                THEATTORNEYGENERA%
                             OF    TEXAS

                            Ausm    11. TEXAS
GroverSellera
-ON




  HonorableLeonardCarltoa,Comnlssioner
  Bureau of Labor Statietloa
  Au&in, Texas

  Dear Sir:                              opinionHO. o-6879
                                         Fte: Legalityof certainfee0
                                              chargedby employment
                                              agencieein Texas.

            Your recent lettersubmittedfor our eoneldemtlon and oglnlon
  reada ae follows:

            "Section11 of the Texae Emploment and
       Lebor Agency Lsw anthorleee a fee to be charged
       for obtainingemployneat,such a fee in IIOevent
       to exceed $3.00 and same to be collectedfrom the
       applicantonly after eaploymenthas been obtained
       and acceptedby the applicant. Thle sectionfurther
       providesthat such age&e engagedexolueirely
       in provldtig employmentfor akllledprofeesional
       or clericalpositionamay charge a fee not to exceed
       30 percentof the first month'8ealary.

           "a. It has been called to our attentionthat
      certain employmentagenciesin thie State charge
      a registrationfee, that is, when an sppllcant
      desiresto be placedon the agsncq'eavailable
      liet the applicantpaye said agency a fee regard-
      less a8 to whether or llotemploymentle ever given
      him or her. Is this permittedby the statutes'l

           "b. Other agenoisecharge a flat monthly regie-
      tratlonfee such a61 either$1.00 or $2.00 a month,
      this cum to be paid by the applicantregardlessof
      whether or not emploment ia obtained,and upon the
      refusalor failureof the applicantto pay said regie-
      trationfee his neme ie wlthdmwn from the list of
      availableemploysee. Is this permleeibleunder the
      Texas statutes?

            "c. Some~agencies,while charging,a‘fUt
       raglet~ationfee of either$2.00 or $3.00, then
       upon obtaining and aoceptanaeof employmentof
HonorableLeonardCarlton - page 2 - O-6879



    the applicantdeductthat from the authorized
    30 per cent commieeion. Is this praotloeper-
    rlselbleunder our statutes?

         Ud. Certainuurees organizationsin this
    State am operatingae abore outlinedbut claim
    exemptionby virtue of Section 2 of the Act.

         The presentTexas Employmentand Iabor Agemy Law va8 enacted
by the 48th Legislature,Aote of 1943, page 86, chapter67, and in designat&
In Vernon'sAnnotatedCivil Statutesof Texas, 1925, am emended,as Article
522la-4. Section 1 (3) definesan employmentor laboragent ae follows:

         "(e) '1Bployment  or Labor Agent'Ipeaueany
    pereon in thie State who for a fee offem or at-
    tempts to procureor procuresemploymentfor em-
    ployees,or with a fee offers or attapts to
    procureor procuresemploymentfor common laborers
    or agrloulturalworkers,  or any peraonwho for a
    fee offers or attemptsto procureor procuree
    employeesfor employem, or withouta fee offers
    or attemptato procureor procurescommon laborers
    or agriculturalworkerefor employera,or any per-
    non, regardlessof whethera fee le receivedor due,
    offers,or attemptsto supplyor suppliesthe services
    of common or agricultural workersto any pereon.",

          Section2 of the Act sets forth the exaeptloneto the pro-
visionsof this Act and among other thinge atatee that, #the provisions
of this Act shall not apply to any person,corporation,or charitable
association,charteredunder the laws of Texas for the purposeof conducting
a free employmentbureauor agency;nor to any veterans'organizationor
labor union;nor to any nurses'organizationoperatednot for profit,to
be conductedby recognizedprofeeslonalregietereduureee for the
enrollnwntof Its profaeelonalmembersonb for the purposeof providing
professionalserviceto the public."(Underscoring   ours).

         Section 11 of the Act Is as follow:

         “Fs. Where a fee is chargedfor obtaln-
    lng -ployrent such ,feein no event ehall eroeed
    the nm of Three ($3) Dollam, which may be col-
    lectedfrom the applicantonly after colployment
    has been obtainedand acceptedby the applicant;
    provided,however,employmentor labor agent8
    engagede~clualvelyIn providingemploymentfor
    skilled,professional,  or clericalpositionemay
    charge,with the writtenconsentof the applicant,
    a fee not to exceed thirty (30) per centum of the
.   -




        HonorableLeonardCarlton - page 3 - O-6879



             first month'e ealary,which may be collectedfrom
             the applicantonly after employmenthae been obtain-
             ed and acceptedby the applloant."

                  State etatuts8fixing the maximumcompensationor fear which
        a privateemploymentagencymay collectfrom an applicantfor employment
        have been uphelda8 a proper exerciseof the etate'epolleepower
        and ae being for the generalwelfareof the people of the State in gemoral.
        Constitutional  Law, 16 C. J 5. 1444, per 690, note 11. In the cam of
        Olsen YEI.State of Nebraska,(Il.8. sup. Ct., 1941) 31.3 u. s. 236, 85
        L. ed. 130, 61 S. C. R. 862, I.33A. L. R. 1500, the SupremeCourt of the
        UnitedStates overmled an earlierdecision and upheld a similarlebraeh
        Statuteregulatingprivateemploymentagencieswhlah fixed the maxlmum
        compeneatlonwhich an agencymight collectfram an applicantfor arploy-
        ment. The Court In the Oleen cane overruledthe caee of Rlbnik ~8. NcRrlde
        (1929 277 U S. 350, 72 L. ed. 913, 48 S. C R. 545, 56 A. L. B. l321,
        and la the Olmn caee Bald:

                 “The drift  away from Ribnlk v. &Bride
            . . . has been so great that it can no longer
            be deemed a controllingauthority. It wa.8de-
            cided in 1928 . . . The lubaequentcaeee in
            th1.scourt (with two exceptions)have given
            increaeingly  wider scope to the price-fixing'
            power. of the state and of Congrees."

                  Ribnlk ve. NoBride controlledthe decielonof the ‘bra8 Court
        of CriminalAppeals in the caee of Karr ~8. State (1932),I22 Tex. Crlm.
        Rep.~88, 54 S. W (26) 92, where it war held that the then Article 1589
        of the Penal Code, 1925, (sincerepealedby tbc presentSection 11 of
        the preeentTexas Rmployhentand Iabor Agent LAW), making it a criminal
        offensefor employmentagenciesto engage in providingemploymentfor
        ekilled,professional,  or clericalpoaitioneto charge for euch services
        a fee exceedingtwenty (20) per cent of the firetmonth'e salarywae held
        violativeof the due processclause of the 14th Amendmentto the Pederal
        Con8titution.Judge Chrletian,writingfor the Court in the Kerr case
        held: "The decieioaof the SupremeCourt of the United States In Rlbnlk
        v. McBride,rupra, touchingthe power of the state to regulatefee#
        that m8y be chargedby employmentagencieo,18 bindingupon thin court.
        Giring It effect in the prerentcase, it become8Wr duty to order a
        rcvemal.* In view of the later opinionof the SupremeCourt in the Oleen
        care, and the luthorltlescited in 16 C. J. S., supra, it ie our opinion
        that Section 11 ir valid.

                  We therefore,aneweryour queetionea, b, c, and d, In the
        negative. The provleioarof Section 11 are plali. A,,Three ($3) Dollare
        fee 'may be collectedfrom the lpplicantonly after employmentha8 been
        obtilnedand acceptedby the lppliCeut"jbut where the employmentor
        labor agent ir engagedexclarire4 in providingemploymentfor ekilled,
        proferrional, dk:clericalpoeitione,he may oherge "with the writtenconeent
HonorableLeonardCarlton - page 4 - o-6679



of the applicanta fee not to exceedthirtyper cent of the fir& month'e
ealary,which may be collectedfrom applicanton4 after employmenthae
been obtainedand acceptedby the applicant."

         The fees are to be paid by the applicantor employeeon4 after
the employmenthae been obtainedand acceptedby the applicant. Any
fee or chargeemade to or paid by the applicantprior to thle event le
contraryto and le am attemptto circumventthe statute. The payment
of the feee are contingentupon obtainingemploy&at atidthe acceptance
of the employmentby the applicant.

         A8 to your qneetion(d), if thee8 numea organisetloneare
operatedfor a profit then they do not come within the purviewof the
exceptionaprovidedby lectlon2 of the Act end the provleionrof the Act
govern such organization.

                                                    Very truly yours,




                                               BY
                                                            Devid Wnutch
                                                               Aealetant

APPROVED OCT. 19, 1945
n/ CABIAS~ c. AsRIm
FIRST ASSISTS
ATTORNEY &NERAL
