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.