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Texas law favors settling disputes by arbitration, as it is intended to provide a less expensive, quicker means of resolving a dispute than litigation. However, in some cases, forcing a party to participate in arbitration can have the opposite effect. For example, in Houston ANUSA, LLC v. Shattenkirk, the Houston (14th) Court of Appeals recently ruled that an arbitration provision in an employment contract was “substantively unconscionable” because the cost of arbitration would be so excessive as to prevent the party from asserting his claims. In Shattenkirk, an employee filed suit against

Must an employer pay commissions to an at-will employee earned after the employee’s date of termination?  The Texas Supreme Court recently weighed in on this issue, reminding employers that written expectations and terms of employees, their positions, their salaries and/or earnings is crucial. In Perthuis v Baylor Miraca Genetics Laboratories, the Court concluded the state’s “procuring-cause doctrine” applies to commission (or sales) payments for an employee no longer employed with employer at the time the commission is collected. In 1916, the procuring-cause doctrine was established

Recently, the Virginia governor signed into law “SB550,” which explicitly makes “pay-if-paid” clauses unenforceable by statute, joining six other states with similar laws. Texas also has a statute governing pay-if-paid or contingent payment clauses, though does not outrightly void them.  What are contingent payment clauses and what are the statutory restrictions in Texas on their enforceability?  This article provides a primer. What are contingent payment clauses? Contingent payment clauses are just that, clauses that provide that when X happens, Y occurs (i.e., X is a condition prec

Characterizing someone as an independent contractor or an employee can have significant monetary consequences.  Under the Fair Labor Standards Act (FLSA), employees are entitled to benefits including overtime pay and minimum wage. Independent contractors, however, are not. As a result, the distinction between an employee and an independent contractor can be an important determination for a business to make. Traditionally, courts have applied a multi-factor test, known as the economic realities test, to “determine whether, as a matter of economic reality, an individual is in business for him

The Miller Act, 40 U.S.C. §§ 3131-3134, governs performance and payment bond acquisition and claims on federal projects (that is, projects being constructed on US Government property, or for the US Government or any agency of the US Government). Unlike the many tricky provisions hidden in the Texas Mechanics’ Lien statute, the Miller Act is relatively simple to maneuver, but not without pitfalls for the unwary.  Under the Miller Act, contractors on federal projects must post two bonds: A performance bond and a labor and material payment bond. A corporate surety company issuing these bonds