City of Denton v. Michael Grim and Jim Maynard ( 2024 )

Supreme Court of Texas
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No. 22-1023
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City of Denton,
Petitioner,
v.
Michael Grim and Jim Maynard,
Respondents
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On Petition for Review from the
Court of Appeals for the Fifth District of Texas
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Argued January 10, 2024
JUSTICE BLACKLOCK delivered the opinion of the Court.
The Whistleblower Act prohibits government employers from
taking “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). The plaintiffs reported an
alleged violation of law by a lone member of the Denton city council.
They claim they were fired for doing so, and they sued the city under the
Whistleblower Act.
As the language quoted above makes clear, the Whistleblower Act
does not protect a public employee who reports just anyone’s violation of
law. Instead, the report must be of a violation of law “by the employing
governmental entity” or by “another public employee.” The parties agree
that members of the unpaid Denton city council are not public
employees. The parties disagree over whether the city council member’s
violation of law was “a violation of law by the employing governmental
entity,” the City of Denton. We hold that it was not. The lone city
council member lacked any authority to act on behalf of the city, and her
actions therefore cannot be imputed to the city. As a result, her violation
of law was in no sense a “violation of law by the employing governmental
entity.”
It is not enough that the alleged violation of law concerns city
business or was committed by the council member in her official
capacity. The statutory text is clear that only reports of “violation[s] of
law by the employing governmental entity or another public employee”
trigger whistleblower protections. Because the plaintiffs’ report was
neither, they did not allege a viable claim under the Whistleblower Act.
The judgment of the court of appeals is reversed, and judgment is
rendered for the city.
I.
Denton’s city council has seven, unpaid members. The city owns
the local electric utility, Denton Municipal Electric (DME). Plaintiffs
Michael Grim and Jim Maynard were city employees who worked for
DME. The plaintiffs appear to have supported construction of a
controversial new power plant called the Denton Energy Center (DEC).
2
Keely Briggs, a member of the city council, opposed the new plant.
Briggs obtained internal city documents about the project and gave the
documents to a reporter with the local newspaper. Briggs acted alone.
She met with the reporter at her home, without the approval or
knowledge of any other city council members or city employees. The
newspaper posted some of the documents on its website but took them
down a few hours later. The article publicly named Briggs as the source
of the documents.
The plaintiffs reported to the city attorney that Briggs leaked
confidential vendor information, allegedly in violation of the Public
Information Act 1 and the Open Meetings Act. 2 In the plaintiffs’ view,
this report triggered the Whistleblower Act’s protections. Whether
Briggs actually violated the Public Information Act or the Open
Meetings Act is not briefed in this Court and is not relevant to the
resolution of this appeal. The city council approved the DEC project on
September 20, 2016, over Briggs’s dissent.
Denton hired a new city manager, Todd Hileman, in January
2017. Hileman began asking questions about possible improper
influence by vendors during the procurement process for the new plant.
Some of these questions concerned whether the plaintiffs in this case,
Grim and Maynard, improperly accepted fishing or hunting trips from
DEC vendors. Hileman retained an investigator to study the matter.
Eventually, both Maynard and Grim were placed on leave, ostensibly
1 TEX. GOV’T CODE §§ 552.001–.376.
2 Id. §§ 551.001–.146.
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because of concerns about the vendor trips and about whether they had
been forthcoming during the internal investigation.
After the May 2017 election, a majority of the new city council
opposed the DEC project. The contracts for the plant had already been
made, however. Hileman decided to fire both Maynard and Grim in July
2017. Maynard’s termination letter says Maynard was fired for giving
investigators inaccurate information about a fishing trip. Grim’s letter
likewise says he was not candid with investigators, and it cites a loss of
confidence in him as a manager. A city witness offered additional
rationales for the firings.
The firings occurred ten months after the plaintiffs’ report about
Briggs’s leaks to the newspaper. The city contends that the firings of
Grim and Maynard were unrelated to their report about Briggs. The
plaintiffs disagree. They allege they were fired for reporting Briggs’s
violations of law. They believe this decision was made by the new city
council and carried out by Hileman in retaliation for their allegations
against Briggs. As the plaintiffs see it, the investigation of procurement
irregularities was a sham, and the decision to fire them for “blowing the
whistle” had already been made.
The city argued in the district court the same theory it now urges
in this Court—that the Whistleblower Act does not apply because the
plaintiffs did not report a violation of law “by the employing
governmental entity or another public employee.” TEX. GOV’T CODE
§ 554.002(a). The court was not convinced. The case proceeded to a jury
trial, which resulted in a $4 million judgment for the plaintiffs.
4
The city’s appeal raised several issues, including the dispositive
legal question we address today. The court of appeals affirmed, over a
dissent. 683 S.W.3d 118, 141 (Tex. App.—Dallas 2022).
II.
A.
We need not decide whether Briggs violated a law by leaking
information to a reporter about the DEC project. We also need not
decide whether the plaintiffs were fired because they reported this
alleged violation of law. The jury found they were fired for that reason,
so we assume that is true for purposes of this appeal. Even if Briggs
violated a law and even if the plaintiffs were fired for reporting her, we
must still decide whether the report the plaintiffs made is the kind of
report that activates the Whistleblower Act’s protections. If it is not,
then the plaintiffs’ claims fail as a matter of law, irrespective of the jury
verdict. For the following reasons, we agree with the city that the
Whistleblower Act does not apply to the plaintiffs’ report of council
member Briggs’s alleged violations of law.
We once described the Whistleblower Act as “a broad remedial
measure intended to encourage disclosure of governmental malfeasance
and corruption.” City of Waco v. Lopez, 259 S.W.3d 147, 154 (Tex. 2008).
Such general judicial statements about a statute’s purpose can never
substitute, of course, for a careful reading of the authoritative text
enacted by the Legislature. Thus, we later clarified that, while the
Whistleblower Act may be “aimed at ferreting out government
mismanagement to protect the public” because of concerns “that
employees who disclose mismanagement deserve legal protection,” the
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Act’s text only “provides a limited waiver” of the government’s immunity
and “is not intended to protect all reports” of wrongdoing. City of Fort
Worth v. Pridgen, 653 S.W.3d 176, 182, 184 (Tex. 2022) (internal
quotation marks omitted).
The disputed portion of the statute says:
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). The prohibition against “adverse
personnel action” applies only when there is a report of a violation of law
by “the employing governmental entity” or by “another public employee.”
The text does not protect all reports of violations of law associated
somehow with government business. Instead, as we recently held, “the
Whistleblower Act protects only express reports to an appropriate law
enforcement authority that unambiguously identify the employing
governmental entity or another public employee as the violator.” Tex.
Health & Hum. Servs. Comm’n v. Pope, 674 S.W.3d 273, 281 (Tex. 2023).
The statute could certainly have been written to include all
reports of public corruption or of illegality associated with the
government. It was not. When answering a question of statutory
interpretation, we look always to “the plain meaning of the words
chosen” by the Legislature. Maxim Crane Works, L.P. v. Zurich Am. Ins.
Co., 642 S.W.3d 551, 557 (Tex. 2022). When those words unambiguously
answer the question at hand, a court’s inquiry is at an end, irrespective
of anyone’s assessment of the statute’s overall intent or purpose.
6
The Whistleblower Act defines a “public employee” as “an
employee or appointed officer other than an independent contractor who
is paid to perform services for a state or local governmental entity.” TEX.
GOV’T CODE § 554.001(4). Denton’s city council members are not paid
for their service, and the plaintiffs therefore concede, as they must, that
Briggs was not “another public employee.”
The case therefore turns on whether the plaintiffs reported a
violation of law “by the employing governmental entity” when they
reported Briggs’s interaction with the local newspaper. The relevant
facts are not in dispute, and the question is purely one of law, which we
decide de novo. Colorado County v. Staff, 510 S.W.3d 435, 444 (Tex.
2017).
B.
Asking whether Briggs’s actions can be imputed to the city for
purposes of the Whistleblower Act is much like asking whether her
actions can be imputed to the city for any other purpose. The statute
itself could of course prescribe a different analysis, either by defining
“violation of law by the employing governmental entity” or by giving
some other indication that a different approach is required. It does not
do so. This does not leave us without an answer, however. We presume
the Legislature enacts statutes with full knowledge of the existing law.
In re Bridgestone Ams. Tire Operations, LLC, 459 S.W.3d 565, 572 (Tex.
2015). The law, both before and after passage of the Whistleblower Act,
is familiar with the common question of whether an individual person’s
actions will be imputed to an organization or entity. We need only apply
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those familiar principles here in order to decide whether Briggs’s alleged
illegal act is also the City of Denton’s alleged illegal act.
There are at least two senses in which the law might impute
Briggs’s acts to the city. First, if the nature of Briggs’s position with the
city vested her with the legal authority to act for the city, then the law
would frequently treat her actions as the city’s actions. This is a
question of the structure of Denton’s city government. Second,
irrespective of Briggs’s position with the city, if legal principles such as
agency and vicarious liability dictate that her disputed actions are
imputed to the city, then her violation of law could be the city’s violation
of law. This is a question of the law of agency. Neither question resolves
in the plaintiffs’ favor. We address them in turn.
We begin with whether Briggs has authority to act for the City of
Denton by virtue of her position as a city council member. She does not.
As with most multi-member governing bodies, the individual members
of Denton’s city council have no authority to bind the City of Denton
through unilateral action, absent a grant of such authority in the city
charter or an ordinance. In general, “[c]ities can express and bind
themselves only by way of a duly assembled meeting,” City of San Benito
v. Rio Grande Valley Gas Co., 109 S.W.3d 750, 757 (Tex. 2003), and “the
words of one city council member or city employee do not ordinarily bind
the entire city council,” City of Austin v. Whittington, 384 S.W.3d 766,
785 (Tex. 2012). 3 This limitation on the authority of city council
3 See also Cent. Power & Light Co. v. City of San Juan, 962 S.W.2d 602,
612 (Tex. App.—Corpus Christi–Edinburg 1998, pet. dism’d w.o.j.); City of
Corpus Christi v. Bayfront Assocs., 814 S.W.2d 98, 105 (Tex. App.—Corpus
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members is an inherent aspect of their positions, from which they can
wield great power, but only as a group. A city council member’s inability
to act unilaterally for the city is a basic, definitional aspect of the office.
Unlike employees or other agents whom the law or the city council has
given legal authority to act for the city, the actions of a lone council
member are generally not the actions of the city itself. Nor are violations
of law by a lone council member violations of law by the city.
Even though Briggs’s seat on the city council does not itself
empower her to act unilaterally for the city, it could nevertheless be true,
depending on the circumstances, that the law of agency would impute
Briggs’s actions to the city. Municipalities are a species of corporation.
See Deacon v. City of Euless, 405 S.W.2d 59, 62 (Tex. 1966). 4
“Corporations, by their very nature, cannot function without human
agents. As a general rule, the actions of a corporate agent acting on
behalf of the corporation within the scope of his authority are deemed
the corporation’s acts.” Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex.
Christi–Edinburg 1991, writ denied); Stirman v. City of Tyler, 443 S.W.2d 354,
358 (Tex. App.—Tyler 1969, writ ref’d n.r.e.); City of Farmers Branch v.
Hawnco, Inc., 435 S.W.2d 288, 292 (Tex. App.—Dallas 1968, writ ref’d n.r.e.)
(“[S]tatements by individual members of a council or board are not binding on
a governmental body which may act only in its official capacity.”).
4 See also State v. Wilson, 490 S.W.3d 610, 618 (Tex. App.—Houston [1st
Dist.] 2016, no pet.). Statutes often refer to municipalities as corporate
entities. See, e.g., TEX. LOC. GOV’T CODE §§ 5.902(b) (“A change in designation
[from ‘town’ to ‘city’] does not affect the municipality’s corporate existence or
powers.”); 6.011; 6.012; 6.014 (“A municipality that changes to a Type A
general-law municipality retains the prior name by which it was known and
continues to be a body corporate with perpetual succession.”); 42.021(a), (b),
(d); 42.0235(a)(1); 42.026(b)(3); 42.0411(c), (d); 42.105(e); 42.155(c); 42.903(b);
51.016; 51.052(b)(3); 62.001; 62.041(a); 62.091(a); 62.093; 62.161.
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1995). 5 Briggs’s acts—including her violations of law—could be deemed
the city’s acts if she was acting at the time as the city’s agent. Although
she lacks legal authority to act for the city on her own, it is not difficult
to imagine circumstances in which the city might be deemed to have
made her its agent.
For instance, a majority of the city council might authorize a
single member of the council to take various actions on behalf of the city,
assuming such an arrangement does not violate the city’s charter. If a
council member has been authorized by the council to act for the city
regarding a certain topic, then the council member’s actions concerning
that topic could very well be imputed to the city—for purposes of the
Whistleblower Act or otherwise. Had the council designated Briggs as
its liaison to the local media, for example, then Briggs’s actions in this
case might be imputed to the city. Or if city personnel were assigned to
an unpaid council member to work under the member’s supervision, the
law might impute to the city a council member’s actions in his capacity
as the manager of city employees. In such an instance, it might be
argued that the city has delegated its authority to manage its employees
to the individual council member, who then acts on the city’s behalf in
that regard. No such scenario is alleged here.
5 See also Speedy Stop Food Stores, Ltd. v. Reid Rd. Mun. Util. Dist.
No. 2, 282 S.W.3d 652, 656 n.2 (Tex. App.—Houston [14th Dist.] 2009) (“It is
well-established that corporations can act only through human agents and
that, when an officer or corporate representative acts on behalf of a corporate
entity, that act is the act of the corporation itself.” (citing Hammerly Oaks, Inc.
v. Edwards, 958 S.W.2d 387, 391 (Tex.1997))), aff’d, 337 S.W.3d 846 (Tex.
2011); Whitney Nat’l Bank v. Baker, 122 S.W.3d 204, 209 (Tex. App.—Houston
[1st Dist.] 2003, no pet.) (“A corporation or other legal entity can conduct
business only through natural persons.”).
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Or to take another example, if Briggs had acted at the request or
with the consent and involvement of the city manager or another
employee with authority to act for the city, then she might very well be
considered the city’s agent. In other words, Briggs’s authority to act for
the city need not necessarily have been documented in an ordinance or
a contract if the facts show that she acted at the city’s behest or at the
behest of others whose actions the law would impute to the city. A
governmental entity cannot shield its violations of law from the
Whistleblower Act by laundering them through unpaid elected officials
or other non-employees. 6
Thus, the inquiry does not necessarily end with the observation
that Briggs’s position on the city council gave her no authority to act
unilaterally for the city. We must also consider whether she was acting
in concert with or under delegated authority from another city official at
the relevant time. There is no indication of any such arrangement in
this case. It is undisputed that Briggs acted entirely on her own, without
the involvement or knowledge of any other council member or employee.
She never purported in any way to be acting for the city. Indeed, it
would have been clear to the reporter that Briggs was acting adversely
to the city, rather than on its behalf, by seeking to undermine a course
of action that was supported at the time by a majority of the city council. 7
6 We do not purport to answer any of the myriad other questions that
might arise, in particular cases, about the Whistleblower Act’s applicability to
the hypothetical circumstances posited above.
7 We need not decide whether the actions of a council member who lacks
actual authority to act for the city but has apparent authority to act for the city
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Both as a matter of the structure of Denton’s government and as
a matter of agency law, there is no sense at all in which Briggs’s
communications with the newspaper were the actions of the City of
Denton. The reported violations of law were by Briggs alone, not “by the
employing governmental entity.” TEX. GOV’T CODE § 554.002(a). As a
result, any adverse personnel action stemming from the plaintiffs’
report of Briggs’s conduct cannot support a Whistleblower Act claim.
C.
As did the court of appeals, the plaintiffs rely heavily on two
precedents from the courts of appeals, neither of which alters our
understanding of the Whistleblower Act’s text. First, in City of Cockrell
Hill v. Johnson, the plaintiffs sued the city after they were fired for
reporting that a city alderman abused his stepson. 48 S.W.3d 887 (Tex.
App.—Fort Worth 2001, pet. denied). The court held that the alleged
violations of law were not the city’s violations because the alderman
committed them “in his personal capacity.” Id. at 896. The court went
on to suggest the result would be different if the alderman acted in his
“official capacity.” Id. The court cited two prior court of appeals
decisions involving county sheriffs to support its view that violations of
law by an alderman in his official capacity amount to violations of law
“by the employing governmental entity.” Id. at 895; TEX. GOV’T CODE
§ 554.002(a).
Unlike a county sheriff, however, a city alderman or council
member generally has no authority to act unilaterally on behalf of the
could be imputed to the city under the Whistleblower Act. Briggs plainly had
neither.
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city, even when acting in an official capacity. There is no indication that
the court in Johnson was presented with this argument.
The court in Johnson also suggested that the Whistleblower Act
should be construed to apply to violations of law that are “detrimental
to the public good or society in general.” 48 S.W.3d at 896. The court
did not ground that statement in the statute’s text, however. We do not
find this statement or others like it to be useful in understanding the
meaning of the Whistleblower Act. To the contrary, this sort of
aspirational judicial statement about the goals of the Whistleblower Act
(or any other statute) can mistakenly point litigants and courts away
from the real touchstone, which should always be the text chosen by the
Legislature. However justified such statements may seem in a given
case, the very real risk is that in later cases they find themselves
equated with the statutory text itself.
That is precisely what happened in Housing Authority of the City
of El Paso v. Rangel, the second case on which the plaintiffs place great
weight. 131 S.W.3d 542 (Tex. App.—El Paso 2004, pet. granted, judgm’t
vacated w.r.m.). An employee with El Paso’s housing authority alleged
he was terminated for reporting lawbreaking by two members of the
authority’s board, which, like a city council, may only act as a body. Id.
at 544; see TEX. LOC. GOV’T CODE § 392.036. One of the allegations was
that a board member misrepresented his personal income to obtain
public housing benefits. Rangel, 131 S.W.3d at 548.
Quoting Johnson’s broad statement of statutory purpose, the
court held that the Whistleblower Act applies to “legal violations that
are detrimental to the public good or society in general.” Rangel, 131
13
S.W.3d at 548. Under this standard, the court concluded that an
individual board member’s public-benefits fraud for personal gain was,
for purposes of the Whistleblower Act, a violation of law “by the
employing governmental entity.” Id. The court reasoned that the
alleged wrongdoing was “detrimental to society in general and would be
the type of conduct the public would be concerned about if committed by
an appointed commissioner.” Id. The court also found it relevant that
the alleged misconduct “constitutes misconduct of office” and that
“[s]ociety as a whole is detrimentally affected by such a
misrepresentation.” Id.
With Johnson’s aspirational statement as its starting point,
Rangel thus added several other such statements, none of which enjoy
firm grounding in the legislative text. While statements like these may
accurately capture much of the spirit motivating the enactment of the
Whistleblower Act, they are better suited for legislative debate than for
a judicial opinion. They rarely aid resolution of disputes about the
meaning of the text itself, which frequently—as in this case—will
depend on subtleties in the Legislature’s choice of words that are not
captured in sweeping generalizations about the statute’s goals. The
unfortunate tendency of these lofty judicial statements is to distract
from the text’s meaning by suggesting that application of the statute
turns on judicially announced considerations untethered from the text.
Extra-textual judicial commentary about the Whistleblower Act’s
laudable motivations should not be relied upon by courts or litigants
seeking to understand the meaning of the statutory text. We disapprove
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of Johnson, Rangel, or any other cases to the extent they suggest
otherwise.
III.
For the foregoing reasons, the plaintiffs did not allege a
cognizable claim against the City of Denton under the Whistleblower
Act. The lower courts erred in concluding otherwise. The judgment of
the court of appeals is reversed, and judgment is rendered for the
defendant.
James D. Blacklock
Justice
OPINION DELIVERED: May 3, 2024
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