Kevin Seaman, a sophomore at the University of Texas, is looking to make a little money to buy his special gal a present for Valentine’s Day.  Shunning work at the Gap and afraid to be a guinea pig for experimental drug clinical tests, Seaman seeks more romantic fund raising.  Late night searching on Craigslist surfaced a lesbian couple looking for a sperm donor and promised compensation ten times more than the local sperm bank.  Seaman contacts the couple who, after a lengthy meeting, decides Seaman is the man for the job.  Not using a doctor, sperm bank or clinic, Seaman drops off a container with his sperm at the couple’s home and signs a release of all parental rights. The couple successfully handles the do-it-yourself artificial insemination, and from the “procedure” a baby girl is born.  A year later, the couple breaks up, falls upon hard times and files for public assistance from the state.  Not long after that, the State of Texas serves Seaman with child support papers.  Is Seaman liable for child support?

Probably.  Had he carefully followed the provisions of the Texas Uniform Parentage Act, as a “donor” Seaman would not be considered the parent and would not be liable for child support.  Not using a licensed physician could prove problematic for Seaman.  The statute defines a donor as an individual who provides eggs or sperm to a licensed physician for assisted reproduction.  Assisted reproduction is also a defined term meaning causing pregnancy not by sexual intercourse and including: (1) intrauterine insemination; (2) donation of eggs; (3) donation of embryos; (4) in vitro fertilization and (5) introcytoplasmic sperm injection.  Besides not using a licensed physician, the couple did not get pregnant using any of these methods. Accordingly, Seaman risks a court declaring that he is not protected by the statute and that he is responsible for child support.

Tilting the Scales in Your Favor

To avoid future child support liability (among other liabilities), sperm donations in Texas should be made through a doctor, sperm bank or clinic. This is to achieve clear-cut, black-and-white cases of sperm donation and, thus, determination of paternity, thereby reducing misunderstandings about child support obligations, parental rights and fraud against the state.

NOTE: Texas was the first state to enact the Uniform Parentage Act which can be found in the Texas Family Code. Other states may not have addressed the legal issues presented by modern medical technology. Under other states’ laws, like Kansas, the attorneys’ general office may have broader latitude to claim child support liability.

Will this Legislative Session impact business owners? With the assistance of our own LRM Freshman State Rep. Jeff Leach, R-Plano, Tilting the Scales will periodically post updates on bills that might affect your business, along with an occasional humorous twist.

As an example and keeping in the tone of this month’s postings on gun control, as the federal government moves forward on its plans to tighten gun restrictions, Texas lawmakers are proposing legislation to expand gun rights in the state. The latest proposal is HB 700, a so-called “open carry” bill filed last week by State Rep. George Lavender, R-Texarkana, to allow individuals with concealed handgun licenses to carry weapons in plain view on a belt or shoulder holster. Similar legislation failed last session. Other recent proposed policy changes include allowing concealed handguns on college campuses, and arming and training school officials, including teachers.

More summaries to come as we continue through this legislative session.

Assult RifleAttendees at the midnight showing of the remake of the movie “Paladin – the Gentleman Black Knight” were ambushed at the Orpheum Theater. According to news reports the accused bought a ticket and sat in the audience. He waited until after the movie started and then stepped out where he donned riot gear and re-entered the theater, tossed two gas canisters and began shooting into the crowd.  Subsequent investigation suggested insufficient security for anticipated crowds and a lack of alarm system controls on the emergency exit. Is the business owner liable to its customers who were injured in the shooting?

Owner Liability Issues to Customers

Probably not the customers (employees – a different story – will be addressed next month). While a business owners must take reasonable steps to protect visitors coming onto the property or people coming to do business in their store, for victims successfully to recover compensation they must show that past violent incidents reasonably caused the mass shooting at that particular theatre to be foreseeable. The Orpheum responded to its patrons’ lawsuits seeking a dismissal and argued, “It would be patently unfair, and legally unsound, to impose on the Orpheum… the duty and burden to have foreseen and prevented the criminal equivalent of a meteor falling from the sky.” There was no history of similar events to argue a pattern. There was no communication of a threat. The theater would likely be successful in arguing it could not have reasonably foreseen that a deranged gunman would shoot up the theater because it is no more at risk for a mass shooting than any other venue hosting a large crowd of people. Hiring armed security guards over and above the presence of routine local law enforcement patrols is not an ordinary and customary procedure for suburban movie theaters in relatively low-risk areas.

A pattern of criminal problems, such as repeated robberies at the business or assaults in the parking lot, are generally required for courts to hold businesses liable for a crime on their premises.

Tilting the Scales in Your Favor

Insurance. Up to forty percent of businesses affected by a natural or human-caused disaster never reopen. If this happened at your business, could your business survive? Evaluate your commercial property and business interruption policies as well as reputational and crisis management coverage. For most businesses, the brunt of the insurance response will likely fall under commercial general liability coverage because there is no exclusion for random acts of violence or mass events. You may wish, however, to consider public liability insurance. Because of their high-severity and low-frequency nature, insurance for public liability occurrences is designed to protect from incidents on the premises those public venues and other businesses that frequently bring large crowds – a shooting, a structure collapse, an explosion, a terrorist act. Talk to your insurance agent, and review your existing general liability insurance policies.

Reasonable Precautions. The Department of Homeland Security created a checklist of measures recommended to create a business preparedness program. Generally, those measures are summarized as organize, develop and administer a preparedness program, identify the hazards and assess the risks. Then, implement the plan and address the emergency response, crisis communications, employee assistance and training. Annually test and evaluate the plan using a variety of exercises and scenarios.

SEE ALSO:

CHL in TexasSam Colt lives in Dallas and is a gun enthusiast.  As a result of a rash of car jackings in his neighborhood, Colt regularly carries a Glock 9mm in his vehicle for self-protection, although he does not have a concealed handgun license.  Driving to his local bank last week, Colt tosses his gun into the passenger seat so that he has easy access to it in the event of an emergency and to dissuade any anyone with bad intent.  Unfortunately, Colt gets stopped for speeding and the officer sees the gun.  Is Colt in trouble?   

Carrying a Gun in the Car

Yes.  Pursuant to the 2009 Texas Motorist Protection Act, Colt does not need a concealed handgun license to carry a handgun in his car.  However, the weapon must be concealed and Colt may not otherwise be:  (1) engaged in committing a crime; (2) prohibited from carrying a weapon; or (3) a member of a gang.  Colt’s violation would be classified as a Class A misdemeanor (the most serious level of misdemeanor) and would be punishable by a fine of $4,000 or less and/or jail time up to a year.  Interestingly, if Colt instead chose to carry a rifle/shotgun in his car, that weapon need not be concealed.

Where Concealled Carry is Prohibited

Now, assume for the moment that Colt has a concealed handgun license.  Could he bring his concealed weapon into his local bank?  Probably.  While the Texas Penal Code specifies many places that one cannot bring a concealed handgun, a bank is not one of them unless the bank has elected to post a sign forbidding concealed carry on the premises.  Types of places where concealed carry is prohibited include, among others:

  • Schools or on school buses;
  • Polling places;
  • Courts and court offices;
  • Locations where high school, college or professional sporting events are taking place;
  • Nursing homes;
  • Amusement parks;
  • Places of worship;
  • Government meetings;
  • Anywhere alcohol is sold if 51% or more of their revenue is from the sale of alcohol;
  • Secured airport areas;
  • Within 1,000 feet of the premises of an execution on the day of execution; and
  • Businesses posting signs prohibiting handguns on their premises based on criminal trespass laws.

Tilting the Scales in Your Favor

The best rule of thumb for those who do not have a concealed handgun license is to always transport your gun in its case in the back of your car.  If you are keeping the gun in your car for safety reasons, then store it in the glove box or under your car seat. 

SEE ALSO:

Hank Hill, a resident of Arlen, Texas, works as a salesman selling propane and propane accessories.  Extremely unhappy with the results of the recent presidential election, Hill initiates a petition for Texas to secede from the United States.  Hill claims that Texas was a sovereign nation when it joined the Union in 1845 and that it specifically reserved the right to secede as part of its Constitution.  Is Hill right?

Constitutional Secession is an Urban Legend

No.  Nothing in the Texas Constitution expressly gives Texas the right to secede.  Despite urban legends to the contrary, Texas has no more of a right to secede than any of the other 49 states.  The U.S. Constitution is also silent on the issue of secession.   As the 10th Amendment to the U.S. Constitution reserves all powers to the states that are not specifically granted to the U.S. by the Constitution, one could argue that all states technically have the right to secede*.

Although the U.S. Constitution may be silent on the issue, constitutional scholars point to the U.S. Supreme Court case of Texas v. White (1869) for the proposition that states may not secede.  In that opinion, the Court found that Texas remained a state during the Civil War because when it joined the United States, it entered into an “indissoluble relation” and that “The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.” Texans favoring secession might quickly point out that the White decision was a 4-3 vote of the Supremes with strong dissent, and that it was decided by the winners of the war – not a surprising result!

Breaking into Five States was Retained

Although Hill’s plan to make Texas its own country (by the way, Texas would be the world’s 14th largest economy and the 10th largest country in terms of land mass) would be unsuccessful, all is not lost.  Texas did preserve the very unique right, pursuant to the 1845 Annexation Agreement with the United States, to split itself into as many as five separate states.  Specifically, the Annexation Agreement provides that:

New States of convenient size not exceeding four in number, in addition to said State of Texas and having sufficient population, may, hereafter by the consent of said State, be formed out of the territory thereof, which shall be entitled to admission under the provisions of the Federal Constitution.

If Texas exercised this right, it could dramatically shift the Congressional balance of power as its number of senators would increase from two to ten!

*Our country’s most notable secession movement occurred during the American Civil War when eleven of the fifteen southern states declared their secession from the United States and joined together as the Confederate States of America.  That attempt at secession collapsed in 1865 after losing the war to the North.

By the end of 2013, The Codfather Seafood Restaurant’s workforce of over 400 full-time employees must be reduced to less than 50 full-time employees. Willy Fry, owner of the Codfather Seafood chain, is also requiring his managers to limit all part-time employees to less than 28 hours a week. Why?

Willy believes the Patient Protection and Affordable Care Act or Obamacare will cost him about $800,000 or more a year – several times more than his annual profit. His competitors are smaller restaurants that are exempt from Obamacare.  To compete, the Codfather managers must reduce their workforce and limit their employees to fewer hours. Is Willy’s problem really that bad? Is his plan a sound one?

Urban Legend or Legitimate Concern

Denny’s, Olive Garden, Red Lobster, Papa John’s, Applebee’s and other owners of restaurants and restaurant chains believe that Obamacare will change the service sector making the 40-hour work week a thing of the past.  Some are experimenting with multi-team systems where two teams of people working part-time replace the former group of full-time employees.  Many predict a reduction in hours and 25% pay cuts in 2013. Much like the Mon-Fri workweek emerged as a standard, restaurateurs believe there may be a complete shift in the US labor model as companies adopt standard ways of dividing up the work week for part-timers, making it easier for schedules to mesh. Expectations of changes in the 40-hour work week are also projected for higher education. The Community College of Allegheny County announced that 400 part-time employees will have their hours cut back by year’s end because the college cannot afford the $6 million projected cost for these employees’ health insurance. CCAC part-timers will see their hours slashed to 25, and adjunct faculty will teach only 10 credit hours, rather than 12.

Yet many believe that Obamacare will, over time, decrease health care costs, and lead to more satisfied workers, competitive hiring, and higher rate of employee retention. While restaurateurs claim Obamacare will further hamper the already sluggish economy by imposing new costs on employers who want to hire, others insist that the health care reform law will only impose a modest increase of 2.2 percent on total employer spending, and that, for small businesses of 100 employees or less, total spending could actually decrease by 1.4 percent. Either way, would the federal government encourage employers to cut full-time employees to part time as a solution to perceived costs related to the Obamacare insurance requirements (for full-time employees)? Surely Obamacare benefits, rather than burdens, millions of Americans without health care. Could legislators working on this law have allowed such a loophole?

Part-time Workers Are Not a Simple Solution

Part-time employees also count toward the 50 full-time employees limit. According to the Congressional Research Service: “The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis, by taking their total number of monthly hours worked divided by 120.” For example, if The Codfather keeps 35 full-time employees (30+ hours) and 20 part-time employees who work 24 hours per week (96 hours per month). The part-time employees’ hours are treated as equivalent to 16 full-time employees (20 employees x 96 hours / 120 = 1920 / 120 = 16). Therefore, The Codfather would be considered to have more than 50 full-time employees. An example provided by the National Federation of Independent Businessman concluded that a small business with 51 employees that doesn’t provide health insurance would owe $42,000. If employees who receive government subsidies are considered in the equation, the calculation is more challenging and the potential tax penalty is even greater.

Tilting the Scales in Your Favor

First, know that the Obamacare insurance requirements do not become applicable until 2014. There is no urgent need to fire employees or to immediately turn your workforce into part-time employees. And, if you choose to re-tool for part-time employees, know that their treatment as full-time equivalent employees must be taken into consideration.

Second, the regulations implementing the Obamacare tax are still being written. Stay tuned for more updates. I, for one, will be relying upon the able assistance of Jason Luter, a recent lateral addition to our Looper Reed team, who is already an expert in employee benefit plans, ERISA and Obamacare- as much as anyone can be an expert on this developing area of the law!

But note, that if you employ 50 or more employees (or qualify under the part time employee formula), you will face a major choice at the beginning of 2014: you can sponsor a health plan for 100% of your workers (even those signed up for government-subsidized health insurance) or pay $750 per worker in penalties to the federal government.

Barack Romney owns a timber and building products business. Earlier this month he mailed his employees a packet suggesting that many of the company’s more than 50,000 U.S. employees and contractors may suffer consequences of higher gasoline prices, runaway inflation, and other ills if we elect a candidate who want to “spend money on subsidies, put regulatory burdens on businesses, delay construction projects, and hinder free trade.”

Barack’s brother Mitt Obama, who works for the Environmental Protection Agency, told his employees that “if the wrong party gains control of Congress then their federal agency could be facing a 15% budget cut and furloughs. If the right party takes control of Congress then we would be looking at a flat budget.” Can the two brothers legally do that?

Companies Can Advise Employees How to Vote.

Yes, Barack, who owns his own company, can communicate his concerns to his company employees. In its ruling on the 2010 Citizens United case, the U.S. Supreme Court held that political spending is a form of protected speech under the First Amendment and, in so ruling, overturned certain limits on political contributions. The ruling nullified Federal Election Commission rules that kept employers or unions from communicating their political opinions to their employees and held that the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections. While corporations and unions may not give money directly to campaigns, they may seek to persuade the voting public through other means. However, Ohio employers take note of their state statute prohibiting employers from printing or posting any notice “that if any particular candidate is elected or defeated work in the establishment will cease in whole or in part.”

Federal Agencies May Not Advise Employees How to Vote.

On the other hand, No, Mitt, who works for the government, may not communicate his concerns to his federal agency employees. The Hatch Act restricts the political activities of governmental employees who work in connection with programs financed in whole or in part by federal loans or grants, including programs receiving financial assistance from the federal government. Generally speaking an agency employee under the Hatch Act may not engage in political activity while on duty, while wearing an official Government uniform or identifying insignia, while using a Government vehicle, while using Government property and so forth.

Tilting the Scales in Your Favor.

If you are not a federal agency affected by the Hatch Act, and you wish to communicate information about the upcoming election to your employees, we urge you to consider:

  • Weigh the Pros and Cons of Your Message – consider the impact of your message and the possible repercussions to your company’s culture
  • Inform But Don’t Pressure – clearly state that the company opinion is just that, and that there is no intent to pressure employees to vote one way or the other.
  • Be Careful About the Message – while the company’s ownership has certain First Amendment rights, the First Amendment rights do not eliminate the “usual” company employment liabilities for claims of harassment based upon race, gender, sexual orientation, etc.
  • Company Harassment Policy – if political discourse in your company gets heated, consider invoking your harassment policy to remind employees of the types of behavior that are prohibited and where they can go with their complaints. If you don’t have a clearly defined company harassment policy, talk to your lawyer and consider getting one.
  • Promote Civil Discourse – make it clear in advance that gloating, victory dances or otherwise “spiking the ball in the end zone” are not acceptable. If there has been particularly lively discourse in your workplace, after the election you may want to say, “Thanks to you all for your participation in the political process, and your efforts to be civil with co-workers who may not agree with your views. Please continue your good work now that the election is over.”

Your Vote CountsGeorge W. Bush famously won the 2000 Presidential election by a mere 534 votes in Florida. But did you know that it is possible to have a tie in the U.S. Presidential Election?  With the election a day away and polls showing the candidates in a virtual tie, an interesting question arises — what would happen if President Obama and Governor Romney each received 269 of the 538 available electoral votes?

What is the Electoral College?

The Electoral College is the body of electors chosen by the voters to officially elect the President and Vice-President.  There are 538 electors, which includes 435 representatives, 100 senators and 3 electors from Washington D.C.

Is it even possible to have a Tie in the U.S. Presidential Election?

Yes, it is very possible.  In fact there are several scenarios that could play out in this election to cause a tie.

What Happens if a Tie Occurs in the Presidential Election?

In the event of an Electoral College tie, our next President would be elected by the incoming House of Representatives with, according to the 12th Amendment to the Constitution, each state able to cast just one vote.  In other words, North Dakota would have as much of a say as the Lone Star State.  As the GOP holds a majority in 33 state delegations, it is most likely that an electoral tie would mean that Romney wins the presidency.  Good news for the Republican Party, right?

Not so fast.  If no vice-presidential candidate receives a majority of electoral votes, then the Senate would decide the winner between Joe Biden and Paul Ryan, with each senator getting one vote.  Should the Democrats retain control of the Senate (which they are expected to do), Biden would remain our Vice-President, and our Country would have a President and Vice President from different political parties!

Jim Locher is a graduating Texas high school senior who finished just outside the top ten percent of his class.  Although his top college choice was the University of Texas at Austin, he wasn’t admitted.  Soon thereafter, Locher, who is white, became quite upset when he learned that, although faring better academically in high school, other applicants with a minority background were admitted.  Believing that he was discriminated against, Locher contemplates a lawsuit against UT.  Can UT legally consider race as part of its admissions process?

Good question!  This exact issue was argued before the U.S. Supreme Court on October 10, 2012 (Supreme Court Argument Transcript).  Currently, UT automatically admits nearly ¾ of its incoming freshman class (approximately 7,100 students) as those students graduated in the top 8% of their high school class.  For the remaining spots, race is one of the factors taken into account as part of the admissions process.

Because the 8% Rule (formerly the 10% Rule) has produced significant diversity (ironically, because Texas high schools tend to be either all white or all minority, more than 8 out of 10 Latino and African American students were automatically admitted), proponents of the change maintain that racial preferences for the remaining spots is unnecessary and discriminatory.  UT argues that the 8% Rule does not create a critical mass of racial groups and that affirmative action is needed as too many of its classrooms contain only token minority representation.

When deciding the case, the Supremes will have four basic options – they can find that:

  1. Race should not be considered in the admissions process;
  2. UT’s program is constitutional;
  3. So long as UT is achieving substantial diversity through the 8% Rule, that race should not be considered; or
  4. They will simply “punt” the issue and maintain that the plaintiff lacks standing to sue.

A ruling is expected in the first part of 2013 and will obviously have far reaching consequences for all schools, as any school, whether private or public, which receives federal funds may not discriminate on the basis of race.

Local dermatologist Dr. Nomo Ackney’s former patient Idgy Skinn is posting derogatory comments and inferior ratings on HealthGrades.com, Rate MDs.com, Vitals.com, AngiesList.com, TopIx.com and Ackney’s Google Places. He is even calling out and speaking ill of Ackney’s family members and posting Ackney’s home address on Facebook. The complaints detail Ackney’s treatment and allege she is an incompetent doctor, that she committed malpractice and that she got away with it. Does Dr. Ackney have a claim? Who can she sue?

Defamation on the Internet

Yes, Ackney has a claim – for some of the comments – against Idgy Skinn. Saying that Ackney committed malpractice is actionable. Opining that Ackney is incompetent or that she did a bad job probably is not actionable.

Libel.  Written defamation (libel) is a catch-all term for any statement that hurts someone’s reputation. Just like plain ‘ole gossip, it must be false, “published” to someone else (like on the internet) and damaging to your business or reputation. In addition, it must cross over the line from protected free speech where you may freely speak your opinion (even if it’s wrong) into the realm of “gone too far.” Some examples of communications that cross the line are those that:

  • Suggest a serious crime involving moral turpitude or a felony was committed
  • Expose Dr. Ackney to hatred
  • Reflect negatively on Dr. Ackney’s character, morality or integrity
  • Suggest that Dr. Ackney suffers from a physical or mental defect that would cause others to not associate with her

Idgy Skinn Can Be Sued, But NOT the Internet Site

Many websites permit anonymous postings making it extremely difficult to know who to stop. Knowing that the offender is Idgy Skinn overcomes Ackney’s first obstacle. The 1996 Communications Decency Act, originally intended to slow pornography, also protects any Internet Service Provider from libelous posting damages.

Texas Cases on Internet Libel

Two Texas cases awarded damages for internet libel. Mark and Rhonda Lesher of Clarksville were awarded more than $13 million (later overturned by the Tarrant County trial court judge) for writing anonymous online comments on Topix.com about an alleged sexual assault at their Texas ranch. The second was a $12.5 million jury verdict in favor of Orix Capital Markets, LLC in a complicated defamation case involving statements published on the defendants cleverly named “gripe site” Predatorix.com. The case was settled after the judgment for undisclosed terms.

Tilting the Scales in Your Favor

Consider carefully your options and the time and expense that are likely to be related to each. As the saying goes, “you can sue someone for just about anything.” There are other options before you pull the pin on the litigation hand grenade. Consider –

  • Be Proactive – consider releasing your side of negative information first. If it is reasonable, it will be believed. “Nip it in the bud.”
  • Be Upfront – consider contacting and offering to meet with the online poster if the negative comments have already been posted. Be conciliatory.
  • Apologize if Necessary – consider ‘fessing up to your mistakes. A quick apology is less painful and costly than years of litigation, and is likely to put you in a better light as one who owns up rather than appearing to be clueless and defiant.
  • Negotiate to Get the Post Down – consider the cost to get it down. Words are forgotten. Even newsprint fades. The permanence of the web creates a major branding challenge.
  • Own Your SEO (Search Engine Optimization) – consider creating your own content and drive the bad stuff down in search engine rankings. Only your worst enemy will look for dirt on you past the first Google search page. See Reputation Repair below.

Reputation Repair

Managing your internet reputation is not a new idea. In fact Looper Reed regularly works with some of our clients on crisis communications and dealing with damaging or misinformation on the internet. There are also internet service providers and websites like Reputation Changer, Reputation Management Consultants, Integrity Defenders,and Online Reputation Management that promote their ability to clear negative search results arising from an internet search engine.