Berry Contracting, L.P. v. Texas Workforce Commission
Berry Contracting, L.P. appealed a district court decision that affirmed the Texas Workforce Commission's (TWC) denial of an unemployment tax refund. Berry Contracting had sought a partial transfer of compensation experience to achieve a lower unemployment tax rate, attempting a strategy where two employees were transferred to a new entity before a larger group. TWC denied the application, ruling that the legal department's compensation experience was not "segregable" as per Labor Code § 204.084, interpreting the term to require the transferred part of the business to be capable of independent operation. The appeals court upheld the district court's judgment, finding TWC's interpretation of "segregable" as reasonable and concluding that the legal department was not a distinct and separate business able to operate independently from Berry GP, Inc.