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  • How to Setup an LLC in Texas: Picking a Name

    Picking the name can actually be difficult both creatively and legally. Legally, you have to ensure you do not pick a name that is the same or similar to another company\’s name. There are three categories of name similarity:

    1. The names are the same. Fairly straight forward. (1 TAC ?79.3

    2. Names that are deceptively similar. They are not the same but could confuse someone. (1 TAC ?79.37)

    (1) The difference in the names consists in the use of different words or abbreviations of incorporation or organization;
    (2) The difference in the names consists in the use of different articles, prepositions, or conjunctions;
    (3) The difference in the names consists in the appearance of periods, spaces, or other spacing symbols that do not alter the names sufficiently to make them readily distinguishable; or(4) The difference in the name consists in the presence or absence of letters that do not alter the names sufficiently to make them readily distinguishable in oral communications.

    3. Names that are similar and require a letter of consent. Meaning, if one of the following is true then the similar is acceptable if you get a letter of consent from the other company with the similar name. (1 TAC ?79.40 & TAC ?79.43)

    (1) The proposed name is the same as or deceptively similar to another name except for a geographical designation at the end of the name;
    (2) The first two words of the proposed name are the same as or deceptively similar to another name and those words are not frequently used in combination;
    (3) The proposed name is the same as or deceptively similar to another name except for a numerical expression that implies that the proposed name is an affiliate or in a series with another entity;
    (4) The proposed name uses the same words as another name but the words are in a different order in the names;
    (5) The proposed name is the same as or deceptively similar to another name except for an Internet locator designation at the end or at the beginning of the name (e.g., www., .com, .org., net); or
    (6) The difference in names consists of words or contractions of words that are derived from the same root word and there is no other distinguishing word in the name.

    If you would like help setting up your new business, call Daly & Campbell to set up a phone or office meeting to discuss your specific situation and needs.

  • Texas Non-compete Agreements

    Non-compete agreements are important to Texas business owners who understand the importance of protecting their business, goodwill, trade secrets, and other confidential or proprietary information. It is also extremely important for business owners who invest their time and money in employees. Without an enforceable non-compete agreement, a business owner can spend loads of resources on an employee who in a short time takes that training and experience only to start the same business as a direct competitor.

    While non-competition agreements are enforceable in Texas, these agreements must follow the following guidelines:

    1. The agreement must be ancillary to or part of an otherwise enforceable agreement
    2. The agreement must have \”reasonable\” limitations with regard to its limitation as to time, geographical area and scope of activity.

    Ancillary To or Part of an Otherwise Enforceable Agreement

    The most common reason a non-compete agreement is determined to be unenforceable is that it is not part of an otherwise enforceable employment contract or the non-compete agreement itself is not supported by \”consideration.\” Often times we see business owners have at-will employees sign a non-compete, non-solicitation agreement but give nothing to the employee in return. This is what the law means when referring to \”consideration\”. Business owners wrongfully assume that the employees\’ paycheck and continued employment is the consideration but it is not. Texas is an at-will employment state meaning that without an employment contract, the employer or employee can terminate the employment at any time without cause. In this context, at-will employment does not create an enforceable agreement beyond the employee getting paid for work completed.

    Reasonable Limitations

    Texas law provides that a covenant not to compete is reasonable if it is limited in duration, geographical area, and scope of business activities. There are no bright-line rules but instead, the reasonableness is reviewed on a case-by-case basis. Courts will likely uphold an agreement that lasts for 1-2 years after termination and is limited to restricting business activities similar to the employee\’s former job duties. Is it still possible for the former employee to compete against the former employer Yes. The geographical restriction is how far a former employee must be from the former employer before they are able to conduct business activities that would otherwise be prohibited by the non-compete agreement. The reasonable of this restriction is much more industry-specific. A good example is a barbershop. Would it be unreasonable to agree that a former employee cannot immediately open a barbershop across the street Yes. Would it be unreasonable for them to open a barbershop in another city or in the same city. Maybe. The geographical restriction should only be an area sufficient to discourage a customer from traveling to the new barbershop. How far are you willing to drive to your barber? That is the question that the judge or jury will be contemplating when reviewing your non-compete agreement.

    Daly & Campbell have litigated non-compete agreements in counties across our area however the agreements have rarely been enforceable. If you are a business owner or former employee facing an issue with a non-compete agreement, contact us so that we can guide you to a successful outcome. If you are a new business or a person considering a new job opportunity, now is an even better time to contact us so that we can help you avoid future problems.

  • Employment Lawsuits: A Laundry List of Reasons to Sue or Be Sued

    Work and employment related lawsuits are far more common than most people realize.  Employers and employees need more awareness about what can get them in trouble.  You should be familiar with some things in our list but maybe surprised by others.

    1. Discrimination
      1. Gender, Age, Race, National Origin, Religion – Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.
      2. Age – Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621-634.
      3. Termination while nearing retirement – Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461.
      4. Race, color, national origin, religion and sex – Texas Labor Code, Chapter 21, Texas Labor Code §21.001 et seq.
      5. Genetic Makeup – Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. § 2000ff
      6. Disabilities – Americans with Disabilities Act of 1990, 42 U.S.C. §§12101-12213
      7. New Parents – Family and Medical Leave Act of 1993, 29 U.S.C. 2601 et seq.
      8. Membership or non-membership in a union – National Labor Relations Act, 29 U.S.C. 151-169.
      9. Gender Compensation Inequality – Equal Pay Act, 29 U.S.C. §§ 206(d) et seq.
      10. Military Service Interference With Work – Uniformed Services Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. §§ 4301-4333
      11. Citizenship or immigration status – Immigration and Nationality Act, 8 U.S.C. § 1324b
      12. Discriminating against an employee based on the employee’s status as a debtor or bankrupt individual under the Bankruptcy Code – Federal Bankruptcy Code, 11 U.S.C. § 525(b).
      13. Discriminating against someone for having to pay child support – Texas Family Code, Section 158.209
    2. Retaliation
      1. Retaliation against an employee for filing a complaint or testifying as to violations of established occupational health and safety standards – Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651-678.
      2. Whistleblower Protection – Sarbanes-Oxley Act, 18 U.S.C. §1514A
      3. Workers’ compensation retaliation – Texas Labor Code, Chapter 451 (Workers’ Compensation Retaliation)
      4. Retaliation for Jury Service – Jury System Improvement Act of 1978, 28 U.S.C. § 1875 & Texas Civil Practices and Remedies Code, Section 122.001 (Juror Re-employment)
      5. Retaliating against an employee based on how an employee voted – Texas Election Code, Section 276.001-276.004 (Employee Voting) 
    3. Not paying the national minimum wage – Fair Labor Standards Act, 29 U.S.C. 201 et seq.
    4. Asking or requiring applicants or employees to take a polygraph test – Employee Polygraph Protection Act of 1988, 29 U.S.C. §§ 2001-2009.
    5. Notice of “Mass layoff” – Worker Adjustment Retraining Notification Act, 29 U.S.C. §§ 2101-2109.
    6. Withholding Nonexempt Employees Wages – Texas Pay Day Law, Texas Labor Code §§ 61.001 et seq.
    7. Breach of Non-compete Agreement – Texas Law on Covenants Not to Compete, Texas Bus. & Comm. Code, §§ 15.50-15.52
    8. Failure to train agricultural laborers regarding exposure to hazardous chemicals –  Texas Agriculture Code, Section 125.013 (Agricultural Hazard Communication Act)
    9. Refusing to permit an Employee absence from work to serve as political delegate – Texas Election Code, Section 161.007 (Attendance at Political Convention)
    10. Defamation
    11. Assault & Battery
    12. Fraud
    13. Negligent hiring, training, supervision or reference
    14. False Imprisonment
    15. Wrongful Discharge

    Daly & Campbell have helped both employers and employees that have found themselves in these types of circumstances.  If you need help or have any questions, never hesitate to call us.

  • How to Setup an LLC in Texas: Overview

    We enjoy nothing more than helping someone start a new business. When at the ground level of an endeavor, your first steps can matter the most. Selecting the proper business entity and structure generally concerns liability, taxation, governance and funding. If the business is not reliant on venture capital or selling stock, an LLC is an excellent option. LLC’s provide liability protection of personal assists. LLCs can elect to be taxed as a partnership or as an S Corp. LLCs do not have intensive governance requirements.

    How do you set up an LLC?

    1. Pick a name
    2. Pick a Registered Agent (which can be you)
    3. File a Certificate of Formation with the Texas Secretary of State (online)
    4. Pay the filing fee
    5. Create and execute an Operating Agreement
    6. Receive your Certificate of Filing from the Secretary of State
    7. Get an EIN from the IRS (online)
    8. Take your Certificate of Filing and EIN to the local bank so you can have a place to store all your profits

    Is it more complicated then that? Yes and no. Continue reading about LLC formation by reading the next article about picking a name.

    Read more about picking a name for your LLC.

    It might be slightly more complicated then the list indicates. If you would like help setting up your new business, call Daly & Campbell to set up a phone or office meeting to discuss your specific situation and needs.

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