Mr. Allen Parker, Sr.              Opinion No. J-M-623
Commissioner
Texas Department of                Re: Constitutionality of article
   Labor & Standards               5196, V.T.C.S., requiring corpora-
P. 0. Box 12157                    tions to give a written statement
Austin, Texas   78711              of cause for discharge of employees

Dear Mr.   Parker:

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3 of article 5196, V.T.C.S. The statute was originally enacted in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

           Either or any of the following acts shall consti-
           tute discrimination against persons       seeking .
           employment:

               . . . .

              (3) Where any corporation or receiver of 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
           shall be made in writing. . . .

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 Southwestern Railway Co. of Texas v. 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:


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Mr. 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 employee of such corporation or receiver, shall
         have discharged an employee and such 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 state-
         ment 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 volun-
         tarily 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 statement under the provision of this
         title the number of years and months during which
         such employee was in the service of the said
         corporation or receiver in each and every separate
         capacity or position in which he was employed, and
         whether his services were satisfactory in each
         such capacity or not, or where any such corpora-
         tion or receiver shall fail within 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 impairment of
a corporation's right to discharge employees at will without cause by
the state is a violation of the corporation's constitutional 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 Constitution was violated because the liberty
to speak or write includes the corresponding right to be silent and
this right was,infringed by the provisions of the statute compelling a
corporation to give a discharged employee a statement of the cause of


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




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

     When the codifiers of the Revised Civil Statutes of Texas in 1925
revised article 594, the definition of discrimination by employers was
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
covered by article 5196 between 1925 and 1929.

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

           the reason that the codifiers of the Revised Civil
           Statutes of Texas, of 1925, omitted said [1909 Act
           as amended] from the 1925 codification was due to
           the fact that this [Act] had been declared
           unconstitutional by the Supreme Court in the case
           of St. Louis Railway Co. v. Griffin.

              It is our opinion that the decision of the
           Supreme Court in the above cited case is con-
           trolling 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
           cause of his discharge. . . .

Attorney General Opinion O-3562 (1941). In 1957, the Attorney General
reaffirmed the 1941 Opinion and interpreted the Griffin case as
invalidating not only section 3, but the entire. act. See Attorney
General Opinion WW-114 (1957). You have asked us to reconsider and to
overrule these two prior Attorney General Opinions to conform with in-
tervening 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
case was decided during a period when the United States Supreme Court
used the Fourteenth Amendment to the United States Constitution as a
protection of fundamental economic and property rights particularly in
the area of labor legislation. See, e.g., Lochner v. New York, 198
U.S. 45 (1905); Coppage v. Kansas, 236 U.S. 1 (1915); Railroad


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Retirement Board 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
Lochner v. New York, the Court held invalid a New York law prohibiting
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 the morals and the
health or safety of the people, such power is limited by the right of
the individual to liberty of person and freedom of contract. 198 U.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. Con-
sequently, the liberty to contract was viewed as a fundamental
economic right and the state    could not interfere with that right
"unless there be 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 constitu-
tional law. See West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937);
Nebbia v. New-rk,   291 U.S. 502 (1934). The prevailing standard used
to evaluate state leaislative action is whether au economic reeulation
is reasonable in rilation to its subject and is adopted-in the
interests of the community. West Coast Rote1 Co. v. Parrish, 300 U.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
procedural due process is given.

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

            So far as the requirement of due process is
         concerned, and in the absence of other constitu-
         tional restriction, a state is free to adopt
         whatever economic policy may reasonably be deemed
         to promote public welfare, and to enforce that
         policy by legislation adapted to its purpose. The
         courts are without authority either to declare
         such policy. or, when it is declared by the legis-
         lature, to override it. If the laws passed are
         seen to have a reasonable relation to a proper
         legislative purpose, and are neither arbitrary nor
         discriminatory, the requirements of due process
         are satisfied, and judicial determination to that
         effect renders a court functus officio. . . .




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Mr. 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 Coast Hotel Cc. v. Parrish. 300 U.S. 379 (1937); see also Seoane
v. Ortho Pharmaceuticals. Inc., 660 F.2d 146 (5th Cir. 1981).

     The Supreme Court has previously upheld the Missouri "service
letter" statute finding it to be within the state's police power and
not an arbitrary interference with freedom of contract amounting to a
deorivaticn of liberty or property without due process.            See
Prudential Insurance Co; 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
voluntarily quitting its service. The Supreme Court 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
large numbers of laboring people. 259 U.S. at 535. Regardless of the
Griffin decision, we believe that the United States Supreme Court,
applying its present substantive due 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 States Constitution.

     The Griffin court also based its decision on the equal protection
clause of the Fourteenth Amendment 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 does not violate the constitutional
equal protection provision. See Seoane v. Ortho Pharmaceutical, Inc.,
660 F.2d 146 (5th Cir. 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
corresponding right to be silent or not to give a discharged employee
a statement of the cause of the discharge. Id. This construction of
article I. section 8, has never been challengedin our court system.




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




     Although the "liberty to speak" guaranteed in article I, section
8, of the Texas Constitution is similar but not identical to the right
of free speech guaranteed by the First Amendment to the United States
Constitution, the Texas courts may construe article I. section 8, more
strictly than federal courts have 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 constitutional provision cannot
have the effect of denying an individual any federal constitutional
right. -See Pruneyard Shopping Center v. Robins, -.

     Therefore, under article I. section 8, of the Texas Constitution,
a corporation has the right not to speak or write letters of dis-
charge. .Even though we may disagree,with this interpretation, we are
not at liberty to modify or overrule the Texas Supreme Court's holding
in Griffin. This is especially true since cur legisiature and courts
have not done so.

     Moreover. the corporation's right should not be abridged when the
legislature has enacted other statutes to curb the problem intended to
be solved. See, e.g.. V.T.C.S. arts. 5196c (definition of black-
listing); 5196d (prohibition against blacklisting); 5196e (penalty for
engaging in blacklisting).

     Attorney General Opinions O-3562 (1941) and W-114         (1956) are
overruled to the extent they conflict with this opinion.

                             SUMMARY

               Section 3 of article 5196, V.T.C.S., does not
          violate the due process clause nor the equal pro-
          tection clause of the Fourteenth Amendment to the
          United States Constitution. However, the statute
          does violate article I, section 8. of the Texas
          Constitution which has been interpreted to grant a
          corporation the right not to write letters stating
          the true cause of discharging employees.




                                      J
                                           Very truly yours



                                           JIM%,
                                           Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MAP.YKELLER
Executive Assistant Attorney General



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




RICK GILPIN
Chairman, Opinion Committee

Prepared by Tony Guillory
Assistant Attorney General




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