-,

                       YXmArrirom~                  GENERAL
                                     OF    TEXAS
                                  AUSTIN    xi. TExAR
     GERAID C.




          Honorable John D. Reed, Commissioner
          Bureau of'LiiborStatistics
          Austin, Texas
          Dear Sir:              Opinion No. 0-4560
                                 Re: Under the facts submitted, does a
                                      labor organizat~lon,not chartered
                                      under the laws of Texas, come with-
                                      in the pi!ovlsionsof our Employment
                                      Agency Law?
                   You have requested the opinion of this department
          upon the question stated above, based upon the following
          statement of facts:
                      1. There has been common practice for a
                 good many years among labor organizations to
                 have the buslness~agent of the organization to
                 act Asia placemdz officer for the union,. In
                 other words, where a contractor for a private
                 corporation has ,touse union labor the.demands
                 for employees by the private corporation are
                 handled through the business agent. For ln-
                 stance, If *300 carpenters are needed the con-
                 tractor contacts the business agent and makes
                 known his need for employees and these'emplogees
                 are referred to the job by the business agent.
                      2. All un~lonshave initiation fees and
                 dues to become a member and to remain a member
                 in good standing.

                      3. Labor unions are generally organized
                 for the purpose of improving the social and
                 financial condition of its membership by the
                 use of collective bargaining.
                      4. No additional charge or special assess-
                 ment is made or collect& for the employment
                 service rendered by the organization.

                      5. Only bona fide members are assFsted In
                 securing employment.
                                                              .   ...




Honorable John D. Reed, page 2'        Q-4560


         6. The union maintains, from the lnltiatlon
    fees, dues, fines, etc., such services as insurance
    for its members, social entertainments, and nego-
    tiations, and contracts covering wages, working
    hours, and safety conditions of its members, both
    those who do and those who do not avail themselves
    of Its employment services, alike.

         7.' There is no difference In the amount of
    money paid by the members who are assisted In se-
    curing employment and those who secure their own
    employment.

        8. The contractor who is assisted In secur-
   ing workers pays nothing directly or Indirectly for
   this service, as it Is common practice for those
   contractors using only union labor to enter Into an
   agreement with the labor union that the labor union
   will supply him wlth,all needed workers, provided
   nothing but union labor Is used.

        9. There is no penalty Involved If a member
   who Is referred by his 'unionto a job refuses to
   take It.
        The Texas Employment Agency Law is contained in Title
83; Chapter 13, Articles 5208-5221, Vernon's Revised Clvi-1
Statutes of 1925, and.Title 18, Chapter 7, Articles 1584-
1593, Vernon's Revised Penal Code of 1925. These statutes
are from House Bill No. 13, Acts 1923, 38th Legislature, Reg.
Sess., as amended. This act provides, in its first two sec-
tions:
        "Section 1. That no person, flrm,partnership
   or association ~of persons shall engage in or carry
   on the business of employment agent in thFs State
   without first having obtained a license therefrom
   from the Commissioner of Labor StatlstFcs of the
   State of Texas.
        "Section 2. ,The term 'Employment Agent' as
   used In this Act shall mean every person, firm, .
   partnership or association of'persons engaged In
   the business of assisting employers to secure em-
   ployes, and persons to secure.employment, or of
   collecting information regarding employers seeking
   employees, and persons seeking employment; pro-"
   vlded, the provisions of this Actshall not apply
   to agents who charge a fee of not more than two,~
   dollars ($2.00) for reglstratlon only, for procur-
.




    Honorable John D. Reed, Page 3        O-4560


        ing employment for school-teachers; nor to any
        department or bureau maintained by the State of
        Texas, the United States Government, or any municipal
        government of this State, nor to any person, firm,
        partnership, association of persons or corporation
        or any officer or employee thereof engaged In ob-
        talning or soliciting help for him, them or it when
        no fees are charged directly or lndlrectlg of the
        applicant for help or from the applicant for em-
        ployment. Provided, that the provisions of this Act
        shall not apply to farmers and stockraisers acting
        jointly or severally in securing laborers for their -
        own use where no fee Is collected or charged directly
        or lnd~lrectly,nor to any association or corpora-
        tion chartered under the laws of Texas conducting a
        free employment bureau or agenay.
            "The term 'Employment Office' shall mean every
       place nor offfce where the business of giving ln-
       telligence nor information where employment or help
       may be obtained, or where the,,businessof an em-
       ployment agent is carried on.
             Other provisions prescribe the requirements for se-
    curing a license, fix the license fee, require a bond of the
    licensee, prescribe grounds for cancellation of the license,
    provide for examination by the Commissioner of Labor Statls-
    tics of books a@ records of the licensee, prescribe criminal
    penalties for violations of the Act, and otherwise strictly
    regulate the business of the licensed employment agent.
             It will be noted from the provisions quoted above
    that the Employment Agency Law applies, not to all those who
    assume the responsibility of securing employment for others,     ,
    or of securing employees for others, but only to those who
    are "engaged in the business of assisting emplOprS to secure
    employes, and persons to secure employment, or of collecting
    information regarding employers seeking employees, and persans
    seeking employment". And, since the particular labor organ-
    ization which you have in mind is not chartered under the laws
    of Texas, it becomes necessary to determine whether, under the
    facts stated, it is "engaged In the business" described.
             We have made a careful search of the reported deCi-
    sions of this an&other jurisdictions, and have found no dase
    in which the exact question here presented is decided.  HOW-,
    ever, we find a close analogy between this case and those In
    which the State has aught to bring bona fide golf iMd'sOCia1
    clubs, selling liquors to their members In good faith ati'an
    incident to the social life of the club, within the provisions
                                                           .     .




Honorable John D. Reed, page 4          O-4560


 of the liquor dealers license laws; and we think it pertinent
 to note the Texas decisions In such cases:
          In the case of State v. Austin Club, 33 S.W. 113,
 decided by the Supreme Court in 1895, the State charged that
 the Austin Club was engaged in the business of selling
 spirituous, vinous and.malt liquors In quantities less than
 one quart, and sought to-collect from It the occupation taxes
 l&Fed againstretail liquor dealers. The--agreedstatemelit
 of facts showed (1) that the Austin Club was a bona fide tilub,
 Incorporated under the laws of Texas for the purpose of "the
 encouragement of social Intercourse among its members,.the     .
 support of literary undertakings and cultivation of literature,
 the maintenance of a library and reading room, and the pro-
 motion of fine arts"; (2) that the club malntalnecla billiard
 room and reading rooms; (3) that Ft from time to time pur-
 chased in bulk spirituous liquors and medicated bltters~and
 through its authorized agent and employee; retailed same to
 Its members, and to its members only, in quantities 1ess'~than
 one quart, and at an agreed price per drink; (4) that each
 member of the club paid for the quantity of spirituous liquors,
 etc., which he called for and consumed; and (5) that the club
 did not sell liquors, etc., for profit, and the money arising
 from such sales to members was placed in the treasury of the
.club, and only used for expenses of the club and replenish+%
 the stock of liquors. The statute under.whlch the State
 claimed the tax-was as follows:
         '* + * 'Hereafter there shall be levied upon
    and collected from any person, firm or association
    of persons engaged in the business of selling
    spirituous, vinous or malt liquors, or medicated
    bitters, an aruiualtax upon every such occupation
    or separate establishment, as follows: For sell-
    ing spirituous, vlnous or malt liquors, or medl-
    cated bitters, in quantities of less than one quart,
    three hundred dollars.'"
         In holding against the State's content&on, the Court
said:
         II*'** If we should hold that a club such
    as thls,.transacting Its business In the manner
    that this did, was engaged in the business of sell-
    ing spirituous liquors by retail, we would, in
    effect, hdld that the place where such club's
    business was being transacted was a house for the
    retail of spirituous liquors, and would be in di-
    rect conflict with the highest court in criminal
    matters.ln this state.* * *' Koenig v. State, 26
S.W. 835.
Honorable John D. Reed, page 5        Q-4560


         In the case of State v. Duke,.137 S. W. 654, the'
Supreme Court again had before it the question whether a club,
selling liquors to its guests, was engaged In the business
of selling Intoxicating liquors. Approving the decisions In
the Austin Club and Koenig cases, cited above, the Court held:
         "That a bona fide club, situated in a pre-
    cinct;clty, or town where liquor may be lawfully
    sold, organized for purposes permitted and sanc-
    tloned by law, which as a mere Incident to its
    organization and without profit furnishes liquor
    to its members and not to the public generally,     .
    is not a person, uniierthe laws of this State,
    engaged In the occupation or business of'selllng
    intoxicating liquors.
        -"That while each individual act of such a
    club, in territory where the,sale of liquor is
    prohibited by law,,is a sale, .in territory where
    such sale Is not unlawful, the method in ques-
    tion of furnishing liquors to the"~membersof such
    club is not embraced In the general language of
    selllng'or engaglng in the business of selling
    intoxicating liquors.
        "That in respect to clubs not organized in
   good faith for purposes auj5horlzedby law, but
   merely as shifts, shields, or subterfuges, such
   sales would not be permitted, and under such
   circumstances they would and should be held to
   be disorderly houses and subject to all the pains
   and penalties of the law."

         In Country Club v. State? 214 S.W. 296, the State
sought, among other things, to enJoin the Country Club from
selling intoxicating liquors to its members and guests with-
out procuring a license as a retail liquor dealer. .The
Supreme Court states the facts of the case as follows:


         "The case was tried on an agreed statement
    of facts, showing in substance that the club was
    incorporated In good~faith, to support and main-
    tain a golf club; and other innocent sports in
    connection therewith; that the club owned,a club-
    house and golf course, worth some $35,900, all
    of whlch.tiereused exclusively by the members of
    the club and their guests; that the club malti-
    talned a buffet, for the purpose of selling and
                                                                 ..




Honorable John D. Reed..page 6


   dispensing intoxicating liquors to Its members
   and theFr guests only, not for the purpose of
   profit and not In the way of trade or business;
   that the club was not maintained as a device or
   scheme to evade afigliquor or license laws of
   the state or of any subdlvislon ~thereof; that
   the dispensation and sale of liquor to members
   and guests of the club were merely lncldental to
   its lawful corporate purposes and for the en-
   joyment and convenience of the club members and
   guests; that the club premises were not within
   local option territory, nor situated where the      -
   sale of intoxicating liquors was forbidden by
   any state or municipal law."
         Again the Court held that the sale of Intoxicating
liquors by a bona flde.soclal club to Its members (and guests,
too,,in this instance), as an incident to its other lawful
actlvlties, did not constitute engaging in the buslness of
selling intoxicating liquors at retail, and pointed out with
approval the holdings In the Duke case, quoted above.
         From the facts upon which your Inquiry 1s based, as
stated above, It appears that the labor unFon in question Is
maintaining a free private employment service for Its members
only, as a proper complement of'its general purpose to elevate
the economic status of its members, and that in view of such
facts and uncle%the reasonin# of the cases herein cl:eCi;z:h
a labor organization is not engaged In the business
sisting employers to secure employees, and person to secure
employment, or of collecting information regarding employers
seeking employees, and persons seeking employment, within
the meaning of the Employment Agency Law. We are the more
inclined to this view because this law is penal in character,
and must be strictly construed.
         It is therefore our opinion that the labor organiza-
tlon in question does not come within the provisions of our
Employment Agency Law. We wish to emphasize, however, the
fact that this opinion Is based upon the facts of this case,
as herein stated, and under a different state of facts the
question might be answered differently. Certainly, to para-
phrase the language of the Court In the Duke case, suprs, any
labor union or other association or CorpOratlOn, not OrgafiiZd
and conducted in goo&falth for purposes authorized by law,
but merely as a shift, shield, or subterfuge for carrying on
the business of an employment agency without procurlti a
license therefor, would be subject to all the pains and penal-
ties of the law.
         .   ..   -




                      Honorable John D. Reed, page 7           Q-4560


                                                       Yours very truly
                                                  ATTORNEfGENERAL OF TEXAS


                                                       By s/W. R. Allen
                                                            W. R. Allen
                                                              Assistant
                      WRA:nw:wc

                      APPROVED AU3 28, 1942
                      s/Gerald C. Mann
                      ATTORNEY GENERAL OF TEXAS
                      Approved Opinion Committee By s/BWB Chairman


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