Texas Parks & Wildlife Department v. Milburn Dearing, Kenneth Head, and Mike Warren, Individually and on Behalf of All Others Similarly Situated ( 2007 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-05-00499-CV
Texas Parks & Wildlife Department, Appellant
v.
Milburn Dearing, Kenneth Head, and Mike Warren, Individually
and on Behalf of All Others Similarly Situated, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
NO. GN102867, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING
OPINION
This is an interlocutory appeal from the re-certification of a class action following this
Court’s reversal and remand of the original certification order. See Tex. Civ. Prac. & Rem. Code
Ann. § 51.014(a)(3) (West 1997 & Supp. 2006). Appellees Milburn Dearing, Kenneth Head, and
Mike Warren, individually and on behalf of others similarly situated (collectively, Dearing), sued
their employer, the Texas Parks & Wildlife Department, alleging a disparate-impact theory of
age discrimination under chapter 21 of the Texas Labor Code in regard to the Department’s
reclassification of their game-warden positions. See Texas Parks & Wildlife Dep’t v. Dearing,
150 S.W.3d 452, 466 (Tex. App.—Austin 2004, pet. denied) (Dearing I), cert. denied, 544 U.S.
960 (2005); see also Tex. Lab. Code Ann. § 21.051 (West 2006). The plaintiffs sought certification
of a class of approximately 130 fellow game wardens whom they claim were similarly situated.
Eighty-eight of the putative class members have since intervened as plaintiffs. The district court
denied a plea to the jurisdiction and summary-judgment motions asserted by the Department and
certified the class.
In Dearing I, this Court affirmed the district court’s ruling on the Department’s plea
to the jurisdiction but reversed its order certifying the class. The Court concluded that the district
court lacked subject-matter jurisdiction to certify the class, and that Dearing’s claim was not viable,
because the labor code did not permit an age-discrimination claim based on a disparate-impact theory
of liability. The Court construed section 21.122(b) of the labor code to mean that age-discrimination
claims based on a disparate-impact theory of liability were available under the labor code to the same
extent that such claims were available under the Age Discrimination in Employment Act of 1967
(ADEA). Dearing I, 150 S.W.3d at 465; see Tex. Lab. Code Ann. § 21.122(b) (West 2006); see also
Age Discrimination in Employment Act, 29 U.S.C.A. §§ 621-634 (West 1998 & Supp. 2006). The
Court thus looked to federal jurisprudence addressing that question and found persuasive the analysis
by the Fifth Circuit in Smith v. City of Jackson, 351 F.3d 183, 195 (5th Cir. 2003), holding that the
ADEA did not permit such claims. Dearing I, 150 S.W.3d at 465. Dearing filed a petition for
review with the Texas Supreme Court, which was denied. He then sought writ of certiorari from the
United States Supreme Court.
While Dearing’s certiorari petition was pending, the Supreme Court affirmed the Fifth
Circuit’s judgment in Smith, but disagreed with its reasoning that claims based on a disparate-impact
theory of liability are categorically unavailable under the ADEA. See 544 U.S. 228, 232-43 (2005)
(plurality opinion); id. at 243 (Scalia, J., concurring) (“I agree with all of the Court’s reasoning, but
would find it a basis, not for independent determination of the disparate-impact question, but for
2
deferral to the reasonable views of the Equal Employment Opportunity Commission” that disparate-
impact claims are permitted under the ADEA). The Supreme Court affirmed the Fifth Circuit’s
judgment on the bases that (1) the claimants had failed to identify sufficiently an employment
practice within the city’s pay plan that had an adverse impact on older workers; and (2) the city’s
plan was based on reasonable factors other than age. Id. at 242. Subsequently, the Supreme Court
denied Dearing’s certiorari petition. 544 U.S. 960 (2005).
After the Supreme Court denied certiorari, this case was remanded to the district
court pursuant to this Court’s mandate “for further proceedings consistent with [our] opinion.” On
remand—without amending his pleadings or introducing additional evidence—Dearing filed a
motion to reinstate the original class certification order. The district court granted Dearing’s motion,
issuing an order incorporating its original certification order without change.
The Department now appeals the district court’s order. For the reasons explained
below, we reverse the order and remand for further proceedings consistent with this opinion.
BACKGROUND
The underlying dispute
The factual background of these proceedings is detailed in Dearing I. 150 S.W.3d
452. The putative class members were at relevant times employed as game wardens by the
Department. Originally, their job classifications ranged from “Game Warden I” through “Game
Warden IV.” Promotions within these classification levels were based on length of service and were
made every four years. In 1994, the Department reclassified the game wardens who had accumulated
over 16 years of service from “Game Wardens IV” to “Field Sergeant Game Wardens” and assigned
3
them additional duties. The following year, the legislature passed a pay-parity rider that prohibited
the Department from compensating its state-commissioned peace officers “at a rate less than the
rate paid by any other state agency to a state-commissioned peace officer performing similar duties.”
See Act of May 25, 1995, 74th Leg., R.S., ch. 1063, 1995 Tex. Gen. Laws 5242, 5857 (effective
Sept. 1, 1995). The Department’s executive director appointed a committee to study the pay-parity
issue. The committee determined that Field Sergeant Game Wardens performed duties similar to
those of sergeants employed by the Department of Public Safety and recommended increasing these
game wardens’ compensation to level C-7, the pay level of the DPS sergeants identified as their
counterparts. In 1996, Field Sergeant Game Wardens received that raise.
The legislature subsequently added a new top tier to the game-warden job
classification, “Game Warden V,” adopted Salary Schedule C designating compensation for the
position at the C-6 level, and specified that adoption of the salary schedule could not result in
decreased pay for any classified employee. See Act of May 29, 1997, 75th Leg., R.S., ch. 1452, 1997
Tex. Gen. Laws 5535, 6341, 6345 (effective Sept. 1, 1997) (the pay rider). Legislative descriptions
of the duties of Field Sergeant Game Wardens matched those of the new Game Wardens V and,
when the bill took effect, the Department reclassified the Field Sergeant Game Wardens to Game
Wardens V. Because the pay rider prohibited reduction of their salaries through the reclassification,
the former Field Sergeant Game Wardens reclassified as Game Wardens V were “grandfathered” and
continued to be paid at the C-7 rather than C-6 level.
In 1999, the legislature increased salaries for all Texas peace-officer positions. See
Act of Apr. 23, 1999, 76th Leg., R.S., ch. 1589, 1999 Tex. Gen. Laws 5446, 6262-6263 (effective
4
Sept. 1, 1999). The Department reclassified the grandfathered Game Wardens V (the former Field
Sergeant Game Wardens) to a new C-6 pay level, which had the effect of giving them a pay raise
from $42,084 (the former C-7 level) to $44,600 (the new C-6 level). However, the new C-6 level
pay was less than the new C-7 level pay of $50,600. Thus, it is alleged, the Former Field Sergeant
Game Wardens received a reduction in pay and other benefits relative to other positions that
remained at the C-7 level. It is further alleged that “[a]ll of the more than 130 Field Sergeant Game
Wardens, save one, were over the age of 40 at the time of the reclassification.”
Proceedings below
Dearing sued, alleging that because none of the other sergeant positions at the
Department had been reclassified, the Department’s reclassification of the former Field Sergeant
Game Wardens from the C-7 to the C-6 level constituted unlawful age discrimination. See Tex. Lab.
Code Ann. §§ 21.051 (prohibiting employers from discriminating against employees on basis of race,
color, disability, religion, sex, national origin, or age), .101 (West 2006) (defining classification of
persons protected against age discrimination as those age forty or older). Dearing also alleged breach
of contract, sought a declaratory judgment that the Department violated the 1997 and 1999
appropriations acts, and sought mandamus to remedy the Department’s reclassification of the former
Field Sergeant Game Wardens from C-7 to C-6. Dearing requested certification of a class defined
as “all Field Sergeant Game Wardens employed by the Texas Parks and Wildlife Department on
September 1, 1999, who were reclassified from pay group C-7 to pay group C-6 and from Field
Sergeant Game Warden to Game Warden V.”
5
The Department filed a plea to the jurisdiction, asserting that the age-discrimination
claim was barred because (1) Dearing’s individual complaint had not been timely filed; (2) even
assuming that Dearing’s claim had been timely filed, none of the other plaintiffs had individually
exhausted their administrative remedies before filing suit; and (3) the reclassification had been
legislatively mandated, rationally related to a legitimate state interest, and not subject to an attack
based on age discrimination.1 The Department also asserted that the breach-of-contract claim
was barred by sovereign immunity, that mandamus would not lie because an adequate remedy at law
was available, and that the declaratory-judgment claim did not independently create a basis for
subject-matter jurisdiction. The Department also sought summary judgment on the grounds that:
(1) Dearing’s complaint had not been timely filed; (2) Dearing’s suit was barred by limitations; (3)
the other class members had failed to exhaust administrative remedies; and (4) the reclassification
had been legislatively mandated. Dearing subsequently filed a cross-motion for summary judgment
on his breach-of-contract, mandamus, and declaratory-judgment claims.
After a hearing, the district court granted the Department’s plea to the jurisdiction as
to Dearing’s breach-of-contract, declaratory-judgment, and mandamus claims, but denied it as to his
age-discrimination claims. It also denied both parties’ summary-judgment motions. The court
granted Dearing’s motion for class-certification “under Tex. R. Civ. P. 42(b)(4).” Its order
incorporated a trial plan identifying “the issues remaining to be tried in this case” after its rulings on
the Department’s plea to the jurisdiction and the parties’ summary judgment motions:
1
See Kimel v. Florida Bd. of Regents, 528 U.S. 62, 83-84 (2000).
6
a. Plaintiffs’ disparate impact claims for age discrimination in violation of Tex.
Labor Code Ann. § 21.051,
b. Defendants’ affirmative defense that their actions were rationally related to
a legitimate state interest,
c. Defendants’ affirmative defense that they were required by law to take the
actions that they did in 1999,
d. Defendants’ affirmative defense that they would have taken the same actions
that they did with regard to Plaintiffs . . . irrespective of the[ir] ages.
The plan did not elaborate on the elements of Dearing’s disparate-impact claim or why it would best
be tried as a class action other than to state: “The reclassification applied to all members of the class
at the same time and affected all of them in the same manner. Thus, all of the proof and evidence
relevant to this issue will be the same for all members of the class, so there is no need for separate
procedures within the trial for individual plaintiffs on this issue.” Nor did the plan explain how this
claim would be tried other than to observe that, “Plaintiffs must first establish that the
reclassification made the basis of this suit has a disproportionate effect on persons who were 40 years
of age or older.” The plan went on to provide, “If a directed verdict is not granted after the
Plaintiffs’ case in chief, then the affirmative defenses set out above will need to be tried,” again
observing that, “The reclassification applied to all members of the class at the same time and affected
all of them in the same manner. Thus, all of the proof and evidence relevant to this issue will be the
same for all members of the class, so there is no need for separate procedures within the trial for
individual plaintiffs on this issue.” The plan then stated that, “Damages for each individual member
of the class will be a manner of mechanical calculation” and proceeded to detail different
methodologies to determine damages for class members who had retired before the date of the
7
judgment and those who had not. The order set a trial date of June 16, 2003 and various discovery
deadlines—all in the first half of 2003.
Dearing I
The Department appealed from the district court’s order denying its plea to the
jurisdiction and certifying the class.2 In Dearing I, this Court affirmed the district court’s denial of
the Department’s plea to the jurisdiction, concluding that Milburn Dearing had filed a timely
complaint with the Texas Commission on Human Rights. Dearing I, 150 S.W.3d at 458-59.3
Although the Department had presented undisputed jurisdictional evidence that no putative class
member other than Dearing had individually filed a timely complaint, this Court permitted the other
putative class members to “piggyback” onto Dearing’s timely filed claim by “adopt[ing] the single-
filing rule fashioned by federal courts.” Id. at 459-60.
But the Court reversed the grant of class certification. It concluded that the sole claim
for which the class was certified—a disparate-impact age-discrimination claim—was not available
under the labor code, an issue that it regarded as going to both the viability of Dearing’s claim and
the subject-matter jurisdiction of the district court, as it controlled whether Dearing’s claim came
within the labor code’s waiver of sovereign immunity for age-discrimination claims. Id. at 465-66
2
Dearing filed a notice of appeal of the district court’s ruling granting the Department’s plea
to the jurisdiction regarding his declaratory-judgment and mandamus claims, but not his breach-of-
contract claim. He later withdrew this notice.
3
We also held that the rule of Kimel did not extend to suits under state anti-discrimination
laws and that “the Department has not pointed us to any legislative or statutory references from
which we can conclude that its reclassification actions were required by law.” Dearing I, 150 S.W.3d
at 460-61.
8
& n.8; see State Farm Mut. Auto. Ins. Co. v. Lopez, 156 S.W.3d 550, 557 (Tex. 2004). This Court
construed section 21.122(b) of the code to “state[] that disparate-impact claims are available for age
discrimination in this state only if they are available under the ADEA.” Dearing I, 150 S.W.3d at
465. Accordingly, it looked to federal jurisprudence on that issue and found persuasive the analysis
of the Fifth Circuit in Smith that disparate-impact age-discrimination claims were unavailable under
the ADEA. Because the Court “reverse[d] the order certifying the class on jurisdictional grounds,”
it did not address issues raised by the Department challenging whether the plaintiffs had met the
other requirements for class certification under rule 42, such as numerosity, commonality,
predominance, and superiority. Id. at 466 n.8.
Dearing then filed a petition for review in the Texas Supreme Court, which was
denied, and then filed a petition for writ of certiorari in the United States Supreme Court. While
Dearing’s certiorari petition was pending, the United States Supreme Court issued its Smith decision.
Because Smith provides the backdrop for many of the issues the parties present in this proceeding,
it is helpful to review it in some detail.
The ADEA and Smith
Smith construed the ADEA’s general prohibition against employment discrimination,
which provides:
It shall be unlawful for an employer—
(1) to fail or refuse to hire or to discharge any individual or otherwise
discriminate against any individual with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual’s age;
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(2) to limit, segregate, or classify his employees in any way which would
deprive or tend to deprive any individual of employment opportunities or otherwise
adversely affect his status as an employee because of such individual’s age . . . .
29 U.S.C.A. § 623(a) (West 1998). Section 623(a) was modeled after section 703(a) of Title VII
of the Civil Rights Act of 1964 and is substantively identical “[e]xcept for substitution of the word
‘age’ for the words ‘race, color, religion, sex or national origin.’” Smith, 544 U.S. at 233; see
42 U.S.C.A. § 2000e-2 (West 2003). The United States Supreme Court has recognized two basic
theories of liability under section 703(a) of title VII: disparate treatment, which requires proof that
an employer’s actions were actually motivated by the employee’s protected classification, and
disparate impact, which does not require proof of motive. Disparate-impact claims of employment
discrimination challenge “employment practices that are facially neutral in their treatment of
different groups but that in fact fall more harshly on one group than another . . . .” Smith, 544 U.S.
at 239 (quoting International Bhd. of Teamsters v. United States, 431 U.S. 324, 335-36 n.15 (1977)).
The Supreme Court first recognized the disparate-impact theory of liability under title
VII in Griggs v. Duke Power Co., 401 U.S. 424 (1971), which involved a challenge to facially race-
neutral educational requirements and intelligence tests. The Court assumed that the employer had
not adopted the requirements with intent to discriminate, but nonetheless held that good faith “does
not redeem employment procedures . . . that operate as ‘built-in headwinds’ for minority groups and
are unrelated to measuring job capability.” Id. at 432. It relied principally on what it perceived to
be Congress’s intent in enacting title VII: “to achieve equality of employment opportunities and
remove barriers that have operated in the past to favor an identifiable group of white employees over
other employees” and prohibit “practices, procedures, or tests neutral on their face, and even neutral
10
in terms of intent . . . if they operate to ‘freeze’ the status quo of prior discriminatory employment
practices.” Id. at 429-30. The Court explained that, “What is required by Congress is the removal
of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously
to discriminate on the basis of racial or other impermissible classification.” Id. at 431. “The
touchstone is business necessity. If an employment practice which operates to exclude Negroes
cannot be shown to be related to job performance, the practice is prohibited.” Id.
Although Griggs relied primarily on the policy goals of title VII, the Supreme Court
subsequently noted that “our holding represented the better reading of the statutory text as well.”
Smith, 544 U.S. at 235 (citing Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 991 (1988)).
Specifically, the Court emphasized that section 703(a)(2) prohibits not only actions that “limit,
segregate, or classify” persons, but also any actions that “deprive any individual of employment
opportunities or otherwise adversely affect his status as an employee, because of such individual’s
race,” color, religion, sex, or national origin.” Id. (citing Watson, 487 U.S. at 991). This statutory
text, the supreme court has concluded, “focuses on the effects of the action on the employee rather
than the motivation for the actions of the employer.” Id. at 236.
Prior to Smith, disparate-treatment claims were clearly actionable under the ADEA,
see Hazen Paper Co. v. Biggins, 507 U.S. 604, 609-10 (1993), but it was uncertain whether
disparate-impact claims were similarly actionable. In the aftermath of Griggs, numerous federal
appellate courts had assumed that given the parallel language in the two statutes, the disparate-
11
impact theory under title VII would also be available under the ADEA.4 These decisions had
prompted judicial and scholarly debate. See Markham v. Geller, 451 U.S. 945 (1981) (Rehnquist,
J., dissenting from denial of certiorari) (criticizing court of appeals decision that had applied the title
VII disparate-impact analysis to the ADEA); Metz v. Transit Mix, Inc., 828 F.2d 1202, 1216-20 (7th
Cir. 1987) (Easterbrook, J., dissenting); see generally Douglas C. Herbert & Lania Schweiker
Shelton, A Pragmatic Argument Against Applying the Disparate Impact Doctrine in Age
Discrimination Cases, 37 S. Tex. L. Rev. 625, 627 nn.6-7 (collecting cases and articles). In its 1993
Hazen Paper decision—an ADEA disparate-treatment age-discrimination case—the Supreme Court
emphasized that “we have never decided whether a disparate impact theory of liability is available
under the ADEA, and we need not do so here.” 507 U.S. at 610 (citation omitted). Three
justices—Rehnquist, Kennedy, and Thomas—concurred to point out that “nothing in the Court’s
opinion should be read as incorporating in the ADEA context the so-called ‘disparate impact’ theory
of Title VII” and further observed that “there are substantial arguments that it is improper to carry
over disparate impact analysis from Title VII to the ADEA.” Id. at 617-18 (Kennedy, J., concurring).
Hazen Paper influenced many federal courts to begin holding that disparate-impact claims were not
available under the ADEA. See Smith, 544 U.S. at 237; see also Dearing I, 150 S.W.3d at 462
4
See Maresco v. Evans Chemetics, 964 F.2d 106, 115 (2d Cir. 1992); MacPherson
v. University of Montevallo, 922 F.2d 766, 771 (11th Cir. 1991); Wooden v. Board of Ed. of Jefferson
County, 931 F.2d 376, 379 (6th Cir.1991); Arnold v. United States Postal Service, 863 F.2d 994, 998
(D.C. Cir. 1988) (assuming disparate-impact theory); Blum v. Witco Chemical Corp., 829 F.2d 367,
372 (3d Cir. 1987); Holt v. Gamewell Corp., 797 F.2d 36, 37 (1st Cir. 1986); Palmer v. United
States, 794 F.2d 534, 536 (9th Cir. 1986); Monroe v. United Airlines, 736 F.2d 394, 404 n.3 (7th Cir.
1984); Dace v. ACF Industries, 722 F.2d 374, 378 (8th Cir. 1983), modified, 728 F.2d 976 (1984)
(per curiam).
12
(“Hazen cast some doubt on the future of disparate-impact claims.”). In Smith, the Fifth Circuit
followed that trend, invoking many of the common arguments advanced by the judicial and scholarly
opponents of extending title VII’s disparate-impact theory to the ADEA. Smith, 351 F.3d at 463-65;
see generally Herbert & Shelton, supra, at 636-50. We analyzed these arguments in Dearing I. See
150 S.W.3d at 463-65.
Smith involved facts similar to those in this case: a group of police and public-safety
officers who were over the age of forty and employed by the City of Jackson, Mississippi sued the
city under the ADEA, complaining that across-the-board salary increases—which were designed to
raise the starting salaries of police officers up to the regional average—resulted in salary increases
that were proportionately greater for officers with less than five years’ service, most of whom were
under the age of forty. Smith, 544 U.S. at 231. Although all police officers received raises, the
claimants alleged that the city deliberately discriminated against them because of their age (the
disparate treatment claim), and the pay plan adversely affected them because of their age (the
disparate-impact claim). Id.
In holding that the officers’ disparate-impact claims were not available under the
ADEA, the Fifth Circuit acknowledged that the ADEA closely paralleled title VII, but with an
important difference: the ADEA, unlike title VII, explicitly provided that an employer may “take
any action otherwise prohibited . . . where the differentiation is based on reasonable factors other
than age.” Smith, 351 F.3d at 193-94; see 29 U.S.C.A. § 623(f)(1). The court reasoned that
this “RFOA” provision would render the ADEA’s general prohibition against age discrimination a
nullity to the extent that it prohibited disparate-impact discrimination and cause the general
13
prohibition to “become nothing more than a bromide to the effect that ‘only age discrimination is
age discrimination.’” Smith, 351 F.3d at 190 (quoting Mullin v. Raytheon Co., 164 F.3d 696, 702
(1st Cir. 1999)). Thus, the Fifth Circuit concluded that the ADEA’s general age-discrimination
prohibition must permit only the disparate-treatment liability theory. Id. at 190.
The Fifth Circuit also pointed to broader differences between the congressional policy
objectives underlying the ADEA versus those of title VII. Id. at 195. During its deliberations
preceding the enactment of title VII, Congress had considered and rejected the inclusion of older
workers among the classes protected from employment discrimination, but had authorized the
Secretary of Labor to prepare a study “of the factors which might tend to result in discrimination in
employment because of age and the consequences of such discrimination on the economy and
individuals affected.” Smith, 544 U.S. at 232. Thereafter,
The ADEA was enacted after the Secretary of Labor issued a report on age
discrimination recommending that Congress ban arbitrary discrimination, such as
disparate treatment based on stereotypical perceptions of the elderly, but that factors
affecting older workers, such as policies with disparate impact, be addressed in
alternative ways. Smith, [544 U.S.] at 195; Mullin, 164 F.3d at 702-03; see U.S.
Dep’t of Labor, The Older American Worker: Age Discrimination in Employment
2, 6, 21-25 (1965) (Congress should prohibit “arbitrary discrimination” based on age
and age stereotypes, but factors that “affect older workers more strongly, as a group,
than they do younger workers” should be addressed through programmatic measures
to improve opportunities for older workers.). Title VII, on the other hand, had a
broad remedial purpose: To “achieve equality of employment opportunities and
remove barriers that have operated in the past to favor an identifiable group of white
employees over other employees.” Griggs, 401 U.S. at 429-30, 91 S. Ct. 849, quoted
in Smith, at 194-195; Adams [v. Florida Power Co.], 255 F.3d [1322,]1325-26 [11th
Cir. 2001)] (“history of the ADEA differs from the legislative history of Title VII,
which the Supreme Court in Griggs relied on to find a cause of action for disparate
impact”); Ellis [v. United Airlines, Inc.], 73 F.3d [999,] 1008 [10th Cir. 1996)]
(“legislative history of the ADEA suggests it was not enacted to address disparate
impact claims”). “The cornerstone of Griggs’s holding that disparate impact is
14
cognizable under Title VII is thus the link between the history of educational
discrimination on the basis of race and the use of that discrimination to continue to
disadvantage individuals on the basis of their race.” Smith, at 195 (citing Griggs,
401 U.S. at 432, 91 S. Ct. 849). “[A]bsent from the scope of the ADEA are the
historical and remedial concerns that, in the Title VII context, led to the recognition
of disparate impact claims directed at overcoming the consequences of past societal
discrimination.”
Dearing I, 150 S.W.3d at 463-64.
Also, as we observed in Dearing I, federal courts had attributed some significance
to differences between subsequent amendments to the ADEA and title VII. See id. at 464-65.
Following Griggs, an elaborate body of case law developed under title VII concerning the standards
for proving disparate-impact liability and any proffered “business necessity.” In Wards Cove
Packing Co. v. Antonio, 490 U.S. 642 (1989), the Supreme Court held that to establish a prima facie
case of disparate-impact race discrimination under title VII, a plaintiff was required to (1) isolate and
identify the specific employment practice challenged; (2) demonstrate any observed statistical
disparity that the practice has on a protected class; and (3) demonstrate a causal link between the
identified practice and the demonstrated disparity. Id. at 655-56. Assuming that a plaintiff could
successfully assert a prima facie case under this standard, Wards Cove held that the burden of
production shifted to the employer to produce evidence of a business necessity for the use of the
practice in question. Id. at 658-59. That inquiry entailed consideration of whether the challenged
practice served, in a “significant” (but not necessarily “essential” or “indispensable”) way, the
employer’s “legitimate” employment goals and whether there were available alternative practices
to achieve the same business ends. Id. Wards Cove further held that while the employer had the
burden of production in this phase, the ultimate burden of persuasion remained with the plaintiff.
15
Id. at 659. The Supreme Court explained that “the ultimate burden of proving that discrimination
against a protected group has been caused by a specific employment practice remains with the
plaintiff at all times . . . for it is he who must prove that it was because of such individual’s race,
color, etc., that he was denied a desired employment opportunity.” Id. at 659-60 (citations omitted).
Wards Cove was controversial, see Smith, 544 U.S. at 240 (characterizing Wards Cove as “narrowly
constru[ing] the employer’s exposure to liability on a disparate-impact theory”), and Congress
responded to it and other controversial Supreme Court employment-discrimination decisions by
enacting the Civil Rights Act of 1991. Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat.
1071. Among other changes, Congress added a new subsection (k) to title VII’s section 703 that
codified the disparate-impact theory of liability for the first time, clarified the requirements for
establishing a prima facie case, placed on the defendant the burden of both production and
persuasion regarding business necessity, and made plaintiffs’ proof of alternative employment
practices easier. Civil Rights Act of 1991, Pub. L. No. 102-166, sec. 105, § 703, 105 Stat. 1071,
1074-75 (current version at 42 U.S.C.A. § 2000e-2(k)). However, while amending other portions
of the ADEA, Congress did not make amendments to section 623(a) that corresponded to its
amendments to title VII, section 723(a). Congress’s insertion of a specific provision into title VII
governing disparate-impact claims while omitting it from the ADEA—even while the ADEA was
undergoing amendments at the same time, in the same legislation—was viewed by some federal
courts as consistent with Congress’s broader intent to preclude such a claim under the ADEA. See
Dearing, 150 S.W.3d at 464.
16
The Supreme Court granted certiorari in Smith to address “whether the ‘disparate-
impact’ theory of recovery announced in Griggs . . . , for cases brought under Title VII of the Civil
Rights Act of 1964, is cognizable under the ADEA.” Smith, 544 U.S. at 230. The Court stated
that the textual parallels between section 703(a)(2) of title VII and section 623(a)(2) of the ADEA
made Griggs a “precedent of compelling importance” and “strongly suggests that a disparate-impact
theory should be cognizable under the ADEA.” Id. at 233-37. In fact, the Court observed, federal
appellate courts had “uniformly” interpreted the ADEA during the decades following Griggs as
authorizing recovery on a disparate-impact theory. Id. at 236-37 & n.8 (collecting cases). Lower
courts had ceased to do so, the Supreme Court suggested, based on a misunderstanding of its Hazen
Paper decision, and that “there is nothing in our opinion in Hazen Paper that precludes an
interpretation of the ADEA that parallels our holding in Griggs.” See id. at 237-38 (citing Hazen
Paper, 507 U.S. at 612).
However, the Supreme Court also recognized the important textual differences
between the ADEA and title VII. In particular, the Court observed that the ADEA’s RFOA
provision “significantly narrows its coverage” by permitting “otherwise prohibited” action “where
the differentiation is based on reasonable factors other than age.” Smith, 544 U.S. at 233 (quoting
29 U.S.C.A. § 623(f)(1) (West 1999)). The RFOA provision, as the Smith Court observed, reflected
legislative origins of the ADEA that differed from those of title VII.
Congress’ decision to limit the coverage of the ADEA by including the RFOA
provision is consistent with the fact that age, unlike race or other classifications
protected by Title VII, not uncommonly has relevance to an individual’s capacity to
engage in certain types of employment. To be sure, Congress recognized that this is
not always the case, and that society may perceive those differences to be larger or
17
more consequential than they are in fact. However, as Secretary [of Labor] Wirtz
noted in his report, “certain circumstances . . . unquestionably affect older workers
more strongly as a group than they do younger workers.” Wirtz Report 28. Thus, it
is not surprising that certain employment criteria that are routinely used may be
reasonable despite their adverse impact on older workers as a group. Moreover,
institutional discrimination on the basis of age has not occurred at the same levels as
discrimination against those protected by Title VII. While the ADEA reflects
Congress’ intent to give older workers employment opportunities whenever possible,
the RFOA reflects this historical difference.
Id. at 240-41. But the Supreme Court drew different inferences from these distinctions regarding
Congress’s intent than had the courts of appeals. In the Supreme Court’s view, the RFOA
confirmed, rather than negated, Congress’s intent to permit disparate-impact claims under the
ADEA. Id. at 238. The Court reasoned that if the ADEA had permitted only disparate-treatment
claims and an employer in fact had acted based on a factor other than age, the RFOA provision
would have been redundant and unnecessary because the employer’s action would not have been
“otherwise prohibited” in the first place. Id. It suggested that “[i]t is . . . in cases involving
disparate-impact claims that the RFOA provision plays its principal role by precluding liability if the
adverse impact was attributable to a nonage factor that was ‘reasonable.’ Rather than support an
argument that disparate impact is unavailable under the ADEA, the RFOA provision actually
supports the contrary conclusion.” Id. at 239.
The Supreme Court held that “[t]he text of the statute, as interpreted in Griggs, the
RFOA provision, and the EEOC regulations [holding that a disparate-impact claim was available
under the ADEA] all support petitioner’s view,” and that it “was error for the Court of Appeals to
hold that the disparate-impact theory of liability is categorically unavailable under the ADEA.” Id.
at 240. Nonetheless, the Court emphasized that “[t]wo textual differences between the ADEA and
18
Title VII make it clear that even though both statutes authorize recovery on a disparate-impact
theory, the scope of disparate-impact liability under ADEA is narrower than under Title VII.” Id.
The first was the RFOA provision. Id. The second was Congress’s amendments to title VII—but
not to the ADEA—in the Civil Rights Act of 1991. Id. Because of the latter distinction, the Smith
Court reasoned, “Wards Cove’s pre-1991 interpretation of Title VII’s identical language remains
applicable under the ADEA.” Id.
The Supreme Court concluded that the plaintiffs had failed to meet Wards Cove’s
requirements for establishing a prima facie case of disparate-impact age discrimination:
[P]etitioners have done little more than point out that the pay plan at issue is
relatively less generous to older workers than to younger workers. They have not
identified any specific test, requirement, or practice within the pay plan that has an
adverse impact on older workers. As we held in Wards Cove, it is not enough to
simply allege that there is a disparate impact on workers, or point to a generalized
policy that leads to such an impact. Rather, the employee is “‘responsible for
isolating and identifying the specific employment practices that are allegedly
responsible for any observed statistical disparities.’” 490 U.S. at 656 (emphasis
added) (quoting Watson, 487 U.S. at 994). Petitioners have failed to do so. Their
failure to identify the specific practice being challenged is the sort of omission that
could “result in employers being potentially liable for ‘the myriad of innocent causes
that may lead to statistical imbalances . . . .’” 490 U.S. at 657.
Id. at 241. The Court then stated, “not only did petitioners thus err by failing to identify the relevant
practice, but it is also clear from the record that the City’s plan was based on reasonable factors other
than age.” Id. The city had perceived a need to raise the salaries of junior officers to make them
competitive with comparable positions in the market. Id. at 242. Older officers, who tended to
occupy more senior positions, on average received smaller increases when measured as a percentage
of their salary. Id. The Court concluded that the disparate impact was attributable to the city’s
19
decision to give raises based on seniority and position, and the city’s reliance on these factors was
“unquestionably reasonable,” given its goal of raising employees’ salaries to make them comparable
with those in surrounding communities. Id. The Court held that the city’s decision to grant a larger
raise to lower-echelon employees to establish salaries that were equivalent to those of police forces
in surrounding communities was based on a “reasonable factor other than age” and was responsive
to the city’s legitimate goal of retaining police officers. Id. On this basis, the Supreme Court
affirmed the judgment of the Fifth Circuit.
The Supreme Court subsequently denied Dearing’s petition for certiorari. Thereafter,
our mandate to the district court in Dearing I issued.
Proceedings after remand
On remand, Dearing filed a motion to reinstate the district court’s original class-
certification order, relying on the same underlying petition and evidence, without modification or
amendment, on which the court had originally certified the class. The district court granted the
motion, stating simply that its prior certification order, which was attached, “is hereby reinstated.”
The court did not prepare findings of fact and conclusions of law, nor did the Department request
it to do so. The Department appeals this order.
DISCUSSION
In five issues, the Department contends that the district court abused its discretion in
reinstating its prior order granting class certification. It argues that: (1) the district court’s re-
certification of the class based on the same pleadings, evidence, and trial plan conflicted with this
20
Court’s mandate in Dearing I; (2) if we revisit Dearing I in light of the Supreme Court’s intervening
Smith decision, we should hold that the labor code permits disparate-impact age-discrimination
claims subject to the same standards of proof identified in Smith; (3) because the district court’s trial
plan did not address each element required by Smith and the ADEA, among other defects, the district
court abused its discretion in certifying the class; and (4) because Dearing has not, and cannot, plead
a proper disparate-impact claim under these standards, not only was certification an abuse of
discretion, but we should proceed to hold that Dearing’s claim is barred by sovereign immunity and
dismiss it. In its fifth issue, the Department urges that if the Court revisits Dearing I to address the
effect of Smith, it should also revisit Dearing I’s holdings regarding exhaustion-of-remedies
requirements and hold that Dearing and the putative class members failed to exhaust administrative
remedies.
Class-certification requirements and standard of review
On remand, the decision by the district court to re-certify the class was governed
by rule of civil procedure 42, as amended in October 2003. Tex. R. Civ. P. 42; see BMG Direct
Mktg. v. Peake, 178 S.W.3d 763, 777 n.10 (Tex. 2005).5 Rule 42(a) states the general class-
certification prerequisites of (1) numerosity—“the class is so numerous that joinder of all members
is impracticable”; (2) commonality—“there are questions of law or fact common to the class”;
(3) typicality—“the claims and defenses of the representative parties are typical of the claims or
defenses of the class”; and; (4) adequacy of representation—“the representative parties will fairly
5
But see Tex. R. Civ. P. 42(i), (j).
21
and adequately protect the interests of the class.” Tex. R. Civ. P. 42(a); Citizens Ins. Co. of Am.
v. Daccach, 217 S.W.3d 430, 438 (Tex. 2007) (citing Southwest Refining Co. v. Bernal, 22 S.W.3d
425, 435 (Tex. 2000)). Additionally, a class action must satisfy at least one of the requirements in
rule 42(b). The district court’s re-certification order (which, in turn, merely incorporates its original,
February 2003 certification order without modification) purports to be based on “Texas Rule of Civil
Procedure 42(b)(4).” Rule “42(b)(4)” was eliminated in the subsequent amendments to rule 42 in
October 2003, but its substance is reflected in current rule 42(b)(3), which requires that “the
questions of law or fact common to the members of the class predominate over any questions
affecting only individual members,” and that “a class action is superior to other available methods
for the fair and efficient adjudication of the controversy.” Tex. R. Civ. P. 42(b)(3). Rule 42(b)(3)
contains a non-exhaustive list of factors to aid courts in determining whether rule 42(b)(3)
certification is appropriate: (A) the interest of class members in individually controlling the
prosecution of separate actions; (B) the extent and nature of any litigation concerning the controversy
already commenced by class members; (C) the desirability or undesirability of concentrating the
litigation or the claims in the particular forum; and (D) the difficulties likely to be encountered in
the management of the class action. Id.
The Texas Supreme Court has rejected a “certify now and worry later approach” and
has instead required courts to “perform a rigorous analysis before ruling on class certification to
determine whether all prerequisites to certification have been met.” Bernal, 22 S.W.3d at 435. A
proper analysis requires courts to “go beyond the pleadings” and identify the substantive issues that
will control the litigation in order to discern which issues will predominate. Peake, 178 S.W.3d at
22
777. Trial courts must resolve disputes affecting the underlying substantive law prior to certification
“as courts can hardly evaluate the claims, defenses or applicable law without knowing what the law
is.” Compaq Computer Corp. v. Lapray, 135 S.W.3d 657, 672 (Tex. 2004). The impact of recent
cases affecting the controlling substantive law must be considered. See Union Pacific Res. Group,
Inc. v. Hankins, 111 S.W.3d 69, 72 (Tex. 2003). The supreme court has further instructed us that
dispositive issues going to the viability of the class claims should be resolved by the trial court
before certification is considered. Lopez, 156 S.W.3d at 557.
Trial plans are required in every order certifying a class “‘to allow reviewing courts to
assure that all requirements for certification under Rule 42 have been satisfied.’” Peake, 178 S.W.3d
at 778 (quoting Lopez, 156 S.W.3d at 556). “The formulation of a trial plan assures that a trial court
has fulfilled its obligation to rigorously analyze all certification prerequisites and understands the
claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful
determination of the certification issues.” Id. The trial-plan requirement is now codified in rule
42(c)(1)(D):
An order granting or denying certification under Rule 42(b)(3) must state:
(i) the elements of each claim or defense asserted in the pleadings;
(ii) any issues of law or fact common to the class members;
(iii) any issues of law or fact affecting only individual class members;
(iv) the issues that will be the object of most of the efforts of the litigants and
the court;
(v) other available methods of adjudication that exist for the controversy;
23
(vi) why the issues common to the members of the class do or do not
predominate over individual issues;
(vii) why a class action is or is not superior to other available methods for the
fair and efficient adjudication of the controversy; and
(viii) if a class is certified, how the class claims and any issues affecting only
individual members, raised by the claims or defenses asserted in the
pleadings, will be tried in a manageable, time efficient manner.
Tex. R. Civ. P. 42(c)(1)(D).
We review a trial court’s order certifying a class for abuse of discretion, but we do
not indulge every presumption in favor of the trial court’s ruling. Schein v. Stromboe, 102 S.W.3d
675, 691 (Tex. 2002). “A trial court has discretion to rule on class certification issues, and some of
its determinations—like those based on its assessment of the credibility of witnesses, for
example—must be given the benefit of the doubt. But the trial court’s exercise of discretion cannot
be supported by every presumption that can be made in its favor.” Id. Instead, “actual, not
presumed, conformance with [rule 42] remains . . . indispensable.” Bernal, 22 S.W.3d at 435. We
must ensure that the district court performed the required “rigorous analysis” before ruling on class
certification, as manifested in a detailed, thorough trial plan. Peake, 178 S.W.3d at 778.
The effect of Dearing I’s mandate
In its first issue, the Department argues that the district court abused its discretion in
re-certifying the class on the same pleadings, evidence, and trial plan on which it had relied in
Dearing I, in derogation of our mandate. We agree with the Department.
24
The mandate is the formal command from an appellate court commanding the lower
court to comply with the appellate court’s judgment. See Tex. R. App. P. 51.1(b), 65.2; In re
Grossnickle, 115 S.W.3d 238, 243 (Tex. App.—Texarkana 2003, orig. proceeding); Lewelling
v. Bosworth, 840 S.W.2d 640, 642-43 (Tex. App.—Dallas 1992, orig. proceeding); Dixie Gas & Fuel
Co. v. Jacobs, 66 S.W.2d 446, 448 (Tex. Civ. App.—Beaumont 1933, writ dism’d w.o.j.) (citing
Black v. Epperson, 40 Tex. 162, 172-73 (Tex. 1874)). Upon receiving the appellate court’s mandate,
the lower court has a mandatory, ministerial duty to enforce the appellate court’s judgment. See
Tex. R. App. P. 51.1(b); Grossnickle, 115 S.W.3d at 243. It has no discretion to review, interpret,
or enforce the mandate but, instead, must carry out the mandate. Grossnickle, 115 S.W.3d at 243.
This Court’s mandate in Dearing I recited its judgment that “the portion of the
[district] court’s order pertaining to class certification is reversed, and that part of the cause is
remanded for further proceedings consistent with this opinion. The remainder of the order is
affirmed.” For further guidance, the district court was obligated to look to the Court’s opinion.
Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) (“[C]ourts should look not only to the
mandate itself, but also to the opinion of the court.”). The mandate concluded with, “we command
you to observe the order of our Court of Appeals in this behalf and in all things have the order duly
recognized, obeyed, and executed.”
This Court has not withdrawn its mandate, nor has the judgment underlying it been
reversed or vacated by a higher appellate court.6 Our command to the district court to conduct
6
In fact, after issuing its Smith opinion, the Supreme Court did not vacate or otherwise
disturb our Dearing I judgment in light of Smith, but denied certiorari. Dearing, 540 U.S. 960
(2005).
25
further proceedings in accordance with our Dearing I opinion thus remains effective unless and until
we instruct it otherwise. Because the district court was bound to apply Dearing I’s holdings that
Dearing’s claim was not viable and that certification was thus inappropriate, the district court abused
its discretion in re-certifying the class on the same record.
The district court may have perceived that Smith nonetheless undermined a central
premise of Dearing I and rendered this Court’s judgment erroneous. If so, it is understandable that
the district court, perceiving a choice between the rationale expressed in an opinion of our nation’s
highest court versus one of this state intermediate appellate court, may have seen fit to apply the
higher court’s analysis. Such a view, however, would overlook the implications of both our mandate
and the law-of-the-case doctrine.
Under the law-of-the-case doctrine, a court of appeals is ordinarily bound by its initial
decision on a question of law if there is a subsequent appeal in the same case. Briscoe v. Goodmark
Corp., 102 S.W.3d 714, 716 (Tex. 2003); see also Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d
593, 596 (Tex. 2006) (“[T]he ‘law of the case’ doctrine is that principle under which questions of
law decided on appeal to a court of last resort will govern the case throughout its subsequent stages.”
(citing Hudson, 711 S.W.2d at 630)). “By narrowing the issues in successive stages of the litigation,
the law of the case doctrine is intended to achieve uniformity of decision as well as judicial economy
and efficiency. The doctrine is based on public policy and is aimed at putting an end to litigation.”
Briscoe, 102 S.W.3d at 716.
The law-of-the-case doctrine does not extend to questions of fact, nor does it
necessarily apply when either the issues or the facts presented in subsequent appeals are not
26
substantially the same as those involved on the first trial. Hudson, 711 S.W.2d at 630. Thus, as the
Department suggests, Dearing “could have redrawn [his] petition and asked the trial court to certify
a class based on a claim under the Smith standard; in that case, the court’s mandate would not have
been an obstacle because the certification would be different.” That is not the case here, however.
The district court re-certified the class relying on the same underlying pleadings, trial plan, and
evidence on which it had originally certified the class.
Nonetheless, “[a] decision rendered on an issue before the appellate court does not
absolutely bar re-consideration of the same issue on a second appeal,” but “[a]pplication of the
doctrine lies within the discretion of the court, depending on the particular circumstances
surrounding that case.” Id. A longstanding exception to the law-of-the-case doctrine (or instance
when courts will exercise their discretion not to apply it) is where the appellate court concludes, on
the second appeal, that its original decision was “clearly erroneous.” Id. (citing Galveston,
Harrisburg & San Antonio Ry. Co. v. Faber, 8 S.W. 64, 65 (Tex. 1888)). The rationale underlying
this exception is that:
It would be unthinkable [for the court] after having . . . reconsidered the case, and
arrived at the conclusion that the opinion on the former appeal was clearly erroneous,
to hold that it is bound by considerations of consistency to perpetuate that error. Our
duty to administer justice under the law, as we conceive it, outweighs our duty to be
consistent.
Id. (citing Connecticut Gen. Life Ins. Co. v. Bryson, 219 S.W.2d 799, 800 (Tex. 1949)). Under this
exception, our sister courts have revisited, on appeals after remand, prior decisions called into
question by intervening higher-court decisions. See In re Estate of Chavana, 993 S.W.2d 311, 315-
27
17 (Tex. App.—San Antonio 1999, no pet.); McCrea v. Cubilla Condo. Corp., 769 S.W.2d 261, 262-
63 (Tex. App.—Houston [1st Dist.] 1988, writ denied).
Thus, while the law-of-the-case doctrine contemplates situations where prior appellate
court decisions on legal questions should be reconsidered in appeals after remand, it is the appellate
court—not the lower court—who decides whether it is appropriate to do so. We sustain the
Department’s first issue.
Revisiting Dearing I
Dearing urges us to revisit Dearing I in light of Smith and affirm the district court’s
order as consistent with the current state of the law. We agree that we would effectuate the policies
underlying the law-of-the-case doctrine by revisiting certain aspects of Dearing I and should exercise
our discretion to do so.
Disparate-impact age-discrimination claims under the labor code
When previously concluding that Dearing’s disparate-impact age-discrimination
claim was not viable and that certification was therefore an abuse of discretion, this Court relied on
two basic premises: (1) the Fifth Circuit’s analysis in Smith was “persuasive” regarding whether
disparate-impact claims are available under the ADEA; and (2) section 21.122(b) of the labor code
means that “disparate-impact claims are available for age discrimination in this state only if they are
available under the ADEA.” Dearing I, 150 S.W.3d at 465. Section 21.122(b) of the labor code
provides:
28
To determine the availability of and burden of proof applicable to a disparate impact
case involving age discrimination, the court shall apply the judicial interpretation of
the Age Discrimination in Employment Act of 1967 and its subsequent amendments
(29 U.S.C. Section 621 et seq.).
Tex. Lab. Code Ann. § 21.122(b). The Department had argued that section 21.122 required us to
apply to the labor code the then-prevailing view of the Fifth Circuit and other federal courts that the
ADEA did not permit disparate-impact claims. Dearing had sought to distinguish these federal
decisions, emphasizing that many had rested on the view that the ADEA’s RFOA provision
manifested Congress’s intent to prohibit disparate-impact claims under that statute. See Dearing I,
150 S.W.3d at 463-64. Dearing pointed out that the legislature had patterned the labor code’s
general employment discrimination prohibition after section 703(a) of title VII7 and had even
codified Griggs’s “business necessity” limitation,8 but has never explicitly enacted a counterpart to
7
The Texas Labor Code’s general prohibition against employment discrimination states:
An employer commits an unlawful employment practice if because of race, color,
disability, religion, sex, national origin, or age the employer:
(1) fails or refuses to hire an individual, discharges an individual, or
discriminates in any other manner against an individual in connection with
compensation or the terms, conditions, or privileges of employment; or
(2) limits, segregates, or classifies an employee or applicant for employment in
a manner that would deprive or tend to deprive an individual of any
employment opportunity or adversely affect in any other manner the status of
an employee.
Tex. Lab. Code Ann. § 21.051 (West 2006). Section 21.051 “is substantively identical to its federal
equivalent in Title VII,” but adds age and disability to the protected categories. Quantum Chem. Co.
v. Toennies, 47 S.W.3d 473, 475 (Tex. 2001); cf. 42 U.S.C.A. § 2000e-2 (West 2003).
8
When enacting the statutory predecessor to chapter 21 of the labor code, the 1983 Texas
Commission on Human Rights Act (TCHRA), the legislature included the following provision:
29
the ADEA’s RFOA provision. While acknowledging the integral role of the RFOA in the federal
ADEA cases on which it relied, see id., this Court did not consider the labor code’s omission of such
a provision to be significant. It dismissed Dearing’s arguments as “ignor[ing] section 21.122, which
states that disparate-impact claims are available for age discrimination in this state only if they are
available under the ADEA.” Id. at 465.
The Court added that section 21.122 “specifically mirrored” the textual distinctions
between the ADEA and title VII following the 1991 Civil Rights Act amendments. Id. Specifically,
following the 1991 amendments, the legislature had made corresponding amendments to Texas law
that tracked the new subsection (k)(1) of title VII, section 703, but made these provisions applicable
solely to claims for disparate-impact discrimination involving protected categories other than age.
Act of May 14, 1993, 73d Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1287 (current version
at Tex. Lab. Code Ann. § 21.122(a), (c)-(d) (West 2006)); cf. 42 U.S.C.A. § 2000e-2(k)(1).
In the aftermath of Smith, the Department concedes that disparate-impact claims may
be available under the ADEA, and that—consistent with its position in Dearing I—section 21.122(b)
incorporates this principle to govern such claims under the labor code. But the Department urges
Notwithstanding any other provision of this article, it is not an unlawful employment
practice . . . .
(7) for an employer to engage in any practice that has a discriminatory effect and
that would otherwise be prohibited by this Act if the employer establishes
that the practice is not intentionally devised or operated to contravene the
prohibitions of this Act and is justified by business necessity.
Commission on Human Rights Act, 68th Leg., 1st C.S., ch. 7, § 5.07(7), 1983 Tex. Gen. Laws 37,
49 (current version at Tex. Lab. Code Ann. § 21.115 (West 2006)).
30
that our ultimate holdings in Dearing I were correct because the district court still abused its
discretion in certifying the class. Central to this contention is the argument that the Department
advances in its second issue: that section 21.122(b) incorporates into the labor code not only Smith’s
holdings regarding the availability of disparate-impact claims under the ADEA, but also its analysis
of the plaintiffs’ burden of proof. Specifically, the Department urges that Wards Cove governs the
standards Dearing must meet to establish a prima facie disparate-impact age-discrimination case
and imposes a burden-shifting framework for addressing any justifications the Department proffers.
Moreover, it asserts that section 21.122(b) incorporates the ADEA’s RFOA limitation, as interpreted
by Smith, into the labor code. See Smith, 544 U.S. at 243 (“Unlike the business necessity test, which
asks whether there are other ways for the employer to achieve its goals that do not result in a
disparate impact on a protected class, the reasonableness inquiry includes no such requirement.”).
Relatedly, the Department argues that its RFOA justification is addressed in the same manner under
the ADEA as was the business-necessity justification under Wards Cove—the defendant has
the burden of production, but the plaintiff retains the ultimate burden of proof to prove the
unreasonableness of any proffered RFOA. Based on these contentions, the Department complains
in its third issue that the trial plan on which certification was based was defective because it failed
to properly address the elements of Dearing’s disparate-impact age-discrimination claim and
the RFOA justification. See Tex. R. Civ. P. 42(c)(1)(D); Peake, 178 S.W.3d at 777; Hankins,
111 S.W.3d at 72.
Dearing’s arguments largely parallel those that he advanced in Dearing I,
emphasizing the textual similarities between section 21.051(a)(2) of the labor code, section 703(a)(2)
31
of title VII, and section 623(a)(2) of the ADEA; the legislature’s omission of an express RFOA
provision in the labor code while including the Griggs “business necessity” limitation; and his
assertion that the labor code’s age-discrimination provisions, unlike the ADEA, share common
legislative and policy origins with those addressing other protected classes. Dearing does not seem
to dispute that Wards Cove would govern proof of his claim. Instead, he contends that the labor code
does not incorporate an RFOA limitation and that, if it does, the RFOA is an affirmative defense on
which the Department would have the burdens of proof and persuasion.
We agree that Dearing I was clearly erroneous in its reliance on pre-Smith
jurisprudence holding that disparate-impact claims were categorically unavailable under the ADEA.
See Chavana, 993 S.W.2d at 315-17; McCrea, 769 S.W.2d at 262-63. However, we conclude that
Dearing I was correct in its construction of section 21.122(b) of the labor code and that this
provision was also intended to incorporate the ADEA’s proof standards as interpreted by Smith—
including the RFOA justification.
Statutory construction presents a question of law that we review de novo. State
v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We seek to discern the legislature’s intent, as
manifested first and foremost in the statutory text. Id. We ascertain the legislature’s intent from the
plain meaning of the words chosen when possible. Id. To that end, we consider statutory language
in context, not in isolation. Jones v. Fowler, 969 S.W.2d 429, 432 (Tex. 1988); see Tex. Gov’t Code
Ann. § 311.011(a) (West 2005). We also presume that the legislature acted with knowledge of
the background law. Acker v. Texas Water Comm’n, 790 S.W.2d 299, 301 (Tex. 1990). Words
and phrases that have acquired a technical or particular meaning shall be construed accordingly.
32
Tex. Gov’t Code Ann. § 311.011(b). When ascertaining legislative intent, we may also consider the
objective of the law, its history, and the consequences of a particular construction. Id.; see also id.
§ 311.023(1), (3), (5) (West 2005).
The Texas Supreme Court has frequently observed that the Texas Commission on
Human Rights Act (TCHRA) and its current incarnation, chapter 21 of the labor code, were intended
to “correlat[e] . . . state law with federal law in the area of discrimination in employment,”
Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 485 (Tex. 1991), and “coordinate and
conform with federal law under Title VII . . . and the Age Discrimination in Employment Act.”
Caballero v. Central Power & Light Co., 858 S.W.2d 359, 361 (Tex. 1993). The legislature, in fact,
specified “general purposes” of the statute that include “provid[ing] for the execution of the policies
of Title VII of the Civil Rights Act of 1964 and its subsequent amendments (42 U.S.C. Section
2000e et. seq.),”9 and “identify[ing] and creat[ing] an authority that meets the criteria under
42 U.S.C. Section 2000e-5(c) and 29 U.S.C. Section 633.” Tex. Lab. Code Ann. § 21.001(1), (2).
These federal provisions—contained within title VII and the ADEA, respectively—require that
where a state has its own anti-discrimination laws and fair employment practices agency, the federal
EEOC must defer its processing of a discrimination complaint for at least 60 days to permit the state
agency to investigate and resolve it. Thus, the legislature created the Texas Human Rights
Commission (now the Civil Rights Division of the Workforce Commission) to serve as Texas’s
9
A similar “general purpose” concerning disability discrimination was added in 1993: to
“provide for the execution of the policies embodied in Title I of the Americans With Disabilities Act
of 1990 and its subsequent amendments (42 U.S.C. Section 12101 et. seq).” Tex. Lab. Code Ann.
§ 21.001(3) (West 2006).
33
“deferral agency,” i.e., one to which the EEOC would defer so the investigation and resolution of
employment discrimination complaints could be handled at the state rather than federal level. See
Schroeder, 813 S.W.2d at 485. A related concern, evident elsewhere in chapter 21 and throughout
its legislative history, was to ensure that Texas anti-discrimination law conformed to federal law to
whatever degree necessary to ensure that the Texas deferral agency would be recognized as such by
the EEOC—and, importantly, could receive federal funding to help subsidize its operations.10
As Dearing emphasizes, much of chapter 21 appears to track title VII. Section
21.051, its general employment-discrimination prohibition, states:
An employer commits an unlawful employment practice if because of race, color,
disability, religion, sex, national origin, or age the employer:
(1) fails or refuses to hire an individual, discharges an individual, or
discriminates in any other manner against an individual in connection with
compensation or the terms, conditions, or privileges of employment; or
10
To that end, the legislature went as far as to provide:
If a provision of this chapter is held by the Equal Employment Opportunity
Commission to disqualify the commission as a deferral agency or for the receipt of
federal funds, the commission shall administer this chapter to qualify for deferral
status or the receipt of those funds until the legislature meets in its next session and
has an opportunity to amend this chapter.
Tex. Lab. Code Ann. § 21.006 (West 2006); see also Fiscal Note, Tex. H.B. 14, 68th Leg., 1st C.S.
(1983) (explaining that “EEOC provides grant monies to state and local governments with acceptable
laws and regulations. . . . During the first year of operation, the State commission would receive
$375 per charge resolution. If it meets the quality standards established by the U.S. Equal
Employment Opportunity Commission in its performance, it would receive $412.50 per charge
resolution beginning in its second year, and increases are anticipated in succeeding years.”).
34
(2) limits, segregates, or classifies an employee or applicant for employment in
a manner that would deprive or tend to deprive an individual of any
employment opportunity or adversely affect in any other manner the status of
an employee.
Tex. Lab. Code Ann. § 21.051. Section 21.051 “is substantively identical to its federal equivalent
in Title VII,” but adds age and disability to the protected categories. Toennies, 47 S.W.3d at 475;
cf. 42 U.S.C.A. § 703(a). Subsection (2) of section 21.051 tracks section 703(a)(2) of title VII, the
provision that the United States Supreme Court has long identified as the textual basis for the
disparate-impact liability theory. Smith, 544 U.S. at 235 (citing Watson, 487 U.S. at 991). Language
parallel to section 703(a)(2) in the ADEA, the Smith court observed, “strongly suggests that a
disparate-impact theory should be cognizable under the ADEA.” Id. at 236. Furthermore, in
codifying the Griggs “business necessity” concept, the legislature implicitly recognized the
disparate-impact liability theory. See Tex. Lab. Code Ann. § 21.115 (“An employer does not commit
an unlawful employment practice by engaging in a practice that has a discriminatory effect and
that would otherwise be prohibited . . . .”) (emphasis added); see also Helena Chem Co. v. Wilkins,
47 S.W.3d 486, 497 (Tex. 2001) (“[W]hen the Legislature looks to another jurisdiction’s statute, but
modifies rather than adopts some of its provisions, it does so purposefully.”).
However, the only provision in chapter 21 that explicitly addresses the availability
of or burden of proof for disparate-impact employment-discrimination claims is section 21.122—and
the only provision that specifically addresses such issues for disparate-impact age-discrimination
claims is section 21.122(b). The provision that is now section 21.122 was added to the TCHRA in
1993 as part of a package of amendments intended to conform the act to the 1991 Civil Rights Act
35
and the 1990 Americans With Disabilities Act. Act of May 14, 1993, 73d Leg., R.S., ch. 276, § 5,
1993 Tex. Gen. Laws 1285, (current version at Tex. Lab. Code Ann. § 21.122 (West 2006)). The
legislature’s desire to make Texas employment discrimination law consistent with its federal
counterparts is repeatedly demonstrated in the text and structure of the amendments.11
The provision that is now section 21.122, with the exception of subsection (b), is
substantively identical to the new section 703(k)(1) that Congress added to title VII in response to
Wards Cove:
Sec. 5.11. BURDEN OF PROOF IN DISPARATE IMPACT CASES. (a) An
unlawful employment practice based on disparate impact is established under this Act
only if:
(1) a complainant demonstrates that a respondent uses a particular
employment practice that causes a disparate impact on the basis of race, color, sex,
national origin, religion, or disability and the respondent fails to demonstrate that the
challenged practice is job-related for the position in question and consistent with
business necessity; or
(2) the complainant makes the demonstration in accordance with federal law
as that law existed on June 4, 1989, with respect to the concept of alternative
employment practices, and the respondent refuses to adopt such an alternative
employment practice.
***
11
We also note that the legislative record reflects an understanding by bill proponents that
“[w]ith the passage of the Civil Rights Act of 1991 and the Americans With Disabilities Act, it is
necessary to amend the Commission on Human Rights Act to be equivalent to these two federal laws
in order to maintain the current relationship between the Commission on Human Rights and the U.S.
Equal Employment Opportunity Commission.” House Comm. On State Affairs, Bill Analysis, Tex.
H.B. 860, 73d Leg. R.S. (1993).
36
(c) To demonstrate that a particular employment practice causes a disparate
impact, the complainant must demonstrate that each particular challenged
employment practice causes a disparate impact, except that if the complainant
demonstrates to the satisfaction of the court that the elements of a respondent’s
decision-making process are not capable of separation for analysis, that decision-
making process may be analyzed as one employment practice.
(d) If the respondent demonstrates that a specific practice does not cause a
disparate impact, the respondent may not be required to demonstrate that the practice
is consistent with business necessity.
Act of May 14, 1993, 73d Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1287-88 (current
version at Tex. Lab. Code Ann. § 21.122 (West 2006)); cf. 42 U.S.C.A § 2000e-2(k)(1). Other
portions of new subsection (k) were also replicated in the TCHRA, including a provision clarifying
that “[a] demonstration that an employment practice is consistent with business necessity may not
be used as a defense under this Act against a complaint of intentional discrimination.” Act of May
14, 1993, 73d Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1288 (current version at Tex. Lab.
Code Ann. § 21.123 (West 2006)); cf. 42 U.S.C.A. § 2000e-2(k)(2) (West 2003). But the
amendments did not track only federal changes that tended to expand liability exposure. To the
contrary, the legislature also incorporated portions of subsection (k) and the 1991 act that limited
employers’ liability. These included a new liability protection regarding employers’ anti-drug
policies, Act of May 14, 1993, 73d Leg., R.S., ch. 276, § 4, 1993 Tex. Gen. Laws 1285, 1887
(current version at Tex. Lab. Code Ann. § 21.120 (West 2006)); cf. 42 U.S.C.A. § 2000e-2(k)(3)
(West 2003), and a prohibition on damage awards, back pay, and reinstatement in certain mixed-
motive cases. Act of May 14, 1993, 73d Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1288
37
(current version at Tex. Lab. Code Ann. § 21.125 (West 2006)); cf. 42 U.S.C.A. §§ 2000e-2(m),
2000e-5(g)(2)(B) (West 2003).
As noted in Smith, Congress did not make changes to the ADEA corresponding to
the new section 703(k) it added to Title VII. In keeping with its intent to retain consistency with
federal law, the legislature, as this Court observed in Dearing I, “specifically mirrored” this “textual
distinction between the ADEA and Title VII” by adopting “the language added to Title VII in 1991
[but] treat[ing] disparate impact on the basis of age distinctly by removing it from the list of other
forms of discrimination that give rise to disparate-impact liability.” 150 S.W.3d at 465. The
legislature provided in subsection (b) of section 21.122 that, “To determine the availability of and
burden of proof applicable to a disparate impact case involving age discrimination, the court shall
apply the judicial interpretation of the Age Discrimination in Employment Act of 1967 and its
subsequent amendments (29 U.S.C. Section 621 et seq.).” Tex. Lab. Code Ann. § 21.122(b).
Ultimately, the parties’ dispute over the construction of section 21.122(b) turns on
the meaning of the “judicial interpretation of the Age Discrimination in Employment Act of 1967
and its subsequent amendments” that we “shall apply” to “determine the availability of and burden
of proof applicable to a disparate impact case involving age discrimination.” Dearing maintains
that the relevant ADEA “judicial interpretation” in Smith that we must apply “is simply the analysis
of a provision of the federal statute that exists nowhere in the Texas Labor Code,” and that is
therefore distinguishable. The Department contends that section 21.122(b) requires us to follow
Smith’s holdings regarding the availability and burden of proof for ADEA disparate-impact
38
claims—including the portions of the court’s analysis that reference the RFOA provision. As in
Dearing I, we agree with the Department’s construction of section 21.122(b).
The legislature manifested its intent throughout the 1993 amendments to the TCHRA
that Texas employment-discrimination law conform to federal law in the aftermath of the 1991 Civil
Rights Act. The conforming changes that the legislature made included not only those expanding
liability exposure, but also those restricting it. The legislature added a new provision specifically
to address the availability and burden of proof in disparate-impact claims and, like Congress, chose
to treat age-discrimination claims differently from those involving other protected classes. The
federal analogue that the legislature identified for age-discrimination claims, moreover, was not title
VII, but the “judicial interpretation of the Age Discrimination in Employment Act of 1967 and its
subsequent amendments.”
If, as Dearing contends, the legislature had intended that Texas courts “apply” the
ADEA “judicial interpretation” only to the extent that the ADEA is textually parallel to the TCHRA,
it would have undermined its own manifest goal to restore consistency between Texas and federal
employment-discrimination law. By the time of the 1993 amendments, as noted, there was already
considerable jurisprudential controversy regarding the availability of disparate-impact claims under
the ADEA, with the RFOA provision and other distinguishing features of the ADEA being focal
points of the debate. See Markham, 451 U.S. 945 (Rehnquist, J., dissenting from denial of
certiorari); Metz, 828 F.2d at 1216-20; see generally Herbert & Shelton, supra, at 636-50. While
the 1993 TCHRA amendments were pending before the legislature, furthermore, the Supreme Court
handed down its Hazen Paper decision, which was viewed by many as validating the arguments
39
being made against disparate-impact claims under the ADEA. We presume that the legislature is
aware of the background law when it enacts a statute. Acker, 790 S.W.2d at 301. Especially given
the jurisprudential environment that existed at the time of the 1993 amendments, it is doubtful that
a legislature intending to keep Texas employment-discrimination law consistent with its federal
counterpart would require Texas courts to apply ADEA “judicial interpretation” while contemplating
that these cases could be deemed distinguishable and inapplicable. Such inconsistency would
have been further compounded by the legislature’s unequivocal mandate that courts apply the
“judicial interpretation of the Age Discrimination in Employment Act of 1967 and its subsequent
amendments,” without regard to whether those future amendments might be consistent with
the TCHRA.
Considering, as we must, the role of section 21.122(b) in context with the 1993
TCHRA amendments as a whole, see Jones, 969 S.W.2d at 432, the more plausible construction of
“judicial interpretation of the Age Discrimination in Employment Act of 1967 and its subsequent
amendments” is that we apply the authoritative holdings governing availability and burden of proof
for ADEA disparate-impact claims as the standards governing the same issues for such claims under
the labor code, without regard to what might otherwise be distinguishing differences in the
underlying statutory texts. What the legislature intended in section 21.122(b), in other words, was
for Texas law to track federal law regarding the availability of and burden of proof in disparate-
impact age-discrimination cases, in effect incorporating not only the ADEA’s textual features
presently governing those issues, but even their “subsequent amendments.” This conclusion is
consistent with Dearing I’s construction of section 21.122(b). Similarly, while Dearing’s arguments
40
emphasize textual parallels between the THCRA and title VII that might have been significant if
considered in isolation, we agree with the Dearing I Court that Dearing “would have us ignore
section 21.122” and its impact. Dearing I, 150 S.W.3d at 465.
Consequently, Dearing must establish a prima facie case under the standards of Wards
Cove, and the Department may invoke the RFOA limitation, as interpreted in Smith, as a
justification. We are also persuaded by the prevailing post-Smith case law that the RFOA provision
must operate in the same way as the business-necessity justification under Wards Cove; that is, the
Department has the initial burden of production regarding this justification, but Dearing retains the
ultimate burden of proof to demonstrate that any proffered RFOA was unreasonable. See Meacham
v. Knolls Atomic Power Lab., 461 F.3d 134, 141-43 & n.7 (2d Cir. 2006) (noting that in Smith,
Supreme Court stated that bona fide occupational qualification was affirmative defense but did not
similarly identify RFOA as affirmative defense and further, it is “hard to see how an ADEA plaintiff
can expect to prevail on a showing of disparate impact based on a factor that correlates with age
without also demonstrating that the factor is unreasonable.”); Pippin v. Burlington Res. Oil & Gas
Co., 440 F.3d 1186, 1200 (10th Cir. 2006) (holding that “to prevail on an ADEA disparate impact
claim, an employee must ultimately persuade the factfinder that the employer’s asserted basis for the
neutral policy is unreasonable.”); Durante v. Qualcomm, Inc., 144 Fed. Appx. 603, 607 (9th Cir.
2005) (ruling in favor of employer that produced “unrebutted evidence” that its termination decisions
were made to satisfy differing business needs of its divisions and departments); see also Marshall
v. Westinghouse Elec. Corp., 576 F.2d 588, 590 (5th Cir. 1978) (“This circuit has consistently held
that once the plaintiff makes out such a prima facie case the defendant bears the burden of ‘going
41
forward’ to demonstrate reasonable factors other than age for the plaintiff’s discharge. Just as
consistently we have said that the burden of persuasion, often called the risk of non-persuasion,
never shifts; it remains upon the ADEA plaintiff.”). Dearing relies on three cases, none of which
address Wards Cove, to argue that the RFOA is an affirmative defense on which the Department has
the burden of persuasion. See Johnson v. Perkins Rests., Inc., 815 F.2d 1220, 1221 (8th Cir. 1987);
Criswell v. Western Airlines, Inc., 709 F.2d 544, 552 (9th Cir. 1983); see also Kimel v. Florida Bd.
of Regents, 528 U.S. 62, 87 (2000) (discussing bona fide occupational qualification as affirmative
defense). All of these cases, moreover, preceded the Supreme Court’s opinion in Smith.
Because the district court’s trial plan does not sufficiently address these elements, it
abused its discretion in certifying the class. We sustain the Department’s second and third issues.
The Department’s jurisdictional arguments
In its fourth issue, the Department adds that under Smith’s requirements, as
incorporated into the labor code through section 21.122(b), Dearing has not pleaded, and cannot
plead, a valid claim for disparate-impact age-discrimination, rendering his claim not viable,
see Lopez, 156 S.W.3d at 557, and barred by sovereign immunity. See Texas Dep’t of Parks &
Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004) (citing Texas Ass’n of Bus. v. Texas Air
Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)); see also Tex. Lab. Code Ann. § 21.002(8)(D)
(West 2006). The Department relies on challenges to both the sufficiency of Dearing’s pleading
allegations and underlying jurisdictional facts. See Miranda, 133 S.W.3d at 227 (citing Bland Indep.
Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000)). To that end, it asks us to consider the evidence
it attached to its pre-Smith, pre-certification plea to the jurisdiction, summary-judgment motions,
42
and special exceptions. While styling these arguments as challenges to class certification, the
Department also asks us to dismiss Dearing’s claim for want of subject-matter jurisdiction, or at least
remand to afford him the opportunity to replead in accordance with Smith. See Miranda,
133 S.W.3d at 226-27.
The Department acknowledges that “the parties [have] not address[ed] the
jurisdictional issues” in the district court after Smith “or the propriety of Plaintiffs’ attempts to certify
a class based [on] pleadings that do not mention Smith’s requirements.” It attributes the context in
which it has raised these jurisdictional issues to the limited scope of our Dearing I mandate,
observing that the “remand proceedings only involved the propriety of re-certifying the class.”
Nonetheless, the Department urges that because these issues implicate sovereign immunity and,
therefore, subject-matter jurisdiction, we may address them for the first time on appeal. See Texas
Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).
In effect, the Department is seeking to re-urge, in light of Smith, its pre-Smith plea
to the jurisdiction augmented by new challenges to jurisdictional facts that it seeks to raise for the
first time on appeal. This Court recently held that where a defendant’s challenge to jurisdictional
facts also implicates the merits of a plaintiff’s claim, Miranda requires that the challenge be raised
first in the trial court rather than on appeal. Hendee v. Dewhurst, ___ S.W.3d. ___, ___, No. 03-06-
00501-CV, 2007 Tex. App. LEXIS 4149, at*53-54 (Tex. App.—Austin May 25, 2007, pet denied)
(op. on reh’g). That is the case here—the Department seeks to conclusively establish that it relied
on an RFOA, which, if successful, would bar liability for any disparate effects of the reclassifications
that Dearing challenges.
43
Nor can we reach these dispositive issues in the guise of determining the “viability”
of Dearing’s class claims. The supreme court has instructed us that “dispositive issues should be
resolved by the trial court before certification is considered.” Lopez, 156 S.W.3d at 557 (emphasis
added). Contrary to the Department’s suggestions, Lopez does not create a new procedural means
by which appellate courts can adjudicate the merits of dispositive issues not otherwise within their
jurisdiction to consider. Instead, it envisions that such issues should be adjudicated in the trial court
in the first instance, through the established procedural mechanisms under our rules—such as pleas
to the jurisdiction, summary-judgment motions, and special exceptions—rather than by what are
substantively the same proceedings initiated at the appellate level. Cf. Lopez, 156 S.W.3d at 157
(declining to reach viability issues and remanding so trial court could address pending plea to the
jurisdiction and special exceptions).
Furthermore, the concept of viability addressed in Lopez emanates from the core
requirement that, before certification, trial courts perform a “rigorous analysis” to determine whether
rule 42’s requirements are met. Bernal, 22 S.W.3d at 435. To “make a meaningful determination
of the certification issues,” Peake, 178 S.W.3d at 778, trial courts must resolve disputes affecting
the underlying substantive law prior to certification because “courts can hardly evaluate the claims,
defenses or applicable law without knowing what the law is.” Lapray, 135 S.W.3d at 672. The
impact of recent cases affecting the controlling law must be considered. Hankins, 111 S.W.3d at 72.
The district court’s trial plan does not reflect any consideration of Smith’s implications for Dearing’s
claim, beyond allowing the claim (in derogation of our mandate) to proceed on a class basis. In fact,
the court’s re-certification order merely attached and incorporated a trial plan that predated Smith.
44
Even under the view of Smith’s effects accepted by Dearing, the trial plan falls short. For example,
the elements for establishing a prima facie case under Wards Cove are not addressed, nor is the
burden-shifting framework it requires.12
The Department will have the opportunity on remand to re-urge its dispositive
motions in light of Smith. Conversely, Dearing will have the opportunity to amend his pleadings and
otherwise respond to the Department’s potentially dispositive issues under the normal procedural
framework that our rules provide to protect and balance the interests of both plaintiffs and
defendants. Cf. Hendee, ___S.W.3d at ___, 2007 Tex. App. LEXIS 4149, at *53-54. The district
court’s disposition of those issues, in turn, will inform its “rigorous analysis” of whether the class
should be certified. We overrule the Department’s fourth issue.
Single-filing rule
In its fifth issue, the Department argues that we should revisit, as “clearly erroneous,”
Dearing I’s holding that the claims of putative class members other than Dearing were not barred
by their failure to exhaust administrative remedies. The supreme court has held that the provisions
now codified in chapter 21 of the labor code, like title VII, impose a comprehensive and exclusive
administrative scheme under which employment-discrimination claimants must first exhaust their
12
E.g., how Dearing’s statistical proof of disparate impact will be proved and
evaluated—specifically, against what other group Dearing’s claims will be measured to test for
disparate impact.
Dearing observes that the district court did not enter findings of fact and conclusions of law
and that ordinarily we would presume that the district court made any fact findings supported by the
evidence that were necessary for any legal theory that could support its order. However, “actual, not
presumed, conformance” with rule 42 is required. Bernal, 22 S.W.3d at 435.
45
remedies before filing a civil action. Schroeder, 813 S.W.2d at 486-88. Failure to exhaust these
remedies is a jurisdictional bar to suit. Id. at 488. In the district court, the Department, in support
of its plea to the jurisdiction, presented undisputed evidence that no class member other than Milburn
Dearing had filed a complaint with the human rights commission. In affirming the district court’s
denial of the plea in Dearing I, this Court purported to “adopt the single-filing rule fashioned by
federal courts” whereby similarly-situated persons can, under certain circumstances, “piggyback”
onto a single plaintiff’s filing of an EEOC complaint under title VII or the ADEA. Dearing I,
150 S.W.3d at 460; see Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1223 (5th Cir. 1995).13 We
agree with the Department that Dearing I’s analysis of the single filing issue should be reexamined,
a conclusion that the concurrence shares. ___ S.W.3d at ___ (Waldrop, J., concurring).14
Dearing I’s “adoption” of the single-filing rule was predicated principally on (1) a
view that “a person’s ‘agent’ could reasonably include a class representative” under section 21.201
13
As the Fifth Circuit explained this concept, in the context of the ADEA:
The federal courts now universally hold that an individual who has not filed an
administrative charge can opt-in to a suit filed by any similarly situated plaintiff
under certain conditions. This so-called “single filing rule” generally allows a
plaintiff, who did not file an EEOC charge, to piggyback on the EEOC complaint
filed by another person who is similarly situated. . . . The policy behind the single
filing rule is that it would be wasteful, if not vain, for numerous employees, all with
the same grievance, to have to process many identical complaints with the EEOC.
As long as the EEOC and the company are aware of the nature and scope of the
allegations, the purposes behind the filing requirement are satisfied and no injustice
or contravention of congressional intent occurs by allowing piggybacking.
Mooney, 54 F.3d at 1223.
14
We decline to revisit the Court’s prior holding regarding the timeliness of Milburn
Dearing’s administrative complaint, however.
46
of the labor code; and (2) what the Court regarded as the beneficial policies served by the rule in
federal courts. 150 S.W.3d at 460. We agree with the concurrence that Texas courts are not in a
position to incorporate extra-statutory requirements into the labor code. ___ S.W.3d ___ (Waldrop,
J., concurring). Our proper inquiry is, instead, to ascertain the policies that the legislature intended
to advance in the labor code, as manifested first and foremost by the statutory text, and as further
discerned through our application of the established statutory construction principles we have
reviewed above.
Section 21.201 provides that “a person claiming to be aggrieved by an unlawful
employment practice or the person’s agent may file a complaint with the commission.” Tex. Lab.
Code Ann. § 21.201 (West 2006) (emphasis added). As the Department observes, “agent” under
Texas law ordinarily denotes a relationship based upon a principal’s manifested consent that the
agent act on his behalf. See Bhalli v. Methodist Hosp., 896 S.W.2d 207, 210 (Tex. App.—Houston
[1st Dist.] 1995, writ. denied). Under traditional agency principles, as the Department suggests, a
class representative “filing the complaint is not necessarily in an agency relationship with the other
members of the purported class.” Indeed, especially in the early stages of litigation, members of the
putative class will frequently have no knowledge of their purported representative’s actions. See
Tex. R. Civ. P. 42(c)(2)(B), (e)(3)-(4). Thus, the Department suggests, section 21.201 could not
have been intended to allow class-wide exhaustion of administrative remedies through a single filing,
absent pleadings and proof establishing that the filer was acting as an agent of each class member.
This intent, the Department argues, is further demonstrated by comparing section
21.201 to the administrative-exhaustion requirements of the ADEA. As originally enacted, the
47
ADEA provided that “[n]o civil action may be commenced by any individual under this section until
the individual has given the Secretary [of Labor] not less than sixty days’ notice of an intent to file
such action.” Age Discrimination in Employment Act of 1967, Pub. L. No. 202, § 7(d), 81 Stat. 602,
605 (current version at 29 U.S.C.A. § 626(d) (West 1998)) (emphasis added). In 1978, Congress
amended this provision into its current form: “No civil action may be commenced by an individual
under this section until 60 days after a charge alleging unlawful discrimination has been filed
[with the EEOC].” Age Discrimination in Employment Act Amendements of 1978, Pub. L. No. 95-
256, § 4(b) 92 Stat. 189, 190 (current version at U.S.C.A. § 626(d)) (West 1998) (emphasis added).
The Department suggests that Congress amended the ADEA specifically to permit class actions
under the single-filing rule, and there is some support for this view. See Tolliver v. Xerox Corp.,
918 F.2d 1052, 1056 (2d Cir. 1990). Although not disputing that “[t]he federal courts now
universally hold that an individual who has not filed an administrative charge can opt-in to a suit
filed by a similarly situated plaintiff” under the single-filing rule, see Mooney, 54 F.3d at 1223, the
Department attributes these developments to the 1978 ADEA amendments, and distinguishes section
21.201 on that basis.
We conclude, however, that section 21.201’s closer federal analogue is section 706(b)
of title VII. See 42 U.S.C.A. § 2000e-5(b). As the Texas Supreme Court observed in Schroeder, the
employment-discrimination provisions of the labor code, like title VII, do not contain an explicit
exhaustion-of-remedies requirement similar to the ADEA’s. 813 S.W.2d at 487 & n.9. Instead, the
court determined that the overall structure of the Texas administrative procedures resembled those
of title VII, observed that the United States Supreme Court had held that title VII’s provision
48
required exhaustion of remedies, emphasized the legislature’s explicit intent to provide for the
execution of title VII’s policies and concluded that the Texas law imposes an administrative-
exhaustion requirement akin to title VII. Id. at 487.
Section 706(d) of title VII resembles section 21.201 of the labor code. It provides that
a “charge” satisfying title VII’s administrative-exhaustion requirements can be “filed by or on behalf
of a person claiming to be aggrieved.” 42 U.S.C.A.§ 2000e-5(b). The phrase “or on behalf of”
was added in the Equal Employment Opportunity Act of 1972. See Pub. L. No. 92-261, sec. 4(a),
§ 706(a)-(g), 86 Stat. 103, 104. As originally enacted in 1964, section 706 had stated that a “charge”
is filed only “by a person claiming to be aggrieved.” Civil Rights Act of 1964, Pub. L. 88-352,
§ 706(a), 78 Stat. 241, 259. Even before the 1972 amendment, federal courts had recognized the
single-filing rule under section 706. See Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 497-99
(5th Cir. 1968); see also Albermarle Paper Co. v. Moody, 422 U.S. 405, 414 n.8 (1975) (noting that
“[t]he Courts of Appeals . . . are unanimous in recognizing that backpay may be awarded on a class
basis under Title VII without exhaustion of administrative procedures by the unnamed class
members” and suggesting that “Congress plainly ratified this construction of the Act in the course
of enacting the Equal Employment Opportunity Act of 1972”).
The similarities between the labor code’s administrative provisions and those of title
VII, like others throughout each statute, cf. Toennies, 47 S.W.3d at 475, reflect the legislature’s
intent to “provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its
subsequent amendments (42 U.S.C. Section 2000e et. seq.)” in regard to exhaustion of administrative
remedies. Schroeder, 813 S.W.2d at 486-88. Both before and after the 1983 enactment of the
49
TCHRA, the single-filing rule was well-established in title VII cases.15 Although the concurrence
states a reasonable view of the statutory language if viewed in isolation, we are to presume that the
legislature was aware of the jurisprudential context in which it drafted the TCHRA and its
implications for the statutory words and structure it chose. See Acker, 790 S.W.2d at 301.
We conclude that the labor code manifests the legislature’s intent to incorporate
the single-filing rule from title VII jurisprudence. As we explained in Dearing I, the single-filing
rule allows a person who has not filed an administrative charge to piggyback on another party’s
timely-filed administrative charge, if the person attempting to piggyback is similarly situated to the
person who actually filed the administrative charge, and the charge provides notice of the collective
or class-wide nature of the charge. 150 S.W.3d at 460. Here the plaintiffs are similarly situated to
Dearing for the purposes of the single-filing rule because they all share the same grievance: that the
Department’s reclassification of the former Field Sergeant Game Wardens from the C-7 to the C-6
level constituted unlawful age discrimination that had a disparate-impact on employees over the
age of forty. See Crawford, 660 F.2d at 665 (holding that plaintiffs were “similarly situated”
for purposes of single-filing rule because “the gravamen of their complaints”—that they were given
improper seniority dates and passed over for promotion because of their race—was “the same”);
Oatis, 398 F.2d at 498 (noting that where employees all had same grievance “it would be wasteful,
if not vain” to require each employee to process identical complaints with EEOC). Furthermore,
Dearing’s charge gave notice of the class-wide nature of the charge. We thus agree with Dearing
15
See Price v. Choctaw Glove & Safety Co., 459 F.3d 595, 598-99 (5th Cir. 2006); Crawford
v. U.S. Steel Corp., 660 F.2d 663, 665 (5th Cir. 1981); Wheeler v. American Home Products Corp.,
582 F.2d 891, 897-98 (5th Cir. 1977); Oatis, 398 F.2d at 499.
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I’s ultimate holding that the single-filing rule applies to Milburn Dearing’s complaint and that
his complaint adequately stated its class-action intent. 150 S.W.3d at 460. We overrule the
Department’s fifth issue.
Other certification issues
Because Smith’s impact on Dearing’s claim and the Department’s defenses will be
integral to the district court’s consideration of class certification on remand, we will defer further
analysis of the propriety of certification until that issue is again before us. Nonetheless, we observe
that the district court order reinstated, without modification, a certification order that predated the
October 2003 amendments to rule 42, and that does not comply with the amended rule. See Tex. R.
Civ. P. 42(c)(1)(D). Among other defects, the plan fails to state the other available methods of
adjudication or adequately explain why a class action is “superior to other available methods for the
fair and efficient adjudication of the controversy.” See Tex. R. Civ. P. 42(b)(3), (c)(1)(D). In
particular, we observe that of the approximately 130 members of the putative class, eighty-eight have
already joined as plaintiffs. Finally, we note that the trial plan purports to set discovery deadlines
and a trial date in 2003. We trust that if the district court reaches the issue of certification again on
remand, it will comply with amended rule 42.
CONCLUSION
We reverse the district court’s order reinstating its prior class-certification order. On
remand, the parties will have the opportunity to address the impact of Smith and this decision on the
adequacy of their pleadings, the district court’s subject-matter jurisdiction, and any other dispositive
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matters. The parties will then have the opportunity to address the impact of these rulings and Smith
on certification. We remand these issues to the district court for further proceedings consistent with
this opinion.
__________________________________________
Bob Pemberton, Justice
Before Chief Justice Law, Justices Pemberton and Waldrop;
Concurring Opinion by Justice Waldrop
Reversed and Remanded
Filed: August 3, 2007
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