2005 Texas Occupations Code CHAPTER 2501. PERSONNEL SERVICES

OCCUPATIONS CODE

TITLE 15. OCCUPATIONS RELATED TO EMPLOYMENT

CHAPTER 2501. PERSONNEL SERVICES

SUBCHAPTER A. GENERAL PROVISIONS


	§ 2501.001. DEFINITIONS.  In this chapter:                                  
		(1)  "Applicant" means a person who:                                          
			(A)  engages the services of a personnel service 
to secure employment;  or 
			(B)  is placed with an employer by a personnel 
service.                    
		(2)  "Commission" means the Texas Commission of 
Licensing and Regulation.   
		(3)  "Counselor" means a person who:                                          
			(A)  interviews and refers an applicant to a 
prospective employer;  or     
			(B)  solicits job orders from an employer.                                   
		(3-a)  "Department" means the Texas Department of 
Licensing and Regulation. 
		(4)  "Employer" means a person who employs or seeks to 
employ an employee.  
		(4-a)  "Executive director" means the executive 
director of the department. 
		(5)  "Fee" means anything of value, including valuable 
consideration or a service or the promise of valuable consideration 
or a service, directly or indirectly received by a personnel 
service as payment from a person seeking employment.
		(6)  "Job order" means a verbal or written notice of a 
job opening from an employer.
		(7)  "Owner" means a person who possesses a proprietary 
interest in a personnel service.
		(8)  "Person" means an individual, partnership, 
association, corporation, legal representative, trustee in 
bankruptcy, or receiver.
		(9)  "Personnel service" means a person who, regardless 
of whether for a fee, directly or indirectly offers or attempts to 
obtain permanent employment for an applicant or obtains or attempts 
to obtain a permanent employee for an employer.  The term does not 
include a newspaper of general circulation or other publication 
that primarily communicates information, other than information 
relating to employment positions, and that does not claim to adapt 
the information provided to the needs or desires of an individual 
applicant.  The term includes a person who offers the facilities of 
or advertises as:
			(A)  an executive search or consulting service;                              
			(B)  an out-placement service;                                               
			(C)  an overseas placement service;                                          
			(D)  a job listing service;                                                  
			(E)  a personnel consulting service;  or                                     
			(F)  a resume service that provides job market 
investigation, research, or evaluation.
		(10)  "Service file" means a job order, resume, 
application, workpaper, or other record containing information 
relating to:
			(A)  an applicant;                                                           
			(B)  an employer;                                                            
			(C)  an employment position;  or                                             
			(D)  the operation of a personnel service.                                   

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 11.001, eff. Sept. 1, 
2003.


	§ 2501.002. EXCEPTION.  This chapter does not apply to:                     
		(1)  a personnel service operated by the United States, 
this state, or a municipality of this state;
		(2)  a personnel service operated by a person who does 
not assess a fee if the personnel service is operated in conjunction 
with the person's own business exclusively to employ help for that 
business;
		(3)  a labor union;  or                                                       
		(4)  a professional counselor licensed under Chapter 
503.                   

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           

SUBCHAPTER B. CERTIFICATE OF AUTHORITY


	§ 2501.051. CERTIFICATE REQUIRED.  A person may not own a 
personnel service that operates in this state unless the person 
holds a certificate of authority issued under this chapter.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.052. MANAGEMENT SEARCH CONSULTANTS.  (a) In this 
section, "management search consultant" means a personnel service 
that:
		(1)  is retained by, acts solely on behalf of, and is 
compensated only by an employer;  and
		(2)  does not directly or indirectly collect a fee from 
an applicant as payment for a service performed by the personnel 
service.
	(b)  This subchapter does not apply to a management search 
consultant.       

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.053. NOTICE.  (a) Not later than the 30th day 
before the date a personnel service begins operating in this state, 
the owner of the service must file notice with the executive 
director.
	(b)  The notice must include:                                                  
		(1)  the address of each location at which the 
personnel service is to operate its business on a daily basis;
		(2)  the assumed name, if any, under which the 
personnel service will operate;
		(3)  the name and residence address of each owner;  and                       
		(4)  a statement that each owner has read and is 
familiar with this chapter.
	(c)  The notice must be signed and sworn to by the owner 
before a notary public or other officer authorized to administer 
oaths.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 26.070, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.702, eff. Sept. 1, 
2003.


	§ 2501.054. SECURITY REQUIRED.  (a) An owner who files a 
notice under Section 2501.053 shall file with the notice a bond in 
the amount of $5,000 that is:
		(1)  executed with a good and sufficient surety;                              
		(2)  payable to the state;  and                                               
		(3)  conditioned that the obligor will not violate this 
chapter.            
	(b)  In lieu of a bond under Subsection (a), the owner may 
deposit $5,000 in cash.
	(c)  A bond filed under Subsection (a) must state that a 
person aggrieved by a violation of this chapter by the principal or 
an agent or representative of the principal is entitled to bring an 
action on the bond.
	(d)  An owner of a personnel service may satisfy the 
requirements of this section by filing one bond for the personnel 
service, regardless of the number of locations at which the 
personnel service is to operate its business on a daily basis.  
(V.A.C.S. Art. 5221a-7, Secs. 1(10), 7(c) (part). )

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.055. ISSUANCE OF CERTIFICATE;  TERM.  (a) On 
receipt of a notice filed under Section 2501.053, the executive 
director shall issue to the owner a certificate of authority to do 
business as a personnel service not later than the 15th day after 
the date the notice is filed if the owner:
		(1)  pays the filing fee required for the certificate;  
and                 
		(2)  complies with the requirements of Section 
2501.054.                    
	(b)  A certificate of authority is valid for the period set 
by the Texas Commission of Licensing and Regulation.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 26.071, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.703, eff. Sept. 1, 
2003.


	§ 2501.056. DISPLAY OF CERTIFICATE.  An owner shall 
display a certificate of authority issued under this chapter in a 
prominent place in each location at which the personnel service 
operates its business on a daily basis.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.057. RENEWAL OF CERTIFICATE.  The executive 
director shall issue a renewal of a certificate of authority on the 
receipt of:
		(1)  a renewal notice from the owner that contains the 
information required by Section 2501.053;
		(2)  a renewal fee;  and                                                      
		(3)  security that complies with Section 2501.054.                            

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 26.072, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.704, eff. Sept. 1, 
2003.

SUBCHAPTER C. PROHIBITED PRACTICES


	§ 2501.101. PROHIBITED PRACTICES.  (a) An owner, 
operator, counselor, agent, or employee of a personnel service may 
not:
		(1)  share or attempt to share a fee paid by a person 
seeking employment or an employer with an employer or an agent or 
employee of an employer or another person provided services by the 
personnel service;
		(2)  make or cause to be made a false promise, 
misrepresentation, or misleading statement or give or cause to be 
given misleading information to an applicant;
		(3)  refer an applicant to an employer unless the 
personnel service has a job order for the referral;
		(4)  advertise a position unless the personnel service 
has a job order verifiable by the employer;
		(5)  procure or attempt to procure the discharge of a 
person from the person's current employment;
		(6)  induce, solicit, or attempt to induce or solicit 
an employee to terminate current employment in order to obtain new 
employment if the current employment was obtained through that 
personnel service or a personnel service that has a common 
ownership with that personnel service unless the employee initiates 
the new contact;
		(7)  deliver, disclose, distribute, or otherwise 
communicate to or receive from a person a service file or 
information contained in a service file, except as authorized by 
the personnel service that owns the file;
		(8)  advertise in any medium, including a newspaper, 
trade publication, billboard, radio, television, card, printed 
notice, circular, contract, letterhead, or any other material made 
for public distribution, except an envelope, without clearly 
stating that the advertisement is by a firm providing a private 
personnel service;
		(9)  refer an applicant to a place where the personnel 
service has knowledge of the existence of a strike or lockout unless 
the personnel service informs the applicant in writing of the 
strike or lockout before the referral is made;  or
		(10)  refer an applicant to employment harmful to the 
applicant's health or morals if the personnel service has knowledge 
of the harmful condition.
	(b)  An employer or a person seeking employment may not:                       
		(1)  make a false statement or conceal any material 
fact to obtain an employee or employment by or through a personnel 
service;  or
		(2)  share or attempt to share with a person subject to 
this chapter a fee paid or another payment made for the services of 
a personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.102. IMPOSITION OF FEE PROHIBITED BEFORE 
EMPLOYMENT OFFER ACCEPTED.  Notwithstanding any refund policy, an 
owner, operator, counselor, agent, or employee of a personnel 
service may not impose a fee on an applicant until the applicant 
accepts an offer of employment resulting from an employment 
referral made by the personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.103. CHARGING OF FEE IN EXCESS OF CERTAIN AMOUNT 
PROHIBITED IF EMPLOYMENT TERMINATED.  An owner, operator, 
counselor, agent, or employee of a personnel service may not charge 
an applicant a fee that exceeds 20 percent of the applicant's gross 
wages if:
		(1)  the employment accepted by the applicant as a 
result of a referral by the personnel service lasts less than 30 
days;  and
		(2)  the applicant terminates the employment for good 
cause.                

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           

SUBCHAPTER D. ENFORCEMENT


	§ 2501.151. ENFORCEMENT.  (a) The executive director 
shall enforce Section 2501.102 and may investigate a personnel 
service as necessary to enforce that section.
	(b)  The attorney general shall assist the executive 
director on request.    

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 26.074, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.707, eff. Sept. 1, 
2003.


	§ 2501.152. COMPLAINT AND INVESTIGATION.  (a) A person 
may file with the executive director a complaint alleging a 
violation of Section 2501.102.
	(b)  On receipt of a complaint, the executive director shall 
investigate the alleged violation and may:
		(1)  inspect any records relevant to the complaint;  
and                    
		(2)  subpoena those records and any necessary 
witnesses.                    

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 11.002, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.707, eff. Sept. 1, 
2003.


	§ 2501.153. HEARING.  (a) If the executive director 
determines as a result of an investigation that a violation of 
Section 2501.102 may have occurred, the commission shall hold a 
hearing.
	(b)  A hearing under this section shall be conducted in the 
manner provided for a contested case under Chapter 2001, Government 
Code.
	(c)  The commission shall render a decision on the alleged 
violation after the hearing is concluded.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 11.003, eff. Sept. 1, 
2003.


	§ 2501.154. SANCTIONS.  (a) If, after a hearing, the 
commission determines that a personnel service has violated Section 
2501.102, the commission may, as appropriate:
		(1)  issue a warning to the personnel service;  or                            
		(2)  suspend or revoke the certificate of authority 
issued to the personnel service.
	(b)  If, after a hearing, the commission determines that a 
personnel service has violated Section 2501.102, the commission may 
award the complainant an amount equal to the amount of the fee 
charged by the personnel service.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 11.004, eff. Sept. 1, 
2003.

SUBCHAPTER E. CIVIL LIABILITY


	§ 2501.201. LIABILITY FOR DAMAGES.  (a) In this section, 
"knowingly" means actual awareness of the act or practice that is 
the alleged violation.  Actual awareness may be inferred if any 
objective manifestation indicates that the person acted with actual 
awareness.
	(b)  A person who violates this chapter is liable to a person 
adversely affected by the violation for:
		(1)  actual damages;  or                                                      
		(2)  if the person adversely affected establishes that 
the violation was committed knowingly, three times the amount of 
actual damages.
	(c)  Damages recoverable in an action under this section are 
subject to reduction by an amount equal to an amount awarded under 
Section 2501.154 based on the same conduct.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.202. INJUNCTION AND OTHER REMEDIES.  A plaintiff 
in an action filed under Section 2501.201 may obtain:
		(1)  an order enjoining the defendant from violating 
this chapter;          
		(2)  any order necessary to restore to the plaintiff 
any property acquired by the defendant in violation of this 
chapter;  or
		(3)  other relief the court considers proper, 
including:                    
			(A)  the appointment of a receiver if the judgment 
against the defendant is not satisfied within three months after 
the date of the final judgment;
			(B)  the revocation of a certificate authorizing 
the defendant to engage in business in this state;  or
			(C)  an order enjoining the defendant from acting 
as a personnel service.  

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.203. AWARD OF ATTORNEY'S FEES.  (a) A plaintiff 
who prevails in an action filed under Section 2501.201 is entitled 
to receive court costs and reasonable and necessary attorney's 
fees.
	(b)  On finding that an action filed under Section 2501.201 
is groundless and was brought in bad faith or for the purpose of 
harassment, the court may award court costs and reasonable 
attorney's fees to the defendant.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.204. DECEPTIVE TRADE PRACTICE.  A violation of 
this chapter is a false, misleading, or deceptive act or practice 
within the meaning of Section 17.46, Business & Commerce Code, and 
any public or private right or remedy authorized by Subchapter E, 
Chapter 17, Business & Commerce Code, may be used to enforce this 
chapter.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           

SUBCHAPTER F. PENALTIES


	§ 2501.251. CRIMINAL PENALTY.  (a) A person commits an 
offense if the person knowingly violates this chapter.
	(b)  An offense under this section is a Class A misdemeanor.                   

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.252. TRADE SECRET.  A service file is a trade 
secret for purposes of Section 31.05, Penal Code.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.           


	§ 2501.253. ADMINISTRATIVE PENALTY.  (a) In addition to 
the amount awarded to a complainant under Section 2501.154(b), the 
executive director may impose on the personnel service an 
administrative penalty equal to two times the amount awarded under 
that subsection.  A penalty collected under this section shall be 
deposited in the state treasury.
	(b)  A penalty imposed under this section is in lieu of a 
criminal penalty provided by this chapter for a violation of 
Section 2501.102.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.  
Amended by Acts 2003, 78th Leg., ch. 816, § 26.075, eff. Sept. 1, 
2003;  Acts 2003, 78th Leg., ch. 1276, § 14A.710, eff. Sept. 1, 
2003.


	§ 2501.254. EFFECT ON OTHER REMEDIES AND ENFORCEMENT 
POWERS.  This chapter does not affect a public or private remedy or 
enforcement power available under other law.

Added by Acts 2001, 77th Leg., ch. 1421, § 6, eff. June 1, 2003.