Facts on Plaintiff Attorney Activity in Texas Option Cases

By Richard S. Johnson J.D., EVP

Approximately four years ago, COVID-19 dramatically altered the way in which employers and employees interact. Since that time, the Texas Option industry has seen an increase in new plaintiff attorneys taking Texas Option employers’ liability cases for injured Texas employees. At the same, the industry has seen plaintiff attorneys and/or their employee clients take more aggressive positions and demonstrate less openness to early claim resolution. Fortunately for PartnerSource clients, the increase in new attorney activity has NOT resulted in increased arbitration award frequency or amounts.

However, as the leader in the Texas Option industry, PartnerSource keeps a keen eye toward changes in our industry and in the workplace, in general. This gives us perspective and enables us to stay on top of trends. In our perspective, this recent increase in attorney activity seems tied to several factors related to changes in our industry, including:

  • The Texas Economy – With its pro-business environment relative to other states, Texas has seen many large employers increasing their operations in Texas. The increase has brought many new employees to Texas, created new jobs for existing Texans and (as expected) created a higher volume of work-related injuries.
  • COVID-19 Aftermath – COVID-19 led to a dramatic increase in remote workers who are now much less open to conforming to traditional employer work conditions. COVID-19 also caused smaller businesses to fail, resulting in their employees moving to large employers seeking to keep up with increased demand. Both factors seem to have created an employee culture having less loyalty, cooperation and trust with their employers.
  • Rogue Arbitrator Awards/National Jury Awards – In recent years, the Texas Option industry has seen a handful of large arbitration awards that appeared out of proportion to the case facts and/or damage model. Many employers also note a continuing national trend of ever-increasing jury awards. As a result, certain attorneys and their employee clients feel that they can “hit the lottery” by bringing frivolous cases with unreasonable demands.
  • Misunderstanding of Texas Option Law – New attorneys taking on Texas Option cases often incorrectly believe that Texas Option employers have no defenses to Texas Option negligence claim – or that the standards of proving negligence don’t apply in the same way as other cases.
  • Social Media – Certain employees seem to have an inflated sense of importance and/or feel more pressure to keep with social media examples that are often unrealistic. Social media also often reinforces a person’s own beliefs and makes them less open to other points of view.

The PartnerSource Difference

The PartnerSource focus on proactive claims management and litigation avoidance puts our clients in a much better position to defend attorney claims when they arise. 

These numbers are worth noting: In PartnerSource’s recent Attorney Study of Texas Option claims with PartnerSource oversight, less than 0.5% of these claims resulted in a lawsuit or arbitration demand. Of those litigated Texas Option cases with PartnerSource litigation oversight, 70% resulted in Take Nothing Awards for the defense. For the 30% of these cases with arbitration awards, several of these awards did not cover the likely expenses plaintiff attorneys put into the cases.

Although the risk of a significant arbitration award is real, Texas Option employers must keep that risk in perspective. Some employers have entered into disproportionately large settlements relative to the case facts – and have only encouraged plaintiff attorneys to send them more cases.  Of the few large arbitrator awards, most involved employers using attorneys and selecting arbitrators that lacked experience with Texas Option negligence liability defense.

Avoid Attorney Activity

Texas Option employers can better avoid attorney activity by taking the following steps:

Reinforce Safety. Employers must conduct initial safety training specific to employee job tasks and keep accurate records for this training. Employers must then constantly reinforce (and document) safety training through ongoing hands-on training, new manager and refresher safety training, documented disciplinary actions for safety violations, and documented corrective actions after notice to management of safety hazards or accidents.

Engage in Proactive Claim Resolution. PartnerSource encourages employers, claims adjusters and nurse case management to provide early notice to PartnerSource for claims involving permanent disability, potential benefit claim denial or similar situations that go beyond the scope of the Texas Injury Benefit Plan. Unlike workers’ compensation, Texas Option programs provide great flexibility for developing creative solutions for injured employees.

Coordinate with Other Resources. Texas injury benefit plan claims adjusters and risk management teams should engage HR/Benefits/Leave Departments before issuing a benefit denial. For example, before denying a claim for preexisting conditions, claims adjusters should help the employee transition over to group health, disability, Medicare/SSDI, counseling, or other resources. Helping the employee find a solution (such as paying a few out-of-pocket costs in exchange for a liability release) can often be all that is needed to prevent attorney involvement.

Communicate Well. In litigation, many employees state that they retained an attorney because they felt that no one in the company cared about them. Claims adjusters and employers must have regular communication with injured workers that is honest, meaningful and compassionate.

Call PartnerSource

If you can’t avoid attorney activity, employers must conduct a thorough liability investigation; prepare a comprehensive, accurate workup of the case; and then make an early, honest assessment of settlement vs. defending the case. If there is clear liability and a reasonable demand, employers should work towards early settlement at a fair case value. 

However, in the current environment, if the case is frivolous, the employer may be better off fighting the case. At that point, it is critical for employers to work with PartnerSource to assign experienced Texas Option defense counsel and make the right arbitrator strikes for their case. Employers must also be willing to arbitrate the right cases rather than settling every litigated case, which sends the wrong message to plaintiff attorneys.

For more information, please contact Richard Johnson at (214) 316-9395 or contact your PartnerSource Team Leader.