articulated in Limestone Products , under which a worker is an employee rather than an independent contractor if the employer "has the right to control the progress, details, and methods of operations of the work." Id. at 923–24 (quoting Limestone Prods. , 71 S.W.3d at 312 ). The overwhelming evidence indicated that "[t]he City set Johnson's work schedule, gave him his assignments, and supervised his work." Id. at 923. We concluded that "undisputed evidence does establish as a matter of law that the City controlled the details of Johnson's work and thus, that Johnson was its employee." Id.³

In each of these dual-employment cases, the fact that the defendant did not directly employ the worker provided by the staffing agency did not factor prominently in the analysis. Nor did the result turn on the contractual relationship between the staffing agency and its client. Instead, we determined whether the defendant qualified as the worker's employer under the Act by examining the parties’ conduct at the jobsite. Rather than focus on the legal question of who had the contractual right to control the plaintiff's work, we looked instead to the factual question of who exercised the right to control as a practical matter in the course of the parties’ daily work.

The approach reflected in our prior dual-employment cases is consistent with the statutory definition of "employee" provided by the Workers’ Compensation Act. An "employee" is "each person in the service of another under a contract of hire, whether express or implied, or oral or written." TEX. LAB. CODE § 401.012(a). The definition expressly includes workers operating under a written contract, so long as they are "in the service of" the employer....