You're Fired!

Fear Friday

Unfortunately, in this economy, getting fired/laid off/let go/etc. is happening at an alarming rate.  Maybe you thought you were doing pretty good work, or maybe you knew you it was coming.

Regardless, most people do not think they deserved being fired and ask me what their legal options are regarding wrongful termination.  Below, we’ll discuss this more in-depth.

“We find it’s always better to fire people on a Friday; studies have statistically shown that there’s less chance of an incident if you do it at the end of the week.” —Office Space

Texas Employment Law

Texas subscribes to the “at-will-employment” doctrine.  Essentially, this means that when you accept employment at a job, unless you have entered into a contract for different terms, you are guaranteed employment until you quit or you get fired, whichever occurs first. 

I bet you’re confused.  This doctrine gives you the freedom to quit for any reason you want, no matter how silly or outrageous.  Actually, you can even quit for no reason at all.  However, the other side of this freedom coin gives your employer the right to fire you for any reason, or even no reason at all.  Well, almost any reason, there are some limitations.

Reasons You Can’t Be Fired For

Obviously, our society is better served when we disallow businesses from engaging in discriminatory practices.  For that reason, an employer can’t fire you (or take any adverse employment action against you) based on your race, creed, religion, age, national origin, disability, possibly sexual preference, or other protected classification.

In addition, there are some Public-Policy Exceptions that employers cannot fire/act against you.  Your employer cannot fire you because you’ve been called for Jury Duty, because you filed a Worker’s Compensation Claim, for refusing to break the law for your employer, being a whistle-blower, or filing a discrimination claim.

How to Protect Yourself from Employment-at-Will

If you and your employer enter into an employment contract, then the conditions of your job will be governed by your agreement.  Most standard employment contracts outline that you can be terminated “for cause,” which means that they need a reason to fire you.

However, if you are contemplating bringing a wrongful employment lawsuit against a former employer, remember that the burden will be on you to prove that you and your employer entered into such a contract and the terms of the agreement. 

Most employers won’t agree to such a contract because they like the freedom of firing people at will.  But remember, even though you don’t have the luxury of an employment contract, be thankful that you even have a job right now in these difficult times. 

--Authored by Matthew L. Harris, Esq.,

Matthew Harris Law, PLLC  - Business Law Division

1001 Main Street, Suite 806, Lubbock, Texas, 79401-3322

Tel: (806) 702-4852 | Fax: (806) 576-1318

Attorney@MatthewHarrisLaw.com 

Your Accident Prone Baby Business

A Dream Come True

When you were just a kid, you knew that you wanted one someday.  You talked about all of the great things it would do for you one day.  You even went as far as picking out a name.

We're talking about owning your own business of course.  However, just like a baby, new businesses are sometimes prone to accidents too.

Except, when your baby has an accident, you don’t lose sleep wondering whether you’ll be able to keep your house.

Cover Your Assets

If you’re considering owning, or if you already own, your own business, then you should consider protecting yourself from the liabilities of your business.  Otherwise, you may find yourself paying for a long time for a simple business decision.

Under Texas law, you can organize your business structure in a manner that protects you personally from the debts of your company.  Some of these structures are: Corporations (Inc.), Limited Partnerships (Ltd.), and Limited Liability Companies (LLC).

Selecting a business structure depends on your Management plan, long-term goals, investment options, and desired tax methods.  (Personally, I prefer paying fewer taxes)

How Bad Could it Be?

Let’s pretend for a moment that you’re considering opening up your own flower shop.  You enter into a 1-year lease for your storefront, you negotiate a contract for a steady supply of daisies, and you lease a billboard for advertisement.

Since you don’t want to waste time with limiting your liabilities, you decide to just start ordering everything with personal checks, signing leases in your name, and entering into contracts as an individual.

Unfortunately, business isn’t doing so hot and after a few months you have to close up your shop.  After closing the doors, your business mail starts showing up at your house and those companies are demanding that you are personally liable for the company’s debts since on paper, it just looks like you’re an eccentric individual with a serious flower addiction.

What Else Could You Do?

Let’s go back and imagine that before you started signing your life away, you organized as a Limited Liability Company (LLC).  Then, instead of signing your own name on all of those leases and contracts, you signed your company’s name as the responsible party.

Now fast forward to you closing your doors; it’s like the business was the one that entered into all of those obligations instead of you.  When the creditors come calling, they come looking to liquidate the company’s assets and not your personal assets.

Get yourself some protection from your baby and you’ll get a little better sleep at night.

--Authored by Matthew L. Harris, Esq.,

Matthew Harris Law - Business Law Division

1001 Main Street, Suite 806, Lubbock, Texas, 79401-3322

Attorney@MatthewHarrisLaw.com 

(806) 702-4852 

www.MatthewHarrisLaw.com

Lien On Me

The Scenario

You notice your brakes are squeaking so you take your car to the shop to have them checked. You and the mechanic discuss what work needs to be done and he gives you a written estimate.

A few days later, the mechanic calls you and informs you that your car is ready.  You arrive at the shop and the mechanic hands you a bill for the price you both agreed on.  However, during the last several days, a family emergency has arisen and you can no longer afford to pay the total.  So, now what?

Mechanic’s Lien

A mechanic’s lien may have been created.  In Texas, if a person has furnished labor and repairs and has not been paid for those services, a lien arises against the vehicle.

A mechanic’s lien is only created when the registered owner of the vehicle is given a written statement of the services and charges and the mechanic has only completed that work which was previously agreed upon by the customer.

Enforcement

Mechanic’s liens are enforced through judicial foreclosure sales.  Therefore, the mechanic must file suit asserting the lien against the registered owner.

The court must then determine if all of the statutory requirements have been met and that no other party has a superior right to the property.  If the court finds the mechanic has first priority and the requirements have been met, the court will order the vehicle to be sold at a foreclosure sale.

The proceeds of the sale will then be applied to the amount owed to the mechanic and any amount left over will be given to the registered owner.

Types of Property

The scenario above only discusses a lien with regard to a car in a repair shop.  However, a mechanic’s lien may also be created in regard to other property.

Regarding real property, a mechanic’s lien may be known as a "construction lien."  For those who provide supplies and materials to other’s without payment, a materialman’s lien or "supplier’s lien" may attach.  All of these liens are created and enforced exactly the same but have different names to clarify what property they attach to.

What Can You Do?

You should discuss your situation with the mechanic and work out a payment plan if possible.  Most companies and individuals will understand that situations arise that cause financial hardships and are willing to work with you on payments.

It is important to know that these liens exist and that the mechanic may in fact have a superior right to your property than you do.  When I say “superior right,” I mean that the mechanic can keep your vehicle until you pay off the balance.

--Authored by Matthew L. Harris, Esq.,

Matthew Harris Law - Property Law Division

1001 Main Street, Suite 806, Lubbock, Texas, 79401-3322, 

Attorney@MatthewHarrisLaw.com

(806) 702-4852 

www.MatthewHarrisLaw.com

Collecting Business Debts

Bad Business

You have a dispute with someone as a result of a business transaction that went sour.  After attempting to settle it peacefully, you finally broke down and filed a lawsuit.  Because you were in the right, the Court ruled in your favor and awarded you a judgment.  However, your opponent refuses to send you a single dime, now what?

With a judgment in hand, you've got a few options.  You can seek an Abstract of Judgment, a Writ of Execution, or a Writ of Garnishment; but this is by far an all inclusive list of options.

Obstacles

One of the major obstacles facing you as you attempt to collect your judgment stems from who you are attempting to collect from.  If you are attempting to collect from an individual person, you will face many hurdles, because there are many exemptions under the law that protects their property from collection.  However, since we are discussing collections from businesses, you'll be glad to hear that there are very few exemptions from collection.

Abstract of Judgment

This is usually the first method used in collecting a judgment.  An Abstract of Judgment creates a lien on your opponent's non-exempt real property.  The Abstract of Judgment should be filed with the County Clerk in every county where they own real property to give you a greater chance of success in recovery.

Writ of Execution

In my own personal view, this is one of the most embarrassing methods of recovery for a judgment debtor.  A Writ of Execution allows the Sheriff to go to their business with trucks and start collecting non-exempt property.  The Sheriff then sells the property at auction and turn the proceeds over to you to satisfy the judgment.

Obviously there is much more to it than this, but you get the general idea of how it works.

Writ of Garnishment

This method is usually saved for last because it is fairly harsh and is expensive to pursue compared to the other methods.  Also, the Writ of Garnishment is only available if, "within the plaintiff's knowledge, the defendant does not possess property in Texas subject to execution sufficient to satisfy the debt."

The Writ of Garnishment allows you to collect your opponent's property that is held by a third-party, such as money held in a bank account, safe deposit box, etc.  If you have to resort to this method, you'll essentially have to file another suit because it will be assigned a new cause number and pay a new filing fee.

Preferred Method

Unfortunately, there is no silver bullet in this area of law and I can't tell you the best method to use.  Each case is different and requires a different approach, and sometimes a combination of more than one of the above described collection methods.  The above is only meant to give you a cursory overview of some options and not nearly detailed enough to be relied upon as a guide to the relevant law.

You and your attorney should sit down and discuss your goals and formulate a plan to attempt to collect what is owed to you.  Regardless of how you choose to proceed, you will certainly need patience because collection of judgments is rarely a speedy affair.

Source: Tex. Civ. Prac. & Rem. Code § 63.001(3).

--Authored by Matthew L. Harris, Esq.,

Matthew Harris Law - Business Law Division

1001 Main Street, Suite 806, Lubbock, Texas, 79401-3322, 

Attorney@MatthewHarrisLaw.com 

(806) 318-8482 

www.MatthewHarrisLaw.com