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Business Litigation Alert: "Crossing State Lines: When Your Business Enters New Territory"

While today’s world of high-speed access to everything makes it easier than ever for a company based in Texas to operate in several other states, pitfalls remain.

An instructive example of this is the wage and hour dispute currently before the California Supreme Court involving Brinker International, a restaurant chain owner (Chili’s). While Brinker is a Texas-based company, its restaurants operate throughout the country; therefore, the laws governing the way it does business vary widely, particularly between Texas and California.

The Brinker case has taken years to work its way up through the California legal system, costing Brinker significant amounts in legal fees and causing its corporate employees to spend significant time assisting with the defense of the case.

However, there are some simple tips that can help with compliance when operating across state lines:

  • Hire local lawyers. Legal experts in the states in which your company is doing business can help ensure compliance. Regional experts know the complexities of the local laws and can help navigate any unfamiliar territory.
  • “One size fits all” does not exist. While laws and regulations can be similar, missing that one small difference can land you in a courtroom.
  • Employee education is key. They are on the ground, and are critical to applying the laws and watching for violations.

Preparation, education, and application might cost time and effort up front but can help your company avoid the significant costs of an out-of-state legal battle down the road.


Jeff Elkin is a partner in the litigation section of Porter Hedges LLP.
He can be reached at 713.226.6617 or
jelkin@porterhedges.com.

This information is made available for educational purposes only and does not offer specific legal advice or create an attorney-client relationship with the Firm. Do not use this information as a substitute for specific legal advice. Attorney advertising

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