Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

I wrote about an unusual dispute between the EEOC and a San Antonio law firm where the EEOC sought enforcement of an administrative subpoena seeking law firm records in connection with a charge of discrimination filed by a former employee of the firm.  You can read that post here.

Well, like Spring itself that blows in like a lion and out like a lamb, the law firm has provided the information sought by the EEOC subpoena and the EEOC has requested dismissal of its application to enforce the administrative subpoena (which has been granted).  Much ado about nothing after all.  You can review the EEOC's Motion to Dismiss here.

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Since at least 1995 Texas law has provided that women has a right to breastfeed in public in any place in which they are legally authorized to be.  Last week, the health care reform signed by the President amended the Fair Labor Standards Act to require covered employers to provide reasonable break time for nursing mothers to express breast milk for nursing children.  The FLSA is the federal law that requires most employers to pay minimum wages and overtime for hours worked in excess of forty per week.

The new law provides that:

• Employers must provide reasonable break time for an employee to express breast milk for her nursing child for one year after the child's birth;
• Provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk;
• Break time is unpaid in Texas (unless of course the employee is an exempt employee entitled to full salary in workweeks where any work is performed).

The law does not apply to employers with 50 or fewer employees if "the requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer's business."

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As I wrote yesterday, the Wage & Hour Division of the U.S. Department of Labor has ceased issuing detailed, fact-specific opinion letters.  In the first of the Administrative Interpretations the Division will issue in lieu of opinion letters, the Division has concluded that most mortgage loan officers will not qualify for the administrative exemption to the overtime provisions of federal law.

For purposes of the Administrator's Interpretation, mortgage loan officers includes employees typically having job titles of mortgage loan representative, mortgage loan consultant and mortgage loan originator.  The interpretation outlines the typical duties performed by the employees as receiving internal leads; contacting potential customers; receiving contacts from customers generated by direct mail or other marketing activity; collecting required financial information from customers (including income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments and liens); assessing loan products available for customers and discussing those products with customers; and completing and forwarding completed documents to underwriters or loan processors for closing.

Based on a lengthy review of the typical duties of a mortgage loan officer and the case law analyzing such positions, the Administrator concluded that the typical mortgage loan officer has the primary duty of making sales for their employers and therefore do not qualify for the administrative exemption.  You can access and review the full interpretation here.

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The U.S. Department of Labor's Wage & Hour Division announced it will no longer issue fact-specific definitive opinion letters in response to questions submitted by individuals and organizations.  According to the Division, its opinion letters provide only limited guidance to broad categories of employers and employees where slight factual differences in the facts assumed in the letter could result in a different outcome. 

In the future, the Division intends to issue Administrative Interpretations to "set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision in issue"  and to "clarify[] the law as it relates to an entire industry, a category of employees, or to all employees."

The Division will continue to respond to requests for opinion letters with references to statutes, regulations, interpretations and cases that relevant to the request but without analysis of the specifics facts presented. You can access the Divisions new Administrative Interpretations page here.

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With Congress finalizing a health care reform bill to send to the President, what exactly will the 2,000 page bill mean for Texas employers?  As reported today by U.S.A Today, employers should expect, among other things:

• A health care exchange where small businesses can comparison shop for insurance policies;
• Fines for employers with 50 or more employees if any full-time workers qualify for health care subsidies; and
• Increases in Medicare payroll tax.

Only time will tell what the true cost of this reform will be for employers and whether the benefits cost.  

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This week the Department of Labor published a poster that must be used by all employers employing employees under H-2A visas.  H-2A visa holders are non-immigrant employees employed in temporary or seasonal agricultural jobs.  A copy of the required poster (in English) can be accessed here.  (Spanish here)  This poster is required by federal rules published February 12,  2010 and must be posted in the place of employment both in English and any other language other than English spoken by a significant portion of the workers. 

For more information on the eligibility requirements to employ H-2A employees, see the Department of Labor's fact sheets that can be accessed here.

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In a discrimination case it is very important to determine whether the plaintiff is alleging direct or circumstantial evidence of discrimination.  This is important because the standard by which a court determines if the case should proceed to trial or not depends on this determination. In Jackson v. Cal-Western Packaging Corp., the U.S. Court of Appeals for the Fifth Circuit applied the Circuit's test for determining whether an age-related comment constitutes direct evidence of discrimination or is merely a stray remark that may constitute circumstantial evidence of discrimination. 

Jackson, a sixty-nine year old employee, had his employment separated following an internal and external harassment investigation that resulting in a determination that he violated the company's anti-harassment policy.   He brought suit alleging that he was terminated because of his age.  His primary piece of evidence supporting his claim was a comment the decisionmaker allegedly made a year earlier.  According to Jackson, the decisionmaker told another coworker that Jackson was an "old, gray-haired fart" and that the coworker would be in charge when Jackson retired.

As the Court reiterated, to constitute direct evidence of discrimination the comment must 1) relate to the protected class of persons that the plaintiffs belongs; 2) be proximate in time to the complained of adverse employment action; 3) made by a person with authority over the employment decision at issue; and 4) relate to the employment decision at issue. Because the comment was made more than a year before Jackson's termination and did not relate to the decision at issue, the court held the comment did not constitute direct evidence of age discrimination. 

Absent direct evidence of age discrimination Jackson was forced to prove, by circumstantial evidence, that the company's stated reasons for his termination were false or untrue.  Stated another way, he had to show that the company did not reasonably believe that he violated the anti-harassment policy (sometime referred to as the "honest belief rule").  Given that the company conducted both internal and external investigations and that witnesses of both sex corroborated the claims made against Jackson, there was no evidence that the company did not reasonably believe that he violated the anti-harassment policy nor evidence that the company's stated reasons for terminating Jackson's employment were false.  Consequently, the Court affirmed the judgment in favor of the employer.

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When investigating a charge of discrimination, the EEOC has the authority to issue administrative subpoenas requiring employers to produce relevant information.  This power, however, is rarely used because most employers voluntarily comply with the EEOC's reasonable requests for information. 

In San Antonio, a law firm respondent is testing the EEOC's powers to require information be produced via administrative subpoena.  In EEOC v. Malaise law firm, the EEOC is seeking the names and addresses of employees working for the law firm as potential witnesses.  The request was made in connection with the Commission's investigation of a claim of sexual harassment.   The firm responded that this information was not relevant, constituted a fishing expedition, and invaded the privacy rights of nonparties   The EEOC persisted in its efforts to obtain the information and ultimately issued an administrative subpoena to the firm.  The law firm filed objections to the subpoena which the EEOC overruled (Yes, the EEOC gets to make the rulings on objections made to its subpoenas).  The law firm still failed to comply with the subpoena and the EEOC filed a Petition to Enforce the subpoena in the U.S. District Court. 

The interesting part about the fact the EEOC had to go to court to get this information is that the Commission's court filing shows some insight into how it goes about investigating charges of discrimination. You can read the EEOC's Petition to Enforce here and the affidavit in support of the petition (with all of the fun-to-read exhibits containing the charge and letters between the firm and EEOC)  here.

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I subscribe to about 20 very good labor and employment law blogs.  This week, one of the blogs I follow posted a good summary on the employee duty of loyalty and what activities are proper and improper for an employee to engage in who is about to start a venture that competes with his or her current employer.   

Jon Hyman's post at the Ohio Employer's Law Blog titled "Do you know?  The duty of loyalty: illegal competition vs. legal preparation" is a good place to start when evaluating an employee's duty of loyalty and the activities that are loyal and disloyal to an employer.

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A trial court's order granting or denying a temporary injunction in a noncompete case is rarely reversed by the court of appeals.  This week the Fourteenth Court of Appeals took the unusual step of reversing a trial court's denial of an employer's application for temporary injunction seeking to prohibit a former employee from engaging in certain competitive activities.

In EMS USA, Inc. v. Shary, EMS brought suit against its former employee (Shary) to enforce the terms of a noncompetition agreement.  The agreement prohibited, in relevant part, Shary from soliciting any of the company's customers existing as of the date of termination.  The trial court issued a temporary restraining order and later held hearings on EMS's application for temporary injunction.  At two temporary injunction hearings the trial court did not take evidence but merely heard oral argument.  Shary argued that the noncompete was overly broad as a matter of law because it was not limited to the customers that he actually dealt with but instead included all customers existing on the date of his termination.  Without taking any evidence, the trial court concluded that EMS had not shown its entitlement to an injunction.

On appeal, EMS argued that the trial court abused its discretion in failing to take evidence addressing the reasonableness of the restrictions; whether the agreement should be reformed; and whether the restrictions were ancillary to or part of an otherwise enforceable agreement such as a personal services agreement. 

The Fourteenth Court of Appeals held that the trial court abused its discretion in denying the temporary injunction without first hearing evidence.  The appellate court found that the trial court should have heard evidence regarding the reasonableness of the restrictions; the circumstances surrounding the execution of the contract; and whether the former employee had dealings with all existing customers of EMS or only part of them.  Consequently, the court of appeals reversed the denial of the temporary injunction and remanded the case to the trial court for further proceedings.

A copy of the opinion is available here.

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Last week, the El Paso Court of Appeals affirmed a judgment in favor of an employer on an unemployment benefit eligibility issue where the employee, abandoned his job.  The employee was a Nationwide Financed Agent from January 2003 until November 2005.  A Financed Agent is an employee-agent of Nationwide who starts an insurance agency and operates it to the point of economic self-sustainability.  At that point the Financed Agent becomes an independent contractor. 

In June 2005, the employee's supervisor met with the employee to discuss his poor job performance.  The employee continued to under perform and the employer attempted to meet with the employee on three successive occasions to address the continued poor performance; however, the employee failed to attend those meetings.  Ultimately, the supervisor telephoned the employee and left a message for him to return the call immediately.  The call went unreturned.  Further investigation revealed that the employee had not been to the office in two months and that he had removed computer equipment and all of his personal belongings from the office.  The supervisor wrote the employee to advise that Nationwide considered his employment to have been abandoned. 

The employee filed for unemployment benefits claiming he quit with good cause.  He contended that he quit with good cause because: 1) he was require to work overtime without being paid time -and-a half; 2) he believed he was about to be laid off; and 3) supervisor acted in bad faith to create a record for his eventual discharge.  The appellate court affirmed the judgment for the employer because:

Uranga had been employed by Nationwide from January of 2003 to November 2005. As an agent, Uranga would have a full day but he was able to set his own office hours. Uranga was aware at the time he was hired of the job responsibilities and the required time commitment. When Uranga's job performance became a problem, Scott met with him to discuss the deficiencies in his operation. Uranga's job performance did not improve and Scott attempted to meet with him again, but Uranga did not attend the scheduled meetings. Scott subsequently discovered that Uranga had been absent from the office for most of the two previous months and he had removed computer equipment and personal belongings. Scott determined Uranga had abandoned his employment and wrote Uranga a letter notifying him that Nationwide considered his employment at an end.

Given these facts, there is nothing surprising or controversial about about the fact the appellate court affirmed the conclusion that the claimant resigned without good cause.  Similarly, the opinion doesn't state any new rules of law.  However, the opinion emphasizes a few points about eligibility for unemployment benefits under Texas law including:

• Leaving a job when work is still available (even when a definite notice of layoff is given) constitutes a voluntary resignation.
• Claimant working under objectionable conditions for a prolonged period of time weighs against a finding that his eventual resignation was for good cause.

A copy of the court's opinion is available here.

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