Untitled Texas Attorney General Opinion ( 1971 )

THE AITORNEY GENERAL
OF ?t-EXAS
Hon. Joe Christie Opinion No. M-860
The Senate of Texas
Nominations Committee Be: Qualification of Mr. Richard
Capitol Building Penn as employer's representa-
Austin, Texas 78711 tive on the Industrial Accident
Board under Art. 8307, Sec. 2,
Dear Senator Christie: Vernon's Civil Statutes.
You ask our opinion whether Mr. Richard Penn, at the
time of his appointment as the employer representative on the
Industrial Accident Board, was qualified un8er the provisions
of Article 0301, Section 2, Vernon's Civil Statutes. *
Our opinion is that he was not,
While this office is without authority to determine
controverted fact questions, Attorney General Opinion No. M-047
(19711, the facts submitted to us are uncontradicted. Although
they are sparse they apparently comprehend the relevant facts
developed at the hearing held on April 15, 1971, before the
Senate Committee on Nominations to consider confirmation of the
appointment of Mr. Penn. The records submitted to us reveal the
following controlling facts. On the afternoon of Friday, October 3,
1969, Mr. Penn and Mr. T. P. Flahive, President of Flahive-Ogden
company, entered into a verbal contract whereby the Company agreed
to employ Mr. Penn, effective the next day, Saturday, October,4,
1969. On the afternoons of these two days these two gentlemen
discussed the duties Mr. Penn would discharge. Theee related to
a proposed re-codification of a book on Workman's Compensation
which the Company proposed to draft and sell. We quote from Mr.
Flahive's letter to us dated~Apri1 26, 1971, as follows:
"In connection with these plans, we had
decided to start seminars explaining workmen's
* All references to Articles are to Vernon's Civil Statutes.
-4172-
. .
Eon. Joe Christie, page 2 (M-860)
compensation and we went into these matters with
Mr. Penn, assigning him at that time the job of
arranging necessary facilities in Houston and
in Dallas as well as takinq,care of all the tech-
nica,lend such as programs, rlame tags, luncheons,
advertising and promotion that we might get into.
"We had made arrangements with Mr. Penn to
report for his'full assumption of duties on Monday,
October 6. Fortunately, or unfortunately. it was
that same date that the Gwernor nominated him as
a member of the Industrial Accident Board. This,
of course, of necessity, terminated immediately
any employment he might have with our company."
Also submitted to us for our consideration is the affi-
davit of Senator A. R. Schwartz, dated Way 4, 1971, which reads
in part:
8,. . . On April 15, 1971, in the Senate
Committee on Nominations, meeting to consider
the nomination of Mr. Richard Penn to the position
of employer member of the Industrial Accident Board,
or. Penn stated that he took employment with a printing
company solely for the purpose of qualifying for the
aforementioned position. Wr. Penn said his title was
executive vice president, but when asked what he did,
Penn replied, 'Nothing.'"
The Minutes of a special called meeting of the Company
held on September 15, 1969, state that Mr. Penn was named as
Executive Vice-President of the company at a compensation of
81,OOO.OO per month: that the effective date of his employment
would be upon his resignation of his present employment with the
State of Texas. Also, a letter statement, accompanied by a sup-
porting copy of Wage and Tax Statement for Federal Income Tax
Information, show that m. Penn was paid by the Company for one
day's services in the gross amount of $46.15. The Company was a
qualified carrier of Workmen's Compensation insurance on its
employees.
-4173-
-, -
Hon. Joe Christie, page 3 (M-860)
The Company was an 'employer' under the definition of
that term in Article 8309, Section 1.
The required qualifications for members of the Industrial
Accide,ntBoard are stated in Article 8307, Section 2, as follows:
"At the time of each appointment one member
of the Industrial Accident Board shall be an em-
ployer of labor in some industry or business covered
by this law: . . .*I
We find no decision of any court or of this Office inter-
preting the relevant portion of this statute. under the relevant
canons of statutory construction we must construe the statute in
accordance with the legislative intent and purpose in enacting it,
and to effect that purpose. 53 Tex.Jur.28 Statutes, 180-187, Sec.
125, and 237-245, Sec. 163-165.
Article 8307, Section 5, of the Workmen's Compensation
Act deals generally with the powers of the Industrial Accident
Board in considering and awarding of claims before it. This
Section 5 provides, in part:
"All questions arising under this law, if not
settled by agreement of the parties interested therein
and within the provisions of this law, shall, except
as otherwise provided, be determined by the Board .*.
If any party to such final ruling and decision of the
Board, after having given notice as abwe provided,
fails within said twenty (20) days to institute and
prosecute a suit to set the same aside, then said
final ruling and decision shall be binding upon all
parties thereto: ..."
The prwisions of this Section make clear that the Board is a
quasi-judicial body. Accord: 63 Tex.Jur.2d 251-254, Workmen's
Compensation, Sec. 291-292, et seq. Further, as to the nature
of the Workmen's Compensation Act itself, the case of Brooks v.
State, 68 S.W.Zd 534, 535 (Texxv.App. 1934, error ref.) holds
that the Act was obviously'intended to apply to industrial
-4174-
Hon. Joe ChriStie, page 4 (M-860)
employment. Accord: 62 Tex.Jur.28 543, Workmen's Compensation,
Sec. 17. With these established statements as to the nature of
the Board and of the Act, and in the absence of decisions of our
Texas courts, we look to the decisions of,courts of other juris-
dictions~to aid us in determining the qualification of Mr. Penn
under our Texas Act.
In Talbert v. Owen-Ames-Kimbel Co., 9 N.W.28 572 (Mich.
Sup. 1943)~the court made the,following holding with reference to
the qualifications of a member of its state agency exercising
similar powers to our Texas Industrial Accident Board:
11 ... The duties and powers aonferred upon
a deputy commissioner are such that he definitely
occupies a quasi-judicial position. He is the
trier of the facts and his findings as to those
facts, if affirmed on review of the department,
are conclusive and bind this court on appeal, if
supported by any competent evidence. The same
hiqh standards required of iudses and courts should
be applied to quasi--judicialofficers, such as com-
missioners and denutv commissioners in the denart-
ment of labor and industrv. ...I' (Emphasis added.)
(at p. 573).
In National Labor Relations Board v. E. C. Atkins & Co,,
331 U.S. 398 (1947) the Supreme Court of the United States con-
sidered the facts and circumstances requisite under the National
Labor Relations Act for qualification as an employee. The Court
made reference to the Act and said:
... In contrast, Sec. 2(2) states that ‘The
I,
term 'employer' includes any person acting in the
interest of an employer, directly or indirectly,
... ' As we recognized in the Hearst case ZNational
Labor Relations Board v. Hearst Publications, 322
U.S. 111 (1944u, the terms 'employee' and 'employer'
in this statute carry with them more than the tech-
nical and traditional common law definitions. They
also draw substance from the policy and purposes of
the Act, the circumstances and background of particu-
lar employment relationships, and all the hard facts
of industrial life.
-4175-
Hon. Joe Christie, page 5 (M-860)
"And so the Board, in performing its delegated
functions of defining and applying these terms, must
bring to its task an appreciation of economic reali-
ties, as well as a recognition of the aims which
Congress sought to achieve by this statute. This
does not mean that it should disregard the techni-
cal and traditional concepts of 'employee' and 'em-
ployer.' But it is not confined to these concepts.
It is free to take account of the more relevant
economic and statutory considerations. And a de-
termination by the Board based in whole or in part
upon those considerations is entitled to great
respect by a reviewing court, due to the Board's
familiarity with the problems and its experience,
in the administration of the Act.” (at p. 403-484).
In Ohio Power Co. v. N.L.R.B., 176 F.2d 385, 287 (6th
Cir. 1949) the Court held that responsibility of an industrial
employer,
II... includes judgment, skill, ability,
capacity, and integrity, and is implied by
power. ...'I (at p. 387).
Based upon the undisputed facts before us and the legal
authorities and principles enunciated set forth, we are of the
opinion that t&. Penn did not legally qualify at the time of his
appointment as representative of the employer class of persons
eligible for membership on the Industrial Accident Board. Article
8307, Section 2, surely contemplates more than a de minimis of
experience, background and acts as an employer. We do not find
any of this of which a court would recognize in Mr. Penn's record
before us. under the undisputed facts he had only a contract of
employment, under which he might have qualified as an employer.
He had no prior experience as an employer: he performed no act
under his contract as an employer: he testified he "did nothing."
He was paid for one day only by his employer, apparently for
Saturday. Nothing was expected of him until the following Monday:
he was not on a "stand-by" basis for the performance of any duty
until Monday, the day upon which he terminated his contract, with-
out pay apparently for Monday.
-4176-
. . -
Hon. Joe Christie, page 6 (M-860)
The post of a director or executive officer of a cor-
poration-necessarily carries with it certain duties contemplated
to beg performed as to the corporate affairs and custody and use
of corporate accounts. Such an officer is necessarily under an
obligation of trust and confidence to the corporation or its
stockholders-and must act in good faith and for the interests
of the corporation, with due care and diligence and withinthe, .
scope of his authority. 13 Am.Jur. 939, Corporations, Sec. 985.
We do not find these necessary elements present'in the
appointment of Mr.,Penn to the post of Executive Vice-President
of the corporation, sinae from the facts presented sych appoint-
ment and acceptance was done solely for the purpose of qualifying.
him for appointment to the Industrial Accident Board. Admittedly,
it was done under circumstances and at a time when he would have
no duties to perform over the weekend. He was not instructed to
do anything and he did not do anything. Neither he nor the cor-
poration can be deemed to have possessed the qualifications to
meet the legal requirements of a corporate director or executive
officer. The requirement of legal responsibility is not shown.
As stated in McFarland v. Georqe. 316 S.W.28 662, 671 (St. Louis
Ct. of App. 1958),
,I
... Legal responsibility is the state of one
who is bound or obliged in law and justice to do
somethinq. Behinke v. New Jersey Highway Authority,
13 N.J. 14, 97 A.2d 647, 654. In Crockett v. Village
of Barne, 66 Vt. 269, 29 A. 147. the Court said:
'One's duty is what one is bound or under obligation
to 80. One's responsibility is its liability, ob-
ligation, bounden duty.' The word 'responsibility'
... means the doing of something, any other meaning
would render the rule meaningless. ...'I
Since Mr. Penn did nothing it cannot be said that he
ever exercised the duties and responsibilities requisite for
qualification as an employer. A court will look through form
to substance and disregard all forms of pretense. Whatever con-
versation Mr. Penn had or agreements he had, his service must
therefore be considered only "de minimis" or insufficient in law,
since under this test the law will take no notice of and not con-
cern itself with such small or trifling matters.
-4177-
.
. . -
Hon. Joe Christie, page 7 (M-860)
SUMMARY
Mr. Richard Penn was not legally qualified
for membership on the Industrial Accident Board
as the employer's representative on the Board when
he was appointed by the Governor'on October 6;1969.
Under the undisputed facts he performed no act, and
was not authorized to perform any act and was not on
a stand-by basis, for the one day for which he was
paid and which constitutes the basis for his
qualification.
Prepared by W. E. Allen
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
Arthur Sandlin
Lewis Jones
Scott Garrison
Max Hamilton
NBADE F. GRIFFIN
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
-4178-