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Retaliation Claims

Published: Jan 01, 2016
Can an employer fire an employee who has been off work due to a work-related injury covered by workers compensation?

Texas law recognizes an "at-will" employment relationship, meaning that either the employer or the employee may terminate the relationship at any time, without grounds for termination, and without further liability. There are court-created and statutory exceptions to "at-will" employment, however.

One exception found in the Texas Workers' Compensation Act prohibits an employer from terminating an employee in retaliation for the employee having filed in good faith a workers compensation claim. This law permits an employee to sue an employer for such retaliation, including wrongful termination. If a terminated employee decides to sue the employer, the definition of "retaliation" will be determined in court.

Will the employer have any insurance to defend against a lawsuit filed by the employee for wrongful termination? Both the workers compensation policy and the CGL policy contain exclusions for employment-related acts such as termination.

An employment practices liability policy may provide defense and indemnification, depending on the definition of "wrongful act" (if it includes wrongful termination and retaliation) and exclusions related to retaliation and workers compensation law claims.

Review the EPL policy forms used by your companies to determine if such claims might be covered or excluded.