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### THEATTOEENEY GENERAL. 

### ~FTExA~,

Honorable James 0. Qerst Opinion No. 

### C-335 Savings &Loan Commissioner 1010 Lavaca Re: Whether the operation Austin, Texas of certain facilities of a savings and loan assoclatlon comes within the definition of an "agency" as that term Is defined in Rules and Regulations for Building and Loan Dear Mr. Gerst: Associations. Your request for an opinion asks whether the operation of certain facilities of an association, whenconsidered in light of facts stated in an enclosed deposition, comes within the definition of "agency" as that term is defined in: (1) Section 3.1 of the Rules and Regulations for Building and LoanAssociations adopted November 

### 15,1963; and (2) the Rules and Regulations for Building and Loan Associations adopted January 27, 1958, andamendedNovember 

### 5,1960. "Agency" is defined in the Rules and Regulations adopted November 

### 15,1963,and in the Rules and Regulations adopted Jffnuary 29, 1958, andamendedNovember 

### 6, 1960,as being

. . .any lawful arrangement whereby any business of an assoclatlon is conducted other than by regularly employed personnel of the association." The facts, as stated in the deposition, showthat the association has opened certain offices, contending that the personnel operating these offices are "agents" of the association within the meaning of that term as used in the Rules andRegulations. The personnel who work at the offices in question sign an employment contract with the assooiation in which they are designated as "agents" of the association. The facts, as stated in the deposition, indicate no substantial difference in the association's treatment of the personnel who are designated as "agents" and the association's treatment of the personnel designated as "employees." The association treats the "agents" and "employees" in a similar mannerin the following instances: -1594-Honorable James 0. Gerst, Page 2 (G-335)

1. The “agents” receive regular monthly compensation. 2. The “agents” are considered to be employees by the association for purposes of the association’s federal income tax returns. 3. The “agents” are considered to be employees by the association for the purpose of the association’s unemployment insurance. 4. The “agents” participate in the association’s group medictl plan, andthere is no distinction between the ‘agents and the “employees” in the coverage extended to participants. 5. The “agents” are protected under the association’s workman’s compensation insurance In the samemannerthat

“employees” are protected. 6. The “agents” are paid a year-end bonus based on the samecriteria which are considered for the payment of a year-end bonus to “employees.” 7. The “agents” do not have expenses In connection with the operation of the offices in question, as all overhead is paid by the association. 8. The “agents” are reimbursed for expenses they incur while working for the association in the same mannerthat the “employees” are reimbursed. 9. Theassociation deducts wlthholdlng and social security taxes from the compensation paid the “agents” just as it does from the compensation of “employees.” 10. The “agents” are required to turn time cards In to the association just as the “employees” are required to do. 11. The “agents” have the samevacation benefits a8 “employees. ” 12. The “agents” are under the direct control and supervision of the association In the performance of their duties, just as the “employees.” Whenthe definition of “agency” as stated In the Rules and Regulations Is applied to these facts, the -1595-Honorable James 0. Gerst, Page 3 (c-335)

question of whether the offices opened by the association are operating within the Rules and Regulations turns on whether the personnel operating the offices in question are "regular employees" of the association. If these personnel are "regular employees" of the association, the offices are not being operated within the framework of the Rules and Regulations. The only distinction between the "agents" and other employees of the asso$iation is the employment contract Figned b%the "agents in which the personnel are called agents. It is well settled that a party to a contract whois designated as an "agent" in the contract is not an "agent" merely because of such designation. The exact relationship Is determined by the legal effect of the provisions of the contract. 2Tex.Jur.2d 446, Agency, Section 10. The contract in question is attached to the deposition as Exhibit 1, and it provides for regular compensation, payment of all operating costs by the association, and control of the "agents" by the association as to the procedures ,to follow in handling loans, office hoursEnd provisions for time and termination of the relationship. Further evidence showing that there is no material difference between the personnel designated as "agents" and those personnel designated as "employees" is found in testimony of the association's president on page 28 of the enclosed deposition wherein the president of the association madethe following statements in response to questioning:

"Q. If the application for a loan office is granted, would there be anything required to be done to the records of the association to change these persons involved in the agencies to be carried as employees? "A~ Yes

“Q. Whatwould have to be done? "A. These contracts would have to be redone, for one thing.

“Q. Insofar as your books and records, payroll, medical, anything of that sort-- "A. No
-1596-Honorable James 0. Gerst, page 4 

### (C-335)

“Q. --is there anything that would have to be done?
“A

. No, not that I knowof. 

### 'IQ.Andthe difference would simply be to dispose of the contract, because then, they would be an employee, as you would see it, is that right? - - "A

. Assumingweretained themas Whenall of the facts concerning the the treatment of 'Iagents" and "employees" tion are considered, it is clear that the employees." similarity in by the associa- "agents" are actually regularly employed personnel of the association. Since, under the facts stated in the deposition furnished with your opinion request, there is nomaterial distinction madeby the association between "agents" and "regular employees," the operation of the facilities in question does not constitute the oueration of an "agencv" within the meaning of that term as defined in the Rules and Regulations.
SUMMARY ------- The operation of certain savings and loan facilities does not comewithin the meaning of "agency" as that term is defined in Section 

### 3.1of the Rules and Regulations for Savings and LoanAssociations adopted November 

### 15,1963,or The Rules and Regulations for EWildlng and Loan.Ass'ociations, adopted January 29, 

### 1958,and amendedNovember 

### 6, 1960. Very truly yours, WAGGONER

CARR Attorney General of Texas

JWF:ced

-1597-Honorable James 0. Gerst, Page 

### 5 (C-335)

APPROVED: OPINIONCOMMITTEE W.V. Geppert, Chairman Joe R. Long Paul Phy W.0. Shultz Kerns Taylor APPROVED

FORTHEATTORNEY

GENERAL BY: ROGER

TYLER

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