Mr. AllenParker, Sr. Commissioner TexasDepartmentof Labor & Standards P. 0. Box 12157 Austin,Texas 78711

Dear Mr. Parker: OpinionNo. J-M-623

Re: Constitutionality of article 5196, V.T.C.S., requiring corporations to give a written statement of cause for dischargeof employees

You have requested our opinion regarding the validity of section 3 of article 5196, V.T.C.S. The statute was originally enacted in 1907by the Thirtieth Legislature. See Acts 1907, 30th Leg., ch. 67, at 142. The 1907version provided: -

Either or any of the following acts shall constitute discrimination against persons seeking

. employment:

. . . . (3) Where any corporationor receiverof same, doing business in this state, or any agent or employee of such corporation or receiver, shall have discharged an employee, and such discharged employee demands a statement in writing, of the
cause of his discharge, and such corporation, receiver, agent or employee thereof fails to furnish a true statement of same to such employee within ten days after such demand, provided, that such demand by the employee for said statement shallbemade inwriting.

. . .
Acts 1907, 30th Leg., ch. 67. at 142. This statute, as amended in 1909, was ruled unconstitutional by the Texas Supreme Court in SC. Louis SouthwesternRailway Co. ofTexasv. Griffin, lil S.W. 703 (Tex. 1914).

This statute was reenacted in 1929 in its present form, which provides:

Either or any of the following acts shall

constitute discrimination against persons seeking employment:

p. 2806Mr. Allen Parker, Sr. - Page 2 (JM-623)

. . . .
3. Where any corporation, or receiver of the
same. doing business in this state, or any agent
or employeeof such corporation or receiver, shall have discharged an employee and such employee demands a statement inwriting of the cause of his discharge, and such corporation, receiver, agent or employee thereof fails to furnish a true statement of the same to such discharged employee, within ten days after such demand, or where any corporation or receiver of the same, or any officer or agent of such corporation or receiver shall fail, within ten days after written demand for the same, to furnish to any employee voluntarily leaving the service of such corporation or receiver, a statement in writing that such employee did leave such service voluntarily, or where any corporation or receiver of the same, doing business within this state. shall fail to show in any statementunder the provision of this title the number of years and months duringwhich such employee was in the service of the said corporationor receiver in each and every separate capacityor position inwhich he was employed,and whether his services were satisfactory in each such capacity or not, or where any such corporation or receiver shall failwithin ten days after written demand for the same to furnish to any such employee a true copy of the statement originally given to such employee for his use in case he shall have lost or is otherwise deprived of the
use of the said original statement.

See Acts 1929, 41st Leg., ch. 245, 91, at 509; see also Attorney General Opinion O-3562 (1941) (general history of this law against blacklisting).

The Griffin case held, among other things, that the impairmentof
a corporation's right to discharge employees at will without cause by the state is a violation of the corporation'sconstitutional right of liberty of contract, which right includes the corresponding right to accept a contract proposal. 171 S.W. at 704. In addition, the court held that the impairment of a corporation's right to discharge employees without cause by the statute is a denial of the equal protection of the laws secured by the Fourteenth Amendment to the United States Constitution. The court also held that article I, section 8. of the Texas Constitutionwas violated because the liberty to speak or write includes the corresponding right to be silent and this rightwas,infringedby theprovisions of the statute compelling a corporation to give a discharged employee a statement of the cause of

p. 2807Mr. Allen Parker, Sr. - Page 3 (JM-623)

the discharge. Id. at 705. Therefore, the decision rested on both federaland state?&stitutional grounds.

When the codifiersof theRevisedCivil Statutesof Texas in 1925 revisedarticle 594, the definitionof discriminationby employerswas omitted along with many of the material provisions of the former law
on that subject, thereby prompting the Forty-first Legislature to reenact article 5196 in its present form. See Acts 1929, 41st Leg., ch. 245, 551, 2, at 509. Apparently therewas no law on the matter coveredby article 5196between 1925and 1929.

In 1941 this office considered the validity of section 3 of article 5196 andheld that

the reason that the codifiersof theRevised Civil Statutesof Texas, of 1925,omitted said [1909Act
as amended] from the 1925 codificationwas due to the fact that this [Act] had been declared unconstitutionalby the Supreme Court in the case of St. LouisRailway Co.v. Griffin.

It is our opinion that the decision of the Supreme Court in the above cited case is controlling and decides the question presented in your inquiry;therefore,it is the opinion of this department that section 3 of article 5196, Vernon's Civil Statutes is unconstitutional, and that a corporation is not required to give a discharged employee a statement in writing of the
causeofhis discharge.

. . . Attorney GeneralOpinionO-3562 (1941). In 1957,theAttorneyGeneral reaffirmed the 1941 Opinion and interpreted the Griffin case as invalidating not only section 3, but the entire.act. See Attorney GeneralOpinionWW-114 (1957). You have askedus to reconsiderand to overrule these twopriorAttorneyGeneralOpinions to conformwith intervening judicial decisions and statutory enactments. We will evaluate section 3 of article 5196, V.T.C.S., in light of those considerations.

You make three suggestions as to why the Griffin case is no longer controlling and the Attorney General Opinions should be overruled.
First, you argue that the idea of substantive due process upon which the Griffin case was based has been discredited. The Griffin
casewas decided during a period when the United States Supreme Court used the FourteenthAmendment to the United States Constitution as a protectionof fundamentaleconomicandpropertyrightsparticularlyin the area of labor legislation. 198 See, e.g., Lochner v. New York, U.S. 45 (1905); Coppage v. Kansas, 236 U.S. 1 (1915); Railroad

P. 2808Mr. Allen Parker, Sr. - Page 4 (JM-623)

RetirementBoard v. Alton Railroad Co., 295 U.S. 330 (1935); see also L. Tribe, American Constitutional Law, at 439-42 (1978);G. Gunther, Constitutional Law, at 502-33 (10th ed. 1980). For example, in Lochnerv. New York, the Courtheld invalidaNew York lawprohibiting the employment of bakery emulovees for more than ten (10) hours oer day or-s&y (60) hours pe; week. Justice Peckham, &it&g for the majority, reasoned that although the state has the authority, through its police power, to enact legislation to couserve themorals and the health or safety of thepeople, suchpower is limited by the right of the individualto liberty of person and freedom of contract. 198U.S. at 57. The liberty of an individual to make contracts for labor applied to both the employer and employee. 198 U.S. at 59. Consequently, the liberty to contract was viewed as a fundamental economic right and the state could not interfere with that right "unless therebe some fair ground,reasonable in and of itself, to say that there is material danger to the public health or safety of the employees." 198 U.S. at 61. It is this concept of substantive due process upon which the Texas Supreme Court based its decision in the Griffin case in 1914.

However, the substantive due process reasoning employed by the Griffin court is no longer a viable analysis under federal constitutional law. SeeWest CoastHotel Co.v. Parrish, 300U.S. 379 (1937); Nebbia v. New-rk, 291U.S. 502 (1934). The prevailing standardused to evaluate state leaislativeaction iswhether au economicreeulation is reasonable in rilation to its subject and is adopted-in the interestsof the community. West CoastRote1 Co.v. Parrish, 300U.S. at 381. Therefore, a state may deprive an individual of his liberty
or freedom of contract in the exercise of its police power, if the legislative action is not arbitrary or capricious, and as long as proceduraldueprocess is given.

This prevailing standard was articulated by the United States SupremeCourt as follows:

So far as the requirement of due process is concerned, and in the absence of other constitutional restriction, a state is free to adopt whatever economic policy may reasonablybe deemed to promote public welfare, and to enforce that policy by legislationadapted to itspurpose. The courts are without authority either to declare suchpolicy. or,when it is declaredby the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper legislativepurpose, and areneither arbitrarynor discriminatory, the requirements of due process are satisfied, and judicial determination to that effect renders a court functusofficio.

. . .

p. 2809Mr. Allen Parker, Sr. - Page 5 (JM-623)

Nebbia v. New York, 291 U.S. at 537. It is this standard we must emclov in determinina whether article 5196. as amended in 1929, violates the due process clause of the Fourteenth Amendment to the United States Constitution. Accordingly. the sole question in this respect is whether the statute is reasonable in relation to its subject and adopted in the interests of the community. See, e.g., West CoastHotel Cc. v. Parrish. 300U.S. 379 (1937); see also Seoane
v. Ortho Pharmaceuticals.Inc., 660 F.2d 146 (5thCir. 1981).

The Supreme Court has previously upheld the Missouri "service letter" statute finding it to be within the state'spolice power and not an arbitrary interferencewith freedom of contract amounting to a deorivaticn of liberty or property without due process. See Prudential InsuranceCo;v. Cheek..259.U.S.530 .(1922);see also & dunhes. 169 S.W.2d 328 (MC. 1943) (statute held constitutional under -_--State constitution). The service letter statute, similar to section 3 of article 5196, V.T.C.S., required corporations to issue service letters on request of corporation employees discharged or voluntarilyquitting its service. The SupremeCourt in the Cheek case reasoned that the Missouri statute was enacted to prevent injustice and oppression which had become so great as to be a public evil to largenumbers of laboringpeople. 259U.S. at 535. Regardless of the Griffin decision, we believe that the United States Supreme Court, applying its present substantivedue process analysis to section 3 of article 5196, V.T.C.S., would reach a similar conclusion. Accordingly,we believe that section 3 of article 5196,V.T.C.S., has
a reasonable relation to a proper legislative purpose and does not violate the due process clause of the Fourteenth Amendment to the United StatesConstitution.

The Griffin court alsobased itsdecisionon the equalprotection clause of the FourteenthAmendment tc the United States Constitution. We believe that the argument set forth in Griffin is no longer valid under present equal protection analysis. Section 3 of article 5196 should be evaluated under the present rational basis standard. In light of the present standard,which is the same as the substantive due process standard, the statute doesnot violate the constitutional equalprotectionprovision. See Seoanev. Ortho Pharmaceutical,Inc., 660 F.2d 146 (5thCir. 1981).-
Finally, the'Griffin case also declared the 1907 version of section 3 of article 5196 invalid because the provision violated article I. section 8, of the Texas Constitution. See 171 S.W.Zd at 705. As stated above, the Texas Supreme Court heldhat article I, section 0, was violated because the corporation had a right of "liberty to speak" or write, and this right carried with it the correspondingright to be silent or not to give a discharged employee
a statementof the cause of the discharge. Id. This constructionof article I. section 8,has neverbeen challengedin our court system.

p. 2810Mr. Allen Parker, Sr. - Page 6 (m-623)

Although the "liberty to speak" guaranteed in article I, section 8, of theTexas Constitution is similarbut not identical to the right of free speech guaranteedby the First Amendment to theUnited States Constitution,theTexas courtsmay construearticle I. section 8,more strictly than federal courtshave construed the free speech clause of the First Amendment. Cf. Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980);Cooper~California, 386 U.S. 58, 62 (1967).But the state court's construction of a state constitutionalprovision cannot have the effect of denying an individual any federal constitutional right. See Pruneyard ShoppingCenterv. Robins, -.

- Therefore,under article I. section 8, of theTexas Constitution,
a corporation has the right not to speak or write letters of discharge. .Eventhoughwe may disagree,with this interpretation,we are not at liberty tomodify or overrule theTexas SupremeCourt's holding in Griffin. This is especially true since cur legisiature and courts have not done so.

Moreover. the corporation'sright shouldnot be abridgedwhen the legislaturehas enactedother statutes to curb theproblem intended to be solved. See, e.g.. V.T.C.S. arts. 5196c (definition of blacklisting); 5196d (prohibitionagainstblacklisting); 5196e (penalty for engaging in blacklisting).
Attorney General Opinions O-3562 (1941) and W-114 (1956) are overruled to the extent they conflictwith this opinion.

SUMMARY
Section 3 of article 5196,V.T.C.S.,does not violate the due process clause nor the equal protection clause of the FourteenthAmendment to the United States Constitution. However, the statute does violate article I, section 8. of the Texas Constitutionwhich has been interpretedto grant a corporation the right not towrite letters stating the true cause of discharging employees.
Very trulyyours 

# J

JIM%, Attorney General ofTexas

JACKHIGHTOWER FirstAssistantAttorney General

MAP.YKELLER ExecutiveAssistantAttorney General

P. 2811Mr. Allen Parker, St. - Page 7 (JM-623)

RICK GILPIN Chairman,OpinionCommittee
Preparedby Tony Guillory AssistantAttorneyGeneral

p. 2812