Minding Your Ps and Qs:
Whistleblower Protection and
Employer Defenses
17th Annual Texas Higher Education Law Conference
University of North Texas
Denton, Texas
March 25-26, 2013
Mari McGowan
Abernathy, Roeder, Boyd & Joplin P.C.
Employer Posting Required
The law requires each governmental
employer to notify employees of their
rights under the Texas Whistleblower Act
“by posting an appropriately worded sign
in a prominent place in the workplace.”
Tex Gov’t Code 554.009
Employer Posting Required
The law requires each governmental
employer to notify employees of their
rights under the Texas Whistleblower Act
“by posting an appropriately worded sign
in a prominent place in the workplace.”
Tex Gov’t Code 554.009
Employer Posting Required
The law requires each governmental
employer to notify employees of their
rights under the Texas Whistleblower Act
“by posting an appropriately worded sign
in a prominent place in the workplace.”
Tex Gov’t Code 554.009
Purpose of the
Texas Whistleblower Act
Protect public employees from employer
retaliation when reporting in good faith a
violation of law, and
Secure lawful conduct from those
conducting the affairs of state and local
government
Tarrant County v. McCrary, 310 S.W.3d 170,
173 (Tex. App. – Fort Worth 2010, pet. denied)
Who is “protected” ?
A state or local governmental entity may not
suspend or terminate the employment of, or
take other adverse personnel action against, a
• public employee
• who in good faith reports a violation of law
• by the employing governmental entity or
another public employee
• to an appropriate law enforcement authority
TEX. GOV’T CODE §554.002(a)
“Public Employee” defined…
…an employee or appointed officer (other than an
independent contractor) who is paid to perform
services for a state or local government.
• must be paid (not a volunteer, student, guest, etc.)
• either part-time or full-time
• cannot be independent contractor (will depend on
the employer’s extent of control)
TEX. GOV’T CODE §554.001(4); Permian Basin Cmty. Ctrs.
for MHMR v. Johns, 951 S.W.2d 497, 501 (Tex. App. – El
Paso 1997, no writ)
What is the public employee
protected from?
A state or local governmental entity may not
suspend or terminate the employment of, or
take other adverse personnel action
against, a
• public employee
• who in good faith reports a violation of law
• by the employing governmental entity or
another public employee
• to an appropriate law enforcement authority
Adverse Personnel Action…
..”is an action that affects the employee’s
compensation, promotion, demotion,
transfer, work assignment, or performance
evaluation.”
. . . the action must be “material and likely to
deter a reasonable, similarly situated
employee from reporting a violation of the
law.”
TEX. GOV’T CODE §554.001(3); Montgomery Cty.
v. Park, 246 S.W.3d 610, 613 (Tex. 2007)
Important Whistleblower Act Cases
State v. Lueck, 290 S.W.3d 876, 885 (Tex. 2009)
• Plea to Jurisdiction is proper vehicle to challenge whether
factual elements exist to support a claim.
• Internal policy recommendation of TxDOT was not a report
of a violation of law that the Act was designed to protect.
• Even if email did report a violation of law, the employee’s
supervisor was not an appropriate law enforcement authority
to whom such a report should be made.
• Email report indicated employee knew his supervisor was
not the proper authority within TxDOT to regulate the
reported violations…so he could not have formed a goodfaith belief that the supervisor was authorized to enforce
such violations.
Important Post – Lueck Whistleblower Cases
Galveston Indep. Sch. Dist. v. Jaco, 331 S.W.3d 182 (Tex.
App.—Houston [14th Dist.] 2011, pet. denied)
Univ. of Houston v. Barth, 2011 Tex. App. LEXIS 6866 (Tex.
App.— Houston [1st Dist.]) Aug. 25, 2011, pet. filed)
Tex. Dep’t of Transp. v. Garcia, 2010 Tex. App. LEXIS 4779
(Tex. App.— Corpus Christi, June 24, 2010, no pet.)
Univ. of Tex. Southwestern Med. Ctr. v. Gentilello, 317
S.W.3d 865 (Tex. App.—Dallas 2010, pet. filed)
Important Post – Lueck Whistleblower Cases
City of Elsa v. Gonzalez, 325 S.W.3d 622 (Tex. 2010)
Univ. of Tex. San Antonio v. Wells, 2011 Tex. App. LEXIS 920
(Tex. App.—San Antonio Feb. 9, 2011 no pet.)
Tex. Water Dev. Bd. v. Neal, 2010 Tex. App. LEXIS 3225 (Tex.
App.— Austin Apr. 28, 2010, pet. denied) (unpublished)
Moreno v. Tex. A&M University-Kingsville, 339 S.W.3d 902
(Tex. App.— Corpus Christi May 5, 2011, pet. filed)
DART v. Carr, 309 S.W.3d 174 (Tex. App.—Dallas, pet. denied)
“Good Faith Report of Violation of Law”
means . . .
Good Faith (subjective and objective
element) . . .
(1) the plaintiff believed the conduct violated the
law; and
(2) the plaintiff’s belief was reasonable in light
of his/her training and experience.
TEX. GOV’T CODE §554.002(a); City of Elsa v.
Gonzalez, 325 S.W.3d 622, 626 (Tex. 2010)
Good Faith . . .
Good Faith (subjective and objective
element) . . .
• does not require that plaintiff is right
• does not require that a law is actually
violated
• does have to be honest and objectively
reasonable
Vela v. City of Houston, 186 S.W.3d 49, 53 (Tex. App. –
Houston [1st Dist.] 2005, no pet.) (because of electrician’s
18 years of experience as electrician, his erroneous belief
of code violation was not in good faith)
“Report of Violation of Law . . .”
Report . . .
• generally any “disclosure of information” tending
to show a violation of law (oral report, phone
call, email, written letter)
Violation of Law - “law” defined in sec. 554.001(1)
as:
(A) a state or federal statute;
(B) an ordinance of a local governmental entity; or
(C) a rule adopted under a statute or ordinance.
What is a “violation of law” . . .?
DART v. Carr, 309 S.W.3d 174 (Tex. App.—
Dallas 2010, pet. denied)
• a plaintiff is not required to identify a specific law
when making the report
• A plaintiff does not have to establish an actual
violation of law
• However, there must be some law prohibiting
the complained of conduct to state a claim.
• An internal policy is not a law.
• Otherwise “any complaint, grievance or
misconduct could support a claim.”
What is a “violation of law” . . . ?
Galveston Indep. Sch. Dist. v. Jaco, 331
S.W.3d 182 (Tex. App.—Houston [14th Dist.]
2011, pet. denied)
• UIL rules are not rules “adopted under a statute
or ordinance.”
• This court gave a strict and narrow construction
of “law” and the definition of “law” in
Whistleblower Act.
Is a University rule a law?
University of Houston v. Barth, 365 S.W.3d 438 (Tex.
App.—Houston [1st Dist.] 2012, pet. filed)
The University Rule
The university maintained a written policy governing the U
of H system called a SAM (“System Administrative
Memorandum”).
Under the SAM, employees are directed to report criminal
activity and advised that failure to do so may result in
disciplinary action.
The officials identified in the SAM for reporting included
the University police, University GC and its CFO.
Barth Facts . . .
Barth was a tenured professor in the Hotel
Management College.
The College business manager told Barth that he
suspected the dean of the College, Alan Stutts,
had engaged in questionable accounting practices,
mishandled University funds, and entered into an
unauthorized contract for services on behalf of the
College.
Stutts was Barth’s supervisor.
Barth reported Stutts’ conduct to the University’s
CFO, GC, internal auditor and Associate Provost.
Barth Facts . . .
After the report, Stutts gave Barth marginal ratings
on his evaluations which affected his merit raises.
Barth was denied funds for travel related to his
position.
Stutts withdrew from a symposium Barth created
and earned $10,000 in annual compensation. As
a result, the symposium was canceled.
Barth grieved Stutts’ twice alleging retaliation and
a lower-than-deserved merit evaluation which
lowered his salary increase.
Neither grievance was successful.
Barth Facts . . .
Barth then reported Stutts to the University
police department. No action was taken.
The University CFO requested the internal
auditor look into Barth’s allegations.
The auditor found Stutts violated portions of
the SAM.
Barth sued the University claiming a
violation of the Whistleblower Act.
Barth Court Ruling . . .
Court found the employee reported a
violation of law when he reported a
coworker’s violations of the University’s
financial rules.
The University contested the employee’s
argument that its rules constituted a law
adopted under statute or ordinance that
could form the basis of a whistleblower
claim.
Barth Court Ruling . . .
As a legislatively-created university, the
court found the University Board of
Regents was empowered to “enact
bylaws, rules, and regulations necessary
for the successful management and
government of the university.”
Thus, the rules of the University were of
the same force as an enactment of the
Legislature and, therefore, a “law” under
the Whistleblower Act.
“Appropriate Law Enforcement Authority”?
• Media is NOT a proper law enforcement authority.
Beaumont v. Bouillion, 896 S.W.2d 143, 145 (Tex.
1995)
• Police Chief and District Attorney were proper law
enforcement authority where employee reported a
criminal violation to them . . . BUT
• Later report to the town manager against Chief and
DA alleging a failure to investigate was NOT
protected because town manager as not a law
enforcement authority. Town of Flower Mound v.
Teague, 111 S.W.3d 742, 755 (Tex. App. – Fort
Worth, 2003, pet. Denied)
“Appropriate Law Enforcement Authority”?
Does the entity:
• regulate under or enforce the law alleged
to have been violated; OR
• Investigate or prosecute a violation of
criminal law.
“Appropriate Law Enforcement Authority”?
City of Elsa v. Gonzalez, 325 S.W.3d 622
(Tex. 2010)
• City council was NOT appropriate law enforcement
authority for purposes of the Texas Open Meetings
Act.
• “[T]he Whistleblower Act’s limited definition of a law
enforcement authority does not include an entity
whose power is not shown to extend beyond its
ability to comply with a law by acting or refusing to
act or by preventing a violation of law by acting or
refusing to act.”
“Appropriate Law Enforcement Authority”?
Tex. Water Dev. Bd. v. Neal, 2010 Tex. App.
LEXIS 3225 (Tex. App.— Austin Apr. 28, 2010, pet.
denied) (unpublished)
Plaintiff’s reports to her employer, the Texas Water
Development Board, regarding alleged violations of
the Texas Labor Code were NOT made to an
appropriate law enforcement authority.
“Appropriate Law Enforcement Authority”?
University of Texas San Antonio v. Wells,
2011 Tex. App. LEXIS 920 (Tex. App.—San
Antonio Feb. 9, 2011, no pet.)
• The focus is on the entity itself, not the
specific department or office that received
the report.
• University is objectively NOT an appropriate
law enforcement authority for a plaintiff’s
complaints of criminal fraud.
A Bad Day for Whistleblowers in Texas
On February 22, 2013, the Texas Supreme Court
issued decisions in two whistleblower cases testing
the “appropriate law enforcement authority”
question:
University of Texas Southwestern Medical
Center at Dallas v. Gentilello
Gertrude Moreno v. Texas A&M University –
Kingsville
UT Southwestern v. Gentilello
University of Texas Southwestern Medical Center at
Dallas v. Gentilello, 317 S.W.3d 865 (Tex. App.—
Dallas 2010, pet. granted)
Tenured professor of medicine held two chair positions.
During employment, he claimed he discovered that
hospital residents were treating and performing surgical
procedures on patients without the supervision of an
attending physician in violation of Medicare and
Medicaid regulations.
He reported the alleged violations to a supervisor who
set the policies regarding the presence of attending
physicians and who had the power to internally
investigate Medicare and Medicaid violations.
Gentilello Facts . . .
Professor’s chair positions were removed.
He sued under the Texas Whistleblower Act
alleging he had a good faith belief that
Medicare and Medicaid violations were
occurring and he reported these violations
to the person that he believed in good faith
had the authority to “investigate and
correct” the violations.
Gentilello Court Ruling . . .
The Court of Appeals found a fact issue existed on whether
the professor had a good faith belief that he reported to an
appropriate law enforcement authority (the Clinical
Department Chair). The medical center sought review.
The Texas Supreme Court overturned the decision of the
Court of Appeals, holding that consistent with the court's
prior cases, “the Whistleblower Act's constricted definition
of a law-enforcement authority requires that a plaintiff's
belief be objectively reasonable. On that score, purely
internal reports untethered to the Act's undeniable focus on
law enforcement—those who either make the law or
pursue those who break the law—fall short.”
The Court noted that other states' whistleblower laws
accommodate internal reports to supervisors; Texas law
does not.
Gentilello Court Ruling . . .
The Court stated that under the Texas Act, “the
jurisdictional evidence must show more than a
supervisor charged with internal compliance or
anti-retaliation language in a policy manual
urging employees to report violations internally.
For a plaintiff to satisfy the Act's good-faith belief
provision, the plaintiff must reasonably believe
the reported-to authority possesses what the
statute requires: the power to (1) regulate under
or enforce the laws purportedly violated, or (2)
investigate or prosecute suspected criminal
wrongdoing.
Moreno v. Texas A&M - Kingsville
Gertrude Moreno v. Texas A&M University –
Kingsville, --- S.W.3d --- (Tex. 2013).
– Moreno was employed as Asst VP for Finance and
Administration and Comptroller.
– Moreno’s supervisor obtained an out-of-state tuition
waiver for his daughter to attend TAMUK at the Texasresident rate. Moreno challenged that action resulting in
the revocation of the waiver and her supervisor ultimately
paid full tuition for his daughter.
– Moreno was then terminated with no explanation.
– Moreno appealed her termination through TAMUK’s
grievance process alleging retaliation, and then sued
under the Texas Whistleblower Act.
Moreno Court Ruling . . .
The Court of Appeals found Moreno created a fact
issue that she had a good-faith belief that her
supervisor violated the law and she could have
relied on the interpretation of the law given by the
employer in forming her belief. The Court felt
Moreno showed that she followed the college’s
policy in reporting the violation to her supervisor and
that the supervisor had both the duty and the power
to enforce the rules.
Again, the Texas Supreme Court overturned the
decision by the Court of Appeals.
Moreno Court Ruling . . .
Quoting the Gentilello Opinion:
The Act, by its text and structure, restricts “law
enforcement authority” to its commonly understood
meaning. That is, it protects employees who report to
authorities that actually promulgate regulations or
enforce the laws, or to authorities that pursue criminal
violations. The specific powers listed in section
554.002(b) are outward-looking. They do not
encompass internal supervisors charged with in-house
compliance and who must refer suspected illegality to
external entities.
The President's authority to compel compliance with
state law on tuition waivers, was not the same as
enforcing the law in the sense required by the statute.
The logical outcome of the Gentilello and
Moreno decision is to force potential
whistleblowers to take the agency's issues
outside the organization, an option that
agencies would not prefer.
However, agencies are protected from
retaliation claims when an employee has
complained internally, but failed to contact the
appropriate enforcement authority.
Minding Your Ps and Qs:
Whistleblower Protection
and Employer Defenses
THANK YOU!!!
Mari McGowan
Abernathy, Roeder, Boyd & Joplin, P.C.
1700 Redbud Blvd., Ste. 300
McKinney, Texas 75069
(214) 544-4000
www.abernathy-law.com