## Facts

- Robert O. Varela, an employee of Hydrocarbon Construction Company, worked on a contracted “turnaround” at a refinery owned/operated by American Petrofina Company of Texas, Inc.
- Varela suffered injuries after a fall allegedly caused by a premises defect at the refinery.
- Hydrocarbon was a workers’ compensation subscriber; Varela pursued and settled a workers’ compensation claim through Hydrocarbon’s carrier.
- Varela then sued Petrofina in a third-party negligence action seeking tort damages.
- The jury allocated negligence: Varela 15%, Hydrocarbon 42%, Petrofina 43%, and found total damages of $606,800.
- The trial court reduced the judgment by both Varela’s and Hydrocarbon’s percentages, awarding Varela $243,924 (43% of total damages), and the court of appeals affirmed.

## Issues

1. Whether, in an employee’s third-party negligence action for a compensable workplace injury, the subscribing employer’s percentage of negligence may be used to reduce the employee’s recovery against the third-party defendant.

## Decision

- The Supreme Court of Texas reversed the court of appeals and the trial court.
- The court held that the subscribing employer’s negligence may not be considered to reduce the employee’s recovery against a third party.
- The court rendered judgment for Varela in the amount of total damages reduced only by Varela’s 15% contributory negligence (85% of $606,800).

## Legal Principles

- Under the workers’ compensation exclusive-remedy scheme, an employee covered by workers’ compensation has no tort action against a subscribing employer for personal injuries.
- Because the statute also bars a subscribing employer from reimbursing or indemnifying a third party for the employee’s judgment or settlement, the third party may not obtain an indirect credit by reducing the employee’s recovery based on the employer’s fault.
- Comparative negligence apportionment applies among parties subject to tort liability; a subscribing employer is removed from that liability structure for the covered injury, so the employer’s negligence does not enter the reduction calculation in the employee’s third-party suit.
- In an employee’s third-party action arising from a compensable injury, the employee’s recovery may be reduced only by the employee’s own percentage of negligence, not by the subscribing employer’s negligence.

## Conclusion

The court held that a subscribing employer’s negligence cannot be used to diminish an injured employee’s recovery from a negligent third party for a compensable workplace injury; the judgment against the third party is reduced only for the employee’s own fault.


Varela v. Am. Petrofina Co. of Tex., Inc., 658 S.W.2d 561 (Tex. 1983)