Companies that opt out of Texas' workers compensation system cannot be sued for retaliation under the state's workers comp law, a Texas appellate court has ruled.

In Willie Addison vs. Diversified Healthcare/Dallas L.L.C., Mr. Addison alleged that Diversified Healthcare retaliated against him shortly after he was injured at work by firing him.

But on Tuesday, the Texas 5th District Court of Appeals ruled that retaliation claims do not apply to Diversified Healthcare and other employers that choose not to purchase workers comp insurance. Texas is the only state in the nation that allows employers to opt out of the state's workers comp system, being known as nonsubscribers.

Mr. Addison worked as a cook for a Carrollton, Texas, nursing home owned by Diversified Healthcare. He injured his back while lifting 50 pounds of food, and was immediately told to leave the premises by his supervisor, court records show.

When Mr. Addison stayed to meet with a facility administrator and staff nurse, his supervisor fired him, records show.

While he was diagnosed with a strained back, the company did not provide benefits for his injury. He sued his former employer, saying Diversified Healthcare retaliated against him in violation of Texas law.

Diversified argued it could not be held liable for retaliation because it does not have workers comp insurance, although it does have a self-administered benefit plan for injured workers.

%%BREAK%%

In a unanimous opinion Tuesday, a three-judge panel of the state appellate court upheld a lower court's ruling in favor of Diversified Healthcare.

Employers that participate in the workers comp system generally cannot fire injured workers who file workers comp claims under Texas law, the court said. However, it ruled that the workers comp statute does not apply to Texas firms that opt out of the comp system.

“A nonsubscribing employer assumes no liability for discharging an employee even if that employee” files a comp claim in good faith, hires an attorney or participates in review proceedings for pending claims, the court said.

Mr. Addison contended that Diversified portrayed itself as a subscriber to the Texas workers comp system. In court records, he noted that an employee handbook said that Diversified Healthcare “maintains workers' compensation insurance on all employees.”

But the appellate court held that the appearance of subscription does not make a nonsubscribing employer subject to Texas' workers comp law.