Nevada Supreme Court Bars Texaco from Hiding Behind Subsidiary to Escape Injury Lawsuit

In the late 1980s, Dennis Willison worked at a Las Vegas-area gas station whose daily operations were run by Petroman, Inc., a wholly owned subsidiary of Texaco Refining and Marketing, Inc. Texaco owned the property and the equipment; Petroman managed the day-to-day work and employed the station's staff, including Willison.

While operating a gas pump, Willison was burned by gasoline when a latch on the pump malfunctioned. He filed a personal-injury lawsuit against Texaco, as the property owner, along with the pump's manufacturers. Texaco responded by seeking to be dismissed from the case entirely. It argued that it was protected by the exclusive-remedy provision of the Nevada Industrial Insurance Act (NIIA), which bars employees from suing their employers in tort for work-related injuries. Texaco's theory came in two parts: first, that because Petroman was its wholly owned subsidiary, Texaco was effectively Willison's employer; and second, that Petroman should be treated as a subcontractor of Texaco, making Willison a 'statutory employee' of Texaco under NRS 616.085 and 616.560. The district court accepted Texaco's motion and entered summary judgment in Texaco's favor.

Greenman, Goldberg, Raby and Martinez took the appeal to the Nevada Supreme Court on Willison's behalf. The firm argued that parent-company ownership alone does not create the control relationship that the NIIA requires before a company can claim employer immunity.

In an opinion issued March 18, 1993, the court agreed. It applied the five-factor control test from Leslie v. J.A. Tiberti Construction (1983), which examines supervision of work details, the source of the worker's wages, the right to hire and fire, the extent to which the work furthers the putative employer's general business, and control over hours and location. On the record before the district court, Texaco had submitted only a single affidavit establishing that Petroman was its wholly owned subsidiary. The court held that fact alone was far from sufficient to show the degree of control NIIA employer status requires, particularly given Willison's showing that Petroman, not Texaco, controlled his conditions of employment.

The court also rejected Texaco's subcontractor argument. Under the test from Meers v. Haughton Elevator (1985), a subsidiary qualifies as a subcontractor only if the type of work it performs is work that the parent would normally carry out through its own employees. Texaco presented no evidence on that question, and the bare parent-subsidiary relationship did not fill the gap.

The Nevada Supreme Court reversed the summary judgment and remanded the case to the district court for further proceedings. The decision at 848 P.2d 1062 (Nev. 1993) clarified that corporate structure cannot, by itself, extend NIIA immunity from a subsidiary to a parent company.