Untitled Texas Attorney General Opinion ( 2004 )

ATTORNEYGENERAL OF TEXAS
GREG ABBOTT
November 24.2004
Mr. Thomas A. Davis Jr., Director Opinion No. GA-0275
Texas Department of Public Safety
5805 North Lamar Boulevard Re: Whether section 1702.323(e) oftheOccupations
Post Office Box 4087 Code makes a paralegal or other person working
Austin, Texas 78773-0001 under an attorney’s direct supervision subject to
regulation by the Texas Private Security Board
(RQ-0232.GA)
Dear Mr. Davis:
You ask whether section 1702.323(e) of the Occupations Code makes a paralegal or other
person working under an attorney’s direct supervision subject to regulation by the Texas Private
Security Board.’
I. Legal Framework
Chapter 1702 of the Occupations Code, the Private Security Act (“chapter 1702” or “Act”),
authorizes the Private Security Board (“Board”) to license and regulate investigations companies and
other security-related businesses and to register and regulate their employees. SXTEX. Oct. CODE
ANN. 55 1702.001 (short title); 1702.004 (regulatory scope); 1702.101-,102, 1702.105-.109
(licensing); 1702.221 (registration) (Vernon 2004). Recent legislation transferred these duties to
the Board, which is a part of the Texas Department of Public Safety (“DPS”), from the Texas
Commission on Private Security, see id. 5 1702.005(a), effective February 1, 2004.2 DPS
administers chapter 1702 through the Board. See id.; see also id. 3 1702.005(b) (“A reference in this
chapter or another law to the Texas Commission on Private Security means the board.“).
Your question involves investigations company licenses. Chapter 1702 provides that “a
person may not act as an investigations company” unless the person “holds a license as
an investigations company.” Id. 5 1702.101. In chapter 1702, the term “person” includes an
“individual” or a “firm, association, company, partnership, corporation, nonprofit organization,
‘SeeLetterfromThomasA. DavisJr.,Director,TexasDepartmentofPublicSafety,to HonorableGregAbbott,
TexasAttorneyGeneral(May24,2004)(on tile withOpinionCommittee,also availableaf http://www.oag.state.tx.us)
[hereinafterRequestLetter].
2SeeAct of Oct. 12,2003,78thLeg.,3d C.S.,ch. 10,9 2.08,2003Tex.Gen.Laws130, 134.
Mr. Thomas A. Davis Jr. - Page 2 (GA-0275)
institution, or similar entity.” Id. 8 1702.002(16). The term “investigations company” means “a
person who performs the activities described by Section 1702.104.” Id. $j 1702.002(10).
Section 1702.104 provides that a person acts as an investigations company for purposes of
chapter 1702 if the person:
(1) engages in the business of obtaining or furnishing, or accepts
employment to obtain or furnish, information related to:
(A) crime or wrongs done or threatened against a state or the
United States:
(B) the identity, habits, business, occupation, knowledge,
efficiency, loyalty, movement, location, affiliations, associations,
transactions, acts, reputation, or character of a person;
(C) the location, disposition, or recovery of lost or stolen
property; or
(D) the cause or responsibility for a fire, libel, loss, accident,
damage, or injury to a person or to property;
(2) engages in the business of securing, or accepts employment to
secure, evidence for use before acourt, board, officer, or investigating
committee;
(3) engages in the business of securing, or accepts employment to
secure, the electronic tracking of the location of an individual or
motor vehicle other than for criminal justice purposes by or on behalf
of a governmental entity; or
(4) engages in the business of protecting, or accepts employment to
protect, an individual from bodily harm through the use of a personal
protection officer.
Id. § 1702.104.
Subchapter N of chapter 1702 provides numerous exceptions to the chapter’s scope. For
example, section 1702.321 generallyexceptsgovemment employees. Seeid. 5 1702.321(a) (“Except
as provided by this section, this chapter does not apply to an officer or employee of the United States,
this state, or apolitical subdivision ofthis state while the employee or officer is performing official
duties.“). Significantly, section 1702.324 provides that the chapter does not apply to certain
occupations, including “an attorney while engaged in the practice of law.” Id. 5 1702.324(b)(9). A
letter opinion from this office addressed the scope of the attorney exception in 1998, prior to the
Act’s 1999 codification in the Occupations Code:
Mr. Thomas A. Davis Jr. - Page 3 (GA-0275)
The exception for “an attorney-at-law in performing his duties”
appears to have been designed to allow attorneys to perform the type
of investigative work normally required in the course of rendering
legal services, such as the discoveryofevidence, witnesses, and facts,
without having to be licensed as investigators under the act.
Tex. Att’y Gen. LO-98-005, at 2.3 As a predecessor to the Board explained the exception’s basis to
the Sunset Commission, “[a]n attorney is licensed by another state agency and part of his authority
would be to investigate matters for a client as an attorney and not as a private investigator.” TEXAS
BOARD OF PRIVATE INVESTIGATORSAND PRIVATESECURITY
AGENCIES,REPORTTO THE SUNSET
ADVISORYCOMMISSION
(1979) at 75.
II. Analvsis
Although attorneys engaged in the practice of law are expressly excepted from chapter 1702,
you are concerned that a paralegal or other person working under an attorney’s direct supervision
may be required to obtain an investigations company license. As you note, a person working under
an attorney’s direct supervision may be required to perform activities described in section 1702.104,
such as obtaining information about a person or securing evidence to use before a court. See TEX.
Oct. CODEANN. 5 1702.104 (Vernon 2004). We assume your concern is limited to a person who
is employed in an employee-employer relationship by an attorney or law firm and who assists an
attorney in the practice of law. We address chapter 1702’s application to such employees; we do not
address its application to persons (i) working for attorneys or law firms as independent contractors,
or (ii) working for persons who are licensed as attorneys but who are not engaged in the practice of
law. See Tex. Att’y Gen. LO-98.005, at 2 (concluding that “a person who is a licensed attorney
operating as an investigations company is not exempt from the act merely because the person is an
attorney’?.
Chapter 1702 does not expressly provide that exempt attorneys’ employees must be licensed
or registered with the Board. And we gather that fiorn 1969, when the legislature first adopted the
‘As theletteropinion observes,see Tex.Att’yGen.LO-9X-005,at 2-3n.1, the Act doesnot defmethe phrase
“practiceof law,”but chapter81of the GovernmentCode,in proscribingtheunauthorizedpracticeof law,definesit to
mean
the preparationof a pleadingor other documentincidentto an action OIspecial
proceedingOIthe managementof the action OIproceedingon behalf of a client
before a judge in court as well as a servicerenderedout of court, includingthe
givingof adviceOIthe renderingof any servicerequiringthe use of legal skill OI
knowledge,suchas preparinga will, contract,or otherinstmment,the legaleffect
of whichunderthe factsand conclusionsinvolvedmustbe caretidlydetermined.
TEX.GOV’T CODEANN. 5 81.101(a)(VernonSnpp.2004);see ako id. $5 81.101(b)(“Thedefinitioninthis sectionis
not exclusiveand does not deprivethe judicial branchof the powerand authorityunder both this chapterand the
adjudicatedcasesto determinewhetherother servicesand actsnot enumeratedmay constitutethe practiceof law.“),
311.01l(b) (Vernon 1998)(wordsthat have acquireda technicalmeaningshall be construedaccordingly)(Code
ConstructionAct).
Mr. Thomas A. Davis Jr. - Page 4 (GA-0275)
statutory predecessor to chapter 1702, until 2003, when the legislature last amended chapter 1702,
the Texas Commission on Private Security and its predecessors had not interpreted the Act to
apply to employees working under exempt attorneys’ direct supervision4 This is a reasonable
interpretation of chapter 1702’s regulatory scope given that state law recognizes that attorneys rely
on paralegals and other employees to assist them in practicing law,5 and attorneys themselves, to the
extent they are engaged in the practice of law, are expressly excepted under section 1702.324. See
TEX. Oct. CODEANN. 3 1702,324(b)(9) (Vernon 2004); Tex. Water Comm ‘n v. Brushy CreekMun.
Util. D&t., 917 S.W.2d 19,21 (Tex. 1996) (“[T]he construction of a statute by an agency charged
with its execution is entitled to serious consideration unless the agency’s construction is clearly
inconsistent with the Legislature’s intent.“).
Moreover, as the State Bar notes,6 chapter 1702 distinguishes between the business of
investigating, which chapter 1702 regulates, and the practice of law, which it does not. See TEX.
Oct. CODEANN. $5 1702.104, .324(b)(9) (V emon 2004). Section 1702.104 provides that a person
acts as an investigations company if the person “engages in the business of obtaining” or “accepts
employment to obtain” certain kinds ofinformation. See id. 5 1702.104(l)-(2). An employee who
works for an attorney who is exempt from regulation under section 1702.324(b)(9) is not engaged
in the business or employment of investigating but rather is employed by the attorney in connection
with the attorney’s legal practice.
A. Section 1702.323(e)%Scope
Although the Texas Commission on Private Security and its predecessors had not
interpreted the Act to apply to employees working under exempt attorneys’ direct supervision, you
are concerned that a recent amendment to chapter 1702 may bring them within the chapter’s scope.
See Request Letter, supru note 1, at 1-2. This concern arises from a 2003 amendment to the
subchapter N, section 1702.323 exception, entitled “Security Department ofPrivate Business.” See
TEX. OCC. CODEANN. 5 1702.323 (Vernon 2004); see also Act of May 28,2003,78th Leg., R.S.,
ch. 593, $ 3,2003 Tex. Gen. Laws 1965, 1966 (House Bill 1769, adding subsection(e)).
%eeRequest Letter,sujvanote 1,at 1(suggestingthatqueryarisesas a resultof a 2003amendmentto theAct);
LetterfromThomasA. DavisJr., Director,TexasDeparhnentof PublicSafety,to HonorableJoe Driver,TexasHouse
of Representatives(June 9, 2004) (on tile with OpinionCommittee)(statingthat DPS has not appliedthe Act to
paralegalsandwillnot do so unlessthe AttorneyGeneralconcludesthat the 2003amendmentbringsparalegalswithin
the Act’sscope).
‘See,e.g.,TEX.R. EVID.503(a)(4)(A)(“A‘representative of the lawyer’is one employedby the lawyerto
assist the lawyerin the renditionof professionallegal services .“), (b) (extendinglawyer-clientprivilegeto a
communicationwith a representativeof the lawyer);TEX.DWZIPLINARY R. PROF’CONDUCT
L 5.03,reprinted in TEX.
GOV’T CODE ANN.,tit. 2, subtit.G app. A (Vernon1998)(TEx.STATE BARR.art. X, g 9) (lawyer’sresponsibilities
regardingnonlawyerassistants),ant. 1 (“Lawyersgenerallyemployassistantsin their practice,includingsecretaries,
investigators,lawstudentinterns,andparaprofessionals.Suchassistantsact for the lawyerin renditionof the lawyer’s
professionalservices.“).
‘SeeLetterfromAntonioAlvarado,ExecutiveDirector,StateBarof Texas,to ThomasA. DavisJr.,Director,
TexasDepartmentof PublicSafety,at 3-5 (Apr.29,2004)(attachedto RequestLetter,supra note 1).
Mr. Thomas A. Davis Jr. - Page 5 (GA-0275)
You ask whether “section 1702.323(e) applies to paralegals and others performing work
under the direct supervision of attorneys.” Request Letter, supru note 1, at 1-2. Section 1702.323(e)
must be read in its statutory context, not in isolation. See Tex. Att’y Gen. Op. No. GA-0008 (2003)
at 7 (to construe Occupations Code section 1702.323(d), “legislative intent should be ascertained
from the entire act, and not an isolated portion thereof’) (citing Merchants Fast Motor Lines, Inc.
Y. R.R. Comm’n of Ten., 573 S.W.2d 502, 505 (Tex. 1978)). Section 1702.323 provides:
(a)’ Except as provided by Subsections (b), (d), and (e),
this chapter does not apply to an individual employed in an
employee-employer relationship exclusively and regularly by one
employer in connection with the affairs of the employer.
(b) An individual described by Subsection (a) who carries a
firearm in the course of employment must obtain a private security
officer commission under this chapter.
(c) Although the security department of a private business
that hires or employs an individual as a private security officer to
possess a firearm in the course and scope of the individual’s duties is
required to apply for a security officer commission for the individual
under this chapter, the security department ofa private business is not
required to apply to the commission for any license under this
chapter.
(d) This chapter applies to an individual described by
Subsection (a) who in the course of employment:
(1) comes into contact with the public;
(2) wears a uniform with any type of badge commonly
associated with security personnel or law enforcement or a patch or
apparel with “security” on the patch or apparel; or
(3) performs a duty described by Section 1702.222.
(e) This chapter applies to any person who conducts an
investigation if the investigation involves a person, or the affairs of
a person, who is not employed by the same employer as the person
conducting the investigation and the investigation is not conducted on
the premises of the employer. Premises of the employer include
walkways, parking areas, and other areas relating to the affairs ofthc
employer.
TEX. OCC. CODEANN. 5 1702.323 (Vernon 2004).
Mr. Thomas A. Davis Jr. - Page 6 (GA-0275)
As its title reflects,’ section 1702.323 is concerned with an employee who conducts
investigations for a private business for the business’ own internal use, as opposed to the use of the
business’ clients or other third parties. Section 1702.323(a) provides that with certain exceptions
chapter 1702 “does not apply to an individual employed in an employee-employer relationship
exclusively and regularly by one employer in connection with the affairs of the employer.” Id.
§ 1702.323(a) (emphasis added). The employees you are concerned about who assist attorneys in
their practice of law do not fall within section 1702.323(a) because, to the extent these employees
investigate, they do so not “in connection with the affairs of the employer,” the employing attorney
or law firm, but in connection with legal clients’ affairs.
Section 1702.323, subsections (b) through (e) modify section 1702.323(a). See id.
§ 1702.323(b)-(e). You are concerned about section 1702.323(e), which was added in 2003 by
House Bill 1769. See Act of May 28, 2003, 78th Leg., R.S., ch. 593, 9 3, 2003 Tex. Gen. Laws
1965, 1966. Section 1702.323(e) limits the scope of section 1702.323(a), which does not apply to
investigations that attorneys or their employees conduct in connection with legal clients’ affairs.
When viewed in the context of section 1702.323 as a whole, it is clear that the legislature intended
section 1702.323(e) merely to narrow the 1702.323(a) exception for a private business’ security
department’s employees, applying chapter 1702 to an individual otherwise excepted under section
1702.323(a) who leaves the employer’s premises to investigate a person who is not employed by the
business. The legislative history is consistent with the plain language. A bill analysis indicates that
the legislature intended amendments to section 1702.323 to affect only individuals employed by
private businesses’ security departments. See HOUSE COMM. ON GOVERNMENTREFORM, BILL
ANALYSIS,Tex. H.B. 1769,78th Leg., R.S. (2003) (“Changes the description ofindividuals to whom
the provisions regarding the security department of a private business applies.“).
In sum, section 1702.323(e) merely limits the section 1702.323(a) exception. It does not
expand chapter 1702’s scope to regulate individuals who are not the subject of section 1702.323(a).
Section 1702.323(e) does not require a paralegal or other employee working under an exempt
attorney’s direct supervision to obtain an investigations company license or otherwise make such
a person subject to regulation under chapter 1702, because section 1702.323(a) does not apply to
investigations that attorneys or their employees conduct in connection with legal clients’ affairs.
B. Section 1702.324(b)(9)%Legislative History
You also ask about the attorney exception>s legislative history. See Request Letter,
supru note 1, at 2. As you note, in 1969 when the legislature adopted article 4413(29bb), the
statutory predecessor to chapter 1702, section 14 provided in pertinent part, “This Act does not apply
to . an attorney-at-law or his agent in performing his duties.” Act of May 23, 1969, 61st Leg.,
R.S., ch. 610, $14(a)(4), 1969Tex. Gen. Laws 1807,18lO(emphasisadded). In 1971, thelegislature
amended this provision to except “an attorney-at-law performing his duties,” omitting the phrase “or
“Although the CodeConstructionAct cautionsthat ‘[t]heheadingof a subchapter. doesnot limit or
expandthe meaningof a statute,’the headinggives someindicationof the Legislature’sintent .” Univ.ofTa.
SouthwesternMed. Ctr. af Dallas Y.Loutzenhiser,140S.W.3d351, 361 (Tex.2004)(citing section311.024of the
GovernmentCode)(footnoteomitted).
Mr. Thomas A. Davis Jr. - Page 7 (GA-0275)
his agent.” Act ofMay28, 1971,62d Leg., R.S., ch. 929,s 8, sec. 14(a)(4), 1971 Tex. Gen. Laws
2835,2838.
The 1971 bill analyses do not explain the reasons for this change or discuss its implications.’
However, on its face, the 1971 amendment does not indicate that the legislature intended to extend
the licensing requirement to attorneys’ employees. The term “agent” is a legal term of art that refers
to a person “who is authorized by another to transact business or manage some affair for him.”
Ackley v. State, 592 S.W.2d 606, 608 (Tex. Crim. App. 1980); Term-La. Oil Co. v. Cain, 400
S.W.2d 318,325 (Tex. 1966) (“‘(A)n agent is one who undertakes to transact some business, or to
manage some affair for another[.]“‘) (citing Boyd v. Eikenbetp, 122 S.W.2d 1045, 1047 (Tex.
1939)).9 An “employee,” on the other hand, is a person in the service of another under any contract
of hire where the employer has the power or right to control and direct the employee in the material
details of how the work is to be performed. See, e.g., Kachmar v. Stewart Title Co., 477 S.W.2d
306, 309 (Tex. Civ. App.-Houston [14th Dist.] 1972, no writ) (defining an employee as “every
person in the service of another under any contract of hire, express or implied, oral or written, where
the employer has the power or right to control and direct the employee in the material details ofhow
the work is to be performed”); BLACK’SLAWDICTIONARY543 (7th ed. 1999) (defining an employee
as a person who “works in the service of another person (the employer) under an express or implied
contract of hire, under which the employer has the right to control the details of work
performance”).” Not all employees are agents. See Ackley, 592 S.W.2d at 608 (“The chief
distinction between an agent and a servant is that an agent is employed to represent his principal in
business dealings and to establish contractual relations between him and third persons, whereas the
servant is not. Moreover, the servant is not allowed the use of personal discretion as to the means
of accomplishing the ends for which he is employed.“). Thus, thepre-1971 exception for attorneys’
agents did not address attorneys’ employees generally, and in omitting attorneys’ agents horn the
exception, the legislature did not make attorneys’ employees subject to regulation.”
‘see BILLANALYSIS,T~X.S.B.768,62dLeg.,R.S.(1971);BELANALYSIS,T~X. Comm.SubstituteS.B.768,
62dLeg.,R.S.(1971)(committeesnot indicated)(on filewithOpinionCommittee,reproducedfromthe holdingsofthe
TexasStateArchives).
?Seealso TEX.GOV’T CODE ANN.5 312.002(b)(Vemon 1998)(termsof art in civil statutes“shallhave the
meaninggivenby expertsin the particulartrade,subjectmatter,OTart”);BLACKS LAWDICTIONARY 64 (7th ed. 1999)
(detiningan agentas “[o]newho is authorizedto act for or in the placeof another;a representative”).
“See also Limestone Prods. Distrib., Inc. Y. McNamara, 71 S.W.3d308, 312 (Tex. 2002) (“The test to
determinewhethera workeris an employeeratherthanan independentcontractoris whetherthe employerhas theright
to controltheprogress,details,andmethodsof operationsofthe work.Theemployercontrolsnotmerelytheendsought
to be accomplished,but also the meansand detailsof its accomplishment.“)
(citationsomitted).
“You suggestthat section 1702.324(b)(l)and (6) expressly except the employeesof other exempted
professions.See RequestLetter,suprn note 1,at 2. Theydo not. Section1702.324(b)(
1)excepts“a manufactureror
a manufacturer’authorized
s distributor.”TFXOct. CODEANN. 9 1702.324(b)(
1)(Vernon2004).It doesnot expressly
except a manufacturer’sor distributor’semployees. See id. Section 1702.324(b)(6)excepts“a licensedengineer
practicingengineeringOIdirectlysupervisingengineeringpracticeunder Chapter1001,includingforensicanalysis,
burglaralarmsystemengineering,andnecessarydata collection.”Id. 5 1702.324(b)(6).It does not expresslyexcept
a licensedengineer’semployees.Seeid.
Mr. Thomas A. Davis Jr. - Page 8 (GA-0275)
As a final note, whatever the legislature’s intent was in 1971, we understand that thereafter
the Act was not construed by the entities charged with enforcing it to apply to exempt attorneys’
employees. Seesupra note 4. Given the passage of time and the legislature’s failure to act to subject
attorneys’ employees to regulation, we question the 1971 amendment’s legal relevance to this issue
in2004. See Humble Oil & Ref: Co. v. Culvert,414 S.W.2d 172,180 (Tex. 1967) (when aparticular
administrative construction of a statute is of long standing, it should not be changed in the absence
of clear statutory authorization).
C. Chapter 1702’s Application to Individuals
Lastly, in response to an argument made by the State Bar of Texas, you ask us to
address whether chapter 1702 provides for the licensing of individuals as investigations companies.
See Request Letter, supra note 1, at 2. Section 1702.101 states that “a person may not . act as an
investigations company” unless the person “holds a license as an investigations company.” TEX.
Oct. CODE ANN. 5 1702.101 (Vernon 2004); see also id. 5 1702.104 (outlining conduct that
constitutes acting as an investigations company). In chapter 1702, the term “person” is defined to
include an “individual” as well as a “firm, association, company, partnership, corporation, nonprofit
organization, institution, or similar entity.” Id. 3 1702.002(16). Chapter 1702 provides for the
licensing of both entities and individuals. See, e.g., id. $ 1702.110 (providing license application
requirements for both entities and individuals). Accordingly, we agree with your assessment that
chapter 1702 provides for an individual to obtain a license to act as an investigations company.”
As we have already concluded, however, an employee who works for an attorney who is exempt
under section 1702,324(b)(9) does not act as an investigations company, but rather is employed by
the attorney in connection with the attorney’s legal practice, conduct which is not regulated by
chapter 1702.
“Wenote that it is not clearwhetherchapter1702requireseveryindividualwhoengagesin section1702.104
activitiesto obtainan investigationscompanylicense. In additionto definingan “investigationscompany”to include
an individual,see id. 49 1702.002(10),(16), ,104, chapter1702also definesthe term “private investigator”as “an
individualwhoperformsone or more servicesdescribedby Section 1702.104,” see id. $ 1702.002(18),and certain
provisionsin chapter 1702provide for the registrationratherthan the licensingof a private investigator,see id. §§
1702.062(establishinga $20 registrationfee for a private investigator),1702.221(providingthat an individualmust
register with the Board if the individual: “(1) 1semployed as an alarm systemsinstaller,alarm systemsmonitor,
electronicaccesscontroldeviceinstaller,locksmith,dogtrainer,manageror branchofficemanager,noncommissioned
security officer,private investigator, private securityconsultant,or securitysalesperson;or (2) is an owner,officer,
partner,or shareholderof a licenseholder”)(emphasisadded),1702.301(a),(d) (providingthat whereasa license“is
valid for one year fromthe date of issuance,”registrationas a privateinvestigator“expireson the secondanniversary
of the date of registration”);see also id. 5 1702.021(a)(2)(providingthat the Boardshall have “one memberwho is
licensedunderthis chapteras a privateinvestigator”).Thus,individualswhoareemployedas privateinvestigatorswho
workfora licenseholdermayonlybe requiredto registerwiththe Board.Weneednot resolvethis ambiguity,however,
in orderto answeryour questionaboutwhetherexemptattorneys’employeesare subjectto regulationunder chapter
1702.
Mr. Thomas A. Davis Jr. - Page 9 (GA-0275)
SUMMARY
Chapter 1702 of the Occupations Code, the Private Security
Act, exempts from regulation by the Texas Private Security Board
“an attorney while engaged in the practice of law.” TEX. Oct. CODE
ANN. 5 1702.324(b)(9) (Vernon 2004). An employee who works for
an exempt attorney is not engaged in the business or employment of
investigating, conduct which is regulated by chapter 1702, but rather
is employed by the attorney in connection with the attorney’s legal
practice, conduct which is not regulated by chapter 1702. Section
1702.323(e) of the Occupations Code does not require a paralegal
or other employee working under an exempt attorney’s direct
supervision to obtain an investigations company license or otherwise
make such a person subject to Board regulation under chapter 1702.
BARRY R. MCBEE
First Assistant Attorney General
DON R. WJLLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Mary R. Crouter
Assistant Attorney General, Opinion Committee