The principle rule governing employment in the state of Texas is “employment at will.” The doctrine of employment at will holds that the employer can terminate the employee at any time for no reason at all. Texas courts have said that if an employee can be terminated for no reason at all, any reason is good enough, be it smart or stupid, true or false, the quality of the reason for termination is irrelevant if the employee can be terminated for no reason at all. Under Texas law, if an employee is an employee at will and is terminated at will, the only remedy is to apply with the Texas Workforce Commission for unemployment benefits. However, there are a number of exceptions to the employment at will doctrine.
(1) Unemployment benefits. In Texas if an employee has worked for an employer for at least six (6) weeks and is terminated at will, the worker can apply for unemployment benefits. The benefits are calculated upon what the worker earned while employed. The employer can protest payment of the befits to the worker because the benefits are payable out a tax the employer pays. The employer’s tax rate goes up every time benefits are paid to a terminated worker. There are three usual grounds for protesting payment of benefits to the terminated worker: (a) employee incompetence, (b) employee insubordination, and (c) employee misconduct.
(2) Retaliatory discharge for filing a worker’s compensation claim. The Texas Labor Code makes it unlawful to terminate an employee in retaliation for that worker filing a Texas Worker’s Compensation claim. Insurance companies have been known to raise the premium rates of companies that have worker’s compensation claims filed against them. Therefore, some unscrupulous companies will terminate the employment of workers who file claims to discourage other workers from filing similar claims. It is important to note that there is a specific special statute that protects the job of injured workers. This is an important and frequently encountered exception to the employment at will doctrine.
(3) Age discrimination and other forms of discrimination. Federal law has created a body of civil rights law that takes precedence over state law. That means that if facts exist to which federal law might apply, that federal law will protect employment even if the employee is an employee at will under Texas state law. A claim that a termination, demotion, or other adverse employment action is the product of unlawful discrimination requires the filing of a Charge of Discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC will investigate the charge. After 180 days have elapsed, the EEOC will issue a “Notice of Right to Sue Letter.” The letter is jurisdictional to the filing of a federal civil rights suit. This means that a plaintiff (the complaining worker) must have the Notice of Right to Sue in his/her possession before filing a lawsuit against the former employer. There prohibited “bases” or motives for terminating an employee under federal law. It is unlawful to terminate an employee because of his race, national origin, gender (female), religion, or age (over 40 years of age).
The Fifth Circuit Court of Appeals requires some “direct evidence” of discrimination. This means that the complaining worker must be able to produce some evidence of a prohibited motive on the part of the employer. Such worker must do more than show persons similarly situated to himself are treated differently than most workers. He must produce some evidence of an expression of intent on the part of the employer to discriminate. For example, in the context of age discrimination, the employee must usually produce evidence that the employer wishes to purge itself of older employees, or that older employees cost too much through their salary or through higher insurance premiums that must be paid to maintain their health insurance. The successful age discrimination plaintiff typically has statements, emails, or other expressions of an employer’s bias against older workers (over the age of 40 years).
The above-listed information is offered to the public for general information purposes only. It is not intended to be specific legal advice. It is not a substitute for personalized advice rendered by a legal professional based upon the individual facts of any particular case. Every legal matter is unique. The reader is encouraged to seek personalized legal counsel on their individual case. Stephen E. Menn does not offer tax advice. Stephen E. Menn is not board certified in any legal specialty by the Texas Board of Legal Specialization. Stephen E. Menn is an attorney licensed to practice law in the state of Texas since 1983. Stephen E. Menn has been licensed to practice law in federal court since 1985.