In Texas, workers are either employed by an employer or they are independent contractors. Often, they are referred to by the tax form used to report income: employers report wages on IRS Form W-2 for employees and on IRS Form 1099 for independent contractors.

Employment contracts take the form as agreed by the parties, which can include any terms the parties agree on such as at-will employment, employment for a fixed term, etc.

In Texas, the presumption is that employment is at will.  Employers can alter the at-will employment relationship by providing an employment contract with a promised term of employment. The term can be for whatever time period is agreeable between the employee and the employer; however, if the term is for more than one year, the offer will not be valid unless it is in writing.

Part-time employees have the same rights with respect to employment laws, but if they work fewer than 30 hours per week for an employer that has  more than 50 full-time equivalent employees, then they are not required to be covered under the employee's health plan.

Employment contracts are personal, and unless there is an assignment clause in the agreement, may not be assigned other than by operation of law to a successor. 

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Employers may change the terms of employment at any time by giving notice to an employee. Unless there is a contract giving the employee different rights, the employee's only recourse is to terminate employment. An at-will employee who returns to work after the employer gives notice of the change is deemed to have accepted the change in terms. In re Halliburton, 80 S.W.3d 566 (Tex. 2002).

Employment in Texas is presumed to be at will.  This presumption is rebutted by proof that the employer has unequivocally indicated an intent to modify the employee’s at-will status.  Midland Judicial Dist. Comm’ty Supervision & Corrections Dep’t v. Jones, 92 S.W.3d 486 (Tex. 2002).  The Texas Supreme Court has held that the at-will doctrine imposes no liability even if the discharge was for a bad reason and “does not require an employer to be reasonable, or even careful, in making its termination decisions.”  Tex. Farm Bureau Mut. Ins. Cos. v. Sears, 84 S.W.3d 604, 606 (Tex. 2002).  A Texas employer does not owe its at-will employees a duty of good faith and fair dealing in connection with employment.  City of Midland v. O'Bryant, 18 S.W.3d 209, 216 (Tex. 2000).  

The Texas Supreme Court has created a narrow public-policy exception to the employment-at-will rule by holding that an employer may not terminate an employee solely for refusing to perform a criminally illegal act ordered by the employer.  Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985).  In addition, various Texas statutes provide exceptions to the at-will doctrine, which parallel and sometimes exceed certain federally-created exceptions.  These include statutes prohibiting discharge based on:

1. a workers’ compensation claim made in good faith (Tex. Lab. Code § 451.001); 
2. race, color, disability, religion, sex, national origin or age (Tex. Lab. Code § 21.051); 
3. jury service (Tex. Civ. Prac. & Rem. Code §§ 122.001); 
4. attendance at a political convention as a delegate (Tex. Elec. Code Ann. § 161.007); 
5. military service (Tex. Gov’t Code §§ 431.005-431.006); 
6. refusal to participate in an abortion (Tex. Occ. Code § 103.002); 
7. membership or non-membership in a union (Tex. Lab. Code § 101.052); 
8. refusal to make a purchase from an employer’s store (Tex. Lab. Code § 52.041); 
9. compliance with a subpoena (Tex. Lab. Code § 52.051);  
10. mental retardation (Tex. Health & Safety Code § 592.015); 
11. a public employee’s report of a violation of law to an appropriate enforcement authority (Tex. Gov’t Code § 554.002); 
12. participation in a general public evacuation ordered under an emergency evacuation order (Tex. Lab. Code §§ 22.002-.004); 
13. exercise of rights under the Hazard Communication Act (Tex. Health & Safety Code § 502.017); and 
14. exercise of rights under the Agricultural Hazard Communication Act (Tex. Agric. Code art. 125.001).

Remedies for wrongful discharge can include reinstatement, back and future pay, promotion, punitive damages, and an injunction against future illegal conduct. In addition to compensating the employee, the employer can also be made to pay attorney's fees, expert witness fees, and court costs.

Yes, employees who perform services for a state or local government entity are protected from retaliation for making a good faith report of  a violation of the law by the employer or another public employee to an appropriate law enforcement authority. Chapter 21 of the Texas Labor Code prohibits retaliation by private employers against employees who engage in protected activity. An employer may not fire, demote, harass or otherwise retaliate against an individual for submitting a complaint of discrimination, participating in a discrimination proceeding or otherwise opposing discrimination. The law applies to private employers with 15 or more employees, and to all state and local governmental entities no matter how many employees they have.  An employee may not be suspended or discharged in retaliation for reporting an alleged violation of an occupational health or safety law via the Safety Violations Hotline (through the Texas Department of Insurance, Workers' Compensation Division). The report must be made in good faith. Tex. Lab. Code Ann. § 411.082.  An employee may not be discharged (or discriminated against) for reporting fraud or falsification of a Medicaid claim. Tex. Hum. Res. Code § 36.115. An employee may not be retaliated against (or discriminated against) for reporting suspected child abuse. Tex. Fam. Code § 261.110. There are also a number of protections for employees in the health care profession, including protection against retaliation by a hospital, mental health facility, or treatment facility for reporting violations of law.  Tex. Health & Safety Code Ann. § 161.134(a).

Texas law does not provide employees with a specific right to privacy.  Best practices for employers include having policies advising employees that, as far as work is concerned, they have no expectation of privacy in their use of company facilities, premises, or resources, and they are subject to monitoring at all times.  Of course, employers should not place video cameras in employee restrooms or conduct a forced search of someone's person.  As far as recording conversations, Texas is a single-party consent state, meaning that it is legal to record a conversation as long as one party to the conversation knows it is being recorded.  Thus, it is important to notify employees and have them sign an authorization form if the employer is monitoring or recording conversations (phone or otherwise) in the workplace, including via the use of video surveillance that picks up audio.

As previously discussed, Chapter 21 of the Texas Labor Code provides protection against discrimination on the basis of race, color, disability, religion, sex, national origin, or age.

There are no family or medical leave laws in Texas beyond the FMLA that apply to private employers.  The Texas Government Code provides for family and medical leave for state employees who have worked at least 12 months and at least 1,250 hours during the preceding 12-month period to the same extent as FMLA.  State employees who have worked fewer than 12 months or fewer than 1,250 hours in the preceding 12 months are entitled to parental leave not to exceed 12 weeks for the birth, adoption, or foster care placement of a child.  Tex. Gov’t Code §§ 661.912-.913. 

A covenant not to compete is enforceable if it is (1) ancillary to or part of an otherwise enforceable agreement at the time the agreement is made, and (2) contains limitations as to time, geographical area and scope of activity to be restrained that are reasonable and do not impose a greater restraint than necessary to protect the goodwill or other business interests of the promisee.  Burdens of proof vary depending on whether the covenant not to compete is executed in connection with personal services, the sale of a business or for another purpose. This law is exclusive and preempts all other laws as to enforceability of non-compete covenants.  Tex. Bus. & Com. Code §§ 15.50-.52.

The Texas Supreme Court requires a two-part test to determine when a covenant not to compete is ancillary to an otherwise enforceable agreement: (a) the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer’s interests in restraining the employee from competing; and (b) the covenant must be designed to enforce the employee’s consideration or return promise in the otherwise enforceable agreement.  Light v. Centel Cellular, 883 S.W.2d 642 (Tex. 1994).  The covenant not to compete becomes enforceable only when the employer actually provides the employee with the promised consideration.  Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006).

The geographic, time and scope limitations of the covenant must be no greater than reasonably necessary to protect the promisee’s legitimate interests. A court will reform an overbroad provision to make it conform, but damages for such a “blue-penciled” provision are forward-looking only and no relief will be granted for harm suffered before the date of reformation.  Tex. Bus. & Comm. Code, §§ 15.51.  Practically speaking, the enforceability of covenants not to compete tends to be a highly fact-specific determination that may vary with the local judiciary’s approach to the issue.

A covenant not to compete is enforceable against a licensed Texas physician only if such covenant complies with specific statutory requirements.  Tex. Bus. & Comm. Code § 15.50(b).

Yes, if an employee refuses to sign a non-compete, the employer may terminate the employee provided the employer is not limited in such ability by a contract with the employee. In Texas, confidential information, specialized training, or stock options serve as consideration for non-competes. An employer may not offer money, whether it is a bonus or severance, to serve as consideration for a non-compete.

Employers and employees are required to contribute to federal social security and hospitalization (Medicare) through payroll deductions. There are no federal- or state-mandated pension or retirement schemes.

Federal health care law requires employers with more than 50 full-time equivalent employees to either provide "affordable" health care insurance that provides certain minimum benefits for full-time employees who work more than 30 hours per week or if not pay a penalty.  Some states also mandate health insurance for employees of certain employers.

For most jobs, no. Both the federal Age Discrimination in Employment Act (ADEA) and the Texas Labor Code. Both the ADEA and the Texas Labor Code prohibit age discrimination against workers who are at least 40 years old. This prohibition generally includes making it unlawful to have a mandatory retirement age, because forcing an employee to retire before they are ready can be discriminatory.  There are exceptions: certain policymaking officials may have mandatory retirement ages. Additionally, an employer may force an executive or person in a high policy-making position to retire at age 65 if that person is immediately entitled to a non-forfeitable retirement benefit of at least $27,000 per year. Further, in rare circumstances, an employer may be able to prove that age is a bona fide occupational qualification.

Yes, in certain situations for employer-provided disability insurance.

Private employers in Texas can mandate the COVID-19 vaccine.  However, per Governor Abbott’s August 25, 2021, Executive Order, no governmental entity can compel any individual to receive a COVID-19 vaccine. Administering a COVID-19 vaccine is not a medical examination under the Americans with Disabilities Act (ADA). However, mandatory vaccination program prescreening questions may constitute a disability-related inquiry, which may only be made if the questions are “job-related and consistent with business necessity.” To meet this standard, the employer must have a reasonable belief, based on objective evidence, that an employee who does not answer the questions (and thus does not receive a vaccination) poses a direct threat in the workplace. This issue does not arise if (a) the vaccination is optional for employees or (b) the employee receives the vaccine from a third party such as a hospital or pharmacy. Merely asking for proof of vaccination is not a disability-related inquiry, however, employers requiring proof of vaccination should warn the employee not to provide any medical information as part of the proof.  Employers are required to keep employee medical information obtained in the course of a vaccination program confidential and separate from the employee’s personnel file. If a mandatory vaccination program screens or tends to screen out individuals with a covered disability under the ADA, the employer must conduct an individualized assessment to determine whether the unvaccinated employee poses a direct threat due to a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.  If the employer determines that a direct threat exists, the employer must assess whether there is a reasonable accommodation—absent undue hardship (significant difficulty or expense, focusing on the resources and circumstances of the employer in relation to the cost or difficulty of providing a specific accommodation) that would eliminate or reduce this risk. This process may include obtaining supporting documentation about the employee’s disability and considering possible options for accommodation given the nature of the workforce and the employee’s position.  Employers may rely on CDC recommendations when deciding whether a reasonable accommodation is available.   If there is a direct threat that cannot be acceptably reduced, the employer can exclude the employee from physically entering the workplace, but this may not necessarily result in termination: for example, it may be a reasonable accommodation for the employee to work remotely. Under Title VII of the Civil Rights Act, employers are obligated to provide reasonable accommodations for an employee’s sincerely held religious beliefs, practices, or observances that prevent the employee from obtaining a vaccine unless it would pose an undue hardship (more than a de minimis cost or burden) to the employer. Employers with an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance may request additional supporting information, but generally, employers should assume that an employee’s request for religious accommodation is based on a sincerely held religious belief.  If accommodation is not possible, the employer can exclude the employee from physically entering the workplace but may be required to provide accommodation, such as performing the current position remotely. If an employee simply does not want to get the vaccine, an employer who has made vaccination mandatory can, and should, terminate the employee’s employment. Otherwise, inconsistent policy enforcement can create liability in the form of claims of discrimination or retaliation.

Yes, subject to any accommodation required under the ADA.  Employees without a qualifying disability can be required to return to the office and can be terminated for refusing to return to the office.  Employees with a qualifying disability under the ADA can be required to request an accommodation in order to continue working remotely. The employer can restore all of an employee’s essential duties (including working at the workplace), and then evaluate any requests for continued or new accommodations under the typical ADA interactive process. If there is no disability-related limitation that requires remote work, then the employer does not have to provide remote work as accommodation. Similarly, if the employer can effectively address the disability-related limitation with another form of reasonable accommodation at the workplace, then the employer can choose that alternative.  Note that the fear of catching Covid is not a reason preventing an employer from requiring an employee to return to work.