Untitled Texas Attorney General Opinion ( 1942 )

-,
YXmArrirom~ GENERAL
OF TEXAS
AUSTIN xi. TExAR
GERAID C.
Honorable John D. Reed, Commissioner
Bureau of'LiiborStatistics
Austin, Texas
Dear Sir: Opinion No. 0-4560
Re: Under the facts submitted, does a
labor organizat~lon,not chartered
under the laws of Texas, come with-
in the pi!ovlsionsof our Employment
Agency Law?
You have requested the opinion of this department
upon the question stated above, based upon the following
statement of facts:
1. There has been common practice for a
good many years among labor organizations to
have the buslness~agent of the organization to
act Asia placemdz officer for the union,. In
other words, where a contractor for a private
corporation has ,touse union labor the.demands
for employees by the private corporation are
handled through the business agent. For ln-
stance, If *300 carpenters are needed the con-
tractor contacts the business agent and makes
known his need for employees and these'emplogees
are referred to the job by the business agent.
2. All un~lonshave initiation fees and
dues to become a member and to remain a member
in good standing.
3. Labor unions are generally organized
for the purpose of improving the social and
financial condition of its membership by the
use of collective bargaining.
4. No additional charge or special assess-
ment is made or collect& for the employment
service rendered by the organization.
5. Only bona fide members are assFsted In
securing employment.
. ...
Honorable John D. Reed, page 2' Q-4560
6. The union maintains, from the lnltiatlon
fees, dues, fines, etc., such services as insurance
for its members, social entertainments, and nego-
tiations, and contracts covering wages, working
hours, and safety conditions of its members, both
those who do and those who do not avail themselves
of Its employment services, alike.
7.' There is no difference In the amount of
money paid by the members who are assisted In se-
curing employment and those who secure their own
employment.
8. The contractor who is assisted In secur-
ing workers pays nothing directly or Indirectly for
this service, as it Is common practice for those
contractors using only union labor to enter Into an
agreement with the labor union that the labor union
will supply him wlth,all needed workers, provided
nothing but union labor Is used.
9. There is no penalty Involved If a member
who Is referred by his 'unionto a job refuses to
take It.
The Texas Employment Agency Law is contained in Title
83; Chapter 13, Articles 5208-5221, Vernon's Revised Clvi-1
Statutes of 1925, and.Title 18, Chapter 7, Articles 1584-
1593, Vernon's Revised Penal Code of 1925. These statutes
are from House Bill No. 13, Acts 1923, 38th Legislature, Reg.
Sess., as amended. This act provides, in its first two sec-
tions:
"Section 1. That no person, flrm,partnership
or association ~of persons shall engage in or carry
on the business of employment agent in thFs State
without first having obtained a license therefrom
from the Commissioner of Labor StatlstFcs of the
State of Texas.
"Section 2. ,The term 'Employment Agent' as
used In this Act shall mean every person, firm, .
partnership or association of'persons engaged In
the business of assisting employers to secure em-
ployes, and persons to secure.employment, or of
collecting information regarding employers seeking
employees, and persons seeking employment; pro-"
vlded, the provisions of this Actshall not apply
to agents who charge a fee of not more than two,~
dollars ($2.00) for reglstratlon only, for procur-
.
Honorable John D. Reed, Page 3 O-4560
ing employment for school-teachers; nor to any
department or bureau maintained by the State of
Texas, the United States Government, or any municipal
government of this State, nor to any person, firm,
partnership, association of persons or corporation
or any officer or employee thereof engaged In ob-
talning or soliciting help for him, them or it when
no fees are charged directly or lndlrectlg of the
applicant for help or from the applicant for em-
ployment. Provided, that the provisions of this Act
shall not apply to farmers and stockraisers acting
jointly or severally in securing laborers for their -
own use where no fee Is collected or charged directly
or lnd~lrectly,nor to any association or corpora-
tion chartered under the laws of Texas conducting a
free employment bureau or agenay.
"The term 'Employment Office' shall mean every
place nor offfce where the business of giving ln-
telligence nor information where employment or help
may be obtained, or where the,,businessof an em-
ployment agent is carried on.
Other provisions prescribe the requirements for se-
curing a license, fix the license fee, require a bond of the
licensee, prescribe grounds for cancellation of the license,
provide for examination by the Commissioner of Labor Statls-
tics of books a@ records of the licensee, prescribe criminal
penalties for violations of the Act, and otherwise strictly
regulate the business of the licensed employment agent.
It will be noted from the provisions quoted above
that the Employment Agency Law applies, not to all those who
assume the responsibility of securing employment for others, ,
or of securing employees for others, but only to those who
are "engaged in the business of assisting emplOprS to secure
employes, and persons to secure employment, or of collecting
information regarding employers seeking employees, and persans
seeking employment". And, since the particular labor organ-
ization which you have in mind is not chartered under the laws
of Texas, it becomes necessary to determine whether, under the
facts stated, it is "engaged In the business" described.
We have made a careful search of the reported deCi-
sions of this an&other jurisdictions, and have found no dase
in which the exact question here presented is decided. HOW-,
ever, we find a close analogy between this case and those In
which the State has aught to bring bona fide golf iMd'sOCia1
clubs, selling liquors to their members In good faith ati'an
incident to the social life of the club, within the provisions
. .
Honorable John D. Reed, page 4 O-4560
of the liquor dealers license laws; and we think it pertinent
to note the Texas decisions In such cases:
In the case of State v. Austin Club, 33 S.W. 113,
decided by the Supreme Court in 1895, the State charged that
the Austin Club was engaged in the business of selling
spirituous, vinous and.malt liquors In quantities less than
one quart, and sought to-collect from It the occupation taxes
l&Fed againstretail liquor dealers. The--agreedstatemelit
of facts showed (1) that the Austin Club was a bona fide tilub,
Incorporated under the laws of Texas for the purpose of "the
encouragement of social Intercourse among its members,.the .
support of literary undertakings and cultivation of literature,
the maintenance of a library and reading room, and the pro-
motion of fine arts"; (2) that the club malntalnecla billiard
room and reading rooms; (3) that Ft from time to time pur-
chased in bulk spirituous liquors and medicated bltters~and
through its authorized agent and employee; retailed same to
Its members, and to its members only, in quantities 1ess'~than
one quart, and at an agreed price per drink; (4) that each
member of the club paid for the quantity of spirituous liquors,
etc., which he called for and consumed; and (5) that the club
did not sell liquors, etc., for profit, and the money arising
from such sales to members was placed in the treasury of the
.club, and only used for expenses of the club and replenish+%
the stock of liquors. The statute under.whlch the State
claimed the tax-was as follows:
'* + * 'Hereafter there shall be levied upon
and collected from any person, firm or association
of persons engaged in the business of selling
spirituous, vinous or malt liquors, or medicated
bitters, an aruiualtax upon every such occupation
or separate establishment, as follows: For sell-
ing spirituous, vlnous or malt liquors, or medl-
cated bitters, in quantities of less than one quart,
three hundred dollars.'"
In holding against the State's content&on, the Court
said:
II*'** If we should hold that a club such
as thls,.transacting Its business In the manner
that this did, was engaged in the business of sell-
ing spirituous liquors by retail, we would, in
effect, hdld that the place where such club's
business was being transacted was a house for the
retail of spirituous liquors, and would be in di-
rect conflict with the highest court in criminal
matters.ln this state.* * *' Koenig v. State, 26
S.W. 835.
Honorable John D. Reed, page 5 Q-4560
In the case of State v. Duke,.137 S. W. 654, the'
Supreme Court again had before it the question whether a club,
selling liquors to its guests, was engaged In the business
of selling Intoxicating liquors. Approving the decisions In
the Austin Club and Koenig cases, cited above, the Court held:
"That a bona fide club, situated in a pre-
cinct;clty, or town where liquor may be lawfully
sold, organized for purposes permitted and sanc-
tloned by law, which as a mere Incident to its
organization and without profit furnishes liquor
to its members and not to the public generally, .
is not a person, uniierthe laws of this State,
engaged In the occupation or business of'selllng
intoxicating liquors.
-"That while each individual act of such a
club, in territory where the,sale of liquor is
prohibited by law,,is a sale, .in territory where
such sale Is not unlawful, the method in ques-
tion of furnishing liquors to the"~membersof such
club is not embraced In the general language of
selllng'or engaglng in the business of selling
intoxicating liquors.
"That in respect to clubs not organized in
good faith for purposes auj5horlzedby law, but
merely as shifts, shields, or subterfuges, such
sales would not be permitted, and under such
circumstances they would and should be held to
be disorderly houses and subject to all the pains
and penalties of the law."
In Country Club v. State? 214 S.W. 296, the State
sought, among other things, to enJoin the Country Club from
selling intoxicating liquors to its members and guests with-
out procuring a license as a retail liquor dealer. .The
Supreme Court states the facts of the case as follows:
"The case was tried on an agreed statement
of facts, showing in substance that the club was
incorporated In good~faith, to support and main-
tain a golf club; and other innocent sports in
connection therewith; that the club owned,a club-
house and golf course, worth some $35,900, all
of whlch.tiereused exclusively by the members of
the club and their guests; that the club malti-
talned a buffet, for the purpose of selling and
..
Honorable John D. Reed..page 6
dispensing intoxicating liquors to Its members
and theFr guests only, not for the purpose of
profit and not In the way of trade or business;
that the club was not maintained as a device or
scheme to evade afigliquor or license laws of
the state or of any subdlvislon ~thereof; that
the dispensation and sale of liquor to members
and guests of the club were merely lncldental to
its lawful corporate purposes and for the en-
joyment and convenience of the club members and
guests; that the club premises were not within
local option territory, nor situated where the -
sale of intoxicating liquors was forbidden by
any state or municipal law."
Again the Court held that the sale of Intoxicating
liquors by a bona flde.soclal club to Its members (and guests,
too,,in this instance), as an incident to its other lawful
actlvlties, did not constitute engaging in the buslness of
selling intoxicating liquors at retail, and pointed out with
approval the holdings In the Duke case, quoted above.
From the facts upon which your Inquiry 1s based, as
stated above, It appears that the labor unFon in question Is
maintaining a free private employment service for Its members
only, as a proper complement of'its general purpose to elevate
the economic status of its members, and that in view of such
facts and uncle%the reasonin# of the cases herein cl:eCi;z:h
a labor organization is not engaged In the business
sisting employers to secure employees, and person to secure
employment, or of collecting information regarding employers
seeking employees, and persons seeking employment, within
the meaning of the Employment Agency Law. We are the more
inclined to this view because this law is penal in character,
and must be strictly construed.
It is therefore our opinion that the labor organiza-
tlon in question does not come within the provisions of our
Employment Agency Law. We wish to emphasize, however, the
fact that this opinion Is based upon the facts of this case,
as herein stated, and under a different state of facts the
question might be answered differently. Certainly, to para-
phrase the language of the Court In the Duke case, suprs, any
labor union or other association or CorpOratlOn, not OrgafiiZd
and conducted in goo&falth for purposes authorized by law,
but merely as a shift, shield, or subterfuge for carrying on
the business of an employment agency without procurlti a
license therefor, would be subject to all the pains and penal-
ties of the law.
. .. -
Honorable John D. Reed, page 7 Q-4560
Yours very truly
ATTORNEfGENERAL OF TEXAS
By s/W. R. Allen
W. R. Allen
Assistant
WRA:nw:wc
APPROVED AU3 28, 1942
s/Gerald C. Mann
ATTORNEY GENERAL OF TEXAS
Approved Opinion Committee By s/BWB Chairman
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