Halferty v. Flextronics Am., LLC
545 S.W.3d 708 | Court of Appeals of Texas | 2018
What This Case Means for Subcontractors
A subcontractor employee was injured at a Flextronics facility and sued for negligence. Flextronics tried to use the workers' compensation exclusive remedy defense to block the lawsuit, claiming it wasn't liable because the subcontractor had insurance. The Texas court rejected this defense, ruling that simply requiring a subcontractor to carry insurance isn't enough—the general contractor must actively provide or ensure coverage through mechanisms like an OCIP (Owner Controlled Insurance Program) or specific insurance provisions in the contract. The case was sent back to trial.
Key Takeaways
- •Don't assume your insurance requirement language protects you from lawsuits. Courts look at whether you actively managed or provided the coverage, not just whether you required it.
- •If you're a general contractor, consider using an OCIP or similar program to actively control workers' comp coverage rather than just passing the requirement to subcontractors.
- •If you're a subcontractor, understand that your own workers' comp insurance may not shield the general contractor from liability—injured workers may still sue the GC directly for negligence.
Flextronics did not 'provide' workers' compensation coverage to Halferty as a subcontracted employee.
Frequently Asked Question
Does requiring subcontractors to carry workers' compensation insurance protect me from lawsuits?
Not automatically. Texas courts require general contractors to actively provide or ensure workers' compensation coverage through mechanisms like an OCIP or specific contractual insurance provisions. Simply requiring subcontractors to obtain their own coverage is insufficient to claim the exclusive remedy defense. You need documented proof of active management of the insurance program.
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