Texas Employment Law Basics for Employers

Let's say you’ve started a business in Austin and it has now grown to the point where you need to employ someone other than yourself or your immediate family.  Congratulations!

But now you have to think like an “employer.”  That means you need to familiarize yourself with at least some basic employment law and human resource management principles.  In this blog, we’ll periodically post topics that can help guide you, but here are a few initial considerations:

Hiring – Employees or Independent Contractors?

Salary – Who is Eligible for Overtime Pay?

Job Applications – What Can I Ask, and What Should I Avoid?

Avoiding Illegal Workers

General Recordkeeping Requirements

Employee Discipline

Firing / Terminating Employees – Creating a Paper Trail

Avoiding a Discrimination Claim

Avoiding a Retaliation Claim

How to Handle an Unemployment Claim

Most employers have a pretty good handle on the day to day operation of their business once armed with basic information.  When in doubt, if something feels “wrong” on a gut level, it’s always a good idea to check with someone well-versed in employment law before taking any action which you may later regret.

By: Cynthia W. Veidt

Locating Lease Space for your Business in Texas: Things to Consider when searching for Commercial Lease Space

When searching for commercial lease space there many things to take into consideration such as, just to name a few, expenses, the lease term, parking and permitted uses and restrictions.

The total monthly cost of the lease is usually the primary concern for tenants and is determined by the type of lease you agree to.  There are two main types of leases – gross leases and triple net leases. Under a gross lease the tenant pays a set amount specified in the lease agreement while the landlord pays for all of the operating costs.  Under a triple net lease the tenant pays the set amount specified in the lease agreement plus its pro rata share of the operating expenses, which may include repair costs, insurance premiums, taxes, and utilities.  It is important for the tenant to determine up front what the anticipated expenses will be and understand that expenses could increase for various reasons such as maintenance issues or increases in taxes or utility rates.  There are also ‘hybrid’ leases that combine elements of the gross and triple net lease.

Many commercial leases will contain a personal guaranty, which means that the individuals signing the lease are also agreeing to be personally liable for all amounts due under the lease agreement.  Even though your business entity is the tenant, you will be personally responsible for the rent as well.  Some landlords may negotiate with prospective tenants if they can show a good rental history or are willing to put up collateral.

Most commercial lease space will need to be altered in some way to meet your needs, or in other words, the space will need to be “finished-out.”  The cost of finish-out may be paid by the landlord, may be the tenant’s sole responsibility, or the landlord may provide the tenant with a budget, and any extras will be charged to the tenant.  It is also important to determine whether the landlord requires that you use certain contractors for finish-out.

Other concerns will depend on the type of business you intend to operate.  Prospective tenants need to ensure there are no restrictions against operating their type of business, and they may want to ask the landlord for a restriction against other businesses similar to yours in the future to prevent competition from moving in next door.  You may need reserved parking or a sign; prospective tenants should determine in advance what they will need to operate their business and ensure the landlord will address these issues.

While commercial leases can be long and confusing, it is important to read and fully understand the lease agreement to ensure the space will meet your business needs and to prevent problems for years to come.

Prepared by Eric Rupe.  Edited by Sarah Berry, Attorney

Texas Primary Custody: What Does That Really Mean?

In Texas, courts typically appoint both parents as “joint managing conservators” or “JMCs” for their children.  What does this really mean though?

“Conservatorship” simply means the parent’s right to make certain decisions for the child, including decisions about medical care, mental health care, and educational decisions.  The presumption is that both parents should share these rights so that each has a say in important decisions concerning their child, in the absence of an emergency or other factors (which will be a topic of future blog entries here).  See Tex. Family Code § 153.131.

So, if the parents are joint managing conservators, how do we determine which parent has “primary custody?” 

Although that term is used by many parents to describe their status, it is not an actual legal term recognized in Texas.  The closest standard for determining which parent is “primary” relates to the court’s decision (or the parties’ agreement) to grant one parent the exclusive right to designate the child’s “primary residence.”  That parent is also generally the parent who has the exclusive right to receive child support. 

So, in Texas, the term “primary custody” is somewhat misleading.  Parents who are appointed as JMCs are usually under a Standard Possession Order or “SPO” where the child spends only a little more time with one parent than the other, once all the days and hours are added up.  It is even common for parents to agree to a possession order in which the children reside an equal amount of time with each parent.  In these circumstances, neither has “primary custody,” but one parent will still have the exclusive right to determine the child’s primary residence. 

Article by Austin Lawyer Cynthia W. Veidt 

Contract Cases Fare Better Than Torts Claims in Texas Appeals

Given the nature of tort reform laws in Texas, it is not surprising to find that cases on appeal related to contract disputes fared much better than cases based on tort claims.  During the Sept. 2010 to Aug. 2011 time frame, Texas Courts of Appeal reversed almost half of the lower court’s judgments based on tort claims (49%) versus a reversal rate of only one third (32%) in contract disputes.

Although this may seem like a fairly small variance, it is actually more significant than it appears at first blush. Due to enactment of Texas’ tort reform laws, the total number of tort claims has dropped significantly, as plaintiff’s counsel now choose to take more compelling cases to court. The Office of Court Administration in Texas has reported a 12% drop in the number of “injury or damage” cases filed from 2002 to 2010. So even the “better” tort claims have even odds of being reversed on appeal.

In summary, creditors should take extra pains to obtain signed agreements documenting the terms of the deal and should include a contract-based claim whenever possible. 

By: Cynthia W. Veidt

 

Source: Liberato & Rutter, “Reasons for Reversal in the Texas Courts of Appeal,” 48 Hous. L. Rev. 993 (2012).

How Does the Texas Standard Possession Schedule Handle Summer Vacations?

Under the Texas Standard Possession Schedule, distance affects the number of days of each parent’s possession during the child’s summer vacations. 

When the parents reside within 100 miles of each other, the possessory conservator (the one with whom the child does not primarily reside) has up to 30 days of possession during the summer months.  Under the default rule, the possessory conservator will have possession of the child beginning at 6:00 p.m. on July 1st until 6:00 p.m. on July 31st. 

If the parents live more than 100 miles apart, however, the possessory conservator is entitled to have possession for up to 42 days during the summer months.  Unless otherwise provided, the possessory conservator will have possession of the child beginning at 6:00 p.m. on June 14th until 6:00 p.m. on July 27th. 

By:  Cynthia W. Veidt and Erin Zeiss

What is the Texas Standard “Weekend Possession” Schedule in Texas?

Texas has adopted statutes which set out guidelines for a “Standard Possession Schedule” of a child by each parent.  A typical possession order determines which parent has the right to possess the child on a particular weekend.

In general, under Texas guidelines, a possessory conservator who resides 100 miles or less from the other conservator (with whom the child primarily resides) can do the following:

- have possession on weekends throughout the year beginning at 6:00 p.m. on the first, third, and fifth Friday of each month and ending at 6:00 p.m. on the following Sunday; and

- have possession on Thursdays of each week during the regular school term beginning at 6:00 p.m. and ending at 8:00 p.m., as long as the court finds that visitation in the best interest of the child.

In cases where the parents reside over 100 miles apart, the possessory conservator can either:

- have the same weekend possession schedule as a parent who lives within 100 miles, or

- can designate one weekend (which could begin on the second or fourth Friday) per month, so long as s/he does so at least 14 days in advance.  This provides the possessory parent a little more flexibility, but somewhat less possession time. 

Also, when residing more than 100 miles apart, the possessory parent no longer receives an overnight visit during the week (usually on Thursdays), but instead is entitled to have possession of the child during every spring break vacation.

By:  Cynthia W. Veidt and Erin Zeiss.

What is the registered office?

The address listed for the Registered Agent is referred to as the “registered office.”  The registered office need not be a place of business for the entity.  Generally speaking, the registered agent must be capable of being served at the registered office.  For organizations serving as the registered agent, Texas law states explicitly that there must be an employee on hand during normal business hours in order to receive any process, notice or demand that is sent to the organization.  While the statute does not impose the same explicit requirements on a person serving as the registered agent, Texas law nevertheless imposes a general requirement that the registered office be a “street address where process may be personally served on the registered agent” (See Texas Business Organizations Code Section 5.201(c)(1)).

Post by Iain A. Berry, Attorney

What is the Texas Standard Possession Schedule?

Texas has enacted a set of statutory guidelines called the “Standard Possession Schedule” to determine the possession schedule of a child by a parent who is either a possessory conservator or a joint managing conservator.

The Standard Possession Schedule gives each parent designated periods of weekend possession, summer possession, and possession during certain holidays (such as Thanksgiving and spring break).

In general, possession schedules are dictated by the parents’ proximity to each other.  Parents who reside within 100 miles of each usually have a slightly different possession schedule than parents who reside 100 or more miles apart from each other. 

You should always look at the particular order or divorce decree in your specific case to determine whether the court has used the Texas Standard Possession Schedule.  Once set by the court, that Possession Schedule becomes the “default;” however, both parents can agree to change the Possession Schedule in order to best meet their needs and the child’s needs. 

Parents should communicate with each other about their Possession Schedule, especially if something has occurred or will occur which would affect either parent’s ability to exercise any period of possession. 

By:  Cynthia W.Veidt and Erin Zeiss.