Code of Conduct - Texas

CODE OF CONDUCT -- TEXAS

Company Name: [________________________________]
Policy Number: [____]-COC-TX
Effective Date: [__/__/____]
Last Revised: [__/__/____]
Policy Owner: [________________________________] (Chief Compliance Officer / General Counsel)
Approved By: [________________________________] (Board of Directors / Chief Executive Officer)

TABLE OF CONTENTS

1. Message from Leadership
2. Purpose and Applicability
3. Foundational Legal Framework
4. Core Standards of Ethical Conduct
5. Compliance with Laws and Regulations
6. Conflicts of Interest and Outside Activities
7. Gifts, Entertainment, and Anti-Corruption
8. Books, Records, and Financial Integrity
9. Confidential Information and Intellectual Property
10. Data Privacy and Information Security
11. Workplace Conduct and Equal Employment Opportunity
12. Health, Safety, and Environment
13. Company Assets and Resources
14. Fair Competition and Antitrust
15. Government Relations and Political Activities
16. Third-Party and Vendor Conduct
17. Texas-Specific Legal Requirements
18. Reporting Concerns and Non-Retaliation
19. Investigations and Disciplinary Action
20. Training and Acknowledgment
21. Governance, Waivers, and Amendments
22. Employee Acknowledgment Form
23. Sources and References

1. MESSAGE FROM LEADERSHIP

To All Employees, Officers, Directors, and Business Partners:

Our Company is committed to conducting business with integrity, transparency, and full compliance with the law. This Code of Conduct ("Code") establishes the ethical standards and legal obligations that apply to everyone who represents our Company, with particular attention to the laws of the State of Texas.

We expect every team member to read this Code, participate in required training, and use the reporting channels described in Section 18 to raise concerns. We will not tolerate retaliation against anyone who reports a concern in good faith.

[________________________________]
Chief Executive Officer
[__/__/____]

2. PURPOSE AND APPLICABILITY

2.1 Purpose

This Code establishes minimum standards of ethical conduct and legal compliance for all persons acting on behalf of the Company. It satisfies the requirements of USSG 8B2.1 for an effective compliance and ethics program.

2.2 Applicability

☐ All employees (full-time, part-time, temporary)
☐ Officers and directors
☐ Contractors, consultants, and agents
☐ Controlled subsidiaries and affiliates
☐ Joint venture partners under Company management control

2.3 Relationship to Other Policies

This Code is supplemented by detailed policies on specific topics. The more restrictive standard applies in any conflict. Texas-specific requirements control for Texas operations.

3. FOUNDATIONAL LEGAL FRAMEWORK

3.1 Federal Requirements

• USSG 8B2.1: Seven elements of an effective compliance program including risk assessment, training, reporting mechanisms, monitoring, enforcement, and continuous improvement.
• DOJ Evaluation of Corporate Compliance Programs (September 2024): Evaluates program design, resourcing, and effectiveness. Updated guidance on AI governance and data analytics.
• SOX: Sections 302, 404 (internal controls), 301 (audit committee), 806 (whistleblower protection).

3.2 Texas State Requirements

• Texas Deceptive Trade Practices Act (DTPA) (Tex. Bus. & Com. Code 17.46): Prohibits false, misleading, or deceptive acts in trade or commerce. Comprehensive "laundry list" of prohibited acts. Private right of action with treble damages for knowing violations. TX AG enforcement. Critical for all customer-facing and marketing activities.
• Texas Data Privacy and Security Act (TDPSA) (Tex. Bus. & Com. Code Ch. 541): Effective July 1, 2024. Consumer rights (access, correction, deletion, opt-out of targeted advertising/sale/profiling). Data protection assessments required. 45-day response period. TX AG exclusive enforcement.
• TCHRA (Tex. Lab. Code Ch. 21): Prohibits employment discrimination based on race, color, disability, religion, sex, national origin, age, or retaliation. TWC-CRD enforcement. Damages capped by employer size.
• Tex. Penal Code Ch. 36: Bribery (second-degree felony); gift to public servant (Class A misdemeanor); offering gift to public servant (Class A misdemeanor).
• Texas Whistleblower Act (Tex. Gov't Code Ch. 554): Protects public employees from retaliation. Sabine Pilot doctrine provides limited common-law protection for private employees.

4. CORE STANDARDS OF ETHICAL CONDUCT

☐ Act lawfully, honestly, and in the Company's best interest
☐ Exercise sound judgment and avoid conduct that harms the Company's reputation
☐ Treat all persons fairly and with respect
☐ Never engage in fraud, bribery, kickbacks, or corrupt practices
☐ Maintain accurate books, records, and financial reports
☐ Protect confidential and proprietary information
☐ Report suspected violations promptly
☐ Cooperate with investigations
☐ Complete required compliance training

5. COMPLIANCE WITH LAWS AND REGULATIONS

☐ Understand and comply with all applicable laws
☐ Seek guidance from Compliance or Legal when uncertain
☐ Never knowingly violate any law or Company policy
☐ Promptly report known or suspected violations

6. CONFLICTS OF INTEREST AND OUTSIDE ACTIVITIES

6.1 Identifying Conflicts

☐ Outside employment or board service with competitors, customers, or vendors
☐ Financial interests in competitors, customers, or vendors (beyond nominal public holdings)
☐ Family or personal relationships influencing business decisions
☐ Diversion of corporate opportunities for personal benefit

6.2 Disclosure

☐ All conflicts must be disclosed in writing to supervisor and Compliance Officer
☐ Undisclosed conflicts may result in disciplinary action up to termination

7. GIFTS, ENTERTAINMENT, AND ANTI-CORRUPTION

7.1 General Standards

☐ Gifts must be modest, infrequent, and have a legitimate business purpose
☐ No gifts intended to influence business decisions or government action
☐ Cash and cash equivalents are always prohibited
☐ Gifts above $50 must be logged

7.2 Texas Public Servants

☐ Tex. Penal Code 36.08: Strict prohibitions on gifts to public servants in regulatory, inspection, or investigation roles
☐ Tex. Penal Code 36.09: Offering a gift you know a public servant is prohibited from accepting is a Class A misdemeanor
☐ Tex. Penal Code 36.10: Limited exceptions (items under $50 excluding cash; gifts based on independent relationships)
☐ Pre-approval from CCO required for any gift to a public servant
☐ Texas Ethics Commission guidance applies to interactions with state officials

7.3 FCPA and Anti-Kickback

☐ Comply with FCPA (15 U.S.C. 78dd-1 et seq.) for all foreign official interactions
☐ Comply with Anti-Kickback Statute (42 U.S.C. 1320a-7b) for healthcare operations

8. BOOKS, RECORDS, AND FINANCIAL INTEGRITY

☐ Record all transactions accurately, completely, and timely
☐ No undisclosed funds, accounts, or assets
☐ All financial records must reflect the true nature of transactions
☐ Never falsify any record
☐ Cooperate with auditors
☐ Comply with SOX 302 and 404 (public companies)

9. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY

☐ Protect all confidential and proprietary information
☐ No unauthorized disclosure
☐ Respect third-party intellectual property rights
☐ Return all Company materials upon termination
☐ Non-disclosure obligations survive employment
☐ Texas trade secret law (Tex. Civ. Prac. & Rem. Code Ch. 134A, Texas Uniform Trade Secrets Act) provides civil remedies for misappropriation

10. DATA PRIVACY AND INFORMATION SECURITY

10.1 General Requirements

☐ Collect, use, and disclose personal data only as authorized
☐ Maintain appropriate safeguards
☐ Limit access on a need-to-know basis
☐ Report suspected breaches immediately

10.2 Texas-Specific Requirements

Texas Data Privacy and Security Act (TDPSA):

• Consumer rights: access, correction, deletion, portability, opt-out of targeted advertising/sale/profiling
• 45-day response period (with 45-day extension if reasonably necessary)
• Data protection assessments required for targeted advertising, sale, sensitive data processing, and profiling
• Sensitive data (racial/ethnic, religious, health, sexual orientation, citizenship, genetic, biometric, child data) requires opt-in consent
• Global opt-out mechanism recognition effective January 1, 2025
• Reasonable data security practices required

Data Breach Notification (Tex. Bus. & Com. Code 521.053):

• Notification to affected individuals within 60 days of breach determination
• TX AG notification if 250+ Texas residents affected
• Consumer reporting agency notification if 10,000+ individuals affected
• Must implement and maintain reasonable procedures to protect sensitive personal information

11. WORKPLACE CONDUCT AND EQUAL EMPLOYMENT OPPORTUNITY

11.1 Equal Employment Opportunity

The Company prohibits discrimination, harassment, and retaliation based on any protected characteristic.

Protected characteristics under TCHRA (Tex. Lab. Code Ch. 21): race, color, disability, religion, sex, national origin, age, and retaliation for exercising rights under the statute.

Additional federal protections: pregnancy, sexual orientation, gender identity (Title VII per Bostock v. Clayton County, 590 U.S. 644 (2020)), genetic information (GINA), veteran status (USERRA/VEVRAA).

11.2 Harassment Prevention

☐ Zero tolerance for all forms of harassment, including sexual harassment
☐ All employees must treat colleagues with dignity and respect
☐ Report harassment immediately

11.3 Texas Employment Considerations

• At-Will Employment: Texas is an at-will employment state. Employment may be terminated for any lawful reason absent a contract.
• TCHRA Damages Caps: $50K (15-100 employees); $100K (101-200); $200K (201-500); $300K (501+)
• TWC-CRD: Administers TCHRA complaints; 180-day filing deadline with TWC (or 300 days if cross-filed with EEOC)
• Sabine Pilot Doctrine: Texas recognizes narrow common-law exception to at-will employment for employees terminated solely for refusing to commit an illegal act

12. HEALTH, SAFETY, AND ENVIRONMENT

☐ Follow all safety protocols and regulations
☐ Report hazards, injuries, and unsafe conditions promptly
☐ No working under the influence of impairing substances
☐ Federal OSHA applies in Texas (Texas does not have a state OSHA plan for private employers)
☐ Comply with TCEQ environmental requirements applicable to Company operations
☐ Texas Workers' Compensation: Texas is the only state where workers' compensation insurance is voluntary for private employers. The Company's workers' compensation status is: ☐ Subscriber ☐ Non-Subscriber. Employees will be informed of their rights accordingly.

13. COMPANY ASSETS AND RESOURCES

☐ Use Company assets only for authorized business purposes
☐ Protect property from loss, theft, and unauthorized use
☐ No expectation of privacy in Company systems
☐ Comply with software licensing and copyright restrictions
☐ Report losses or theft immediately

14. FAIR COMPETITION AND ANTITRUST

☐ Compete vigorously but fairly
☐ No price-fixing, bid-rigging, or market allocation with competitors
☐ No exchange of competitively sensitive information
☐ Comply with Sherman Act, Clayton Act, and FTC Act
☐ Texas DTPA (Tex. Bus. & Com. Code 17.46(b)) prohibits specific unfair competitive practices
☐ Texas Free Enterprise and Antitrust Act (Tex. Bus. & Com. Code Ch. 15) prohibits monopolies, restraints of trade, and conspiracies in restraint of trade

15. GOVERNMENT RELATIONS AND POLITICAL ACTIVITIES

☐ All lobbying must be conducted by authorized personnel per Tex. Gov't Code Ch. 305
☐ Personal political activities must not use Company time or resources
☐ Corporate political contributions are permitted in Texas subject to reporting under the Texas Election Code (Title 15)
☐ No Company political contributions without General Counsel and Board approval

16. THIRD-PARTY AND VENDOR CONDUCT

☐ Third parties must adhere to standards consistent with this Code
☐ Due diligence before engagement, especially for government-facing and data-handling vendors
☐ Contracts must include compliance obligations and audit rights
☐ Report suspected third-party violations to the Compliance Officer

17. TEXAS-SPECIFIC LEGAL REQUIREMENTS

17.1 Texas Deceptive Trade Practices Act (Tex. Bus. & Com. Code 17.46)

• Comprehensive prohibition on false, misleading, or deceptive acts in trade
• "Laundry list" of 27+ specifically prohibited acts (Tex. Bus. & Com. Code 17.46(b))
• Private right of action: consumers may recover economic damages; treble damages for knowing or intentional violations
• TX AG enforcement: injunctive relief and civil penalties up to $10,000 per violation ($250,000 for violations targeting elderly or disabled persons)
• Company obligation: All marketing, sales, advertising, and customer communications must be truthful, substantiated, and not misleading

17.2 Texas Data Privacy and Security Act

• See Section 10.2 above for detailed requirements
• Data protection assessments, consumer rights, sensitive data consent, global opt-out recognition

17.3 Bribery and Public Corruption

• Tex. Penal Code 36.02 (Bribery): second-degree felony
• Tex. Penal Code 36.08-36.09 (Gifts to Public Servants): Class A misdemeanor
• See Section 7.2 above

17.4 Texas Cybersecurity

• Tex. Bus. & Com. Code 521.052: Businesses must implement and maintain reasonable procedures to protect sensitive personal information from unauthorized use or disclosure
• Texas Cybersecurity Act (Tex. Gov't Code Ch. 2054, Subch. N-2): Applies to state agencies; relevant for government contractors

18. REPORTING CONCERNS AND NON-RETALIATION

18.1 Reporting Channels

☐ Direct supervisor or manager
☐ Human Resources: [________________________________]
☐ Chief Compliance Officer: [________________________________]
☐ General Counsel: [________________________________]
☐ Anonymous Ethics Hotline: [________________________________]
☐ Ethics Email: [________________________________]

18.2 Non-Retaliation

The Company strictly prohibits retaliation against any person who, in good faith, reports a violation or participates in an investigation.

Federal protections: SOX Section 806; Dodd-Frank Section 922.
Texas protections: Texas Whistleblower Act (Tex. Gov't Code Ch. 554) for public employees. Sabine Pilot doctrine (private sector -- narrow exception for refusal to commit illegal act). No comprehensive private-sector whistleblower statute in Texas; however, federal protections and this Company policy provide substantial safeguards.

19. INVESTIGATIONS AND DISCIPLINARY ACTION

19.1 Investigations

☐ Prompt, thorough, and fair investigation of all reports
☐ Confidential to the extent practicable
☐ Full cooperation required; obstruction or false information is a separate violation

19.2 Disciplinary Action

☐ Verbal or written warning
☐ Mandatory training
☐ Forfeiture of bonus/incentive compensation
☐ Demotion, reassignment, or suspension
☐ Termination
☐ Referral to law enforcement

20. TRAINING AND ACKNOWLEDGMENT

☐ New employees: training within 30 days of hire
☐ Annual refresher for all employees
☐ Enhanced training for high-risk roles
☐ Training records maintained five (5) years
☐ Annual written acknowledgment required

21. GOVERNANCE, WAIVERS, AND AMENDMENTS

• Policy Owner: Chief Compliance Officer
• Review: Annually or upon material legal changes
• Waivers for officers/directors: Board approval required; SEC/listing disclosure if applicable
• Waivers for others: CCO and General Counsel approval; documented
• Amendments: Board authority; material changes disclosed as required

22. EMPLOYEE ACKNOWLEDGMENT FORM

I acknowledge that I have received, read, and understand this Code of Conduct. I agree to comply with its terms and report any known or suspected violations.

I understand this Code does not create an employment contract and my employment remains at-will unless I have a separate written agreement.

Employee Name: [________________________________]
Signature: [________________________________]
Title / Department: [________________________________]
Date: [__/__/____]

Conflict of Interest Disclosure:
☐ No conflicts to disclose
☐ I wish to disclose: [________________________________]

23. SOURCES AND REFERENCES

• U.S. Sentencing Guidelines 8B2.1 -- https://guidelines.ussc.gov/
• DOJ Evaluation of Corporate Compliance Programs (Sept. 2024) -- https://www.justice.gov/criminal/criminal-fraud/page/file/937501
• Sarbanes-Oxley Act (15 U.S.C. 7201 et seq.)
• Texas DTPA (Tex. Bus. & Com. Code 17.41 et seq.)
• TDPSA (Tex. Bus. & Com. Code Ch. 541) -- https://www.texasattorneygeneral.gov/consumer-protection/file-consumer-complaint/consumer-privacy-rights/texas-data-privacy-and-security-act
• Tex. Bus. & Com. Code 521.053 (Breach Notification)
• TCHRA (Tex. Lab. Code Ch. 21)
• Tex. Penal Code Ch. 36 (Bribery)
• Texas Ethics Commission -- https://www.ethics.state.tx.us/
• Texas Whistleblower Act (Tex. Gov't Code Ch. 554)
• Texas Free Enterprise and Antitrust Act (Tex. Bus. & Com. Code Ch. 15)
• FCPA (15 U.S.C. 78dd-1 et seq.)

This document is a template provided for informational purposes only and does not constitute legal advice. It must be reviewed and customized by a qualified attorney licensed in Texas before implementation.