Why Construction Businesses Should Protect Lien Rights

With the current COVD-19 situation and the fact most businesses are shut down, despite construction being considered an essential business, we are noticing a frequency of situations where the owner has suspended payments on their construction projects. While understandable, it will only compound the financial problem. When this occurs the most important step to take as a contractor, subcontractor and/or vendor is to preserve your lien rights. 

  Protecting your lien rights may not get you paid any faster but having a valid lien will ensure eventual payment. Below are several necessitous steps to take to ensure your Lien Rights are protected.

The First Step in Protecting Your Lien Rights

  The first step in protecting your lien rights is a pre-lien notice. Specifics on the pre-lien notices depend on if the claimant is a “first-tier” subcontractor or a “second-tier” subcontractor or below.

  •   A “first-tier” subcontractor is one that has a contract with the general contractor. A “first-tier” subcontractor only has to give one pre-lien notice.  The notice must be sent to the Owner and general contractor informing them of the unpaid balance not later than the 15th day of the third calendar month following each month the labor and/or material was delivered.
  •   A “second-tier” subcontractor is one that has a contract with a subcontractor of the general contractor.  A “second-tier” subcontractor must give two pre-lien notices.  The first notice must be sent to the general contractor informing him of the unpaid balance not later than the 15th day of the second calendar month following each month the labor and/or material was delivered.  The second notice must be sent to the Owner and general contractor informing them of the unpaid balance not later than the 15th day of the third calendar month following each month the labor and/or material was delivered.

If you have a contract with the owner, you are considered an original contractor (general contractor) and no notice is required.

What to Include in the Pre-lien Notice

The notice to the owner should include the following “funds trapping” language:

“If this claim remains unpaid you may be personally liable and your property may be subject to a lien unless:

              1. you withhold payments from the contractor for payment of the claim, or

              2. the claim is otherwise paid or settled.”

The Second Step in Protecting Your Lien Rights

The next step is to file your lien affidavit in the county in which the project is located.  The lien affidavit must be filed not later than the 15th day of the fourth calendar month after the last day of the month in which you performed labor or supplied material. The statutory notices are deadlines. There is no penalty for sending the notices or filing the lien affidavit early.

What If the Claim is For Retainage?

If the claim is for retainage, a claimant must send the requisite notices and file the lien affidavit for retainage no later than the 30th day after the work was completed.

  The lawyers at Murray|Lobb Attorneys, PLLC are ready to help you with your lien perfection needs. Contact us for consideration of your specific needs. This notice is designed to be informative and no attorney/client relationship is created unless we enter into a formal agreement, hiring us as your attorney. This notice is intended to aid in guidance and is not necessarily authoritative in relation to your specific situation. Because special statutory rules apply to residential construction, this notice does not apply to residential contracts.

Steps to Take Before Searching an Employee’s Work Area or Property

When expensive company property goes missing or an employee reports that a new wallet was stolen from his desk while he briefly left his office, you will want to immediately search for the missing item. However, you can quickly encounter legal problems if your employees have not already consented to such workplace searches.

The best way to remedy this situation is to update your current employee handbook, adding a policy addressing this topic. If you do not have a handbook, it would be wise to draft one now, carefully including a provision about searches, including a statement that they will only be conducted when valid reasons make them necessary. (You should always conduct searches with at least one other supervisor with you – to help document that it was handled properly).

What follows is a brief review of search standards that may apply to different types of employees, the most common items employers often look for during searches – and the importance of never inappropriately touching any employee during a workplace search. You must also avoid detaining an employee in a manner that could be considered “false imprisonment.”

Search standards can vary, based on the employment status of the workers involved

The Texas Work Commission addresses this topic on its website, in an article titled: “Searches at Work – Legal Issues to Consider.”

           1. Legal standards that apply to state and federal government employees. Federal and state constitutional provisions prohibit subjecting these workers to any “unreasonable searches and seizures.” This prohibition is set forth in the Fourth Amendment to the U. S. Constitution, made applicable to the states through the due process clause of the Fourteenth Amendment (under the incorporation doctrine). The nature of this type of violation is discussed further below.

            2.  Standards that apply to private company employees. While the strict standards, statutes and governing case law may sound less strict for these workers, private businesses must still conduct their searches cautiously – or become vulnerable to lawsuits based on one or more of the following claims.

  • Assault and battery. This would likely involve the searched employee claiming that you wrongfully – without obtaining prior consent (or in keeping with known company policy – touched him/her wrongfully.
  • False imprisonment. You detained the worker in a manner that exceeded your rights under the circumstances.
  • Wrongful termination. You cannot fire someone when you do not find the contraband or stolen items you thought you might find. Be sure to have a clear policy in your employment handbook that outlines how many warnings an employee must be given prior to being let go. (However, if the worker is an “at-will” employee, you can terminate that person at any time, without having to state a reason or explain your actions).
  • Negligent or intentional infliction of emotional distress. Always handle search matters in a private setting – where you are not putting the employee’s reputation on the line or subjecting the person to embarrassment in front of others.  When conducting an actual search, always ask all workers in the area to take a work break and wait 15 minutes before returning to their cubicles, offices or nearby work areas.

It is also wise when conducting a search (or disciplining an employee), to have another management official present who can vouch for how everything was handled – prior to writing up a report documenting the events. You may also want to ask the employee to voluntarily sign and date the statement you write up, indicating what took place. Be sure to note that either you acted under the authority of a known workplace search policy – or that you obtained the employee’s advance permission before conducting the search.

What items are employers often looking for during a locker or work area search?

  1. Stolen property. This may belong to the company or to another employee.
  2. Drugs or alcohol
  3. Any type of dangerous weapon, including certain knives. Be sure to address all the types of weapons that employees can never bring to work in your employee handbook.

What might constitute an unreasonable search and seizure?

  1. Searching an employee’s work area or locker without attempting to provide advance notice. However, if this is a right you reserved for the company in the employee handbook, advance notice may not be required. Be sure to note that even if an employee secures his/her locker with a personal lock, you must still be given access to the contents.
  2. Conducting the search in front of the employee’s co-workers. This should always be avoided, even if the other employees must be asked to take a work break or go gather in a nearby conference room until you invite them to return.
  3. Physically touching an employee or yelling while interacting with the person. Be polite and treat the person as you would want to be treated. After all, it may be up to a court to later determine if your company owes the employee any monetary damages.

Can you ever, in any permissible way – physically search a worker’s body/clothing?

This should always be avoided at all costs. However, you can – with another management employee present in a private office – ask the employee to voluntarily empty his or her pockets. You can also ask the worker to empty out the contents of a briefcase, purse or wallet. If the person refuses to do as you ask – and you have no stated company policy in place about searches, you cannot insist that the employee do as you ask.

If you fear some serious theft has occurred, you should inform the employee of your concerns and contact the police. Should the police visit your office, you can allow them to conduct the physical search – if they determine that one is immediately necessary.

While this overview is not intended to be comprehensive, it should provide you with a basic understanding of why all workplace searches must be handled with great care.

Please feel free to contact one of our Murray Lobb attorneys to discuss this specific employment law problem – or any other — at your convenience. We are also available to help you with your general business and estate planning needs. And we can readily draft the contracts and documents that you regularly need.

Estate Planning: Becoming a Texas Organ and Tissue Donor

If you’ve ever known someone waiting to receive an organ, you know how stressful the process can be. Most of those requesting help are either fighting to save their lives or to greatly improve their health. Fortunately, there’s a national transplant waiting list that’s been set up to match donors and recipients in Texas and all other states.

Since many people want to help with this critical need, they often ask their lawyers how they can become donors. This article will describe what you should do — besides simply indicating this desire on your Texas driver’s license.

A few statistics are set forth below to help those trying to decide if they’re ready to help others in this way, followed a description of the other steps you should take to be sure your decision to become a donor is faithfully honored in the future.

How many people’s lives are at stake annually due to the need for organ donation?

  • About 20 Americans die each day due to the lack of available organs
  • Since 1988, about 700,000 transplants have been performed in this country
  • Nearly every 10 minutes, a new name is added to the donor recipient list
  • It only takes one donor to save as many as eight lives. In fact, one donor can improve the quality of life for over 100 individuals – just by making extensive tissue donations
  • The most commonly transplanted tissue is the cornea of the eye
  • Roughly 6,000 living donations are made each year. And one-fourth of the donors are not family members or biologically related to the person in need.
  • About 1 in every 26 Americans has a kidney disease without knowing it – that equals about twenty-six million people who might one day require a transplant.

Living donors are also needed. Healthy people can donate part (or all) of a kidney, liver, intestine or lung. Sick patients are also in need of bone marrow and blood from healthy donors.

How do most Texans handle this decision to donate tissue or organs?

States like Texas have tried to simplify this process by allowing those wishing to donate their organs or tissues (in the future) to indicate that on their Texas driver licenses. Residents of the state can also have their Houston estate planning attorney directly state this commitment in their Medical Power of Attorney or Advance Directive. This latter approach can help remove the anxiety from the shoulders of family members once this information has been legally documented in this manner.

The third way people can indicate their desire to be organ donors is to directly sign up with DonateLifeTexas.org . You can learn more about this process by watching the following video created by DonateLifeTexas.org .

Please feel free to contact any of our Murray Lobb attorneys so we can meet all your business and estate planning needs. We look forward to sharing our legal skills and advice with you.

Important Legal Tips for Communicating with Disabled Employees

Since everyone deserves to be treated with respect, employers must make sure that they’re communicating professionally and politely with all their disabled workers. Careless employers who speak callously with their disabled workers not only set a poor example for everyone else in the workplace – they also increase their chances of being sued for unlawful discrimination under the Americans with Disabilities Act (ADA).

Here are some other important tips that can help you create a more pleasant work environment for everyone – that’s also fully compliant with the ADA.

Examples of workplace situations that may require special communication skills

  • When someone present in a meeting has a hearing disability. Should there be an employee present with a known hearing impairment, always remind everyone to speak one at a time – and never “over” one another. That will help everyone more easily follow the conversation and possibly take notes. Of course, never refer to the person by name who may need this simple accommodation.
  • Always speak directly to the disabled person. Even when someone has a sign language interpreter, always turn and speak to the disabled person – and not their helper or other companion – whenever possible.
  • Be honest with the disabled during regular workplace evaluations. This is important so they’ll have the chance to improve their performance – and request any new accommodations they may need. They deserve an honest appraisal like everyone else. This will also limit the chances of painful misunderstandings in the future. Be willing to give them concrete ideas for how they can improve the quality of their work.
  • Be prepared to shake the hand of a disabled person – even if this means shaking their left hand and not their right one. This is a simple gesture that communicates respect and equality. You don’t need to shake the person’s hand for an extended time period.
  • Always introduce yourself when speaking with someone who is sight impaired. Be sure to also identify everyone else who is present during the conversation.
  • Never pat anyone who is very short (or in a wheelchair) on the head or shoulder. This makes all adults – and even older teens – feel a bit demeaned. We all have a right to have our “personal body space” fully respected by others.
  • Should you decide to offer a disabled person your assistance – wait briefly to find out if they would like to accept it. For example, it’s possible you may want to help someone transfer from a wheelchair or walker to a nearby chair. However, be aware that many disabled people want to move about on their own as much as possible, to maintain their sense of independence.
  • Be sure you’re addressing the disabled person in the same manner as everyone else present. Far too often, well-meaning bosses or employers may refer to the new department head who’s disabled as “Johnny” – while calling everyone else in the room by his or her last name. Be consistent with how you refer to all who are present.
  • Don’t lean on, move, or play with a disabled person’s crutches, wheelchair or walker. You may think you’re just being lighthearted – but when you do this, you’re calling attention to the person’s disability when that person may simply want to blend in with everyone else. However, if you believe it’s a safety hazard to leave a wheelchair or other assistive device where the disabled person left it, always politely ask that person if you can move it to a different location to make it easier for everyone to walk in that area. Also, be sure to tell the disabled person that you’ll personally retrieve the device when the meeting or seminar is about to end. Finally, never lean on someone’s wheelchair for support – that often makes disabled people feel like you’re violating their personal body space – and that can make them feel very uncomfortable.
  • Be very respectful when listening to a disabled person talk who has a speech impediment. Never assume you’re helping them by suddenly announcing a “translation” or “clarification” of what was just said. Instead, if you think you and others were left a bit confused by what was stated, calmly wait until the person finishes talking and say something like, “So, if I understood you correctly, you’re asking or suggesting that we start handling this account differently in this manner” – repeating what you think you heard. If you misunderstood what was said, then give the person a chance to repeat what they said earlier – or allow them to present it to you in a different way.
  • If someone you need to speak with is in a wheelchair, respectfully pull up a chair so you can speak with that individual at eye level. This conveys both respect and equality.
  • Never assume that all hearing-impaired people can read lips. Should you need to gain the attention of a hearing-impaired person who is looking off in a different direction, very lightly tap the person on his/her shoulder to gain their attention (assuming you’re not interrupting another conversation). If you’re certain someone can lip read – stop eating, drinking or smoking – so it will be easier for that person to follow what you’re saying.
  • Try to interact naturally with the disabled. Should you accidentally say something like “Did you hear that there’s an extra meeting next week?” – only to realize you said that to someone who is hearing impaired, forgive yourself. You can then point to a flyer about the meeting or write the information down on a piece of paper and hand it to the disabled person.

Always remember to stay calm and polite, even if you’re finding it hard to communicate with the disabled worker – and realize that the situation may be far more frustrating for that individual. If you’ll be speaking with one or more disabled people during a meeting, try to let them know, in advance (through a medium they can easily access like email), that you’ll be supplying everyone with a complete summary of the meeting’s highlights in a follow-up email.

If one or more workers are sight-impaired and read Braille, let them know that you’ll get a copy of the meeting notes to them in that format (if you have that capability) within one to two business days. Also, tell them that you’ll be happy to answer any questions they may have prior to their receiving their copy of that summary. Finally, whenever possible, use such terms as “hearing impaired” instead of deaf – and “sight impaired” in the place of blind.

Please feel free to get in touch with one of our Murray Lobb attorneys so we can provide you with any guidance you may need when relating to your disabled employees. We’re also available to provide you with legal advice concerning many other general business, estate planning or employment law topics. And we can draft a wide variety of legal documents on your behalf or help you revise an outdated employee handbook.

Minimizing Chances of Violence When Terminating Difficult Employees

Although some angry former employees who’ve been fired have tried to physically harm or kill their former employers and co-workers, there are constructive steps you can take to greatly lower the chances of any workplace violence. After all, most workers don’t suddenly begin doing poor work or behaving rudely to others. There is usually an extended time period when a person’s work starts to deteriorate.

If you’ll conscientiously conduct regular employee job evaluations that put each worker on notice of any deficits in their productivity or demeanor, being let go should rarely come as a surprise (unless there’s been a sudden, violent outburst or you’ve recently discovered illegal activity).

Here’s some specific advice about how your company or office manager should interact with employees once you’ve decided to fire them.

Workplace practices that may help a dismissed employee cope better when terminated

  • Privately inform the employee that you need to meet with him/her in your office.

No one likes to be embarrassed in front of others, so be discreet. Plan to have at least one other management employee present to witness the event. Once you start this meeting, be sure to briefly reference the other person present and then immediately tell the worker being fired that this is a permanent decision that’s been made after great consideration of all the relevant facts. (These words can help prevent an anguished exchange during which the employee may beg to stay on the job – or even unwisely threaten those s/he blames for the firing.)

Give serious thought to creating a folder with all the materials the employee will need inside of it. Then, tell the employee you’d like to go over the different forms, possibly including any severance agreement that your company may need signed and dated in your presence. If you employ 20 or more employees, be sure to include adequate information about how the employee can apply for (and most likely) receive health insurance through the COBRA program. (COBRA stands for Consolidated Omnibus Budget Reconciliation law.) And be sure to check with your Houston employment law attorney to see if Texas requires that you provide the person with any other health insurance information.

Remember to always speak in a calm and pleasant tone, even if the employee becomes a bit agitated or excited. Consider always having a company (or building) security guard on hand in the outer office, just in case an upset employee becomes unruly.

Be willing to stop and answer questions. After all, most people have many questions they need to ask at such an upsetting time in their life — even if they “should have known” this event was likely. Carefully explain exactly when a final check will be cut and explain how you will deliver the funds to the person being dismissed.

  • Obtain all remaining property that must be returned. When providing the employee with notice of the meeting, you should always give the individual a clear list of all proprietary equipment, keys and other materials that you expect to have returned to you in good condition. If the person has been entrusted with extremely important security codes, you might want to note that those are always changed when any employee leaves the company.

If any major piece of equipment is not returned, be prepared to discuss a reduction in the final sum of money owed to the person – unless you failed to state that policy in your employee handbook. If no prior notice was provided, you should speak to your attorney about the wisdom of deducting any amount of money from that final paycheck or payment of benefits owed.

In addition to all company vehicles, be sure to collect all ID badges, security parking tags not currently affixed to vehicles, beepers, cell phones and confidential company publications.

Finally, you should calmly allow the employee to express some moderate anger about the decision. Sit quietly – and at most, simply restate that the decision is final. By listening to the person, you’re affirming them to some extent, and that’s important to having the individual leave in a calmer state of mind.

Unless the employee becomes verbally abusive (not just angry or a little flippant), ask them to be prepared to leave with all their belongings right after the meeting. (Of course, you should have already conducted a thorough investigation of any reported wrongdoings by the employee – and given that person a chance to explain his/her side of any alleged wrongdoing.)

Note: Always be sure that the person has time to collect his/her belongings and remind them to check the employee lunchroom or any locker that may have been assigned. It’s also wise to state that you will not be discussing the dismissal further with any of the departing employee’s co-workers. As for references, try to state (if true), that your company normally only provides confirmation of employment dates, without further comments or explanations. (Be sure that’s already set forth in your employee handbook). If the person has remained calm, brief goodbyes to co-workers should also be allowed.

  • One other key point: always be specific during the dismissal process. Employees being let go really want to know why their work wasn’t satisfactory. Since people often feel completely out of control of their lives when they’re being fired – specific feedback helps them feel empowered and like they can bounce back with a new job. It can help to have copies of all recent job performance evaluations handy when meeting with any employee who is leaving.

If you liked the person but found their work unacceptable, you’re always free to tell them that you wish them well and hope they can find another position more in keeping with their most highly developed talents;

  • Decide in advance whether your company believes it should ever allow someone being fired to “resign” their position instead. This helps some people feel less angry and like they have retained some degree of self-respect. Of course, if you do choose to allow this approach, you should remind the departing employee (in writing) that s/he might still be legally viewed as having been fired.

However, be sure you avoid making any promises about the receipt of unemployment benefits when someone chooses to resign. To protect yourself, it’s probably best to tell the person (in writing) that they will need to check with the Texas Workforce Commission about such benefits, noting that all dismissals are usually handled on a case-by-case basis.

  • Formal outplacement services. While these are most frequently used by large corporations when laying off groups of employees, it’s wise to check on all the services that they provide. However, if you’re a smaller company or a solo office with a relatively small group of employees this probably won’t be practical. If nothing else, try to include a form in the “separation” or dismissal packet that provides the address of the nearest Texas Workforce Commission office, its website address, and the phone number for that office. People will usually be calmer if they have an idea about how they can immediately begin looking for a new job;
  • Provide clear information about what you’ll be including in the employee’s final paycheck. In Texas, an employer normally has six days to provide the departing employee with his/her final paycheck. However, if someone insists that they’re quitting the job, you can wait to issue their final paycheck at the time of the next scheduled payday.  See Texas Code Annotated, Labor, Section 61.014.

If you fail to pay a fired employee on time, you might be required to pay that person damages – and possibly even a penalty to the employee and the state.

And remember that in most states, you’re usually required to pay the employee for any accrued vacation time.

Gray areas can easily occur during dismissals

A bit too often, people get very angry when being fired. In some cases, they will storm off during your meeting, claiming that you can’t fire them – because they’re quitting. While you do not have to put up with rude or antagonistic behavior, you might want to calmly note that being fired might be the better option, if they prefer to sit and think about it for a few minutes.

However, you have no duty to try and counsel the person on this issue. Just be aware that when any employee says s/he is walking off the job, the law may not treat that person as fired – causing the individual to lose access to unemployment benefits.

If the departing employee really tried hard to do good work for many years and may just no longer be able to keep up with new job technologies, your company always has the option of covering the fee so that individual can go to a local personnel agency and receive one formal placement in a new position.

Final tips for carefully handling employee dismissals

  • As the Texas Workforce Commission notes, try to avoid dismissing or firing any employee “during the heat of the moment.” All future interactions will go much more smoothly if there are clear reasons for firing a person that have been documented over time – even though Texas doesn’t require warnings for at-will employees. Just try whenever possible, to treat anyone you wish to fire with dignity.
  • Make sure all your actions are backed by clearly stated company policies and procedures. The last thing any company needs is to be sued by an angry former employee who can reference an employee handbook that clearly indicates that you failed to properly handle his/her dismissal.
  • Be sure you always responded to all legitimate complaints made by the person you’re about to fire. The Texas Workforce Commission is often sympathetic to people seeking unemployment benefits who can document that certain workplace problems – that were formally reported and negatively impacted the person’s performance – were never properly addressed.
  • Try to only fire people early in the morning or late in the day – when few other workers are still present. And be sensitive enough to not provoke someone by firing them on their birthday or the day before a major holiday.
  • Check ahead of time with your accountant to be sure the employee doesn’t owe the company for any loan made against future paychecks.
  • While it was suggested above that you may rarely want to try and help a worker meet with a personnel agency, keep in mind many workers may try to abuse that privilege.
  • Never allow any employee who was just dismissed to log back into the company computer system. Irate people with moderate skills can easily wreak havoc on your database or other sensitive files.
  • Always have each staff person present during the termination meeting prepare a memo documenting what took place. This information can prove very useful later if your company is sued for wrongful termination.

Please feel free to contact one of our Murray Lobb attorneys if you need to ask any questions about specific issues involved with terminating an employee. We can also help you (re)draft your employee handbooks so that all procedures involved with firing employees are set forth clearly.

The SBA Suggests 10 Key Steps for Starting a New Business

Once you’ve decided to start a new business, it can be tempting to simply moved forward with various tasks as they come to mind. While this may work for a few entrepreneurs, it’s always best to create an organized plan of action so you won’t waste time and cause problems for yourself that could easily have been avoided.

Fortunately, the SBA (Small Business Administration) provides excellent online materials that can help you plan the most useful way to start a new company – or expand the current reach of an existing one. Here’s a brief review of the ten important tasks that should normally be addressed first as you launch a new business.

The key steps for creating a solid foundation for your new business

  1. Decide where to locate your company. Prior to starting any market research, you’ll need to look at several cities to decide upon the best location for your business. This decision must be partly based on if you’ll be selling goods and services to your customers from a brick-and-mortar storefront or office – or if you’ll just be contacting potential customers on the phone or over the Internet. Be sure to select a location where many well-qualified job applicants live – as well as a city and state with reasonable business taxes;
  1. Develop a reliable market research plan. Once you’re certain about the goods or services your new business will sell, you must conduct market research to verify that there’s a definite need for what you’ll be selling in a specific location. This activity also involves identifying your potential customers and all known competitors; 
  2. Create a viable business plan. Most people starting a new business choose between a traditional business plan or a lean one for a basic start-up company. If you need to borrow money to finance your company, you’ll almost certainly have to provide a lender with a traditional business plan.

The traditional plan is normally very comprehensive – it describes your specific goods and services, provides a mission statement about what you seek to accomplish in the long run and names the initial team of professionals who will be running the company. It also states where the business will be located and how many employees you’ll need to hire. A traditional business plan should also describe the business structure you’ll be using, who will be handling specific tasks – and it should review your market analysis. Initial financial projections or earnings for the company should also be included.

In contrast, a lean start-up business plan may simply describe your goods and services, provide a statement about who will be running the company and state who you believe will be your most likely customers. It should also contain information about how you’ll initially finance the company and where it will be located;

  1. Make sure you have enough initial funding for the company. You and your business partners or advisors must determine how much money you’ll need to start your business. If you cannot raise this money among your business partners, then may have to try and obtain funds from venture capitalists or request a small business loan from a bank or through SBA resources. Other options include raising capital through crowdfunding or other online resources;
  2. Select the best business structure for your company. While many people run sole proprietorships if they’ll be handling all of the major company tasks themselves, others choose between forming such structures as partnerships, limited liability companies (LLCs) — or some type of corporation or cooperative;
  3. Decide upon the best name for your company. It’s a good idea to brainstorm with your partners or investors since you want to try and choose a name that clearly reflects the nature or “brand” of your business – as well as its spirit. Be aware that one of your first tasks will be to make sure the name you select is original and that it’s not already being used by anyone else;
  1. Be sure to register and protect your business name. After you’ve chosen the best name for your company, you’ll need to take steps to protect that name by properly registering it. Keep in mind that you may also need to register any trademark you’ll be using. Since additional ways of protecting your company name may also be required, you should always discuss this topic with your Houston business law attorney;
  2. You must request state and federal tax IDs. You will need to obtain an EIN (employer identification number) for many reasons. For example, you must have an EIN to open a bank account for your company and to pay taxes (among other tasks). Depending on the different states where your company will be operating, you may also need to obtain one or more state tax IDs;
  3. Obtain all required licenses and permits. Your specific type of business activity and where you’ll be working will determine the types of permits and licenses you must obtain, if any;
  4. Be sure to open one or more business accounts for your company. These most often include checking and savings accounts, credit card accounts and a merchant services account. Depending on the nature of your business and its initial size, you may be able to simply start with a checking account and then open other accounts as the need arises.

Please feel free to contact one of our Murray Lobb attorneys for legal advice as you address any or all of the various steps named above while starting a new business. We’ve had the opportunity to help many clients establish a wide variety of successful businesses in the past and are prepared to provide you will all the guidance you may need.

Designating a Guardian for Your Children in a Will

If you’re a parent with children who haven’t yet reached the age of majority, you need to create a Will that designates a guardian to step in and look after them if you suddenly pass away. If you fail to provide for your kids in this manner, a court will usually appoint someone to serve in this role – especially if your former spouse is deceased or incapable of handling this responsibility.

A list of traits and abilities a responsible guardian should have are set forth below. If your children have entered their teens at the time when no parent remains alive to care for them, the courts will normally consider their preferences for a guardian at that time.

What are some key considerations when choosing a guardian for your children?

  • It’s often best to choose someone already known to your kid(s) or who has a definite gift for caregiving. This might be one of your parents, a sibling or a very close and trusted friend. Always be sure to obtain this person’s advance permission to name him (or her) in your Will before doing so. If you prefer, you can also designate a married couple as co-guardians;
  • If possible, try to choose a person who already lives in the same city as you — or who is willing to relocate there in the future. It can be very comforting to children if they’re allowed to remain in their same school district. If you can’t find someone who lives nearby, be aware that it may prove a bit expensive for an out-of-state guardian to handle legal matters for the children in a different state. Choosing a local guardian can prevent this type of problem;
  • Give serious thought to choosing a guardian who will fully support your faith beliefs and core ethical values. It’s always best to appoint a person who’s eager to help your children grow up in the faith community you prefer – and who will daily enforce the moral teachings you treasure most;
  • Think about the financial responsibilities involved. Hopefully, you’ll have provided well for your children’s future with life insurance and other funds prior to your death. However, regardless of how much money you’ve put in an account for your kids, you’ll need a guardian who can responsibly handle money. If you do not know of anyone with strong financial skills, you can still choose a person to serve as the caregiving guardian – and designate a different individual to manage the children’s financial resources;
  • What should you do if you do not want your estranged spouse to become the guardian after you pass away? Your Houston estate planning attorney may advise you to write and sign a letter documenting your reasons – and to attach relevant police reports or court documents to the letter. You can then give that letter to your named guardian so that it can be presented to the court after you’ve passed away;
  • How should you proceed if you have children living with you from different marriages? It may be necessary to name more than one guardian for the children. Your main goal should be to keep as many of the kids together as possible. However, you must be realistic about how many children your named guardian can handle;
  • Give some thought to the age of the person you’d like to name. If your parent or another desired guardian is still in good health, you may decide to go ahead and name that person now and simply revisit your decision within the next five years (or when that guardian’s health suddenly declines.) If you are naming a much older person as guardian, be sure to also name a secondary guardian who is willing to step in if the first one cannot serve in this capacity after you pass away. In fact, it’s always a good idea to have a back-up guardian named in your Will;
  • Remember to name every child you want to be cared for by your guardian. It’s never wise to think that a court will assume that all your kids are covered if you only name one or two. Also, extended family members might step in and try to contest your choice if every child isn’t named individually.

Before finalizing any Will that designates one or more guardians, be sure to discuss your choices with your older children. Also, make sure each named guardian is truly interested in helping you by taking on such a demanding assignment.

Please feel free to contact one of our Murray Lobb attorneys so we can prepare a Will that designates a guardian for your children. We’ll be happy to answer any additional questions you may have about this critical task. Most parents gain a greater sense of peace once they’ve legally provided for these important caregiving needs for their children.

Handling Your Adult Child’s Estate in Texas

Losing a child of any age remains one of life’s most difficult challenges. When that child is an adult, you may often need legal advice on how to manage any estate left behind, even if it’s rather limited. Now that so many Americans are living well into their 70s and 80s, the chances of losing an adult child are growing.

One study found that 11.5 percent of people age 50 or older have lost at least one adult child. That likelihood of loss is even higher for African Americans – 16.7 percent of them have lost an adult child. Furthermore, the older you get, the sense of loss can be even harder to cope with since adult children are often the closest caregivers of their aging parents.

Here’s a look at some of the legal questions you’ll need to address after losing an adult child.

Issues Surviving Parents May Need to Face After an Adult Child Passes Away:

  • Did your son or daughter live with and leave behind a spouse or partner? If so, calmly reach out to that person to find out if there’s a Will naming the personal representative of the estate. If your child didn’t have a Will or named someone else as the executor of their Will, you’ll need to interact very sensitively with that person. When you contact your Houston estate planning lawyer, be prepared to indicate your adult child’s marital status at the time of death;
  • Did your adult child have any children? It’s important to stay on good terms with your loved one’s surviving spouse or partner since visitation rights and overall family harmony may depend upon your relationship with that person. (Note: If the surviving spouse or partner has any major substance abuse problems, be sure to share that information with your lawyer. We can explain pertinent child custody and adoption laws, if necessary);
  • Did your son or daughter own considerable land or personal property? Your attorney can help you try to prevent anyone from giving away or disposing of such property before the estate can be probated – or passed on according to your adult child’s estate plan. If you’ve been named the personal representative, obtain a copy of the Will as soon as possible. If no one is living in your adult child’s former house or apartment, be sure someone visits soon to look for pets needing immediate care, valuables that must be secured and vehicles that must be locked and placed in a garage;
  • Contacting your adult child’s employer. If you were named as your adult child’s personal representative, you’ll soon need to contact that employer to find out what employee assets may still be held in a 401k or other account. Likewise, you’ll want to find out if any other benefits are still owing to your child – and if s/he held any type of insurance policy through the employer;
  • What should you do about burial, cremation and related issues? Always try to honor the instructions in your deceased child’s Will or other legal documents. If you can’t find a Will, then work with any surviving spouse/partner and other family members to handle this matter in keeping with your family’s faith practices or general traditions;
  • Do you know what to expect under Texas law if your adult child died intestate – without a Will or some other type of estate plan?  Your Houston estate planning attorney can explain how Texas courts address this type of situation. We can also inform you about how estates are handled by probate courts and how you should manage other tasks that are often required after losing an adult child.

Please know that since our firm has worked with many clients grieving over the loss of loved ones. We’ll provide our legal advice in the most caring manner possible. When you contact one of our Murray Lobb attorneys, we’ll be ready to provide you with simple steps to take so you can concentrate on obtaining comfort from family and friends.

EEOC Guidelines: Training Employees About Workplace Discrimination

To create and maintain a professional work environment, employers must make sure everyone interacts in a respectful manner. The best way to promote respect is to provide proper employee training that carefully defines discriminatory behavior and clearly states what won’t be tolerated.

Newly hired employees should always be trained, even if this must be done individually. They must learn how to recognize forbidden forms of discrimination. Periodic retraining on sexual harassment and other common forms of discrimination should also be mandatory. If you don’t already have a hard copy or online employee handbook that clearly sets forth your workplace standards on discrimination, you can ask your Houston employment law attorney to help you draft one.

Here’s a review of the types of workplace discrimination and harassment that should be clearly forbidden in writing and during oral training sessions. After presenting information on these topics to all your employees, it’s best to also provide a bit more in-depth training to your supervisors and managers who will need to handle the discipline, complaints and investigations usually involved with reported acts of alleged discrimination.

What types of workplace discrimination are most common today?

  • Treating others differently due to their race, skin color, ethnic background or country of natural origin. No job applicant or employee should ever be treated unfairly due to any of these facts or traits. When investigating this type of claim, you may need to privately admonish and inform the wrongdoer that such behavior is legally forbidden and can lead to dismissal. (In egregious cases, immediate firing may be required.) Employers should keep detailed notes about all such complaints and formal reprimands. It’s wise to always have disciplined employees sign and date forms indicating that they’ve been warned that additional acts of discrimination may lead to dismissal. All employee files and complaints must be kept safely locked up and only accessed by a few managers;
  • Discrimination based upon a person’s sex including sexual harassment or current pregnancy status. All workers must learn to respect their coworkers, regardless of another employee’s sex. Stay open to questions and provide answers that are clearly supported by your company’s anti-discrimination policies;
  • Disability status. Regardless of whether someone was born with a physical disability or acquired one later in life, every effort must be made to help that person handle his/her job, unless doing so would place an undue burden on the employer. (Requests may often involve making facilities more accessible or changing an employee’s work schedule so it will interfere less with a medical disability);
  • Age. When workers are young, it’s hard for them to believe that age discrimination is real. However, as they grow older, they’ll start noticing how the most desirable promotions are often given to younger staff members – and not to older workers. And older workers often find themselves in the groups being laid off when a company claims it’s going through hard times. This type of discrimination is often self-defeating since older workers often: (1) have excellent problem-solving skills due to all their experience, (2) usually enjoy learning new skills and helping to train newcomers – and (3) often have the lowest rates of absenteeism due to their dedication to their employers;
  • Religion. Sadly, although most American adults know that one main reason this country was founded was to extend religious freedom to all citizens, too many people today treat coworkers with disrespect when they appear to follow faith practices different than their own;
  • Discrimination related to an employee’s genetic information (or family medical history). Both state and federal laws forbid this type of discrimination. One of the federal laws is named the Genetic Information Non-Discrimination Act (GINA). Title II of GINA specifically prohibits workplace discrimination based upon an employee’s genetic information. Employers must exercise great care when hiring the employees who must handle all company medical insurance and claim forms. These workers must understand that any knowledge they accidentally gain about an employee’s medical condition(s) or family history must be held in the strictest confidence.

Special training for company managers and supervisors

An additional, separate training should be periodically presented to these employees to be sure they fully understand how to handle every discrimination complaint they receive. After all, they will be playing a key role in investigating these complaints and making sure they handle their responsibilities in strict compliance with all state and federal laws.

Be sure that these higher-level employees have made the complaint process both easy and transparent for workers. It’s their job to remind employees that they will not be punished for coming forward with claims – or acting as witnesses for those who are filing claims.

In your special training program for these workers, be sure to also address the following topics.

  • Managers must understand that detailed, investigative notes must be kept. When an employee files a complaint based on alleged acts of discrimination or harassment, you need to obtain information about each time such acts were committed and get the names of all possible witnesses. Dates and times are crucial bits of information. If more than one person was involved in the illegal behavior, be sure to write down all names – and speak with each of these individuals separately;
  • All managers and supervisors need clear definitions of what can constitute a “reasonable accommodation” for a disabled employee. It’s a good idea to review the content of your training with your attorney prior to making this type of presentation;
  • Retaliation. Inform higher-level employees that all forms of retaliation for reporting alleged acts of discrimination or harassment are strictly forbidden – and can result in liability for those involved;
  • Acceptable religious attire, hairstyles and practices. Explain to your managers what type of religious clothing is fully acceptable in the workplace. You should also tell them which hair or beard styles should be allowed, based upon an employee’s stated religious beliefs. When possible, managers should try to accommodate time off from work to attend special worship services – if doing so won’t cause an undue burden on co-workers or the company;
  • Sexual harassment. Supervisors and managers must be fully acquainted with all the types of language and behavior that can constitute sexual harassment. Remind them that offensive cartoons or signs related to sex should never be posted or circulated at work;
  • Privacy is crucial to all investigations. Remind all of those involved with investigating any claims of discrimination or harassment that they must never share any information they gain with non-investigative employees – or anyone outside of the company – since confidentiality is critical for everyone.

Please feel free to contact one of our Murray Lobb attorneys if you have any questions about how you’ve drafted portions of your employee handbook, especially sections addressing discrimination and sexual harassment. We can provide you with useful advice and are always available to help should an employee file a claim with you or the EEOC alleging any form of workplace discrimination.

Key Ways to Protect Your Business Against Cybersecurity Threats

After the massive data breach involving Marriott’s Starwood hotel brands was reported in 2018, businesses of all sizes began wondering again if anyone can remain safe against hackers. About 500 million guests who stayed at Starwood properties (including Westin, Sheraton, W Hotels, and the St. Regis) had their names, phone numbers, email addresses, birth dates, encrypted credit card data and other information stolen.

What’s shocked people even more is that this breach covered a four-year time period extending from 2014 through September 2018. It’s hard to believe that any company’s computer networks could be so severely compromised over such a long period of time before being discovered.

Companies of all sizes who haven’t already done so must immediately take proactive steps to reduce their chances of having their customer data and other proprietary information suddenly stolen or compromised.

What one past study revealed about cybersecurity threats – that keep increasing annually

  • Close to half of the businesses surveyed consider themselves “very dependent” on the Internet for their daily business operations;
  • Over one-third of those interviewed said that it would be very damaging for their companies to be without Internet access for 48 hours in a row;
  • Small business employees rely on using the Internet for 75% to 100% of their daily work.

A much more recent study revealed that 58% of the victims of malware (cybersecurity) attacks are small businesses. Furthermore, cyber attacks wound up costing most targeted small companies about $2,235,000. Clearly, no one should avoid addressing this crucial issue.

Fortunately, various cybersecurity experts and business professionals are sharing their ideas about some of the best ways to prevent new attacks – as opposed to just responding to them.

You must determine your current level of risk to an attack before creating a protection plan

Even if you already have a highly qualified IT professional on your payroll, it’s often best to hire an outside cybersecurity consultant to come in and objectively assess your various levels of risk to a hacking attack. A “white-hat hacker” (someone on your side) can attempt to evaluate your code vulnerabilities and network and system weaknesses.

This expert can also evaluate how appropriately your employees are responding to suspicious emails that could easily introduce malware into your computer networks and databases. Give serious thought to having this type of outside expert audit your risk level at least once every two years – if not annually.

Keep in mind that it’s often useful to assign a risk level of low, medium or high to each system that might be compromised by a data breach. This can help you as you design a cybersecurity protection plan that prioritizes various risks.

Regularly review the FINRA cybersecurity checklist if you’re a smaller firm or business

This source is designed to help companies handle the following tasks.

  • Identify and evaluate all current cybersecurity threats to better protect all business assets against outside intrusions (or in-house security lapses);
  • Readily determine when your company software or databases have been hacked or compromised;
  • Decide (in advance) how to quickly counter attacks or threats as soon as they’re detected. It’s always wise to create several options based on the type of information or software that may be under attack;
  • Develop a plan with any in-house IT professionals and your outside cybersecurity consultant for readily recovering any company assets that are lost, stolen or otherwise compromised.

Create an employee training program that will help protect your systems and networks

Your employees must take the ongoing threat of a cyberattack very seriously. Staff members who fail to follow all in-house cybersecurity protocol often make it easier for outside hackers to gain entry. You might consider requiring a two-factor authentication password for those seeking to gain access to some of your company’s most valuable or vulnerable accounts.

Before providing this training, you must decide which parts of your computer network, systems and databases should remain off limits to various levels of employees.

It’s also important to let your employees know if you’ll be regularly monitoring their usage of all company computers. (It’s best to obtain written permission for this practice at the time you initially hire all employees). Inform everyone that each employee’s access to information will probably be restricted — based on their normal daily need to access certain information or to complete their assigned tasks.

Give very serious thought to limiting the outside Internet websites that employees can visit while at work and indicate what types of data downloads from outside sources are forbidden. Including these restrictions in your company’s formal training and cybersecurity protocol can help decrease the chances of anyone downloading threatening malware or viruses.

Always ask everyone to encrypt their attempts to access various company databases and accounts. You should also encrypt access to all email accounts. Finally, be sure all employees know the safest ways to file and store data, so it can be fully protected from hackers, while remaining easy to access again when needed.

Develop a comprehensive plan for offboarding employees (those leaving your company)

Regardless of whether someone is being fired or has accepted a new job elsewhere, you need to have a systematic way of reclaiming company property when workers leave. You must also revoke their access to all business networks. Be sure all exiting employees return all company laptops, ID badges, company credit cards, mobile devices and other equipment.

Finally, delete the email addresses of exiting employees as soon as they leave. Someone should also change the company passwords they regularly used that were not encrypted. And always try to make sure every employee has signed an appropriate NDAs (non-disclosure agreements).

Although not intended to be comprehensive, we hope this list of suggestions will help your company gain greater protection against future cybersecurity attacks.

Please feel free to contact one of our Murray Lobb attorneys about how various Texas and federal cybersecurity laws and regulations may impact your company. We can also provide you with a non-disclosure agreement for exiting employees to sign and review the terms and legal limitations of any cybersecurity insurance policy that you may be looking at in hopes of limiting your business liability for future data breaches.