A recent Texas Supreme Court ruling allows employers without workers' compensation insurance to give an employee company-paid benefits in exchange for the employee waiving the right to sue for an injury sustained on the job. The court interpreted the Texas Workers' Compensation Act as not specifically prohibiting this kind of arrangement. However, the court indicated that the legislature should ultimately decide if this kind of agreement is against public policy.

The Texas Workers' Compensation Act does not require employers to carry workers' compensation insurance but does provide that if the business chooses not to carry insurance and is sued by an employee, the employer cannot claim that the employee was partially at fault for his or her injury.

Recently, Texas' Senate passed a bill that would prohibit this type of waiver.