Jim Duncey is more than just the majority owner of Duncey’s Caps, Inc. – he’s the face of the company, appearing on billboards, in television and radio ads, and on the home page of the company’s website.  He is one of the most influential and recognizable business leaders in the city.  On Saturday night Jim and his wife Diane attend a charity event at the toniest country club in town.  With a little “liquid courage” Jim was the high bidder at the night’s live auction, which earned him respect (and envy) from those in attendance.  On the way home Jim ran a stop sign and t-boned another vehicle.  The driver of the other vehicle suffered serious injuries that would force her to spend several weeks in the hospital.  Police investigating the accident gave Jim a field sobriety test, which he failed.  Jim ended blowing a .12 BAC and was charged with DWI.  The accident, along with Jim’s arrest, was the lead story on the Sunday news.        

With the face of the company in legal and public relations trouble, Duncey’s board of directors called an emergency meeting to discuss the situation and consider options.  What can they do?

Continue Reading Jekyl and Hyde: When the Face of Your Company Becomes a PR Liability

 

Before Duncey’s Caps, Inc. hired Bud Dunop as its new human resources manager in 2018, all of Duncey’s human resources issues were handled by Dot Uris. One of Dot’s responsibilities was to have all new employees complete their new hire paperwork, which included an agreement for the employee and Duncey’s to arbitrate any employment-related disputes.  The arbitration agreement included a signature block for Dot to sign on behalf of Duncey’s.  Instead of signing each employee’s agreement, Dot just placed it in the employee’s file.   

One day Don “Crash” Gordon broke his foot when he walked around the corner of the warehouse and stepped into a bucket that another Duncey’s employee placed on the floor.  Crash filed a lawsuit against Duncey’s when it failed to cover his medical bills.  Duncey’s attorney filed a motion to compel arbitration, attaching a copy of the arbitration agreement that Crash signed but Dot did not.  Will Duncey’s be able to get this lawsuit sent to arbitration? Continue Reading Are Employers Required to Sign Employees’ Arbitration Agreements?

Duncey’s Caps, Inc. hired Bud Dunop as its new human resources manager for 2018.  Bud quickly determined that Duncey’s needed a formal employee policy handbook.  Included within the handbook was an arbitration agreement requiring employees to arbitrate all claims against Duncey’s relating to the employee’s employment.

Bud then held training and review sessions with all Duncey’s employees.  At the end of each session, each Duncey’s employee was required to log into a computer with their own self-created password.  Once logged in, the employee was given the opportunity to fully review the handbook and the arbitration agreement.  The employee was then required to click a box stating that he or she “acknowledges” receiving and reviewing the handbook, and that by clicking the box they “agreed” to abide by the handbook and the arbitration agreement. The employee was then required to enter their initials and click “submit.”

A few weeks later, one of Duncey’s employees who electronically acknowledged the handbook was injured on the job.  The employee filed a lawsuit.  Will Duncey’s be able to get this lawsuit sent to arbitration? Continue Reading Are Your Employees’ Electronically-Signed Agreements Enforceable?

N. O. Smelz, owner of Smelz Rug and Carpet Cleaning, learns that Brite Bank has submitted a request for proposal to clean the carpets at their 15 branches in the DFW area. When Smelz reads the request he notices it includes a diversity provision that requires at least 10% of the total amount paid by Brite to go to a vendor, or a subcontractor, that is a minority-owned, woman-owned, veteran-owned, LGBT-owned, or disabled-owned business. Smelz is concerned because he doesn’t fall into any of those categories, and he doesn’t believe any of his long-time suppliers do either.  But because his cleaning company has the best reputation around, Smelz submits his proposal anyway.  Will Smelz get the contract?         Continue Reading Supplier Diversity Policies

Agreeing with Benjamin Franklin that there is nothing certain except death and taxes, Sketch Wood and his partner Minnie Brix, owners of Wood & Brix, and their 200 employees are certain that the new tax law will affect them, but they are a bit overwhelmed. Looking for an overview, Sketch asked his favorite non-tax lawyer to hit some of the high points of the first significant reform of the U.S. tax code since 1986. Continue Reading New Tax Law – Impacting Your Small Business and You

Frustrated with the high number of employees that did not show up for work in the fall and winter last year, Jim Duncey, the owner of Duncey’s Caps, Inc., issues a memo to all employees that they must provide proof that they got a flu vaccine shot by January 1, 2018 or they would be fired.  Tommy Goinmyownway protests, saying that his religious beliefs prohibit him from getting vaccinations.  New Year’s Day comes and Tommy is fired after he doesn’t provide the required proof.  As he is escorted out of the plant Tommy threatens to sue Duncey’s for discrimination.  Does he have a claim? Continue Reading Sticking it to Your Employees During Flu Season

“Big” Bob Brothers is concerned that his company, Big Brothers Security Systems, is losing out on customers because his salesmen and installation teams are slacking when they are out of the office.  Brothers reads a newspaper article about another company that is putting microchip implants containing radio-frequency identification tags (RFID) into his employees in order to make sure they aren’t doing “off the clock” stuff while on the clock.  Brothers sends a memo to employees explaining that they will all be chipped the next month, and anyone refusing to chip will be terminated.  Can Brothers “big brother” his employees like that?   

Continue Reading Can I “Chip” Away at my Employees’ Privacy?

US Customs and Border ProtectionLast week Emma Grant’s line cook and 25 other undocumented employees at her bar-b-que restaurant Emma Grant’s Bar-B-Que were working the lunch shift when it was raided by Immigration and Customs Enforcement personnel, apparently at least in partial response to a recent executive order. Can the President of the United States do that? Can this be a problem for Emma Grant and her bar-b-que restaurant?

Executive Orders

Recognized since George Washington as being authorized by Article II, Section 1 of the Constitution that provides “the executive power shall be vested in a President of the United States of America,” there have been more than 13,000 issued, in one form or another, since 1789. Notable executive orders were Abraham Lincoln’s Emancipation Proclamation and Franklin Roosevelt’s mandatory registration of aliens from World War II enemy countries. FDR also holds the record, by far, of the most Executive Orders at 3,721; next closest is Woodrow Wilson at 1,803. To date, President Donald Trump has issued twelve executive orders. Suggested as undoing many of President Barack Obama’s policies, here’s a list and short summary of each. The Federal Register details the executive orders transcripts, numbers and disposition tables from Herbert Hoover to date.

The Legal Reality

But what about Emma’s exposure? Yes, as the employer of the undocumented workers, Emma Grant could have liability. Employers must verify the identity and employment authorization of each person hired after Nov. 6, 1986 and complete and retain Form I-9. Failure to do so can result in civil fines ($539 for each at the first offense and up to $21,563 for each after multiple offenses), criminal penalties (when there is a pattern or practice of violations), and debarment from government contracts.

Tilting the Scales in Your Favor

Get a completed I-9 for each employee. Undertake reasonable and diligent investigation, if appropriate. For key employees, consider undertaking steps to secure their legal residency in the United States.

Riding her beloved Packers late-game win against the Dallas Cowboys, Allfer Funn, owner of Con Genial, is polishing her cheese head hat and dusting off her Super Bowl Squares Pool from last year in anticipation of the Big Game in a couple of weeks. Electing not to “Reinvigorate [Her] Super Bowl Office Betting Pool” as some have suggested, she does, however, decide to up the ante from $10 a square on her 10 x 10 grid to $20 a square. Just good clean office fun to build morale, right? It’s not illegal… or is it?

The Legal Reality?

Yes, it’s illegal in any number of ways. It’s illegal gambling in Texas. And, for Allfer, organizing the Pool is likely “bookmaking” – receiving more than 5 bets in a 24 hour period. Under the gaming laws of all 50 states, it’s a bet with a prize that is won or lost solely by chance. Because squares pools involve randomly assigned numbers, the contest is entirely based on chance and thus illegal unless (in a state other than Texas) it falls within a state-specific “recreational gaming exception.”

And there’s more.

Beyond Texas, the federal Professional and Amateur Sports Protection Act of 1992 also prohibits gambling, specifically on professional and amateur games. Should Allfer Funn or her employees elect to bet online there’s always the federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) which Tilting commented upon in 2011 that prohibits nearly all types of online gambling.

Notably, the UIGEA exempts most fantasy sports competitions, classifying them as games of skill rather than games of chance – except for the Super Bowl. A fantasy football competition is based upon a single game with a limited number of outcomes as well as a limited number of players/teams from which participants can choose, whereas the Super Bowl is viewed as a game of chance rather than a game of skill.

The Practical Reality?

As reported in a Houston KTRH NewsRadio 740 interview last year by Tilting’s own Cleve Clinton, “It’s illegal. Now, realistically and practically, is anybody going to do anything about it? No.”

In the same interview, Clinton told KTRH that Texas law has such a broad definition of gambling, that technically any betting pool violates state law.  Whether or not the state chooses to enforce that depends on a few factors.

“The first thing you really want to look at is how big of a pool are we talking about, the second thing is who’s running it, and the third, will someone (the organizer) profit by it,” says Clinton.

Allfer may want to reconsider and not increase the pool size from a total of $1,000 to $2,000.

Good Clean Fun?

Notwithstanding that gambling on the Super Bowl is illegal, Allfer Funn should be wary of potential retaliation and hostile work environment claims from employees either excluded from or uncomfortable with office gambling.  What happens if an employee snitches? The Texas Penal Code seems to offer “testimonial immunity.”

Tilting the Scales in Your Favor

While Texas does have strong laws against gambling, most low-stakes office pools should be all right, as long as they are run by an individual and not the company, and nobody takes a profit or fee off the top for organizing or running the pool.  “It risks becoming a problem when you get out of bounds on size or (scope),” says Clinton. It is best for Allfer Funn that she not manage the Super Bowl pool. And, she should check Con Genial’s employee manual to make sure that she is not stepping out of bounds of her own company policy. Finally, Allfer should be cognizant of the objection of any employee and respond accordingly. Go Packers!

Read more: Houston KTRH NewsRadio 740 Super Bowl Betting Pools May Be Illegal

Tilting the Scales articles: Internet Gambling in the U.S.March Madness Basketball GamblingWanna Bet? Betting About Baseball Returns to the News

HiResGunner Gunter employs dealership manager Sayles and computer technician H. Packard (“Pack”) at Falconaire’s Fine Ford and pays these “white collar” employees $40,000 per year. In busy sales months, each averages 50-60 hours a week without paid overtime. Do the new FLSA regulations affect Gunner?

Yes. Effective December 1st, Sayles and Pack must either be paid for their overtime hours or to avoid this mandate, their minimum annual salary must be $47,892 (up from the current $23,600 minimum per year) assuming they are Fair Labor Standards Act “white collar” employees (i.e., executive, administrative or professional) under the exemption, and not otherwise entitled to overtime pay.

The Labor Department estimates the new rules affect some 5 million exempt workers, predominantly in Texas, California, Florida, Illinois, New York and Pennsylvania, which have the largest number of newly eligible workers – 200,000 or more in each state. Of those numbers, hardest hit are lower-wage businesses and service industries like hospitality and retail, which identify the new rules as “Career Killers.” Rather than increasing salaries, many business may elect to reclassify professionals as hourly workers and reduce hours, adjust or remove existing benefits and flexibility (including loss of their more prestigious titles) or cut base salaries. “Comp time” (working overtime for future days off) is not an option for these newly eligible overtime workers. Even with labor reductions, the projected additional administrative costs to businesses to track hours of more employees and updating payroll systems are estimated to cost $745 million.

Employers who fail to comply after December 1st risk Department of Labor (DOL) investigation. More daunting, perhaps, is the threat of private litigation, including class action litigation – a risk with substantial downside potential.

Tilting the Scales in your Favor

Evaluate your current employees and salary levels to assess your company’s possible DOL exposure. If you elect to reclassify employees from “overtime exempt” to “overtime eligible”, develop comprehensive plans to (1) determine new hourly rates for impacted employees; (2) revise or update current timekeeping programs and policies to reflect the changes; and (3) implement training for both managers and employees addressing the changes. Congress may attempt to redirect these changes with legislation, but it’s more likely that the results of the November election  will dictate whether that momentum is sustained. Consider using a Checklist.

For more insight on cutting edge employment issues, including federal changes to overtime exemptions, visit the Texas Employer Handbook blog, written by Gray Reed employment partner Michael Kelsheimer.