The Texas Legislature - Picking Up Steam

Since the latest report on Tuesday, there has been the first initial action on a couple of the bills and more bills have been introduced.


Two bills have been referred to committee after an initial reading. S.B. 137 which would prohibit the so called 'dead peasants insurance' has been referred to the State Affairs Committee. H.B. 50 which would allow employees time off to meet with certain school officials has been referred to the Economic Development Committee.


New legislation filed includes:

H.B. 624 Menendez (D - San Antonio). Basically a refined version of Representative Moreno's H.B. 281 which prohibits use of mobile phones while driving. This version has more definitions, some exceptions for emergency calls, and a range of fines that increases if the violation occurs in a school zone.

H.B. 643 Wohlgemuth(R - Burleson) A technical amendment to the punitive damages cap. Currently, the cap is not applicable where the defendant engages in certain criminal activity. The amendment would require a conviction before the cap would not be applicable. Under the current law, plaintiffs are able to argue that certain conduct should be outside the cap because it meets the literal language of the current statute, even though there has been no criminal prosecution.

S.B. 328 West (D - Dallas) Requires an arbitrator and/or arbitration services provider to file a public disclosure within 30 days of the entry of the award by the arbitrator. Failure to do so could result in a fine, and multiple failures could result in the arbitrator being barred from court ordered arbitrations and being listed on a public list maintained by the Office of Court Administration. The disclosure would require the names of the parties, the general nature of the claim and the relief sought, the award by the arbitrator and the costs charged by the arbitrator and the arbitration services provider. It is designed to be a supplement to existing arbitration laws, including the Federal Arbitration Act.

Fee Splitting and Arbitration - 6th Cir. En Banc View

The 6th Circuit issues its en banc decision today, Morrison v. Circuit City, (6th Cir. 1/30/03) setting forth their standard on how courts should determine whether or not a fee splitting provision in an arbitration clause precludes it from being enforced. Surveying the approach of other circuits, they set forth their own standard to ensure that the courts are looking at the effect not only of the provision on the individual before the court, but also of the 'chilling impact' on other individuals. Under their new standard, Circuit City's plan initially strikes out as being too costly and improperly limiting remedies. Ultimately, however, it is bailed out by the Court's holding that the two offending provisions are severable. There is a dissent, mainly complaining of the complexity introduced by the Court's creation of a "pre-arbitration quasi-class action litigation". I note that my friend from law clerking days, Judge R. Guy Cole, sided with the majority. Thanks to Howard Bashman's How Appealing for the quick notice on the decision.

Letter of Intent = Fact Question, Not a Contract

The First Court of Appeals has an interesting discussion of the difficulty of finding a contract as a matter of law when there are disputed writings, particularly when one is called a letter of intent. See Electronic Bankcard Systems, Inc. v. Retriever Industries, Inc. (Ct. App. - Houston [1st] 1/30/03).


The Court also dealt with two other issues: 1) finding a fact question as to the existence of a contract for one year, that had continued to operate as the basis for the parties agreement for a number of years without a formal renwal, and 2) refusing to apply the continuing tort doctrine to keep a claim of tortious interference from being barred by the statute of limitations.

Non-Compete Covenant Not Up to Light v. Centel Cellular Standard

Although recognized by every court as the standard for determining the validity of a covenant not to compete, the application of Light v. Centel Cellular [pdf] is not always that easy to follow. In Strickland v. Medtronic, Inc. (Ct. App. - Dallas 1/29/03) decided yesterday, the Dallas Court of Appeals makes the standard clear.


Importantly, it also rules on a question that comes up repeatedly, holding that general language about providing confidential information will not be enough to constitute a non-illusory promise (and therefore is not enough to support a covenant not to compete). Even if such general language were an implied promise (which the court finds it is not), it would still not be sufficient because it would require that the employee work for a certain period of time. Since the court found the employee relationship to be at will, any promise conditioned on a period of employment would be illusory.

It Could Be Worse - Costs of Employment Laws in Britain

It's a day for reporting on studies. Startups has the report of a survey of British businesses and their concerns with the increasing costs of complying with various employment laws.

Wake Up Call For Employers - Report of Current Employee Attitude

Towers & Perrin, the large consulting firm, and Gang & Gang, their research partner, today release a study of employees' view of their work which should be a wake up call for employers. One of the money quotes, "Right now, emotion about the current work experience is extremely negative." Interestingly, it is not related to a crises of trust, as you might expect given the focus of the last year, but questions of competence of those leading the companies. And, again repeating what most in the h.r. business have known all along, it is not really about money, but about recognition and fairness. All in all, a somber reminder that almost every company's self avowed "most important asset", their employees, are uneasy, at best. Go here to see the report, Working Today:Exploring Employee's Emotional Connection to Their Jobs [pdf].


And for those of us who try lawsuits involving employment law issues, it is a not too subtle message that juries, made up primarily of employees who bring their own workplace feelings with them to the jury box, are apt to start with a less than favorable view of the employer that stands before them accused of wrongdoing.

Two More Legislative Offerings - Including Sexual Orientation Discrimination

Two more representatives have filed bills that would have applicability to a broad group of Texas employers.

H.R. 570 Fred Brown Bryan - R For non-subscribers to workers compensation, the bill would cap liability at $250,000 for work place injuries to employees. In order to qualify for the cap, the employer must have insurance meeting certain limits.

H.R. 574 Jessica Farrar Houston - D. Would amend the TCHRA, to prohibit discrimination against individuals on the basis of their sexual orientation or gender identity. It would also protect anyone treated differently because of the sexual identity of individuals with whom the employee associates. Based on the make up of the legislature, this would seem almost certain to be a non-starter. However, most bills which would implement major changes are often introduced with no success for a number of years. The Texas effort is probably behind that on the national level on this issue.