Court Opinion

ID: 4130353
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:03:17.003434+00
Date Added: 2024-06-11T14:32:13.157198
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November 14, 1989

Honorable Bob McFarland         Opinion No.    JM-1116
Chairman
Criminal Justice Committee      Re: Validity under article I,
Texas State Senate              section 8, of the Texas Consti-
P. 0. Box 12068                 tution of article 5196, V.T.C.S.,
Austin, Texas 78711             which requires a corporation to
                                give a discharged employee a
                                statement of reasons for the
                                termination (RQ-1747)
Dear Senator McFarland:
     You request an opinion on the constitutionality of
section 3 of article 5196, V.T.C.S. This provision reads in
part:
           Either or any of the following acts shall
        constitute discrimination against     persons
        seeking employment:
           .   .   .   .

          3. Where any     corporation . . .   doing
       business in this state . . . shall       have
       discharged an employee and such employee
       demands a statement in writing of the cause
       of his discharge, and such corporation . . .
       fails to furnish a true statement of the
       same to such discharged employee, within ten
       days after such demand, or . . . 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.
     Statutes of this nature are commonly called "service
letter statutes."    Annot.,   24 A.L.R.Qth 1115     (1983).
Violators of the Texas service letter statute are subject to
forfeiting one thousand dollars to the state. V.T.C.S. art.
5199. It is the duty of the attorney general, or the

                                 p. 5861
Honorable Bob McFarland - Page 2   (JM-1116)

district or county attorney under the direction of the
attorney general, to sue to recover the forfeiture. Id.    A
private cause of action for damages may exist under service
letter statutes. &8 -iPrudential          Ins. C& , 192 S.W.
387, 393 (MO. 1917).
     The Texas service letter act was adopted in 1907 and
codified as section 3, article 594 of the 1911 code.    See
Acts 1907, 30th beg., ch. 67, S 1, at 142. Its title read
as follows: "An Act to define and prohibit discrimination
against persons seeking     employment, and to    prescribe
penalties for the breach of said act." In 1910 the court of
civil appeals identified the purpose of this provision as
follows:
        The statute here under discussion was passed
        to meet and remedy an evil that had grown
        up in this state among railway and other
        corporations to control their employees.   It
        seems that a custom had grown up among
        railway companies not to employ an applicant
        for a position until he gave the name of his
        last employer, and then write to such company
        for the cause of the applicant's discharge,
        if he was discharged, or his cause for
        leaving such    former employer.     If   the
        information was not satisfactory to       the
        proposed employer, he would refuse to employ
        the applicant. They could thus prevent the
        applicant, by failing to give a true reason
        for his discharge or blacklisting him, from
        procuring employment in either instance.
s *nt Louis Southwestern Rv. v. Hix'0,n 126 S.W. 338,     341
(!?:x.Civ. App. 1910), rev'd on other urounds, 137 S.W. 343
(Tex. 1911).
     In Rixon, the former employee alleged that the corpora-
tion's service letter did not state the true cause of his
discharge. The court of appeals affirmed a judgment of
$2,500 for the employee against the corporation, rejecting
various arguments for holding the statute unconstitutional.
The supreme court reversed on the ground that the former
employee had failed to establish that statements in the
service letter were untrue.    S e also won       v. P rry
181 P. 504 (Okla. 1919), aff'd,e259 U.S. 548, 550 (1:22);
Cheek V. Prudential Ins. Co., m,     at 389.

                             p. 5862
Honorable Bob McFarland - Page 3 (JM-1116)

     As you point out in your letter, the Texas Supreme
Court held the service letter provision unconstitutional
in Sa'nt Louis   outhwestern Rv. v. Grif&     171 S.W. 703
(Tex.ll914). InSGriffin the court held th;t article 594,
section 3, of the 1911 &de interfered with a corporation8s
right to discharge employees at will without cause, and
accordingly violated the corporation's freedom of contract
under the United States Constitution. It found that the
statute violated the equal      protection clause of   the
Fourteenth Amendment of the Constitution. The Griffin case
also held that the service letter requirement violated
article I, section 8, of the Texas Constitution, which
guarantees the freedom of the people to speak, write or
publish their opinions on any subject. The court stated as
follows:
           The liberty to write or speak includes the
        corresponding right to be silent, and also
        the liberty to decline to write. To say that
        one can be compelled at the instance of
        another party to do what he has the constitu-
        tional liberty to do or not is a contradic-
        tion that is not susceptible of reconcilia-
        tion. (Citations omitted.)
Griffin, Sunra, at 705. The supreme court concluded that
the provision could not be sustained as an exercise of the
police power, stating as follows:
        The subject of legislation in this statute
        and its various provisions, as stated above,
        are purely personal as between the employee
        and the corporation, and do not directly
        affect the    public, in    health,  safety,
        comfort, convenience, or otherwise.
Id. at 707.
     Within a few years of the Griffi.Rdecision, the United
States Supreme Court ruled that the Missouri service letter
statute was constitutional, finding      that it did     not
interfere with the corporation's freedom to        contract,
deprive it of any property or liberty without due process,
or deny it the privileges and immunities of citizens or the
equal protection of the laws. mential     Ins. Co. v. Cheek,
259 U.S. 530 119221.    "The state with aood reason miaht
regulate the terms and conditions of employment, including
the methods of accepting and dismissing employees, so as to

                            P. 5863
Honorable Bob McFarland - Page 4 (JM-1116)

prevent the corporations from producing undue detriment    to
the individuals concerned . . . .n L   at 545.
     In Attorney General Opinion JR-623 (1987), this office
concluded that section 3 of article 5196, V.T.C.S., did not
violate the due process clause or the equal, protection
clause of the Fourteenth Amendment to the United States
Constitution. Thus, developments in federal constitutional
law since Griffin have shown its reasoning and conclusion on
the federal issues to be incorrect.
     The Griffin court?8 holding that the service letter
statute violated article I, section 8, of the         Texas
Constitution has never been challenged in our court system.
Attorney General Opinion JM-623 (1987), at 5. In addressing
this aspect of Griffin, Attorney General Opinion 313-623
stated as follows:
            Even though we     may disagree with    this
            interpretation, we are not at liberty to
            modify or overrule the Texas Supreme Court's
            holding in Griffb.   This is especially true
            since our legislature and courts have not
            done so.
Id.   at   6.1

     1. In 1929, the legislature reenacted article 594 as
article 5196, V.T.C.S.   Acts 1929, 41st beg., ch. 245, at
509. The emergency clause stated that "the codifiers of the
Revised Civil Statutes of Texas of 1925, omitted from the
definition of discrimination many of the material provisions
of the former law on that subject as set out in Article 594
of the Revised Civil Statutes of 1911 . . . .M      A prior
opinion of this office stated, without mentioning any
federal cases, that the codifiers of the 1925 statutes had
obviously omitted article 594 because it had been declared
unconstitutional in Griffin.     Attorney General    Opinion
O-3562 (1941) (overruled by Attorney General Opinion JM-623
(1987)). However, the legislature's reenactment of the
provision omitted from the 1925 code could also mean that
the legislature was aware of the Prudential case and thought
that it had overruled the reasoning of Griffin.

                                p. 5864
Honorable Bob McFarland - Page 5   (~~-1116)

     It is well established that opinions of the attorney
general do not have the force of law. See. e.cz       Travis
fountv v. Matthews 235 S.W.2d 691 (Tex. Civ. App. L Austin
1951, writ ref'd A.r.e.); Gavnor mst .      0. v.   oard of
Truste . E    r Countv Indev. School Dist, 233 S.W.Zd 472
(Tex. Esv. zii. - El Paso 1950, writ ref'di. As stated in
Attorney General Opinion JM-623, we cannot overrule a
judicial decision. We can, however, review developments in
the law since Griffin was decided, and attempt to predict
whether the Texas courts, if faced with this issue in the
future, would find that the service letter requirement
violated a corporation#s free speech rights under article I,
section 8, of the Texas Constitution.
      In 1914, when the Texas Supreme Court ruled in Griffin,
the First Amendment had not yet been held to be applicable
to the states through the Fourteenth Amendment. &8      Gitlow
   N    Yr      268 U.S. 652 (1925); Prudential Ins. Co. v.
x&,at                542-43.   Thus, the court could not have
based its decision about corporate speech rights on the
First Amendment of the United States Constitution. Instead,
it followed two state cases that found service letter
statutes unconstitutional under the freedom of expression
provisions of their respective constitutions. See Wallace
v. Georaia. C. 8 N. Rv., 22 S.E. 579 (Ga. 1894); Atchison.
 . & S. F. Rv. v. Brow&         102 P. 459 (Kan. 1909).    In
Prudential Ins.     Co.   v. Cheek, the United States Supreme
Court commented as follows on this aspect of Griffin and the
Kansas and Georgia cases it relied on:
           The cases cited from Georgia, from Kansas,
        and from Texas place material dependence upon
        provisions of the several state Constitutions
        guaranteeing freedom of speech, from which is
        deduced as by contrast a right of privacy
        called the 'liberty of silence'; and it seems
        to be thought that the relations between a
        corporation and its employees and former
        employees are a matter of wholly private
        concern. But, as we have stated, neither the
        Fourteenth Amendment nor any other provision
        of the Constitution of the United States
        imposes upon the states any restrictions
        about 'freedom of speech' or the 'liberty of
        silence' . . . .

                              p. 5865
Honorable Bob McFarland - Page 6   (JM-1116)

prudentia,   w,    at 542-43.2
     In a 1983 decision, the Supreme Court of Missouri
concluded that the state service letter statute did not
violate corporate rights of free speech under the First
Amendment. Ha ch v. K. F. C. Nat ,1 Manaaement Corn. , 615
S.W.Zd 28 (Mo.n1981) (en bane). The court stated:
        The statute's    mandate affects    corporate
        rights of free speech no more than the
        plethora of  state and federal statutes and
        regulations that require corporations      to
        keep the governments to     which they    owe
        their existence appraised [sic] of      their
        activities. Few are the cases raising first
        amendment challenges to tax, corporate or
        securities laws requiring corporations to
        speak truthfully.   The compulsion to speak
        truthfully to a former employee would appear
        to be a small price to pay for the benefits
        gained by corporations, and their owners, for
        the enjoyment of their statutory franchises.
Id. at 36.
     The Eighth Circuit of the United States Court of
Appeals also found the Missouri statute constitutional,
reversing a federal district court decision that found it to
violate the free speech provision of the First Amendment.
Rimmer v. Colt Indus. Overatina Core,, 656 F.2d 323 (8th

         In Chicaao. R. I. 8 P. Rv. v. Perry, 259 U.S. 548,
555 &22),    the United States Supreme Court stated that
Prud ntial had overruled the contention that the service
let&   statute denied the right of      free speech    "upon
the ground that the right did not exist under th; state
Constitution in the absolute form in which it was asserted."
It also stated that the l'decisionsby the Supreme Courts of
Georgia, Kansas, and Texas . . . were disapproved."      &
This commentary on state court interpretations of state
constitutional provisions is dicta, since the United States
Supreme Court looks to the decisions of a state's courts to
determine the meaning of its laws. &S Clav v. Sun Ins.
Office, 363 U.S. 207 (1960). This dicta is nonetheless of
interest because it shows how the United States Supreme
Court thought about the issue before us.

                             P. 5866
Honorable Bob McFarland - Page 7 (JM-1116)

Cir. 1981), yev’q,  495 F. SUPP. 1217 (W.D. MO. 1980).    The
                                       -',1 Bank v. Bellotti,
court of appeals-noted that in-First Nat
435 U.S. 765 (1978). the Suvreme Court held that sveech
otherwise protected-.by the First Amendment does not -lose
that protection simply because its source is a corporation.
The eighth circuit concluded, however, that the First Nat'1
&&     decision did not shield corporations from        state
statutes that require them to make truthful statements or
take actions that effectuate legitimate legislative ,goals.
Rimmer, suvrg, at 328. "There are numerous statutes that
similarly, and nevertheless constitutionally, restrict the
'free speech' rights of corporate employers." &       (citing
National Labor Relations Act, 29 U.S.C. 5 158(c)      (1976);
Employee Retirement Income Security,Act, 29 U.S.C. 8 1132(c)
(1976); Missouri Workers' Compensation Act, Mo.Ann.Stat.
§ 287.380 (Vernon Supp. 1981)). The statute was adopted to
protect certain economic and social interests and was
properly characterized as economic or social legislation
enacted for the general public welfare. L     at 328-29.   It
did not affect any "fundamentaltlFirst     Amendment rights.
Id. at 329 (analyzing service letter statute in terms of
equal protection clause and First Amendment of the United
States Constitution),
     Texas cases decided more recently than Griffin rely on
a broader conception of the police power than did that case.
The Supreme Court of Texas has stated that "the very
foundation of the police power is the control of private
interests for the public welfare . . . .I1 T wn of A cam
v. Villalobof, 223 S.W.2d 945, 950 (Tex. 19z9) (guotsng 16
C.J.S. Constitutional L&f 5 199, at 581).     The court has
recognized the validity     of legislation that      protects
employee rights in disputes      with the employer.       LTcee
mnstructi n & Gen. Labor Union v. Stevhensoi,    225   S.W.Zd
958 ITex. y950) (vicketina). The volice vower authorizes
the adoption of iegislation designed to pkevent deceitful
communications in a commercial setting.    "A state statute
designed to prevent the deception of consumers of particular
goods is recognized as a valid exercise of police power."
Malestic Indu . v. Saint Clair 537 S.W.2d 297, 302 (Tex.
Civ. App. - AEstin 1976, writ r;f#d n.r.e.); see also w
y. State, 665 S.W.2d 476 (Tex. Grim. App. 1984) (the First
Amendment does not protect intentionally false or misleading
statements made in a commercial context).
     Exercises of the police power that involve restraints
on freedom of speech are not for that reason necessarily
invalid. S.!?S2Allenv.         604 S.W.2d 191 (Tex. Grim.
App. 1980) (discussing First Amendment of United States

                             p. 5867
Honorable Bob McFarland - Page 8   (JM-1116)

Constitution). In upholding a provision of the Alcoholic
Beverage Code that prohibited solicitation of drinks by a
beer retailer's employee, the court of criminal appeals
quoted the United States Supreme Court as follows:
          It has never been deemed an abridgement of
       freedom of speech or press to make a course
       of conduct illegal merely because the conduct
       was in part initiated, evidenced, or carried
       out by means of language, either spoken,
       written, or printed. . . . Numerous examples
       could be cited of communications that are
       regulated without offending the First Amend-
       ment, such as the exchange of information
       about   securities, . . .   corporate   proxy
       statements, . . . the exchange of price and
       production information about     competitors,
       . . . and employers' threats of retaliation
       for the labor activities of employees.
&& at 192 (citing Ohralik v. Ohio State Bar Ass'n, 436 U.S.
447, 456 (1978)).
     The court of criminal appeals quoted the United States
Supreme Court in answering an argument based on the First
Amendment of the United States Constitution, not article I,
section 8, of the Texas Constitution. However, decisions of
Texas courts that deal with the Texas         constitutional
provision also recognize that permissible regulations of
conduct may sometimes include regulation of speech.      Our
courts have upheld statutes      that require persons     to
communicate information or that      limit some kinds     of
communications, finding them consistent with article I,
section 8, of the Texas Constitution.
     In finding that an injunction to prevent untrained
layman from advertising and selling blank will forms did not
violate article I, section 8, of the Texas Constitution, the
court pointed out that constitutional rights of speech and
publication are not absolute.      palmer v.    Unauthorized
practice Comm. of St t Bar, 438 S.W.2d 374 (Tex. Civ. APP.
- Houston [14th His:.; 1969, no writ). In a given case
where the public interest is involved, courts may strike a
balance between fundamental constitutional freedoms and the
state's interest in the welfare of its citizens. &
     The court of criminal appeals has held that a statute
proscribing harassing and threatening telephone calls did
not violate article I, section 8, of the Texas Constitution

                             P. 5868
Honorable Bob McFarland - Page 9 (JM-1116)

or the First Amendment of the United States Constitution.
Schuster v. State   450 S.W.Zd 616 (Tex. Crim. App. 1970)
(applying Penal &de article 476 (1925)).
     In another case, an injunction prohibiting a 40 percent
shareholder of a corporation from writing letters         to
corporate clients asking for   assistance in a liquidation
suit was upheld as not violative of article I, section 8, of
the Texas Constitution. C
&I&, 678 S.W.2d 580 (Tex. App. - Houst& [14th Dist;] 1984
writ dism'd). The injunction was granted to prevent inter:
ference to the contractual relationships of the corporation
and interference from private communication. L
     Finally, a recent decision of the court of criminal
appeals indicates that the free   speech clause of the Texas
Constitution does not create an absolute privilege to be
silent. y-F---'            687 S.W.Zd 736 (Tex. Grim. APP.
1984), cer . denied, 474 U.S. 944 (1985). In a prosecution
for obstructing a public passageway where the key issue was
whether the defendant had chained himself to a doorway
during the protest, the defendant sought to subpoena a
newspaper photographer who had photographed the incident.
The photographer refused to make his photographs available
and was held in contempt.    The court held that neither the
First Amendment of ~the United States Constitution nor
article I, section 8, of the Texas Constitution created a
privilege that would excuse the photographer from testifying
and producing photographs. Id. at 737.
     The Texds legislature has enacted numerous statutes
that require corporations and others to disclose information
to governmental agencies, to employees, or to shareholders.
See. e.a., V.T.C.S. arts. 5221b-14(b) (employers prohibited
from making false statements or failing to disclose material
fact to prevent payment of unemployme,ntbenefits), 5221k,
5 8.01(a) (record-keeping and reporting requirement applic-
able to persons under investigation by Texas Human Rights
Commission): Tex. Bus. Corp. Act arts. 2.44 (right of
shareholders to examine corporate books and records), 9.01
(corporation, officers, and director shall answer interroga-
tories propounded by secretary of state to enable him to
determine whether corporation is in compliance with Business
Corporation Act): Agric. Code ch. 125 (duty of certain
employers of agricultural laborers to make information about
their use of toxic chemicals available to employees and
others); Health & Safety Code ch. 502 (employers must make
available to employees information about certain hazardous
chemicals stored or used in the workplace). Thus, a statute

                             p. 5869
Honorable Bob McFarland - Page 10 (JM-1116)

requiring a corporation to disclose information is no longer
the novelty it appeared to be in 1914, when Griffin was
decided.
     Based on our review of decisions of the Texas courts
subsequent to Griffin and the cases on service letters from
other states, we believe that the Supreme Court of Texas, if
it were to reconsider section 3 of article 5196, V.T.C.S.,
would find that it did not violate article I, section 8, of
the Texas Constitution. Until the supreme court overturns
its decision in Griffin however, section 3 of article 5196,
V.T.C.S., will be unco&itutional.      Following a judicial
decision that a statute is unconstitutional, the statute
remains on the books unless expressly repealed by the
legislature. 39 Op. [U.S.] Att'y Gen., 22 (1937). When a
court overrules a prior judicial decision that held a
statute unconstitutional, the statute will be held valid
from its effective date. Storrie v. Cortes, 38 S.W. 154,
158 (Tex. 1896); see also State ex rel. Badcett v. Lee, 22
So.Zd 804 (Fla. 1945); Christovher v. Munaen
(Fla. 1911). Rut see Chavers v. Harrell 166 i0.~:6!?"*(Fzz?
1935) (state may not prosecute for cond;ct in violation of
statute during time it was held unconstitutional). As we
have already stated, an opinion of the attorney general
cannot overrule a judicial decision, and therefore cannot
validate the service letter statute.
     A statute held unconstitutional by the courts does not
cease to exist for the purpose of amendment by the legisla-
ture. Ex varte Hen 1 v 285 S.W.2d 720 (Tex. Crim. App.
1956). The Griffin ie%on      does not prevent the legisla-
ture from amending article 5196, V.T.C.S. The legislature
may update this statute or make the changes, if any, it
deems necessary due to the passage of time since its re-
enactment in 1929.    Attorney General Opinion JM-623 is
modified with respect to its discussion of article I,
section 8, of the Texas Constitution.
                       SUMMARY
                                               . .
          In Saint Louis Southwestern Rv. v. Griffu
       171 S.W. 703 (Tex. 1914), the Texas Suprem
       Court held that section 3 of article 5196,
       V.T.C.S., was invalid because it was inconsis-
       tent with article I, section 8, of the Texas
       Constitution.   On the    basis of    judicial
       decisions of Texas courts and the courts of
       other jurisdictions, we predict that the Texas

                            p. 5870
Honorable Bob McFarland - Page 11       (JM-1116)

       Supreme Court, if it again considered this
       question, would find section 3 of article
       5196, V.T.C.S., consistent with article I,
       section 8, of the constitution.     Until the
       Texas Supreme Court overrules its decision in
       El       hoy;I;r, section 3 of article 5196,
        . . . .,         be unconstitutional.     The
       decision in Griffin does not prevent the
       legislature from amending section 3 of article
       5196, V.T.C.S.     Attorney General    Opinion
       JM-623 (1987) is modified with respect to its
       discussion of article I, section 8, of the
       Texas Constitution.

                                -   ~
                                    JIM     MATTOX
                                    Attorney General of Texas
MARYKELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Susan L. Garrison
Assistant Attorney General

                              P. 5871