By Dutton H.B. No. 1141
75R4320 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to termination of employment requirements regarding
1-3 certain employees; providing a civil penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 3, Labor Code, is amended by adding Chapter
1-6 103 to read as follows:
1-7 CHAPTER 103. REQUIREMENTS FOR TERMINATION OF CERTAIN EMPLOYEES
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Sec. 103.001. DEFINITIONS. In this chapter:
1-10 (1) "Employee" means an individual employed by an
1-11 employer, including an individual employed in a supervisory,
1-12 managerial, or confidential position. The term does not include an
1-13 independent contractor.
1-14 (2) "Employer" means a person that employs five or
1-15 more employees for each working day in each of 20 or more calendar
1-16 weeks in the two-year period preceding the date of a termination.
1-17 The term does not include a parent, spouse, child, or other member
1-18 of the employer's immediate family or of the immediate family of an
1-19 individual that has a controlling interest in the employer.
1-20 (3) "Fringe benefit" means vacation leave, sick leave,
1-21 compensatory leave, a medical insurance plan, a disability
1-22 insurance plan, a life insurance plan, a pension benefit plan, or
1-23 another benefit of economic value, to the extent the leave, plan,
1-24 or benefit is paid for by the employer.
2-1 (4) "Wages" means hourly wages or periodic salary,
2-2 including tips, regularly paid to an employee. The term includes
2-3 nondiscretionary commissions and bonuses and regularly paid
2-4 overtime, but does not include fringe benefits.
2-5 (5) "Termination" means:
2-6 (A) a dismissal of an employee by an employer,
2-7 including a dismissal resulting from the elimination of a
2-8 position;
2-9 (B) a layoff or suspension of an employee by an
2-10 employer for more than two consecutive months; or
2-11 (C) the voluntary leaving of employment or
2-12 retirement by an employee as the result of an act or omission by
2-13 the employer that, after notice to the employer of the act or
2-14 omission and the failure of the employer to provide appropriate
2-15 relief, is so intolerable that under the circumstances a reasonable
2-16 individual would voluntarily leave or retire from employment.
2-17 (Sections 103.002-103.020 reserved for expansion
2-18 SUBCHAPTER B. GROUNDS FOR CERTAIN TERMINATIONS
2-19 Sec. 103.021. TERMINATION FOR CAUSE. (a) An employer may
2-20 not terminate the employment of an employee without good cause.
2-21 (b) A termination is for good cause if:
2-22 (1) there exists a reasonable basis for the
2-23 termination that is related to an individual employee taking into
2-24 consideration relevant factors and circumstances, including the
2-25 employee's duties, responsibilities, conduct on the job or
2-26 otherwise, job performance, and employment record; or
2-27 (2) the termination is made in the exercise of
3-1 business judgment in good faith by the employer, taking into
3-2 consideration:
3-3 (A) the employer's economic or institutional
3-4 goals and the methods necessary to achieve those goals;
3-5 (B) the need of the employer to organize or
3-6 reorganize the employer's operations or to discontinue,
3-7 consolidate, or divest operations or positions or parts of
3-8 operations or positions;
3-9 (C) the size of the employer's work force and
3-10 the nature of the positions filled by the work force; and
3-11 (D) changing standards of performance for
3-12 employees.
3-13 (c) Subsection (a) applies only to an employee who has been
3-14 employed by the same employer for not less than one year and who
3-15 has worked for the employer for not less than 520 hours during the
3-16 26 weeks preceding the date of the termination.
3-17 Sec. 103.022. DETERMINATION OF LENGTH OF EMPLOYMENT. (a) A
3-18 layoff or other break in service is not counted in determining the
3-19 length of an employee's period of employment.
3-20 (b) An employee is considered to be employed during a paid
3-21 vacation or other authorized leave.
3-22 (c) An employee who is rehired after a break in service that
3-23 exceeds one year, excluding an absence due to a labor dispute or
3-24 authorized leave, is considered to be a newly hired employee.
3-25 (d) The 26-week period for purposes of Section 103.021(c)
3-26 does not include any week during which the employee was absent
3-27 because of:
4-1 (1) a layoff of one year or less;
4-2 (2) a paid vacation or other authorized leave; or
4-3 (3) a labor dispute.
4-4 Sec. 103.023. APPLICATION OF COMMON LAW. (a) Except as
4-5 provided by Subsection (c), this chapter preempts any right or
4-6 claim under common law raised by a terminated employee against an
4-7 employer or the employer's officers, directors, and employees, to
4-8 the extent the right or claim is based on the termination or on an
4-9 act or statement that is reasonably necessary to initiate or effect
4-10 the termination if the employee's termination:
4-11 (1) requires good cause under Section 103.021;
4-12 (2) is subject to an agreement under Section 103.042;
4-13 or
4-14 (3) is permitted by the expiration of an agreement
4-15 under Section 103.043(a).
4-16 (b) An employee whose termination is not subject to
4-17 Subsection (a) retains all common law rights and claims.
4-18 (c) This chapter does not supersede a right or claim of a
4-19 terminated employee against an employer if the right or claim
4-20 arises under:
4-21 (1) state or federal law;
4-22 (2) an administrative rule or regulation having the
4-23 force of law;
4-24 (3) a municipal ordinance that is valid under state
4-25 law;
4-26 (4) a collective bargaining agreement between an
4-27 employer and a labor organization; or
5-1 (5) an express oral or written agreement relating to
5-2 employment that does not violate this chapter.
5-3 (d) A right or claim listed under Subsection (c) may not be
5-4 asserted under this chapter, except as otherwise provided by this
5-5 chapter.
5-6 (Sections 103.024-103.040 reserved for expansion
5-7 SUBCHAPTER C. EMPLOYMENT AGREEMENTS
5-8 Sec. 103.041. AGREEMENTS BETWEEN EMPLOYER AND EMPLOYEE. (a)
5-9 A right of an employee under this chapter may not be waived by
5-10 agreement except as provided by this subchapter.
5-11 (b) By an express written agreement, an employer and an
5-12 employee may provide that the employee's failure to meet specified
5-13 business related standards of performance or the employee's
5-14 commission or omission of specified business related acts
5-15 constitute good cause for termination under this chapter. The
5-16 standards or prohibitions contained in the agreement are effective
5-17 only if consistently enforced and not applied to a particular
5-18 employee in a disparate manner without justification. If the
5-19 agreement authorizes a change by the employer in a standard or
5-20 prohibition, the change must be clearly communicated to the
5-21 employee in writing.
5-22 Sec. 103.042. AGREEMENT TO PROVIDE SEVERANCE PAY. (a) By
5-23 express written agreement, an employer and an employee may mutually
5-24 waive the requirement of good cause for termination if the employer
5-25 agrees that on the termination of the employee for any reason other
5-26 than wilful misconduct of the employee, the employer will provide
5-27 severance pay in an amount equal to at least one month's pay for
6-1 each year the employee was employed by the employer, with a maximum
6-2 total payment equal to 30 months' pay, at the rate of the
6-3 employee's wages in effect immediately before the date of
6-4 termination.
6-5 (b) An employer may make a payment under Subsection (a) in a
6-6 lump sum or in a series of monthly installments. An installment
6-7 payment may not be an amount equal to less than one month's pay
6-8 plus interest on the principal balance. Payment under this section
6-9 must be made or begun not later than the 30th day after the date of
6-10 the employee's termination.
6-11 (c) An agreement under Subsection (a) constitutes a waiver
6-12 by the employer and the employee of the right to a civil trial,
6-13 including a jury trial, concerning a dispute over the nature of the
6-14 termination and the employee's entitlement to severance pay.
6-15 Sec. 103.043. TERMINATION UNDER AGREEMENT OF EMPLOYMENT FOR
6-16 SPECIFIC DURATION. (a) The requirement of good cause for
6-17 termination does not apply to the termination of an employee at the
6-18 expiration of an express oral or written agreement of employment
6-19 for a specified duration related to the completion of a specified
6-20 task, project, undertaking, or assignment.
6-21 (b) If the employment continues after the date of the
6-22 expiration of an agreement under this section, Section 103.021
6-23 applies to the termination of the employment unless the parties
6-24 enter into a new express oral or written agreement under this
6-25 section.
6-26 (c) The period of employment under an agreement described by
6-27 this section applies toward the minimum period of employment
7-1 required by Section 103.021(c).
7-2 Sec. 103.044. AGREEMENT TO PROVIDE ADDITIONAL RIGHTS. (a)
7-3 An employer may provide substantive and procedural rights in
7-4 addition to the rights provided by this chapter to:
7-5 (1) one or more specific employees by an express oral
7-6 or written agreement; or
7-7 (2) all of the employer's employees by a written
7-8 personnel policy or statement.
7-9 (b) An agreement under Subsection (a) may provide that the
7-10 additional rights are enforceable under this chapter.
7-11 Sec. 103.045. AGREEMENT TO BE SUBJECT TO CHAPTER. (a) A
7-12 person who employs employees and an employee not otherwise subject
7-13 to this chapter may become subject to this chapter to the extent
7-14 provided by an express written agreement.
7-15 (b) A person who employs employees who becomes subject to
7-16 this chapter under an agreement under this section is considered to
7-17 be an employer for the purposes of this chapter.
7-18 Sec. 103.046. GENERAL REQUIREMENTS FOR AGREEMENTS UNDER
7-19 SUBCHAPTER. (a) An agreement between an employer and an employee
7-20 subject to this subchapter imposes a duty of good faith in the
7-21 formation, performance, and enforcement of the agreement.
7-22 (b) By express written agreement, an employer and an
7-23 employee may settle at any time a claim arising under this chapter.
7-24 (c) By express written agreement before or after a dispute
7-25 or claim arises under this chapter, an employer and an employee may
7-26 agree to private arbitration or any other alternative dispute
7-27 resolution procedure for resolving the dispute or claim.
8-1 (d) By express written agreement after a dispute or claim
8-2 arises under this chapter, an employer and an employee may agree to
8-3 judicial resolution of the dispute or claim.
8-4 (Sections 103.047-103.060 reserved for expansion
8-5 SUBCHAPTER D. ENFORCEMENT
8-6 Sec. 103.061. POSTING. An employer shall post a copy of
8-7 this chapter or a summary approved by the Commission on Human
8-8 Rights in a prominent place in the employer's work area.
8-9 Sec. 103.062. CAUSE OF ACTION; REINSTATEMENT. (a) An
8-10 employer who terminates an employee from employment in violation of
8-11 this chapter is liable to the employee for reasonable damages
8-12 incurred by the employee as a result of the violation.
8-13 (b) An employee terminated in violation of this chapter is
8-14 entitled to reinstatement to the employee's former position of
8-15 employment.
8-16 Sec. 103.063. CIVIL PENALTY. An employer who violates
8-17 Section 103.061 is subject to a civil penalty not to exceed $200
8-18 per day for each day the violation continues. The attorney general
8-19 may bring a civil action on behalf of the state to collect a civil
8-20 penalty under this section.
8-21 Sec. 103.064. RETALIATION PROHIBITED; CIVIL ACTION. (a) An
8-22 employer may not directly or indirectly take adverse action in
8-23 retaliation against an individual who files a complaint, gives
8-24 testimony, or otherwise lawfully participates in a proceeding
8-25 arising under this chapter, regardless of whether the individual is
8-26 an employee having rights under this chapter.
8-27 (b) An employer who violates this section is liable to the
9-1 individual subjected to retaliation for:
9-2 (1) damages caused by the action;
9-3 (2) punitive damages, if appropriate; and
9-4 (3) reasonable attorney's fees.
9-5 SECTION 2. This Act takes effect September 1, 1997, and
9-6 applies only to an employee terminated from employment on or after
9-7 that date. An employee terminated from employment before the
9-8 effective date of this Act is governed by the law in effect on the
9-9 date the employee was terminated, and the former law is continued
9-10 in effect for that purpose.
9-11 SECTION 3. The importance of this legislation and the
9-12 crowded condition of the calendars in both houses create an
9-13 emergency and an imperative public necessity that the
9-14 constitutional rule requiring bills to be read on three several
9-15 days in each house be suspended, and this rule is hereby suspended.