— Employment Contracts Category Archives — Dallas Employment Lawyer Blog Published by Dallas, Texas Employment Lawyers

Texas Supreme Court decision may give employees greater certainty about when they are owed commissions

July 19, 2022 | Austin Campbell

Summary: This article gives an overview of the May 2022 Texas Supreme Court decision Perthuis v. Baylor Miraca Genetics Laboratories, LLC, and its implications for employees’ rights to their commissions in Texas.

Under Texas law, if you are an employee who is paid via commission, as long as you fully performed what you were required to do under your commission plan at the time, you are owed the commissions for your work. Furthermore, written commission plans can only be modified in writing. Employers can modify their commission plans prospectively, i.e., going forward. But employers cannot escape their obligation to pay commissions already earned by changing the plan.

Unfortunately, knowing this, some employers may try to “creatively re-interpret” or add to your commission plan after the fact to claim that actually, no, you did not meet the requirements. Some employers may even go so far as firing employees in an attempt to avoid paying commissions owed.

Cunning companies may try to circumvent Texas’s “conflict of law” rules for non-competes: what that means and what to watch out for

January 27, 2022 | Austin Campbell

Summary: This article discusses Texas conflict-of-law rules as they apply to non-compete agreements, and some ways that employers may try to get around those rules.

Various articles we have published address in general what a non-competition agreement is and what is required for one to be enforceable in Texas. But with Texas increasingly becoming a hub for large or even multinational companies, it can be much more confusing for workers to figure out what a non-compete their company insists they sign even means. That is especially true as companies may demand that employment documents be governed by some other state’s laws, or even another country’s.

This arcane choice can have profound consequences. Other states’ non-compete laws may be more protective of employees, or instead may allow an employer to get away with more restrictive limits on you. If you are dealing with a contract governed by some other state’s law, it may be a good idea to consult an attorney licensed in that state. However, even if you are in Texas, you should also ask yourself whether your employment agreement subjects you to another state’s non-compete laws, and what that might mean. This article is meant to give a basic overview of Texas’s so-called “conflict of law” rules when it comes to non-competes, as well as some closely related non-compete pitfalls.

Federal employees, the MSPB, and what to do if “the Man” won’t honor its word.

December 16, 2021 | Austin Campbell

Summary: This article gives a very brief overview of what you can do if you are or were a federal employee, settled an MSPB appeal with the government, and are now concerned it is breaching its agreement.

Say you’re a federal employee who, unfortunately, had to file an appeal with the Merit Systems Protection Board (“MSPB”). Perhaps you were improperly reduced in grade, removed from your position, or you were subjected to a prohibited personnel practice. A final hearing before an Administrative Law Judge (“ALJ”) with the MSPB may be the way to fix the situation. Other times, before the hearing you and the federal agency you work(ed) for may be able to work out some deal to put an end to the situation, like them reinstating you, paying you lost wages, agreeing not to sabotage your career, or the like.

You might or might not have an attorney at that time. That deal may be great on paper (and it should always be in writing!), but what happens if your employer refuses to do what it said it would do? That sort of thing is not necessarily common, nor is it unheard of. Unfortunately, there are federal agencies that have problems with a culture of retaliation.

Strategize your Resignation

November 11, 2021 | Paige Melendez

For employers and employees alike it is becoming apparent that there is a trend of employees leaving their workplaces. In Texas, the at-will doctrine allows an employee to leave for any reason or no reason, but sometimes resignations can be a bit more complicated. For employees it is complicated because resignations can be and should be used strategically rather than a simple decision to leave a job. To use a resignation strategically, there are a few things to consider and think about before pulling the plug.

First and foremost, leaving a job can evoke questions about eligibility for unemployment benefits. In Texas, resignations, except for narrow exceptions related to “good cause connected with the work,” can be fatal to an application for unemployment benefits. While every case is different, resignations likely spell the end for unemployment benefit eligibility. Yet, it ultimately comes down to the Texas Workforce Commission’s decision. Therefore, if unemployment benefits are part of the financial planning underpinning a resignation, it is important to keep this in mind.

If unemployment benefits are not a concern or can be overlooked, then resignation becomes a good option to leave an employer on amicable terms. Outside of a contractual obligation, there is generally no notice period requirement on resigning. Nonetheless, there are practical steps to take before submitting a notice of resignation to protect your best interest. By way of example, medical procedures that can be done while health insurance coverage is still fully paid by your employer, figuring out finances in case you cannot find a different job, how a resignation might look at your next employer, and finally, contractual obligations. The contractual obligations can be tricky and are typically governed by an employment contract that an employee signed at the beginning of employment. Contracts that govern resignations or leaving a job without cause sometimes have requirements like a notice period, a method of giving that notice like certified mail to a specific address, or even set out specific information that needs to be in a notice. Some contracts even have promises of severance.

There’s Nothing Refreshing About “Liquidated Damages”

May 21, 2021 | Austin Campbell

Increasingly, employers in Texas have been inserting what might be called “liquidated damages” clauses into employment agreements like non-competes or severance agreements. At a basic level, a liquidated damages clause is an agreement that a party to a contract will pay a specific amount if they breach some part of the contract.

There is such thing as a proper liquidated damages clause, and there are situations (especially in commercial contracts) where clauses like that are appropriate. However, when used in the employment context often they can be wildly inappropriate, and may even cross the line into being penalty clauses that you might then have to fight to overturn. Employers may even try to demand that you agree that these damages are reasonable and not a penalty, even when that is not true. The purpose of this article is to give employees a basic idea of the things they should look out for—at least, when it comes to “liquidated damages”—before signing a contract with their employer

Generally, in a lawsuit over breach of a contract the party that breached the agreement does not have to pay any more than the amount of harm they actually caused the other side. Usually the parties would need to fight over exactly what that number would be as part of the lawsuit. But in Texas, if that number would be difficult or impossible to estimate, parties to a contract are allowed to agree to a “reasonable forecast” of those damages, just in case one party does breach the agreement. To put it another way, in situations where it would probably be prohibitively expensive or flat out impossible to put an exact dollar value on how much a party would be harmed by a breach of contract, the parties can negotiate “just compensation” ahead of time. A proper liquidated damages clause should make it so the parties do not need to argue over their actual damages at all, rather than piling on top of actual damages.