USA – TEXAS Law and Practice Contributed by: Alana Ackels and Katie Beaird, Bell Nunnally & Martin
off employee refrain from publicly disparaging the company or otherwise keep confidential the terms of the employee’s severance as part of a severance agreement. The NLRB decision overruled decisions of the board issued just a few years prior. Under the Biden administration, the NLRB reversed course and found that an employer’s use of severance agree - ments that contain sweeping non-disparagement and confidentiality provisions interferes with a laid-off employee’s Section 7 rights. However, since Donald Trump became President, the Acting General Counsel of the NLRB rescinded this decision. Thus, employers using severance agreements with confidentiality and non-disparagement clauses may no longer use the carve out language, carving out conduct protected by Section 7 of the NLRA, if they so choose. Companies from overseas expanding into the US market should be aware of these NLRA regulations and ensure that their policies – especially policies that might limit employees’ ability to discuss wages and other terms of employment – are not restricted. 6.3 Collective Bargaining Agreements Collective bargaining agreements are agreements between employers and representatives of their employees (eg, unions), which address the wages, hours and other conditions of employment. Collective bargaining agreements exist and operate under the statutory framework established by the NLRA. Most collective bargaining agreements contain the following common elements: • union recognition clause; • management rights clause; • union rights provisions; • prohibits on strikes and lockouts; • union security clause; • non-discrimination provisions; • grievance and arbitration procedures; • provisions establishing the terms and conditions of employment; • provisions addressing changes in the employer’s business; and • terms defining the scope of the agreement.
A collective bargaining agreement will typically require “just cause” (as defined in the agreement) for an employer to terminate employment. If the employee disputes that the employer had just cause, this will likely proceed under the grievance procedures until a determination is finalised.
7. Termination 7.1 Grounds for Termination At-Will Employment
When facing termination of the employment relation - ship, companies should look to determine whether the employee is party to any employment contract or collective bargaining agreement that governs the termination or the employment relationship itself. The default rule in 49 states (including Texas) is that employees are “at will”, meaning the employee or the business can terminate the employment relationship for any reason or no reason at all, so long as the rea - son or no reason is not “illegal” – something that is typically tied to a protected classification. Employment Contracts and Collective Bargaining Agreements If there is an employment contract, the business must determine what steps – if any – are needed to end the relationship. By way of example, some employment contracts may require a severance payment or certain notice if the employee is terminated without cause (which should be defined in the agreement). A collec - tive bargaining agreement will typically require “just cause” (as defined in the agreement) for an employer to terminate employment. Best Practices to Minimise Risk Assuming there is no contractual relationship or col - lective bargaining agreement with the employee that governs the termination, the employer should still ensure it has legitimate business reasons for the ter - mination and no decision is tied to a protected clas - sification or in response to a workplace complaint. If a protected classification listed in 7.5 Protected Cat- egories of Employee is motivating the termination, liability could be found against the employer. There are many state and federal statutes that protect against
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