Evaluating Employee Performance While Mitigating Liability

Employee performance reviews can be uncomfortable, often even more so than issuing discipline to an employee. With disciplinary actions, employers are often dealing with employees who intentionally break the rules. With negative performance reviews, however, employers are often dealing with employees who simply are not competent to satisfactorily perform their jobs, despite their dedication and hard work. Telling a well-meaning employee that they are doing a bad job is simply a hard thing to do.

The first step an employer can take to protect itself is to hire employees for a probationary period with a performance review to take place at the end of the probationary period. Assuming the employee is at-will, the employer must make it clear that the probationary period does not guarantee any length of employment – the employee may still be terminated for any reason either before or after the probationary period ends. The purpose of the probationary period is to give the employee time to learn the job and to make sure that the employee is capable of performing the job duties. The length of the probationary period should be determined in accordance with the difficulty of the job duties to be learned. If a probationary period is done correctly, and an honest assessment is taken at the end of the period, the employer can avoid future complications by either cutting an employee loose at the end of the period or continuing the individual’s employment with the expectation that the employee can and will satisfactorily perform all job duties in the future.

If an employer continues to conduct performance reviews for all employees, the performance reviews must be done honestly, consistently, and thoroughly to be effective. In fact, if performance reviews do not meet these criteria, the employer is much worse off from a legal liability standpoint. For example, a common problem with performance reviews is that supervisors are hesitant to offer honest, negative feedback to their employees. They understandably want to avoid confrontation and awkward conversations. So, supervisors tend to complete performance reviews in a much more positive light than an employee’s performance truly merits. Eventually, the employee’s performance might decline to such a point that the employer wants to terminate the employee, and it does so. If that employee brings a claim for unlawful discharge, the employee’s positive performance reviews will tend to support the employee’s claims against the employer. So, if an employer cannot ensure that performance reviews are honest, consistent, and comprehensive, it would be better off by not having performance reviews at all.

A good performance review is one that lists each of the job expectations for the employee and offers constructive feedback for each of those expectations. Employees should be given clear directions on what they need to do to improve on any points of poor or weakening performance, and they should be given a timeline for expected improvement with a description of potential consequences if they do not meet expectations within that timeframe. Employers should have the employee sign the performance review, and the employer should document its conversation with the employee about the performance review. Finally, employers should be wary of guaranteeing or implying that employees will receive any benefits, raises, or continuing employment associated with positive performance reviews unless the employer fully intends to honor such commitments.

New Veteran-Owned Business Entities Get Texas Franchise Tax Abatement

There is great news for Texas veterans who want to form a business entity. In accordance with Senate Bill (SB) 1049, effective January 1, 2016, a new veteran-owned business entity that is formed in Texas between January 1, 2016 and January 1, 2020, may be eligible for an exemption from the Texas franchise tax for the first five years of operation. The Secretary of State also waives certain filing fees, and can even refund fees previously paid if the entity complies with the procedures.

To be considered a new veteran-owned business, an entity must:

• be formed or organized in Texas on or after Jan. 1, 2016, and before Jan. 1, 2020;

• be 100 percent owned by a natural person or persons with each owner being an honorably discharged veteran from a branch of the U. S. Armed Services; and

• All owners must complete the Comptroller Certification Form (PDF) certifying that 100% of the owners of the business are veterans (verification of status must be obtained from the Texas Veterans Commission (PDF)

The Comptroller’s office verifies this information. If during the initial five-year period, a new veteran-owned business no longer meets the above criteria, the business:

• must notify the Comptroller’s office; and

• becomes subject to franchise tax

The Underwood Law Firm is familiar with this veteran-specific process and knows how to get your business entity formed as quickly as possible. In addition, we can help you with important considerations such as choice of entity, name restrictions on veteran-owned entities, drafting your letter to the Texas Veterans Commission, and coordinating the entire process. To find out more about starting your own veteran-owned business in Texas, contact us today.

What To Do When There Is No Discipline Policy Addressing An Offense

An employer’s disciplinary policy should be general enough to allow the employer to discipline an employee for any and all unacceptable conduct. But what happens if the employer’s policy is not broad enough to cover certain conduct that the employer believes merits discipline? Fortunately for most (at-will) employers, the absence of specific language in a disciplinary policy does not necessarily impair the employer’s ability to discipline appropriately, as long as the employer follows certain guidelines.

If the offense is minor, and it is not addressed or prohibited in the employer’s policies or handbook, the employee may not know that he or she is doing anything wrong. In such circumstances, the employer should first speak with the employee about the conduct and should consider revising the employer’s policies to address the conduct. If the employee does not correct their behavior after the conversation with the employer and after an opportunity to cure their behavior, the employer may want to move to formal discipline. 

If the conduct is more severe, the employer may want to start by formally disciplining the employee rather than simply speaking with the employee. If an at-will employment relationship is clear, an employer may terminate an employee for any reason, as long as that reason is not otherwise prohibited by law. This is true regardless of whether the employer’s disciplinary policy addresses the conduct at issue. However, the employer must be aware of the risks involved in terminating an employee for conduct not addressed in its handbook – if the employee makes a claim for unlawful discharge (discrimination, retaliation, or the like), the employer cannot point to a specific violation of its disciplinary policies as evidence of lawful termination.

An employer may also impose less severe discipline for conduct not addressed in the employer’s policy, but it must be careful that such discipline is consistently enforced. If the employee is the first to engage in a certain type of unacceptable conduct, the employer might consider revising its policies to address that conduct (or it might consider broadening the language in its policy so that it will cover all unacceptable conduct). The employer should ensure that any employee who subsequently engages in the same unacceptable behavior receives similar discipline. If the employee is not the first employee to engage in a certain type of unacceptable conduct, the employer should determine whether, and how, it disciplined other employees who previously committed the same acts.

The keys to an employer protecting itself from liability in these situations are consistency and documentation. All employees must be disciplined consistently for similar unacceptable behavior, and the employer should carefully document the reasons for discipline and/or termination. With good documentation, the employer can show that the reasons for discipline or termination are legitimate reasons and are not pretext for an unlawful action taken against the employee.

Texas School Bond Elections: Unofficial Results, November 7, 2017

On Tuesday, November 7, 2017 Texas voters went to the polls to vote on bond propositions and other ballot measures called by 58 school districts.  Among other ballot measures, 52 districts submitted a total of 59 bond propositions to the voters, totaling over $7.2 billion.  While all results are unofficial and canvassing is underway, as of 9:30 a.m. on Monday, November 13, local media outlets and the Texas Comptroller are reporting preliminary election results.

Of the 52 districts that submitted bond propositions, voters look to have approved the propositions of 42 Districts (some with multiple propositions) totaling over $6.4 billion.

The Underwood Law Firm public finance team has extensive experience representing school districts in all aspects of bond issuances, from facilities planning to election, and through issuance and post-issuance compliance. Whether serving as bond or disclosure counsel to issuers or as counsel to underwriters or trustees, Underwood stands ready to work with all participants needed to finance the improvements needed to meet school districts’ future needs. 

Summary of Results

  • Region 1 Districts

    • La Villa ISD: $5 M—Passed


  • Region 2 Districts

    • Calallen ISD: $39.5 M—Passed
    • London ISD: $18 M—Passed


  • Region 3 Districts

    • East Bernard ISD: $18.5 M—Passed
    • Kenedy ISD: $26 M (two propositions)—Passed
    • Van Vleck ISD: $88.2 M–Passed
    • Victoria ISD: $141.2 M—Failed


  • Region 4 Districts

    • Crosby ISD: $109.5 M—Passed
    • Danbury ISD: $18.7 M—Passed
    • Deer Park ISD: $156M—Passed
    • Katy ISD: $609.2 M—Passed
    • Lamar CISD: $445 M—Passed
    • Pasadena ISD: $135 M—Passed
    • Spring Branch ISD: $898.4 M—Passed
    • Stafford MSD: $62 M—Passed
    • Tomball ISD: $275 M—Passed


  • Region 6 Districts

    • Coldspring-Oakhurst CISD: 8 M—Passed
    • Navasota ISD: $55 M—Passed
    • Snook ISD: $7.5 M—Failed


  • Region 7 Districts

    • Laneville ISD: $6.9 M (two propositions)—Failed
    • Mineola ISD: $41 M—Failed
    • New Diana ISD: $5.5 M—Passed
    • Winnsboro ISD: $31.5 M—Passed


  • Region 8 Districts

    • Dekalb ISD: $12.5 M (two propositions)—Passed


  • Region 10 Districts

    • Community ISD: $115 M—Passed
    • Howe ISD: $17M—Passed
    • Pottsboro ISD: $59 M—Failed
    • S and S CISD: $24 M—Passed
    • Sherman ISD: $176 M—Passed
    • Waxahachie ISD: $78 M—Failed


  • Region 11 Districts

    • Aledo ISD: $72.9 M (2 propositions) – Failed
    • Aubrey ISD: $51 M—Passed
    • Eagle Mountain-Saginaw ISD: $524.7 M –Passed
    • Fort Worth ISD: $750 M—Passed
    • Little Elm ISD: $239.5 M (two propositions)—Passed
    • Peaster ISD: $13.5 M—Failed


  • Region 12 Districts

    • Groesbeck ISD: $5 M—Passed
    • Mart ISD: $9.2 M—Passed


  • Region 13 Districts

    • Austin ISD: $1.1 B—Passed
    • Bastrop ISD: $88.5 M—Failed
    • La Grange ISD: $37.9M—Passed
    • Lago Vista ISD: $2.9 M—Passed
    • Lake Travis ISD: $253 M—Passed
    • Leander ISD: $454.4 M—Passed


  • Region 14 Districts

    • Wylie ISD: $45 M—Passed


  • Region 16 Districts

    • Amarillo ISD: $100 M—Passed


  • Region 18 Districts

    • Ector County ISD: $291.2 M—Failed
    • Grady ISD: $35 M—Passed


  • Region 19 Districts

    • Socorro ISD: $448.5 M—Passed


  • Region 20 Districts

    • Lytle ISD: $6.5 M—Failed
    • Medina ISD: $5.9 M—Passed
    • Poth ISD: $10 M—Passed


Whether filling out the team to get recently approved bonds to issuance, contracting for the expenditure of those funds, refinancing existing debt, or evaluating future financing options, Underwood has the experience in election, finance, procurement, real estate, and construction law to make your vision reality.