Texas Business Lawyer: Appeal’s Court Sides With States, Not President Obama Over Health Insurance Debate
Posted on | August 12, 2011 | No Comments
The 11th Circuit of Appeals ruled today that the individual mandate in the health care overhaul package that requires all Americans to carry health insurance or face penalties is unconstitutional. Initially, 26 states filed suit to block the health care package, claiming the entire package was unconstitutional; while the Justice Department claimed the law falls under a “quintessential” power of the legislative branch.
The Circuit Court specifically struck down the individual mandate. The Court held that it “exceeds Congress’s enumerated Commerce power” by forcing individuals to enter into expensive insurance contracts for the duration of their lifetime.
Circuit Judge Stanley Marcus dissented in the opinion.
For information on Texas employment and small business law contact The Wright Firm, L.L.P. at 972-353-4600 to speak with a Texas Business Lawyer or visit us on the web at www.thewrightlawyers.com
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TEXAS BUSINESS LAW UPDATE:NON-COMPETITION AGREEMENTS EASIER TO ENFORCE
Posted on | August 7, 2011 | No Comments
A few blog entries ago I discussed the enforceability of noncompete agreements. In that article, I mentioned that noncompete agreements may be enforced if they contain reasonable limitations with respect to geography, time and scope of the activity and if they are ancillary to an enforceable agreement.
On June 24, 2011, the Texas Supreme Court shifted away from its previous analysis of noncompete agreements, ruling that the issuance of stock options which are exercised by employees can support a noncompetition agreement. The court found that the interest the employer is protecting, here the goodwill of the company, must only be “reasonably related” to the consideration, or the stock options, provided by the company. This is a break from prior Texas Supreme Court rulings, which held that the consideration an employer provided to the employee must give rise to an interest in restraining competition, such as a promise of trade secrets or confidential information.
If you would like to discuss how the Texas Supreme Court’s new ruling effects your noncompetition agreement with your employer or Texas Business Law, please call The Wright Firm today at 972-353-4600 or visit our website at www.thewrightlawyers.com
Tags: Dallas Business Attorney > Dallas Business Lawyer > Dallas Employment Attorney > Dallas Employment Lawyer > Denton Business Lawyer > Enforceability of Non-Compete Agreements > Lewisville Business Lawyer > Non-Compete > Non-Competition Agreements > noncompete agreements > Texas Business > Texas Business Law > Texas Supreme Court > The Wright Firm
Texas Business Attorney: “FOOTBALL’S BACK!!”
Posted on | July 30, 2011 | No Comments
I dusted off my Cowboys jersey on Monday after NFL Commissioner Roger Goodell announced that the NFL lockout was finally over after the owners and players agreed to a new collective bargaining agreement (the “agreement”).
A collective bargaining agreement functions as a labor contract between an employer and union(s). Collective bargaining agreements regulate working conditions such as wages, hours, benefits and health and safety issues.
The agreement that was reached on Monday had victories for both owners and players. The owners will receive a higher percentage of all revenues, 53% to the players 47 % as opposed to the old 50%-50% deal. Another part of the agreement restricts spending on first-round draft picks.
Players, meanwhile, convinced the teams to spend almost all of their salary cap in cash. They also forced safety changes to offseason and in-season practice rules. DeMaurice Smith, head of NFL Player’s Association had this to say about the agreement on Monday: “We didn’t get everything that either side wanted…but we did arrive at a deal that we think is fair and balanced.”
Recognizing that the fans had been left out in the cold throughout the collective bargaining process, New England Patriots owner Robert Kraft stated, “I’d like, on behalf of both sides, to apologize to the fans: For the last five, six months we’ve been talking about the business of football – and not what goes no, on the field, and building the teams in each market, but the end result is we’ve been able to have an agreement that I think is going to allow this sport to flourish over the next decade.”
For information on Texas Business law contact a Texas Business Attorney at The Wright Firm, L.L.P.-972-353-4600 or visit our website at www.thewrightlawyers.com.
Tags: collective bargaining > Contract > Dallas Business Attorney > Dallas Business Lawyer > Dallas Employment Lawyer > Dallas Labor Attorney > Denton Business Attorney > Denton Business Lawyer > Lewisville Business Attorney > Lewisville Business Lawyer > NFL > The Wright Firm
Texas Business Attorney: What is a Partnership?
Posted on | July 12, 2011 | No Comments
A general partnership is an association of two or more persons to carry on a business for profit as owners. A general partnership is created regardless of if the persons intend to create a partnership or not, or whether the association is called a “partnership” or other name. SeeTexas Business Organizations Code Section 152.051.
Texas Business Attorney: Partnerships are governed by a partnership agreement. Partnership agreements set forth the relationship between the partners, as well as the relationship between the partners and the partnership. There is no requirement that the partnership agreement be in writing or filed with the Texas Secretary of State. However, it is always best to define clearly in writing the obligations of the partners to each other and to the partnership itself. SeeTexas Business Organizations Code Section 152.002.
Partnerships are easy to form, require complying with less red-tape as corporations and have certain tax benefits. However, each individual partner is exposed to personal liability as there is no protection from a corporate veil as in corporations or limited liability companies.
In order to determine whether a partnership has been created, Texas courts will evaluate several factors, including but not limited to: 1) receipt or right to receive a share of profits of the business; 2) expression of an intent to be partners in the business; 3) participation or right to participate in control of the business; and 4) an agreement to share in losses or liabilities of the business. SeeTexas Business Organizations Code Section 152.052.
If you are debating whether to form a general partnership, need clarification regarding whether your business qualifies as a partnership, or are already in a general partnership and need to draft a partnership agreement, please contact The Wright Firm today as we can help with all aspects of a general partnership at 972-353-4600 or visit our website at www.thewrightlawyers.com.
Tags: Dallas Business Attorney > Denton Business Lawyer > General Partnership. Sole Proprietorship. > Limited Liability Partnership > partner > partnership > The Wright Firm
Supreme Court Rejects Class Action in Wal-Mart Sex Discrimination Suit
Posted on | June 20, 2011 | No Comments
In a 5-4 vote, the U.S. Supreme Court ruled in favor of Wal-Mart Monday when it rejected a class action suit brought by 1.5 million female employees of Wal-Mart.
The court said that there was not enough commonality among each case of discrimination, pointing to the fact that Wal-Mart left most pay and promotion decisions up to each individual store manager.
“Without some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question,” the court said in its official decision.
The court continued on to say, “In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Respondents attempt to make that showing by means of statistical and anecdotal evidence, but their evidence falls well short.”
For information on Texas employment and business law contact The Wright Firm, L.L.P. at 972-353-4600 or visit us on the web at www.thewrightlawyers.com
Tags: business law > class action > Dallas Business Attorney > Dallas Business Lawyer > Dallas Employment Attorney > Denton Business Lawyer > Denton Employment Lawyer > Discrimination > employment law > Lewisville Business Attorney > Lewisville Business Lawyer > The Wright Firm > U.s. Supreme Court
Caution: Workplace Retaliation on the Rise!
Posted on | June 17, 2011 | No Comments
Last year, the Equal Employment Opportunity Commission (“EEOC”) received 36,258 charges for retaliation, thereby surpassing all other discrimination complaints, including race and sex discrimination, to become the number one filed charge with the EEOC. This sharp increase of complaints is due in part to the broad scope of federal and state retaliation laws.
To bring a charge for retaliation, an employee has to prove that he or she has engaged in protected activity that resulted in an adverse employment action by the employer. Protected activities include filing a complaint with a manager or HR, opposing illegal activity or even just being a witness in a company investigation. The adverse activity is not just limited to termination of the employee. Retaliation encompasses a wide spectrum of adverse employment activity, including but not limited to, demotion, time cuts, be passed over for a promotion, transfers and constructive termination.
Recently, the U.S. Supreme Court further expanded the scope of retaliation in Thompson v. North American Stainless, LP, by recognizing a cause of action for third-party retaliation for persons who did not themselves engage in protected activity. In Thompson, an employee was fired after his fiancé filed a discrimination complaint against their employer. The Court held that termination of a close family member would trigger protection under Title VII.
With the laws for retaliation only broadening, it is imperative that both employees and employers are aware of what constitutes workplace retaliation. If you are an employee that believes you are, or have been retaliated against, or if you are an employer who wishes to educate your employees on retaliation laws, please call The Wright Firm, LLP for assistance at 972-353-4600 or visit us on the web at www.thewrightlawyers.com
Tags: Dallas Business Attorney > Dallas Business Lawyer > Dallas Employment Attorney > Dallas Employment Lawyer > Dallas Labor Attorney > demotion > Denton Business Attorney > Denton Business Lawyer > EEOC > employer > employment > fired > Lewisville Business Attorney > Lewisville Business Lawyer > promotion > retaliation > The Wright Firm > Thompson v. North American Stainless
Starting a Texas Business: Entity Selection!
Posted on | May 21, 2011 | No Comments
One of the greatest concerns when starting a business is what type of entity to select. In Texas, there are several types of entities to choose from, and understanding which is best for your particular needs can seem overwhelming.
All business entities have their pros and cons. Therefore, it is important to evaluate the specific needs of the business and to compare those needs against each entity. The most critical areas to consider are taxes; liability; formality of operation; management; and transferability of ownership, amongst other things.
Below is the list of available business entities as described by the Texas Secretary of State’s website:
Sole proprietorship: The most common and the simplest form of business is the sole proprietorship. In a sole proprietorship, a single individual engages in a business activity without necessity of formal organization. If the business is conducted under an assumed name (a name other than the surname of the individual), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.
General partnership: A general partnership is created when two or more persons associate to carry on a business for profit. A partnership generally operates in accordance with a partnership agreement, but there is no requirement that the agreement be in writing and no state-filing requirement. If the business of the partnership is conducted under an assumed name (a name that does not include the surname of all of the partners), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.
Corporation: A Texas corporation is created by filing a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements. A corporation is a legal person with the characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The owners of a corporation are called “shareholders.” The persons who manage the business and affairs of a corporation are called “directors.” However, state corporate law does provide for shareholders to enter into shareholders’ agreements to eliminate the directors and provide for shareholder management. Choosing the best management structure for your corporation is a decision you make with the advice of an attorney. The Secretary of State cannot assist you.
An “S” corporation is not a matter of state corporate law but rather a federal tax election. A for-profit corporation elects to be taxed as an “S” corporation by filing an election with the Internal Revenue Service. Please contact the IRS or competent tax counsel regarding the decision to be taxed as an “S” corporation and the requirements for filing the election. This is not a matter with which the Secretary of State may assist.
Limited Liability Company: A Texas limited liability company is created by filing a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements.
The limited liability company (LLC) is not a partnership or a corporation but rather is a distinct type of entity that has the powers of both a corporation and a partnership. Depending on how the LLC is structured, it may be likened to a general partnership with limited liability, or to a limited partnership where all the owners are free to participate in management and all have limited liability, or to an “S” corporation without the ownership and tax restrictions imposed by the Internal Revenue Code. Unlike the partnership, where the key element is the individual, the essence of the limited liability company is the entity, requiring for its creation more formal requirements. 1 William D. Bagley & Phillip P. Whynott, The Limited Liability Company, §2.10, (2d ed. 2d rev. James Publishing, 1995).
The owners of an LLC are called “members.” A member can be an individual, partnership, corporation, trust, and any other legal or commercial entity. Generally, the liability of the members is limited to their investment and they may enjoy the pass-through tax treatment afforded to partners in a partnership. As a result of federal tax classification rules, an LLC can achieve both structural flexibility and favorable tax treatment. Nevertheless, persons contemplating forming an LLC are well advised to consult competent legal counsel.
A limited liability company can be managed by managers or by its members. The management structure must be stated in the certificate of formation. Management structure is a determination that is made by the LLC and its members. The Secretary of State cannot give advice about management structure.
Limited Partnership: A Texas limited partnership is a partnership formed by two or more persons and having one or more general partners and one or more limited partners. The limited partnership operates in accordance with a partnership agreement, written or oral, of the partners as to the affairs of the limited partnership and the conduct of its business. While the partnership agreement is not filed for public record, the limited partnership must file a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements.
Limited Liability Partnership: In order to limit the liability of its general partners, a general or limited partnership may opt to register as a limited liability partnership. The Secretary of State provides a form for registration as a limited liability partnership.
If you need help selecting and forming one of the above-mentioned business entities, please contact The Wright Firm, LLP today at 972-353-4600 or visit our website at www.thewrightlawyers.com. We have offices in Dallas, Denton, Lewisville, Frisco, Plano, and Ft. Worth. We handle all kinds of business matters from business formation, tax issues, employment law, civil litigation, and collections.
This Blog is a public resource for general information about The Wright Firm, L.L.P. and Texas Law. Nothing in this Blog should be construed by you as a source of legal advice. You should not rely or act upon the contents of this Blog without seeking advice from your own attorney. Use and access to this Blog or any materials or information provided on this Blog does not create an attorney-client relationship between you and The Wright Firm, L.L.P. or any of its attorneys, nor is this Blog a substitute for legal advice. Any information submitted by you by The Wright Firm, L.L.P. or its attorneys via this Blog, an email, or any form of social media communication will not be considered an attorney-client communication or otherwise be treated as confidential or privileged in the absence of an executed Engagement Agreement between you and The Wright Firm, L.L.P. or its attorneys.
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Enforceability of Non-Compete Agreements: Fact or Fiction?
Posted on | May 21, 2011 | No Comments
Contrary to popular belief, non-compete agreements are generally enforceable in Texas. However, the non-competes have to be narrowly tailored to hold up in a courtroom. Specifically, the scope of the agreement has to be limited to: 1) a particular geographic area and 2) a limited amount of time. Texas courts have stated that two to five years is a reasonable time requirement, and that the proper scope for a geographic area is the territory in which the employee worked. Additionally, the activities protected under these agreements have to bear some resemblance to the activities that the employee was responsible for at his or her previous job.
For more information on Texas business law contact The Wright Firm, L.L.P. at 972-353-4600 or visit our website at www.thewrightlawyers.com. The Wright Firm has offices in Dallas, Denton, Lewisville, Frisco, Plano, and Ft. Worth. We handle all business matters, business tax issues, civil litigation, employment, and collections law.
This Blog post is a public resource for general information about The Wright Firm, L.L.P. and Texas Law. Nothing in this Blog should be construed by you as a source of legal advice. You should not rely or act upon the contents of this Blog without seeking advice from your own attorney. Use and access to this Blog or any materials or information provided on this Blog does not create an attorney-client relationship between you and The Wright Firm, L.L.P. or any of its attorneys, nor is this Blog a substitute for legal advice. Any information submitted by you by The Wright Firm, L.L.P. or its attorneys via this Blog, an email, or any form of social media communication will not be considered an attorney-client communication or otherwise be treated as confidential or privileged in the absence of an executed Engagement Agreement between you and The Wright Firm, L.L.P. or its attorneys.
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