Employment law basics for Texas employers.
Texas is an employer-friendly state that still manages to generate employment lawsuits every day, mostly from the same handful of misreadings. Here is the working map: what at-will actually means, which thresholds matter, the workers'-comp decision unique to Texas, and the moments when a short call beats a long lawsuit.
At-will, and its edges
The default is real: absent an agreement otherwise, employment in Texas can end at any time, from either side, for almost any lawful reason. The edges are where employers get hurt. Statutes override the default for protected characteristics, retaliation, and protected activity. Texas courts recognize a narrow exception for an employee fired solely for refusing to commit a crime. And employers override the default themselves more often than any statute does, in offer letters that promise a term, handbooks that promise a process, and managers who promise anything in writing. An at-will relationship survives only as long as the paperwork agrees it exists.
The thresholds, and the decisions they change
Discrimination statutes generally attach at fifteen employees, age coverage at twenty, and federal wage law at essentially one. The practical use of these numbers is not comfort below the line; it is knowing which crossings change your obligations while you are busy growing. The Texas-specific decision most owners have never revisited: workers' compensation is optional here, and a nonsubscriber trades away the system's liability shield and its best courtroom defenses. That can be a rational trade. It should never be an unexamined one.
The paperwork that decides the disputes
Nearly every employer-side loss traces to documents: the handbook that promised progressive discipline nobody followed, the glowing review written weeks before a for-cause termination, the final paycheck handled sloppily under the Payday Law, the non-compete that was never supported by the right consideration. The single highest-value read on this site for an employer about to act is what every Texas business owner should know before firing an employee, because the termination meeting is where most employment litigation is actually born.
How this works with one relationship
Employment questions arrive weekly in a growing company, and they are exactly what an ongoing counsel relationship handles well: the termination call, the handbook read, the non-compete, the odd situation that doesn’t fit any category. That day-to-day layer is my work, often inside a fractional GC engagement. When a matter becomes a charge, a suit, or a workforce-wide question, it moves to Scale LLP’s employment bench without you starting over, and the strategy stays coherent across the handoff. One relationship, one number: (682) 529-7177.
Common questions
Yes, and the doctrine is real: either side can end the relationship at any time, for almost any reason or none. The word doing the work is almost. Federal and Texas law prohibit termination based on protected characteristics, Texas recognizes a narrow exception for employees fired for refusing to commit a criminal act, and any contract, offer letter, or policy that promises more can override the default. Most employer trouble starts with treating at-will as consequence-free rather than as a default with edges.
The headline federal and Texas discrimination statutes generally reach employers with fifteen or more employees, and age discrimination coverage starts at twenty. But small headcount is thinner protection than owners assume: wage laws apply at one employee, retaliation theories don't wait for fifteen, and a company growing past the thresholds rarely notices the week it happens. Count your people annually, and act as if covered before you are.
No, and that makes Texas nearly unique: private employers can opt out of the workers' compensation system. The trade is severe, though. A nonsubscriber loses the system's liability shield and its traditional common-law defenses in an injury suit, which is why opting out is a risk decision to price deliberately rather than a cost line to trim. If you have opted out without pricing that trade recently, it deserves a fresh look.
The unglamorous kind, kept contemporaneously: offer letters that say what was actually offered, a handbook that matches actual practice and preserves at-will status, performance documentation written when the performance happened rather than the week before the termination, and clean final-pay handling under the Texas Payday Law. The full walkthrough of the termination decision itself is in the firing guide below, and it exists because the seven mistakes it covers are all documentation mistakes at heart.
Before the decision, not after the charge. The moments that repay a short call: any termination touching a protected characteristic, medical situation, or recent complaint; the first hire in a new state; drafting or enforcing a non-compete; a demand letter or agency charge arriving; and reductions affecting more than a handful of people. Routine questions are exactly what an ongoing counsel relationship is for, and the expensive version of every employment problem was cheap two weeks earlier.
The expensive version of every employment problem was cheap two weeks earlier.
The words you'll hear
If this goes further, these are the terms that will come up, from us or from the other side. Each one links to a fuller explanation.
- Independent Contractor
- A person or entity engaged to perform services but not as an employee, retaining control over manner and means of performance, providing services to multiple clients....
- Final Paycheck
- Wages owed to an employee at the conclusion of employment, including earned wages, overtime, accrued vacation pay (if owed by company policy), commissions, and bonuses.
- EEOC Charge
- A formal complaint filed with the U.S. Equal Employment Opportunity Commission (EEOC) alleging employment discrimination under federal law (Title VII, ADA, ADEA, GINA, EPA).
- Severance Agreement
- A contract between an employer and a departing employee under which the employer provides specified compensation, benefits continuation, or other consideration in exchange for the employee's....
- Restrictive Covenant
- A privately-imposed limitation on the use of real property, typically arising from a deed restriction or recorded declaration governing a subdivision, planned community, or condominium.
- Family and Medical Leave Act (FMLA)
- Federal statute (29 U.S.C. § 2601 et seq.) requiring covered employers to provide eligible employees up to 12 workweeks of unpaid, job-protected leave....