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.

How Texas Estates Are Often Handled When Wills Cannot Be Found

Given how hard most people work to pay their bills and save up for their retirement years, you would think all of us would want to maintain strict control over who will inherit from us. Yet statistics reveal that only about forty percent (40%) of Americans have faced their mortality and asked their lawyers to help them create Wills.

When we make this error, we increase the chances that relatives we don’t know very well – or perhaps even like – may one day receive all our wealth. That’s regrettable since most of us have specific family members who would benefit the most from an inheritance. And great charities and faith-related beneficiaries can always use our funds to bless many others.

Hopefully, this article will help you see the advantages of meeting with your Houston estate planning attorney to create a first Will — and then later update it as your estate grows.

What are the five ways Texas wealth is often distributed when there is no Will?

  1. Under the state’s intestate succession laws. While these are useful, they do not let you determine who will inherit from you. Furthermore, if you own any of the following types of accounts or property, you must make sure that you’ve provided an updated list of beneficiaries to those who maintain these accounts (or other forms of wealth) on your behalf.
  1. Proceeds from a life insurance policy
  2. Retirement account funds that may include a 401k, IRA — or another, similar type of account
  3. Property that you and another person own together
  4. POD or payable-on-death account funds
  5. Property that’s already held in some type of living trust
  1. Through the filing of an Affidavit of Heirship. This approach can normally only be used when the assets requiring a title transfer are real estate. However, you can sometimes use this type of affidavit for non-property assets – depending on the rules of the institution that currently manages those items. Be prepared to discuss this topic in detail with your lawyer since there are certain limitations involved with using this type of affidavit.

For example, some title companies will not accept these types of affidavits when you’re trying to establish a legally valid chain of title for property. In addition, since no personal representative will be appointed, there won’t be anyone who can manage the estate’s assets and pay all required debts. Also, two witnesses must sign this type of affidavit and both are liable for any false statements that may be contained in it.

  1. By filing a Small Estate Affidavit. If your attorney takes this approach, he’ll first have to determine if the estate is solvent and if it’s worth $75,000 or less. In addition, the affidavit can only be used to transfer title to a homestead. Furthermore, there will be no appointed personal representative to collect all the assets, pay all required debts and deal with necessary third parties. Financially responsible witnesses must also sign this type of affidavit.
  1. Using a probate court proceeding called a determination of heirship. The advantages of this approach include having a hearing, the presentation of evidence and a court issuing a judgment accepting or rejecting all submitted affidavits of heirship. However, some relatives eager to settle an estate may find this approach less appealing since it can be rather costly – mainly due to the need to file various pleadings with the probate court. You must also coordinate everything with the court appointed attorney ad litem who will investigate whether there’s any possible fraud regarding the filed affidavits of heirship. However, obtaining a court ruling that specific parties are lawful heirs is very useful;
  1. Handling the matter as either an independent or dependent administration of the estate.

The difference between these two types of administrations is based on the degree to which the probate court must be involved in the proceedings. The term “independent administration” simply means that the court has minimal involvement.

Whichever approach is chosen, there will need to be an appointment of a personal representative who is qualified to receive letters of administration provided by the probate court. These “letters” allow the personal representative to collect all the assets and pay all the debts. The biggest drawback of this approach is that it’s often the most expensive way to handle the estate of someone who died without a Will.

Hopefully, this general information has helped you see that creating a Will is one of the best ways to move forward into a more stable financial future.

Please feel free to contact one of our Murray Lobb lawyers so we can answer any questions you may have about settling someone else’s estate — or drawing up a Will (or full estate plan) of your own. We appreciate the opportunity to help our clients handle these types of matters and look forward to hearing from you soon.

Why You Need to Create a Business Succession Plan NOW

Why You Need to Create a Business Succession Plan Now

Even when all owners of a company plan to work until the very end of their lives, there’s still a need for a viable business succession plan. After all, anyone can become totally or partially disabled as a result of a serious car accident or die of a deadly disease on almost any day.

When business owners hide from this reality, they often create havoc for all surviving partners or family members. Instead, it’s better to move forward at a calmer time to carefully address these types of possible future events.

Your Houston business law and estate planning attorney can help you decide on the best way to either pass your business on to others — or liquidate all the assets to meet your own needs and those of your survivors.

General questions you must answer yourself about any succession plan

  • What is the current market value of this business and all its assets?
  • Who is the best possible buyer? Do I prefer to sell the business to a co-owner, family member, employee or a third party?
  • Am I more likely to sell the business sooner rather than later? Am I interested in selling the company now due to health, retirement or other reasons?
  • Is this business tied to its current location? If not, would it be reasonably simple for the business to be moved elsewhere and successfully run by someone there?
  • What preferences do I have about how the sale should be financed? Am I willing to personally finance the loan? If so, what type of collateral should I require?
  • Which business advisors should I consult with while securing all the required contracts and other paperwork? Besides business and tax lawyers, do the specific assets of my company require me to consult with real estate agents, insurance and business brokers, bankers and financial advisors?

It’s often wise to start this process by locating and reviewing all your current business contracts and deeds. Next, give some thought to your company’s most productive and respected employees. Then, carefully determine the current market value of every business asset. Finally, schedule confidential, preliminary talks with any co-owners, family members who work for you, other key employees and perhaps one or two other potential buyers of your company.

Once these initial tasks have been handled – or while you’re completing them – it’s wise to meet with your Houston business law attorney.

Advantages and disadvantages of selling to different parties

Unless you’re the sole owner of the company and simply want to liquidate all the business assets and not sell (or transfer) the company to others, you must carefully evaluate each potential buyer and decide which one is best qualified to run the company in your absence.

  1. One or more family members. In most instances, it’s usually best to sell to only one family member, preferably one who is already involved in the business and respected by your employees. Ask your attorney about the best ways to prevent future challenges to any decision you make. One approach might involve drafting a buy-sell agreement that clearly states who is going to be running the company — and asks all others who currently work there (or own shares) — to sell their shares to the person you’ve named as your successor. This approach often helps minimize future family disagreements.

When selling a business to a family member, you may want to execute a self-canceling installment note (SCIN). Your attorney can explain why that may be useful;

  1. A key employee who is highly knowledgeable and well liked by other workers. The most common drawback to selling to a key employee is that the person may not be able to give you a large down payment in cash. Be prepared to execute a buy-sell agreement that clearly lists all the valuable collateral for any loan you may be willing to finance. You can also suggest that this employee try to obtain an SBA (Small Business Administration) or bank acquisition loan that will provide you with up to 70% or more of the purchase price upfront;
  2. You can sell your shares to your co-owners. Be sure to clearly indicate the sale’s price and all purchase terms;
  3. An outside third-party or competitor. Be very careful when selling to this type of buyer if you’re financially depending on the person to keep running the company. Due diligence is critical when evaluating every potential buyer.

Since this article only provides a broad overview of the types of issues involved when drafting a business succession plan, you’ll need to obtain competent legal help to handle this entire process. Should you already have some type of succession plan, we can help you decide if it’s time to update it.

All our Murray Lobb attorneys have the necessary experience to help you create a business succession plan that’s specifically tailored to your company’s unique needs. We look forward to helping you draft all the contracts and other documents you’ll need while selling your business.

 

Key Drafting Points for a Texas Employment Contract

Although Texas employers hire many workers on an “at-will” basis to make it easier to dismiss them (for reasons that doesn’t violate governing statutes), they also still provide employment contracts to others. After all, a well-drafted employment contract helps employers clearly establish what’s expected of their employees and makes it easier to protect proprietary information when workers leave.

If your company prefers to negotiate employment contracts with highly skilled employees, try to first meet with a Houston employment law attorney so that all of your most important needs and interests can be protected during the hiring process. And always be sure to communicate carefully with prospective employees since it’s easy to accidentally convey contract terms you may not have intended.

Before reviewing some of the important terms that should be included in most Texas employment contracts, it’s wise to note how some employment contract terms can become binding when set forth outside of contracts.

Ways employers may convey certain employment terms to job applicants or new hires 

Always carefully review the following ways that your company may be granting certain rights you didn’t intend to include in your formal employment contacts.

  • Through verbal agreements. Only allow a limited number of interviewers and other hiring staff to discuss key employment terms that may or may not be set forth in writing;
  • Statements made in offer letters. Always reread these before sending them out to make sure they do not contradict what’s in your written employment contract;
  • Provisions set forth in your employee handbook. (You should periodically ask your attorneys to review this material – to be sure it’s still current regarding new laws and recent court decisions);
  • All emails and faxes sent to prospective employees or new hires;
  • Statements made on workplace job notice boards.

While this list isn’t intended to be comprehensive, it should remind you that all written materials and formal conversations with applicants and new hires must be conducted carefully.

Here’s a look at some the terms you must properly address in your contracts.

Written employment contracts should always address these key terms and conditions

  • All core duties and responsibilities of the employee. It’s often wise to also note when the employee’s performance will be evaluated. For example, after the first 30 to 60 days – and then at other stated intervals;
  • Pay rate. This should be carefully discussed while making the initial offer and then documented in the employment contract;
  • All employee benefits, such as healthcare and stock options, should be listed and at least briefly explained;
  • Work locations and hours. If rotating shifts are required or if you strictly forbid working from home – you should set forth all these relevant restrictions;
  • Clear information indicating how employee disciplinary actions will normally be handled;
  • Reimbursement of approved expenses. If you do not cover any major expenses, you must state this very clearly;
  • How employee terminations are handled under different circumstances. This is a good place to possibly offer some type of severance pay if provided with two weeks’ notice (or some other time period you may prefer). You can then state that no general severance packages will be offered to those who fail to provide advance notice of their departure;
  • Dispute resolution terms. If you and the employee later have a dispute regarding the employment terms set forth in the contract, state whether you require the use of a specific form of dispute resolution — before any litigation can be pursued;
  • A reasonable covenant not to compete when employees are leaving. You should also include some type of clear statement that the departing employee must not disclose any trade secrets to others upon leaving.
  • A confidentially agreement. All employees who have any access to any company trade secrets, proprietary information or information the company deems to be of a sensitive or confidential nature must sign a confidentiality agreement.

If any of these terms are especially important to your company, give serious thought to asking all employees to not only sign their employment contracts – but to also initial certain paragraphs – clearly indicating that they were asked if they had special concerns or questions about those topics.

Please get in touch with one of our Murray Lobb attorneys once you’re ready to draft any employment contracts for new employees. We are also available to help you modify any of these contracts when various employment conditions change.

Steps Required to Dissolve a General Partnership in Texas

Even when business partners get along well with each other and succeed, a time may come when they may develop new interests, decide to retire or move elsewhere for business or pleasure reasons. While the Internet and modern communications make it possible to still run businesses with partners scattered around the globe, it’s still quite common for partnerships to break apart or take on new members when others leave.

Do You Need a Written Partnership Agreement in Texas?

Normally, Texas law doesn’t require general (or “at-will”) partnerships to create a written partnership agreement. However, it’s always best to draft one so that when the entity breaks apart (or any partner leaves), you’ll know exactly how to pay off all partnership debts and distribute the remaining assets among everyone.

When general partnerships don’t have an agreement, then Texas law expects the partners to govern their “wind-up” activities in keeping with our state’s default partnership laws.

Here’s a broad overview of the tasks that you and your partners must handle as you dissolve your partnership. Should you have any questions at this early stage, it’s always wise to schedule an appointment with your Houston business law attorney.

First Steps to Take When Preparing to Dissolve Your Partnership

Schedule a meeting so everyone can discuss how your written partnership agreement requires you to dissolve the partnership. During this meeting, you must take a vote to determine if all parties still holding majority rights (or financial interests equal to or greater than 50% of the partnership assets) favor dissolving it. Next, ask this same majority to vote whether they’re ready to draft and sign a written resolution stating that the partnership will now wind up all its affairs and be dissolved.

At this point, all partners who want to keep working together under a new partnership agreement can indicate this desire to everyone else – and offer to buy-out the partnership shares of those who are leaving.

Handling Debt Payments and Winding Up All Remaining Matters

Every current partner should expressly agree to complete certain tasks approved by all those winding down the partnership’s affairs – and to refrain from negotiating any new business that could potentially obligate all partners after the dissolution.

As referenced above, those leaving the partnership are free to sell their shares in it to others, in keeping with their original partnership agreement (or the state’s laws governing such transactions when there is no written agreement). To help the partnership pay off existing debts, all partners can vote on which current partnership assets (if any) may be sold for cash.

The laws governing the pay-off of all partnership debts are set forth in our state’s Uniform Partnership Act. It basically states that you must pay off all your creditors first – before paying back each partner for all past capital contributions to the partnership.

Are There Any Remaining Wind-Up Steps You Must Address?

  • Paperwork filing with the state. In Texas, there’s no need to file anything when dissolving an at-will (general) partnership;
  • Providing notice to all creditors, customers and other parties. It’s customary to send out notices through the mail to all your business contacts so they’ll know that your partnership is being dissolved as of a certain date. However, there’s no law which requires this to be done. You can also just simply publish a notice about the dissolution in your local newspaper;
  • Updating all out-of-state registrations. To prevent your partnership from owing any more fees to other states where you’ve registered for the right to do business, you need to formally notify the correct offices via certified mail that you’re dissolving your partnership;
  • Paying all taxes that are owed. Although Texas doesn’t require you to obtain a tax clearance before winding-up your partnership, you must make sure all taxes owed have been paid before dissolving it. This step includes filing a final federal tax return for your partnership in keeping with Texas law.

Should you have any specific questions about dissolving your partnership – or making sure that you’re handling all tax matters properly – please contact our law firm so we can provide you with all pertinent legal advice.

All Stock Purchase Agreements Must Include Key Provisions

Every stock transfer is important, regardless of its size. Therefore, your corporation must draw up a comprehensive stock purchase agreement to govern all such transactions. If you fail to do so, shares of stock could easily wind up in the hands of company outsiders whose interests are at odds with those of most shareholders.

Corporations usually choose to prevent this type of problem by including a “right of first refusal” in their written agreements so that their shareholders’ interests remain fully protected. As the term implies, the corporation itself (or one of its current shareholders) will always have the right to try and purchase all shares being sold before an outsider can try to buy them. This is just one of the many basic provisions your Houston corporate law attorney will address when drafting a stock purchase agreement for you.

The following information covers some of the other basic provisions that should normally be included to fully protect your most important corporate interests during sales of stock.

Added Legal Protections Offered by Professional Stock Purchase Agreements 

Even when a buyer and seller know each other well, it’s always best to capture all the terms governing their sales transactions in writing. In addition to describing different warranties, your lawyer may suggest that you also cover some of the topics set forth below in your stock purchase agreement.

  • Details about the parties and the specific stock being sold. For example, you’ll need to state the names of the seller and buyer, the number of shares being sold, and the current dollar value of each share of common stock. The date of the transaction should also be noted, along with a statement that the seller is conveying all ownership of the endorsed stock certificates to the buyer. It’s also customary to note that the seller will pay all applicable taxes on the sale;
  • Proper warranties and representations should be included. It’s important to state (1) that the corporation is legally entitled at the time of the sale to transfer ownership of the stock and that the corporation itself is in good standing with all governing agencies; (2) that the seller is currently the valid owner of the stock and has the right to fully convey all rights in the shares to the seller; (3) that all federal, state and local laws and guidelines intended to govern such transactions are being followed; and (4) that all critical facts have been disclosed regarding the transaction;
  • In some cases, you may want to state that the buyer will pay in two installments. When this happens, a percentage of the purchase price is paid upon both parties signing the stock purchase agreement. On a second date set forth in the agreement, the remainder of the purchase price is paid for the shares (when the contract is fully executed). It’s always preferable to have at least one witness sign the agreement in case either party later tries to challenge the entire transaction in court;
  • Clear definitions should be provided in the opening paragraphs of the agreement. These should always include a description of how the corporation currently pays stock dividends to shareholders. A paragraph should also clearly indicate which dispute resolution or mediation groups may be consulted if any problems arise later concerning the sale of the shares;
  • A specific statement as to whether this sale is governed by the SEC (Securities and Exchange Commission). Depending on the type of corporation you’re running, it may be necessary for your attorney to file paperwork regarding the sale with the SEC.

While the list above isn’t intended to be comprehensive, it should provide you with a clear idea of the many critical topics that most stock purchase agreements should cover. It’s always best to have your lawyer go over your corporation’s specific needs with you before drafting this type of document since federal, state and local laws are constantly changing.

Members of our firm are readily available to provide you with professional legal advice concerning all your corporate needs and interests. We look forward to meeting with you soon.

Shareholder Agreements Require Flexible Buy-Sell Provisions

There are many reasons why shareholders in closely-held corporations may need to quickly sell their shares to others. Therefore, it’s important when drafting a shareholder’s agreement to cover every basic aspect of buying and selling shares – in addition to the general administrative matters that must normally be addressed.

Depending on a corporation’s number of major shareholders and business pursuits, a flexible framework helps facilitate every goal. The following list sets forth some of the main terms that shareholder agreements should cover, separate and apart from the buy-sell provisions that will be discussed in greater detail below.

Common Administrative Topics Set Forth in Many Shareholder Agreements

  • Voting rights. Always describe each shareholder’s voting rights and when they can be properly exercised;
  • Qualifications for serving as corporate officers. Basic requirements must be stated so that only fully qualified individuals can serve as corporate officers at any level;
  • Noncompete provisions. All parties involved with a corporation must agree to avoid compromising its trade secrets or later leaving and then trying to compete for its clients for a limited time;
  • Preferred groups to consult with when internal disputes must be resolved. Include the names of specific mediation or dispute resolution services that can be contacted and how the corporation should decide when such outside help is required;
  • Inclusion of anti-dilution provisions to protect stock values;
  • A description of major shareholders’ “tag-along” rights;
  • Registration rights must be explained and how they apply to certain restricted stocks;
  • Stock valuation procedures must be described and closely followed.

Once these and other crucial topics have been covered, you and your Houston corporate law attorney should discuss the best buy-sell provisions suited to your corporate structure.

Basic Buy-Sell Provisions – Events That Often Trigger Their Use

Your shareholder’s agreement should always include a very detailed explanation of how shares should be sold when one of the following events takes place.

  • The death of a shareholder;
  • The termination of an employee shareholder – whether “for cause” or without cause;
  • The disability of a shareholder;
  • A shareholder’s retirement

When trying to draft the best buy-sell procedures to address these situations, it’s often wise to sit down and review your corporation’s main concerns and interests with your lawyer.

Should the Selling of Shares Be Mandatory — or Provide Parties with Greater Choice?

When trying to answer this question, you may want to provide different answers, depending on whether the sales are to the corporation itself, other shareholders – or to third parties.

  1. Should your corporation be given the first right to purchase (or redeem) the stocks? If you and the controlling officers of your corporation wish to include this provision in your shareholder agreement, be sure to first consider the possible capital gains tax issues involved;
  2. Do you want to automatically offer the available shares to other general shareholders if the corporation isn’t interested in redeeming the shares after a set deadline? If so, it’s important to indicate if majority shareholders will have the first opportunity to buy the shares;
  3. Are you willing to allow outside third parties to buy the newly available shares? If so, you must decide in advance the types of criteria that such buyers must meet.

Other Key Issues Involved with Drafting Your Buy-Sell Provisions

  1. Setting the proper price to be paid for the stocks. In general, if the available shares are to be purchased by the corporation or one of its current shareholders, you should have already created a clear formula in your shareholder’s agreement for determining the current, proper valuation of the stock. However, if the shares are to be sold to an outside third party, that outsider’s offer will normally be determined by the current market price for the type of shares involved;
  2. How should the price be paid? Most corporations will benefit from establishing a basic buyout procedure within its shareholder agreement so that these common transactions can be handled according in a very clear, pre-determined manner. Since lump-sum payments are usually not preferred, you will need to decide if you prefer such options as:
  1. A buyer-financed buyout
  2. A seller-financed buyout, or
  3. Some type of financing arrangement involving insurance or a trust

Since a corporation’s success is often determined by the terms and quality of its shareholder’s agreement, please feel free to contact our firm so we can provide you with our general legal advice or help you draft a new agreement. 

Obtaining A Mechanic’s Lien in Texas

Once your company has been hired as a contractor or subcontractor to build, repair or renovate a structure for others, it may become necessary to file a mechanic’s lien on the property to ensure that you’ll be promptly paid for all your labor and materials. This type of lien must be filed with the County Recorder or Clerk in the county where the property is located. When a company fails to file this type of lien before the property worked on is sold – it can become more difficult to enforce your rights against the party who contracted with you.

As the State Bar of Texas explains in one of its publications addressing mechanic lien rights, shortly after you begin your work – and long before you ever need to send out any invoices  — you should also consider sending out two notices to the other parties to your contract. These are known as a Notice of Contractual Retainage Agreement and a Notice of Specially Fabricated Materials. 

Since mechanic’s liens can be rather detailed and are drafted a bit differently in most states, it’s always wise to obtain legal advice on how this document should be appropriately worded. However, it’s usually not best to begin trying to collect all funds owed to you by filing this type of lien. Your first step in the process of seeking payment should be to simply mail your final invoice and other pertinent statements to the party that hired your company.

Additional Steps That Should Precede the Filing of a Mechanic’s Lien

It’s a good idea to send your initial invoice and statements via certified mail so you can later document the amount of time the other party has had to pay all that’s owed. If you receive no response, you should directly call the party who initially agreed to pay your company for its work. If you still cannot obtain the money owed, you should ask your Texas business attorney to send a formal yet polite demand letter using the law firm letterhead, seeking immediate payment of all sums owed.

Once a late-paying client is aware that you have a law firm acting on your behalf, they will often submit prompt payment. If you still cannot recover all sums owed to you, be sure to ask your attorney how quickly you must file a mechanic’s lien – so that a sale of the property on which you worked cannot occur so quickly that it might compromise your rights.

Consider Filing a Lawsuit after Filing a Lien

As your lawyer will tell you, Texas is a bit different than many other states because our state’s laws providing the right to file a contractor’s lien are set forth in our state constitution. In fact, Article XVI, Section 37 of the Texas Constitution protects the rights of all mechanics, artisans and others who handle materials while building, repairing or renovating another party’s property. These rights are further set forth in Chapter 53 of the Texas Property Code.

Unfortunately, Chapter 53 is rather long and its description of your mechanic’s lien rights can be difficult to interpret at times. Nevertheless, an experienced attorney can provide you with answers to your questions that cannot be readily answered by reading that material. Common questions regarding liens often revolve around the types of contractors and subcontractors who can file a valid mechanic’s lien.

Texas law clearly indicates that most companies – even those who only briefly work on the property while planting a few trees or providing their landscaping skills — are entitled to file a lien.

Should You Also File a Lawsuit?

This is always a matter that you must discuss with your attorney. When it’s recommended, it’s normally done in addition to filing a mechanic’s lien against each of the appropriate parties to your contract. If you pursue this remedy, your lawyer will present several arguments. Chief among them will be the assertion that the party who directly hired you has breached your contract by failing to timely pay all reasonable amounts owed.

Our firm recognizes that it’s often difficult to understand all Texas mechanic’s lien rights, even if you’ve been working as a contractor or subcontractor for many years. Therefore, we welcome the chance to meet with you, so we can provide all the guidance you may need to obtain full and timely payment for all the services you have rendered to others.

Q & A: Job Accomodations Often Requested by Disabled Workers

Like most Americans, people living with chronic disabilities know that their best physical and mental health is often easiest to maintain when they’re doing meaningful work. Yet despite their strong work ethic – many of the disabled must still combat negative stereotypes that often don’t match the excellent work they do.

Fortunately, the Americans with Disabilities Act of 1990 (ADA) made it illegal for employers to discriminate against job applicants with known disabilities. The ADA applies to all employers with 15 or more employees and to all state and local government employers. The Equal Employment Opportunity Commission (EEOC) enforces all the provisions of the ADA.

Once employers become aware of the untapped talents and skills of the disabled, they still hesitate to hire people because they’re concerned about the “reasonable accommodations” they may need to make to help disabled workers function at their full capacity. However, most of the time, the special requests made by the disabled are relatively simple to handle.

Here’s a brief look at some of the questions employers often ask about properly honoring all the ADA’s provisions in the workplace.

Frequently asked questions concerning the Americans with Disabilities Act

Q:  What exactly constitutes a “disability” under this law?

A:  A job applicant’s disability is normally covered by the ADA if it involves a mental or physical impairment that substantially interferes with (or limits) an individual’s ability to handle a major activity like work.

Q:  Can my company require a job applicant to undergo a medical exam before extending a job offer?

A:  Generally, no. However, you can make a job offer that’s conditional, based on a satisfactory result of a post-offer medical exam (or inquiry) that’s required of all new employees entering in the same job category. Under certain circumstances, always best discussed in advance with your Houston employment law attorney, you can ask an applicant who has disclosed that s/he has a disability to either demonstrate the ability to perform the job’s required tasks – or at least describe how s/he will handle them due to the disability.

Q:  What constitutes a “reasonable accommodation?”

A:   Employers sometimes need to adjust or modify certain aspects of the job application process and how a job is performed so that a disabled person can readily enjoy the same rights and privileges extended to others without disabilities.

Q:  Do we have to grant preference to a disabled applicant over someone who is not disabled?

A:  No. One of the clearest examples provided by one source refers to a job where the employees may need to type rather fast. If the disabled job applicant’s best typing score (after being provided with appropriate testing accommodations) is only 50 wpm and a non-disabled applicant can type 75 wpm, the employer is completely free to hire the faster typist. Again, this holds true if fast typing skills are crucial to the job;

Q:  Can you provide concrete examples of reasonable accommodations that employers might need to provide?

A:  Yes. A sample list follows.

  1. You may need to modify how someone takes a qualifying exam, completes a training program or handles limited aspects of the job once hired. For example, a person with limited use of his hands may require special software that lets him dictate most of his work instead of typing it;
  2. You may have to honor certain lifting limitations or a requirement that someone remain seated in a regular chair most of the day. Depending on the disabled person’s special needs, particularly if she’s suffering from a spinal cord injury, you may need to provide an ergonomically correct chair. Of course, employers can object to some requests, if they can prove that purchasing the required equipment would likely impose an undue hardship on them;
  3. It may be necessary to allow a disabled person to work from home. Some disabled people need to work in either extremely high- or low-light environments. Others may need to telecommute so they can readily take certain medications — or periodically change, adjust or empty various medical devices they must wear. Still other employees may need to lie down and periodically rest their bodies due to various spinal cord or traumatic brain injuries that make sitting upright for lengthy periods of time too compromising or painful.

Please note that regardless of whether the disabled employee works at home or in a company’s office, no employer is required to lower their standards for the quality of work being done – nor lower their overall production standards;

  1. It may help to change an employee’s work schedule. This can help the disabled person perform the required tasks at a time of day or night that may be much more conducive for doing his/her best work;
  2. You may need to make special scheduling adjustments to help an employee with a known psychiatric or mental health impairment. This might include excusing the person from working rotating shifts; allowing the individual to take extra time to rest during the lunch hour — and making sure the employee has a work schedule that allows for regular therapy appointments during the day;
  3. It may be necessary to provide a TTY (text telephone) system to a worker who has suffered a significant hearing loss that’s been formally recognized as a disability;
  4. You may need to authorize a short-term leave from the job. This type of disability request will always revolve around special circumstances. For example, if a worker and his/her doctor both believe that such a leave is necessary to help improve the person’s health and ability to work, this might be useful. However, employers are not required to bear undue hardships and disrupt overall workflow by leaving critical positions unfilled for lengthy periods of time.

As all this material indicates, meeting ADA standards is usually a straightforward process. Odds are, you’ll soon discover that hiring disabled employees is a smart move since they’re normally highly qualified and eager to succeed.

Please feel free to contact one of our Murray Lobb attorneys so we can assist you as you try to conform with all the ADA’s provisions – while also creating a pleasant job atmosphere for all your employees.

7 Good Reasons for Starting a New Business in Houston

Although Hurricane Harvey took far too many lives and delivered devastating blows to Houston’s economy and infrastructure back in 2017, the city has since rebuilt much of what was lost and is once again helping many entrepreneurs start new companies.

Some outsiders unfamiliar with the Lone Star State’s “can-do” attitude are a bit surprised to hear this good news. After all, Hurricane Harvey flooded 165,000 homes in Harris County — and dumped more rain in the Houston area than any other storm in recorded U.S. history.

Yet despite the $80 billion or more in damages, Houston is busy thriving again. In fact, the city’s growing economy surely played a role in CNBC’s decision to name Texas the best state for business in 2018. The following list sets forth seven key advantages that are enticing various entrepreneurs to start their companies here.

Strong reasons why Houston is fully ready to help “grow” your new business

  1. The city is home to excellent business incubators and accelerators. They include the Houston Technology Center (HTC), once referred to by Forbes as one of “Ten Technology Incubators Changing the World.” In fact, Texas has ranked HTC as its largest technology business incubator and accelerator. Other incubators in the city include Station Houston and Fruition Technology Labs.

Back in 2015, our Texas Governor’s Office created a statewide list of business incubators that may also still prove helpful. Regardless of the type of product or service you’re trying to develop, you should be able to find an incubator in Houston that can help you creatively launch your business. Most of them offer unique resources – and can help you locate venture capitalists and others interested in investing in new companies.

  1. Based upon foreign tonnage, Houston remains the biggest port in the country. Back in 2016, the port handled 68% of all the Gulf Coast’s container traffic. You can ship your goods just about anywhere in the world from this port;
  1. Forbes’ 2018 list of best employers included eight (8) based in Houston. If you start a company here and regularly network with other corporate leaders, you may easily get the chance to learn how these other highly successful businesses are managing to provide the best working environments for their employees;
  1. There’s plenty of highly desirable office space available for businesses of every size. Furthermore, it’s often easy to find “co-working spaces” that can readily meet the needs of smaller companies with limited budgets;
  1. Houston remains a business-friendly city with leading companies representing a wide swath of industries. Depending on which business incubator or accelerator you choose to join, there’s a strong chance you’ll have the chance to network with leaders in the fields of energy, healthcare, aerospace, nanotechnology and information technology – just to name a few;
  1. The cost of living is reasonable – and there are no state taxes in Texas. Many Houston entrepreneurs choose to live in affordable suburbs such as Webster, Stafford, Katy, Deer Park and Brenham. Statistics indicate that many thriving new businesses are also run in those same areas;
  1. Houston has a well-developed and diverse transportation system. METRORail, busses, freeway systems and other options provide reasonable means for everyone to live and work in this large metropolitan city. With careful planning, you should be able to get to meetings across town without delay on most days;

If you have any questions about a business that you’d like to start, please contact one of our Murray Lobb attorneys. It’s been our privilege to provide general business and legal advice to entrepreneurs creating new companies for many years. When you get in touch, we can also help you decide which type of business structure will best serve your needs.