Worker Classification: Employee or Contractor?  

Worker classification is one of the most common, recurring tax disputes.   At its most basic level, the question boils down to this: Is the worker an employee or an independent contractor?  The risks of getting it wrong can be significant: Back taxes, penalties, Affordable Care Act penalties, back wages—even criminal exposure in some cases.

Worker classification determines whether an employer is required to withhold income taxes and pay social security, medicare taxes, and unemployment tax on the wages paid to a worker.  The general, black-letter law provides that a worker is an independent contractor if the person or entity paying them has the right to control or direct only the result of the work, not what will be done to achieve that result or how it will be done.  Employers can have major—sometimes existential—risk from misclassifying workers.  If that risk exists, they should contact a tax attorney proactively, as there may be avenues for relief to remove that exposure.

How does a Worker Classification Audit Arise?

There are many potential avenues.  For example, an employee may inform the IRS of the misclassification.  Or it may arise from a state labor audit or Department of Labor audit through information sharing agreements with the IRS.  A worker-classification audit may also arise from a whistleblower, a civil lawsuit, or a random audit.  And with states and the federal government short on cash, worker classification audits will be on the rise.

Worker Classification, The Law

The Internal Revenue Code defines an employee for employment tax purposes as “any individual who, under the usual common law rules, applicable in determining the employer-employee relationship, has the status of an employee.”

Under this test, whether a worker is classified as an independent contractor or an employee is based upon an examination of the relevant facts and circumstances and an application of common law principles. Courts have generally looked to whether a worker qualifies as an employee under common law principles.

Among the relevant factors in determining the proper classification are the following: (1) The degree of control exercised by the principal over the details of the work; (2) the taxpayer’s investment in facilities; (3) the taxpayer’s opportunity for profit or loss; (4) permanency of the relationship between the parties; (5) the principal’s right of discharge; (6) whether the work performed is an integral part of the principal’s business; (7) what relationship the parties believe they are creating; and (8) the provision of employee benefits.  Ultimately, all of the aspects of the relationship are relevant, and the factors are not necessarily weighted equally, as their significance varies from context to context.

Under Treasury regulations, the question of whether a worker constitutes an “employee” largely boils down the degree of control exercised by the employer over the individual. In this regard, it is not necessary that the employer actually direct or control the manner in which the services are performed; rather, there is sufficient control if the employer has the right to do so. The right to discharge is also an important factor when considering the presence of an employment relationship.

The Common-Law Worker-Classification Rules

The IRS analyzes the evidence of the degree of control and independence through three overarching categories:

1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (How is the worker paid?  Are expenses reimbursed? Who provides tools/supplies, etc.?)
3. Type of Relationship: Are there written contracts or employee-type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work a key aspect of the business?

Businesses must weigh these factors when determining whether a worker is an employee or an independent contractor. No one factor stands alone in making this determination and the relevant factors will vary depending on the facts and circumstances.

The Internal Revenue Service also utilizes the following 20 factors as an aid in determining the status of a worker’s relationship:

1. LEVEL OF INSTRUCTION.  A worker who is required to comply with other persons’ instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if the person or persons for whom the services are performed have the right to require compliance with instructions.
2. AMOUNT OF TRAINING.  Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods, indicates that the person or persons for whom the services are performed want the services performed in a particular method or manner.
3. DEGREE OF BUSINESS INTEGRATION.  Integration of the worker’s services into the business operations generally shows that the worker is subject to direction and control. When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business.
4. SERVICES RENDERED PERSONALLY. If the Services must be rendered personally, presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as in the results.
5. HIRING, SUPERVISING, AND PAYING ASSISTANTS. If the person or persons for whom the services are performed hire, supervise, and pay assistants, that factor generally shows control over the workers on the job. However, if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor
6. CONTINUING RELATIONSHIP. A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals.
7. SET HOURS OF WORK. The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control.
8. FULL TIME REQUIRED. If the worker must devote substantially full time to the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor on the other hand, is free to work when and for whom he or she chooses.
9. DOING WORK ON EMPLOYER’S PREMISES. If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Work done off the premises of the person or persons receiving the services, such as at the office of the worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer’s premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required.
10. ORDER OR SEQUENCE SET. If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker’s own pattern of work but must follow the established routines and schedules of the person or persons for whom the services are performed. Often, because of the nature of an occupation, the person or persons for whom the services are performed do not set the order of the services or set the order infrequently. It is sufficient to show control, however, if such person or persons retain the right to do so.
11. ORAL OR WRITTEN REPORTS. A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control.
12. PAYMENT BY HOUR, WEEK, MONTH. Payment by the hour, week, or month generally points to an employer-employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on straight commission generally indicates that the worker is an independent contractor.
13. PAYMENT OF BUSINESS AND/OR TRAVELING EXPENSES. If the person or persons for whom the services are performed ordinarily pay the worker’s business and/or traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regulate and direct the worker’s business activities.
14. FURNISHING OF TOOLS AND MATERIALS. The fact that the person or persons for whom the services are performed furnish significant tools, materials, and other equipment tends to show the existence of an employer-employee relationship.
15. SIGNIFICANT INVESTMENT. If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees (such as the maintenance of an office rented at fair value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer-employee relationship. See Rev. Rul. 71-524. Special scrutiny is required with respect to certain types of facilities, such as home offices.
16. REALIZATION OF PROFIT OR LOSS. A worker who can realize a profit or suffer a loss as a result of the worker’s services (in addition to the profit or loss ordinarily realized by employees) is generally an independent contractor, but the worker who cannot is an employee. For example, if the worker is subject to a real risk of economic loss due to significant investments or a bona fide liability for expenses, such as salary payments to unrelated employees, that factor indicates that the worker is an independent contractor. The risk that a worker will not receive payment for his or her services, however, is common to both independent contractors and employees and thus does not constitute a sufficient economic risk to support treatment as an independent contractor.
17. WORKING FOR MORE THAN ONE FIRM AT A TIME. If a worker performs more than de minimis services for multiple unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement.
18. MAKING SERVICE AVAILABLE TO THE GENERAL PUBLIC. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor
19. RIGHT TO DISCHARGE. The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer’s instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications.
20. RIGHT TO TERMINATE. If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship.

Ordinarily, the principal’s right to control the manner in which the work is performed is the most important factor in determining whether there is an employer-employee relationship.

A Path Forward

Worker classification presents a major business risk–implicating tax, labor, and civil litigation risks, among others.  If worker classification exposure exists, a business should contact a tax attorney proactively, as there may be avenues for relief to remove that exposure.  We frequently assist clients with worker agreements and contracts, risk exposure mitigation, audit representation, and, where necessary, serve as litigation counsel.

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Governmental Immunity Under Texas Law

Governmental Immunity

Although often used interchangeably, the terms sovereign immunity and governmental immunity involve two distinct concepts.  Sovereign immunity protects the State and divisions of state government (including agencies, boards, hospitals, and universities) from lawsuits for damages. Sovereign immunity embraces two distinct principles: immunity from suit and immunity from liability.

Governmental immunity, on the other hand, protects political subdivisions of the State, including counties, cities, and school districts.  Like sovereign immunity, it also encompasses immunity from suit and from liability. Governmental immunity is an extension or application of the State’s sovereign immunity, the age-old, common-law doctrine that shields the State, its agencies, and generally its officials from suit.  Although Texas case law recognizes a distinction between sovereign immunity and governmental immunity, the two concepts function identically.

The Derivative Nature of Governmental Immunity

Ultimately, a political subdivision’s immunity (governmental immunity) derives from and is limited by the state’s sovereign immunity:

Texas is inviolably sovereign. Such sovereignty is inherent in its statehood, and generally protects the state from suits for money damages. Political subdivisions of the state—such as counties, municipalities, and school districts—share in the state’s inherent immunity. But they represent no sovereignty distinct from the state and possess only such powers and privileges as have been expressly or impliedly conferred upon them. Therefore, in the realm of sovereign immunity as it applies to such political subdivisions—referred to as governmental immunity—this Court has distinguished between those acts performed as a branch of the state and those acts performed in a proprietary, non-governmental capacity. Consistent with the understanding that a municipality’s immunity extends only as far as the state’s but no further, we have long held that a municipality is not immune from suit for torts committed in the performance of its proprietary functions, as it is for torts committed in the performance of its governmental functions.

Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 429–30 (Tex. 2016) (Wasson I) (citations, footnotes, quotation marks and modifications omitted).

Immunity From Suit and Immunity From Liability, Distinguished

Immunity from suit bars a suit against a governmental entity without the State’s consent.  Even if the State concedes liability, immunity from suit prevents a lawsuit from being maintained to seek a remedy, unless the State consents, either through a constitutional provision or legislative action. The Legislature, however, may consent by statute or by legislative resolution.  Under Texas law, a statutory waiver of immunity must be effected by clear and unambiguous language.

Immunity from liability prevents enforcement of a judgment, even if the Legislature has given consent to sue.  And under Texas law, the Legislature does not create or admit liability by granting permission to sue.

However, sovereign immunity does not prohibit suits against a state official or officer of a state entity if the official’s actions are ultra vires.

Waiver of Immunity

Absent a clear and unambiguous expression of the Legislature’s intent to waive immunity, either from suit or liability, sovereign immunity will protect the State and its subdivisions from both suit and liability.  The Texas Supreme Court has recognized that it is the Legislature’s sole province to waive or abrogate sovereign immunity, and that sovereign immunity, unless waived, protects the State of Texas, its agencies and its officials from lawsuits for damages, absent legislative consent to sue the State.

Several Texas statutes provide for express waivers of immunity, including Chapter 271 of the Texas Local Government Code; the Texas Whistleblower Act; and the Texas Tort Claims Act.

Waiver of Immunity to Liability by Entering into Contract

When the State contracts, it is generally liable on contracts made for its benefit as if it were a private person. As a result, when the State contracts with private citizens it waives immunity from liability. That is, it binds itself like any other party to the terms of the agreement.  But the State does not waive immunity from suit simply by contracting with a private person. Legislative consent to sue is still necessary to obtain jurisdiction.

Thus, in order to bring suit against a governmental entity for breach of contract, a plaintiff must establish legislative consent to sue by bringing suit pursuant to a special statute or by obtaining a legislative resolution. Otherwise, governmental immunity from suit defeats a trial court’s subject matter jurisdiction.

 

Lawsuits Involving Governmental Immunity

Freeman Law represents clients in matters involving governmental immunity, sovereign immunity, and exceptions to the immunity doctrines, as well as other complex civil litigation.

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What happens at the first CPS hearing?

Going through a CPS case can be one of the most intimidating experiences is that a parent must face. The idea that your relationship with your child could be adversely affected by a group of people that you have never even met before can be extremely stressful. To be in that position because your child has been abused or neglected makes the situation even more stressful. This is a position that no parent can ever Say that they are glad that they went through. However, the process can be managed well if you are prepared.

A CPS case would begin with a person making an anonymous report of abuse or neglect of your child to The Texas Department of Family and Protective Services. From there, the state agency would investigate the matter to determine a theory is a sufficient evidence available to corroborate the information presented in the report. Note that reports can be made hi there over the phone or on the Internet. Do not expect that you will ever learn the identity of the person who made a report regarding your child.

If CPS determines there is sufficient evidence to warrant a full investigation of the abuse or neglect, then it is likely that CPS will assign a caseworker or investigator to your child’s situation. Many times, an investigation begins with Investigator coming to your home to introduce themselves and notify you of the pending investigation. At this stage, you have a few options to consider. First, you do not have to let the person into your home. Without a search warrant, there is nothing mandatory about speaking to the CPS employee or letting him or her into your home. Additionally, you do not have to allow your child to have contact with the investigator.

Or you may choose to allow the person into your home and talk to him or her about the investigation. Answering questions truthfully and providing information may be enough to help CPS conclude that there are not sufficient grounds to continue with their investigation. CPS will have the option to not continue with an investigation band can stop their contact with your family at that moment. You would be notified in writing of the conclusion of your case it would not be contacted any further by CPS. 

On the other hand, CPS may determine that there are sufficient grounds to find that your child was abused or neglected. Depending upon your involvement in that abuse or neglect your child may be eligible for removal from your home. To be in this position, an attorney for CPS would need to obtain a court order detailing the nature of your case in requesting that CPSB be named as the temporary conservator of your child. If granted that order, then CPS could remove your child temporarily.

What happens once your child is removed from your home?

If your child is removed from your home, then a hearing must be held within three days of their removal to allow for you to request that you shall be returned home to you. As soon as CPS files it’s not a suit the process begins where you will find yourself in family law or juvenile law court. The purpose of these hearings it’s for the judge to check on the status of your case as far as CPS meets its burden of proving that the best interests of your child are served by continued removal. CPS would remain as a temporary conservator of your child during this time. 

The judge in your case will want to talk with all the parties involved to obtain information about what happened after your child was removed from your home. It is not ideal for your child to be in the temporary care of CPS. This is a strange environment for your child and a major disruption to their everyday lives. However, it may be determined that it is in your child’s best interest for him or to not be in your home at least temporarily. This first CPS hearing will be used to determine whether the same circumstances are in place that justified the removal of your child from your home. 

Next, the judge will want to consider what you are doing to address the concerns raised by the CPS investigation. There is a wide range of issues that may have led to your child being removed from your home. To begin with, your child may have been removed because it was found that you abused or neglected him or her. This abuse could be physical or sexual. The neglect may have been your inaction of yours that led to your child being abused by another or simply is a defect in the home that is dangerous to the well-being of your child.

Along the way, CPS we’ll work with you to develop a plan intended to have your child be returned home to you if indeed that is the go it is created by the two of you. If that is the goal of your case, you will be allowed to update the family court judge on what progress you have made in completing the steps necessary to have your child returned home. It is unlikely that the process can be completed by this initial hearing, but you can show what steps you have taken to improve the conditions in your home at the very least.

Additionally, CPS will be able to show the family court judge what steps they have taken to help you have your child returned home to you in the shortest possible time. This could involve having you work with a counselor or mental health professional to overcome any issues that may have arisen in your life that affected your parenting. Things like a safety plan or family-based social services can help a great deal in terms of your being able to show that you are competent to care for your child on an ongoing basis.

Attendance at the initial hearing in front of CPS is extremely important for you to take seriously. You and your attorney need to be present at every hearing held by CPS. However, the initial hearing would be an especially bad hearing to not be present for. You should assume that if you are not present for this initial hearing that a family court judge will not allow your child to be returned home to you. You should create a calendar for yourself and make sure that you are prepared for each hearing whatever it comes up.

This means having available transportation to and from the hearing taking into consideration Disruptions in your schedule, traffic, and things of this nature. A family court judge is not responsible for providing you with transportation or for not holding hearings at convenient times for you. Rather, you were on the court schedule and should be mindful of that. You need to become an expert at planning and accounting for unseen and unforeseen issues if you want to give yourself a good opportunity to present yourself well to a judge.

The reality of the situation is that court hearings can and will start without you present. In March counties like Harris County, you will be told to appear in court for a morning docket that usually begins around 9 am. However, it is anyone’s guess when your hearing will be called. Usually, the court will call the oldest cases first, and then we’ll Move on to more recent cases. However, you should be ready to go from the moment that your judge takes their seat on the bench.

At the initial hearing with CPS as well as after every hearing after that point, the judge will sign a court order listing out the responsibilities of you and CPS. You should make sure that you have a copy of the order after every hearing. Having a copy of the order and understanding what your responsibilities are moving forward is extremely important. You should speak with your attorney or even a representative of CPS if you do not understand something.

How long can you expect your CPS case to last?

By law in Texas, most CPS cases cannot last longer than 12 months. Your CPS case can be shorter if CPS moves for dismissal based on changing circumstances that you may be facing. For example, if you participated fully in the investigation, completed any safety planning that you were involved with, and CPS has no reservations about returning your child home to you your case may be dismissed. This put allows your child to be returned home to you in case would be closed. You should talk with your attorney about how to position yourself as well as possible for this to be the result of your case.

In addition to hearings in court, there will also be permanency planning meetings that happened outside of court. These meetings can occur at the offices of CPS or other locations. You and the CPS representatives will be able to talk about and she’s like where your child will live during the case as well as what goals are being set to ensure your child a safer home environment. In this way, you will be given a great deal of authority in terms of having an opportunity to have your child returned home sooner rather than later.

These hearings are held outside of court and the judge in your case will not be present. A record will not be kept of any of the discussions in these meetings, either. In that way, you will have the ability to process information and give honest feedback without fear of a judge being present.

What is an adversarial hearing? 

An adversarial hearing involves you being able to approach a family court judge for the first time after your child is removed from your home.

This is an important hearing in that you will have the opportunity to present a case as to why your child should be returned home and why CPS should not be able to extend their temporary conservatorship over your child. It would be best to have an attorney for this hearing so that you can present a clear-cut case for the return of your child. The reality is that if your child is not returned home to you in this hearing it could be a very long time, at least a few months before your child can come home to you. Your best bet is to present a strong case in this hearing and give the judge some reason to consider why it is not appropriate for CPS to be the continued conservator of your child.

This hearing will take place within 14 days of when CPS removes your child from your home. CPS will speak to the judge about why your child was removed from the home.You or your lawyer will have the opportunity to tell the judge why the rationale provided by CPS is insufficient to continue to keep your child out of your house or why their rationale is not factual. You may be surprised to learn that the justification for the continued removal of a child can be rather small or based on shoddy information. For this reason, he will have an opportunity to present a countercase to the judge about why your child should be able to be returned to you immediately. The judge will consider the evidence and decide that is in the best interests of your child.

If CPS has not provided enough evidence the judge can dismiss the petition for them to be a continued caretaker of your child and your child will be returned home to you immediately. On the other hand, if the judge determines that CPS has provided him or her with enough evidence then CPS will continue as your child’s temporary managing conservator. This does not mean that CPS will always have conservatorships authority over your child or that your parental rights have been terminated. However, it does mean that for the time being CPS will be able to have primary decision-making responsibility for your child. The case will continue, and you will need to follow through with whatever safety planning has been created and wanted to have your child returned home. 

Additionally, CPS will submit an order to the court that will tell you and the judge where your child will live, if any child support needs to be paid by you as well as a visitation schedule for you to be able to follow up within the future.

There may also be requirements for you to undergo drug or alcohol testing or even two submit to other assessments like psychiatric tests. Whether or not you participated in this process will be followed through with at the next hearing. Bear in mind that your ability to have your child returned home hinges a great deal on following through with the court orders. Even if you think that the court orders are unjust or based on lies once the judge signs are named to the order it becomes extremely important for you to follow them. Your failure to follow them could result in the termination of your parental rights. It may feel like a bad dream once you are involved in a CPS case, but the reality is that if you find yourself dealing with one you need to treat it as if it is the most serious matter, he will ever face in your parenting life.

The idea that circumstances are beyond your control once you get involved in a CPS case is simply not true. Thinking this way may be helpful in terms of helping you to justify why your child was removed from your home but it will do nothing to help you get your child back. Rather, only accepting your situation for what it is and working with CPS will get your child back. 

Much of the time the recommendations made by CPS will be extremely reasonable and do not take much effort at all to fulfill. It may even be that you simply need to repair a problem with your home that was dangerous and present your child with the threat of harm. Whatever it is, you need to be prepared to work with the agency especially if your child is not returned home to you after these initial permanency hearings.

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material presented in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family circumstances may be impacted by the filing of a divorce or child custody case.

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How to Prove Up a Note

This testimony (in addition to, but also independently of, a business-records affidavit) was sufficient to prove up a note, and the Fifth Court found error in concluding otherwise, in Collins Asset Group v. Ayers:

Dan Laux, CAG’s Legal Outsourcing Manager, testified that he is familiar with CAG’s records and the method by which CAG acquires, stores, and takes possession of notes. He further described how this Note was received, scanned, and stored with CAG’s business records.

 

Laux testified that he received the original Note within thirty days of CAG’s purchase of the Note, and that he had tendered the original to counsel. He identified the Note attached to the business records affidavit as a true and correct copy of the original.

 

Laux also offered testimony about how CAG relied upon and used the Note to calculate the amount due and sent letters based on that calculation. Laux testified that CAG is the owner of the Note.

No. 05-21-00295-CV (March 30, 2022) (mem. op.).

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Texas Supreme Court Orders on the “Save Chick-fil-A Law” in Dohlen v. City of San Antonio (April 1, 2022)

Dohlen v. City of San Antonio, No. 20-0725, __S.W.3D__ (Tex. April 1, 2022)

Overview. In this case, the Texas Supreme Court addresses, for the first time, Chapter 2400 of the Texas Government Code, being the “Save Chick-fil-A Law” (or more formally: Prohibited Adverse Actions by Government – Protection of Membership In and Support to Religious Organizations). As discussed below, Chapter 2400 provides an express waiver of governmental immunity for government action that is in violation of Chapter 2400, including action to deny any government benefit based on a person’s affiliation with a religious organization.

Dohlen v. City of San Antonio. In March 2019, and after certain San Antonio City Council persons made reference to Chick-fil-A’s support of anti-LGBTQ religious organizations, the City Council voted to ban Chick-fil-A from the San Antonio airport. In June 2019, Chapter 2400 of the Texas Government Code was signed into law, with an effective date of September 1, 2019. A few days after Chapter 2400 became effective, several individuals who complained that they would be unable to enjoy Chick-fil-A at the San Antonio airport, filed suit against the City of San Antonio (“City”) pursuant to Chapter 2400. The City sought a dismissal based on governmental immunity and lack of standing. The trial court denied the City’s request. The City appealed that decision to the court of appeals which found that the City was immune from the suit. The claimants petitioned that ruling to the Texas Supreme Court, which essentially found that claimants allegations at the trial court level were insufficient to invoke a waiver of immunity contained in Chapter 2400; however, claimants should be afforded an opportunity to replead at the trial court level to allege sufficient facts.

Chapter 2400 of the Texas Government Code. Chapter 2400 consists of 6 individual statutes: Tex. Gov’t Code §§ 2400.001, .0015, .002, .003, .004 and .005.

Adverse Action Prohibited. Chapter 2400 prohibits a governmental entity from taking “any adverse action against any person based wholly or partly on the person’s membership in, affiliation with, or contribution, donation, or other support provided to a religious organization.” Id. at § 2400.002 (emphasis added). The term “adverse action” is defined as any action taken by a governmental entity to:

• withhold, reduce, exclude, terminate, or otherwise deny any grant, contract, subcontract, cooperative agreement, loan, scholarship, license, registration, accreditation, employment, or other similar status from or to a person;
• withhold, reduce, exclude, terminate, or otherwise deny any benefit provided under a benefit program from or to a person;
• alter in any way the tax treatment of, cause any tax, penalty, or payment assessment against, or deny, delay, or revoke a tax exemption of a person;
• disallow a tax deduction for any charitable contribution made to or by a person;
• deny admission to, equal treatment in, or eligibility for a degree from an educational program or institution to a person; or
• withhold, reduce, exclude, terminate, or otherwise deny access to a property, educational institution, speech forum, or charitable fund-raising campaign from or to a person.

Id. at § 2400.001(1)-(1)(F).

Governmental Entity. The term “governmental entity” is defined to include (A) the State of Texas; (B) a board, commission, council, department, or other agency in the executive branch of state government, including an institution of higher education; (C) the legislature or a legislative agency; (D)  a state judicial agency or the State Bar of Texas; (E) a political subdivision of Texas, including a county, municipality, or special district or authority; or (F) “an officer, employee, or agent of an entity described by Paragraphs (A)-(E).” Id. at § 2400.001(3)-(3)(F).

Religious Organization. Section 2400.001(4) defines “religious organization” by reference to “religious organization” as defined in Section 110.011(b) of the Texas Civil Practices and Remedies Code. That statute defines “religious organization” as (1) an organization whose “primary purpose and function are religious, it is a religious school organized primarily for religious and educational purposes, or it is a religious charity organized primarily for religious and charitable purposes; and (2) it does not engage in activities that would disqualify it from tax exempt status under Section 501(c)(3), Internal Revenue Code of 1986, as it existed on August 30, 1999.” Tex. Civ. Prac. & Rem. Code § 110.011(b)-(b)(2).

Relief Available. Pursuant to Section 2400.003, “[a] person may assert an actual or threatened violation of Section 2400.002 as a claim or defense in a judicial or administrative proceeding and obtain: (1) injunctive relief; (2) declaratory relief; and (3) court costs and reasonable attorney’s fees.” Tex. Gov’t Code §§ 2400.003.

Immunity Waived. Governmental immunity protects the State’s political subdivisions, including its cities, against suits and legal liability. Hillman v. Nueces County, 579 S.W.3d 354, 357 (Tex. 2019). Governmental immunity bars suit against a city, for example, unless the state legislature has clearly and unambiguously waived the city’s immunity. See Chambers–Liberty Cntys. Navigation Dist. v. State, 575 S.W.3d 339, 344 (Tex. 2019); Tooke v. City of Mexia, 197 S.W.3d 325, 330 (Tex. 2006).  Pursuant to the clear and unambiguous language of Chapter 2400—and as asserted by the claimants in the case of Dohlen v. City of San Antonio—“[a] person who alleges a violation of Section 2400.002 may sue the governmental entity for the relief provided under Section 2400.003. Sovereign or governmental immunity, as applicable, is waived and abolished to the extent of liability for that relief.” § Id. at § 2400.004 (emphasis added).

Insights. The Texas Supreme Court gave the hungry claimants in Dohlen an opportunity to replead at the trial court level, their allegations of waiver of immunity by the City of San Antonio pursuant to Chapter 2400. Those claimants may end up going hungry because there was no governmental action taken after Chapter 2400 became effective (i.e., the decision to ban Chick-fil-A occurred months before Chapter 2400 became effective), and the claimants failed to point to any specific “adverse action” that the City took on or after the effective date of Chapter 2400. Absent a “credible threat” to violate Chapter 2400, the courts and the law will assume that the City will comply with its prescriptions. Time, additional–and likely creative–pleading, and additional due process of Texas law will tell.

 

The post Texas Supreme Court Orders on the “Save Chick-fil-A Law” in Dohlen v. City of San Antonio (April 1, 2022) appeared first on Freeman Law.

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Drones in Texas: Privacy? or Free Speech?

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Privacy, Technology and Perspective

Drones in Texas: Privacy? or Free Speech? This week, press photographers are celebrating their newly-recognized right to use drones for news gathering.

Texas – a Dim View of Drones:  In 2013 and 2015, the Texas Legislature generally forbade the use of Unmanned Aireal Vehicles (“UAVs”) for surveillance on private property.  In what has become known as “Chapter 423” of the Texas Government Code, flying a UAV over correctional or detention facilities, critical infrastructure, or sports venues came in for specific mention – understandably, in our view, as those sites are such attractive targets for malicious actors.  Also understandably, however, the statute allowed for dozens of exceptions, such as photographs of public property below a certain height or for purposes of higher education, utility and telecom services, certain police or fire purposes, high-risk operations or rescue, oil spill surveys, surveying, real estate sales, engineering, or insurance (among others), or of course with the consent of the surveilled. 

You can read the text of Chapter 423 by clicking on the following link:

https://statutes.capitol.texas.gov/Docs/GV/htm/GV.423.htm

Interestingly, Chapter 423 focuses on circumscribing the use of a particular technology, UAVs, rather than on prohibiting specific conduct.  Texas already provides a common law action against intrusion (conduct which would be highly offensive to a reasonable person, and which is unjustified, unnecessary and unwarranted), as well as criminal penalties for stalking (under Texas Penal Code Section 42.072, engaging in a pattern of behavior which the person knows or reasonably should know would likely cause a person to feel threatened or fearful).  But like most privacy laws, the focus of these protections is on protecting personal rights generally no matter what tools a miscreant selects. Chapter 423, however, – like Texas statutes which prohibit anti-spyware or -eavesdropping devices – is focused on a technology.

 Missing One Key Exception:  But for all of its enumerated exceptions – and whether intentionally or not – Chapter 423 left out an exception for the press. Read literally, Chapter 423 appears to cover the press corps’ use of UAVs to photograph newsworthy events or circumstances within the statute’s wide prohibitions. So, in 2019, the National Press Photographers’ Association and others filed suit in U.S. District Court in Austin, Texas, seeking to have Chapter 423 declared unconstitutionally restrictive under the first amendment.

This Week’s Decision: On Monday of this week, the Court in Austin ruled in the press corps’ favor and declared the statute unconstitutionally vague (in its definitions of “surveillance” and “commercial enterprise”) and restrictive.  The statute’s restrictions would lead to odd results, it held – “As Plaintiffs note, the same drone image taken legally by a professor would constitute a misdemeanor if captured by a journalist.” Applying the strict scrutiny standard, the Court held that specific sections of the statute are not narrowly-tailored enough and may not be enforced. 

You can read the opinion in National Press Photographers’ Ass’n v. McCraw et al. at the following link:

https://www.dallasobserver.com/media/pdf/tx_drone_case_sj_order.pdf

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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.

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Is Collaborative Divorce in Texas Right for Me?

Collaborative divorces in Texas can be more complicated than you might think. The general idea behind collaborative divorce is that instead of spending most of your time arguing and debating the points of your case you would instead devote most of your time and attention towards resolving matters through settlement and negotiation. The objective is that you would avoid the negative aspects and costly financial implications of a divorce. By doing this you can save yourself a lot of time and money. On top of that, you and your spouse can devote more of your attention to areas of your life that will require greater attention Once your case is done and over with.

The expectation that many people have when they begin a divorce is that it is going to be not only complicated but it also expensive and long. From having worked with many people who have gone through the divorce process I don’t think there is anyone that began the case also with the expectation that the whole thing would be simple or even straightforward. The expectation is that divorce laws are more complicated than need be and that the family courts of Texas are Byzantine as far as they’re being needlessly complicated and unwieldy in terms of their application for everyday people. I cannot say that this expectation regarding divorce law and the courts is altogether off base. Many aspects of a divorce case can be complicated.

A collaborative divorce, on the other hand, seeks to avoid many of these negative aspects of a divorce. Without a doubt, collaborative divorces can be complicated and do carry with them challenges of their own. However, most collaborative divorces seek to allow you and your spouse to have direct control over the proceedings. This is a huge benefit for you and your spouse if your mission is to avoid bringing the Texas family code as well as a family court judge into the picture. The fewer adjudges involved the less the Texas family code becomes a relevant consideration in your divorce. This usually shortens the length of your case and allows for a better outcome to be the result.

The main points associated with collaborative divorces

Most everyone reading this blog post, I assume, is more familiar with the traditional method of divorce than with a collaborative method. The traditional method of divorce involves you and your spouse filing divorce papers and then attempting to settle your case in mediation before a temporary order hearing or a trial date. In the middle of all that you will exchange discovery information and attempt in whatever way you can to settle the main issues in your case. Some parties are better than others at this. You probably have a good idea right now of how well you and your spouse may fare when it comes to negotiating through the tough issues of a divorce.

All the while, your attorneys should be attempting to work with both of you to resolve your case amicably. However, the reality is that there are some attorneys out there who are better at creating conflict than they are at resolving conflict. Well, it can be advantageous for you to have an attorney who will not back down from a fight that the same attitude can lead to unnecessary stress and acrimony within the case if not harnessed correctly.

A collaborative law attorney, on the other hand, is equipped to advocate zealously for you but to do so in a way that will not create unnecessary conflict between you and your spouse. The reality of your situation is that there already is going to be a certain amount of conflict and acrimony between you and your spouse. Going through a divorce necessarily means that there is some degree of disagreement between you and your spouse. The last thing in the world that you want is to have the divorce process itself or even your attorney add to that level of disagreement. 

Rather, a collaborative law attorney will pledge that he or she will do whatever it takes to help you and your spouse avoid going to court. Both of you will hire A collaborative attorney to represent your interest period from there, the attorney can help the two of you facilitate settlement agreements. This can be through negotiation, the exchange of documentation or even engaging with both of you in creative problem-solving. The bottom line is that the more you and your spouse are put into positions where you are talking to one another the greater chance you have of settling your case. 

Finding solutions that work for both parties

it is sometimes lost in even amicable divorce negotiations that a settlement structure is supposed to benefit both parties. Even when people say that they intend to work towards amicable solutions in their divorce what they mean is that they are willing to discuss the contents of a case but only to the point where they come out on top and then negotiate. While it is better to be willing to negotiate a case than not the reality is that in any settlement both sides must give to get something. If you are bent on negotiating only so far as it will benefit you and your family, then you are doing yourself a disservice.

Collaborative law attorneys strike a balance between advocating zealously for their clients while keeping and finding solutions that work well for all parties involved. In this way being an attorney in a collaborative environment is oftentimes more challenging than being Elsa turning in an adversarial environment. However, if you select an experienced collaborative divorce attorney did that lawyer could walk you through creative solutions that you may otherwise have been unaware of. 

the collaborative divorce process begins with both you and your Co-parent agreeing in writing to participate collaboratively. As I mentioned a moment ago both you and your spouse will be represented by an attorney in the collaborative law process. The exact language contained in your collaborative law agreement may differ from another person who has gone through the collaborative divorce process. However, the overall aim of your collaborative divorce will be the same as any other person. Namely, the goal will be to resolve your disputes between you and your spouse while avoiding the courtroom if possible.

I think that the setting involved in a collaborative divorce also makes a difference. In a collaborative divorce, a great deal of the negotiations and events of the case will occur in an attorney’s office. Neutral parties like parenting coordinators, financial experts, and others may participate in the ongoing discussions between you and your spouse. The simpler your case may be the less you need to employ experts for this type. However, the more complicated your case is the more you may stand to benefit from the advice and perspective of experts in their fields like these.

You can compare the events of a collaborative divorce to that of a traditional divorce. In a traditional divorce, you and your spouse will take disagreements to the courtroom and submit evidence to a judge. The judge will then have ultimate decision-making authority when it comes to determining outcomes in your case on subjects like temporary orders, discovery, final orders, and everything in between. This is a much different setting for a divorce than what you see in a collaborative environment. I think the opportunities are greater for civil in amicable conversations in a collaborative divorce than in litigation-based, traditional divorce.

If you and your spouse are unable to agree within a collaborative divorce setting, then you can opt-out of your agreement on a mutual basis. From there, the two of you would be able to re-engage in a more traditional divorce. You will hire new attorneys depending upon the circumstances of your case and the preference that you and your attorneys have. Even then, it is not as if you and your attorney we’ll have to start from scratch. Much of the work in your case will have already been done and accomplished simply by engaging in productive conversations on settlement and exchanging documentation.

One of the best advantages that I can mention to you in this setting when it comes to a collaborative divorce is that a collaborative divorce requires a fair bit of time to become engaged. As a result, it does encourage you and your spouse to be become truly engaged in the process and to stay faithful to it despite any hardships that you might encounter during negotiation. The alternative is to delay your case. It is almost like having to start from scratch when you transition from a Collaborative divorce to a traditional divorce. Depending on the exact circumstances relevant to your case it may be best for you all to stay the course in an attempt to resolve your issues through negotiation and the collaborative process. 

How do I know if the collaborative divorce process is right for me and my family?

You will not be able to figure out whether a collaborative divorce is right for you and your family just by reading today’s blog post. While it is a good place to start, I am not able to provide you with any type of recommendations given that I do not know your circumstances. Family law in general and divorces specifically tend to hinge on the specific circumstances that you find yourself in along with that of your family. If you, cannot understand and be truthful with yourself about your specific circumstances then you will have trouble determining goals for your case as well as what type of divorce is right for you.

To be sure, most people that are going through a divorce as we speak become involved with a traditional divorce that proceeds through the family courts. It is not as if your collaborative divorce will not involve the courts at all. You would still file your divorce through the family court then be assigned a judge. Your case would have the same timeline like any other divorce assuming that you are not able to reach a successful settlement in your case. However, what I can tell you is that the people who succeed in a collaborative environment are those that are willing to put aside their ego, differences and expectations to an extent and instead focus on the reality of your case and what is best for your family, especially your children. 

I think families stand to benefit the most from collaborative divorces when they have children. If your divorce just involves financial issues, then you can achieve similar results in a collaborative and traditional divorce environment. Nobody is forcing you to engage in either. However, if you and your spouse are willing to negotiate with one another then a collaborative divorce may be something that you can consider. 

Remember that your children stand to benefit from a situation where you and your spouse are willing to work with each other and set aside your major differences in hopes of reaching outcomes that are beneficial for everyone involved. I see this occur with some regularity for parents who may have some issues regarding conservatorships. Namely, new and your Co-parent just agree on who should be named as the primary conservator of your children. Many times, you may hold the opinion that you should be the primary conservator even if that is not a responsibility you have ever dealt with.

As a result, your pride may tell you to push for primary conservatorships even if you are ill-suited for the job. This does not mean that you are not a good parent or are not devoted to your child. However, what it may mean is that your spouse is better acclimated to the job, and you may have a job that takes you away from family regularly. As a result, if you cannot devote the time necessary to raise your children on a primary basis, they probably would be better off with you as are Co-parent as their primary conservator.

Another way that collaborative divorces can ease the transition for children in terms of going from one household to two is that you can provide your children with regular updates on the case based on their age and maturity. Older children may be better equipped to handle the updates Whereas younger children may not need or even understand the updates if you wanted to give them. Either way, you can choose what updates to give to your children based on your individual preferences and circumstances. However, a collaborative divorce Will allow you to provide updates to your children and two encourage them that the divorce will not be something that goes on forever.

Maintaining a greater degree of control over what information about your divorce is made public 

In a traditional divorce, you and your spouse would proceed to the family law courts in any event of a dispute that cannot be resolved between the two of you. This is best seen through having hearings and even trials in open court where essentially any person off the street can wander in and view the proceedings of your case. You can make your pleadings and other documentation for the case nonpublic, but the courtroom appearances tend to be very public.

On the other hand, collaborative divorce allows you and your spouse to keep your personal and financial lives out of the public record in private between the two of you. Settlement negotiations, in general, are not made public as part of a record in any divorce. The same is true in a collaborative divorce. Rather, you and your spouse can obtain a divorce without resorting to messy, public disagreements and hearings. Even if your collaborative divorce does not end up as a successful means of settling your Case No party can testify to what occurred in those settlement negotiations once the case is complete. 

Additionally, if you and your spouse own little in terms of property and have no children then a collaborative divorce may work for you as well. While collaborative divorces work well for families with big issues to sort through, they can also work well for families that have only smaller matters to engage in. For example, if all it takes is one afternoon’s worth of negotiation for you all to divide your bank account and other small amounts of the property then collaborative divorce can encourage communication and quickly and your case on a positive note. 

Questions about the material presented in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as well as about how your family circumstances may be impacted by the filing of a divorce or child custody case.

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