“There the Court made it clear that an order may be supported by substantial evidence and yet be invalid for arbitrariness.”
How later courts described this case
- “There the Court made it clear that an order may be supported by substantial evidence and yet be invalid for arbitrariness.”
- “Our primary goal, therefore, is to give effect to the written expression of the parties’ intent.”
- “The failure to include more express language of the parties’ intent does not create an ambiguity when only one reasonable interpretation exists.”
- “In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument.”
Written by the judges who cited it.
The opinion
ACCEPTED
07-15-00113-CV
SEVENTH COURT OF APPEALS
AMARILLO, TEXAS
6/1/2015 8:01:39 PM
Vivian Long, Clerk
_________________________________
FILED IN
In The 7th COURT OF APPEALS
AMARILLO, TEXAS
6/1/2015 8:01:39 PM
Seventh District Court of Appeals VIVIAN LONG
CLERK
No. 07-15-00113-CV
MOHAMMED FAWWAZ SHOUKFEH, M.D.,
P.A., D/B/A TEXAS CARDIAC CENTER,
APPELLANT
v.
JAMES G. GRATTAN AND TEXAS WORKFORCE COMMISSION,
APPELLEES
_________________________________
APPELLANT’S BRIEF ON THE MERITS
_________________________________
CRAIG, TERRILL, HALE & GRANTHAM, LLP
H. GRADY TERRILL
ELIZABETH G. HILL
Texas Bar No. 24083179
9816 Slide Rd, Suite 201
Lubbock, Texas 79424
806/744-3232
Facsimile 806/744-2211
ehill@cthglawfirm.com
ORAL ARGUMENT REQUESTED
ISSUES PRESENTED
I. Did the Texas Workforce Commission fail to enforce the plain language of
Grattan’s agreement when it failed to conclude that the agreement was
ambiguous in order to consider evidence outside the written agreement
between the parties?
II. Was the Texas Workforce Commission’s decision arbitrary, unreasonable and
without regard to the law when it imposed duties on Texas Cardiac Center in
violation of the Texas Labor Code and voided another employee’s
compensation agreement?
i
IDENTITIES OF PARTIES AND COUNSEL
Pursuant to Texas Rule of Appellate Procedure 38.1(a), Appellants certify
that the following is a complete list of the parties, the attorneys, and any other
person who has any interest in the outcome of this lawsuit:
Plaintiff/Appellant: Mohammed Fawwaz Shoukfeh, M.D. P.A.,
d/b/a Texas Cardiac Center
Attorneys for Plaintiff/Appellant: H. Grady Terrill
Elizabeth G. Hill
Craig, Terrill, Hale & Grantham, LLP
9816 Slide Road, Suite 201
Lubbock, Texas 79424
Defendant/Appellee: James G. Grattan
Attorneys for Defendant/Appellee: John H. Simpson
Splaw Simpson Pitts
P.O. Box 1376
Lubbock, TX 79408-1376
Defendant/Appellee: Texas Workforce Commission
Attorneys for Defendant/Appellee: Peter Laurie
Office of the Attorney General
P.O. Box 12548
Austin, TX 78711-2548
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL..............................................................i
TABLE OF CONTENTS ......................................................................................... iii
INDEX OF AUTHORITIES ...................................................................................... v
ISSUES PRESENTED .............................................................................................. ii
I. Did the Texas Workforce Commission misconstrue the contract’s plain
language when it accepted Grattan’s argument that certain expenses should
not be deducted, even though the plain language of the contract provided
for the deductions? ............................................................................................. ii
II. Was the Texas Workforce Commission’s determination arbitrary and
unreasonable when it imposed duties on Texas Cardiac Center that are in
violation of the Texas Labor Code and voided another employee’s
compensation agreement? .................................................................................. ii
STATEMENT OF THE CASE .................................................................................... 1
STATEMENT REGARDING ORAL ARGUMENT .................................................. 1
STATEMENT OF FACTS .......................................................................................... 2
SUMMARY OF THE ARGUMENT........................................................................... 4
ARGUMENT ............................................................................................................... 8
I. This Court should find that the Texas Workforce Commission misconstrued
the contractual agreement between the parties because it accepted
Grattan’s analysis of an unambiguous provision. ............................................ 8
A. The agreement is unambiguous and therefore, the TWC—as well
as the district court—erred in considering parol evidence.................... 10
iii
B. The Texas Workforce Commission, as well as the district court,
failed to determine that the contract was ambiguous and
therefore, committed an error of law. .................................................... 17
II. This Court should find that the Texas Workforce Commission’s
determination was arbitrary and unreasonable because it imposed
unwritten and illegal duties on Texas Cardiac Center. .................................. 20
A. The Texas Workforce Commission imposed duties on Texas Cardiac
Center that are in direct violation of the Texas Labor Code. ....................21
B. The Texas Workforce Commission reached its conclusion by looking
to the title of the employee rather than the nature of the
employee’s compensation agreement .......................................................23
PRAYER ..................................................................................................................25
APPENDICES.......................................................................................................... 28
iv
INDEX OF AUTHORITIES
Cases
Ayres Welding Co. v. Conoco, Inc., 243 S.W.3d 177
(Tex. App.—Houston [14th Dist.] 2007, pet. denied) ............................ 8,9
Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738
(Tex. 1998)................................................................................................. 9, 14
Calpine Producer Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783
(Tex. App.—Dallas 2005, no pet.) ................................................................. 17
Cities of Abilene v. Pub. Util. Comm’n of Tex., 146 S.W.3d 742
(Tex. App.—Austin 2004, no pet.) .................................................... 14, 17
City of El Paso v. Pub. Util. Comm’n of Tex., 344 S.W.3d 609
(Tex. App.—Austin 2011, no pet.) ...................................................... 8, 12
Coker v. Coker, 650 S.W.2d 391
(Tex. 1983) ............................................................................................... 8
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587
(Tex. 1996) ......................................................................................... 9, 15
Evergreen Nat’l Indem. Co. v. Tan It All, Inc., 111 S.W.3d 669
(Tex. App.—Austin 2003, no pet.) ............................................................ 8
City of Houston v. Morris, 23 S.W.3d 505
(Tex. App.—Houston [1st Dist.] 2000, no pet.) .............................................. 7
Heritage on San Gabriel Homeowners Ass’n v. Tex. Comm’n on Envtl. Quality,
393 S.W.3d 417 (Tex. App.—Austin 2012, pet. denied).......................... 11,20
Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc.,
907 S.W.2d 517(Tex. 1995)..................................................................... 17, 18
Starr Co. v. Starr Indus. Servs., Inc., 584 S.W.2d 352
(Tex. App.—Austin 1979, writ ref’d n.r.e.) ................................................... 20
v
State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430
(Tex. 1995)..................................................................................................... 14
Statutes
Texas Labor Code § 61.018 ............................................................................ passim
vi
STATEMENT OF THE CASE
This case arises pursuant to a wage claim filed by Appellee, James
Grattan, with the Appellee, Texas Workforce Commission (TWC) (Claim No. 13-
055631-0). See CR 340-53. The initial determination order was issued by TWC on
August 14, 2013, wherein Appellant, Texas Cardiac Center, was ordered to pay
Grattan wages of $38,435.89; both parties appealed. See CR 348. After an appeal,
the Wage Claim Appeal Tribunal issued an order on October 7, 2013 wherein
Texas Cardiac was ordered to pay Grattan the wages of $5,817.32; both parties
appealed. See CR 340-47. Finally, TWC issued Findings and Decisions of
Commission Upon Review of Claim for Wages on February 06, 2014, wherein
Texas Cardiac was ordered to pay Claimant the wages of $125,988.91. See CR
351-53. Pursuant to Tex. Labor Code § 61.062, the administrative remedies were
exhausted and Texas Cardiac petitioned for a trial de novo from the 99th District
Court in Lubbock County pursuant to § 61.062 (e) on February 28, 2014. See CR 6-
10. All parties filed cross motions for summary judgment. The Court issued its final
judgment on March 2, 2015, granting the motions for summary judgment of the
Appellees and denying the motion for summary judgment of the Appellant. See CR
426. Texas Cardiac timely filed this appeal of the trial court’s ruling on March 31,
2015. See CR 428-29.
1
STATEMENT REGARDING ORAL ARGUMENT
Oral argument would be beneficial to the Court in this case because the
issues presented concern complex legal analysis of both the standard of review, as
well as the interplay between contract law and statutory mandates.
STATEMENT OF FACTS
James Grattan was a physician with Texas Cardiac Center (“Texas Cardiac”)
from June 19, 2006 through April 30, 2013. See CR 262-64; 273. At the onset of
Grattan’s agreement to become a physician with Texas Cardiac, Grattan entered
into a Physician Employment Agreement providing for the written authorization to
deduct expenses for shared overhead of Texas Cardiac. See CR 262-64. The
Agreement specifies a formula in Section 1(E) that outlines how earnings will be
calculated. See CR 263. Grattan was paid the net results of his gross receipts less
his pro rata share with other physicians of Texas Cardiac who had also
contractually agreed in writing to the deductions. See CR 260-61. This “eat what
you kill” concept is highly common in physician groups and the deductions are
authorized pursuant to Texas Labor Code § 61.018. See CR 260-61.
In 2012, one of the four physicians that were subject to the deductions
resigned, leaving only three physicians to share in the overhead expenses. See CR
260-61. Texas Cardiac hired a new employee, Dr. Qaddour, a new physician who
2
was not yet licensed in Texas and did not have staff privileges at the local hospitals.
See Ex. CR 260-61. Qaddour’s employment with Texas Cardiac resembled that of
a nurse or office staff member who was not yet income producing and would
gradually increase his duties and salary until he became an expense-sharing
physician after two years of employment. See CR 189-96. Qaddour did not provide
written authorization for the deductions to allow Texas Cardiac to deduct the
overhead expenses pursuant to the Texas Labor Code. See CR 191. Although notice
was given to Grattan regarding the meeting to discuss these issues, Grattan did not
attend or express his opinion regarding the offer to Qaddour; therefore, the Board of
Texas Cardiac approved the hire of Qaddour as an employee that would allow a
stair-step transition period while he was obtaining licenses and privileges to
practice. See CR 260-61; 189-96.
Throughout his employment, Grattan received detailed calculations of his
pay—calculated pursuant to the above formula. See CR 260-61. The portion of
time in dispute between the parties includes the pay for the months of September
2012 through April of 2013. See CR 260-61. In January of 2013, Grattan
provided notice of his intent to depart his employment with Texas Cardiac. See
CR 273. During that time, Grattan continued to receive compensation pursuant
to the agreement between the parties. See CR 260-61. Following his final
departure in April of 2013, Texas Cardiac sent Grattan his final paycheck in the
3
amount of $32,014.66 (amounts calculated from September 2012 until April
2013), the amount calculated pursuant to the above formula minus required
deductions, such as income tax and social security. See CR 265-73.
Grattan filed this wage claim in complaint that Texas Cardiac had not
deducted the overhead expenses from Qaddour, even though neither Qaddour’s
agreement nor the Texas Labor Code authorized such deductions. See Parts I
and II; Tex. Lab. Code § 61.018. Grattan argued that because Texas Cardiac had
required all practicing physicians to contribute to the overhead deductions in the
past, that Texas Cardiac was always required to do so, even though not
contractually or statutorily authorized to against Qaddour. Nonetheless, the final
TWC committee agreed with Grattan and determined that Texas Cardiac Center
must divide the overhead expenses between four physicians, including Qaddour,
even though Texas Cardiac had no contractual or statutory authorization to do
so. See CR 351-53.
SUMMARY OF THE ARGUMENT
The entire crux of the dispute between the parties focuses on what
deductions were authorized by Grattan as his pro rata share as dictated in his
agreement with Texas Cardiac. The question is: Who should be subject to the
“pro rata” share of the deduction of overhead expenses? Grattan urged—and the
Texas Workforce Commission (TWC) accepted—the argument that because
4
Qaddour was a “practicing physician,” Qaddour should consequently, be subject
to the pro rata deduction requirements because this was the past “compensation
practice” of Texas Cardiac. Yet, neither the agreement between Grattan and
Texas Cardiac nor the agreement between Qaddour and Texas Cardiac provided
for such a presumption. Most importantly, the Texas Labor Code prohibits an
employer, such as Texas Cardiac, from deducting expenses without written
authorization, or some other legal authorization, such as a court order.
Yet, the TWC required just that: ordering that Texas Cardiac must divide
the overhead expenses with a new physician who had not provided written
authorization as required by the Texas Labor Code. Further, without
determining that Grattan’s agreement was ambiguous, the TWC looked outside
the agreement to reach its conclusion in violation of traditional principles of
contract law. Further, the TWC failed to consider Qaddour’s contractual
arrangement, as well as the character of his employment with Texas Cardiac,
more akin to that of a nurse or staff member, especially in the first six months.
This determination violated the Texas Labor Code, as well as general principles
of contract law.
In fact, the only division authorized contractually, or statutorily by the
Texas Labor Code, was a division between the physicians who had contractually
agreed in writing to the deduction of overhead expenses. This was the only
5
conclusion that the TWC could have come to that would be consistent with the
law. Rather than determining that a new employee who never provided written
authorization for the deductions should be forced to share in the overhead
expenses, the TWC should have looked to the plain language of both
agreements, as well as the requirements under the Texas Labor Code, which
dictate written authorization prior to such deductions. Because the TWC’s
decision was arbitrary, unreasonable, and without regard to the law, this Court
should reverse the district court’s ruling affirming the TWC’s decision and
remand for further proceedings.
STANDARD OF REVIEW
The various standards of review potentially applicable to this case warrant
considerable discussion. As a preliminary matter, this Court is aware that it reviews
de novo whether a district court applied the correct legal standard and granted
summary judgment affirming an agency decision. See Heritage on San Gabriel
Homeowners Ass’n v. Tex. Comm’n on Envtl. Quality, 393 S.W.3d 417, 423 (Tex.
App.—Austin 2012, pet. denied). Further, while courts provide certain deference to
administrative agency decisions, courts still review the agency’s legal conclusions
for errors of law, while reviewing its factual findings for support by substantial
evidence. See id. (“In other words, we must remand for arbitrariness if we conclude
that the agency has not ‘genuinely engaged in reasoned decision-making.’”). While
6
courts should provide considerable deference to an agency’s decisions involving
factual determinations, there is no presumption of validity to be afforded an
agency’s interpretation of a contract. See City of El Paso v. Pub. Util. Comm’n
of Tex., 344 S.W.3d 609, 619 (Tex. App.—Austin 2011, no pet.) (“[A]n
administrative interpretation of the contract is not entitled to a presumption of
validity.”) (emphasis added). Likewise, in contrast to the interpretation of a
statute or rule—in which courts give deference to an agency’s interpretation due
to its rulemaking authority and expertise concerning its policies—interpretation
of private parties’ agreements are not given such statutory-like deference. See
id.
Further, courts must remand for arbitrariness if it concludes that the agency
has not “genuinely engaged in reasoned decision-making.” See id. Courts should
review not only whether there was substantial evidence to support the decision, but
also whether the correct legal standard was applied to reach that decision. City of
Houston v. Morris, 23 S.W.3d 505, 508 (Tex. App.—Houston [1st Dist.] 2000, no
pet.) (stating that if the TWC acted “without regard to the law or the facts,” the
denial was “unreasonable, arbitrary, or capricious” and subject to reversal).
7
ARGUMENT
I. This Court should find that the Texas Workforce Commission misconstrued
the contractual agreement between the parties because it accepted Grattan’s
interpretation of an unambiguous provision and ignored a valid contractual
agreement with Qaddour.
When interpreting contractual language, courts should seek to give full
effect to the plain language of the contract as the best expression of the intent of
the parties. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (“In
construing a written contract, the primary concern of the court is to ascertain the
true intentions of the parties as expressed in the instrument.”). When a contract
can be given a definite interpretation, then the contract is not ambiguous and
will be interpreted as a matter of law. See id.; see also City of El Paso, 344
S.W.3d at 619 (“If a contract is unambiguous—i.e., it can be given a definite or
certain legal meaning—an administrative interpretation of the contract is not
entitled to a presumption of validity.”). Simply claiming that a provision could
be interpreted differently does not amount to an ambiguity. See Evergreen Nat’l
Indem. Co. v. Tan It All, Inc., 111 S.W.3d 669, 676 (Tex. App.—Austin 2003,
no pet.); Ayres Welding Co. v. Conoco, Inc., 243 S.W.3d 177, 182 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied) (“Ambiguity in a contract does not exist
merely because the parties assert forceful and diametrically opposing
interpretations, but only if the contract language is susceptible to two or more
reasonable interpretations.”) (emphasis in original). Even when a contract
8
could include more specific language, this alone does not create an ambiguity
when the court can ascertain the reasonable interpretation of the language. See
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 591
(Tex. 1996) (“The failure to include more express language of the parties’ intent
does not create an ambiguity when only one reasonable interpretation exists.”).
If a party’s urged interpretation would require the court to ignore the plain
language of the contract, the interpretation is unreasonable and must be rejected.
See Ayres Welding Co., 243 S.W.3d at 182.
Further, courts should strive to maintain consistency throughout a written
agreement and not construe any single portion in a manner that would conflict with
general rules of contract construction and would result in an absurd and nonsensical
result. See Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 740-41 (Tex. 1998)
(“We must read all parts of the contract together, striving to give meaning to every
sentence, clause, and word to avoid rendering any portion inoperative.”) citing State
Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 433 (Tex. 1995). To that end, courts
should strive to give full effect to the parties’ chosen language. See Balandran, 972
S.W.2d at 741 (“Our primary goal, therefore, is to give effect to the written expression
of the parties’ intent.”).
9
A. The agreement is unambiguous and therefore, the TWC—as well as the
district court—erred in considering parol evidence.
Here, Grattan’s employment agreement provides for the deduction of
expenses pursuant to a clearly enunciated formula. See CR 206-08. Grattan’s urged
interpretation, which the TWC adopted, ignores the plain language of the
agreement entered between the parties. The pertinent portion of Grattan’s
agreement provides:
E. The following terms shall apply beginning June 19, 2006. Physician
will be responsible for his own malpractice and health insurance,
life/disability insurance expenses, communication (i.e., cell phone,
pager, etc.) expenses, and other non-cardiac related expenses as well
as a pro rata share of the overhead expenses incurred by Association
(including, without limitation, overhead incurred by Association
during periods in which Physician may be ill and therefore, absent
from Association); and (ii) Physician will receive Physician’s Net
Receipts collected by Association less Physician’s pro rata share of
the overhead expenses. “Physician’s Net Receipts” means the net
amount collected by Association for services personally performed by
Physician, less contractual and other adjustments, and shall exclude
all Designated Health Services Revenues. “Designated Health
Services Revenues” are defined as the net collections of Association
for the professional and technical components of the following
ancillary tests: echocardiograms, Doppler tests, chest x-rays and any
other ancillary services that are deemed to be designated health
services under the Stark Law (Social Security Act §1877 and as
published at Fed. 70 Reg. 70116 (Nov. 21, 2005) and as amended
thereafter). The revenues from designated Health Services Revenues
will be distributed to shareholders in accordance with a formula based
on revenues from the previous year.
See CR 262-64 (emphasis added). Essentially, the agreement dictated a formula
to determine Grattan’s pay:
10
Physician’s Net Receipts
plus
Designated Health Services Revenues
minus
Contractually Agreed Deduction of Overhead Expenses
Although the practice had typically employed four physicians, during
times of transition, three physicians divided the overhead expenses. See 260-61.
In 2012, one of the physicians left the practice, leaving only three physicians,
including Grattan and Shoukfah, to share in the expenses of the practice. See
CR. In January 2013, Texas Cardiac hired a new employee, Dr. Qaddour, an
unlicensed doctor that was in the process of both obtaining a license to practice
medicine in Texas and obtaining privileges at area hospitals. See CR 189-96.
Qaddour was unable to begin practice in earnest until his license and privileges
were granted. See CR 189-96. Qaddour’s employment agreement specifically
referenced a lower salary and limited responsibilities during the time he was not
yet granted privileges at the area hospitals, including and up to two years after
his initial employment. See CR 189-96. As a result, Qaddour was hired as an
employee, with a different agreement with Texas Cardiac than Grattan, and
treated similar to a nurse or office staff member until he began generating
income. See CR 189-96; 340-47.
Yet, Grattan urged that because Qaddour was technically a “physician”
(even if he was not licensed to yet practice in Texas) that Qaddour should also
11
share in the division of expenses from the first day he began working for Texas
Cardiac. See CR 351-53. Texas Cardiac, however, contracted with Qaddour
under a different arrangement because without privileges and, consequently,
practice income, Qaddour was not yet able to generate income to cover the pro
rata division of overhead expenses. See CR 189-96 (agreement with Qaddour
contemplating his eventual completion of privileges). No written authorization
to deduct expenses was obtained from Qaddour, as required under the Texas
Labor Code § 60.018. See CR 189-96. The TWC adopted this position even
though nothing within Grattan’s agreement set forth a mandated requirement
that any employee who was also a physician must share in the pro rata expenses.
See CR 262-64. The consequence of the TWC interpretation would literally
mean that While true that courts should provide considerable deference to an
agency’s decisions involving factual determinations, there is no presumption of
validity to be afforded an agency’s interpretation of a contract. See City of El
Paso, 344 S.W.3d at 619 (“[A]n administrative interpretation of the contract is
not entitled to a presumption of validity.”). Further, in contrast to the
interpretation of a statue or rule—in which courts give deference to an agency’s
interpretation due to its rulemaking authority and expertise concerning its
policies, interpretation of private parties’ agreements are not given such
statutory-like deference. See id.
12
Nothing within Grattan’s employment contract provided for a guaranteed
number of physicians and even past conduct between the parties revealed that
often times, only three physicians shared in the pro rata division. See CR 260-
61. And, considering the different hiring and compensation agreement with
Qaddour, no reasonable interpretation of Grattan’s contract could support his
insisted division in violation of the agreement with Qaddour, and consequently,
in violation of the Texas Labor Code. See Part II; Tex. Lab. Code § 61.018. In
fact, looking to the plain language of the contract, Grattan was required,
himself, to “practice medicine in Association’s office(s), as well as in area
hospitals required by Association.” See CR 206. In contrast, Qaddour’s contract
contemplated a substantially lower salary until Qaddour obtained his privileges.
See CR 189-96. Further, Grattan was required to “maintain medical staff
membership and appropriate clinical privileges in good standing at the Lubbock
Heart Hospital, Covenant Health System, and such other area hospitals as
required by Association.” See CR 206. In return, Grattan received a percentage
of the “Designated Health Service Revenue” pursuant to his contract—
something Qaddour would not receive at all for his first two years. See CR 206.
Even so, prior to determining that a provision or portion of a contract is
unambiguous, the court (or in this case, agency) must first seek to determine
whether the contract can be interpreted pursuant to the plain language. See
13
Balandran, 972 S.W.2d at 740-41 (“We must read all parts of the contract together,
striving to give meaning to every sentence, clause, and word to avoid rendering any
portion inoperative.”) citing State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430,
433 (Tex. 1995). Prior to considering parol evidence, the agency should first
determine that the contract is ambiguous. See Cities of Abilene v. Pub. Util.
Comm’n of Tex., 146 S.W.3d 742, 750 (Tex. App.—Austin 2004, no pet.).
Yet, the TWC accepted Grattan’s unilateral assertion that Qaddour should
be treated as a fully practicing physician from the moment he began working at
Texas Cardiac (without a written agreement to deduct expenses as required
under the Texas Labor Code). In looking to the contract’s plain language,
including the requirements placed on Grattan, the TWC should have reached a
plain language interpretation that determined that Qaddour was not yet on the
same level as Grattan (and the other practicing physicians) and had not agreed to
the authorized deduction of expenses during the time of his transition of the first
two years. In fact, in contrast to Grattan’s agreement with Texas Cardiac,
Qaddour did not receive a percentage of the “Designated Health Service
Revenue” which would certainly aid a fully practicing physician in covering the
shared overhead expenses. See CR 262-64.
To be sure, simply because the agreement does not further provide
specific references to a transition time for unlicensed physicians, this alone does
14
not create an ambiguity that would allow the Court—or TWC—to look outside
the parties’ agreement. See Columbia Gas Transmission Corp., 940 S.W.2d at
591 (“The failure to include more express language of the parties’ intent does
not create an ambiguity when only one reasonable interpretation exists.”). Here,
Qaddour was not a practicing, fully licensed physician and under an analysis of
the plain language of Grattan’s agreement, Qaddour was not on the same
playing field as Grattan. Yet, the final TWC committee (two of the three
committee members) arbitrarily accepted Grattan’s urged and unreasonable
interpretation—which finds no basis or support within the agreement’s plain
language and is in direct violation of the requirements of the Texas Labor Code.
See Ayres Welding Co., 243 S.W.3d at 182 (finding that an interpretation is
unreasonable when it ignores the plain language of the agreement between the
parties); see also Texas Labor Code § 61.018 & Part II. Essentially, Grattan
urged and the TWC’s final committee adopted this position that looks outside—
and conflicts—with the plain language of the contract which provides that
Grattan would receive additional and better compensation than Qaddour. Even
considering Grattan’s complaint that his income was substantially less the final
months of his employment is explained by the decrease in his revenue. See CR
265-73 (averaging approximately $97,000 in gross revenue for the months of
September – December 2012 as compared to approximately $79,000 in gross
15
revenue for the months of January – April 2013). See CR 265-73. And,
Grattan’s claim that overhead expenses increased dramatically during the final
months of his employment are unfounded as well. See CR 265-73 (averaging
total overhead expenses of approximately $185,000 for the months of September
– December 2012 as compared to approximately $190,000 for the months of
January – April 2013).
The practical effect of this interpretation is highlighted by the apparent
effect on Qaddour this interpretation would create. Essentially, Qaddour,
without a license or privileges to practice and without providing written
authorization, would be expected to incur and payout the shared expenses of the
physician group, even though he initially had little to no revenue because he was
not yet licensed or privileged to practice. This interpretation violates both
contractual principles, as well as the Texas Labor Code’s requirement that
employees provide written authorization before deductions. See Tex. Lab. Code
§ 61.018. And, because he was not receiving certain revenue and limited to 45
percent of his collections, Qaddour’s salary compensation was significantly less
advantageous than Grattan. Compare CR 262-64 with CR 189-96.
Consequently, the TWC decision reflects a fundamental error of law
because it failed to construe the agreement by its plain terms or consistent with
other provisions within the same agreement. But, importantly, it is impossible to
16
even determine how the TWC reached its decision, which considered parol
evidence, because it failed to determine that the contract’s language was
ambiguous.
B. The Texas Workforce Commission, as well as the district court, failed
to determine that the contract was ambiguous and therefore,
committed an error of law.
Before reaching the conclusion that outside evidence should be considered
to construe the parties’ agreement, a court, or agency, must first find that the
contract itself is ambiguous. See Cities of Abilene, 146 S.W.3d at 750. The
ultimate concern in construing a contract is to ascertain the true intent of the parties.
See Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d
517, 520 (Tex. 1995). Courts should examine an unambiguous contract as a whole,
harmonizing all provisions and looking only to the written contract. See Calpine
Producer Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex. App.—Dallas
2005, no pet.) (describing this approach as the “Four Corners Rule”). When the
contract reveals itself as ambiguous, however, the court may consider the parties’
interpretations of the contract and examine extraneous evidence to determine the
true meaning of the instrument. See Nat’l Union Fire Ins. Co., 907 S.W.2d at 520.
The determination of whether a contract is ambiguous is a question of law. See id.
And in making that determination, a court may construe the contract in light of the
surrounding circumstances at the time the contract was drafted. See Balandran, 972
17
S.W.2d at 741. If when viewed through the lens of those circumstances, the
contract’s meaning appears uncertain or doubtful, then the language is necessarily
susceptible to more than one meaning. See id.
An ambiguity may be patent—evident on the face of the contract—or
latent—only ambiguous when applied to the subject matter with which it deals by
reason of some collateral matter. See Nat’l Union Fire Ins. Co., 907 S.W.2d at 520
n.4 (“For example, if a contract called for goods to be delivered to ‘the green house
on Pecan Street,’ and there were in fact two green houses on the street, it would be
latently ambiguous.”). The court may consider parol evidence only when the
ambiguity at issue is latent. Id. Once the court reaches the determination that a
contract’s language proves ambiguous, the court may look to parol evidence to
decipher the parties’ intent. Id.
Here, however, there is nothing within the record to show that the TWC
actually engaged in any analysis to reach the conclusion that the contract was
ambiguous. In fact, the contrast between the extent of the opinions issued by the
prior agency decision maker, Sue Dennis, highlights the lack of analysis and
consequently, arbitrary results. See CR 15 (actually analyzing the language of
Grattan’s agreement). This is further buttressed by the starkly different results
that the prior two agency decision makers reached. See CR 11-20. The final
TWC committee simply stated the following: “According to the compensation
18
practice and agreement between the parties, the expenses of the business were
divided between all practicing doctors.” See CR 24. Yet, this interpretation is
not actually supported by either the agreement or the actual facts. But,
nonetheless, the TWC must have first reached the conclusion that the agreement
was ambiguous to even consider parol evidence.
But here, the TWC engaged in apparently no analysis that the agreement
was ambiguous and would allow the consideration of parol evidence. The
TWC’s opinion simply states that the “Commission does not agree with the
Wage Claim Tribunal’s conclusion that the employer had the right to change the
pay agreement between the parties.” See CR 24. Then, the TWC goes on to
claim that “[a]ccording to the compensation practice and agreement between the
parties, the expenses of the business were divided between all the practicing
doctors.” See CR 24. Yet, nothing within Grattan’s agreement states this
presumption and Grattan’s agreement does not include the term, “all practicing
doctors,” as those that would be sharing in the pro rata expenses. See CR 262-
64. The TWC clearly considered parol evidence without identifying any
provision within the agreement as ambiguous. See CR 351-53. Consequently,
the TWC committed errors of law when it heavily considered evidence outside
the four corners of the agreement in construing the parties’ contractual
commitments without first determining that the agreement was ambiguous.
19
Therefore, this Court should reverse the District Court’s decision affirming the
TWC’s determination.
II. This Court should find that the Texas Workforce Commission’s
determination was arbitrary and unreasonable because it imposed
unwritten and illegal duties on Texas Cardiac Center.
Even when courts have found that substantial evidence supports an
agency’s decision, courts must still reverse and remand when the decision is
unreasonable or reached without a reasoned basis under the law. See Starr Co. v.
Starr Indus. Servs., Inc., 584 S.W.2d 352, 355 (Tex. App.—Austin 1979, writ ref’d
n.r.e.) citing Lewis v. Metropolitan Savings & Loan Ass’n, 550 S.W.2d 11, 16
(Tex. 1966) (“There the Court made it clear that an order may be supported by
substantial evidence and yet be invalid for arbitrariness.”); Heritage on San Gabriel
Homeowners Ass’n, 393 S.W.3d at 423 (“In other words, we must remand for
arbitrariness if we conclude that the agency has not ‘genuinely engaged in reasoned
decision-making.’”). The unreasonable nature of the TWC’s determination is best
characterized by practically observing its effect: that Texas Cardiac must deduct
overhead expenses to Qaddour—without a written agreement to do so as
required under the Texas Labor Code—and could never employ a physician
without charging the overhead expenses to that physician. Nothing within
Grattan’s agreement required Texas Cardiac to only employ physicians that
would contribute to the overhead expenses and nothing required Texas Cardiac
20
to include “all practicing physicians” within the calculations of the formula. See
CR 262-64. In fact, as further discussed below, the TWC decision is in direct
violation of the Texas Labor Code. Further, the TWC’s decision virtually voided
another employee’s agreement who was not party to the wage claim and
presumed that the fourth doctor must share in the expenses, even though he was
not contractually obligated to do so—a violation of Texas law. Because the
TWC engaged in abrupt and arbitrary decision making—without regard to the
legal analysis as to whether the contract was ambiguous and without regard to
the other employee’s nature of compensation and employment, this Court should
reverse because the TWC acted unreasonably, arbitrarily, and without regard to
the law.
A. The Texas Workforce Commission imposed duties on Texas Cardiac
Center that are in direct violation of the Texas Labor Code.
As specifically addressed in the Texas Payday Law, an employer may
only withhold or divert employee’s wages under certain exceptions, including
written authorization from the employee. See Tex. Lab. Code 61.018. Yet,
instead of determining that the pro rata share would be shared between those
physicians that had agreed contractually to the overhead deductions—pursuant
to the Payday Law—that “all practicing physicians” should share. See CR 351-
53. In fact, there is no evidence within the TWC record that the final committee
even considered the fact that the Payday Law would apply equally to Qaddour
21
and requires deductions only if contractually agreed to, or otherwise authorized
by law. See CR 351-53. In contrast, the TWC made the determination,
essentially, that Qaddour should also share in the expenses because “this is how
it had always been done.” See CR 351-53.
Yet, this very presumption is in direct violation of Texas law itself—by
the agency charged with its enforcement. See Tex. Lab. Code 61.018. The Texas
Payday Law provides:
An employer may not withhold or divert any part of an employee’s
wages unless the employer:
(1) is ordered to do so by a court of competent jurisdiction;
(2) is authorized to do so by state or federal law; or
(3) has written authorization from the employee to deduct part of
the wages for a lawful purpose.
See Tex. Lab. Code § 61.018 (emphasis added). Texas Cardiac obtained written
authorization from Grattan in the original employment agreement, pursuant to
the third exception under the Labor Code. See CR 262-64. Any other physician
who would be required to share in the pro rata arrangement must also agree in
writing for the deduction pursuant to Texas law. But, incredibly, the final TWC
committee did not even contemplate this critically important legal requirement
placed on Texas Cardiac through its order—that Texas Cardiac would violate
the Texas Labor Code as to Qaddour if it followed the TWC’s order.
In fact, the only way that Texas Cardiac could have required Qaddour to
share in the overhead expenses was to enter a contractual agreement with
22
Qaddour in writing to that effect. But, somehow, the TWC committee expected
Texas Cardiac to impose the pro rata share on “all practicing physicians”
regardless of the statutory requirement of a written agreement, because that was
the “compensation practice” in the physician’s group. Although the TWC
actually cited the correct statute, it failed to consider that this statute would
apply to Qaddour as well. See CR 351-53. This unexplained and arbitrary
determination is in direct violation of the Texas Labor Code and consequently
arbitrary, unreasonable and essentially, illegal.
Further, there was absolutely nothing within Grattan’s agreement that
required Texas Cardiac to only employ a physician if the physician agreed to
share in the overhead expenses. The reasoning that “it had always been done this
way” simply does not muster any reasonableness to essentially disregard both
the written agreement between the parties and the Texas statutory requirement
that any employer obtain written consent prior to withholding deductions from
wages. As a result, the TWC decision is in direct violation of the Texas Labor
Code because it imposes an obligation on Texas Cardiac to withhold deduction
from an employee who had not agreed to do so in writing.
B. The Texas Workforce Commission reached its conclusion by looking
to the title of the employee rather than the nature of the employee’s
employment agreement.
In support of its formula of compensation of Qaddour, Texas Cardiac
23
provided the TWC with a copy of Qaddour’s agreement. See CR 189-196.
Qaddour agreed to considerably less compensation over the course of the first
two years of practice with Texas Cardiac than Grattan or the other Texas
Cardiac physicians. See CR 191 (providing that Qaddour would only receive 45
percent of his collections with an advanced salary to be deducted “against
Physician’s collections”). Qaddour’s compensation was starkly contrasted from
Grattan, who received 100 percent of his net collections. See CR 189-96.
Both of the lower agency decisions considered it unreasonable to force
Texas Cardiac to saddle Qaddour with the division of expenses—in violation of
Qaddour’s employment agreement—when his engagement with Texas Cardiac
was most similar to that of a nurse or office staff member. See CR 15 (“Dr.
Shoukfeh introduced Dr. Qaddour as a new employee, but not an associate. . .
Dr. Qaddour was hired as a salaried employee, and was not held responsible for
any portion of the overhead of the practice. . .”).
A comparison could best be illustrated by considering a law firm that
included partners only—each compensated in an “eat what you kill”
arrangement. The TWC’s decision would arbitrarily prevent that law firm from
ever hiring an associate right out of law school—without a license to practice or
without holding any admissions to nearby courts. Because otherwise, the new
associate (in the process of obtaining a law license) must share in the overhead
24
expenses in a similar manner as the rest of the attorneys (simply because that
associate was technically an “attorney” once licensed). Such an interpretation is
nothing short of an arbitrary and capricious decision, arbitrarily overruling the
contractual arrangement between Texas Cardiac and Qaddour. Simply finding
concern because Grattan’s salary decreased does not give rise to agency
authority to rewrite both his and Qaddour’s compensation agreements, in
violation of the Texas Labor Code.
Further, Grattan failed to attend the called meeting to discuss the hiring of
Qaddour. See CR 340-47. Grattan had full opportunity to participate and at least
become aware of the compensation arrangement with Qaddour. Yet, later
Grattan complained that he was unaware of the difference in Qaddour’s
compensation. The TWC simply declared that “the fourth doctor was not
included when splitting business expenses” and therefore Grattan “was
underpaid.” See CR 353. The TWC determined that because Qaddour was
technically a “physician,” he should also share in the expenses. See CR 351-53.
On the contrary, the TWC did not hold the authority to re-write and ignore valid
contractual agreements, as well as the Texas Labor Code, between Grattan and
the Texas Cardiac, as well as Qaddour and Texas Cardiac. Consequently, the
TWC decision was entirely unreasonable, arbitrary and capricious and carried
out without regard to the law and the agreements between the parties. As a
25
result, this Court should reverse the District Court’s ruling that affirmed the
TWC’s decision.
PRAYER
The TWC issued findings and conclusions wherein Texas Cardiac was ordered
to pay Grattan in a division of deductions that would violate both the Texas Labor
Code, as well as traditional principles of contract law. The order required Texas
Cardiac to deduct expenses to each of the practicing physicians, even though one of the
practicing physicians, Qaddour, had not provided written authorization to do so as
required under the Texas Labor Code § 61.018. Further, the TWC looked outside the
written agreement between the parties without first determining that the agreement was
ambiguous. Therefore, this Court should find that the TWC decision is arbitrary,
unreasonable and without regard to the law. This Court should reverse the judgment of
the district court and remand for further proceedings consistent with its decision.
Respectfully submitted,
/s/ Elizabeth G. Hill
ELIZABETH G. HILL
State Bar No. 24083179
CRAIG, TERRILL, HALE & GRANTHAM, LLP
9816 Slide Rd., Suite 201
Lubbock, TX 79424
806/744-3232 806/744-2211 Facsimile
ehill@cthglawfirm.com
26
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing was sent to the
following counsel of record pursuant to the Tex. R. Civ. P. on this the 1st day of
June, 2015:
John Simpson
Splaw Simpson Pitts
P.O. Box 1376
Lubbock, TX 79408-1376
Peter Laurie
Financial and Tax Litigation Division
Office of the Attorney General
P.O. Box 12548
Austin, TX 78711-2548
/s/ Elizabeth G. Hill
CERTIFICATE OF COMPLIANCE
I certify that the word count in this Brief is 5,721.
/s/ Elizabeth G. Hill
27
APPENDICES
APPENDIX 1 – FINAL ORDER OF THE DISTRICT COURT ................................... TAB 1
APPENDIX 2 – ORDERS OF THE TEXAS WORKFORCE COMMISSION ................. TAB 2
APPENDIX 3 – GRATTAN AGREEMENT ............................................................ TAB 3
APPENDIX 4 – QADDOUR AGREEMENT ........................................................... TAB 4
APPENDIX 5 – WILLS AFFIDAVIT .................................................................... TAB 5
APPENDIX 6 – REVENUE CALCULATIONS........................................................ TAB 6
APPENDIX 7 – TEXAS LABOR CODE § 61.018 ................................................. TAB 7
28
TAB 1
Filed 3/2/2015 11:30:00 AM
Barbara Sucsy
District Clerk
Lubbock County, Texas
TB
No. 2014-510,479
MOHAMMED FAWWAZ SHOUKFEH, § IN THE 99th DISTRICT COURT
MD PA, d/b/a TEXAS CARDIAC §
CENTER §
Plaintiff, §
§
v. § OF
§
JAMES G. GRATTAN §
TEXAS WORKFORCE COMMISSION §
Defendants § LUBBOCK COUNTY, TEXAS
FINAL ruDGMENT
After considering the Motions for Summary Judgment of James G. Grattan and the
Texas Workforce Commission, the pleadings, any response, the affidavits, and other
evidence on file, the Court GRANTS the Motions for Summary Judgment of James G.
Grattan and the Texas Workforce Commission. The Motion for Summary Judgment of
Plaintiff is DENIED.
The Court fmds that there is substantial evidence to support the Texas Workforce
Commission's PAYDAY LAW (wage claim) decision and that judgment should be
entered as to that decision.
It is therefore, ORDERED, ADruDGED AND DECREED that the Texas
Workforce Commission PAYDAY LAW benefits decision pursuant to Chapter 61, Texas
Labor Code in favor of James G. Grattan is affirmed.
426
This order ia final and II_PPC8lable 8l1d clispOflea af all parties I!Dd all claima. All
attorntya' fee• I!Dd costa of court incum:d in 1hia cause shall be borne by the party
incurriDg same. All other relief not exJUeuly granted herein ia denied.
SIGNEDonlhia 2nd dayofMud1,201S
Filial ]11dgmmd Pagel
427
TAB 2
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FILE COPY
DETERMINATION CODES: C0-45 El41
TExAS WORKFORCE COMMISSION
PREliMINARY WAGE DETERMINATION ORDER
labor Law
August 14, 2013 PAGE 1 OF 1 PAGES
CLAIMANT EMPLOYER
MOHAMMED FAWWAZ SHOUKFEH, M. D.• P.A.
DBA TEXAS CARDIAC CENTER
3710 21S'T 51
LUBBOCK TX ,7941~~ 1220
Wg Cfm 1:13 055b31~U Det 8 :000476197
MOHAMMED FAWWAZ SHOUKFEH. M.D •• P.A.
DBA TEXAS CARDIAC CENTER
An lnvestlgatlo~ having been completed, the following order Is entered pursuant
to Chapter 61 of the Texas Labor Code:
FINDINGS AND CONCLUSIONS
The claimant Is entl tied _ to - $38,435.89 for unpaid ~wa=.og;o.;;e:;;:;s'-:---~--
Based on the employer's policy/agreement and/or the claimant 1 s performance
records, the claimant is entitled. to the deter mined amount.
It has been determined that the employer violated· the provisions of the Texas
Payday Law when the claimant's earned wages were not paid Jn accordance with
the Jaw. If it is determined that an employer has acted in bad faith, the
Commission may assess an administrative penalty for failure to pay wages as
required by Jaw . In this case no penalty is assessed.
ORDER
The employer,
MOHAMMED FAWWAZ SHOUKFEH, M.D., P.A.
~~~~~--------------~n-~~~~--~--------~~--~~--~~~--~~--~·
is ORDERED to pay $38,435.89 for t he
use and benefit of the claimant,
JAMES G GRATTAN • and shall remit the gross or net
amount di sbursement payable to the Texas Workforce Commi ss ion.
In addition, being found in violation of Chapter 61 of the Texas Labor Code,
the employer is assessed an admin is trative penalty in the amount of so .oo'
which is t o be remitted to the Texas Workforce Commission.
Ass igned Inves ti gator : SMITH
Pursuant to the Texas Tax Code, section 171.255, if the corporate privileges of a corporation or
other taxable entity subject to the franchise tax are forfeited by the Texas Comptroller, each officer
or director of the taxable entity is liable for any debt of the entity during the period of forfeiture.
M (SEE REVERSE SIDE fOR ADDITIONAL INFORMATION)
LL-25A (0310)
335
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APPEALS
You have the right to appeal this determination order. Your appeal must be in writing. It must be flied no later than 21
days from the date this determination order was mallei! in order to preserve administrative appeal rights. It you fax your
appeal TWC must receive it no later than 21 days from the date the determination was mailed. lWC will use the date
we receive the fax to determine whether your appeal is timely. If you file your appeal ·by talC, you should retain your fax
confirmation as proof of transmission. If neither party files a timely appeal, this determination order becomes the FINAL
ORDER of the Commission. Appeals should be mailed or faxed to:
Special Hearings Or You may appeal by
Texas Workforce Commission TWC's online appeal form
101 East 15th Street Go to www.texaswo:rk.force.org
Austin, Texas_ 78778-0001
Fax#: 512-463-9318
ADMINISTRATIVE LIEN
Sac:. 61.081 of the Labor Code pJovides that "A final order of the Commission against an employer Indebted to the state
for penalties or wages, unless timely appealed to a court, Is a lien on all property belonging fo the employer. The lien
tor an unpaid debt attaches at the time the order of the Commission becomes final."
PAYMENTS
An employer who requests a hearing to contest fuis determination should not send payment Should your appeal decision
affirm that wages are due, follow the payment instructions provided with the appeal decision.
An employer who does not request a hearing to contest the determination order shall pay the amount ordered to the
Commission not later than the 21st day after the date of mailing of the order. An employer shall malce a net payment
amount (balance after valid ·deductions that are authorized by state or federal law, and by court orders; such as but not
limited to federal income tax witholding, social security, and child support) payable to the Texas Workforce Commission.
Payment to the Commission constitutes payment to the employee for all purposes. To ensure proper processing please
return the enclosed remittance slip, and deduction documentation with payment. You may contact the Commission for
clarification on valid deductions.
PENALTY
If the Commission detennines that an employer acted in bad faith in not paying wages as required by this chapter, tho
Commission, in addition to ordering the payment of wages, may assess an administrative pen~~lty against the employer.
If the Commission determines that an employee acted in bad faith in bringing a wage claim, the Commission may assess
an administrat\ve penalty against the employee.
BOND
The Commission may require an employer to deposit a bond if the employer is convicted of two violations of this
chapter or a final order of the Commission against an employer for nonpayment of wages remains unsatisfied after the
l Oth day after the date on which the time to appeal from that final order has expired and an appeal Is not pendfng.
Please provide the labor Law Section written notificarlon of anv change in your address.
Tcxns Workforce Commission
Labor Law Section
101 East 15th Street
Austin, Texas 78778-00()1
1-800 832-WAGE (9243) - - Fax#: 512-936-3364
ll-25A- BK (0613)
TWC000098
Gqr-~ -~ --r· At"•J. lt.~e!:l'S·HS.
336
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STATE OF TEXAS
TEXAS WORkFORCE COMMISSION .
Labor Law Dept. FILE COPY
.
'
.
.
101 East 15th Street
Austin, Texas 78778-0001
H. GRADY TERRill.
•
~
. . .
. .
.
FIRST BANK CENTER
9816 SLIDE RD. SUITE 201
LUBBOCK TX 79424
DETERMINATION NBR: 000476197
WAGE CLAIM NBR: 13 055831 ~ 0
ll250 (0 194) TWC 000099
1
.J PtMES.- G R e-":, TTAN : ~~~rb§'" l
337
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TEXAS WORKFORCE COMMISSION
WAGE CLAIM APPEAL TRIBUNAL
101 East 15th Street
Austin, Texas 787?8 October?. 2013
Date Mailed
TEXAS PAYDAY LAW DECISION
CLAIMANT EMPLOYER
JAMES G GRATTAN MOHAMMED FAWWAZ SHOUKFEH MD PA
DBA TEXAS CARDIAC CENTER
3110 21ST ST .
LUBBOCK TX 79410-1220
NOTICE: .
The attached decision will become fmal fourteen (14) calendar days after the date mailed shown abqve, unless
within that time a party to the appeal files a written request for reopening or a written appeal to the
Commission.• Please see the attached copy of appeal rights for further information regarding reopenings or
appeals to the Commission.
APPEAL NO.: 13-055631-0 WAGE CLAIM DATE: May 16,2013 · ·
BUSINESS ENTITY: Texas Professional Association
APPEAL FD.,ED BY: Employer DATEAPPBALFILED: August27, 2013
APPEAL FILED BY: Claimant DATE APPEAL FILED: August 28, 2013
DATE OF HEARING: October 1, 2013 PLACE OF HEARING: Telephone
APPEARANCES:
Hearing, October 1, 2013; Telephone
For Claimant: James G. Grattan
Observer: John Simpson, Attorney
For Employer: Grady Terrlll, Attorney
Shirley Willis, CPA
Exhibits: 6
CC:
H GRADY TERRILL
FIRST BANK CENTER
9816 SLIDE RD STE 201
LUBBOCK TX 79424
*Note: Ifthe last date for filing a motion for reopening or an appeal falls on a Texas state or federal holiday,
the time for filing the request is extended to the next working day. ·
TWC 000021
JAMES GRATTAN:00013
339
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TEXAS WORIQ'ORCE COMMISSION
' '( W~GE CLAIM APPEAL TRIBUNAL
101 East 15th Street
Austin, Texas 78778 October 7. 2013
Date Mailed
TEXAS PAYDAY LAW DECISION
EMPLQYER CLAIMANT
MOHAMMED GAWWAZ SHOUKFEH MD PA
DBA TEXAS CARDIAC CENTER
3710 21ST ST
LUBBOCK TX 79410-1220
NOTICE:
The attached decision will become fmal fourteen (14) calendar days after the date mailed shown above, unless
within that time a party to the appeal files a written request for reopening or a written appeal to the
Commission,* Please see the attached copy of appeal rights for further information regarding reopenings or
appeals to the Commission.
APPEAL NO.: 13-055631-0 WAGE CLAIM DATE: May 16, 2013
BUSINESS ENTITY: Texas Professional Association
APPEAL FILED BY: Employer DATBAPPBALFILED: August27, 2013
APPEAL FILED BY: Claimant DATE APPEAL FILED: August28, 2013
DATE OF HEARING: October 1,2013 PLACE OF HEARING: Telephone
APPEARANCES:
Hearing, October I, 2013; Telephone
For Claimant: James G. Grattan
Observer: John Simpson, Attorney
For Employer: Grady Terrill, Attorney
Shirley Willis, CPA
Exhibits: 6
CC:
H GRJU)Y TERRILL
Fffi.ST BANK CENTER
9816 SLIDE RD STE 201
LUBBOCK IX 79424
+Note: Ifthe lost date for filing a motion for reopening or an appealfalls on.a Texas state or federal holiday_
the time for filing the request is exten:Jed to the next working day.
TWC 000022
.7 ~~ME~~; GP{·,, 1 T ,'-\1·; . fn{~l?~ :<:f?i
340
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TEXAS WORKFORCE COMMISSION APPEALNO. 13-055631-0
~ '( PAGENO. 2
CASE IDSTORY: By a detennination order issued August l4, 2013, pursuant to the Texas Payday Law, Labor
Code, Chapter 61, section 61.052, the employer, MOHAMMED FAWWAZ SHOUKFEH MD PA, DBA
TEXAS CARDIAC CENTER, was ordered to pay to the Texas Workforce Commission for the benefit of the
claimant, JAMES- G GRATTAN, the amount of$38,435.89. Both the employer and claimant appealed.
FINDINGS OF FACT: The claimant filed a wage claim with the Texas Workforce Commission on May 16,
2013, alleging that the employer failed to pay the claimant as prescribed by the Texas Payday Law.
Specifically, the claimant asserted that he was not paid all wages earned from September 1, 20121o April 30,
2013. Wages were payable 60 to 90 days fol_loy.'ing the close o_fthe month i~ which they were_eamed,
The claimant worked as an associate physician (cardiologist), from June 19, 2006 to April 30, 2013, for the
employer, MOHAMMED FAWWAZ SHOUKFEH MD PA, a Texas professional association, doing business
under the name TEXAS CARDIAC CENTER. The claimant earned wages based on formula dependent on his
patient load. Wages and expenses were calculated for each month, They were to be paid at the end of the
second month following the month in_ which service was provided. (September earnings would be paid at the
end of November), When he was paid, the standard federal deductions were taken from his earnings. The
employer would also deduct incidental personal expenses as covered by the association. The claimant did not
protest these deductions.
When the claimant was hired ~n June 2006, he and Dr. Fawwaz executed an Agreement Proposal. The
agreement was not amended during the cl~mant's association whh the practice. The claimant was identified as
an employee/partner. A partnership agreement was not formulated. In January 2013, due to the lack of a
partnership agreement and other reasons, the claimant resigned, giving 90 days' notice.
The claimant did not contribute personal funds outside of his stated earnings from the practice to pay overhead
or operational costs of the offices and practice. The claimant did not contribute real or personal property to the
business. The claimant did not have the right to review the financial records of any other doctors within the
practice. The claimant never purchased a single share in the Professional Association, but at some point was
designated a 1% owner. A documentary·record of the ownership interest was not provided to the claimant or to
the Commission. The claimant had did not have a significant interest to effect the operation of the association.
He had no right to control or direct the expenditures. He had no authority to hir~ and f~te staff members .. -
The claimant did not share in the profits of the association. Amounts received were based on the receipts his
services generated. However the claimant did share in the expenses of the practice. How the employer
calculated his percentage of the expenses is the basis of his wage claim. At his separation, the claimant and
other associates did not enter into the dissolution of a partnership.
In March 2013, the employer calculated the claimant's earnings for September 2012. This was the first
tabulation of the claimant's earnings since September 2012 when August earnings were paid. Since the
claimant had given his 90 day notice, the employer calculated all overhead expenses from September 2012 .
through February 2013, and deducted one third of the expenses from the claimant's one month of receipts. In
doing so, the earnings were zeroed out. No check was issued to the claimant for September 20 I 2. The claimant
was not provided with an earnings statement showing his gross earnings for September, minus federal
deductions and minus $8,616.47 as his overhead portion, leaving th~ claimant with net zero. The claimant had
no lmowledge that his wages earned for September 2012 had been accounted for when he filed his claim.
On September 1, 2012, one of the physicians, Dr. Wischmeyer, left the practice. A meeting was called by Dr.
Shoukfeh to discuss the situation. The claimant was unable to attend. In the meeting, Dr. Shoukfeh announced
his intention to hire a doctor. The claimant had previously advised Dr. Shoukfeh, that since there had been no
discussion or decision regarding his request to consider partnership, this was not the time to bring in another
physician.
T WC 000023
JAMES GRATfnN: 0 0 0 21
341
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TEXAS WORKFORCE COMM1SSION APPEAL NO- 13-055631-0
-~ " PAGENO. 3
· In the .week following the meeting, Dr. Shoukfeh introduced Dr. Qaddour as a new employee, ·but not an.
associate. The new physician was hired in November 2012. Dr. Shoukfeh did not inform the claimant of how
the hiring of a non-US resident, who was not at that time credentialed by the two hospitals served by the
physicians of Ute ~ociation, would effect the claimant's earnings. The claimants hiring agreement was not
altered. The claimant was not presented with a written agreement that would explain any special privileges
provided to Dr. Qaddour. Each doctor that became affiliated with the professional association, signed a distinct
work agreement, individualized to him. Dr. Qaddour was hired as a salaried employee, and was not held
responsible for any portion of the overhead of the practice, as the claimant and the other two physicians in the
association. It is noted that after his hire, the line item in the overhead expenses identified as medical support
salary was not increased commensurate with Dr. Qaddour' s salary.
The new employee was credentialed to treat patients in the Lubbock Heart Hospital in January 2013, and may
not have been credentialed at Covenant Medical Center until sometime later. Dr. Qaddour was not required to
bear the burden of a share of the overhead costs while the claimant·was employed and he was establishing
himself in Lubbock medical community.
According to the Agreement Proposal executed June 19, 2006, and not altered or replaced· by alternate work
agreement, the section pertaining to compensation states:
Physician will be responsible for his own malpractice and health insurance, life/disability
insurance expenses, communication (i.e., cell phone, pager, etc.) expenses, and other non-
cardiac related expenses, as well as a pro rata share of the overhead expenses insured by the
Association.
This section also explained that the claimant's earnings would be paid in accordance with the following formula:
Physician's Net Receipts collected by Association
(paid for services personaJiy rendered)
+ Designated Health Services Revenue collected by Associ!ltion
(paid for professional and technical tests)
- Pro Rata share of overhead expenses
= monthly earnings paid
The formula did not mention the non-cardiac expenses, which were defmed in the first sentence of the
paragraph. These expenses were deducted from the claimant's net earnings after overhead had been taken. The
claimant signed the Agreement Proposal, indicating his agreement to all terms and conditions.
The claimant provided evidence to show that employer had historically divided the overhead expenses evenly
between all physicians active in the practice within a mcmth>s period. Each physician held responsible for
overhead costs had a hiring agreement requiring them to participate in covering the overhead .expenses. In the
past when leniency was offered to Dr. Wischmeyer regarding the requirement to provide llis share of the
overhead expenses, all other doctors agreed to the action. When Dr. Qaddour was hired he was not required to
pay any portion of the overhead expenses, as a salaried employee. The claimant was not consulted before this
decision was made or advised of the decision before his termination.
Each month the claimant was to be issued an accounting sheet tabulating llis earnings from medical services and
tests ordered. The accounting also itemized the overhead costs of the association. A total overhead cost was
TWC 000024
J f.>::~·~t::·s GRr-··d-Tf\N: 0~10~?2
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TEXAS WORKFORCE COMMISSION APPEAL NO. 13-055631-0
.iJ . P.AGENO. 4
calculated and his pro rata sbare was calculated. The claimant's personal expenses would then be itemized and
deducted. The claimant's pre-tax wage amount would be printed in bold. The claimant did not receive his
revenue sheets for September to April until after his separation.
In September and October the gross expenses were divided by three (Dr. Shoukfeh, Dr. Overlie and the
claimant). After Dr. Qaddour was hired, the employer continued to divide the overhead expenses by three
participants in the practice. The claimant asserted that this forced him to pay more than his pro rata share of the
expenses.
. .
In each but the April revenue sheet for the cla1mant, the expense of a personal employee, from $4,700 to as
great as $4,953.84 was deducted from the claimant's earnings. Thi.s was his share of the cost of o~e nurse who
assist~ him and tlie other doctors. .When be-resigned, the nurse did also,- moving with the_clainiant to a new
·.·
practice. The employer attributed-the funds issued to the nurse aS accrued.and unus~d bene'fit time, $12, 334.84;
'· to the claimant 'alone. Further evidence was ""not provided ·to detemillie ·the true cost of" the benefit to the
departing nurse. It is noted that the. list of overhead ·expenses. include medical support staff (approximately.
$40,000 to $45,000 per month), ~d for employee benefits•
...
I
. .
The claim.ant also protested being charged overhead expenses·for a rese_;utlt-,operatron that h~ had no part of.
The claimat1t asserted that th~ receiptS, from the.research conducted were not deposited into the as~c~ati6n. The
employer asseited ·that ·if the claimant's patients had particip'~tel;l in th:e re$.eaicb active~ revenue from ~e
research would have been posted to the claimant's acrount The re.Seatch entity was maila~ by the
association. The claimant had not protested-the expenses for the research component of the association duri.M.
his emplo~ent ·
Accordlng-to the tabu 1ations
• oftheem oyer. ..
:Month Revenue Total. Overhead· Pr~Qtata . ·p~rson_iil ·Pay~bl~ :
..
E~ttenses . sti-ar~i£+ 3> Expenses Earuines
September 2012 $WS,040.98 $22~.905.14 $1~;30l.9l . $13~114.71 .$l$~0!U;36
October 2012 $ 97.651.81 $J 83,295~63 $61,09.8.54 . $ 8.531.15 $28;022.12
November2012 . . $ 91,324.96 $170;224.18 .$56 741.39 . st~.345,4o ~1;23SJ7
December 20 l-2 $ 95 691.40 $162,670.45 $S4i22~.48 $~2~08.83 * $l$559.09 ..
January2013 . $ 65 972.96 $1~5,661.17 $S~:220.:3p .+ $r5,8J).44 $Jlj S6S.OJ
Jan.
recalculated
' $ 6,5,972.9_6 $229;505.06 ~ $76~01.68
. . ·':· .
· $2?,~98.69 ** -$~0,0~7A1 . .
F~brt.iary2013 . $ 87,289.79 $162.SS7.38 $54195.19 .. $24,108.66· $ . g,38S.34 .. ·.
Ml!I<;h.2013 $ ·72,767.50 $115;9&,5.)$ ~ $5~;69,5.06 . -~3;324,73- · -:$92~;29· .-: ..
Aptil201"3. $ 9404S.OS $197:.035'.92 $65~67$,64 $30;513.81 + ·$4;H1AO:
* OecembeJ". figure includes ~p.31 aspeti on·al"expense ·dlscqvtfted aftei; -ujbuJatlon or not atlilblitiible: to··
anotner cate~ory. January ~gures include a $590.51 as a person_al_expe_n~e - di~CC?Ve~ed after t~bulailon o·r,not : '
attributable to'another category. The wliges 8efore·taX.es w~ ~ot'ticalcul~te(i"with:the $590.57 deduWons when-·
the sheet was adjusted, but is considered a~ove.
* The credit for an isotope reimbutserrtentwas removed.
+ Includes total rosts of paid benefits to departing nurse.
Tabulating the payable earnings using ihe recalculated .figures for January; the claimant would have been due
$37,831.98. Note is taken that the inv~stigator did not consider the extr~·- expenses that were attributed to the
claimant and handwritten on the revenue sheets, lfthe initial calcuJa~iol). for January i~ used, the claimant would ..
be entitled to $95,424.40.
On May 20, a final disbursement was issued to the claimant in the amount of $32,014.66. This was net wages.
Proof of the federal deductions taken was not provided. The earnings statement associated with the payment
TWC OO!l025
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TEXAS WORKFORCE COMMISSION APPEAL NO. 13-055631-0
PAGENO. S
cbeok, No. 6069, does not itemize the deductions taken. The employer asserted $at the $6,421.23 difference
between the ordered amount of$38,435.89 and the face value of the check, constitutes the federal deductions.
CONCLUSIONS: The claimant is entitled to $5,817.32 in gross wpaid wages from this employer under the
Texas Payday Law.
JURISDICTION --PARTNERSHIP .
Section 61.001(3) of the Texas Payday Law states, in part, that employee means an individual who is employed
by an employer for compensation.
Section 2;03 ofthe Texas. Revised Partnership Act provides, in part, that factors indicating that persons have
created a partnership irtoltJde their
(1) receipt or right to receive·a share of profits _from the business,
(2) expression of an .intent to be parf!lers in the business,
(3}participlfti9n or right to'particip~t~ in the eontrofofthe business,
(4) sharing·or a~irig to share to~~~- oftbebusincs"s or Jiability for claims by third parties against the busincrss,
and (5) conttibuting 6t agreejhg to contri~lite money or propertY to the business;
A partnership is a distinct legal entity. A pitrtner is a co-ow.ner ar'ld nQt an emplt>yee of tb:e entity. Therefore the
Texas Payday Law would not apply to a controversy concerning a partrler against the parbiership.
When the. claia)ant w2S hired as :~,n ~~~i~te; tl1ere:~~- ~~' poten~ial th~t \VO~Jd becomfi' a partner in the fu~r~:
Howev~r, he was not enijtle4 to .a s~~:of the profits-, altJj9'\igh h~ was reql,lj~d to ~ontribute to the expenses of
tJte ·business, The claimant ha.d nQ authorityt~ inal_<~c. de~isio~ for
the aJ~sociation. The ult4nate authority rested ·
·in the JJ)ajoricy· owner. As ~hown by the hirfug pf,Dr. Qadd~~_r,.the ~lair:nant's reservations were not consicfeted.
The claunimt"had no )mo)VJ~~ge t:JJat he-w,M ~onsider.ed a·l% 9wner, until a~er th<:! fact. . The claimant did n!)t
share in the'Iosses of the as~pciation: The' ciaiinant did ·not contnoute re.al or personal PJOperty, including cash,
with ·the except\on of partial.. paymefit ,of the overhead. Therefore1 "although an eventual · partnership was
anticipated, this relationship_was not formecl As pr9ven by his separation, there was no termination of the
Professional Association and wrapping up of a partnership.
The claimant was hired· as an associate employee. Therefore his wage claim is covered by the Texas Payday
Law.
. ·REGULAR: WAGES .
Section 61.001(7)(A). ofth~ Texas ;payday Law state~ that'wages means compeilsati!)n ow~d by an employ~r for ''
labor or serviees rendered by .an employee,
- .
whether
. comput~d
.
ori a time; task, piece, eomm1ssion,
~ . or other basis.
The claimant was to be paid· for his services as a cardioJ(igist, and the tests that" be ordered.. Howev.er, the.
•' . and ilie
re've.pue ~~ g~n~i';lted \'(~:; ~:ubj~d tp;hls~co;ri"trib~itiol}, to ~~ o.verl)eaii .deduction ofh'is personal ~xpenses; . .. . .
The employer calculated·his earnings for ea~ ~onth's seJVices. - ·
The controve~y in this claim is whelher-lhe overheap ~hould h~ve. been divided equally between three . .
physicians as was done b"y tlie employ6(, or by four physicians nfter the hiring of Dr. Qadd"our. While the
claimant remained employed, Dr. Q<Jdliour :was .the only salaried employee. He was not paid based on the .
revenue he generated. The divis.ion ofthe cost of overheac! \vas c6nsist~ntly. between those do~tors who w~re
paid based on the revenue they generated, not a .set salary. ·.For sev(lral months, Dr; Qaddour' s earning potential
was restricted because he wai not credentialed. Therefore P.r. Qa:ddour did not"have the potential -earning to be-
able to contribute to the overhead of the association. It was reasonable for the employer not to require Dr.
Qaddour to contribute to the overhead. He was treated the same as a nurse or administrative staff member
earning a salary. Therefore the Commfssion will not correct the employer's cal~;ulations and reduce the
TWC 000026
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TEXAS WORKFORCE COMMISSION APPEAL NO. 13-055631-0
PAGENO, 6
claimant's overhead deduction for November -April. The calculations presented by the employer, including
the corrected January revenue sheet will be found to be accurate and authoritative.
Therefore when the claimant filed his wage claim, he was due $37,831.98 in earned and unpaid wages.
Month Revenue Expense · Personal Payable
Share(+3) Expenses Earnlnes
September 2012 $105 040.98 $76 301.91 $13 714.71 $15 024.36
October 2012 $ 97,651.81 $61 098.54 $8531.15 $28,02:2.12
November 2012 $ 91,324.96 $56 741.39 $13,345.40 $21,238.17
December 2012
Januazy2013
$ 95 691.40
$ 65;972.96
$542~3.48
$76,501.68
$22 908.83
$29 498.69
* $1.8,559.09
-$40.027.41
February 20 13 $ 87,289.79 $54,195.79 $24,708.66 ' $ 8 385.34
March 2013 $ 72,767.50 $58 665.06 $23,324.73 -$9222.29
April2013 $ 92,045.05 $65 678.64 $30,513.81 -$4,147.40
To tar $37831.98
* December figure includes .$13.31 as personal expense discovered after tabulation or not attributable to
another category. January figure includes $590.57 as a personal expense discovered after tabulation or not
attributable to another category.
Folfowing the filing of his claim the claimant was issued a check in the net amount of $32,014.66. The claimant
negotiated the check after the determination order was issued. The employer failed to produce evidence to
prove that this is the amount payable to the claimant after federal deductions. Therefore the determination·will
be modified to order the employer to pay $5,817.32 ($37,831.98- $32,014.66).
If the employer provides proof of payment of the gross wages earned of at least $37,831.9"8, minus federal
deductions of no more than $5,817 .32, the amount due and payable to the claimant will be satisfied. ·
REQUIRMENT TO PROVIDE EARNINGS STATEMENTS
Texas Labor Cpde 62.003 states:
EARNINGS STATEMENT. (a) At the end of each pay period, an employer shall give each employee a written
earnings statement covering the pay period.
(b) An earnings statement must be signed by the employer or the employer's agent and must show:
(1) the name of the employee;
(2) the rate of pay;
(3) the total amount of pay earned by the employee during tbe.pay period;
(4) any deduction made from the employee's pay and the purpose of the deduction;
(5) the amount of pay after all deductions are made; and
· (6) the total number of:
(A) hours worked by the employee if the employee's pay is computed by the hour; or
(B) units produced by the employee during the pay period if the employee's pay is ·
computed on a piece rate
(c) An earnings statement may be in any form detemlined by the employer. The information required by
Subsection (b) may be stated on a check voucher or bank draft given to an employee for the employee's
wages.
(d) In this section, "pay period" means the period that an employee works for which salary or wages are
regularly paid under the employee's employment agreement.
Commission Rule 815.106 (40 TAC 815.106) reads, in part, as follows:
TWC000027
JAMES GRATTAN 00025
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TEXAS WORKFORCE COMWSSION APPEAL NO. 13-055631-0
f
PAGENO. 7
(a) Each employing unit shall keep true and accurate employment and payroll records. that shall include the
name and correct address of the employing unit, and the name and address of each branch or·divjsion or
establishment operated, owned, or maintained by the employjng unit at different locations in Texas, and the
following infonnation for each and every individual perfonning services for it:
(I) the individual's name, address, and social security number; .
(2) the dates on which the Individual perfonned services for the employing unit and the state or states in
which the services were performed;
(3) the amount of wages paid to the individual for each separate payroll peri~d, date of payment. ofthe
wages, and amounts or remuneration paid to the individual for each separate payroll period other
than "wages," as defined in the Act; and
(4) whet.{ler, during any payroll period the individual worked less than full time, and ·i fso, the hours and
dates worked.
The employer failed to provide an earnings statement to the cJaimant at the time of the accounting of September
wages was performed and with the fmal wages issued to the claimant. The employer is therefore in violation of
the Texas Labor Code.
AUTHORIZED DEDUCTIONS
Section 61.018 of the Texas Payday Law states that an employer may not withhold or divert any part of an
employee's wages unless the employer: (1) is ordered to do so by a court of competent jurisdiction; (2) is
authorized to do so by state or federal law; or (3) has written authorization from the employee to deduct part of
the wages for a lawful purpose.
Commission Rule 821.28 (40 T.A.C. § 821.28) states, in part:
(a) The Commission provides the following guidance in determining whether an employer is entitled to
withhold or divert wages under court order, by Jaw or with written autl10rization under Sectiqn _61.018 of the
Act:
(1) A court is presumed to be a court of competent jurisdiction with respect to issuing court orders: The
burden shall be on the party opposing a court.order to challenge the court's authority by appealing to the issuing
court or court of appropriate revi~w as the Commission will preswne full faith and credit applies to court orders.
(2) State or federal law includes statutes and codes enacted by Congress or the TeXAS Legislature, roles
promulgated by a Texas or federal agency, and regulations promulgated by a Texas or federal agency.
(3) A lawful purpose is one that is authorized, sanctioned, or not forbidden, by law;
(b) Written authorization for deductions shall be specific as to the lawful purpose for which the employee has
accepted the responsibility or liability. Written authorizations shall be;
( 1) sufficient to give the employee a rea~onable expectation of the amount to be withheld from pay; and
(2).a clear indication that the deduction is to be withheld from wages.
(c) lf an employer uses a handbook, policy manual or other similar document instead of a separate writing, the
employee's signed acknowledgment of receipt of company policies can be authorization to withhold wages if the
acknowledgment meets the requirements of subsection (b) of this section and specifically informs the employee
of the deduction. The signed acknowledgment of receipt shall also include language that states that the
employee agrees to abide by or be bound to the authoriza,tion for deduction.
(d) The employer shall ensure that properly withheld wages are applied toward their authorized purpose.
Properly withheld wages not applied towar~ their authorized purpose wlll be considered unlawful deductions.
(e) The employer shall obtain written authorization as required under the Act to deduct credit card service
charges from an employee's tips.
TWC 00002&
JAMES GRATTAN:0002G
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TEXAS WORKFORCE COMMISSION APPEAL NO. 13-055631-0
PAGENO. 8
The standard federal -deductions were taken from earnings according to federal law. The employer is not In
violation of the Texas Payday Law for taking these deductions. However the employer must produce a record
of the federal deductions taken from his final earning to satisfy the amou_nt ordered through this.decision.
Through his written hiring agreement, the claimant agreed to have a share of the overhead expenses deducted
from the revenue he produced. In addition, he authorized deductions for personal expenses from.his earnings.
Therefore the employer is not in violation of the Texas Payday Law for deducting the amounts accounted for on
his revenue sheets.
Insufficient evidence was provided to detennine if any other doctor had been charged for the expense of her
employment, during her full tenure.' Insufficient evidence haS been provided to reduce the $12, 334.84
deduction for the nurse's receipt of earned wages and earned and unused vacation time from tho claimant's fmal
month•s earnings. Based on the revenue history, the claimant was responsible for at least $4,700 of this amount
as payment of wages for work perfonned by the nurse in April. Therefore the Commission bas not factual basi.s
to find the amount deducted was in error.
The claimant protested the inclusion of research expenses in the overhead costs charged to the associate doctors.
The claimant failed to protest these charges during his employment or before this hearing date. · Therefore they
will be accepted as the part 'of the itemized list of overhead expenses, and will not be excluded from the
calculation of the claimant's earnings.
DECISION: In accordance with the Texas Payday Law, Labor Code, Chapter 61, section 61.059, the
detennination order issued August 14, 2013, is modified.
The employer, MOHAMMED FAWWAZ SHOUKFEH MD PA, DBA TEXAS CARDIAC CENTER, is
hereby ordered to pay to the order of the Texas Workforce Commission for the use and benefit of the claimant,
JAMES G GRATTAN, wages in the amount of $5,817.32, in accordance with tho attached instructions for
payment.
S. Dennis
Hearing Officer
sd3
TWC 000029
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TEXAS WORKFORCE COMMISSION APPEAL NO. 13-055631-0
PAGENO. 9
***IMPORTANT**"'
INSTRUCTIONS TO EMPLOYER FOR PAYMENT TO THE COMMISSION
***IMPORTANT***
WHO MUST PAX:
MOHAMMED FAWWAZ SHOUKPEH MD PA
DBA TEXAS CARDIAC CENTER
Pursuant to the Texas Tax Code, § 171.255, if the corporate privileges of a corporation or other taxable·entity
subject to the franchise tax are forfeited by the Texas Comptroller, each officer or director of the forfeited entity
is liable for nny debt of the entity during the period offorfeiture.
AMOUNTOFPAXMENT: $5,817.32 (less deductions, if applicable, for federal income tax
withholding and Social Security to the extent authorized by federal law.)
WHEN PAYMENT DUE BY EMPLOYER TO THE COMMISSION:
November 20. 2013
MAKE CHECKPAXA.BLE TO: Texas Workforce Commission
Please note the claimant's name and Social Security number on the face of the check.
MAIL CHECK TO: Texas Workforce Commission
Labor Law Payment Division
P.O. Box 684483
Austin, Texas 78768-4483
QUESTIONS ABOUT PAYMENT: If you have questions concerning payment of the amounts assessed you
may contact the Labor Law Department at:
1(800) 832-9243 or (512) 475-2670
PAYMENT TO EMPL OYEE; The Commission will pay the claimant wages coUected and, if applicable, any
interest earned on those wages.
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Texas Workforce Commission
Appealing Texas Payday Law Decisions
Ifyou disagree with the Payday Law decision, two methods of appeal are available:
1. Request a Reopening oro Heoring. Ifyou did not participate in your hearing and have good cause Cor your nonappearance,
you may request a reopening ofyour hearing within 14 days pursuant to Commission Rule 16 (40 TAC §815.16(5)). This
request must explain why you were not able to appear. You may be granted a reopening ifyour request establishes good cause
for your failure to participate. To request a reopenjng of your hearing. mail your request to Special Hearings Department, Texas
Workforce Commission, 101 E. 151h Street, Austin, Texas, 78778, fBx it to (512) 463-9318, file it online at
www teX!ISworlsforce,orglveydayappC11l or vis~t your local TWC office.
2. Request a review of the case by filing .:sn Appeal to th~ CommisJ:ioo. Section 61.0612 of the Texas Labor Code states, in
part, tbat the Commission may pennit any oftbe parties affected by the order to inilil!le a further appeal before the Commission
within 14 days. To file an App~al to tho Commission, mail your appeal to Commission Appeals, Texas Workforce Commission,·
Room678, 101 E. ·l5111 St., Austin, Texas, 78778, fax it to (512) 475-2044, file it online at · ·
www texasworlcforce.orelpaydayaopeal. or visit your local TWC office.
lmportantlnslructlons . .
Your appeal must include the following infonnatlon: the claimant's name, the Payday Law appeal number, the bearing officer's
name, and the date the decision was mailed. If you mail your appeal, it must be postmarked no later than 14 days from the
date this decision was mailed to you. If you fax your appeal, TWC must receive it oo later than 14 days from the date tbe
decision was mailed. Keep your f!IX. confinnation as proof of transmission. If the 14"' day from the decision mailing date falls
on a Texas slate or federal holiday, the time lbnlt for filing an appeal wlll be extended through tho next working day. Appeals
made prior to the decision mnlling dote will not be considered. You may also appeal by sub!Jilltlng TWC's online appeal
form. Go to www.texasworkforce.org/paydayappcal.
.For more infonnation about the appeals process, visit www,texasworkforcc.org/oaydavaPpcal.
APELACI6N DE LAS DECISIONES EN VIRTUD DE LA LEX DE SALARIOS ATRASADOS DE TEXAS
Si us ted no es~ de acuerdo con Ia dccisi6n respecto de Ia Ley de Salarios Atrasados, tlene a su dlsposlci6n dos m~todos de
apelaci6n:
1. Solieitud de Reapertura de Audlencla. Sl usted no partlclp6 de su audlencla y tiene una causojustificada para no hab.er
aslstido, podri sollcitar la reapertura de Ia nudiencla dentro de los 14 d!as de confonnidad con Ia Norma de Ia Comlsi6n 16
(titulo 40 TAC Articulo 815. 16(5)). Dicha solicitud deb era exp!icar los motivos de su inasistencla. Se lo podrA otorgar Ia
reapertura si su solfcitud estableee causa justificada para su Calla de partlcipaci6n. A !in de solicilat Ia reapertura de su Qudiencia,
envfe por corrco su solicitud at Special Hearings Department. Texas Workforce Commission, 101 E. 15111 Street, Austin, TX,
78778, o por fax nl (512) 463-9318, Tambien puede presenlarla por Internet en www.texasworkforce.org/paydayapneq! o visite
su oficina local de la TWC. ·
2. Solicllud de revision del caso por medio de Apelaci6n ante Ia Comisi6n. El articulo 61.0612 del Codigo Lab oral de Texas
establece, en parte, que Ia Comisi6n puede autorizar a cualquiera de las partes afectadas por la orden a presentar otra apelaci6n
nnte Ia Comisi6n dentro de los 14 d!as. A fin de lnterponer una apelaci6n ante Ja ComisiOn, deb.era envier Ia apelaci6n por
correo a Commission Appeals, Texas Workforce Commission, Room 678, 101 E. 15"' Street, Austin, TX, 78778 o por fax al
(5 12) 475-2044. Tambi~n puede presentarla por Internet en www.texasworkforce.org[paydayappeal. o visite su oficina local de.la
TWC. . .
lnS1rucciones Importnntes .
Su apciaci6n debe incluir Ia siguiente infonnaci6n: nombre del reclamante, el ntimero de apelaci6n seg(ln Ia Ley de Sa Iarios
Atrasados, el nombre del Mbitro de Ia audiencia, y Ia fecha de envio de Ia decisi6n. Si us ted envla su apelaci6D pot eorreo,
deb era estar sell ada no m~s do 14 dCos desde Ia fecha en que se le envi6 esta deeisi6n. Si usted envla su Apelaci6n IJOr fox, Ia
TWC deberli recibir su llpelaci6n no m~s de 14 dlas dcsde Ia fecha en que so cnvi6 Ia decisi6n. Conserve Ia confinnaci6n del
fax como comprobante de Ia transmlsi6n. Si el decimocuarto dla de Ia fecha del envio de Ia decisl6n cae en un feriado estatal de
TeKas o ferlado federal, el plazo de presentaci6n de Ia apelaci6n se extender! hasta el siguientc dla Mbil. Las apclaciones
realizadas con anterioridad a Ia fecha de envlo de Ia decisi6n no seran consideradas. Tambi6n podrA npelar mediante Ia
prcsentnci6n del formulorio de apelnci6n en linea de Ia TWC. Visite )Y)V\V,texa.~workforce,org/paydnynppepl.
Para mnyor infonnaei6n sobre el proceso de apelaci6n, visite W\V\V.texasworkforce.orglnaydavappeal,
Equnl Opportunity Employer/Programs
TWC 00003 1
J P1~"'1F. S G~:{i!~ TT (.:'if<J ii.i~t!)2~~
349
' .t'age ~ O:t ~u - 'J.'fUS prl.nt. n e aa er ca1.. 4 cn angea u s.1.nq t ne prl.nt.ha~oer tt'. t'ML t. ag - ,;ee 't.n~ ,wvtf.r.. tt'..lML runu aJ. ror r urt.ner .l.nrorm.ac..t.on ,
/ ~-1(4~) Sre re>'Cru side for instrucllons
TEXAS WORKFORCE COMMISSION
Austin, Texas
FINDfNGS AND DECISIONS OF COMMISSION
UPON REVffiW OF CLAIM FOR WAGES
FEB 0 6 2014
Dat~Mailed
i=ILE COPY
c
I.. Claim Number:
A 13-055631-0
I
M
A
~ty~umber;
N
T
E MOHAMMEDFA~AZSHOUKFEHMDPA
M DBA TEXAS CARDIAC CENTER Prior Decision Date:
p 3710 21ST ST . October 1, 20 13
L LUBBOCK TX 79410-1220
0
y
E
R
Appeal Filed:b::y:==E=m=pl::o~;y:=er:/:C::l:aim=:an:::t:::======================
CASE WSTORY: By a determination order issued August l4, 2013, pursuant to the Texas
Payday Law, Labor Code, Chapter 61, section 61.052, the business, MOHAMMED FAWWAZ
SHOUKFEH MD PA DBA TEXAS CARDIAC CENTER, was ordered to pay to the Texas
Workforce Commission for the benefit of the claimant, JAMES G GRAITAN, the amount of
$38,435.89. Both parties appealed.
By a Wage Claim Appeal Tribunal decision issued October 7, 2013, the employer was ordered to
pay to the Texas Workforce Commission for the benefit of the claimant $5,817.32. Both parties
appealed. ·
FINDINGS OF FACT: The claimant was employed by the business, a Professional
Association, as a Cardiologist, from June 19, 2006 through April 30, 2013. Throughout his
employment, the claimant was paid based on a formula that took his net revenue from his own
patients (revenue minus expenses) and subtracted his pro rata share of the expenses of the
business. This arrangement was memorialized in a written agreement between the parties. For
the entirety of his employment, the pro rata share was determined by dividing the expenses by
the number of practicjng physicians in. the AssociatioJL Initially, the claimant was not paid
anything for his work from September 2012 through April 2013. In May 2013, the emp.loyer
calculated what the claimant was owed, aividing ·the business' expenses by three doctors, and
paid the claimant $32,014.68.
From Nqvember 2012 through April 2013, there were four doctors practicing in the business~
The employer did not divide the expenses between the four doctors because the fourth was newly
licensed in Texas. Th~ employer paid the fourth doctor a salary and counted the salary ln the
expenses shared between the other three doctors. The claimant did not have a say in whether or
not the fourth doctor was hired.
. TWC 000003
J ~i\ i,1f.:.S Gf";f. (~ Tl' 1·\ i'..\ : 0!2'Hc1V> :l.
351
TEXAS WORKFORCE COMMISSION ..
COMMISSION APPEALS
. 101 .EAST 15TH ST
AUSTIN TX 78778-0001
Appeal Rights from _Commission Appeals
A copy of the decision of the Texas Workforce Commission is either printed on the reverse side
of this form or attached. The date of mailing of the decision is set out at the top of the decision.
All mailing dates are shown as month, day, and year.
You have two methods of appeal available: (1) filing a motion for rehearing with the
Commission, or .(2) filing a petition for Judicial review In a court of competent jurisdiction.
Section 61 .0614 of the Texas Labor Code provides that this decision wiU become final fo~rteen
(14) days-after the date the order Is mailed unless before that date, the appeal Is reopened by
Commission order or a party .to the appeal flies a written motio~ for rehearing.
A MOTION FOR REHEARING MUST BE FILED IN WRITING. YOU MAY FILE BY MAILING IT
DIRECTLY TO THIS OFFICE AT THE ADDRESS SHOWN ABOVE, OR BY FAX AT FAX
NUMBER (512) 475-2044. IF YOU FAX YOUR MOTION FOR REHEARING TWC MUST
RECEIVE IT NO LATER THAN 14 DAYS FROM THE DATE THE DECISION WAS MAILED.
TWC WILL USE THE DATE WE RECEIVE THE FAX TO DETERMINE WHETHER YOUR
APPEAL IS TlMELY.
IF YOU FILE YOUR APPEAL BY FAX, YOU SHOULD RETAIN YOUR FAX CONFIRMATION
AS PROOF OF TRANSMISSIO~: .
THE COMMISSION WILL GRANT YOUR MOTION ONLY·IF IT:
(1) DESCRIBES SPECIFIC NEW EVIDENCE THAT IS NOT IN THE RECORD,
(2) STATES A TRUE, COMPELLING REASON WHY THE EVIDENCE WAS NOT
PRESENTED AT THE EARLIER HEARING, 8!iQ
(3} EXPLAINS SPECIFICALLY HOW THE NEW EVIDENCE WILL CHANGE THE
OUTCOME OF THE CASE.
The Commission will grant y_ our motion only if you have shown substantial reasons for granting
it, Please include the claimant's social security number and appeal number in your motion.
Section 61.062 of the Texas Labor Code provides that a party who has exhausted the party's
administrative remedies, other than a motion for rehearing, may brin~ a suit to appeal the
decision of the Commission. The suit must be filed not later than the 30 day after the date the
decision of the Commission Is mailed.
PIH{1006)
352
(!!age b or 40 - ·rtus pn.nt neaaer car. • cnangea uu.ng tne pr 1nt11eaacr tntu. tag - see cne . ·JVI<t: tt'l'tll- u nuaJ. ror :urcner :tnrorma.c1.on1
Case No.: 13-05563 1-0
Page: 2
CONCLUSIONS: Section 61.001(7)(A) .of the Texas Payday Law states that wages means
compensation owed by an emploY,er .for labor or services rendered by an employee, whether
computed on a time, task, piece, commission, or other basis.
Section 61.018 of the Texas Payday Law states that an employer may not withhold or divert any
part of an employee's wages unless the employer: (J) is ordered to do so by a ~ourt of
competent jurisdiction; (2) is authorized.to do so by·state or federal law; or (3) has written
authorization from the employee to deduct part of the wages for a lawful purpose.
The Commission does not agree with the Wage· Claim Tribunal's conclusion that the employer
had the rig1it to change the pay agreement between the parties. According to the compensation
practice and agreement between the parties, the expenses of the business were diVided between
all the practicing doctors. The claimant's pay for September 2012 througll April 2013. was
improperly withheld. Thereafter, for the period from November 2012 through April 2013 the
claimant's compensation ·was not calculated in accordance with the agreement between the
parties in that the fourth doctor was not included when splitting business expenses. Thus, the
claimant was underpaid. The claimant's original calculation of what he is owed is reasonable
and supported by the weight of the evidence.
The elaimant earned $158,003.59 from September 2012 through April20l3. Of this amount, the
claimant was paid $32,014.68 (net} in May·2013, The claimant is entitled to the remainder,
$125,988.91 (gross before standard deductions for taxes):
DECISION: In accordance with the ~exas P~Y.d~y Law, Labor Qode, Chapter 61, section
61.059, the Wage Claim Appeal Tribunal decisiQn, is modified.
The employer, MOHAMMED FAWWAZ SHOUKFBH MD PA' DBA TEXAS CARDIAC
CENTER, is hereby ordered to pay to the order of the Texas Workforce Commission for the use
and benefit of the claimant, JAMES G GRATTAN, wages in the amount of $125,988.91, in
accordance with the attached instructions for payment
The last day a timely appeal may be filed 'is FEB 2 0 21}14
holidays and weclcends as authorized by CommiSsioL M . This date includes
l
Andres Alcantar
J dissent Coml)lissioner Representing the Public
Hope Andrade
Commissioner Rcprescntin,l! Employers
Ronald G. Congleton
Commissioner Representing Labor
TWC 000005
JAMES GRATTAN : 00003
353
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TAB 4
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03:07:22 p.m. 07-30..2013 4 I 1 806 7441211
f;rom:C'f.H&G 806 744 2211 07/30/2013 14:59 1212 P.004/014
'll'EXASCARID>IACCENTER
PHYSICIAN EMPLOYMENT AGREEMENT
Mohammad Fawwaz Sboukfeh, M.D., P.A.
A Texas P1r0fessional Assoclatiom
and J)r• .Ahmad Qaddour
Date: November 19, 2012
ncBIVBD
JUL 3 0 2013
LAB0RLAW4
TWC 000114
JAMES GRATTAN.00112
186
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03:1>7:12p.tn.OJ-30-201l ~ I 180& 7442211
F.: rom: CT>H&G 80~ 744 2211 07/30/2013 15:00 #212 P.OOS/014
TABLE OF CONJENTS
AltTICLE l. EJIIIPLOYMBNT ..................._............................................................................................................... l
Section l .1 General Tenns ........................................................................................................." ............... l
Section 1.2 Fees Generated ......................................................................................................................... 2
Section 1.3 Managed Care Agreement$ ,............................................................ ~....................................... 2
Section !.4 Patients and Records of the Association..........................................................w ....................... 2 ·
Section 1.5 Accounts~ lnspection......................................,_.......................................~ ............................. 2
Section 1.6 Division; Su'bdivisions.............................................................................................................. 2
ARTICLE II. DUTIES .......................:......................................................................- ............................................... 2
Section 2.1 Professional Duties................................................................................................................... 2
Section 2.2 Representations/Covenants.......................................................... "''''"""'"'"'"""'''''"'"' ""''"' 3
Section 23 Evaluation ofPhyslcian............................................................................................................ 3
AR.TfCLB UI. COMPENSATION ANI:> BENEFITS .............................................................................................." 4
Section 3.1 Compensation.............................................................................:............................................. 4
Section 3..2 B.mplo"YIUent Tax.es ...............................~.,. ......................,.................................................. :·······'·f'··· 4
Section 3.3 Vacation, Professio.nal Meetings, and Leave Tinte .......---···..................................................4
Section 3.4 Professional Liability Insurnnce ............................................................................................... 4
Section 3.S Otber insurance .............................................................. _ ....................................................... 4
AR.TICLE N. TERM AND TERMINATION ......................... w . . . . . . . . . . . . .. .. .. . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 4
Section 4.1 Tenn ......,.................................................................................................................................. 4
Section 4.2 Tennlnation For Cause ............................................................................................................. 5
Section 4.3 Termination Without Cause...................................................................................................... 6
Section 4.4 Effect ofTenni.narlon .......................................................................................................:....... 6
ARTICLE V. ASSIONNJSNT OF RIGHT TO .BILL ..................................................................................,.............. 6
ARTICLE VI. CONFlDENTIALITY OF INFORMATION .....~.............................................................................. 6
Section 6.1 Confidentiallnfonnntion .......................................................................................................... 6
Section 6.2 Departure...........................................................................~..................................................... 6 ·
S<:ction 6.3 Exceptions ...........,............................................................................................................ ,, ...... 7
ARTICLE VII. NONCOMP:BTITION .......................- ...........................................~......................._ ....................... 7
Section 7.1 Covenant Not to Compete ........................................................................................................ 7
Secti.on 7.2 Essential and Separate Covenants: Reasonableness or Restraints ...........................~ ............... 7
i
187
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ARTICLE VUL lNDEMNlFICATION.......- ...- .........................................................................:............................ 1
ARTICLE IX. MISCELLANEOUS .......- .......................:......................................................................................... 8
Section 9.1 Arbitration ..................................................................................................... _......................... &
Section 9:Z Assignabiley............................................................................................................................. 8
Section 9.3 Notico ....................................................................................................................................... 9
Section 9.4 Enforceability ...................- ...............................- ................................................................... 9
Section 9.5 Governing Law......................................................................................................................... 9
Section 9.6 Construction .....................................................................- ...................................................... 9
Section 9.7 Binding Effect ................................:...................._....................................................- ............ 9
Section 9.8 Entice Agreement, Amendntents ........................................:..................................................... 9
Section 9.9 V/aiver ofBceacb.....- .......- ..........................................."""""""'"'"""'""""'"'""''""'"'"'"" 9
ARTICLE X. NON ENFORCEABILITY
Section 10.1 ...................~........................- ................................................................._. ..............................9
Section 10.2 ......................................................................................................... _, .................................... 10
RECEIVED
JUL 3 0 2013
LA.BORLAW4
TWC 000116
JAMfS GRATTA~ 188
00114
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·RBCBIVBD
JUL 3 a·2013
PIIVSICIAN EMPLOYMENT AGREEMENT
LABORLAW4
.AHMAD QADDOUR, M.D.
THIS 'PHYSICIAN EMPLOYMENT AGREEMENT (this "Agreement") is made and entered as of
November 19,2012, by nnd between Mohammad Fawwaz Sbould'eh, M.D., P.A. d/b/a Texas Cardiao Center, a Texas
professional association("Association") artdAhmad Qaddour, M.D. ("Physician'~.
WHEREAS. the Association is a Texas professional association organized to, among other lhings, eonduct tho
authorized professional services that may be perfonned by a doctor of medicine, duly licensed under the laws ofthe Stare
ofTexas.
WHEREAS, Physician is doly licensed or reasonably anticipates that he will be licensed to practice medi~ine
in the State ofTexas.
WHEREAS, the Association desires to employ and retain Physician to provido professional medical services
for the Association's patients md Physician agrees to accept such employment.
NOW, THER.EFORE, for and in consideration of the promises and of the covenants and agreements
hereinafter stipulated, the mutuality and adequacy of which is now and forever acknowledged, the parties agree and
covenant as follows:
ARI'ICLE L l&MPLOYMENT
Section 1.1 General Terms. The Association em~loys Physician, and Physician a<:cepts employment
with tho Association to provide cardiology and nuclear services to the patients of Association on a rull-t!me basis unless
otherwise agreed to or determined by the Association. The tenn "cardiology services" shall mean the services of a
specialist in the practice of cardiology. Association agJ"eCS to ace¢pt tho conditions imposed for Physician to obtain a FJ.
lB Visa.
Physician shall render cardiology services in accordance with the Association's poli.elts and procedures and
shall perfonn any other related services that are reasonably assigned or reasonably tequested fl'om time to time by the
Association. TI1e Associntlon shall provide office space, staff: and facUlties, as needed, to allow Physician to eany out
his duties under this Agreement Physician shall practice llledicine at the offices ofToxa.s Cardiac Center,
Section 1.2 fees Generated. Any and all Professional Fees generated hereunder during the term of this
Agreement shall belong to !he Association. "Professional Fee!" shall mean fees, oonrpensation, or remunerntion
generated by cardiology services rendered or ordered by or otherwise attributable to Physician ·and by administrative
hospital services performed by Physician in his capacily as an employee of the Association; provided, however, that
"Professional Fees" shall not include any royalties, honoraria, or the like "from authored documeats, speeches or similar
professionally-related activities, con>pensation generated by Physician's expert testimony. or sums earned by Physician
while on vacation and working at a teaching hospitaL The Association, at its sole discretion. shall establish tM fees to be
charged for cardiology services. It is specifically understood and agreed that Physician shall have no right o.t claim to
any pOJtion of Professional FCC3, ei<cept as olherwi$e _piVvided in tbjs Agreement
Except with regard to services which shall be provided by Physician on vacation days, weekends and days off
(when not OJ\ call ) Physician may not enter into other administrative or medical services agreements without
Association's prior written approval. which shall not be unreasoll8bly wiUihold, and nny income from su.ch agreements
shall belong to Physician; provided, however, that Physician shall cany the appropriate insurance for the services he
provides under the agreement and th
This text is long and has been trimmed here. Open the source document for the complete record.