Neighborhood Centers Inc. v. Doreatha Walker

Opinion issued May 24, 2016
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00844-CV
———————————
NEIGHBORHOOD CENTERS INC., Appellant and Cross-Appellee
V.
DOREATHA WALKER, Appellee and Cross-Appellant
On Appeal from the 80th District Court
Harris County, Texas
Trial Court Case No. 2014-37034
OPINION ON REHEARING
Appellant and cross-appellee, Neighborhood Centers Inc. (“Neighborhood
Centers”), moved for rehearing, asking that we address the effect of amendments
to the Texas Education Code that became effective after oral argument in this case
but before we issued our July 30, 2015 opinion. We grant the motion for rehearing,
withdraw our previous opinion and judgment, and issue this opinion and judgment
in their stead.
Appellee and cross-appellant Doreatha Walker sued her former employer,
Neighborhood Centers, for its alleged retaliation against her for filing a workers’
compensation claim.1 She also sued Neighborhood Centers under the
Whistleblower Protection Act.2 Neighborhood Centers filed a plea to the
jurisdiction asserting that it had governmental immunity from Walker’s claims.
The trial court granted the plea as to Walker’s workers’ compensation anti-
retaliation claim, and it denied the plea as to Walker’s claim under the
Whistleblower Protection Act.
In its sole issue on appeal, Neighborhood Centers argues that the trial court
erred in denying its plea to the jurisdiction on Walker’s claim under the
Whistleblower Protection Act. Walker argues in her sole issue on cross-appeal
that the trial court erred in granting Neighborhood Centers’ plea to the jurisdiction
on her workers’ compensation anti-retaliation claim.
We affirm.
1
See TEX. LAB. CODE ANN. § 451.001 (Vernon 2015).
2
See TEX. GOV’T CODE ANN. §§ 554.001–.010 (Vernon 2012).
2
Background
Neighborhood Centers is a private, non-profit corporation that provides
services—including Head Start, workforce career centers, meals and programs for
seniors, immigration services, tax preparation services, and a community credit
union—to low-income communities in Houston. Neighborhood Centers also
operates the Promise Community School, an open-enrollment charter school
established pursuant to Texas Education Code chapter 12.3
Neighborhood Centers hired Walker, who has a master’s degree and is
certified in mid-management as a school principal, for the 2013-2014 school year
to work as a third-grade teacher at the Promise Community School. Walker
alleged that while she was employed with Neighborhood Centers she observed
health code violations and various testing irregularities, which she described as
“cheating irregularities,” “[s]pecial education testing irregularities,” and untimely
provision of Individualized Education Plans. Walker also observed health code
violations and eventually filed a workers’ compensation claim for health issues that
she asserts were caused by the health code violations she observed at the school.
3
See TEX. EDUC. CODE ANN. §§ 12.001–12.156 (Vernon 2012 & Supp. 2015). The
Education Code provides for three classes of charters: (1) a home-rule school
district charter; (2) a campus or campus program charter; or (3) an open-
enrollment charter. Id. § 12.002 (Vernon 2012). The Promise Community School
operates as an open-enrollment charter, governed by subchapter D of chapter 12.
3
Walker alleged that after she filed her workers’ compensation claim
Neighborhood Centers forced her to accept a demotion and reassignment as “an
Interventionist and a Girl Scout Leader,” and Neighborhood Centers’ insurer
denied her workers’ compensation claim. Walker reported her observations
regarding the testing violations and health code violations to the Texas Education
Agency and the Texas Health Department, respectively. She asserts that once her
report of these violations came to light, Neighborhood Centers terminated her
employment on a pretext.
Walker filed suit against Neighborhood Centers, alleging that its actions in
demoting and subsequently firing her violated Labor Code section 451.001—
which prohibits retaliation against an employee for filing a workers’ compensation
claim—and Government Code section 554.002(a)—a provision of the
Whistleblower Protection Act that prohibits a state or local governmental entity
from retaliating against an employee who has reported a violation of law to an
appropriate law enforcement authority.
Neighborhood Centers filed a plea to the jurisdiction, arguing that its
immunity from suit and liability barred Walker’s workers’ compensation anti-
retaliation claim. It argued that open enrollment charter schools, such as the
Promise Community School, have the same immunity as a public school district.
Relying on the Texas Supreme Court’s opinion in Travis Central Appraisal
4
District v. Norman, 342 S.W.3d 54 (Tex. 2011), it argued that governmental
immunity is not waived for retaliatory discharge claims under Labor Code chapter
451. Neighborhood Centers also argued that it is not a “political subdivision” or
“local governmental entity” under the Whistleblower Protection Act, as that act
defines “local governmental entity” narrowly. It asserted that all of Walker’s
claims must be dismissed for lack of subject-matter jurisdiction.
The trial court granted Neighborhood Centers’ plea to the jurisdiction as to
Walker’s workers’ compensation anti-retaliation claim, and it denied the plea as to
Walker’s claim under the Whistleblower Protection Act. Both Neighborhood
Centers and Walker filed notices of appeal.
Open-Enrollment Charter Schools
Open-enrollment charter schools, such as Promise Community School
operated by Neighborhood Centers, have been a part of the Texas public school
system since 1995. LTTS Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d 73, 74
(Tex. 2011). As the supreme court stated,
These nontraditional public schools, created and governed by Chapter
12 of the Education Code, receive government funding and comply
with the state’s testing and accountability system, but they operate
with greater flexibility than traditional public schools, in hopes of
spurring innovation and improving student achievement.
Id.; see also TEX. EDUC. CODE ANN. § 12.001 (Vernon 2012) (describing purposes
behind charter schools).
5
The Education Code unequivocally provides that “[a]n open-enrollment
charter school is part of the public school system of this state.” TEX. EDUC. CODE
ANN. § 12.105 (Vernon 2012); C2 Constr., Inc., 342 S.W.3d at 76. An open-
enrollment charter school is a publicly funded institution. TEX. EDUC. CODE ANN.
§ 12.106 (Vernon 2012); C2 Constr., Inc., 342 S.W.3d at 77–78. The Education
Code provides generally that “an open-enrollment charter school is subject to
federal and state laws and rules governing public schools and to municipal zoning
ordinances governing public schools.” TEX. EDUC. CODE ANN. § 12.103(a)
(Vernon 2012).
The Education Code also “subjects open-enrollment charter schools to a host
of statutes that govern governmental entities outside the Education Code.” C2
Constr., Inc., 342 S.W.3d at 78. Specifically, the Code provides that open-
enrollment charter schools are also “considered to be governmental bodies for
purposes of Chapters 551 and 552, Government Code [providing Open Meetings
and Public Information Laws].” TEX. EDUC. CODE ANN. § 12.1051(a) (Vernon
2012). Open-enrollment charter schools are “considered to be a local government
for purposes of Subtitle C, Title 6, Local Government Code, and Subchapter J,
Chapter 441, Government Code [providing the laws relating to local government
records].” Id. § 12.1052(a) (Vernon 2012). And “Section 12.1053 confers
‘governmental entity’ status, ‘political subdivision’ status, and ‘local government’
6
status on open-enrollment charter schools for purposes of myriad public
purchasing and contracting laws. . . .” C2 Constr., Inc., 342 S.W.3d at 77 (citing
TEX. EDUC. CODE ANN. § 12.1053 (Vernon Supp. 2014)); see also TEX. EDUC.
CODE ANN. §§ 12.1054, 12.1055 (Vernon 2012 & Supp. 2015) (providing for
applicability of law relating to conflicts of interest and nepotism laws to open-
enrollment charter schools, their governing bodies, members, and officers).
Regarding an open-enrollment charter school’s immunity from suit and
liability, the Legislature amended Education Code section 12.1056, effective June
18, 2015,4 to provide:
4
In her response to the motion for rehearing, Walker argues in part that the
Legislature’s 2015 amendments to the Education Code should not be applied
retroactively to her case. Generally, we presume that the Legislature intends
statutes and amendments to operate prospectively unless they are expressly made
retroactive. See TEX. GOV’T CODE ANN. § 311.022; City of Austin v. Whittington,
384 S.W.3d 766, 790 (Tex. 2012). However, this general rule does not apply when
the statute or amendment is procedural, remedial, or jurisdictional because such
statutes generally do not affect vested rights, and procedural, remedial, and
jurisdictional laws should be enforced as they exist at the time the judgment is
rendered. Whittington, 384 S.W.3d at 790; see also Subaru of Am., Inc. v. David
McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002) (holding that “not all
statutes that apply retroactively are constitutionally prohibited” and retroactive
statute violates constitution only if, when applied, it takes away or impairs vested
rights). Here, the Legislature’s amendments are relevant to the jurisdiction of the
court to hear the case, and application of these statutes will not take away or
impair a vested right. See Whittington, 384 S.W.3d at 790; Subaru of Am., Inc., 84
S.W.3d at 219. Accordingly, we consider the application of the Legislature’s
amendments that became effective prior to the issuance of our judgment in this
case.
7
(a) In matters related to operation of an open-enrollment charter
school, an open-enrollment charter school or charter holder is immune
from liability and suit to the same extent as a school district. . . .
(b) An open-enrollment charter school is a governmental unit as
defined by Section 101.001, Civil Practice and Remedies Code, and is
subject to liability only as provided by Chapter 101, Civil Practice and
Remedies Code, and only in the manner that liability is provided by
that chapter for a school district.
Act of June 1, 2015, 84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015
(codified as TEX. EDUC. CODE § 12.1056).5
The Legislature also added section 12.1058, entitled “Applicability of Other
Laws,” which provides:
(a) An open-enrollment charter school is considered to be:
(1) a local government for purposes of Chapter 791,
Government Code [governing interlocal cooperation contracts];
(2) a local government for purposes of Chapter 2259,
Government Code [governing self-insurance funds], except that
an open-enrollment charter school may not issue public
securities as provided by Section 2259.031(b), Government
Code;
5
Prior to its most recent amendment, section 12.1056 provided, “In matters related
to operation of an open-enrollment charter school, an open-enrollment charter
school is immune from liability to the same extent as a public school district. . . .”
TEX. EDUC. CODE ANN. § 12.1056 (Vernon 2012). The amendment changed the
language of what is now subsection (a) and added subsections (b) (discussed
above), (c) (providing that open-enrollment charter school is local government as
defined by Civil Practice and Remedies Code Chapter 102, governing payment of
tort claims), and (d) (providing that open-enrollment charter school is local
governmental entity for purposes of Local Government Code chapter 271,
governing liability of local governmental entities under certain written contracts).
See Act of June 1, 2015, 84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18,
2015 (codified as TEX. EDUC. CODE § 12.1056).
8
(3) a political subdivision for purposes of Chapter 172, Local
Government Code [also known as the Texas Political
Subdivision Employees Uniform Group Benefits Act]; and
(4) a local governmental entity for purposes of Subchapter I,
Chapter 271, Local Government Code [governing adjudication
of claims arising under written contracts with local
governmental entities].
Act of June 1, 2015, 84th Leg., R.S., ch. 1020 (H.B. 1170), § 1, eff. June 19, 2015
(codified as TEX. EDUC. CODE § 12.1058).
Section 12.1058 also specifies that open-enrollment charter schools may
elect to extend workers’ compensation benefits to employees through any method
available to a political subdivision under Labor Code chapter 504. Id.
§ 12.1058(b). Section 12.1058(c) then states:
(c) Notwithstanding Subsection (a) or (b), an open-enrollment charter
school operated by a tax exempt entity as described by Section
12.101(a)(3) is not considered to be a political subdivision, local
government, or local governmental entity unless the applicable statute
specifically states that the statute applies to an open-enrollment
charter school.
Id. § 12.1058(c).
Standard of Review for Pleas to the Jurisdiction on Governmental Immunity
A plea to the jurisdiction challenges the trial court’s subject-matter
jurisdiction to hear the case. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554
(Tex. 2000). Subject-matter jurisdiction is essential to the authority of a court to
decide a case and is never presumed. Tex. Ass’n of Bus. v. Tex. Air Control Bd.,
9
852 S.W.2d 440, 443–44 (Tex. 1993). The plaintiff has the burden to allege facts
affirmatively demonstrating that the trial court has subject-matter jurisdiction. Id.
at 446; see also Weir Bros., Inc. v. Longview Econ. Dev. Corp., 373 S.W.3d 841,
847 (Tex. App.—Dallas 2012, no pet.) (“[The plaintiff] had the burden to plead
facts that affirmatively demonstrate a waiver of governmental immunity and that
the court has subject matter jurisdiction.”).
We review a trial court’s ruling on a plea to the jurisdiction de novo. See
Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). In
reviewing the ruling, an appellate court “must determine whether facts have been
alleged that affirmatively demonstrate jurisdiction in the trial court.” City of Waco
v. Lopez, 259 S.W.3d 147, 150 (Tex. 2008).
When reviewing a trial court’s ruling on a jurisdictional plea, “we first look
to the pleadings to determine if jurisdiction is proper, construing them liberally in
favor of the plaintiffs and looking to the pleader’s intent,” and “we consider
relevant evidence submitted by the parties when necessary to resolve the
jurisdictional issues raised.” City of Waco v. Kirwan, 298 S.W.3d 618, 621–22
(Tex. 2009). We do not adjudicate the substance of the case but instead determine
whether a court has the power to reach the merits of the claim. Bland Indep. Sch.
Dist., 34 S.W.3d at 554; Bd. of Trs. of Galveston Wharves v. O’Rourke, 405
S.W.3d 228, 233 (Tex. App.—Houston [1st Dist.] 2013, no pet.).
10
If the pleadings affirmatively negate the existence of jurisdiction, the plea
may be granted without allowing the plaintiff an opportunity to amend her
pleadings. Miranda, 133 S.W.3d at 227. If the relevant evidence is undisputed or
fails to raise a fact issue as to jurisdiction, the trial court rules on the plea as a
matter of law. Id. at 228.
“Under the common-law doctrine of sovereign immunity, the [state] cannot
be sued without its consent.” City of Houston v. Williams, 353 S.W.3d 128, 134
(Tex. 2011). Governmental immunity operates like sovereign immunity to afford
similar protection to subdivisions of the state, including counties, cities, and school
districts. Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Like sovereign
immunity, “governmental immunity has two components: immunity from liability,
which bars enforcement of a judgment against a governmental entity, and
immunity from suit, which bars suit against the entity altogether.” Tooke v. City of
Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Governmental immunity from suit
deprives a trial court of subject-matter jurisdiction and is properly asserted in a
plea to the jurisdiction, while immunity from liability is an affirmative defense.
See Miranda, 133 S.W.3d at 224–26. Furthermore, “[i]mmunity from suit bars a
suit against the State unless the Legislature expressly consents to the suit.” Tex.
Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002).
11
“[F]or the Legislature to waive the State’s sovereign immunity, a statute or
resolution must contain a clear and unambiguous expression of the Legislature’s
waiver of immunity.” Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696
(Tex. 2003); see also Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500, 512
(Tex. 2012) (recognizing that immunity from suit “remains intact unless
surrendered in express and unequivocal terms by the statute’s clear and
unambiguous waiver”). The supreme court has “repeatedly affirmed that any
purported statutory waiver of sovereign immunity should be strictly construed in
favor of retention of immunity.” Chatha, 381 S.W.3d at 513 (citing Taylor, 106
S.W.3d at 696); see also TEX. GOV’T CODE ANN. § 311.034 (Vernon 2013) (“In
order to preserve the legislature’s interest in managing state fiscal matters through
the appropriations process, a statute shall not be construed as a waiver of sovereign
immunity unless the waiver is effected by clear and unambiguous language.”).
Interlocutory Appeal
As a preliminary matter, Walker argues that Neighborhood Centers is a
private, non-profit corporation that does not enjoy governmental immunity from
suit. She contends that, for that reason, “the Court should dismiss Neighborhood
Centers’ issue on appeal for lack of appellate jurisdiction.” We disagree with
Walker’s contention that we lack appellate jurisdiction over this interlocutory
appeal.
12
Civil Practice and Remedies Code section 51.014(a)(8) provides that “[a]
person may appeal from an interlocutory order of a district court . . . that . . . grants
or denies a plea to the jurisdiction by a governmental unit as that term is defined in
Section 101.001.” TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (Vernon
2015). Pursuant to the Legislature’s recent amendment of Education Code section
12.1056, “[a]n open-enrollment charter school is a governmental unit as defined by
Section 101.001 [of the] Civil Practice and Remedies Code. . . .” Act of June 1,
2015, 84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015 (codified as
TEX. EDUC. CODE § 12.1056(b)); see also C2 Constr., Inc., 342 S.W.3d at 75–76
(holding that open-enrollment charter school is governmental unit as defined in
Civil Practice and Remedies Code section 101.001(3), and thus court of appeals
has jurisdiction to hear interlocutory appeal from order granting or denying charter
school’s plea to jurisdiction pursuant to Civil Practice and Remedies Code section
51.014(a)(8)).
Accordingly, we hold that because the Education Code provides that
Neighborhood Centers is a governmental unit as that term is defined in Civil
Practice and Remedies Code section 101.001, this Court has jurisdiction over this
interlocutory appeal under the express language of section 51.014(a)(8). See TEX.
CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8); id. § 101.001(3); Act of June 1,
13
2015, 84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015 (codified as
TEX. EDUC. CODE § 12.1056(a)); C2 Constr., Inc., 342 S.W.3d at 82.
Plea to the Jurisdiction on Walker’s Workers’ Compensation Anti-Retaliation
Claim
In her sole issue on cross-appeal, Walker argues that the trial court erred in
granting Neighborhood Centers’ plea to the jurisdiction on her workers’
compensation anti-retaliation claim under Labor Code section 451.001. See TEX.
LABOR CODE ANN. § 451.001 (Vernon 2015).
Walker argued in her original brief on appeal that “Texas courts have not
decisively afforded entities like Neighborhood Centers immunity from suit”
because the Education Code only provides that open-enrollment charter schools are
immune from liability to the same extent as public school districts and does not
explicitly mention immunity from suit. She also argues that “[a]n entity should not
obtain immunity from suit merely by operating an open-enrollment charter school”
and that granting Neighborhood Centers immunity from suit because it operates an
open-enrollment charter school would not serve the purposes of governmental
immunity.
Neighborhood Centers responds that numerous courts of appeals, including
this Court, have held that charter schools enjoy the same immunity from suit as
traditional public school districts. It further argues that, because the Texas
Supreme Court has held that governmental immunity has not been waived for
14
claims under the Workers’ Compensation Act’s anti-retaliation provision set out in
Labor Code section 451.001, the trial court lacked jurisdiction over this claim of
Walker’s.
As set out above, the Legislature has effectively settled the issue of whether
an open-enrollment charter school is immune from suit to the same extent as a
public school by amending Education Code section 12.1056. Effective June 18,
2015, “[i]n matters related to operation of an open-enrollment charter school, an
open-enrollment charter school or charter holder is immune from liability and suit
to the same extent as a school district. . . .” Act of June 1, 2015, 84th Leg., R.S.,
ch. 922 (H.B. 1171), § 1, eff. June 18, 2015 (codified as TEX. EDUC. CODE
§ 12.1056(a)) (emphasis added); see also C2 Constr., Inc., 342 S.W.3d at 82
(holding that open-enrollment charter school is governmental unit for purposes of
Tort Claims Act in Civil Practice and Remedies Code chapter 101); LTTS Charter
Sch., Inc. v. C2 Constr., Inc., 358 S.W.3d 725, 735–36 (Tex. App.—Dallas 2011,
pet. denied) (holding that open-enrollment charter school was immune from suit on
plaintiff’s contract claim just as public school would be).
Here, Walker sued Neighborhood Centers, a charter holder, for its actions
related to operating its open-enrollment charter school. We conclude that
governmental immunity from suit applies to Neighborhood Centers in this case,
and the trial court lacks subject-matter jurisdiction absent a clear and unambiguous
15
waiver of that immunity by the Legislature. See Tooke, 197 S.W.3d at 332–33;
Miranda, 133 S.W.3d at 224–26; see also City of Dallas v. Albert, 354 S.W.3d
368, 374 (Tex. 2011) (holding that waivers of sovereign immunity or consent to
sue governmental entities must generally be found in actions of Legislature). We
therefore turn to whether Neighborhood Centers’ immunity from suit has been
waived for a workers’ compensation anti-retaliation claim brought pursuant to
Labor Code chapter 451.
In Travis Central Appraisal District v. Norman, the Texas Supreme Court
addressed the issue of waiver of governmental immunity under the same statute
Walker relies upon in her pleadings—“the Texas Anti-Retaliation Law, found in
Chapter 451 of the Texas Labor Code, [which] prohibits a person from discharging
or discriminating against an employee, who in good faith files a workers’
compensation claim.” 342 S.W.3d 54, 54 (Tex. 2011) (citing TEX. LAB. CODE
ANN. § 451.001(1)). The court acknowledged that it had previously held that,
while the anti-retaliation statute itself did not waive governmental immunity, the
1981 and 1989 versions of Labor Code chapter 504, also known as the Political
Subdivisions Law, reflected a legislative intent to waive governmental immunity
for retaliatory discharge claims under chapter 451. Id. at 56–57 (citing City of
LaPorte v. Barfield, 898 S.W.2d 288, 298–99 (Tex. 1995) (holding that chapter
16
504 waives governmental immunity of political subdivisions for retaliatory
discharge claims under chapter 451)).
However, the supreme court in Norman also observed that, following the
2005 revisions to the Political Subdivisions Law, the statute no longer contained a
clear and unambiguous waiver of immunity from suit under the anti-retaliation
provision. Id. at 57–59. The court concluded, “Because a retaliatory discharge
claim may not be brought against the government without its consent and the
Political Subdivisions Law no longer provides such consent by waiving the
government’s immunity, the underlying claim in this case must be dismissed.” Id.
at 59.
Following the supreme court’s reasoning in Norman, we conclude that the
Legislature has not provided a clear and unambiguous waiver of Neighborhood
Centers’ governmental immunity from suit on Walker’s anti-retaliation claim. See
id. Accordingly, the trial court lacked subject-matter jurisdiction over this claim
and properly granted Neighborhood Centers’ plea to the jurisdiction on this claim.
See Tooke, 197 S.W.3d at 332–33; Miranda, 133 S.W.3d at 224–26.
We hold that Neighborhood Centers enjoys immunity from Walker’s suit
under the anti-retaliation provision of the Workers’ Compensation Act in Labor
Code chapter 451 and that the immunity of political subdivisions to suit under this
chapter has not been clearly and unambiguously waived.
17
We overrule Walker’s sole issue on appeal.
Plea to the Jurisdiction on Walker’s Whistleblower Protection Act Retaliation
Claim
In its sole issue on appeal, Neighborhood Centers argues that the trial court
erred in denying its plea to the jurisdiction on Walker’s retaliation claim under the
Whistleblower Protection Act. It argues that, as a public charter school, it is not
subject to the Whistleblower Protection Act and, accordingly, Walker cannot
allege any waiver of its governmental immunity from suit under that statute.
Neighborhood Centers acknowledges that the supreme court has held that
open-enrollment charter schools are “governmental units” under the Texas Tort
Claims Act. See C2 Constr. Inc., 342 S.W.3d at 82. However, it argues that the
definition of “governmental unit” in the Tort Claims Act is broader than the
definition of “local governmental entity” in the Whistleblower Protection Act. It
argues that it is not a “political subdivision of the state” within the meaning of the
Whistleblower Protection Act because it does not have the characteristics of a state
governing board or of a traditional political subdivision of the state, such as the
power to assess and collect taxes, a governing body that is either elected in local
elections or appointed by locally-elected officials, or jurisdiction over a portion of
the state. See Guar. Petroleum Corp. v. Armstrong, 609 S.W.2d 529, 531 (Tex.
1980) (providing characteristics that “political subdivisions” possess).
Neighborhood Centers’ argument thus turns on whether an entity operating an
18
open-enrollment charter school falls within the definition of “local governmental
entity” in the Whistleblower Protection Act such that its immunity from suit is
waived for anti-retaliation claims filed under the Act.
On rehearing, Neighborhood Centers argues that the Legislature’s adoption
of Education Code section 12.1058 “makes clear that Neighborhood Centers is not
subject to the Whistleblower Act; and therefore, there has been no waiver of
immunity.”
A. Waiver of Immunity from Suit Under the Whistleblower Protection Act
and Education Code
Neighborhood Centers argues that newly added section 12.1058(c) must be
construed to preclude the treatment of charter schools like public schools for
purposes of the Whistleblower Protection Act because that subsection states that a
charter school “is not considered to be a political subdivision, local government, or
local governmental entity unless the applicable statute specifically states that the
statute applies to an open-enrollment charter school.” It argues that the
Whistleblower Protection Act does not specifically state that the Act applies to
charter schools; therefore, Neighborhood Centers does not fall within the definition
of a local governmental entity as defined by the Whistleblower Protection Act. We
disagree.
19
1. Waiver of Immunity Under the Whistleblower Protection Act
The Whistleblower Protection Act, in Government Code section 554.002,
prohibits retaliation for reporting a violation of law:
A state or local governmental entity may not suspend or terminate the
employment of, or take other adverse personnel action against, a
public employee who in good faith reports a violation of law by the
employing governmental entity or another public employee to an
appropriate law enforcement authority.
TEX. GOV’T CODE ANN. § 554.002(a) (Vernon 2012). In section 554.001, the
Whistleblower Protection Act defines “local governmental entity” as used in
section 554.002 to mean “a political subdivision of the state, including a:
(A) county; (B) municipality; (C) public school district; or (D) special-purpose
district or authority.” Id. § 554.001(2) (Vernon 2012).
“A public employee whose employment is suspended or terminated or who
is subjected to an adverse personnel action in violation of Section 554.002 is
entitled to sue for: (1) injunctive relief; (2) actual damages; (3) court costs; and
(4) reasonable attorney fees.” Id. § 554.003(a) (Vernon 2012). The term “public
employee” is defined for this purpose to mean “an employee or appointed officer
other than an independent contractor who is paid to perform services for a state or
local governmental entity.” Id. § 554.001(4).
The Whistleblower Protection Act also contains a waiver of immunity:
A public employee who alleges a violation of this chapter may sue the
employing state or local governmental entity for the relief provided by
20
this chapter. Sovereign immunity is waived and abolished to the
extent of liability for the relief allowed under this chapter for a
violation of this chapter.
Id. § 554.0035 (Vernon 2012). We conclude, therefore, that the Whistleblower
Protection Act waives the immunity of local government entities, including public
school districts, from suits brought by whistleblowers.
2. Waiver of Immunity Under the Education Code
The Education Code, in turn, unequivocally provides that “[a]n open-
enrollment charter school is part of the public school system of this state.” TEX.
EDUC. CODE ANN. § 12.105; C2 Constr., Inc., 342 S.W.3d at 76. The Education
Code further provides that “an open-enrollment charter school is subject to federal
and state laws and rules governing public schools and to municipal zoning
ordinances governing public schools.” TEX. EDUC. CODE ANN. § 12.103(a). In
addition, regarding immunity, the Education Code, as amended in 2015, now
specifically provides, “In matters related to operation of an open-enrollment
charter school, an open-enrollment charter school or charter holder is immune from
liability and suit to the same extent as a school district. . . .” Act of June 1, 2015,
84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015 (codified as TEX.
EDUC. CODE § 12.1056(a)).
The Education Code also “subjects open-enrollment charter schools to a host
of statutes that govern governmental entities outside the Education Code.” C2
21
Constr., Inc., 342 S.W.3d at 78. The Code provides that open-enrollment charter
schools are: (1) “governmental bodies” for purposes of Open Meetings and Public
Information Laws; (2) a “local government” under laws relating to local
government records; and (3) a “governmental entity,” “political subdivision,” and
“local government” for purposes of public purchasing and contracting laws. See
TEX. EDUC. CODE ANN. §§ 12.1051–12.1055; C2 Constr. Inc., 342 S.W.3d at 77;
see also TEX. EDUC. CODE ANN. § 12.1054–12.1055 (providing for applicability of
law relating to conflicts of interest and nepotism laws to open-enrollment charter
schools, their governing bodies, members, and officers).
Newly enacted Education Code sections 12.1058(a) and (b) add to this list of
specific provisions for which open-enrollment charter schools may be considered
governmental entities. See Act of June 1, 2015, 84th Leg., R.S., ch. 1020 (H.B.
1170), § 1, eff. June 19, 2015 (codified as TEX. EDUC. CODE § 12.1058(a)–(b))
(providing that open-enrollment charter schools can be “a local government” for
purposes of statutes governing inter-local cooperation contracts and self-insurance
funds under Government Code chapters 791 and 2259; “a political subdivision” for
purposes of Texas Political Subdivision Employees Uniform Group Benefits Act
under Local Government Code chapter 172; “a local governmental entity” for
purposes of adjudication of claims arising under written contracts with local
governmental entities under Local Government Code chapter 271; and “a political
22
subdivision” under Labor Code chapter 504 governing workers’ compensation
participation). New section 12.1056(d) also provides that an open-enrollment
charter school is a local government entity for purposes of Local Government
Code chapter 271. See Act of June 1, 2015, 84th Leg., R.S., ch. 922 (H.B. 1171),
§ 1, eff. June 18, 2015 (codified as TEX. EDUC. CODE § 12.1056(d)). And section
12.1056(b) provides that an open-enrollment charter school is a governmental unit
as defined in Civil Practice and Remedies Code section 101.001, governing tort
claims against governmental entities. Act of June 1, 2015, 84th Leg., R.S., ch. 922
(H.B. 1171), § 1, eff. June 18, 2015 (codified as TEX. EDUC. CODE § 12.1056(b)).
Finally, newly enacted section 12.1058(c) provides a limit to the application
of other provisions to open-enrollment charter schools, stating, “Notwithstanding
Subsection (a) or (b), an open-enrollment charter school operated by a tax exempt
entity as described by Section 12.101(a)(3) is not considered to be a political
subdivision, local government, or local governmental entity unless the applicable
statute specifically states that the statute applies to an open-enrollment charter
school.” Act of June 1, 2015, 84th Leg., R.S., ch. 1020 (H.B. 1170), § 1, eff. June
19, 2015 (codified as TEX. EDUC. CODE § 12.1058(c)).
The newly enacted amendments in sections 12.1056(b) and 12.1058(a) and
(b) add to the provisions in law for which charter schools are to be considered
public entities, and section 12.1058(c) limits the courts’ extension of the purposes
23
for which charter schools are considered to be local government entities, but they
do not affect or in any way alter the express immunity provision, set out in section
12.1056(a) of the Code, enacted at the same time, which provides that “[i]n matters
related to operation of an open-enrollment charter school, an open-enrollment
charter school or charter holder is immune from liability and suit to the same
extent as a school district.” TEX. EDUC. CODE ANN. § 12.1056(a). Nor do these
amendments affect the clear waiver of immunity for local government entities,
expressly including school districts, set out in the Whistleblower Protection Act,
which provides that “[a] public employee who alleges a violation of this chapter
may sue the employing state or local governmental entity for the relief provided by
this chapter” and that “[s]overeign immunity is waived . . . for a violation of this
chapter.” TEX. GOV’T CODE ANN. § 554.0035; see also §§ 554.001(2), (4),
554.002(a), 554.003(a).
We hold that Neighborhood Centers’ immunity from Walker’s suit against it
under the Whistleblower Protection Act is expressly waived by the Whistleblower
Protection Act and the Education Code.
This conclusion is supported by the principles of statutory construction.
B. Application of the Whistleblower Protection Act to an Open-Enrollment
Charter School Under the Principles of Statutory Construction
The Texas Code Construction Act provides that, “[i]n enacting a statute, it is
presumed that . . . (2) the entire statute is intended to be effective [and] (3) a just
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and reasonable result is intended.” TEX. GOV’T CODE ANN. § 311.021 (2), (3)
(Vernon 2013). The Act further provides that, “[i]n construing a statute, whether
or not the statute is considered ambiguous on its face, a court may consider among
other matters the (1) object sought to be attained; (2) circumstances under which
the statute was enacted; (3) legislative history; (4) common law or former statutory
provisions, including laws on the same or similar subjects; [and] (5) consequences
of a particular construction.” Id. § 311.023(1)–(5). The primary objective in
statutory construction is to give effect to the legislators’ intent. State v. Shumake,
199 S.W.3d 279, 284 (Tex. 2006). We rely upon the plain meaning of the statutory
text unless a different meaning is supplied by legislative definition or is apparent
from the context or a construction leads to absurd results. City of Rockwall v.
Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008).
Texas law holds that before the courts construe amended statutes to make
substantive changes to prior statutes or to common law rules, they must look
carefully to be sure that was what the Legislature intended. Energy Serv. Co. of
Bowie, Inc. v. Superior Snubbing Servs., Inc., 236 S.W.3d 190, 193–94 (Tex.
2007). “The Legislature has directed that ‘[i]n interpreting a statute a court shall
diligently attempt to ascertain legislative intent and shall consider at all times the
old law, the evil, and the remedy.’” Id. at 194 (quoting TEX. GOV’T CODE ANN.
§ 312.005 (Vernon 2013)). Furthermore, “[a]bsent any identifiable reason for a
25
substantive change to have been made in the statutory provision, or any extra-
textual indication that one was intended, or any resulting change in industry
practice, . . . the most reasonable construction of [the statute] is the same as its
pre-[textual-change] predecessors.” Id. at 195 (construing Texas Labor Code
section 417.004).
The Whistleblower Protection Act expressly states that the Act applies to
public school districts. See TEX. GOV’T CODE ANN. § 554.002(a) (providing that
“[a] state or local governmental entity” may not retaliate against employee who
reports violation in good faith to proper authority); id. § 554.001(2) (including
“public school district” in definition of “local governmental entity”). And the
Education Code expressly provides that “an open-enrollment charter school is
subject to federal and state laws and rules governing public schools. . . .” See TEX.
EDUC. CODE ANN. § 12.103(a). Furthermore, the Whistleblower Protection Act
contains an express waiver of immunity that applies to public schools. See TEX.
GOV’T CODE ANN. § 554.0035. And as provided for by the Legislature’s recent
amendment of Education Code section 12.1056, governing immunity of open-
enrollment charter schools, open-enrollment charter schools are immune from
liability and suit to the same extent as public schools. See Act of June 1, 2015, 84th
Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015 (codified as TEX. EDUC.
CODE § 12.1056(a)).
26
We conclude that the Legislature has clearly expressed its intention that the
Whistleblower Protection Act apply to open-enrollment charter schools just as it
applies to public schools. See Shumake, 199 S.W.3d at 284 (primary objective in
statutory construction is to give effect to legislators’ intent); Hughes, 246 S.W.3d
at 625–26 (in determining legislative intent, we rely upon plain meaning of
statutory text).
The Legislature’s addition of section 12.1058(c) to the Education Code does
not change this analysis. That section provides only that “an open-enrollment
charter school . . . is not considered to be a political subdivision, local government,
or local governmental entity unless the applicable statute specifically states that the
statute applies to an open-enrollment charter school.” TEX. EDUC. CODE ANN.
§ 12.058(c). The Whistleblower Protection Act specifically states that public
schools are local government entities subject to the Act, and Education Code
section 12.1056(a) specifically states that open-enrollment charter schools are
“immune from liability and suit to the same extent as public schools.” See TEX.
GOV’T CODE ANN. § 554.001; TEX. EDUC. CODE ANN. § 12.1056(a).
Section 12.1058, as a catch-all provision, does not purport to repeal or alter
the general provision found in Education Code section 12.103 providing that
charter schools are subject to the same laws as public schools. To read section
12.1058 in such a way would effectively negate section 12.103, which we will not
27
do. See TEX. GOV’T CODE ANN § 311.021(2) (“In enacting a statute, it is presumed
that . . . the entire statute is intended to effective.”). Moreover, such a reading
would create an absurd result by requiring that every statute that applies to charter
schools through the requirement that they be treated the same as public schools be
retrofitted to add the words “charter schools” in addition to stating that the law as
applied to a public school applies also to a charter school. See id. § 311.021(3) (in
construing statute, “a just and reasonable result is intended”); Hughes, 246 S.W.3d
at 625–26 (stating that we rely upon plain meaning of statutory text unless different
meaning is supplied by legislative definition or is apparent from context, or
construction leads to absurd results).
We turn, therefore, to the courts’ construction of the law prior to the
enactment of section 12.1058.
In Pegasus School of Liberal Arts & Sciences v. Ball-Lowder, the Dallas
Court of Appeals addressed arguments similar to those raised by Neighborhood
Centers. That court held that, in spite of the differences in the statutory definitions
of “governmental unit” in the Tort Claims Act and “local governmental entity” in
the Whistleblower Protection Act, “the Whistleblower Protection Act’s definition
of ‘local governmental entity’ must be interpreted to include an open-enrollment
charter school.” Pegasus Sch. of Liberal Arts & Scis. v. Ball-Lowder, No. 05-13-
00482-CV, 2013 WL 6063834, at *5 (Tex. App.—Dallas Nov. 18, 2013, pet.
28
denied). The court in Pegasus School held that a private, non-profit entity
operating an open-enrollment charter school, such as Neighborhood Centers here,
is subject to the Whistleblower Protection Act and to its waiver of immunity from
suit under that Act. See id.
Neighborhood Centers argues, however, that we should not rely on the
Dallas Court of Appeals’ opinion in Pegasus School. It argues that the Pegasus
School opinion strays from the established precedent of the supreme court in C2
Construction; that it erroneously applies the broad definition of “governmental
unit” to the more narrowly defined term of “local governmental entity”; and that it
confuses two distinct issues: “(1) the extent of an open-enrollment charter school’s
immunity, and (2) the basic applicability of a law and statutory cause of action to
open-enrollment charter schools.” We disagree for the reasons set out below.
In reaching its conclusion in Pegasus School, the Dallas Court of Appeals
began by discussing both the supreme court’s opinion in C2 Construction and its
own opinion in that case on remand from the Texas Supreme Court. Id. at *3–5.
In C2 Construction, the supreme court’s analysis involved the “broad,”
“catch-all” provision in the Tort Claims Act, found in Civil Practice and Remedies
Code section 101.001(3)(D), and it concluded that an open-enrollment charter
school is a “governmental unit” as defined in that chapter. TEX. CIV. PRAC. & REM.
CODE ANN. § 101.001(3)(D); C2 Constr., Inc., 342 S.W.3d at 76.
29
After the supreme court remanded the case for consideration of the trial
court’s interlocutory order on the charter school’s plea to the jurisdiction, the
Dallas court in C2 Construction considered the question of whether the charter
school’s immunity had been waived by Local Government Code section 271.152,
which provides a waiver of immunity for limited breach of contract claims. 358
S.W.3d at 740–42 (opinion on remand). It concluded that an open-enrollment
charter school is a “local governmental entity” for purposes of the waiver of
immunity in Local Government Code section 271.152. Id. at 742. Noting that
Education Code section 12.103 specifies that “an open-enrollment charter school is
subject to federal and state laws and rules governing public schools,” it reasoned
that the waiver of immunity from contract claims against public schools must also
extend to open-enrollment charter schools. Id. at 741 (citing C2 Constr., Inc., 342
S.W.3d at 78 n.44). The Texas Legislature has now definitively resolved this issue
exactly as the C2 Construction court did, by expressly providing in newly added
section 12.1056(b) that an open-enrollment charter school is a governmental unit
as defined in Civil Practice and Remedies Code section 101.001, governing tort
claims against governmental entities, just as the C2 Construction court held. See
Act of June 1, 2015, 84th Leg., R.S., ch. 922 (H.B. 1171), § 1, eff. June 18, 2015
(codified as TEX. EDUC. CODE § 12.1056(b)).
30
Against the backdrop of the history of the C2 Construction cases, the Dallas
court in Pegasus School turned to the question of whether an open-enrollment
charter school is a “local governmental entity” under the Whistleblower Protection
Act—the same question we must answer here.
The Pegasus School court stated that the Whistleblower Protection Act and
Local Government Code section 271.151(3) contain “almost identical” provisions.
2013 WL 6063834, at *5; compare TEX. GOV’T CODE ANN. § 554.001(2)(c)
(Whistleblower Protection Act) (“‘Local governmental entity’ means a political
subdivision of the state, including a . . . public school district.”), with TEX. LOC.
GOV’T CODE ANN. § 271.151(3) (Vernon Supp. 2015) (“‘Local governmental
entity’ means a political subdivision of this state . . . including a . . . public school
district.”). The court held that “[t]he ‘attributes and circumstances’” of open-
enrollment charter schools relied on in the C2 Construction cases—i.e., that they
are part of the public school system, have “responsibility for implementing [the]
state’s school system of public education, and are subject to state laws and rules
governing public schools, among other factors”—are equally relevant and
applicable in determining whether an open-enrollment charter school is a “local
governmental entity” under the Whistleblower Protection Act. Pegasus School,
2013 WL 6063834, at *5 (citing C2 Constr., Inc., 358 S.W.3d at 736–37, 741
(opinion on remand)). The Pegasus School court held that the logic of its opinion
31
on remand in C2 Construction likewise compelled its holding that an open-
enrollment charter school was a “local governmental entity” under the
Whistleblower Protection Act. Id.
The conclusions of the Dallas Court of Appeals in C2 Construction and in
Pegasus School are both consistent with the intent of the Legislature as expressed
in the Whistleblower Protection Act, the previously existing sections of the
Education Code, and the newly enacted sections. The Education Code grants
open-enrollment charter schools “status as ‘part of the public school system of this
state’” and “authority to wield ‘the powers granted to [traditional public] schools,’”
including the power “to receive and spend state tax dollars (and in many ways to
function as a governmental entity).” C2 Constr. Inc., 342 S.W.3d at 78 (citing
TEX. EDUC. CODE ANN. §§ 12.104–12.106). Moreover, the Education Code
expressly provides that “an open-enrollment charter school is subject to federal and
state laws and rules governing public schools,” and it waives an open-enrollment
charter school’s immunity from liability and suit “to the same extent as a public
school.” Id. §§ 12.103(a), (b), 12.1056(a).
The Whistleblower Protection Act contains a “clear and unambiguous
expression of the Legislature’s waiver of immunity” that expressly applies to
public schools, as required to waive governmental immunity. See Taylor, 106
S.W.3d at 696; see also TEX. GOV’T CODE ANN. § 554.0035 (providing that public
32
employee “may sue the employing state or local governmental entity” and that
“[s]overeign immunity is waived and abolished to the extent of liability for the
relief allowed” under Act). Thus, there is no question that the Legislature intended
to waive immunity from suit for some claims under the Whistleblower Protection
Act. There is only the question of whether the scope of affected governmental
entities includes open-enrollment charter schools.
We conclude that the Whistleblower Protection Act applies here and that
Neighborhood Centers’ immunity from suit and liability is waived to the same
extent that the public school district’s immunity from suit and liability is waived.
Thus, we hold that the Legislature has waived governmental immunity for the
Whistleblower Protection Act claim asserted here by Walker against Neighborhood
Centers. See Taylor, 106 S.W.3d at 697 (holding that statute waiving immunity
need not be model of “perfect clarity” but must do so beyond doubt). Accordingly,
the trial court properly denied Neighborhood Centers’ plea to the jurisdiction on
this issue.
We overrule Neighborhood Centers’ sole issue on appeal.
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Conclusion
We affirm the order of the trial court.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Bland, and Massengale.
34