Category Archives: Regulatory

Texas AG Issues Opinion on When Tree Ordinances Could Result In A Taking of Private Property Rights

The Texas Attorney General recently issued opinion KP-0155 addressing the issue of whether, under certain circumstances, municipal tree preservation ordinances might violate the Takings Clause of the Texas Constitution.

The opinion begins by noting that although there are some differences between the Takings Clause in the Texas Constitution and the Takings Clause in the United States Constitution, the two are similar enough that Texas courts usually refer to opinions interpreting the federal clause when interpreting the Texas clause.

The AG opinion notes that there are two types of takings that may arise.  The first is a per se taking which occurs when a governmental action denies a landowner all economically viable use of the property and focuses its inquiry on determining whether any value remains in the property after the governmental action.  A tree preservation ordinance could theoretically affect an entire parcel of land rendering it valueless and eliminating any possibility of the landowner realizing any economic value from the property.

The more common situation will arise when an ordinance affects one or two trees on a property without rendering the entire parcel of land useless.  The AG Opinion recognizes that a taking may occur if a governmental action imposes a restriction that unreasonably interferes with the landowner’s rights to use and enjoy a property.  Determining whether a taking occurs in this situation requires a fact intensive analysis under the factors set forth in Penn Central Transportation Co. v. New York City 438 U.S. 104 (1978).

In Penn Central, the Supreme Court stated that a use restriction on real property may constitute a taking if not reasonably necessary to the effectuation of a substantial public purpose, or, if it has an unduly harsh impact upon the landowner’s use of the property.  The Penn Central factors used to determine whether a landowner’s rights have been deprived to such an extent that a taking occurs are set forth below:

  1. the economic impact of the regulation on the owner;
  2. the extent to which the regulation interferes with a distinct investment backed expectation of the landowner; and
  3. the character of the governmental action.

The “economic impact” factor focuses on the extent of the diminution in value of the property as a result of the regulation.  The greater the economic loss a landowner suffers as a result of the regulation, the more likely a court would determine a taking occurs.

The second factor focuses on determining the legitimate expectations of the landowner regarding which rights the landowner would have when investing in the property.  If the landowner’s expectations regarding his or her use of the property are limited by the governmental action, then it is more likely to result in a taking.  Under this factor, the focus is on the landowner’s expectations at the time of purchase and whether a later enacted ordinance limits those rights.

The third factor asks whether the regulation is aimed at the broader public good and burdens the public at large or whether the regulation results in a greater burden on the individual landowner.  A court is more likely to find the ordinance results in a taking in the latter situation.

While the AG Opinion is not binding upon a court of law, the analysis provides highly persuasive support for landowners impacted bye local tree preservation ordinances that wish to challenge the impact of those ordinances under the Takings Clause of the Texas Constitution.

What Employers Should Know About the EEOC Mediation Process

Beginning in the 1990s, the EEOC implemented a mediation program as an alternative means for resolving employment discrimination complaints filed by employees against their employers or former employers.  You can read more about the mediation program’s history on the EEOC’s website.  This article offers some insights into the EEOC mediation process for employers, as well as tips for employers who are attending or are considering attending an EEOC mediation session.

The EEOC Mediation Referral Process

When an employee files a discrimination complaint against his or her employer, the employer and employee may have the opportunity to participate in the EEOC’s mediation process.  The EEOC will determine upon filing whether the complaint is appropriate to refer to its mediation program, and if so, the EEOC will offer both parties the chance to elect to participate.

If both parties agree, the matter is moved from the EEOC’s investigative division to the mediation division and the employer’s response deadline is suspended pending the mediation.  The EEOC mediator will coordinate with both the employer and the employee to schedule the mediation date.  If the mediation is successful, the complaint is resolved through a settlement agreement.  If, however, the parties do not come to an agreement at the mediation, then the matter is referred back to the EEOC’s investigative unit and the EEOC will give the employer a new deadline to file a response to the complaint.

What Happens at the Mediation

Every mediation is different but most follow a standard formula.  The parties usually start out in separate rooms upon arrival.   Most mediation sessions begin with the mediator bringing both parties together for a joint session where the mediator will explain the mediation process and the rules governing the mediation.  Each side usually has an opportunity to make an “opening statement” outlining its position with regard to the complaint that has been filed during this joint session.  Some mediators may allow the employee to decide whether or not there is a joint session.

The mediator may continue the joint session in hopes of further identifying underlying issues in the dispute or in hopes of a quick resolution if the matter is relatively simple and straight forward.  Most of the time however, the parties will move back to their individual rooms after the joint session and the mediator will begin shuttle negotiations.  During this process, the mediator will meet with each side individually to gain a better understanding of the employer and the employee’s positions.  After the initial round of individual sessions, the mediator will continue shuffling between the parties.

Each time the mediator meets with a party, the mediator will attempt to ascertain whether that party wants to make an offer or respond to an offer from the other party.  The mediator may also evaluate that particular party’s position by asking questions and pointing out weaknesses in that party’s argument or assessment of the facts.   The mediator may also comment on the other party’s position and suggest strengths or weaknesses to consider in evaluating or responding to an offer.

The mediator’s purpose is to assist the parties in reaching a resolution of the complaint.  Parties will and should share information with the mediator that they would not share with the other party.   One of the most significant benefits of mediation is that the mediator has (confidentially) heard both parties’ positions and can suggest alternatives or solutions to bring the parties together that they might not otherwise consider.

If the employer and the employee reach an agreement, then the mediator will draft a settlement agreement for both parties to sign.  The details of the settlement will be specific to the issues in each complaint, but the EEOC has a standard form and the settlement should result in no further investigative action by the EEOC.

Tips for Employers When Attending an EEOC Mediation Session

There are a number of things employers should keep in mind about an EEOC mediation to ensure the best chance of resolving the complaint before having to deal with an EEOC investigation.  Many of these are general tips for mediation but they apply equally well in this situation.

  1. First and foremost, leave your emotions at the door.  The purpose of the mediation is to resolve the dispute.  The issue can be just as emotional for the employer (particularly smaller employers) as it is for the employee but the employer does itself no good by allowing emotions to dictate its position or its response to the employee during the mediation.
  2. Remember that you do not have to reach a resolution.  There will be other opportunities to resolve the dispute with the employee at a later date (but not necessarily the EEOC).
  3. Remember that the mediation is not about determining who is right or wrong.  The mediator is not a judge or jury.  There is no fact finder.  The mediation is simply a forum to try to reach a resolution, agreeable to both sides, that resolves the matter.  Discussing strengths and weaknesses in both parties’ positions can be useful for coming to a resolution, but ultimately no one is going to determine which side is right at the mediation.
  4. Listen.  Sometimes employers can get a lot further along in resolving an employment dispute simply by listening to the employee and his or her concerns.  Sometimes employees just feel like they haven’t been heard and need an opportunity to vent.
  5. Very rarely will you reach a resolution that you are completely satisfied with.  Most settlements end with each side happy about some points and disappointed in others.

 Whether An Employer Should Be Represented By An Attorney at an EEOC Mediation Session

Being an attorney, I naturally answer this question yes.  But let me offer a few reasons why having an attorney is important for employers when attending an EEOC mediation by explaining the benefits to an employer in having an attorney represent the company.

  1. Preparation.  A lot of employers have limited or no experience dealing with an EEOC discrimination complaint nor any experience with mediation.  An attorney can serve as a useful guide to provide confidence and security to the employer.
  2. Knowledge of the Law.  Employers greatly benefit by having a thorough understanding of the law that applies to the employee’s complaint.  That understanding is important in determining the employer’s settlement position and whether any given settlement offer is reasonable.  An employer wouldn’t want to miss out on an early settlement opportunity if the liability and damage exposure were clearly in the employee’s favor.  Likewise, an employer wouldn’t necessarily want to settle an employee’s claim for a significant sum if the employer has a strong defense to liability or a basis for limiting its damages exposure.
  3. Stronger Negotiations.  No matter the setting, if you can apply objective standards to relevant facts and present logical arguments in support of your position then you are more likely to convince an opposing party to accept your position.  An attorney’s knowledge of the law, ability to distinguish relevant facts, and analysis of those facts, can support the legitimacy of the employer’s position.  This strengthens the employer’s arguments in support of its settlement position.  It also increases the burden on the opposing party to offer a specific and logical reason or a basis for the employee’s position. This could result in the revelation of new information that may be beneficial to the employer’s position or a lack of information that could weaken the employee’s position.
  4. Acts as a Firewall.  A mediator’s goal is to encourage the parties to settle the matter.  This includes critiquing a party’s position and asking questions about possible outcomes to test the party’s resolve.  An attorney can help an employer decipher whether the mediator’s questions and statements are legitimate concerns or mere puffery designed to encourage settlement.
  5. Settlement Documents.  EEOC mediators use a standard settlement agreement that often does not include a number of terms an employer would want to include in any settlement agreement.  An attorney can make sure the employer’s terms are included in the agreement, or alternatively, come prepared with a separate form to use at the settlement.


Employee or Independent Contractor? IRS Webinar

The IRS is hosting a webinar on March 12th titled “Employee or Independent Contractor?”  This is an opportunity for business owners with questions about employee classification issues to learn more about the IRS’s views, the investigative process, and opportunities to resolve inaccurate classifications.  Topics that the webinar will cover include:

  1. Defining “Employee”
  2. The three control factors.
  3. Key vendor characteristics.
  4. The Voluntary Classification Settlement Program.

You can read about the webinar and register to attend by clicking here.

What is the Texas Business Opportunities Act?

Almost everyone is familiar with the concept of franchises and franchise law but many people are unaware of another statute governing business opportunities called the Texas Business Opportunities Act.  The importance of understanding this law cannot be understated due to the penalties involved – failure to comply is by law a deceptive trade practice in… Continue Reading

A Summary of the 2013 Texas Legislature’s Impact On Business Laws In Texas

The Texas legislature’s 2013 regular session produced a number of bills that amend or alter laws affecting businesses in Texas.  Below is a summary of key bills passed by this legislature that affect Texas businesses, some of which will be addressed in more detail in later posts.  There is also a list of other bills… Continue Reading

Obama Administration Launches One-Stop-Shop Website to Educate Business Owners About the Affordable Care Act

The Obama Administration today launched, a one-stop-shop Website which will provide employers of all sizes educational materials on how the Affordable Care Act may affect businesses and help them compete. The site includes a wizard tool that is tailored based on size and location, so businesses can learn how the law helps them provide… Continue Reading