In Etie v. Walsh & Albert Co., 135 S.W.3d 764 (Tex. App.--Houston 1st Dist. 2004, pet. denied), the injured plaintiff asserted that the appellee, a lower-tier subcontractor, could not be a "deemed employee" because the TWCA's definition of "employee" excludes independent contractors, and the subcontractor had conceded at oral argument that it was an independent contractor. Id. at 767 (citing Tex. Lab. Code Ann. § 401.012(b)(2)).
The court disagreed, noting that the TWCA "clearly . . . contemplates that independent contractors may, in certain circumstances, be considered 'employees' despite not meeting the definition of an 'employee' in section 401.012(b)(2).'" Id.
The court held that "the provision of workers' compensation insurance transforms an independent contractor into a 'deemed employee'" for TWCA purposes. Id.
And the court saw "no reason why this shift in status from 'independent contractor' to 'deemed employee,' with its concomitant protections, should be denied to lower tier subcontractors." Id.
The court held that "the purposes of the TWCA are best served by deeming immune from suit all subcontractors and lower tier subcontractors who are collectively covered by workers' compensation insurance"; but it hastened to add that "we do not abrogate the right of an injured worker to sue a subcontractor or its employees when that subcontractor retains its status as an independent contractor by choosing not to participate in workers' compensation coverage." Id. at 768.
"Employee" is defined in the TWCA as "each person in the service of another under a contract of hire, whether express or implied, or oral or written." Id. § 401.012(a).
The term includes:
(1) an employee employed in the usual course and scope of the employer's business who is directed by the employer temporarily to perform services outside the usual course and scope of the employer's business;
(2) a person, other than an independent contractor or the employee of an independent contractor, who is engaged in construction, remodeling, or repair work for the employer at the premises of the employer; and
(3) a person who is a trainee under the Texans Work program established under Chapter 308. Id. § 401.012(b)