COVID-19–Driven Layoffs Are Not a ‘Natural Disaster’ Under WARN Act, Fifth Circuit Rules

In the first ruling from a federal appellate court examining COVID-19–related layoffs and the Worker Adjustment and Retraining Notification (WARN) Act, the Fifth Circuit Court of Appeals held in Easom v. US Well Services, Inc., No. 21-20202 (June 15, 2022), that a mass layoff resulting in part from the economic impact of COVID-19 did not qualify for the “natural disaster” exemption to the WARN Act’s sixty-day notice requirement for mass layoffs. The court also held that for an employer to rely on the exemption, the mass layoff (or plant closing) must be the “direct result” of the natural disaster. This is an important ruling for employers in Louisiana, Mississippi, and Texas.

Fifth Circuit Finds Specific Allegation of One-Time Use of Racial Slur Sufficient to Preclude Dismissal Under Rule 12(b)(6)

On March 24, 2022, the U.S. Court of Appeals for the Fifth Circuit reversed a district court’s Federal Rule of Civil Procedure 12(b)(6) dismissal for failure to state a claim on a pro se plaintiff’s hostile work environment claim in violation of Title VII of the Civil Rights Act of 1964, holding that the plaintiff’s specific allegation—that his supervisor, in the presence of other employees, called him a derogatory racial epithet—was sufficient to give rise to a viable claim.

OSHA Reminds Arkansas, Louisiana, Oklahoma, and Texas Employers to Protect Workers From Heat-Related Illness

High temperatures in the Southwestern United States have and continue to break records. In Arkansas, Louisiana, Oklahoma, and Texas, the heat index could reach triple digits and in some cases exceed 110°F. These elevated temperatures pose a serious risk to employees exposed to heat due to the nature of their jobs. As a result, the Occupational Safety and Health Administration (OSHA) is aggressively enforcing its national and regional programs aimed at preventing heat-related illnesses and fatalities.

Fifth Circuit Relied on ‘Next to No Evidence’ of Animus in Discrimination Suit

On May 13, 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed summary judgment in favor of an employer, finding that a fired employee had failed to create a genuine dispute of material fact as to pretext. In Owens v. Circassia Pharmaceuticals, Inc., the court affirmed summary judgment despite its recognition that the former employee had presented “substantial evidence” that could lead a reasonable jury to conclude that the employer’s stated reason for termination—her poor job performance—was false.

Texas Supreme Court Clarifies Standard for Payment of Commissions When an Employment Agreement Is Silent

For many years, an oft-litigated question concerned whether a former employee was owed the commissions on sales made prior to the employee’s discharge from employment. Sometimes employment agreements were clear on the issue, such as by providing unambiguously that commissions would be paid when the employer received payment for a completed sale. Frequently, however, employment agreements were less than clear as to when commissions would be paid to former employees. Over the years, courts ruled in different ways and applied different standards when determining whether a former employee was entitled to commissions on sales made prior to an employment termination. On May 20, 2022, in Perthuis v. Baylor Miraca Genetics Laboratories, LLC, the Supreme Court of Texas clarified the standard to be applied in those situations.

Fifth Circuit Rules Age-Related Comments Must Be Specific to Defeat Summary Judgment

The Fifth Circuit Court of Appeals recently issued a ruling concerning the discharge of Michael Harris from his position with the City of Schertz, Texas, as the city marshal. In doing so, the Fifth Circuit gave a bit more clarity on the situations in which comments made by an employer or agent of an employer amount to discriminatory pretext.

CMS Vaccine Mandate Update: Last, but Not Least, Texas Joins the Rest of the Country

On January 13, 2022, the Supreme Court of the United States issued an opinion staying preliminary injunctions issued in cases filed in Missouri and Louisiana challenging the Centers for Medicare and Medicaid Services’ (CMS) COVID-19 vaccination mandate for healthcare providers. The ruling stayed preliminary injunctions applicable to twenty-four states. Twenty-five states were already subject to enforcement under the CMS rule. This left Texas standing alone and in limbo.

Breaking News on the CMS Vaccination Rule: Less Than 24 Hours After Being Shelved in 10 States, the Rule Is Sidelined Nationwide

In a November 30, 2021, order, a federal judge sitting in Louisiana entered a nationwide preliminary injunction against the Biden administration’s Centers for Medicare and Medicaid Services’ (CMS) interim final rule entitled “Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination.” The effect of the order is that CMS must immediately “cease all implementation or enforcement of the [CMS] Rule” in the remaining 40 states not covered by an earlier November 29, 2021, order from a federal judge sitting in Missouri that prevented implementation and enforcement of the CMS rule in only 10 states.

Consistently Inconsistent: An Example of Shifting Reasons for Employment Termination Precluding Summary Judgment

The U.S. District Court for the Western District of Texas recently denied an employer’s motion for summary judgment when its alleged shifting reasons for terminating the plaintiff’s employment contract raised genuine issues of material fact as to whether those reasons were a pretext for discrimination and/or retaliation.

Texas Governor Issues Executive Order Significantly Limiting the Ability of Many Employers to Mandate Vaccines

On October 11, 2021, Governor Greg Abbott issued Executive Order (EO) No. GA-40, prohibiting any entity in Texas from requiring any individual, including an employee, to receive a COVID-19 vaccination if that individual objects to the vaccination “for any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.”

Fifth Circuit Rules Day Rate Compensation Does Not Satisfy Requirement of Payment on a Salaried Basis for Exempt Status

The issue of the proper application of the highly compensated employee exemption under the Fair Labor Standards Act (FLSA), as it applies to employees paid on a “day-rate” basis in the oil and gas industry, has been a hotly debated issue in recent years, especially in the Fifth Circuit Court of Appeals.

Texas Appellate Court Clarifies Proof Required for Establishing Misconduct in Receipt of Unemployment Benefits Cases

Navigating the unemployment benefit administrative process under the Texas Unemployment Compensation Act can be difficult for employers. The act limits the type of conduct that may disqualify a claimant from receiving benefits, but it does provide for disqualification “if the individual was discharged for misconduct connected with the individual’s last work.” Employers’ notions of “misconduct” do not necessarily match the act’s definition of “misconduct.” A recent Texas appellate court decision, Texas Workforce Commission v. Dental Health for Arlington, Inc., provides guidance for employers regarding the factors required to establish misconduct that would disqualify a former employee from receiving unemployment benefits.

Dallas County Issues Emergency Order and FAQs on Indoor Masking as COVID-19 Legal Battle Evolves

On August 11, 2021, Dallas County Judge Clay Jenkins signed an emergency executive order, taking effect at 11:59 p.m. that same day, requiring “all child care centers and Pre-K through 12 Public Schools operating in Dallas County,” as well as “all commercial entities in Dallas County providing goods or services directly to the public,” to “develop and implement a health and safety policy” that requires “universal indoor masking” regardless of vaccination status.

Texas Supreme Court Rules Request for Disability Accommodation Does Not Support Retaliation Claim Under State Law

Texas courts generally look to federal courts’ interpretation of federal anti-discrimination laws to assist in interpreting the anti-discrimination provisions of the Texas Commission on Human Rights Act (TCHRA). However, the provisions of the TCHRA do not always exactly mirror the language of parallel federal anti-discrimination laws. The Texas Supreme Court recently examined such differences in interpreting the scope of the anti-retaliation provisions of the TCHRA.

Texas Supreme Court Issues Two Key Pro-Arbitration Decisions

Arbitration agreements are intended to expedite the legal process while minimizing fees and costs. In reality, former employees and their counsel often resist submitting their employment claims to arbitration, resulting in protracted and expensive litigation before trial and appellate courts on the issue of whether there is an enforceable arbitration agreement. This year, the Supreme Court of Texas issued two key decisions that may provide employers with stronger legal grounds for enforcing their arbitration agreements.

Texas Legislature Expands Employee Protection for Sexual Harassment Claims

Effective September 1, 2021, any employer that employs “one or more employees” or that “acts directly in the interests of an employer in relation to an employee” will be considered an employer under Texas law and subject to a heightened level of scrutiny for sexual harassment claims under Texas law. The new law is a significant change from the current standard, which shields employers with fewer than 15 employees from liability regarding sexual harassment claims.

Texas Firearm Carry Act of 2021: Can Employers Bar Employees From Carrying Guns Onto Work Premises?

Texas Governor Greg Abbott is expected to sign the Firearm Carry Act of 2021 (House Bill 1927) into law. Texas will join several other states that have enacted or plan to enact similar permitless, “constitutional carry” statutes in support of the individual right to keep and bear arms under the Second Amendment of the U.S. Constitution.

Unemployment Insurance System Update, Part III: Additional States Opting Out of Federal Unemployment Benefits

Twenty-two of 27 Republican-led states have announced that they will end enhanced federal COVID-19 unemployment benefits early. Of those, four (Arizona, Montana, New Hampshire, and Oklahoma) will offer additional monetary incentives for individuals to return to work. To date, no state with a Democratic governor has chosen to opt out of the COVID-19–related enhanced federal unemployment programs.

Texas Fifth District Court of Appeals: Texas Law Prohibits Sexual Orientation Discrimination

In Tarrant County College District v. Sims, No. 05-20-00351 (March 10, 2021), the Court of Appeals for the Fifth District of Texas held that “claim[s] of discrimination based on sexual orientation may be brought under the Texas Commission on Human Rights Act (TCHRA).” The Sims decision represents the first time that Texas law has been interpreted to provide workplace protection for LGBTQ workers and it follows on the heels of the June 2020 decision from the Supreme Court of the United States in Bostock v. Clayton County, Georgia, ruling that Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of sexual orientation and gender identity.

Texas Court Upholds San Antonio’s Sick and Safe Leave Ordinance Injunction

On March 10, 2021, the Texas Fourth Court of Appeals affirmed the District Court of Bexar County’s entry of a temporary injunction preventing the City of San Antonio’s sick and safe leave ordinance from taking effect. The appellate court reasoned that San Antonio’s ordinance was preempted by the Texas Minimum Wage Act (TMWA) and was thus unconstitutional.

Texas Discrimination Laws Protect Intention to Become Pregnant, State Court Rules

The Texas Commission on Human Rights Act (TCHRA) prohibits discrimination in employment based on sex. The state law defines “sex discrimination” to include “discrimination because of or on the basis of pregnancy, childbirth, or a related medical condition.” In South Texas College v. Arriola, a Texas appellate court considered for the first time whether the TCHRA protects an employee who has announced her intention to become pregnant.

Incomplete Payroll Records Lead to Employer FLSA Liability, Fifth Circuit Rules

Employers recognize that the Fair Labor Standards Act (FLSA) requires that they pay nonexempt employees overtime wages for all hours worked in excess of 40 hours in a workweek. Additionally, the FLSA imposes recordkeeping requirements on employers regarding the hours worked by their nonexempt employees. A recent Fifth Circuit Court of Appeals decision, U.S. Department of Labor v. Five Star Automatic Fire Protection, LLC, illustrates the danger to employers when they fail to keep complete timekeeping records of their nonexempt employees’ work.

Fifth Circuit Loss for Employee Who Refused Vaccine for Religious Reasons

As the COVID-19 vaccine becomes more readily available, employers are considering mandatory vaccination for their employees and in particular, how to respond to employee requests for accommodation, whether on the basis of disability or religion. In Horvath v. City of Leander, the U.S. Court of Appeals for the Fifth Circuit recently considered an employer’s proposed accommodations to a firefighter who refused a mandatory tetanus, diphtheria, and pertussis (TDAP) vaccine for religious reasons, and its analysis now provides timely guidance to employers considering a different type of mandatory vaccine.

Recent Texas Court Decision Highlights the Risks of Defamation in Internal Misconduct Investigations

Employers understand they have an obligation to investigate complaints of workplace misconduct. However, communications made during internal investigations are not totally without risk. Reports of misconduct, such as theft, assault, or abuse of others, can raise the scepter of defamation claims if the employer does not properly manage the communications. Further, while a qualified privilege exists for potentially defamatory statements made during misconduct investigations, such privilege is not absolute and can be lost.