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Appellate Court Resolves Texas Oil and Gas Dispute by Looking to a Deed Written Nearly 100 Years Ago

Earlier this year, a state appellate court issued an opinion in a Texas oil and gas case, requiring the court to interpret a 1927 deed. The deed purported to convey a “royalty interest” as well as an “equivalent reversionary interest in and to all oil, gas, casinghead gas and other minerals” pertaining to certain land. Ultimately, the court affirmed the lower court’s ruling.

In this case, Five Star claimed it was the successor in interest to the original grantee, and that it was entitled to a “floating” royalty interest, providing the company a 3/8 interest in any leased royalty. Ultimately, the court found that Five Star owns an undivided 3/8 interest in the minerals. However, the court clarified that the interest consists only of the “right to receive a proportionate share of royalties and does not include any executive right or right to develop the land.”

The Facts of the Case

According to the court’s opinion, Five Star sought to establish that it was the successor in interest to an earlier grantee. Five Star tried to prove that it owned a 3/8 interest in the mineral interests. In response, the defendants argued that Five Star was only entitled to 3/8 of a 1/8 interest, or a 3/64 interest.

In support of its claim, Five Star presented the court with a quit-claim deed that purported to convey a “ROYALTY ONLY” interest. The question for the court was whether the quit-claim deed conveyed a 3/8 interest or a 3/64 interest to Five Star. In resolving this question, the court had to wrestle with the fact that the Texas oil and gas industry’s customs and terms have changed significantly since the original deed was created in 1927.

The court began its analysis by noting that there are two types of royalty interests.

  1. a “mineral interest” that includes a right to receive a proportionate share of reserved royalties; and
  2. a free “royalty interest” granting a right to a fixed fraction of gross production.

The court then went on to explain that a mineral estate consists of five separate interests:

  1. The right to develop,
  2. The right to lease,
  3. The right to receive bonus payments,
  4. The right to receive delayed rentals, and
  5. The right to receive royalty payments.

Under state law, a party can convey any of the above interests while reserving others. If any of the above interests are conveyed, they are generally referred to as “mineral interests.” The court explained that when a deed conveys a royalty interest, through a fractional share, “what is conveyed is a fraction of royalty, not a fixed fraction of total production royalty.”

Here, the court noted that the original deed conveyed a “royalty interest of three-eighths of all . . . minerals.” The court acknowledged this alone may indicate that the conveyance only consisted of a 3/8 fixed royalty. However, later in the document, the same interest is referred to as “a three-eighths part of the royalty provided by the then-operative lease” and again as a “three-eighths of one-eighth interest.” The court also noted that the deed did not address production costs. This led the court to find that the “royalty interest” mentioned in the deed was not a fixed royalty, but a right to receive royalties proportionate to a held mineral interest. Ultimately, the court concluded that Five Star was entitled to a full 3/8 interest, but that its interest was limited to receive a proportionate share of royalties and does not enable Five Star to develop or lease the land.

The court acknowledged that the original deed used confusing, and at times, conflicting language. The court attributed some of this confusion to the fact that the deed was nearly 100 years old, and that the customs and common terms used in the oil and gas industry have changed.

If nothing else, this case illustrates the complexity of oil and gas litigation in Texas. These cases often involve old documents that may not comport with the current state of the law. Thus, anyone dealing with a dispute surrounding Texas mineral interests should work with an experienced attorney to ensure that their rights are adequately protected.

Reach Out to a Dedicated Austin Oil and Gas Lawyer

Oil and gas disputes can be extremely complicated. Choosing an attorney to represent you or your business is a crucial decision that can save months or even years of litigation, and many thousands of dollars. At the Law Offices of Gregory D. Jordan, we have been effectively handling Texas oil and gas cases for over 30 years. This experience provides us with a detailed understanding of this unique practice area, which we put into each of our clients’ cases. We genuinely value your business and time and strive for quick and effective resolutions to whatever legal issues you face. To learn more, and to schedule an initial consultation, call 512-419-0684. You can also contact me online.

Court Issues Opinion in Texas Business Law Case Involving “Imploding Partnership”

Earlier this month, a state appellate court issued an opinion in a Texas business law case discussing a partner’s claims against a former partner. The case is a good illustration of how business relationships can sour and what can be done to minimize the chances of a dramatic ending.

The Facts of the Case

According to the court’s opinion, four architects formed a partnership in 2000. Years later, two of the founding members retired and, in 2005, the firm was reorganized into a professional limited liability corporation (PLLC).

By 2014, the relationship between the remaining two partners, Boucher and Thacker, began to sour. The firm was heavily in debt and Thacker accused Boucher of “not pulling his weight.” Boucher refused to inject additional capital into the company and, in late 2014 or early 2015, the two began talking about dissolving the company.

In early February 2010, the two went over the firm’s debts and discussed how to dissolve the firm. Boucher explained that he intended to retire and, under the terms of the agreement, would receive $300,000 upon his retirement. Thatcher responded that the firm did not have the money to pay this lump-sum amount, and the two should focus on shutting down the firm instead.

By February 16, the two had agreed to dissolve the firm, with both partners splitting the firm’s debt evenly. However, later that day, Boucher sent Thatcher a notice of his intent to retire on February 20. In response, Thatcher immediately withdrew from the firm. Both parties continued to conduct business individually after the dissolution of the firm.

Thacker subsequently sued Boucher for breach of contract, arguing that he had abandoned “the firm at the time of dissolution and fail[ed] to pay all obligations, losses and debts of the firm.” Thacker claimed that Boucher’s actions resulted in the unnecessary accrual of interest and also sought attorney’s fees. Boucher filed a counterclaim, seeking the $300,000 in retirement compensation.

The trial court determined that Boucher breached the agreement, by not paying his share of the debts and by not participating in the winding down of the business. The court also found that Boucher violated his fiduciary duty to the firm. Finally, the court ruled against Boucher in his counterclaim for retirement compensation. The court awarded Thacker the full amount of attorney’s fees he requested.

The Court’s Opinion

The court reviewed the evidence presented below and largely affirmed the lower court’s decision. The appellate court explained that the evidence suggested that the firm had been dissolved upon Thacker’s withdrawal. Thus, because the firm was no longer in existence at the time Boucher retired, the court explained that Thacker did not breach any duty owed to the firm or Boucher, and that Boucher was not entitled to the retirement compensation.

However, the court disagreed with the lower court regarding the award of attorney’s fees. The court explained that to obtain attorney’s fees, “a party must 1.) prevail on a cause of action for which attorney’s fees are recoverable, and 2.) recover damages.”

Here, the court held that because Thacker did not recover any economic damages as a result of Boucher’s conduct, he was not entitled to an award of attorney’s fees. The court acknowledged that there were exceptions to this general rule but found that neither applied in this case. One exception is when the agreement between the parties provides for an award of attorney’s fees absent an award of damages. However, the partnership agreement between the parties did not provide for such an award. Thus, the court reversed the award of attorney’s fees to Thacker.

Are You Dealing With a Texas Business Dispute?

When success matters, every decision you make for your business is essential. Choosing which Austin partnership dissolution attorney or contract dispute attorney to handle the unique issues your business faces is no exception. At the Law Offices of Gregory D. Jordan, we have over three decades of experience helping all types of businesses deal with the full range of legal issues they confront, including breach of contract claims and business fraud cases. We also routinely assist businesses through the dissolution process, reducing the chances of costly and time-consuming litigation. To learn more about how we can help your business through the issues it faces, call 512-419-0684 to schedule a consultation today.

U.S. Supreme Court Issues Opinion in Landmark Sex Discrimination Lawsuit

Earlier this year, the United States Supreme Court issued a written opinion in an employment discrimination case that will have significant implications in Texas, as well as throughout the county. The opinion involved the interpretation of Title VII of the Civil Rights Act of 1964. Specifically, whether the Act’s prohibition against discrimination on the basis of an employee’s “sex” precludes an employer from firing an employee for being gay or transgender. The Court answered the question in the affirmative, finding that employers cannot discharge an employee for being gay or transgender, even if other motivations supported the employer’s decision.

Background Into the Civil Rights Act

The Civil Rights Act of 1964 (CRA) was the country’s first civil rights legislation, protecting against discrimination based on an employee’s race, color, religion, sex, or national origin. However, initially, the protections under the CRA were weak and under-inclusive. So, while the CRA was an important step toward seeking a more equal workplace, it was not a complete solution. For example, the Act did not apply to discrimination based on a worker’s age or disability status. Additionally, although the Act purported to protect against sex discrimination, it was subsequently interpreted by the courts not to protect against pregnancy discrimination and, until recently, an employee’s status as gay or transgender.

Of course, subsequent legislation filled in some of the holes left by the CRA. The Age Discrimination in Employment Act of 1967 provides protection for employees and job applicants over the age of 40. The Americans with Disabilities Act, passed in 1990, protects workers who are experiencing disability. And the Pregnancy Discrimination Act of 1978 amended the CRA to “prohibit sex discrimination on the basis of pregnancy.”

The Supreme Court’s Recent Opinion

The Court’s opinion in Bostock v. Clayton County, is a consolidation of three similar cases, all arising from different states. Gerald Bostock was a child welfare advocate in Clayton County, Georgia. After he began playing in a gay softball league, he was fired for engaging in conduct “unbecoming” of an employee. Donald Zarda was a skydiving instructor who was fired days after mentioning that he was gay. And Aimee Stephens, who presented as a male when she was hired, was fired after telling her employer that she intended to “live and work full-time as a woman.”

In each of these three cases, the employee was fired at least in part for either being gay or transgender. All three employees filed employment discrimination claims against their employers under Title VII of the CRA. Oversimplifying the procedural background of each individual case; two of the cases were allowed to proceed toward trial while one was dismissed as a matter of law. The question that was eventually presented to the United States Supreme Court was whether Title VII to the CRA prevents an employer from making an employment decision because an employee is gay or transgender. In other words, does the CRA’s language precluding discrimination based on “sex” extend to an employee’s sexual orientation or status as a transgender person.

The Court’s Analysis

The Court began its analysis by noting that the CRA precludes employees from making an employment decision “because of” an employee’s sex. In its preliminary discussion of the applicable law, the Court reviewed several other opinions to glean a general rule regarding what is covered under the CRA.

First, the Court noted that it is “irrelevant what an employer might call its discriminatory practice, how others might label it, or what else might motivate it.” In making this statement, the Court was pointing out that it does not matter if the employer does not believe that they are engaging in sex discrimination. The Court explained “when an employer fires an employee for being homosexual or transgender, it necessarily and intentionally discriminates against that individual in part because of sex.”

Next, the Court went on to explain that the plaintiff’s sex does not need to be the only criteria leading to an employer’s decision. In other words, an employer cannot reframe their reason or firing an employee to be based on some non-protected trait.

Finally, the Court held that an employer cannot avoid the requirements of Title VII by showing that it treats men and women equally. The Court noted, “an employer who intentionally fires an individual homosexual or transgender employee in part because of that individual’s sex violates the law even if the employer is willing to subject all male and female homosexual or transgender employees to the same rule.”

In coming to its conclusion, the Court rejected each of the employers’ arguments. For example, the employers argued that firing an employee for being gay or transgender was not “sex” discrimination because it had nothing to do with an employee’s sex. In support of their argument, the employers noted that each of the employees, if asked, would likely have explained that they were fired for being gay or transgender (rather than for being male or female). However, the court reiterated that an employment discrimination charge does not require an employee to prove that the employer intended to discriminate, only that the employer acted in a discriminatory manner.

The Court also rejected the employers’ argument that public policy supported their actions. Specifically, the employers argued that, when enacted, few would have thought the CRA covered gay and transgender employees. The Court noted that “people are entitled to rely on the law as written, without fearing that courts might disregard its plain terms based on some extratextual consideration.” And the Court even acknowledged that these cases fell outside the “principal evil” at which the CRA was directed. However, rather than use that as a reason to minimize the protections afforded by the CRA, the Court explained that it “demonstrates the breadth of the legislative command.”

In the end, the Court’s holding was simple; employers cannot base an employment decision on an employee’s status as gay or transgender.

Contact an Experienced Austin Employment Law Attorney for Immediate Assistance

Whether you are an employer trying to navigate the new changes in the law, or an employee who believes that your employer illegally fired you, contact the Law Offices of Gregory D. Jordan for help. For over 30 years, we have been helping individuals and businesses with complex employment law issues, including claims of employment discrimination, wrongful termination, retaliation, wage and hour violations and more. To learn more about how we can help you with your situation, call 512-419-0684 to schedule a consultation today.

Texas Appellate Court Rules Against Pipeline Company in Condemnation Hearing

Earlier this year, a state appellate court issued an opinion in a Texas oil and gas case discussing a pipeline company’s condemnation claim against a landowner based on the parties’ inability to reach an agreement regarding an easement. Ultimately, the court ruled in favor of the landowners, finding that the pipeline company failed to prove that it was a “common carrier” with eminent domain power. The court also held that one of the property owners should not have been prevented from testifying as an expert regarding the value of the easement. 

The Facts of the Case

In the early 2000s, the Hlavinkas purchased 15,000 acres in Brazoria County for the primary purpose of generating income by acquiring additional pipeline easements. At the time the family purchased the land, there were about 25 pipelines already traversing the property. A pipeline company, HSC Pipeline Partnership (HSC), wanted to obtain an easement across the property to build a pipeline from Texas City to Brazoria County. 

The Hlavinkas and HSC could not agree on the terms of the easement, so HSC filed for a condemnation hearing. Essentially, HSC was attempting to use its purported eminent domain power to compel the Hlavinkas to grant HSC the easement. The Hlavinkas challenged HSC’s ability to exercise eminent domain powers, arguing that propylene, the product HSC intended on transporting through the pipeline, was neither crude petroleum under the Texas Natural Resources Code, nor an oil product or liquefied mineral under the Texas Business Organizations Code. The Hlavinkas also argued that the pipeline was not for public use, which prevented HSC from exercising eminent domain powers. The trial court rejected the Hlavinkas’ arguments, granting HSC’s motion for summary judgment and subsequently awarded HSC the easement. The court ordered HSC to pay the Hlavinkas $132,293.36 for the easement. In calculating this figure, the court precluded one of the Hlavinkas from testifying to the value of the easement. The Hlavinkas appealed. 

On appeal, the case found in favor of the Hlavinkas on both issues. First, the court held that HSC was not a “common carrier” as a matter of law, and summary judgment should not have been entered in favor of HSC. The court also held that the Hlavinkas should have been allowed to present testimony regarding the value of the easement. 

Regarding the “common carrier” issue, the court began by noting that the burden rests with a company to establish that it is a common carrier. To do this, the company must serve a public purpose, which requires the company show that “at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.” The court explained that whether a pipeline serves a public purpose is a judicial question. In finding that there was conflicting evidence regarding whether the HSC pipeline served a public purpose, the court noted the following:

  • The pipeline did not have any interconnections, and there was no evidence that HSC advertised other companies could use the pipeline. 
  • There was no evidence of the pipeline’s capacity. 
  • The pipeline was designed to serve only one customer. 

Taking all this into account, the court held that the lower court erred when it ruled, as a matter of law, that the pipeline served the public and that HSC was a common carrier. 

Moving on to the issue regarding the Hlavinkas’ ability to testify to the value of the easement, the appellate court ruled that the lower court was wrong to prevent the Hlavinkas’ testimony. The court explained that, generally, an expert testifies regarding the value of the condemned property. However, in certain situations, a landowner can testify to the value of their property. 

Here, the court noted that Terry Hlavinka would have testified that he bought and sold property and negotiated pipeline easements and oil and gas leases for over thirty years, and that the “main driver” behind purchasing the land was the opportunity to generate income through pipeline development. He was also planning on testifying that the income derived from pipeline development exceeds the income he could get from any other use of his property. Additionally, he would have explained that there were at least twenty-five pipelines located on the property before HSC expressed its interest in the easement, and that he relied on this fact when determining that the best use of the property was for pipeline development. Terry used comparable sales from other deals to arrive at a value for the easement. 

Ultimately, the court concluded that Terry Hlavinka’s methodology for calculating the value of the easement was sound and should have been presented to the jury. The court also noted that “the sale of easements to private pipelines who are not common carriers, and, therefore, do not have the power to acquire property by eminent domain are necessarily voluntary.”

The issues presented in this case, especially landowners’ ability to testify regarding the value of their property, is a hot-button issue in Texas oil and gas law. This case represents one of the few times a property owner was able to do so.  

Are you dealing with a Texas oil and gas issue?

Oil and gas disputes can be complicated. Choosing an attorney to represent you or your business is a crucial decision that can save months or even years of litigation, and tens of thousands of dollars. At the Law Offices of Gregory D. Jordan, we have been effectively handling Texas oil and gas cases for over 30 years. To learn more, and to schedule an initial consultation, call 512-419-0684. You can also contact me online.

Texas Court Discusses Scope of Assignment in Recent Oil and Gas Case

Oil and gas law in Texas is often closely intertwined with contract law. In fact, many Texas oil and gas disputes are based on disagreements over unclear terms in lease or sale agreements. Earlier this year, the state’s high court issued a written opinion in a Texas oil and gas case highlighting the importance of unambiguous contractual terms. The case required the court to determine the scope of an oil and gas assignment that was, by all accounts, far from clear.

The facts of the case

According to the court’s opinion, Neuhoff Oil purchased a two-thirds interest in a mineral lease for a piece of property referred to as Section 28. A few years after its initial purchase, Neuhoff Oil assigned its two-thirds interest, reserving for itself a 3.75 percent overriding royalty interest on all production under the lease.

From 1975 to 1999, there was only one well on Section 28. Under the assignment agreement, Neuhoff received royalty payments until 1999, when Neuhoff sold its overriding royalty interest to Piranha Partners. The following year, Neuhoff Oil went out of business, and all the company’s assets were assigned to individual members of the Neuhoff family.

After the sale to Piranha Partners, the operator drilled several other wells on Section 28. Piranha Partners continued to receive payments related to the initial well. However, the Neuhoff family received payment for all the newly drilled wells. However, in 2012, the operator obtained a title opinion suggesting that Piranha Partners actually owned the royalty interest according to the sale. The operator then paid Piranha Partners what it believed the company was due, and asked the Neuhoff family to refund it for the amount they received in error.

The Neuhoffs filed this lawsuit, claiming that the sale to Piranha Partners only included the one well in existence at the time of the agreement. The trial court agreed with Piranha Partners, finding that the sale agreement transferred the rights to all wells then in existence and those not yet in existence. The court of appeals reversed, finding that the agreement only transferred the Neuhoff’s rights for some of the future wells. Not satisfied with the appellate court’s opinion, Piranha Partners appealed to the Texas Supreme Court.

The Texas Supreme Court agreed with Piranha Partners, that the agreement conveyed the mineral rights to the entirety of Section 28. The court first looked to the language of the conveyance:

Neuhoff Oil does hereby assign, sell and convey unto Piranha . . . without warranty or covenant of title, express or implied, subject to the limitations, conditions, reservations and exceptions hereinafter set forth . . . all of Neuhoff Oil’s right, title and interest in and to the properties described in Exhibit “A.”

The court then looked to Exhibit A, which described both the individual well that existed at the time of the sale, as well as the property as a whole. The court reviewed the typical rules of construction and the surrounding circumstances, finding neither helpful to resolving the issue at hand. Ultimately, the court determined that Exhibit A was ambiguous because it referred to the individual well, the general area where the well was located, as well as the entire property. Thus, the court looked to the agreement as a whole, trying to reconcile what the original intent of the parties would have been at the time the agreement was executed. Ultimately, the court agreed with the trial court, holding that Piranha Partners obtained a royalty interest in the entire property.

Are you involved in a Texas oil and gas dispute?

If you have a Texas oil and gas legal issue, contact Austin oil and gas attorney Gregory D. Jordan for immediate assistance. Choosing an attorney to represent you or your business in a Texas oil and gas dispute is a crucial decision that can save months or even years of litigation, and tens of thousands of dollars. At the Law Offices of Gregory D. Jordan, we have been effectively handling Texas oil and gas cases for over 30 years. To learn more, call 512-419-0684. You can also contact us online.

Texas Court Rules in Subcontractor’s Favor in Prompt Payment Act Claim

The Prompt Payment Act is a federal law that was passed to ensure the timely payment to all tiers of contractors who work on federally funded construction projects. The Act accomplishes this by providing a timeline of when payments will be released to the prime contractor, subcontractors, and suppliers. The State of Texas has its own version of the Prompt Payment Act that applies to state-funded construction projects.

Recently a state appellate court issued an opinion in a Texas construction payment dispute case under the Prompt Payment Act. The lawsuit arose when a window company, a subcontractor, installed windows on a hotel construction project at the request of the general contractor. The two companies entered into an agreement outlining the terms of the project, as well as how payment would be made.

As the project got underway, the owner of the hotel contacted the general contractor, concerned that the construction was not going according to schedule. As a result, the owner of the hotel began to withhold payment to the general contractor. Eventually, the general contractor submitted a bill to the hotel owner, including an amount for the windows that were installed by the subcontractor. However, while the hotel owner paid most of the amount due, it withheld a certain sum that was designated for the general contractor’s “overhead and profit.” Rather than take the potential loss itself, the general contractor kept the money and only paid select subcontractors. The window company was not paid by the general contractor. Eventually, after finding out what the general contractor had done, the hotel owner terminated the general contractor for cause.

The hotel owner then sued the general contractor, and the window company intervened in that lawsuit, claiming breach of contract, violation of the Prompt Payment Act, quantum meruit, breach of fiduciary duty, violation of the Construction Trust Fund Act, and unjust enrichment. The general contractor responded by explaining that the hotel owner did not pay the general contractor, and that it was permissible to pass this loss on to the subcontractor.

The trial court heard and granted the subcontractor’s motion for summary judgment, and awarded the subcontractor the amount it was due.

The Court’s Analysis

The court began its analysis by citing the language from the Prompt Payment Act, which provides:

A contractor who receives a payment from the owner . . . in connection with a contract to improve real property shall pay each of its subcontractors the portion of the owner’s payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor’s interest in the owner’s payment. The payment . . . must be made not later than the seventh day after the date the contractor receives the owner’s payment.

The court went on to explain that the only exception to this requirement arises when there is a “good faith dispute concerning the obligation to pay or the amount of payment.”

The court then noted that, to prove its claim under the Prompt Payment Act, the subcontractor needed to show that the general contractor received payment from the hotel owner that was attributable to the work performed by the subcontractor. The general contractor argued that, because some of the windows were installed after the hotel owner started to withhold payment to the general contractor, the hotel owner was responsible for paying the subcontractor. However, as the court pointed out, the agreement between the general contractor and subcontractor provided that the general contractor would pay the subcontractor, not the owner of the hotel.

Ultimately, the court agreed that the subcontractor was entitled to payment from the general contractor, pursuant to their agreement. In so holding the court rejected the general contractor’s argument under the Construction Trust Fund Act. The Construction Trust Fund Act provides that:

It is an affirmative defense to prosecution or other action brought under section 162.031(a) that the trust funds not paid to the beneficiaries of the trust were used by the trustee to pay the trustee’s actual expenses directly related to the construction or repair of the improvement or have been retained by the trustee, after notice to the beneficiary who has made a request for payment, as a result of the trustee’s reasonable belief that the beneficiary is not entitled to such funds or have been retained as authorized or required by statute.

In reaching this conclusion, the court noted that the subcontractor was not a beneficiary to the Construction Trust, and that the Act did not apply.

Is Your Business Dealing with a Complex Texas Contract Issue?

When success matters, every decision you make for your business is essential. Choosing which Austin contract dispute or business litigation attorney to handle the unique issues your business faces is no exception. At the Law Offices of Gregory D. Jordan, we have over 30 years of experience helping all types of businesses deal with the full range of legal issues they confront, including breach of contract claims and business fraud cases. To learn more about how we can help your business through the issues it faces, call 512-419-0684 to schedule a consultation today.

COVID-19 and How It May Impact the Rights of Texas Employers and Employees

The COVID-19 pandemic has dramatically impacted our country since arriving on United States soil. City, county, state and federal lawmakers have scrambled to keep up with the rapid spread of the virus. In Texas, Governor Abbott signed a state-wide stay-at-home order, requiring the closure of schools, non-essential businesses and many government offices. Cities and counties have issued their own orders, and Governor Abbott has revised and amended his orders. These actions have created many concerns regarding Texas employment law.

Business owners and employees face different, yet equally serious, concerns about how the novel coronavirus and the state’s response to it will affect them. Lawmakers have stepped in to address some of these concerns.

The Families First Coronavirus Response Act

One of the most important new laws that Texas employers and employees should familiarize themselves with is the Families First Coronavirus Response Act (Families First Act). The Families First Act requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The amount of leave employers that are covered by the Act must provide is dependent on the reason for the requested leave:

Two weeks of paid sick leave at an employee’s regular rate of pay must be provided to:

  • Employees who are unable to work because they are quarantined pursuant to state, federal or local orders, or have been ordered to do so by a healthcare professional; or
  • Employees who are experiencing symptoms of COVID-19 and are seeking a medical diagnosis.

Two weeks of paid sick leave at two-thirds of an employee’s regular rate of pay must be provided to:

  • Employees who need to take time to care for an individual who is in quarantine;
  • Employees who need time to care for a child whose school is closed due to concerns surrounding COVID-19; or
  • Employees who are experiencing a substantially similar condition.

Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds of an employee’s regular wage must be provided to:

  • Employees who have been with the organization for 30 or more days and are unable to work because they must care for a child whose school or childcare provider is closed due to the COVID-19 pandemic.

The Act covers the period between April 1, 2020 and December 31, 2020 and only applies to covered employers. The Act defines a covered employer as:

  • Public employers, and
  • Private employers with fewer than 500 employees.

Notably, small businesses with fewer than 50 employees may be exempt from the Families First Act’s provision regarding paid leave for an employee’s child-care needs, if providing such leave would jeopardize the business’ continued viability. Additionally, all employees, regardless of the amount of time they have been employed with an organization, are eligible for the two weeks of paid sick leave. However, only employees who have worked for the organization for more than 30 days are eligible for the 10 weeks of expanded family and medical leave.

The Act also imposes limits on the total amount employers are required to pay. For example, employees who cannot work because they are quarantined can receive a maximum of $511 per day, or a total of $5,110. Employees who take leave to care for a child are eligible for a maximum of $200 per day, or $2,000 in total.

To be sure, the interplay between the Families First Act and the Family and Medical Leave Act (FMLA) can be complicated, and employers or employees who have questions about the required amount of leave should reach out to a dedicated Austin employment lawyer for immediate assistance.

Contact a Travis County Employment Attorney

If you have concerns about your rights, either as an employee or as an employer, contact the Law Offices of Gregory D. Jordan. Attorney Jordan is a veteran Texas employment attorney with over 30 years of experience representing both employees and employers in a diverse range of employment matters. He commands an in-depth understanding of various state and federal employment laws, and is ready to put this advanced knowledge to use in your case. To learn more, and to schedule a consultation today, call 512-419-0684 today.

Texas Court Discusses the Formation of a Texas Contract Through Email

In Texas, a contract can be something as simple as an agreement between two parties that is supported by consideration. Notably, not all contracts need to be written to be enforceable. However, before a court determines that a contract is enforceable, the party in favor of the contract must show that there was, indeed, an agreement between the parties. In contract law, this is referred to as a “meeting of the minds.”

Recently, a state appellate court issued a written opinion in a case involving a Texas contract dispute illustrating how courts analyze agreements. The specifics of the purported agreement are not particularly relevant to the court’s discussion. Essentially, a group of sellers, the defendants, agreed to develop and eventually sell a group of assets worth hundreds of millions of dollars. The sellers moved forward with development and, when it came time to sell the assets, enlisted the assistance of a third-party.

The third-party solicited bids from several potential buyers. The plaintiff was one of the high bidders. The parties exchanged several emails back and forth. Eventually, the plaintiff sent a counter offer with the following email:

We will not be modifying or accepting any changes to the base deal described above and don’t want to be jerked around anymore. We will give you till 5:00 pm CST tomorrow to accept. Best we can do and you hopefully understand I have recommended to my Board to pass if the timeline is not met or a counter proposal is sent.

An agent for the sellers responded that they are ready to “move forward” with the sale. However, before the contract was drawn up, another bidder revised their offer, making it more favorable to the sellers. The sellers then accepted the other buyer’s offer and the plaintiff filed a breach-of-contract claim against the sellers.

The case ultimately came down to whether a contract was formed through email. If so, then the sellers were committed to selling the assets to the plaintiff. However, if a contract had not formed by the time the sellers accepted the other bidder’s offer, then the sellers were under no obligation to the plaintiff.

The court determined that no contract existed, and that the sellers were free to accept the other bidder’s offer. The court explained that, in general, parties are free to write contracts however they see fit. Included in this freedom of contract, is the ability to insert language into negotiations explaining when a contract comes into existence. Here, the sellers included the following language in the Confidentiality Agreement that they sent out to all prospective buyers:

The Parties hereto understand that unless and until a definitive agreement has been executed and delivered, no contract or agreement providing for a transaction between the Parties shall be deemed to exist and neither Party will be under any legal obligation of any kind whatsoever with respect to such transaction by virtue of this or any written or oral expression thereof.

The court explained that this “no obligation” clause required a definitive agreement before a legally enforceable contract could be formed. The court then held that the emails between the parties did not constitute a definitive agreement.

In concluding that the emails were not a definitive agreement, the court explained that the emails resembled a preliminary agreement in that they represented a “precontractual understanding in which two commercial parties allocate their contributions to an undertaking but do not specify all the important terms of the deal.” The court noted that a definitive agreement requires a “final solution” that is “authoritative and apparently exhaustive.”

The court explained that the emails contemplated the need for an upcoming formal agreement. In fact, the court pointed out that the emails even referenced a purchase and sale agreement. In addition, the court found that a contract was not created merely by laying out the “assets to be sold, the purchase price, a closing day, and other key provisions.” The court explained that the emails “left much to the imagination” and that there were still key areas that needed to be negotiated.

Is Your Business Dealing with a Complex Texas Contract Issue?

When success matters, every decision you make for your business is essential. Choosing which Austin contract dispute attorney to handle the unique issues your business faces is no exception. At the Law Offices of Gregory D. Jordan, we have over 30 years of experience helping all types of businesses deal with the full range of legal issues they confront, including breach of contract claims and business fraud cases. To learn more about how we can help your business through the issues it faces, call 512-419-0684 to schedule a consultation today.

Texas Federal Court Addresses Pregnancy Discrimination Claim

Early February, a federal court issued a written opinion in a Texas employment discrimination lawsuit. The case involved an employee’s allegations that her employer illegally discriminated against her based on her pregnancy, as well as her pregnancy-related disabilities. The woman brought several claims. This case arose when the defendant employer filed a motion for summary judgment, asking the court to dismiss each of the employee’s claims. The court discussed two important issues in its opinion.

First, the court addressed the timeliness of the employee’s claim with the Texas Workforce Commission (TWC). Under Texas law and unless the deadline is deferred, employees who believe that they have been subjected to illegal employment discrimination must file a claim with the Texas Workforce Commission within 180 days. Under recent Supreme Court case law, this requirement is not a jurisdictional one, meaning that non-compliance will not bar a court from hearing a claim. However, the charge-filing requirement is still a mandatory pre-requisite, and can limit the amount of time that a court can consider an employer’s allegedly discriminatory conduct.

As a matter of general procedure, once filed, the Texas Workforce Commission will review the employee’s claim to ensure that it meets all the necessary criteria and, if it does, then provide a “charge of discrimination” form to the employee for her to sign. Once the charge of discrimination form is signed, the TWC will investigate the employee’s claim, sometimes in conjunction with the Equal Employment Opportunity Commission.

The TWC or EEOC can later issue a right to sue letter, and the employee can then file a claim in court. In some rare cases, the EEOC or TWC will sue on an employee’s behalf.

According to the court’s opinion, the employee first noticed that she was being discriminated against in April or May of 2017. The court did not discuss the exact details of the employer’s allegedly discriminatory actions; however, the employee filed a claim with the Texas Workforce Commission on March 20, 2018. Thus, the court noted that it was only able to consider conduct occurring in the 180 days before the complaint was filed. The court explained that there is a possible exception to the 180-day filing requirement when an employer is engaged in continuing violations. However, the employee, in this case, did not allege continuing violations. Thus, although the employee claimed that she was discriminated against starting in April or May of 2017, because she did not file a claim with the TWC until September, the court could only consider potentially discriminatory conduct that occurred on or after September 21, 2017 (180 days before the filing date of March 20, 2018).

Next, the court considered the employee’s claim that her employer interfered with her right to take leave under the Family and Medical Leave Act (FMLA). The FMLA provides employees of certain companies with the right to take leave under certain conditions, including childbirth or a serious health condition. Employers cannot interfere with this right or retaliate against an employee for taking leave under the FMLA. However, employers can terminate an employee for a valid reason, even if they have already arranged to take FMLA leave in the near future. Additionally, an employee who obtained her requested leave cannot file an FMLA interference claim, as she got what it is that she was seeking. However, arguably, any adverse employment action stemming from an employee’s decision to take leave could be considered retaliation if properly plead.

Here, the court noted that the employee asked for, and took, a portion of her FMLA leave. After returning from an initial leave, but before going back on leave in December of 2017, the employee was terminated. Resultingly, the court held that the employee was not able to bring an interference claim as to the portion of her leave that she was able to take. However, the court did allow for the employee to continue with her claim of interference for the unused portion of her leave.

The above discussion illustrates a few of the complex issues that can arise in a Texas employment discrimination case. It is important to keep in mind that, while the case discussed a few of the employee’s claims against her employer, several other claims were not mentioned in the opinion.

Contact a dedicated Austin employment discrimination attorney

At the Law Offices of Gregory D. Jordan, Attorney Jordan represents both employers and employees in all types of Texas employment lawsuits and arbitration matters. Attorney Jordan has over 30 years of relevant experience assisting businesses and employees in Travis County and throughout Central Texas. Contact the Law Offices of Gregory D. Jordan at https://www.theaustintriallawyer.com/.

Texas Lawmakers Pass Law to Curtail Common Oil and Gas Scam Tactic

To some extent, the history of Texas is closely tied to the state’s historically ample supply of oil and gas. Texas has been at the forefront when it comes to establishing oil and gas laws throughout the country. Unfortunately, due to the value of the commodity, over the years, enterprising scammers have come up with ways to bilk unsuspecting landowners of their mineral rights. Earlier last year, Texas lawmakers passed HB 3838, which was designed to stop one of the more common Texas oil and gas scams.

The scam worked like this: someone posing to be an employee of a reputable oil and gas operator approaches a landowner who is receiving nonparticipating royalties with what looks to be an “oil and gas lease.” The document looks and reads as though it is a typical lease for mineral interests; however, it is an agreement by which the landowner sells their interest in the land for what is termed a “bonus.” While this should be a red flag because nonparticipating royalty holders are not technically permitted to sign a lease — few owners are aware of this fact, and scam artists have been able to take advantage of this.

To help curb this dishonest practice, Texas lawmakers recently passed HB 3838. The bill was signed into law by Governor Abbott last year in June and took effect in September. It is currently codified at Texas Property Code Section 5.152, and it clarifies what language an oil and gas royalty lease must contain to be valid. The new law applies to contracts that convey mineral or royalty interests but are presented to the owner in the form of a document that “is titled an oil and gas lease or an oil and gas royalty lease.” Under the terms of the new law, for such a document to be valid, it must contain the following language in size 14 font, at the top of the document’s first page: THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF YOUR MINERAL OR ROYALTY INTERESTS IN (DESCRIPTION OF PROPERTY BEING CONVEYED). In addition, the same language must be displayed immediately above the signature line of the agreement. If this language is not included in an agreement, the contact will be deemed void.

As noted above, the new law went into effect in September 2019. That said, those who have been bilked prior to the passage of the new law may have other remedies available to them. However, aggrieved right holders need to act quickly to preserve all of their rights as the statutes of limitations that govern these disputes are relatively short.

Are you involved in a Texas oil and gas dispute?

If you believe that you have been the victim of a Texas oil and gas scam, contact Austin oil and gas attorney Gregory D. Jordan for immediate assistance. Choosing an attorney to represent you or your business in a Texas oil and gas dispute is a crucial decision that can save months or even years of litigation, and many thousands of dollars. At the Law Offices of Gregory D. Jordan, Mr. Jordan has been effectively handling Texas oil and gas cases for over 30 years.

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