A Publication of the Texas Association of Business TEXAS Volume 25 | Issue 2 | February 2010 | www.TXBIZ.org BUSINESS REPORT A Look At The 2010 TAB Annual Conference WORKFORCE Q&A Leaders tackle education at successful event What is the “Franken The Texas Association of Business 2010 Annual Amendment” and how Conference was a resounding success. Nearly four does this new law impact employers? hundred people attended the event, which highlighted how the business community and lawmakers can prepare (see page 2) and equip Texas graduates to excel in the job market. The Association was proud to welcome Lt. Governor David Dewhurst, Comptroller Susan Combs and the esteemed legislators and policy experts who brought attention to the myriad challenges we face in producing a world-class NEW MEDIA education system. The conference kicked off with a keynote address from Lt. Governor Dewhurst, who highlighted the Tier One initiatives passed during the 2009 Legislative Join the 1,000-plus Session. The state will match funds raised by schools on the path to becoming a people who follow TAB world-class research universities. Texas currently only has two public universities on top social media sites. with a “Tier One” designation, while California and New York both have at least six. To remain competitive with our neighbors across America and the globe, the Find us on Twitter at Legislature passed and the Governor signed legislation that will guide many of our twitter.com/txbiz great public universities to reach the next and become a fan of level in academic accomplishment. us on Facebook by searching for the “Texas Senator Dan Patrick closed out the first Association of Business” day of the conference with entertaining remarks that tied his current success in business, broadcasting and the Legislature to finding what he enjoyed doing as a young man. Much like in his experience, he pointed out that having the outlets for students who are MISSION interested in mechanics or repair can TAB lead them to high-paying jobs. Patrick To make the Texas cited an employer in his district that was business climate the Governor Rick Perry chats with TAB Chair Gray looking for a diesel mechanic paying Mayes (L) and Board Member Brint Ryan at the $85,000. Patrick’s anecdote reflects best in the world. 2010 Annual Conference perfectly the problem TAB’s conference continued on page 3 WORKFORCE TEXAS Q&A BUSINESS What is the “Franken Amendment” and how does REPORT this new law impact employers? Volume 25 | Issue 2 The Franken Amendment is a provision included in February 2010 the Department of Defense Appropriations Act for TAB StatEWIDE OFFICERS 2010. Specifically, that federal statutory provision, Gray Mayes, State Chairman which was sponsored by Senator Al Franken of Min- Larry Simmons, Chair Elect nesota, requires any defense contractor that receives a Brett Graham, Treasurer contract awarded under the Defense Appropriations Rudy Oeftering, Secretary Bill Hammond, President Act on or after February 17, 2010, to refrain from entering into any agreement with any of its employees TAB TEAM CONtaCts Bob Nichols or independent contractors that requires, as a condi- Art Roberts, Senior Vice President Bracewell & Giuliani LLP tion of employment, that the employee or independent Chamber Relations contractor agree to resolve through arbitration any [email protected] claim under (i) Title VII of the Civil Rights Act of 1964 or (ii) any tort related Sandra McGee, Senior Vice President to or arising out of sexual assault or harassment, including assault and battery, Employment Services & Finance [email protected] intentional infliction of emotional distress, false imprisonment or negligent hir- ing, supervision or retention. Further, the provision prohibits an employer with Dan Cahalen, Senior Vice President Membership Development a covered contract from taking any action to enforce any provision of an existing [email protected] agreement with an employee or independent contractor that mandates the em- Cathy DeWitt, Vice President ployee or independent contractor to resolve any of the identified types of claims Workers’ Compensation, Tort Reform and through arbitration. Employment Relations [email protected] Although many employers might assume the Franken Amendment is not a Stephen Minick, Vice President concern for them because they do not have a contract of over $1 million with Environmental Quality and Energy the Department of Defense, this new law also provides that, beginning 180 days [email protected] after December 19, 2009, defense contractors will be required to certify that their Kandice Sanaie, Governmental Affairs Manager subcontractors with subcontracts of over $1 million on a defense project will also Insurance & Health Care comply with these restrictions on arbitration agreements with employees and [email protected] independent contractors. Enrique Marquez, Communications Director [email protected] Notably, while originally this legislation was characterized as just prohibiting em- ployers from requiring employees making sexual assault allegations from arbitrat- TAB REGIONAL OFFICES ing claims, the law appears to have much broader scope than that and extends to Central Texas Area Ron McGill any (i) discrimination claim under Title VII and (ii) tort claims related not only [email protected] ~ (254) 913-0752 to alleged sexual assault, but also to sexual harassment. Southeast Texas Area Miles Resnick All employers should be concerned by the Franken Amendment because it [email protected] ~ (409) 363-1481 demonstrates the widespread support in Congress for restrictions on workplace Northwest Texas Area arbitration. There are bills currently pending in Congress that would broadly Marshall Jeffus prohibit mandatory arbitration in the employment setting. [email protected] ~ (940) 642-5428 North Texas Area For the time being, those employers with significant defense-related contracts or Mark Sadowski subcontracts should evaluate whether they are covered by the Franken Amend- [email protected] ~ (214) 906-3361 ment restrictions and, if so, modify any arbitration programs that may have to Texas Business Report (ISSN0892-6816) is published comply with these restrictions. on the 15th of every month by Texas Association of Business, located at: 1209 Nueces Street, Austin, TX Employment Relations questions? 78701. Subscriptions are available at a rate of $2.00, which is deducted from TAB members’ annual dues. Don’t forget to call TAB’s Employment Relations Hotline Articles may be reprinted with permission. Legislative for your next HR Question advertising paid by TAB. Periodicals Postage Paid at Austin, Texas. 1.800.856.6721, ext. 164 or E-mail [email protected] POSTMASTER – Send address changes to: Texas Business Report, 1209 Nueces Street, Austin, TX 78701 2 Annual Conference Spotlights Education Special Thanks to continued from page one 2010 TAB Annual Conference Sponsors hoped to tackle: If we do not have a TAB’s signature education issue, prepared workforce here in Texas, the accountability, was the focus of a jobs will move elsewhere. panel featuring Rep. Rob Eissler Opening Session and Senator Florence Shapiro – Commissioner of the Texas Higher Sponsor who chair the respective House Education Coordinating Board and Senate education committees, Walmart Raymund Paredes led one of the policy guru Sandy Kress and Chris most insightful panels featuring Cloudt of the Texas Education Representatives Dan Branch (R Agency. Shapiro and Eissler were Awards Ceremony – Dallas) and Joaquin Castro (D the architects behind House Luncheon Sponsor – San Antonio) and Chair of the Bill 3, which will overhaul the Governor’s Business Council, Woody accountability system, was one TAB Ryan Hunt. The four tackled the subject of strongly supported and continues to higher education, with Hunt laying support. Cloudt reinforced that the out in a brief presentation the dire Conference Hosts bill took much of the wiggle-room consequences Texas faces if we do not Altria Client Services Inc away from TEA so that the vision continue to improve how we educate American Insurance Association outlined in the bill will be what is our children. As Texas shifts to soon Boeing Company implemented in the classrooms. becoming a majority-minority state, CenterPoint Energy, Inc educating and ensuring that the The final panel of the conference Chevron Hispanic student body graduates featured Gary Scharrer of the ExxonMobil Corporation with a high school degree that Houston Chronicle, Terry Stutz of Hewlett Packard prepares them to enter the job the Dallas Morning-News and Ross Prudential Insurance Company market is the most important public Ramsey of the Texas Tribune. They TAB Dallas Chapter policy issue Texas faces. went into detail about the lack of Time Warner credibility that politicians have when USAA Rep. Castro provided insightful speaking honestly about education. Verizon Communications commentary on his experience The panel also gave their perspective representing an area that contains on the 2010 elections and who’s got Friends of TAB underprivileged students whose the power in Texas. parents do not know enough about Akin Gump Civic Action Committee American Electric Power the higher education process to In addition to the conference, BGI Contractors be able to help with financial aid, TAB’s political action committee Blue Cross and Blue Shield of Texas choosing a school or filling out announced its endorsement of Frost Bank the necessary paperwork – leaving Governor Rick Perry’s gubernatorial Germer Gertz, LLP the students to try to negotiate the re-election in 2010 just prior to his Greenberg Traurig, LLP difficult process on their own. speech honoring the Best Companies IBC Bank To Work For In Texas. Perry spoke Paredes detailed the ideas being con- Lockheed Martin Aeronautics Company at length about the power of Texas sidered at the Coordinating Board to Nucor Steel - Texas business and how the employer base tie education grants and scholarships Pfizer Inc is what keeps Texas thriving. to merit and need, rather than just a Superior Health Plan need-based system that is currently in “The event was a wonderful Texans for Lawsuit Reform place.