Firm Articles

ANSWERS TO SOME COMMON EMPLOYMENT
LAW QUESTIONS

Question No. 1

            The employment application that I signed stated that I had to arbitrate all employment disputes.  What does this mean?

Answer:

            It is typical today to see employers require job applicants to sign agreements to arbitrate all employment disputes.  The execution of such an agreement is enforceable and any suit that is filed in Court will be "deferred" to an Arbitrator by the Court.  A collateral question that is frequently asked is "what is the difference between Mediation and Arbitration?"  The difference is vast!  Arbitrators make a final and binding decision whereas Mediators have no such authority and merely try to get the parties to mutually agree to a settlement of their dispute.  Stated another way, by signing an Agreement to Arbitrate there will be no trial by a Court or Jury!

            There are advantages and disadvantages to arbitration for both employers and employees.  Mr. Crawford is in a unique position to discuss these in detail as he has handled over 100 arbitration cases as a representative of one of the parties, and, since 1997, he has been an Arbitrator for the American Arbitration Association and called upon to decide many employment disputes as the Arbitrator.

QUESTION NO. 2

            What government agencies enforce the various employment laws? (That is, where does an individual go to file claims of various types?)

ANSWER:

The following agencies deal with the most common type employment complaints: 
            (a)  Race, sex, age, religious and national origin discrimination and sexual harassment are handled by the Equal Employment Opportunity Commission (EEOC).  (www.eeoc.gov)  There is also a state agency, the Texas Workforce Commission (TWC) which enforces similar state laws.  (www.twc.state.tx.us)           
            (b)       There are time limits for filing complaints with various agencies and additional time limits for filing suits after a complaint has initially been filed with the agency.  The websites of the various agencies explain these details. 
            (c)        Family Medical and Leave Act issues, minimum wage, overtime entitlements, and child labor is regulated by the Wage and Hour Division of the U. S. Department of Labor. (www.dol.gov/esa/whd)        
            (d)       Unemployment claims, and claims that a company has failed to properly pay wages, are filed with the TWC. 

QUESTION NO 3   

            I want to bring a claim for "wrongful termination," what do I do?

Answer:

            The term "wrongful termination" is often used to describe many different type claims.  But, unless the employee has an employment contract with the employer or is covered under a Union contract there is no such claim of "wrongful termination" in the technical sense in Texas and most other states.  Texas and most states apply the "employment at-will rule," which means that an employee can quit for any reason or the employer can terminate the employee for any reason, so long as such reason is not specifically prohibited by law.  Thus, the correct question should be, is the termination "unlawful"?  The agencies that enforce most of the various laws of Texas and the United States are listed under Question No. 2 above.  In addition to specific laws passed by Congress or the State Legislature there are certain "common law" rights given to employees, which are exceptions to the "employment at-will" rule.  These can best be explained through actual contact with our firm. 

QUESTION NO. 4. 

            I was terminated by my employer but my employer did not pay me a bonus (or commission) as promised.  Can I force this to be done?

Answer:

            This is a frequent problem.  Many employee bonus plans or commission agreements provide that if an employee is terminated prior to the actual payout of the bonus or the commission that the employee will not be paid.  Sometimes this occurs, not pursuant to the actual documentation, but as a matter of the Company's practice. Sometimes this can be successfully challenged if the employee has fully performed all of his/her expected functions prior to the time they are terminated.  In other words, if they have earned the commission or bonus by performance of all their duties.  A similar question also arises where the employee is terminated during the bonus period and the employee wants a pro-rata payment of the bonus.  There is Texas law that generally supports such an employee's claim unless the employer shows "good cause" for the termination.  There are other factors involved which can best be discussed by contacting the firm.

QUESTION NO. 5

            I found out that my Company doesn't carry Worker's Compensation Insurance – how is that possible and what does it mean if I am injured?

Answer:

            Unlike most other states, this can happen in Texas.  Under Texas law a company has an option to not subscribe to Worker's Compensation Insurance.  In such an event, if the worker is injured on the job, in order to recover against the Company, he must show that it was "negligent" in some manner.  However, such an employer is prohibited from raising certain defenses to the "negligence" claim.  In addition, the amount that can be awarded by the Court, if the employee successfully proves "negligence" is not limited in amount, as it is in the case of the Company that subscribes to Worker's Compensation Insurance. 

            Some companies have chosen to go with a "middle ground" approach and establish special benefit plans that provide various types of disability and medical benefits for employees, without the employee having to prove "negligence".  The employee has to agree to participate in such a plan, but if he does, the benefits are limited to the terms of the particular plan.  The benefits available under these plans must approximate the benefits available under Worker's Compensation Insurance.  The benefit to employers for having such a plan comes from the fact that the plan benefits can often be funded by purchasing insurance at a lower premium than Worker's Compensation Insurance.  The advantage to the employee is that to qualify for the benefits he/she does not have to prove that the employer was "negligent."  No employee anticipates an on-the job injury, but it is important to know what type of benefits the Company has for such an injury before it occurs.  Likewise, companies need to understand their options.

QUESTION NO. 6

            I have been terminated (or laid off) – can I get unemployment?

ANSWER:

            Yes, unless the employer can convince the TWC that you engaged in "misconduct" connected with your job.  The meaning of this term is often debated in TWC hearings, but clearly it means more than just poor workmanship.

            Employees who voluntarily resign cannot collect these benefits.  Questions often arise as to whether or not it was voluntarily or forced resignation (called constructive discharge).

            Independent contractors cannot collect.  Questions often arise about whether the individual is truly an "employee" versus a "contractor".

            If the individual received a severance in the form of continued salary payments for a period of time beyond the actual termination date, he/she will not be paid unemployment benefits for the same time.  Lump sum severance pay does not similarly prevent recovery.

            NOTE:  Testimony given in TWC proceedings can sometimes impact other claims or defenses that the parties are making in other forums. 

QUESTION NO. 7

            I signed a Non-Compete and/or Confidentiality Agreement with the Company, is such enforceable in Texas?

ANSWER:

a.         Non-Compete Agreements

            Employees often are asked to sign various types of agreements that restrict competition after they leave the Company.  In general, such agreements are hard to enforce in Texas – leading to a misconception that they are totally unenforceable.  However, agreements that are properly drawn and are limited in scope and time can be enforced. 

            This area of employment law is one of the most unsettled and troublesome – leading to many lawsuits.  Specific situations need to be individually discussed with an attorney specializing in this subject.  There are several in this firm.

b.         Confidentiality Agreements

Agreements that prohibit the use of "confidential" information are valid and enforceable.   Disputes in this area generally involve what is really "confidential" information of the Company, versus what information is already known by the public or by competitors.  Companies must be able to show:  (1) the information has been kept confidential by the Company and is not publicly available, (2) it is somehow unique, so that it gives the Company a competitive advantage, (3) the employee knew it was confidential and not to be disclosed or used by others; (4) the employee disclosed it, and (5) harm has been done to the Company (or will be done) by its disclosure or use.

Actually, if all this can be proven, the Courts will restrict use of such information, even if no Confidentiality Agreement has been signed.  However, Companies are much more likely to succeed in showing the above elements if they require employees to sign these agreements.