Employment relationship defined

• Author: Laura M. Franze/Steven E. Clark
• Pages: 81-184

EMPLOYMENT

RELATIONSHIP

1-1

CHAPTER 1

EMPLOYMENT RELATIONSHIP DEFINED

BY LAURA M. FRANZE AND STEVEN E. CLARK

1:1. SCOPE OF CHAPTER AND INTRODUCTION

A. Overview

B. Common Thread: The Common Law Control Test

1:2. COUNTING WHO COUNTS

A. Payroll Test Method

B. Damages

C. Aggregating Employees

D. Other Issues

1:3. FORMATION OF THE EMPLOYMENT RELATIONSHIP

A. Texas Presumption of Employment At-Will

B. Employment Relationship Modif‌ied by Contract

1. Express Written Contract

2. Offer Let ters of Employment

3. Employee Handbooks and Implied Contracts

4. Oral Promises

5. Promissory Estoppel

C. Employment Relationship Modif‌ied by Statute

1. Title VII of the Civil Rights Act of 1964

2. The Texas Commission on Human Rights Act

3. The Texas Labor Code

4. Age Discrimination in Employment Act of 1967

5. Americans With Disabilities Act of 1990

6. Genetic Information Nondiscrimination Act

7. Rehabilitation Act of 1973

8. Family and Medical Leave Act of 1993

9. The National Labor Relations Act

10. The Texas Right to Work Law

11. The Employee Retirement Income Security Act of 1974

12. Reconstruction Era Civil Rights Act (Section 1981)

13. Occupational Safety and Health Act of 1970 and Related Safety Statutes

14. The Fair Labor Standards Act

15. The Equal Pay Act

16. The Sarbanes-Oxley Act

EMPLOYMENT

RELATIONSHIP

Texas Employment Law 1-2

17. Bankruptcy and Indebtedness

18. Jury Service and Political Activity

19. Military Service

20. The Texas Whistleblower Statute

21. Texas Health & Safety Code §161.134

1:4. RIGHTS AND DUTIES IN THE EMPLOYMENT RELATIONSHIP

A. Generally

B. Employee’s Duties to Employer

C. Employer’s Duties to Employee

1:5. EMPLOYMENT IS AN ISSUE RELATED TO THE MERITS OF THE CLAIM, NOT A

JURISDICTIONAL ISSUE

1:6. DETERMINING EMPLOYMENT STATUSINDEPENDENT CONTRACTOR OR EMPLOYEE?

A. In General

B. Determining Employment Status Between Employees and Independent Contractors Under Federal Law

1. The Internal Revenue Services Test

2. The Fair Labor Standards Act Test

3. The ERISA Test

4. Tests Under Title VII, the ADEA, and Section 1981

C. Distinguishing Independent Contractors From “Employees” Under Texas Law

1. The Employee vs. Independent Contractor Test Under Texas Common Law—the “Right to

Control” Test

2. The Employee vs. Independent Contractor Test Under the Texas Unemployment Compensation

Act (TUCA)

3. The Employee vs. Independent Contractor Test Under the Texas Workforce Commission Act

4. The Employee vs. Independent Contractor Test Under the Texas Commission on Human Rights Act

5. The Employee vs. Independent Contractor Test Under Other Texas Laws

D. Vicarious Liability for Employees and Independent Contractors

1. Liability for Negligent Acts Generally

2. Distinguishing Between Employees and Independent Contractors for Purposes of Liability for

Negligent Acts

3. Assessing Liability of General Acts of “Independent Contractor” in Exceptional Situations

1:7. DETERMINING EMPLOYMENT STATUS FOR PARTNERS, SHAREHOLDERS, AND DIRECTORS

A. Generally

B. The Clackamas Case

C. Cases Following Clackamas

1. Implications for Shareholder/Directors/Executives

a. Professional Corporations

b. Ordinary Corporations

2. Implications for Partners

a. Brief Background on Law Concerning Partners as “Employees”

b. Treatment of Partners as “Employees” in Clackamas

3. Implications on Future Law

D. Impact of Clackamas on Employment Status Tests Generally

1. Factors Suggesting That Clackamas Will Replace Competing Tests With the “Control Test”

2. Factors Suggesting That Clackamas Will Leave Alternative Tests Untouched

EMPLOYMENT

RELATIONSHIP

1-3 Employment Relationship Def‌ined

1:8. MULTIPLE “EMPLOYERS”

A. Borrowed Servant Doctrine

B. “Single Employer” or “Integrated Enterprise” Doctrine

1. NLRB Test Has Traditionally Been Applied

2. Trend Towards a Fresh Approach to “Single Employer” or “Integrated Enterprise” Analysis?

C. Joint Employer Analysis

1. Texas Decisions Recognizing Joint Employment Doctrine

2. Federal Decisions Recognizing Joint Employment Doctrine

3. Statutes and Regulations Recognizing Joint Employment

D. Special Circumstances—Multiple Entity Analysis Under Specif‌ic Employment Laws

1. Joint Employment Doctrine and the Family Medical Leave Act

a. The Statutory Def‌inition of “Employer” and the Regulations

b. Applying the Law to the Facts in Moreau

c. Other Cases Addressing Joint Employment Under the FMLA

2. The WARN Act

3. The NLRA

4. The FLSA

1:9. MULTIPLE EMPLOYER ISSUES INVOLVING STAFF LEASING AND TEMPORARY SERVICES PROVIDERS

A. Texas Staff Leasing Act

1. Staff Leasing Ser vices Def‌ined

2. Licensing Requirement

3. Relationship Between Leasing Company and Client Company

a. Contract Requirements

b. Texas Workers’ Compensation

c. Texas Unemployment Compensation

d. Legal Compliance

4. Liability Issues

B. Other Texas Case Law Pertaining to Multiple Employer Relationships Involving Temporary Service Providers

C. Federal Case Law Involving Multiple Employer Issues for Staff‌ing Services Agencies

APPENDICES

Appendix 1-1 IRS Guidance on Employment Status (2005), updated for use in 2017

Appendix 1-2 Agreement Between U.S. Dep’t of Labor, Wage and Hour Division and the State of

Texas-Texas Workforce Commission (Feb. 15, 2015)

Appendix 1-3 Memorandum of Understanding Between the IRS and U.S. Department of Labor (Sept. 19, 2011)

Appendix 1-4 WHD Administrator Interpretation No. 2016-1, “Joint employment under the Fair Labor

Standards Act and Migrant and Seasonal Agricultural Worker Protection Act.”

Appendix 1-5 WHD Administrator Interpretation No. 2015-1, “The Application of the Fair Labor Standards

Act’s ‘Suffer or Permit’ Standard in the Identif‌ication of Employees Who Are Misclassif‌ied as

Independent Contractors” (July 15, 2015)