Top Tips on Smooth Terminations: Best Practices for Firing Employees

When people talk about the worst parts of running a business, employee termination is often at the top of the list. Attracting the right talent, training your current workforce, and retaining good employees is where most employers want to focus their attention.  Unfortunately, as businesses grow, an involuntary employee termination is inevitable.  By the time employers come to see us, the employer/employee relationship has significantly deteriorated, and it may be “too late” to carry out the best practices for smooth, inexpensive employee termination. However, starting the relationship right can help make the end a bit less tumultuous.

A successful employee termination begins before you even hire the employee.  Do you have good company policies incorporated into an employee handbook for the employee to sign?  An effective employee handbook contains set expectations and progressive discipline policies for employee and employer to follow.  A withholding agreement may allow you to deduct certain costs from your employee’s last paycheck, and a policy on commissions may protect you from having to pay out commissions following termination. Do you need an employment contract?  Certain types of employees, such as those with access to client lists you do not want to be shared, may benefit from an employment contract setting out benefits and restricting the employee’s use of confidential information, or even offering severance under certain conditions.  Once you hire the employee and proper on-boarding documents are signed, the best strategy is to tackle employee problems immediately and intentionally. 

You may have heard documentation is essential, and it is, but smart documentation is also better.   Be specific and thorough when documenting employee misconduct.  Instead of employee self-evaluations, supervisors should evaluate honestly.  Moreover, go with your gut.  If an employee commits misconduct and your gut tells you the situation is not going to get better, it is better to terminate immediately for that instance of misconduct rather than later.  It saves you time and money and is more likely to result in a favorable result with the Texas Workforce Commission. 

Rosenblatt Law Firm is experienced in counseling businesses with proactive, headache-saving employment policies and procedures and would be glad to discuss your unique labor force.

The Secret to Hiring Employees: Steps to Make the Hiring Process Less of A Headache

Hiring a new employee is always a time of excitement and possibilities.  Whether it is your first or hundredth, it is crucial that you get it right.  There are a few legal hoops you need to jump through to start the relationship strongly and legally.

Paperwork: A few pieces of paperwork that required to hire a new employee.  The employer needs a properly – completed W-4, which allows it to correctly withhold federal income taxes, and a correctly completed I-9, which demonstrates the employee is able to work in the United States.  The I-9 forms are the subject of audit where by penalties can accrue quickly for issues which may appear arbitrary or minor.

  • If the new employee is not located in Texas, you may have to withhold state or local income taxes and file corresponding tax forms for those localities.

  • In most states, including Texas, you are required to notify the State you have hired an employee to allow them to match child support and other legal obligations with the new hire.

Handbook: While an employer is not required to have a handbook, it can be incredibly useful to make sure the employees are aware of the company’s rules, processes and procedures. A useful handbook cites appropriate and current laws which apply and are followed by the company.  A handbook downloaded from the internet, written with reference to another state’s laws, that is out of date, and/or which has processes that are not being followed by the company, is not a cost-saving measure which will provide benefits.  In fact, a lousy handbook can be more dangerous than no handbook at all.  When our firm is asked to handle an unemployment claim or other employee dispute, and we can utilize the client’s handbook to demonstrate clear rules and policies which were not followed, the results are always more positive than when there were no clear rules on which they rely.

Deduction Form: Under both Texas and Federal law, an employer cannot deduct amounts from an employee’s pay which are not specially allowed by law or consented to by the employee.  A form signed by the employee which acknowledges items which can be deducted from their pay will reduce the risk of future litigation or a claim to the Texas Workforce Commission.

There are several other forms which may be useful depending on the employee’s job responsibilities, location, and job duties.

When an employer has taken the time to provide its new employee with clear and updated documents, it starts off the employment relationship on the right foot.

Finding the Tweet Spot: Learning from Tesla What Not To Do on Twitter

Social media has become an integral part of business marketing and brand awareness. It has become a great tool to reach countless more potential customers and clients than traditional marketing avenues, but it does come with a risk.

The risk of businesses and entrepreneurs using social media was highlighted recently by Elon Musk, President and CEO of Tesla, who recently tweeted he was considering taking Tesla private at $420 per share and funding was secured. Musk is being investigated by the SEC and subject to numerous shareholder lawsuits for his statements on Twitter and is accused of fraud and market manipulation because he has later abandoned the idea of going private costing investors a lot of money.

The SEC is also investigating Musk because he is blocking people on Twitter, including investors and journalists who criticize Tesla. The SEC is trying to determine if this is illegal for a CEO of a public company because their communication methods must be “reasonably designed to provide broad, non-exclusionary distribution of the information to the public.” By blocking people, Musk is allowing one set of investors access to information that others will not have. A federal judge has ruled that President Trump cannot block people on Twitter because this violates people’s First Amendment rights. Musk could be next.

Every business should have a social media policy which sets forth who has the right to post for the company and what type of disclaimers other employees must utilize. If you have questions on how to formulate such a policy, your friends at Rosenblatt Law Firm are always here to help.

Rain or Shine: Employment Law for Every Weather Condition

After a week of nonstop showers and flooding in the Alamo City, many residents wish the sun would shine again. However, with two to four more inches expected this weekend, the end is far from here. When faced with rain and weather, businesses of any size can find operating their business at full capacity a challenge. Here are some common weather-related business questions:

Is an employer required to pay an employee who does not report to work due to bad weather?

No. Subject to federal and state law and the policies of the employer to the contrary, an employer in Texas is not required to pay a non-exempt employee if the employee does not work. An exempt employee generally must be paid on days the employee does not report to work due to bad weather. An employer policy may require employees to use paid time off for days missed for any reason, including weather-related reasons.

If an employer chooses to close down their business for the day, are employees entitled to pay?

No. Subject to federal and state law and the policies of the employer to the contrary, an employer in Texas is not required to pay a non-exempt employee if the employee does not work. An exempt employee generally must be paid on days the employee does not report to work due to bad weather. An employer policy may require employees to use paid time off for days missed for any reason, including weather-related reasons.

Is absence (or lateness) due to bad weather “cause” to dismiss an employee?

As Texas is an at-will employment state, in the absence of an employer policy or federal or state law to the contrary, an employer may dismiss an employee for any non-discriminatory reason. However, without a clear violation of company policies and satisfaction of other Texas Workforce Commission requirements, and depending on the history of the employment of that particular employee, there is a risk such a termination would result in a successful unemployment compensation application by the employee.

If an employer requires an employee to come to work during bad weather, are they exposed to any liability?

Generally, not for the employee’s commute back and forth from work. Texas law on employer liability while commuting is generally well-established, freeing the employer from liability from commute-related claims, including vehicle wrecks. There have been exceptions based on particular circumstances, for example, if the employer asks the employee to run an employer errand on the way to work. If the employer requires the employee to drive in bad weather after commuting to work, the risk of liability is higher.

Can an employer make employees work in bad weather?

Employers can force employees whose primary work is outside to work outdoors in the rain, in most cases. The only time it is prohibited for an employee to be forced to work is if the weather can cause risk of serious injury or death.

Under OSHA, employers are required to provide workplaces free of known dangers. OSHA forbids an outdoor environment that could cause serious bodily harm or death, such as a hurricane, but rain is allowed up until the point it can cause severe unsafe conditions.

These answers are general and may differ based on your business and employees’ specific circumstances, so please call our office if you have specific employment law questions.

What is a Data Breach? What Businesses Have to Report in Cases of a Cyber Attack.

The Texas Hospital Association recently described the “security of information” as the number one concern for hospital CEOs in Texas. We all understand a hospital or doctor is required to notify you if your health information is breached. But what about for small businesses: should information security be the number one concern? Or at least in the top five?

Any business which either owns or maintains its customers’ personal information, no matter the business’s size, is required to immediately report a breach either as soon as the breach occurs or whenever the business has been notified of it. Each state defines protected personal information differently. In Texas personal information includes the following: name (first and last or first initial and last); social security number; date of birth, maternal data such as mother’s maiden name; government-issued IDs; biometric data; unique computerized ID, routing codes, or addresses; financial account information; credit card or debit card (as well as all passwords and PINs); personal in information relating to physical or mental health; and healthcare payment history.

While a business which has experienced an information security breach is required to immediately provide notification unless law enforcement determines the notice will hinder a criminal investigation. Notice generally must be submitted in written form, though notice can be delivered in electronic format if it complies with relevant federal regulations, which include obtaining affirmative consent by the consumer as well as a lengthy statement. However, if a provision of written notification would cost over $250,000, be to over 500,000 individuals, or you have insufficient contact information, you may make the notifications by email. If possible, a traditional letter is the safest way to notify your consumers their personal information may have been compromised.

Failure to properly notify a customer of a data breach involving their personal information may expose you to liability for penalties ranging from $2,000 to $50,000 per violation. Prompt notification is therefore vital, because every day that goes by without taking reasonable action to notify affected individuals may result in increased penalties.

Trademarks are All a Happy Time for Sesame Street

For small businesses, your image which is usually protected in a trademark, is your lifeblood and an indispensable part of your business which you have thoughtfully crafted to make you more competitive in the marketplace.  Your brand, identity, and product are all wrapped up into your image and creates a mental connection for consumers between you and your product or services.  

 

While not involving small businesses, a current example of the importance of a trademark to protect a business recently made frontpage news.  Sesame Street, the famed children’s show, has filed a lawsuit in federal court against filmmaker, STX Productions, to protect Sesame Street’s trademark claiming STX utilized their protected trademark in their movie trailer for “The Happytime Murders.”  The new film apparently shows puppet characters snorting drugs, committing murder, working as prostitutes, swearing, gambling and engaging in obscene sex scenes.  Sesame Street claims the violation arises from the promotion of film with the unauthorized use of the Sesame Street mark and tagline, “No Sesame. All Street.”  The plaintiff claims the use of Sesame Street’s registered trademark implies and leads consumers to believe that Sesame Workshop is affiliated with and is endorsing the movie.  Sesame Workshop claims their brand of being a wholesome television show for children for over 50 years suffers from appearing to be associated with the movie and poses irreparable injury to Sesame's mark and brand.  

 

Protecting a trademark and brand of your business requires your Company to file with the U.S. Patent and Trademark Office (USPTO), monitor potential violations of your trademark, and maintain your trademark.  This important business asset should be more than an afterthought.