Texas At-Will Employment Carve-Outs

Texas at-will employment principles with the major exceptions: public-policy, contract, sworn-officer (Sabine Pilot), and federal/state statutory protections.

Purpose

• This policy explains Texas's default at-will employment rule and the principal exceptions that may limit termination decisions. It is intended to help policy holders, managers, and HR personnel apply consistent, lawful employment practices and to identify when legal review is required before a termination decision is finalized.

Scope

• This policy applies to all employees, supervisors, managers, and HR personnel working in Texas or otherwise governed by Texas employment law. It also applies to sworn officers and to any employee covered by a written employment agreement, offer letter, handbook disclaimer, collective bargaining agreement, or other contract that modifies at-will status. **Texas employees:** This policy is drafted for Texas at-will employment and should be read together with applicable federal and state laws. **Multi-state employees:** If another state law provides greater protection, the more protective law controls.

Definitions

• For purposes of this policy, the following terms have the meanings below: - **At-will employment**: Either party may end employment at any time, with or without cause or notice, unless a legal exception applies. - **Good-faith**: A sincere and honest belief or action taken without intent to deceive or retaliate. - **Essential function**: A fundamental job duty, not a marginal task, used in evaluating accommodation and job performance issues. - **Interactive process**: The good-faith, individualized communication used to identify possible reasonable accommodations under the ADA. - **Reasonable accommodation**: A change to the work environment or job process that enables a qualified individual with a disability to perform essential functions, absent undue hardship. - **Documented warning**: A written record of a performance, conduct, or attendance issue and the expectations for correction. - **PIP**: A performance improvement plan that identifies performance gaps, goals, timelines, and follow-up expectations.

Policy Statement

• Employment with the Company is generally at-will. This means that, unless a written agreement signed by an authorized Company representative states otherwise, either the employee or the Company may end the employment relationship at any time, with or without cause, and with or without advance notice. At-will employment does **not** permit termination that violates applicable law, a valid contract, or a protected public-policy exception. Managers may not promise continued employment, progressive discipline, or termination only for cause unless the promise is authorized in writing by the Company. Nothing in this policy creates a contract of employment, guarantees continued employment, or limits the Company's right to make lawful employment decisions.

Major Carve-Outs and Protected Exceptions

• The Company will not terminate, discipline, or retaliate against an employee in a manner prohibited by law or contract. The following exceptions may limit at-will termination decisions: 1. **Public-policy protections**: The Company will not take adverse action for refusing to engage in unlawful conduct, reporting conduct protected by law, or exercising rights protected by statute or public policy. 2. **Written contract modifications**: If a signed employment agreement, offer letter, collective bargaining agreement, or other enforceable contract changes at-will status, the Company will follow the contract terms. 3. **Sabine Pilot / sworn-officer protections**: Texas law may provide additional protections where a sworn officer or other covered employee is terminated for refusing to perform an illegal act. Legal review is required before any adverse action in these situations. 4. **Federal and state statutory protections**: The Company will not terminate or retaliate in violation of laws including, as applicable, Title VII, ADA, ADEA, FMLA, FLSA, NLRA Section 7 rights, Texas Labor Code protections, and other anti-retaliation or whistleblower laws. 5. **Accommodation and leave-related protections**: Termination decisions involving disability accommodation, pregnancy-related issues, medical leave, or protected leave must be reviewed through the interactive process and applicable leave procedures before action is taken.

Procedure

• Before any termination decision involving a Texas employee, managers and HR must complete the following steps in good faith: 1. **Confirm at-will status**: Review the employee's offer letter, handbook acknowledgements, arbitration agreement, collective bargaining agreement, and any other written contract. 2. **Check for protected activity**: Determine whether the employee recently reported discrimination, harassment, safety concerns, wage issues, leave concerns, accommodation requests, or other protected activity. 3. **Review statutory protections**: Confirm whether the action could implicate Title VII, ADA, ADEA, FMLA, FLSA, NLRA Section 7 rights, or any Texas-specific protection. 4. **Evaluate accommodation and leave issues**: If disability, pregnancy, medical leave, or another accommodation issue is involved, complete the interactive process and document the analysis of essential functions and reasonable accommodation options. 5. **Assess performance documentation**: Ensure any performance-based decision is supported by documented warnings, objective evidence, and, when appropriate, a PIP. 6. **Escalate high-risk cases**: Send any termination involving a sworn officer, alleged refusal to break the law, whistleblowing, discrimination complaints, wage-and-hour complaints, or contract disputes to HR and legal counsel before final approval. 7. **Document the decision**: Record the lawful business reason, supporting facts, approvals, and any accommodations or alternatives considered.

Roles & Responsibilities

• **Employees** must comply with workplace rules, report concerns through available channels, and provide accurate information during investigations or accommodation requests. **Managers and supervisors** must avoid making promises that alter at-will status, must use documented warnings and PIPs when appropriate, and must escalate any protected-activity or contract-related issue to HR. **HR** must review termination decisions for legal risk, maintain documentation, coordinate the interactive process, and ensure consistency with applicable law. **Legal/compliance** must review cases involving Sabine Pilot issues, sworn officers, public-policy concerns, contract disputes, or any potential federal/state statutory violation. **Policy holder** is responsible for maintaining this policy, updating Texas and federal law references, and ensuring the policy is reviewed at least annually.

Compliance, Discipline, and Non-Retaliation

• Violations of this policy may result in corrective action up to and including termination, subject to applicable law and any contractual limitations. Disciplinary decisions must be based on legitimate business reasons, applied consistently, and documented. The Company prohibits retaliation against any employee who in good faith reports discrimination, harassment, wage concerns, safety concerns, leave concerns, accommodation needs, or suspected legal violations, or who participates in an investigation or protected concerted activity. If a termination or discipline decision is later found to conflict with applicable law or a contract, the Company will take appropriate corrective action, which may include reinstatement, back pay, policy revision, or additional manager training.

Review & Revision

• This policy will be reviewed at least annually and whenever Texas or federal employment law changes in a way that affects at-will employment, wrongful termination risk, leave rights, discrimination protections, wage-and-hour obligations, or whistleblower protections. Any revisions must be approved by HR and legal counsel before publication. Employees will be notified of material changes and may be required to re-acknowledge the policy.