EMPLOYMENT LAW

SPRING 2008

 Montgomery County, Texas v. David Park, W.L. 4216605; LEXIS 1027 (Tex. 2007)

Whistleblower Retaliation: The respondent, David Park, a patrol lieutenant with the Montgomery County Sheriff’s Department, also served as the security coordinator for Montgomery County convention center events. While Montgomery County owned the convention center, many activities there were privately sponsored. As security coordinator for these private events, Park received event sheets from the convention center’s director, Don Carpenter, and arranged the hiring of off-duty deputies to provide security. Park conducted these activities from his office in the sheriff’s department during regular business hours. He received no additional compensation from either the County or the convention center for coordinating security for these private events. In the spring of 2002, during a meeting Park attended with County Commissioner Ed Rinehart and others, Rinehart allegedly spoke in graphic sexual terms about Park’s administrative assistant and another administrative assistant. Park informed his administrative assistant of Rinehart’s remarks, and another meeting attendee informed the other administrative assistant of the same. The two assistants then relayed numerous instances of Rinehart’s alleged sexual harassment that occurred over the preceding months. Park reported Rinehart’s remark, as well as the administrative assistants’ accounts, to the sheriff. The County then undertook an investigation. In the midst of that investigation, Rinehart allegedly ordered Carpenter to relieve Park of his security coordination duties. Those duties were transferred first to the constable’s office and then rotated on a monthly basis between the sheriff’s and constable’s offices. On October 30, 2002, Park sued Montgomery County, alleging that the County violated the Whistleblower Act by reassigning the security coordinator duties in retaliation for Park’s report of Rinehart’s comments. The County filed a plea to the jurisdiction and motion for summary judgment, raising no evidence claims and asserting that Park’s whistleblower claim failed as a matter of law. The trial court granted the County’s motion for summary judgment, and Park appealed. The court of appeals reversed and remanded, holding that Montgomery County was not entitled to summary judgment on any of the theories advanced.

Held: The Supreme Court granted Montgomery County’s petition for review and held that for a personnel action to be adverse within the meaning of the Act, it must be material, and thus likely to deter a reasonable, similarly situated employee from reporting a violation of the law. See Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006). The Court adopted the Burlington standard with appropriate modifications. The Court held that a personnel action was adverse within the meaning of the Whistleblower Act if it would be likely to dissuade a reasonable, similarly situated worker from making a report under the Act. The Court stated that the question of whether an action was illegal was generally a question of law with any fact issues being still decided by a jury. Park received no extra salary as security coordinator, and did not show that the position allowed him to work more extra jobs than he would have without it. Had extra jobs been scarce, the ability to control one source of them might have been the difference between getting extra work and not. Here, however, even after losing the first choice of convention center jobs, Park assumed that he would be able to find outside work if he wished. The Court stated that there was no evidence that the ability to assign himself convention center jobs actually increased Park’s access to extra work and, thus, indirectly, his compensation. Finally, the Court noted that the loss of Park's coordinating duties stood in stark contrast to the reassignment from forklift operator to track laborer and unpaid thirty-seven day suspension, albeit with subsequent back pay awarded through internal grievance procedures, suffered by the complaining worker in the Burlington case. Because the Court concluded that David Park did not suffer an adverse personnel action, they reversed the court of appeals’ judgment and rendered judgment for Montgomery County.

Sporran Kbusco, Inc. v. Cerda, 227 S.W.3d 288 (Tex. App.—San Antonio 2007)

Arbitration: A terminated employee brought suit against his former employer. The employee had been employed for several years at Kerrville Bus Co., Inc.. In 2003, the company became Kerrville Bus Co. and asked employees to complete a new application of employment, which included a “re-employment certification” in which employees were asked to initial 8 provisions, one of which was an arbitration provision. The employee in question initialed 6 provisions but refused to initial the arbitration provision. When the employee was injured on the job, he filed a workers’ compensation claim, was then was fired, and filed this suit. Kerrville Bus Co. filed motion to compel arbitration, which the trial court denied resulting in this appeal. Held: Affirmed. The Court stated that, although there was a strong presumption favoring arbitration, that presumption arose only after the party seeking to compel arbitration proved that a valid arbitration agreement existed. Under both the Federal Arbitration Act and the Texas Arbitration Act, ordinary principles of contract are applied in order to determine whether a valid arbitration agreement exists. The Court held that the employee’s refusal to initial the arbitration provision but initialing the other provisions demonstrated his refusal to accept arbitration. Therefore, the arbitration provision was not enforced.

In Re Pisces Foods, LLC, 228 S.W.3d 349 (Tex. App.—Austin 2007)

Arbitration: An employee who was injured on the job filed a negligence claim against his employer, who was a non-subscriber to the workers’ compensation statute. The employer raised an arbitration agreement and the trial court denied arbitration, which the employer appealed. Held: The Court of Appeals discussed the law in the arbitration area. A party seeking arbitration must establish it’s right under a contract. Once the arbitration agreement was established and the claims were shown to be within the agreement’s scope, the trial court must compel arbitration. The employer had a dispute resolution program, which had a 4 step procedure: first, talking about problems one on one with a store manager; second, formal review by the HR department; third, mediation; and fourth, final and binding arbitration. The agreement further provided that each of the steps must be followed in sequence, which provision was emphasized. The employee argued that arbitration was improper because the parties had not engaged in mediation. The Court considered whether the question of the failure to mediate was a matter to be considered by the arbitrator and ruled upon by the arbitrator. The Court considered whether a matter was a substantive issue or a procedural issue. Substantive issues were those relating to whether the subject matter of the dispute was within an arbitration agreement and a procedural issue as those relating to whether the procedures for invoking and using arbitration were met. Generally, substantive issues were to be decided by the courts and procedural issues were to be decided as part of the arbitration. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964). The John Wiley court also held that the issues concerning fulfillment of arbitration prerequisites blended substance and procedure and should by decided by the arbitrator. Courts nevertheless have held that issues related to the meeting of conditions precedent to arbitration, including time limits, notice, and laches, are procedural arbitrability issues. The Court stated that the Fifth Circuit recognized a narrow exception to the general rule that arbitrators decide questions of procedure, applicable only when those issues of procedure were essentially undisputed factually. The Fifth Circuit wrote that “we have interpreted this rare exception to mean that a court will not order arbitration if “no rational mind” could question that the parties intended for a procedural provision to preclude arbitration and that the breach of the procedural requirement was clear”. The Court of Appeals applied this exception to rule on the arbitration provision and held that arbitration could not be compelled when parties who were contractually required to mediate or follow other grievance procedure as a precondition to arbitration had failed to do so. The Court refused to rule on whether the company had waived the right to arbitrate upon satisfaction of the preconditions, only that the right to compel arbitration has not accrued under the terms of the contract.

Hurley v. Tarrant County, 232 S.W.3d 781 (Tex. App.—Fort Worth 2007)

Whistleblower Act Claim: A deputy constable was terminated. Prior to termination, he had reported a violation of law by the Constable. The deputy then sued for wrongful termination alleging a whistleblower claim under state law. The trial court granted the county summary judgment. The Court of Appeals examined the evidence. To show causation, a public employee must demonstrate that after he reported a violation of the law in good faith to an appropriate law enforcement authority, the employee suffered discriminatory conduct by his employer that would not have occurred when it did if the employee had not reported the illegal conduct. This causation standard has been described as a “but for” causal nexus requirement. An employee did not have to prove that the reporting of the illegal conduct was the sole reason for the employer’s decision. Circumstantial evidence may be sufficient to establish a causal link. This circumstantial evidence may include: (1) knowledge of the report of illegal conduct; (2) expression of a negative attitude toward the employee’s report of the illegal conduct; (3) failure to adhere to established company policies regarding employment decisions; (4) discriminatory treatment in comparison to similarly situated employees; and (5) evidence that the stated reason for the adverse employment action is false. However, evidence that an adverse employment action was preceded by a superior’s negative attitude toward an employee’s report of illegal conduct was not enough, standing alone, to show a causal connection between the two events. There must be more. So, number 1 and 2 above, standing alone, were not enough evidence because number 2 assumed number 1 that the supervisor would know of the report of the illegal conduct in order for him to express a negative attitude. Therefore, the Court of Appeals affirmed the summary judgment holding that the only evidence presented by the deputy was number one and two above.