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Blogs From 2015 - 2018

May 10, 2018


One of the most unsettling issues that clients come to me with involve interpreting non-competition agreements under Texas law. It’s probably one of the most misunderstood areas of employment law. People always ask questions such as – “Texas is a right to work state, how can they prevent me from working?” Or – “Didn’t indentured servitude go away years ago?” First, though Texas is, in fact, a “right to work” state, that phrase is taken out of context. That phrase has to do with whether or not a person can work for a unionized employer without being a member of a union (a discussion for a different day). Second, this issue has nothing to do with servitude but employers do have the right to curtail post-employment activity in certain situations.

The situation was significantly different years ago when virtually no judge in the courthouse would sign an order enforcing non-competition agreements in Texas, citing such factors as restraint of trade and public policy concerns. In the early 1990’s things started to change and non-competition agreements were more routinely enforced than they were in years past. Courts essentially stated that if non-competition agreements were ancillary to an “otherwise enforceable agreement” such as an employment agreement, and supported by independent consideration, the could be enforceable.

Since most non-competition agreements were ancillary to an otherwise enforceable agreement the question became whether the agreement was supported by consideration. “Consideration” is a legal term generally meaning in the sense of non-competition agreements, something given at the outset in exchange for the employee’s promise not to compete once the employment ends. Consideration as to be something of value which most people believe translates to money but this is not usually the case. Consideration can be the giving of confidential and proprietary information such as trade secrets, customer lists, formulas, etc., but can also be the promise to provide this information in the future. The point is that it is very easy for the employer to satisfy what is needed to make a Texas non-competition agreement enforceable.

Then the question becomes, if most agreements are enforceable, how do people get out of them? The answer is simple and is a heavy concentration of the service I provide to my clients trying to get out of non-competition agreements. The answer always revolves around what is known as the “standard of reasonableness.” The basic premise is that an enforceable non-competition agreement still must be reasonable to be fully enforced. A non-competition agreement that is not reasonable can be modified or “reformed” by a court to make it reasonable.

There are three main factors that a court will take into consideration to determine whether it is reasonable, time of the restriction, scope of the activity to be restrained and the geographical are involved in the restriction. For example, a non-competition agreement in Texas that purports to keep somebody out of an entire industry, nationwide for five years can be safely concluded to be unenforceable. Though I’m not going to be able to review all of the scenarios in this blog, the overriding premise is that a non-competition agreement will only be enforced to the extent reasonably necessary to protect the legitimate interests of the company seeking to enforce it. There isn’t an absolute answer to which non-competition agreements are subject to modification as that determination is usually made on a case by case basis relating to the specifics of the employment relationship. Its reasonable to assume that if you get laid off for economic reasons and you find a job in the same industry a non-competition agreement is less likely enforceable because there would be no legitimate interest preventing you from moving on in your career. On the other extreme, somebody who plans to compete for months before leaving their employer and collects a bunch of confidential data to take with them are likely to see their agreement enforced perhaps to the maximum provided for even if the above factors are overreaching.

If there is something to be learned from this, it is that every Texas non-competition agreement is looked at differently depending on the circumstances surrounding the employment relationship that it is based on. Don’t think that just because you have a non-competition agreement that you are precluded from working anywhere else but by the same token don’t think that even though you have one, it can’t be enforced against you. My firm reviews and litigates non-competition agreements as a regular part of its practice and we will be happy to assist anybody who would like help with theirs.


May 19, 2016


In FirstLight Federal Credit Union v. Loya, 478 S.W.3d 157 (Tex. App. – El Paso, Oct. 7, 2015), the appellate Court reversed and remanded the trial court’s decision denying FirstLight Federal Credit Union’s (“FirstLight”)Motion to Compel Arbitration.

Former employee, Martha Loya, filed claims of discrimination and retaliatory discharge against FirstLight based on age, sex, and race and for reporting an inappropriate relationship involving a supervisor.  After filing the required Charge of Discrimination with the TCHR, Martha received her Notice of Right to Sue and filed her petition in state court.  FirstLight filed a motion to compel arbitration based on a 2011 arbitration agreement that it asserted applied to Martha’s claims.

The major questions that were answered by the Court in determining that the trial court abused its discretion in failing to enforce the arbitration agreement were:

Did an arbitration agreement actually exist, in other words was a contract properly formed to begin with?

The initial issue in this case was whether Martha was required to arbitrate her claims when she never signed the signature block on the arbitration agreement at issue.  The Court decided that a contract was formed even without her signature because (1) there was uncontroverted evidence that she was notified electronically of the arbitration agreement and she electronically acknowledged receipt and (2) the arbitration agreement specifically said that she would be bound by it by continuing her employment with FirstLight after receiving electronic notice, which she did. 

Under the Federal Arbitration Act, it is not required that an arbitration agreement be signed by the parties.  The Court further stated that “to make a signature a condition precedent to enforcement of a contract – including an arbitration agreement – the agreement must clearly and explicitly require a signature before it becomes binding.”  FirstLight’s arbitration agreement had no such signature requirement.

What effect does a delegation clause have on the power of the Court to resolve gateway issues regarding the validity and enforceability of the arbitration agreement?

Since the Court found that even without a signature, the arbitration agreement was an existing contract, it next looked to the delegation clause contained within the arbitration agreement to determine its jurisdiction in deciding validity and enforceability.  A delegation clause is contractual language contained in the arbitration agreement where the parties can agree to delegate to the arbitrator the power to resolve issues regarding the validity and enforceability of the arbitration agreement instead of leaving this power with the Courts if/when a lawsuit is filed.

The Court determined that FirstLight’s arbitration agreement did contain a delegation clause that “clearly and unmistakably provides that the issues of validity and enforceability are to be decided by the arbitrator and not the court.” 

The next question for the Court was… What is the reach of the delegation clause?  Or, in other words, what specific matters fall within, “validity and enforceability”?

Martha claimed that the arbitration agreement was illusory because it contained a modification provision.  The Court determined that because of the delegation clause, the determination of whether the arbitration agreement was illusory was a matter of its validity and thus, was to be determined by the arbitrator.

Further, the Court analyzed whether the delegation clause put the determination of whether Martha’s claims fell within the scope of the arbitration agreement in the hands of an arbitrator or the Court?

The Court determined that the issue of scope was not covered by the arbitration agreement’s delegation clause because it only provided for a delegation of issues of validity and enforceability to the arbitrator.  The Court warned, “[W]e must be mindful that delegation clauses must “clearly and unmistakably” delegate issues to the arbitrator.”  Since the arbitration agreement did not specifically delegate issues concerning the scope of the arbitration agreement to the arbitrator than scope was rightfully an issue for the trial court.

Inevitably, the Court determined that the claims alleged in Martha’s lawsuit fell within the scope of the arbitration agreement and therefore would not be decided by the Court.


March 2, 2016


Questions regarding the relationship between a staffing agency or recruitment firm, the company client and the employee often surface when discrimination occurs in the workplace.  Currently, many companies forego the difficulty of sifting through resumes and conducting countless interviews to find the perfect person for an open position.  Instead, this responsibility is passed to a professional in the form of a recruiting or staffing agency.

But what does the law say about who is responsible when an
employee or former employee accuses the company he/she was placed in to work of engaging in discrimination, retaliation and/ or violating the Fair Labor Standards Act regarding minimum wage and/or overtime practices?

Recently, the
Fifth Circuit United States Court of Appeals in Burton v. Freescale Semiconductor, Inc., 798 F.3d. 22 (5th Cir. 2015) addressed this question in a case where a temp employee, Nicole Burton, was placed by her staffing agency, Manpower of Texas, at Freescale Semiconductor, Inc. as a designer and manufacturer and then was terminated after being injured on the job.  She inhaled chemical fumes while at work at Freescale and after facing health complications filed a workers’ compensation claim.  She notified both Freescale and Manpower of her injury. She suffered heart palpitations which she believed was a result of her on the job injury. Two weeks later she was terminated.  The employee sued both Freescale and Manpower for wrongful termination in violation of the Americans with Disabilities Act (ADA) and retaliatory violation of section 451.001(1) of the Texas Labor Code (workers’ compensation retaliation). The district court below had granted summary judgment in favor of both Freescale and Manpower dismissing Nicole Burton’s claims but the Fifth Circuit appellate Court decided to reverse that decision as to the ADA claim after analyzing Freescale and Manpower’s position as employers under the law.

The company, Freescale, argued that it was not Burton’s employer because it, “did not have authority to hire, fire, supervise or directly administer disciplinary procedures” to her.  The Fifth Circuit rejected this argument because (1) Freescale had the right to demand that Burton be terminated from her assignment working with them, which it did; (2) Freescale supervised Burton while she was at work; and (3) complaints about Burton’s work were made by Freescale personnel and on-the job corrections were delivered by Freescale employees. The Court highlighted that Freescale decided and insisted that Burton be fired and thus could not avoid the
employment relationship.

Importantly, Freescale tried to use the fact that it did not control payroll or withhold taxes as a major part of its argument to avoid liability.  The Court rejected this argument stating that when analyzing whether an entity is an employer under the ADA, “it is appropriate to apply the “
hybrid economic realties/common law control test.”  This means that the Court will look at if the company had the right to hire, fire, supervise and set the employee’s work schedule as well as the payment of salary, withholding of taxes, benefits provided etc.  Freescale’s argument failed in this respect because it focused only on the economic realities portion of the test; that Manpower as the staffing agency controlled payroll.

As for the staffing agency, Manpower, it also could not escape employer liability with regards to the
ADA claim of discrimination (disability discrimination). The Court explained:

A staffing agency is liable for the discriminatory conduct of its joint-employer client if it participates in the discrimination, or if it knows or should have known of the client's discrimination but fails to take corrective measures within its control.

The court further pointed out that even if Freescale demanded that Burton be terminated but Manpower knew or should have known that it was a discriminatory termination, Manpower could be found liable under the ADA as it had an, “independent obligation to comply” with the law.

As for the
Texas Labor Code workers’ compensation retaliation claim however, the Court concluded that Freescale was not liable because it did not provide workers’ compensation coverage for Burton. Manpower was the employer that provided the workers’ compensation for Burton therefore would alone be liable as the employer on that claim if Burton was able to meet her burden of proof.

Whether you are the
staffing agency, company employer or employee/former employee in this kind of situation it is important to contact an employment lawyer who is familiar with this type of potential joint employer/ co-employer liability

Burton v. Freesclae Semiconductor, Inc., 798 F.3d 222 (5th Cir. 2015).


November 11, 2015


In the recent case, Ion v. Chevron USA, Inc., Todd Ion, a laboratory chemist for Chevron USA, Inc. began working for the company in November 2006.  In late 2008, Mr. Ion went through a divorce which was particularly hard on his five-year old son.  He noticed that Chevron had a leave policy for an employee going through a life changing event, divorce included.  Mr. Ion asked for leave and attempted to schedule meetings with his supervisor to discuss leave options.  These meetings were repeatedly canceled and he was told he would have to wait several months to even discuss a possible leave.  Instead of meeting with Mr. Ion about leave, he was presented with a five day suspension for performance deficiencies and attendance issues.  While on suspension, Mr. Ion contacted Chevron’s Employee Assistant Program and was told that FMLA leave might be available for him and to call in sick every day and Chevron would start the paperwork.  Mr. Ion’s doctor filled out his FMLA paperwork stating in the supporting certification that he was incapacitated and unable to perform work because of “too much stress – can’t focus on his job – single parent.”  The anticipated return to work date was “undetermined.”  Mr. Ion took several actions to communicate with Chevron and complete the forms requested to certify his FMLA leave.  Despite Mr. Ion’s FMLA paperwork from his physician, Chevron’s General Manager stated in an email that Mr. Ion premeditatedly planned to fake an illness and that they did not need that type of criminal behavior at Chevron.  There was also an email from Chevron’s General Manager stating that Mr. Ion was playing games with Chevron after his suspension, that he was just looking for a way to get FMLA qualified time off, and that Chevron needed to consider the options moving forward. 

Mr. Ion was subsequently terminated for alleged “abuse of management constituting insubordination.”  The termination letter indicated that Mr. Ion took Chevron company equipment and expressed to his office mate that he would fake a nervous breakdown relating to his personal situation so he could get paid for being at home.  Mr. Ion refuted he ever made such a statement.  The letter further stated that his employment was ended effective immediately based on his overall performance, the seriousness of the policy violations and his behavior following the March 16th discussions.

Mr. Ion filed his lawsuit in the U.S. District Court for the Southern District of Mississippi against Chevron on March 29, 2011 alleging violations of the FMLA; that Chevron terminated him in retaliation for taking FMLA leave and interfered with his right to take FMLA leave.  Chevron filed two motions for summary judgment trying to get the Court to dismiss all of Mr. Ion’s claims. The District Court granted Chevron’s Motions and Mr. Ion appealed the decision only on his FMLA retaliation claim to the Fifth Circuit.  

In reviewing the decision, the Fifth Circuit stated that the email questioning Mr. Ion’s FMLA leave showed that Chevron’s General Manager was upset that he was seeking FMLA-qualified time off.  The Court also stated that a jury could “reasonably conclude” that the General Manager was attempting to stop Mr. Ion from taking FMLA. Another important point that the Court highlighted in reversing the Southern District and denying Chevron’s Motion for Summary Judgment was that Chevron attempted to assert a reason for Mr. Ion’s termination in response to the lawsuit that was not indicated in his termination letter. Chevron claimed that an incident occurred where Mr. Ion’s behavior raised concerns about workplace violence but this incident was directly related to him trying to exercise FMLA rights and being forced to sign a medical release form after being told that he would not have to do that by Chevron’s EAP counselor. The Court stated that the fact that the termination letter was devoid of any reference to what Chevron post-lawsuit claimed to be “concerns of workplace violence” and one of the bases for Mr. Ion’s termination called into question whether Chevron really relied on that as a reason for termination. Additionally, the Fifth Circuit specifically said:

  [I]t would be unreasonable, and would undercut the FMLA’s protection to permit an employer to draw an arbitrary distinction between firing an employee for how he exercised his FMLA rights.  Pursuant to Chevron’s view, an employer would be able to fire an employee for raising his voice when opposing an employer’s unlawful attempt to violate the FMLA.  

The Court concluded that Chevron had failed to meet its burden to establish that it would have fired Mr. Ion despite its retaliatory motive. Even though Chevron tried to assert different bases for Mr. Ion’s termination such as performance and behavior, the Court still found genuine issues of material facts existed that needed to be decided by the jury. 

When an employee is faced with a serious medical condition necessitating FMLA leave, one of the most important considerations is to be able to return to work without fear of retaliation or termination. The FMLA was enacted to ensure that this happens and provide some legal recourse in the event of an unlawful termination or some other adverse action.  The Fifth Circuit’s decision here shows that even if the employer asserts some alleged legitimate reason for the termination, the employee may still be able to show that under the circumstance that reason is untrue and be able to prove retaliation under the law.

Ion v. Chevron USA, Inc., 731 F.3d 379 (5th Cir. 2013).


October 8, 2015


The Texas Commission on Human Rights Act (TCHRA) was “enacted to address the specific evil of discrimination and retaliation in the workplace.”  When an employee believes that he/she has been wrongfully terminated based on his/her race or national origin, he/she can file a lawsuit against the former employer for violation of the TCHRA.

Texas courts have explained that in order for a former employee to prevail in a lawsuit against a former employer based on discrimination, he/she must establish a prima facie case of employment discrimination which means these elements must be met: (1) he/she was a member of protected class (2) he/she was qualified for the employment position (3) he/she was subject to an adverse employment decision and (4) he/she was replaced by someone outside of the protected class, or was treated less favorably than similarly situated members of the opposite class. 

Usually, an employer defending against a discrimination lawsuit will attempt to assert a reason for the employee’s termination (or other adverse employment decision) that it claims was the real reason and that no discrimination occurred. The law calls this a “legitimate nondiscriminatory reason” for the employment decision.  Even if the employer does this, the plaintiff-employee has the opportunity to prove that the reason is false and that the employer is actually trying to cover up a discriminatory purpose.

In the case Rincones v. WHM Custom Services, Inc., et. al., Gilberto Rincones, a Hispanic male of Mexican descent, worked as a technician for WHM.  Mr. Rincones was required by WHM to take a drug test administered by a third party drug testing company.  Mr. Rincones was accused of failing the drug test for marijuana use but asserted he did not use marijuana and his requests to be retested were denied.  Mr. Rincones even contacted WHM’s human resources to present another drug test he took from another laboratory that proved he was negative for drug and alcohol use.  Because of his alleged failure, he was changed to “inactive” status which meant he could not work.  However, WHM had a work policy that should have allowed Mr. Rincones to complete rehabilitation and meet some other requirements to be returned to “active” status and return to work.  Mr. Rincones was never given the opportunity to be re-tested and was not told he could complete rehab and meet the requirements to regain “active” status to work.  When Mr. Rincones tried to submit a claim for unemployment benefits WHM told the Texas Workforce Commission that Mr. Rincones was fired for violating the company’s policy on substance abuse.

Mr. Rincones filed his lawsuit against WHM for race and national origin discrimination and retaliation.  At first, Mr. Rincones’ claims were dismissed after WHM filed a motion for summary judgment.  However, the Court of Appeals of Texas reviewed that decision and decided that there were genuine issues of material fact, his case should be remanded to the trial court and he should have the opportunity to have his case decided by a jury.  Mr. Rincones provided evidence that non-Hispanic employees of WHM were allowed to retest after failing a drug test and were allowed to return to work.  He also presented evidence that after a Caucasian employee tested positive, WHM’s human resources director explained the company policy, informed him that he could return to work by meeting the return to work requirements and the employee did in fact return to work within two weeks.  On the other hand, Mr. Rincones, a Hispanic worker, was never told by the WHM human resources director whom he spoke with that he could return to work by meeting certain requirements and he was instead fired.  The Court found that reasonable people could reach different conclusions about whether WHM treated non-Hispanic employees more favorably than Mr. Rincones.  Therefore, among other points in its analysis, the Court determined that the trial court was wrong to dismiss Mr. Rincones’ discrimination claim under the TCHRA based on race and national origin at the summary judgment stage.

Rincones v. WHM Custom Services, Inc., et. al., 457 S.W.3d 221 (Tex. App. – Corpus Chrisiti – Edinburg, Feb. 12, 2015).


September 21, 2015


If you are an employee bringing a wrongful termination case under the Texas Whistleblower Act for being wrongfully terminated for reporting violations of the law to an appropriate law enforcement agency there are specific steps that must be adhered to before filing a claim in state court. If not, a Plea to the Jurisdiction could get the entire case dismissed on procedural/jurisdictional grounds even if the facts of the case amount to a violation of the law. 

Essentially, if a claim under the Texas Whistleblower Act is filed against a state/government entity, a Texas court must have subject-matter jurisdiction to hear the claim. In Ninan v. Houston Community College System (HCC), recently decided on August 20, 2015, the Fourteenth Court of Appeals, Houston affirmed a trial court’s decision to grant HCC’s Plea to the Jurisdiction because the plaintiff-employee failed to initiate the grievance procedure of HCC before filing his claim in state court.  

When a person is wrongfully terminated from a state/government employer, he/she will be required to complete the employer’s grievance procedure before filing suit in court. Specifically, in claims brought under the Texas Whistleblower Act the employee must invoke the applicable grievance procedure not later than the 90th day after the date on which the alleged violation of the law either (1) occurred or (2) was discovered by the employee through reasonable diligence. If the former employee does not do this before filing a claim in state court, the employer will be able to file a Plea to the Jurisdiction and get the claims dismissed.
In Ninan v. HCC, the court concluded that HCC did have a grievance policy in place and it applied to all terminated employees. Ninan’s failure to initiate a grievance caused his claim to be dismissed and HCC’s Plea to the Jurisdiction was granted.

Before the court even reached the merits of Ninan’s wrongful termination claim under the Texas Whistleblower Act, his claim was dismissed. This could have been avoided had Ninan taken the first step as stated under the law and initiated the grievance process internally within HCC within 90 days of his discovery of alleged violations of law.

How to avoid this procedural pitfall?

Contacting an employment law attorney who specializes in these types of cases and knows the procedural steps can be very important to make sure all your rights are protected. A wrongful termination case under the Texas Whistleblower Act is meant to protect employees who do the right thing, report violations of law, and then end up losing their jobs because of it. However, the law is very specific in the procedures that must be followed in order to make sure rights are preserved.

Ninan v. Houston Community College System, No. 14-14-00713, 2015 WL 4985116 (Tex. App. – Houston [14th Dist]).



September 9, 2015

Rosenberg & Sprovach Open New Fort Worth Office

Gregg Rosenberg, Managing Partner of the Houston based law firm of Rosenberg & Sprovach, announced that the firm will be opening their second Texas office in Fort Worth. The office will be located at 1301 Ballinger Street. The new office is being opened in response to the firm's increased business in the Dallas Forth Worth metroplex area.  As with its Houston office, Rosenberg & Sprovach focus will be on employment law representing individuals in claims against their employers in the State of Texas.  Initially, Mr. Rosenberg and Ellen Sprovach will handle the cases being serviced by the new office, with plans to expand the professional staff within the next month.


April 6, 2015

Tortious Interference, Unfair Competition


Different modes of transportation, especially in established and growing cities, is a consistently expanding industry. Lately, at the forefront of the cab transportation industry right now is a company called Uber Technologies, Inc. (“Uber”). Lyft Inc. (“Lyft”) is also a major competitor in this relatively new “app” based cab industry. As commuters across the nation rave about this new age transportation, which basically provides riders with an impromptu cab they can hail within minutes right from an app on their phone, the traditional cab industry is not so welcoming of the overwhelming competition. In Texas, the Greater Houston Transportation Company and nine (9) other taxi-cab companies and licensed taxi-operators have filed a lawsuit against Uber and Lyft for tortious interference with business relations, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. §1125(a). In response Uber and Lyft filed a Motion to Dismiss.

The law does have protections for existing businesses when other companies enter an industry and in some way, interfere or compete with their business. This also applies when former employees start new companies within the same industry as their former employer if they take steps that violate the law. In this case, Greater Houston Transportation Co., et al. v. Uber Technologies, Inc. and Lyft Inc., the Greater Houston Transportation Company and the other plaintiffs will have to meet the following four elements to establish their claim that Uber and Lyft are tortuously interfering with their business: (1) the existence of a contract subject to interference, (2) willfull and intentional interference, (3) interference that proximately caused damages, and (4) actual damage or loss. A large part of the Plaintiffs’ claim in this case is that Uber and Lyft are soliciting their independent contract drivers inducing them to breach contracts they have with Plaintiffs to jump ship and work for the new companies. However, the Court determined that Plaintiffs did not provide enough information in their pleading to establish that Uber or Lyft were aware of the contracts. On those grounds, the Court dismissed the tortious interference with existing contracts claim as well as the tortious interference with prospective business relations claim.

The Plaintiffs did claim some victory at this stage of their lawsuit as the Court denied Uber and Lyft’s motion to dismiss Plaintiffs’ Lanham Act Claims (in part) and request for a permanent injunction. The Court decided that because Uber and Lyft were allegedly making misleading comparisons between their products or services and that of Plaintiffs’, a permanent injunction was appropriate. For example, Uber claims that it carries insurance with 20x the requirements taxis have in Houston but the Court determined this could be misleading because the public could believe that Uber’s insurance policy is the same type of insurance as the taxi companies have, which it is not. Because a “presumption of irreparable injury” could result from that type of misleading comparison diminishing the value of Plaintiffs’ product or services in the minds of consumers, the permanent injunction request was not dismissed.

This is just a brief summary focusing on some of the many issues that were addressed by the Southern District of Texas in this early stage of litigation. The Court’s opinion highlights the legal avenues a business can take to defend its products and services and also to protect its position in its respective industry from competitors.

Greater Houston Transp. Co., et al. v. Uber Tech., Inc. and Lyft, Inc., No. 4:14-0941, 2015 WL 1034254 (S.D. Tex. March 10, 2015).



Feburary 19, 2015


The Southern District of Texas recently answered an important question that is relevant to both employers and employees regarding the payment of
overtime compensation:

Does the Fair Labor Standards Act apply only to employees of an “enterprise” or does it apply to an employee of a business too small to qualify as an enterprise so long as the employee engages in commerce as part of his/her job duties?

The Court gave a clear answer: the Fair Labor Standards Act and in turn the requirement that an employer pay a non-exempt employee working over forty hours per work week overtime compensation does in fact apply to a business that is too small to qualify as an enterprise if that employee is engaged in commerce or in the production of goods in commerce.  In Holland v. DA Tencil, Inc., et. al., the Court rejected an employer’s argument that it was not covered by the Fair Labor Standards Act because its annual sales were below $500,000.  The court stated that even though the Fair Labor Standards Act states that to qualify as an “enterprise” an employer must “have an annual gross volume of sales made or business done not less than $500,000” the general provision of the Fair Labor Standards Act provides “individual coverage” that covers an employee engaged in commerce even if the employer does not meet the definition of “enterprise” based on its annual sales.  The employer’s attempt to avoid a Fair Labor Standards Act overtime compensation lawsuit here failed and the Court pointed out the employer’s argument as a “mistake” in that the employer only looked at the definition of enterprise and not the FLSA coverage provision itself.  Accordingly, the Court denied the employer’s motion for Summary Judgment based on that flawed argument and this case will proceed to trial.  This is an important answer from the Court for employers who may assume that they are exempt from the FLSA standards on overtime pay.

Holland v. DA Tencil, Inc., et. al., Civ. A. No. 3:14-CV-00086, 2015 WL 631389 (S.D. Tex. Feb. 12, 2015).



Feburary 9, 2015


In a recent decision, the Southern District of Texas, Corpus Christi Division, decided that there was enough evidence for an age discrimination case to proceed to the jury and denied the employer’s motion for summary judgment where there were discrepancies in the facts as to whether the person who replaced the terminated employee was outside the protected class (ie. over 40 years of age), the employer’s failure to follow its progressive discipline policy and the employer’s inability to accurately identify who made the termination decision.

In Gutierrez v. City of Corpus Christi, the City of Corpus Christi, filed a motion for summary judgment after Armando Gutierrez, a 55 year-old employee filed an
age discrimination case against it after he was terminated from his position as a professional engineer. When he was terminated for alleged poor performance in 2012, Mr. Gutierrez claimed he had never been reprimanded or disciplined over his four-year tenure with the City. The City on the other hand claimed he was terminated for his poor attitude and work performance in the two departments he worked in. In considering the City’s Motion for Summary Judgment, the Court determined that there were too many facts in dispute and the case needed to proceed to trial.

In denying the City of Corpus Christi’s motion for summary judgment on Gutierrez’s claim for age discrimination, the Court first looked at whether Gutierrez as the plaintiff was able to meet the prima facie elements of an
age discrimination case under the Age Discrimination in Employment Act (“ADEA”). Under the ADEA, to establish a prima facie case of age discrimination, the plaintiff must establish he is (1) within the protected class (ie. over 40 years old); (2) qualified for the position, (3) suffered an adverse employment decision and (4) was either replaced by someone younger, replaced by someone outside the protected class or otherwise discharged because of his age. In this case, the dispute centered around the fourth element of the prima facie case because the City of Corpus Christi argued that Gutierrez was replaced by someone who was 52 years old.

When the Court looked deeper into the facts it found discrepancies with whether the position filled by the 52 year old was in fact Gutierrez’ position prior to his
termination. The Court stated that “it is difficult to determine who actually replaced Plaintiff, whether it be the person hired with the job classification number of Plaintiff’s position in the Engineering department or the persons hired who completed Plaintiff’s actual job duties…” The Court concluded that since there was a dispute as to the fourth element of the prima facie case, Gutierrez was able to satisfy the prima facie case of age discrimination for the purposes of summary judgment.

As is often the case in
age discrimination cases, the City of Corpus argued the Gutierrez was not fired for age discrimination but was instead fired for poor performance. Because the City of Corpus provided this non-discriminatory reason for Gutierrez’s termination, he was required to present evidence that that reason was merely a pretext for discrimination. Gutierrez presented evidence that all of the supervisors involved in his termination gave conflicting testimony as to who decided to terminate him. For example, one supervisor stated that the Director of Development Services was the primary decision maker in Gutierrez’ termination while that Director testified that he was not involved in the termination and it was in fact the Director of Engineering Services that made the decision. The Court pointed out that the City of Corpus Christi’s “difficulty in identifying who was involved in the decision to terminate [Gutierrez] casts doubt on the explanation.” The Court also negatively viewed the fact that the City did not follow it progressive disciplinary policy, which was in place when Gutierrez was terminated.

In light of all the discrepancies in the facts in this
age discrimination case, the Court decided that summary judgment was not appropriate and Gutierrez should be able to have his day in court and proceed with a trial on the merits.

Gutierrez v. City of Corpus Christi, No. 2:13-CV-359, 2015 WL 150445 (S.D. Texas, Jan. 12, 2015).