Monday, December 10, 2012

A Common Sense Fix to the TX URL Case

Because workers' compensation is a state-by-state phenomenon, every jurisdiction has its own little quirky laws that originate to deal with relatively local problems - at least as they are perceived by legislators and regulators.

Texas has a law, Section 419.002 of the Texas Labor Code, that prohibits the misuse of the Texas Division of Workers' Compensation's (DWC) name, initials, logo and any combination of the words "Texas" and "Workers' Compensation" (or "Workers'Comp") by unauthorized persons "in connection with any impersonation, advertisement, solicitation, business name, business activity, document, product, or service made or offered by the person regarding workers' compensation coverage or benefits."

Lubbock workers' compensation attorney, Jack Gibson, has an Internet domain name, ""

A few years ago he received a cease and desist order from DWC, advising him that he was in violation of Section 419.002 by the use of such domain name.

So Gibson sued, alleging violation of his free speech rights and other constitutional protections.

The U.S. District Court for the Northern District of Texas dismissed Gibson's complaint, saying he had failed to state a claim.

On Oct. 30, 2012, the U.S. 5th Circuit Court of Appeals in New Orleans ruled that the trial court erred by dismissing Gibson's constitutional challenge and remanded the case back to the trial court to determine whether the statute is necessary to advance a "substantial state interest" and whether the law is more extensive than necessary to serve that interest.

The origin of 419.002 goes back to abuses by certain medical clinics that were setting up shop in buildings that also housed the field offices for the former Texas Workers’ Compensation Commission (DWC’s predecessor) and using similar names, such as "Texas Workers’ Compensation Clinic" in conjunction with the use of the state seal.

Presumably this is no longer an issue.

But the statue remained and Gibson was targeted.

Now DWC Commissioner Rod Borderlon is asking the legislature to reconsider that statue and amend it so that it is not so broad and sweeping.

In DWC's biennial report to the Legislature, in which Borderlon is expected to say the state's workers' compensation system is in good shape, it is suggested that the legislature create a "new Labor Code Section 419.001 and clarify existing Labor Code Section 419.002" to say that the use of the agency's name "and other terms and state symbols is prohibited if they are used in a 'deceptive manner' in an effort to create a false impression that something is endorsed, approved, sponsored, authorized or associated with" the DWC, Texas Department of Insurance or the State of Texas.

"These changes are meant to clarify the existing statute so that it aligns with the way the Division has applied these requirements in individual cases − to prohibit the use of the agency’s name, certain terms and state symbols when it is being used in a deceptive manner," the report to the Legislature says.

Kudos to Borderlon for thinking ahead, and for making a good attempt at rectifying what I think is a misdirection of DWC resources.

I can understand DWC's cease and desist enforcement action against Gibson - upholding the law requires administrative action. The law is what the law is and that law was necessary to deter deceptive actions by people that have no association with the Division.

And I can completely understand Gibson's position, in particular because I am a publisher. The enforcement action in my opinion is an impermissible restriction against free speech since Gibson is not engaging in any practice that holds himself out as a part of the government.

Borderlon's approach should end the issue for the long term. And it seems to me the parties (Gibson and DWC) can come together at this stage and settle the litigation so that each can direct their energies and resources towards more productive activities.

And I urge the Texas legislature to adopt Commissioner Borderlon's recommendations as just plain good sense.

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