To Delete Or Not To Delete

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Two recent cases, one from the plaintiff’s side and one from the defendant’s side, highlight the importance of following information retention requirements. Recently, Heather Painter learned a difficult lesson about deleting. Ms. Painter claimed that her boss, a dentist, sexually harassed her. After filing her lawsuit, she deleted some Facebook comments that (allegedly) said she loved her job and working for the dentist. Ms. Painter claimed that she did not know it was improper to delete the comments, but the court disagreed. Deleting the posts was a deliberate act, and the court could not infer that she deleted comments, that were detrimental to her case, for an innocent reason. The judge decided that the jury should infer that the Facebook[…]

Will a BYOD Policy WORK for You?

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One of the most popular trends in the IT world right now is the bring-your-own-device (BYOD) approach, where employees use their own mobile device at work. Its another case of new technology creating new problems. Before implementing a BYOD policy, you need to weigh the risks against the cost benefits. IT departments have spent years working on desktop security and trying to prevent data loss via web and email, but employees are increasingly accessing corporate data with their own smartphones and tablets. As a result, employers have much less control over the security protecting their corporate data. Unlike desktops, very few people have protection against viruses and malware on their smartphones and tablets. Thirty-seven percent of IT decision makers reported that[…]

The Problem’s Not Just Porn Anymore

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Computer policies used to be fairly simple: no personal emails, no surfing the internet on company time, and especially no porn. Now, with social media and “the cloud,” there are so many more avenues for trouble. One of the more prevalent issues recently has been who owns Twitter followers when an employee leaves.  The issue is particularly thorny when the employee was hired to manage the employer’s official Twitter account.  The employer will argue that the followers belong to it, because the employee’s job was to send out tweets and increase the number of followers. On the other hand, the employee will argue that the Twitter followers belong to him or her, because they put in all the work to[…]

Weeding Out the Medical Marijuana Issues

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Alright, alright, alright… After a very entertaining and high-ly informative #nextchat about medical marijuana in the workplace, I started thinking about some of the points made today and decided that I’d like to expand on some of the ideas thrown around.  And I’ll  try to avoid more bad jokes and puns, but no promises… The Sky Isn’t Falling Even with the passage of bills in your state allowing medical marijuana, it isn’t the end of the world as we know it.  After all, it’s not as if your employees are going to run out to get medical marijuana cards and start smoking up at work.  For the most part, you won’t have any employees that need medical marijuana.  And even[…]

Properly Paying On Call Employees Under the FLSA

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The Fair Labor Standards Act requires you to pay your employees for time they actually spend working, whether they’re working on your property, at a client’s property, at home or anywhere else.  When evaluating whether wages are owed to your employees, the key inquiry is whether the employee is actually engaging in work. Some businesses, particularly those in the medical field or other fields where emergencies arise, have employees  “on call” for a certain period of time in addition to their actual work day. Under some circumstances, you may need to pay your on-call employees for their on-call time. When determining whether your employees’ on call time is compensable requires a case-by-case analysis. For example, if your is required to[…]

Monitoring Texas Employees’ Social Media

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A great deal has been written in the last week about whether you should monitor your employees’ social media activity. A lot of very smart folks fall on both sides of the debate, since it can be a rather murky issue involving a balancing act between protecting the company and respecting employees’ right to act as they wish in their time off work. Notice that I didn’t say employees’ privacy. Little, if anything, shared via social media is private, so monitoring social media can hardly be deemed an invasion of privacy. So now I’ll offer my two cents on the subject: it probably isn’t worth it to actively monitor your employees’ social media accounts. Doing so would require a great[…]

Texas Partnerships – Rights to Third Parties & Apparent Authority

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What exactly is a “partnership” under the laws of the State of Texas?  As a starting point, a PARTNERSHIP may arise when two or more individuals become associated in a common venture for the purpose of making money.  This association of individuals would NOT be a partnership if appropriate documents are signed which provide that the joint owners instead intended to create a different business structure – like a Corporation or a Limited Liability Corporation (LLC).   Basically, in the absence of any documentation to the contrary, two or more associated individuals may be considered partners in the eyes of the law.  Since the individuals are considered Partners in the business venture, they each have the ability to legally bind the business venture and the other Partner (or Partners).  Since the individuals are considered[…]

Non-Compete Agreements – Balancing Act for Employers and Employees

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A battle between Capital One and two of its former senior executives brings us “new” insight into the thorny issue of NON COMPETE AGREEMENTS and their enforceability.  As a Texas  employment law practitioner, I am sometimes faced with clients who have determined that their fully signed Non Compete Agreement cannot be enforceable based on the advice of friends and family in other states.  If they acted on that advice without checking further, these same clients may be bringing us a letter from their former employer stating that they are in violation of that Non Compete Agreement.  The Agreement may contain several restrictions for the former employee – including such categories as non-competition restrictions,  non-interference provisions, confidentiality provisions, protection of trade secret provisions and non-solicitation provisions  (with respect[…]

Business Emergencies – How to Plan for the Unexpected

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As a business owner, I really need to look at it as a wake up call for what Mother Nature can really throw our way.  Business owners owe it themselves, their customers and their employees to develop a solid plan to handle natural and man-made disasters.  Disaster Planning is not something just for big businesses and the local municipality.  Small and mid-size business owners and sole proprietorships need to develop a Disaster Plan as well.  There are some excellent websites available to help business owners learn how to develop an Emergency Preparedness Plan, how to implement and test the Plan and how to keep the Plan current as time passes. For information Business Owners can use in developing an individualized Disaster Preparedness Plan for their own[…]

Insurance: Stowers Doctrine in Texas

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The Stowers doctrine in Texas imposes a duty on insurers to settle third party claims against their insured under circumstances that would cause a reasonably prudent uninsured to settle. Sample Stowers Demand Letter The theory behind the rule is that it is necessary in order to prevent insurers from “rolling the dice” with the insured’s money.  An example helps explain this concept.  Consider a situation where an insured with $30,000 limits runs a stop sign and causes the death of an innocent child. Under any reasonable evaluation, the insured faces liability exposure greatly in excess the policy limits.  But if the insurance company faces no exposure in excess of the $30,0000 limit, what incentive does it have to tender the[…]

Insurance: First Party and Third Party Claims Explained

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If you are new to the study of insurance law, you may be confused by references  to “first party” claims and “third party” claims.  Who are these people, and what happened to the “second party”?  These terms derive from reference to the insurance policy as a contract. There are two parties to the insurance contract: the insured and the insurance company.  By custom and practice, the insured is universally referred to as the “first party”.  The insurance company is the “second party” but for some unexplained reason, it is seldom if ever referred to in this manner. A “third party” is a stranger to the policy: that is, someone who is neither an insured or the insurer. A first-party claim[…]

Recent Changes in Texas Law Favor Limited Liability Partnerships

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The Texas Legislature’s recent changes to the Texas Business Organizations Code went into effect September 1, 2011.  These include several provisions favorable to Limited Liability Partnerships (LLPs).  An LLP is a general partnership (GP) or limited partnership (LP) that chooses to register as a Limited Liability Partnership with the Texas Secretary of State. The intended purpose of an LLP is to limit the liability of all partners to the amount of their partnership investment. Liability protection of this nature is not available at all for general partnerships.  In an LP, such protection is provided for limited partners but not for the general partner.  The LLP is intended to close this gap. LLCs & General Partnerships in Texas But before the[…]

Basics of Business Liability Insurance

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For most businesses, a complete insurance program will involve the purchase of several insurance policies designed to provide protection from both the first-party and third-party risks which the business is expected to face. The most common types of policies that most businesses have are a commercial general liability policy (CGL); some type of auto policy; and workers compensation. Each of these policies is intended to fill a different need and by design, they usually do not have any substantial amount of overlapping coverage. The CGL is designed to cover accidental bodily injury or property damage that does not arise out of the use of an auto and which does not occur to one of your employees. A prime example of[…]

Protecting Your Business Name in Texas

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Almost all primers on starting a business in Texas  will advise you to register your business name as an assumed name with your county clerk.  Many business owners incorrectly assume that this gives them the exclusive legal right to use the name.  Similarly, it is commonly (but incorrectly) assumed that such rights are obtained by filing a certificate of formation as a limited liability company, limited partnership, or other form of business organization.  In fact, the purpose of these filings is to protect others, not the business. State law requires that an assumed name certificate be filed so that parties who are injured or damaged by your goods or services have a way to determine who can be sued.  Nothing[…]

Workers Compensation Alternatives For Texas Employers

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In the majority of states, employers are required to maintain workers compensation insurance (WC) for their employees.  In Texas, however, employers have the ability to “opt-out” of purchasing such coverage.  Several factors come into play in determining whether this option might be right for your business. First, companies that do business directly with the State of Texas or local governments are required to maintain workers compensation insurance, so if you fall into this category, you cannot operate as a ”non-subscriber” (the term used to describe those who do not carry WC). Many large companies also require that their vendors and contractors carry WC, so this may limit your practical ability to operate as a non-subscriber. If you are still in[…]

Limits on Termination of an At Will Employee

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As practiced in Texas, the “at will” employment doctrine has been described as meaning that “employment may be terminated by the employer or the employee at will, for good cause, bad cause, or no cause at all.” Federal Express Corp. v. Dutschmannn, 846 S.W.2d 282, 283 (Tex. 1993).  The absolute nature of this statement holds true for the employee (slavery has been abolished) but the employer’s right to terminate is not as sweeping as it suggests. A more accurate statement of the law would be that an employer can terminate an employee for good cause, no cause, and some but not all bad causes. Texas At Will Employment As the phrase implies, “bad cause” means that the Texas employer has[…]

Insurer Liability For Failure to Pay Promptly

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Every attorney who represents policyholders dreams of “hitting the big one” and holding an insurance company liable for treble damages for unfair settlement practices.  In the process, Texas’ Prompt Payment of Claims statute is often overlooked or under appreciated as an avenue of recovery. The Prompt Payment statute (previously known as Art. 21.55) is now codified at sections 542.051-061 of the Texas Insurance Code.  This statute provides an 18% per year penalty for first party claims that are not paid after the insurer has had an opportunity to ask for information and conduct a reasonable investigation. What the statute lacks in damages, it makes up for in simplicity.  Recovery is automatic for any covered claim that has been delayed without[…]

Basics of Texas Workers Compensation

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Workers compensation insurance provides medical and income benefits to employees who suffer work-related injuries.  Unlike in most states, participation in workers compensation is optional for most private employers in Texas.  The major exception is that employers who contract with governmental entities are required to maintain workers’ compensation coverage for each employee working on the public project. Many clients or customers may also require that a company maintain workers compensation as condition of doing business with it. The major advantage of workers compensation coverage for the injured employee is that benefits are payable without regard to fault: in most circumstances, an employee can recover even if his or her own negligence caused or contributed to the injury.  The disadvantage (and corresponding[…]

Texas Liability Insurance: Duty to Defend

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A common feature of all liability insurance policies is that the insurer has a contractual duty to defend the insured any time the insured is sued for something that is potentially covered under the policy.  This means that the insurance company will hire an attorney to file an answer to the lawsuit and protect the insured’s interests.   This is a valuable right because the cost to defend even a small or seemingly frivolous lawsuit can be significant.  Although the insurance company pays the defense attorney’s fees, Texas law is quite clear that the attorney’s client, and the one to whom a fiduciary duty is owed, is the insured. All liability policies place a duty on the insured to notify the[…]

Overview of EEOC Complaint Process

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The U.S. Equal Employment Opportunity Commission (EEOC) is the federal agency responsible for enforcing federal laws relating to employment discrimination.  In most situations, employees are required to “exhaust administrative remedies” (i.e., file a complaint with the EEOC) before they can file suit against their employer. The EEOC refers to an employee complaint of discrimination as a “charge of discrimination” or simply a “charge” for short. The first thing to recognize when you receive notice of such a charge is that it does not mean that the EEOC is accusing you of anything or that federal government has filed “charges” against you in any way.  Every employee complaint is treated as a “charge” and the employer is always given notice of[…]