The question of who provides workers’ compensation insurance in employer–staffing company relationships is handled in different ways. Frequently, the staffing company will provide workers’ compensation coverage for all individuals provided to the client company. Issues sometimes arise related to the client company’s and staffing company’s liability under a joint-employer theory for adverse employment actions involving workers provided by the staffing company to the employer. A Texas appellate court recently examined the scope of joint-employer liability in the workers’ compensation retaliation context.
An employer/client company had contracted with various staffing (non-professional employer organization (PEO)) agencies to supply temporary contract personnel. The client company provided workers’ compensation coverage for its permanent employees. The staffing company provided workers’ compensation coverage for the temporary workers assigned to work with the client company. A dispute arose when a temporary worker left work because the tasks assigned to her were too physically demanding. After she left, the client company directed the staffing company to end her assignment. The next day, the temporary worker reported to work and claimed that she had been injured on the job the day before.
Following the termination of her employment, the temporary worker sued both the temporary staffing company and the client company under Chapter 451 of the Texas Labor Code...
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