On February 10, 2021, PalterLaw partner Nathanial Martinez and associate Joshua “Jay” Minton secured a favorable verdict on behalf of their client Four Corners Development, LLC against Alsal Construction, Inc. Four Corners is a subcontractor that worked on an assisted living facility in Mansfield, Texas under a $1.4M subcontract with the general contractor Alsal. Four Corners filed its lawsuit in 2019 against Alsal alleging that Alsal had failed to make full payment under a subcontract agreement between the parties. After a two-day bench trial conducted via Zoom before Judge Martin Hoffman, the Court found that Alsal had breached its contract with Four Corners. Judge Hoffman entered a Final Judgment on February 22, 2021, awarding Four Corners damages in the amount of $445,159.60 plus attorneys’ fees in the amount of $40,000.

“This was my first Zoom trial in Dallas County which made the victory all the more exciting,” said Martinez. “The client is very happy with this result.”

The case, styled Four Corners Development, LLC v. Parwaiz Alam and Alsal Construction, Inc., was tried in the 68th Judicial District of Dallas County, Texas, Honorable Martin Hoffman, presiding.

On November 1st, the firm welcomed Jerry L. Carlton to our expanding Multifamily Property Management practice area. With over 40 years of experience in the field, Jerry advocates for and advises clients on a multitude of topics, including evictions,  landlord-tenant disputes, fair housing and employment discrimination claims, COVID-19 compliance, employment, construction, vendor/customer, bankruptcy and mold claims.

Growing up on a dairy farm in West Texas and co-founding a business with his daughter that grew to 40 employees in only four years, Jerry applies deeply personal business insight to every case he handles, and truly understands his clients’ challenges. He speaks regularly to North Texas professional apartment associations and serves as one of only five members of the Legal Counsel Advisory Council of the Texas Apartment Association.

Jerry and his wife, Sally, who is an attorney and insurance company executive, enjoy entertaining friends with creative cooking and cocktails, love to travel, and treasure their children and grandchildren. 

Palter Sims Martinez PLLC is proud to announce that members John Palter, Kimberly Sims and Nathanial Martinez have once again been designated “Super Lawyers,”  as announced in the new edition of Super Lawyers magazine. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations obtained and tabulated by research firm Thomson Reuters. Mr. Martinez received the special designation “Rising Star.” While up to 5 percent of the lawyers in Texas are named to Super Lawyers, no more than 2.5 percent are named to Rising Stars. To be eligible for Rising Stars, a lawyer must be 40 years old or younger, or in practice for 10 years or less.

All employers should be aware of a new fraudulent unemployment benefit scheme. The Texas Workforce Commission (“TWC”) is actively working to address a scam involving fraudulent applications for unemployment benefits. Generally, the “claimants” who appear to be seeking benefits are innocent victims of identity theft. A typical attack involves a third party improperly obtaining a password or routing number through a hacking or phishing attack.

You can read more about the TWC’s action to prevent this scam here.

To avoid this scam and protect yourself or your company from being at risk, we suggest taking the following actions:

1. Create a centralized system for reviewing all unemployment claims and screening for potential fraud, and assign it to an individual or a department for monitoring.
2. Train, or otherwise inform, all employees on the necessity for informational security to safeguard personal information which may be subject to a breach by a third party leading to identity theft. Such information includes, e.g., social security numbers, passwords, and routing numbers.
3. Submit any known or suspected cases of unemployment fraud to the TWC via the fraud reporting portal on their homepage. A link to the portal can be found here. 

We agree with the TWC’s executive director that “all fraud is a betrayal of the taxpayers and a shameless exploitation of the suffering of others for the fraudster’s personal gain.” Make sure you and your company are protected against these attacks by taking these preventive measures.

If you have any questions, or desire assistance in these and other employment matters, please contact John Palter at jpalter@palterlaw.com or Greg Eyster at geyster@palterlaw.com.

This article is posted for informational purposes only, is not intended as legal advice, and does not create an attorney-client relationship. Links to external resources are provided as a convenience only; external information may change, become outdated or be removed.

As we near the half-way mark of 2020 – an election year – it is clear that politics, and, more specifically, political speech, is going to dominate water cooler discussions in many businesses across Texas. With those discussions come the chance (or risk) for impassioned and potentially fiery discussions about the direction of the country. Indeed, in March, a Pew research study discovered that the share of adults who see “strong” partisan conflicts – particularly the share who perceive “very strong” conflicts between Democrats and Republicans – is much higher today than in 2016 or 2012, when the last two presidential elections took place.

In this politically-charged environment, private employees[1] across the state may wonder what they can and cannot say in the workplace, or what they can and cannot do when “off the clock.” While no one should ever feel the need to censor themselves, employees should, at a minimum, be aware of the consequences of some of their political speech and conduct when it comes to their employment.

First Amendment Protections Severely Limited in Texas Workplaces

Texas is an “at-will” state. This basically means that, absent a statute or an express agreement to the contrary (such as an employment contract), a Texas employer may modify any of the terms or conditions of employment, or terminate the relationship altogether, for any reason, or no particular reason at all, with or without advance notice. The general exceptions to this rule are that a discharge or adverse employment decision cannot be based upon a person’s race, color, religion, gender, sex, age, national origin, disability, or citizenship.[2]  In addition, no person may be discharged because the person is engaging in some statutorily protected activity (e.g., filing a wage claim, etc.).

In “at-will” states such as Texas, because you can be fired for any reason at all, an employer may fire you for political speech and/or conduct, whether done at work or off-the-clock. Texas and federal courts have not construed such speech as a purely protected activity in the context of private employment. Therefore, an employee’s participation in such speech or conduct does come with risks.

Some Speech is Protected under the National Labor Relations Act

Some speech that might be described as at least partly “political” is specifically protected and may not form the basis for termination, such as what may be referred to as “union speech.” Specifically, Section 7 of the National Labor Relations Act (NLRA) grants the following protected right to all private-sector, non-supervisory employees: “…to engage in… concerted activities for the purpose of collective bargaining or other mutual aid and protection.” Accordingly, under the NRLA, employers may not “interfere with, restrain or coerce employees in the exercise of” the employee’s section 7 protected rights. Section 7 has been given a wide berth by courts, as “mutual aid and protection” is generally read to include any employee-interested motivation, such as concerns on compensation, hours, working conditions, supervisors, and workplace policies.

Is Speech the Only Basis?

Even where an employer discharges an employee for certain unprotected speech or conduct, an employee may still have grounds to challenge the discharge if there were additional unlawful reasons for termination and the speech at issue was merely a pretext. For example, if a black employee attends a political rally and is fired because the employer finds out, but a similarly-situated white employee is not fired for attending a counter-rally, the termination may be determined to be discriminatory. Any challenge to an employer’s decision will depend on the facts surrounding the termination, and an employee who questions the motivations of their employer’s adverse action should consult with a labor attorney as soon as possible to ascertain their rights.

Do Not Be Silent, But Be Wise

St. Catherine of Siena once said, “[p]roclaim the truth and do not be silent through fear.”  While speech protections for Texas employees are indeed limited in the private workplace, employees need not let that fact silence them entirely. Instead, employees should be smart and cautious about their political participation. Employees may even seek to start a dialogue with their employers to see what may and may not be tolerated. In this political climate, which is filled with harsh words and criticism, an olive branch from an employee to an employer, or vice versa, seeking to arrive at an understanding, would be a refreshing change of pace.

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[1] A public employee is an employee or appointed officer other than an independent contractor who is paid to perform services for a state or local governmental entity.

[2] In addition, on June 15, 2020, the Supreme Court ruled that Title VII of the Civil Rights Act, which prohibits sex discrimination, protects gay and transgender workers from discrimination in the workplace, including termination. Read the opinion here.

On June 1st, the firm welcomed commercial trial and appellate lawyer Gregory A. Eyster to our team of dedicated legal professionals. Greg is a native of Austin, Texas, and served Tarrant County for several years in the Tarrant County District Attorney’s Office before entering private practice in Fort Worth. Greg’s extensive trial and appellate experience gives him a significant edge in pursuing effective solutions for business clients, both at the courthouse and in the boardroom.

After completing his undergraduate studies at The University of Texas at Austin, Greg received his law degree magna cum laude from St. Mary’s University School of Law, where he served as Comment Editor of the St. Mary’s Law Journal. After graduation, he clerked at the Texas Court of Criminal Appeals.

“I met Greg when he was my opponent on a case several years ago,” said firm member Kimberly Sims. “I was impressed by his skill and professionalism, and am excited that he will now be working with me instead of against me. We are delighted he has joined our firm.”

Greg is a recently-qualified keel boat sailor who also enjoys fishing and golfing. He and his wife Rebecca, who is also an attorney, are busy raising their daughter and four sons in Hurst, Texas.

COVID-19 and Commercial Leases: What Texas Tenants And Landlords Should Consider During This Public Health Emergency

With the recent emergence of social distancing guidelines and shelter-in-place orders in areas such as Dallas County, the novel coronavirus, which causes the disease known as COVID-19, has substantially disrupted the day-to-day operations of many businesses across the Texas. Some businesses face the very real prospect of being shuttered by the sheer weight of accumulated financial obligations that cannot readily be satisfied because of the virus and accompanying governmental orders. Many business owners may wonder, among other things, if they have any recourse to avoid – or, at the very least, postpone – their obligations as tenants under their respective commercial leases.

This article provides a high-level summary of potential avenues that commercial tenants may, depending on their circumstances, utilize to secure much needed relief during these difficult times.

Plain Language of Contractual Provisions in Commercial Leases

Commercial tenants should begin, first, by carefully reviewing their lease documents to see if they have included any specific contractual provisions that could help them to accomplish their goals. For example, many commercial leases have what is known as a “force majeure” clause, commonly referred to as an “act of God” clause. Under Texas law, the term “force majeure” describes a particular type of event which may excuse performance under a contract; usually, it is an unexpected event outside of the control of either party. To determine whether a certain event excuses performance, courts typically look to the language that the parties specifically bargained for in the contract to determine the parties’ intent, rather than resorting to any traditional definition of the term. Indeed, contractual terms are controlling regarding force majeure with common law rules merely filling in gaps left by the document. In other words, when the parties have themselves defined the contours of force majeure in their agreement, those contours dictate the application, effect, and scope of force majeure.

Because the application of a force majeure clause turns on the exact language contained in that provision, it is very important for commercial tenants and landlords to carefully review the language to determine if a situation such as the current COVID-19 pandemic would qualify. A concerned tenant or landlord should look for terms such as “pandemic,” “contagion,” “disease,” and “public health emergency.”

Common Law Doctrine of Frustration and Impossibility

Another potential tool that a struggling commercial tenant might employ is the common law doctrine of frustration and/or impossibility. Under these legal doctrines, if the purpose of a lease is totally frustrated by a supervening event of which the lease says nothing, and compliance with the obligations is rendered impossible, the lease may be dissolved and the parties may be excused from their obligations thereunder. The case law on this subject is not extensive in the context of health pandemics such as COVID-19, which are historically rare. Nevertheless, in light of more stringent lockdown measures such as the recent shelter-in-place order by Dallas County, and potentially more to come from other counties, a tenant might be able to use the doctrines of frustration and impossibility to avoid (or postpone) its obligations under the commercial lease.

Seeking Relief Directly from Landlords

If a commercial lease force majeure provision does not account for a pandemic or public health emergency, or if the circumstance of a particular case does not rise to the level of frustration or impossibility, a tenant’s only recourse may be to have a frank and honest conversation with the landlord to obtain short-term relief. These types of interactions are never easy, but they may be necessary for a struggling business. In today’s global environment, many landlords are feeling pressure to work out short-term, temporary deals with their tenants, especially where eviction may be halted or stymied by court closures. Nevertheless, it is important to understand that a landlord may not have the flexibility to forgive or postpone rent if they are subject to are strict loan or insurance requirements.

COVID-19 presents new challenges for many commercial tenants and landlords, and their respective attorneys. It is safe to say that future contracting parties will no longer look at the terms in force majeure provisions the same way. Tenants and landlords should consult with real estate and property law professionals to examine their specific circumstances to determine what they can do to reduce the financial impact of this global pandemic.

Nathanial Martinez is a civil litigation attorney in Dallas, Texas who focuses on commercial real estate, construction, and employment law at his firm Palter Sims Martinez, PLLC. He expressly incorporates herein all disclaimers of all law firm blogs everywhere. These are his opinions, not the opinions of his firm or clients, so do not cite any part of this post against him in an actual case. Every case is different, so do not rely on this post as legal advice for your case.

In August 2019, Nathanial Martinez of Palter Sims Martinez PLLC secured a favorable  jury verdict on behalf of his clients Hertz Electric LLC and HJC Global Electric LLC against James Benge and Benge General Contracting LLC. The Benge parties had initially filed the lawsuit against the Hertz parties alleging defective workmanship as the basis for not paying the Hertz parties for the work they performed. Martinez was able to obtain dismissal of all of the Benge parties’ affirmative claims through summary judgment before trial and directed verdict during trial.  After a four-day trial,  Dallas County jury unanimously found that the Benge parties had committed both breach of contract and fraud against the Hertz parties in connection with certain electrical and painting work performed at several commercial projects in DFW, including restaurants such as Quill Lounge and Matchbox Pizza. The jury awarded the Hertz parties damages under both the fraud and contract theories of the case and their attorneys’ fees. In addition, the jury found that James Benge was the “alter ego” of Benge General Contracting LLC because he had caused Benge General Contracting to be used for the purpose of perpetrating and did perpetrate an actual fraud on HTJ Global and Hertz Electric primarily for his own direct personal benefit.

“This case had been reset for trial over nine times, and my clients were beginning to wonder if they would ever get this to a jury,” said Martinez. “I cannot begin to describe how elated they are with this hard-fought and well-deserved result.”

The case, styled Benge General Contracting LLC v. Hertz Electric LLC and HJC Global Electric LLC v. James Benge, Individually, was tried in the 160^th Judicial District of Dallas County, Texas, Honorable Aiesha Redmond, presiding.

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