In Office of the Attorney General v. Rodriguez, a supervisor reported possible insurance fraud to her supervisor at the Office of the Attorney General of Texas. Laura Rodriguez believed she had a duty to report fraud, waste or abuse. She reported possible fraud concerning her her long-time friend and administrative assistant, Debbie Galindo. Ms. Rodriguez reported the apparent fraud in January, 2009 to her supervisor. The employer investigated and found her suspicions to be correct, that the co-worker had tried to commit insurance fraud in listing a non-relative on her insurance plan. The supervisor, Charles Smith, later started an investigation of Ms. Roidriguez based on an old complaint about her and based on a newer complaint.

As part of the investigation into Ms. Rodriguez, her complaint about Ms. Galindo came up. The investigators reported to Mr. Smith that Ms. Rodriguez had shown bad judgment as a supervisor. They claimed she had become “irrational” when they asked her about renting a home to Ms. Galindo’s family. In actuality, Ms. Rodriguez did break down and cry when asked about the rental and told that rental to Galindo was not appropriate. Later, Ms. Rodriguez wanted to discipline one of her subordinates. Mr. Smith thought the manner of the discipline was improper and again showed poor judgment on the part of Ms. Rodriguez. In September, 2009, Mr. Smith drafted his first termination memo regarding Ms. Rodriguez. Jo Kirk, an attorney in the HR section at OAG advised Smith to make it a demotion, based on similar discipline of another supervisor at the OAG.

So, when Ms. Galindo was placed on suspension for her insurance fraud, Ms. Rodriguez was herself demoted later that same day in September, 2009. The next day, Mr. Smith issued a written warning to Ms. Rodriguez for the complaint about her by a subordinate, and for her renting a house to Ms. Galindo’s family members. When she was demoted, Ms. Rodriguez had to perform evaluations for all her former employees. Due to that requirement, she fell behind quickly in her new job.

In her evaluation in December, 2009, Mr. Smith gave her high marks, but in the area of ethics, she was rated very low for an alleged business relationship with one of her employees. Mr. Smith said that her business relationship “cast doubt” on her initial complaint about possible insurance fraud.

Ms. Rodriguez then submitted a claim of retaliation, saying that Mr, Smith had included false statements on her evaluation. A few months later, her new supervisor terminated Ms. Rodriguez. Ms. Rodriguez filed suit regarding her termination. The jury found the whistle blower complaint was part of her termination and award her $260,000 in lost pay, compensatory (emotional suffering) damages of $100,000, and lost future pay in the amount of $275,000.

On appeal, the OAG argued the evidence did not support the finding that her whistle blowing was part of her termination and that the evidence did not support the award of lost future pay, or “front pay.” The El Paso Court of Appeals did not agree wit the Office of the Attorney General. The court found that management conduct during the whole process supported the finding. Her supervisor thought it “odd” that Ms. Rodriguez took her concerns to a higher level, instead of disciplining the subordinate herself. The court noted that the employer wanted her to violate its own policy in requiring her to confront Ms. Galindo directly. Ms. Rodriguez wanted to keep her complaint anonymous, as OAG policy allowed. In pressing her to confront Ms. Galindo, the OAG was violating its own policy. Violating an employer’s own policy does help show illicit motive.

Too, the court of appeals found that a comparable employee was indeed comparable because they were accused of similar infractions, even if they had different supervisors. So, it was relevant that the comparable employee was not disciplined as severely as Ms. Rodriguez. Ms. Rodriguez’ replacement as Office Manager suffered from the same degree of backlogs as she did. Yet, her replacement was not fired or disciplined. And, noted the court, the fact that Mr. Smith included false statements in his evaluation of Mr. Rodriguez helps show illicit intent on his part.

Regarding lost future pay, or “front pay,” the court found that Ms. Rodriguez accepted a lower paying job that was not comparable to her last job as Office Manage – only after a fruitless search that lasted 18 months. If the employer believes Ms. Rodriguez could have found a job sooner than 18 months, it has the burden to show that. But, the OAG offered no such evidence.

See the decision here.

Two managers at the state Department of Health and Human Services Commission were fired weeks after they complained about possible violations of law at the agency. Before they were fired, they were excluded from important meetings. These are the allegations in a whistle blower lawsuit filed by Dimitria Pope and Shannon Pickett. Ms. Pope and Ms. Pickett were in charge of the Medical Transportation Program until last October. They were fired with no notice.

According to the lawsuit, the two women were subjected to unfair performance valuations and useless investigations which found no wrongdoing after they made their complaints. See San Antonio Express News report.

Unfortunately, under current whistle blower law, that may not be enough. What is critical in whistle blower lawsuits is that the employees reported their concerns to persons in a position to enforce the laws that are being violated. The news report does not indicate to whom they made their initial report. It does mention that later they reported their concerns to the Austin Police Department. But, we do not know if that report led to their termination, or if it was the report to their supervisors.

Federal employees have a wide range of options when they run into problems at work. One of those options is the Office of Special Counsel. OSC has the mandate to investigate fraud and violations of law. But they receive too many complaints and lack enough staff to investigate all those complaints. But, one San Antonio federal worker succeeded in attracting the attention of OSC. A Veterans Affairs worker named Jamie McBride complained about the process for transplants at the V.A. hospital.

He said veterans were being short-changed because they were being required to travel to distant V.A. hospitals in Houston and Nashville for heart, lung, liver and kidney transplants. Yet, when the veteran travels to these distant locales, they were actually being treated in non-VA hospitals. Mr. McBride pointed out that several San Antonio area hospitals performed these transplants. For unknown reasons, the V.A. refused to enter into contracts with those local hospitals.

After hearing the V.A.’s explanation, the OSC found Mr. McBride was correct. The V.A. imposed unreasonable eligibility criteria for persons seeking transplants under the Choice program. The OSC found that requiring families to re-locate to distant centers caused financial stress for those families. The V.A. argued that the local hospitals would not accept Medicare rates, which is a V.A. requirement. But,. Mr. McBride showed that some 50% of San Antonio hospitals would indeed accept medicare rates for those transplants.

The OSC agreed that the V.A. satisfied the requirements of the statute, but the V.A.’s actions were still unreasonable.

Mr. McBride submitted a complaint to the V.A. Inspector General’s office in 2013. Three years ago, the IG found in his favor. The worker then submitted a complaint to the Office of Special Counsel in Washington, D.C. See San Antonio Express-News report.

Yes, this is the first time I have experienced the OSC finding in favor of a local employee. Indeed, at least in my experience, they accept very few complaints for investigation.

Under the Texas Whistleblower Act, a person who works for a governmental entity and who reports violations of law is protected. Chad Carter worked for the City of Abilene as an engineer. He complained to his superiors that the city had hired contractors who were using unlicensed engineers. Using unlicensed engineers violates the Texas Engineering Practice Act. Mr. Carter was soon afterward fired. He sued under the Texas Whistleblower Act. The City responded with three different pleas to the jurisdiction. A peal to the jurisdiction is equivalent to a motion to dismiss for failure to state a claim. The plaintiff said he made three reports of violation of law: to the city engineer, the city attorney and to the Texas Board of Professional Engineers. The TWA requires that a person make the report to a law enforcement official with responsibility for the violation.

The trial court denied the plea to jurisdiction. The city appealed, saying Mr. Carter did not report the violation of the Engineering Practice Act to an appropriate law enforcement agency. The city argued that a complaint to the Texas Board of Professional Engineers was not the appropriate law enforcement agency. But, the plaintiff pointed to specific provisions of the Texas Occupation Code providing that the Board does enforce the Engineering Practice Act. Since this is a plea to the jurisdiction, the court is required to accept the plaintiff’s allegations as true. But, in this instance, the court can simply look at the statute and see if the Occupations Code says what the employee says it says. The decision does not explain why the city would offer an argument that can be verified so easily. But, in making an argument easily shown to be false, the city impeaches itself.

According to the plaintiff, the Board looked into the matter and did investigate his complaint. It reached an agreement with the City of Abilene regarding the complaint. So, the Eastland Court of Appeals rejected the employer’s appeal. See the decision in City of Abilene v. Carter, No. 11-15-00121 (Tex.App. Eastland 8/10/2017)  here. Indeed, one must conclude the city’s appeal was frivolous.

Another local manager has sued Wells Fargo saying she was fired due to the oppressive and fraudulent sales tactics employed by the company. Rachael DeBoy of Cibolo sued the company accusing them of fraud, breach of contract, quantum meruit (i.e., alleging the company did not pay what was owed), and for wrongful termination. In the Petition filed under DeBoy v. Wells Fargo Bank, N.A., No. 2017-CI-12897, the former Branch Manager accuses the bank of imposing stringent sales quotas starting in 2011. Ms. DeBoy complained about the unethical sales tactics. She said these sales tactics harmed customers. She complained to managers, Human Resources and to the Ethics phone line. She received no response. But, her better sales persons were fired or transferred. She was set up to fail, she alleges.

She went out on maternity leave and was replaced by a temporary manager who reinforced the bank’s unethical sales practices. Then, upon her return to work, she received a poor job evaluation with no warning and no job coaching.She had formerly been a stellar employee.

She resigned to avid a termination. Her replacement received a raise and a promotion. I previously wrote about the first lawsuit by Alex Leal against Wells Fargo here. Lawsuits based on “wrongful termination” in Texas will not go far. There is no such cause pf action in Texas. Her other causes of action are perhaps problematic. The Plaintiff alleges she was denied bonuses and raises due to the unethical practices. But, given the bad publicity about Wells Fargo and its shady practices, she may succeed. See San Antonio Express News report here.

The Texas Whistleblower Law has many limitations. One of those limits includes the requirement that the whistleblower must report the alleged violation of law to a law enforcement authority. For most laws, the local police force would be the appropriate authority. But, what about those many obscure white collar type crimes? We see one such violation in Office of the Attorney General v. Weatherspoon, 472 S.W.3d 280 (Tex. 2015). In this case, an Assistant AG, Ginger Weatherspoon says she was asked to submit a false affidavit regarding her dealings with a judge. She reported the unlawful request to her superiors within the Child Support Enforcement Division. She was later fired.

Ms. Weatherspoon filed suit under the Texas Whistleblower Statute. Tex.Govt.C. §554.0035. The OAG moved for a plea to the jurisdiction, which is like a motion for summary judgment. The trial court denied the motion. The Court of Appeals affirmed the denial. The Texas Supreme Court found in favor of the employer and reversed the denial of the plea. The main issue was other she reported the violation to the correct authority. She reported to the chief of her division, which in turn was required to make a report to the Office of Special Investigations. OSI was apparently the correct law enforcement agency. But, the Texas Supreme Court said that was not enough. Since, said the court, the division chief was not vested with authority to speak for the OSI or to conduct her own investigation.

The employee pointed out that if reporting to her division chief does not suffice, then OAG employees have no place to report. Since, they are subject to termination if they contact any law enforcement authority directly. The court essentially replied, “too bad.” The Whistleblower Act protects employees from reprisal, said the court. That should be dissuade employers from reprisal. See decision here.

The problem with that analysis is that the Texas Whistleblower statute is supposed to protect persons from reprisal, not lead them toward reprisal. The Court has taken the unrealistic view that employees should be willing to undergo financial hardship or worse in order to protect Texas citizens from law breakers. No other employer would have such a rule, that contacting law enforcement authorities directly is cause for dismissal. No one should have to risk her/her job to protect the public. The decision does not explain the basis for a rule prohibiting direct contact with any law enforcement agencies. We can only assume it has some nondiscriminatory purpose. But, if it has such a legitimate purpose, OAG employees should not be required to violate internal rules in order to comply with the Texas Whistleblower statute.

 

Texas has a whistleblower statute. It applies only to government workers. In a recent whistleblower decision, the Fourth Court of Appeals here in San Antonio reversed a grant of summary judgment. In the case of Torres v. City of San Antonio, No. 04-15-00664 (Tex.App. San Antonio 12/7/2016), Lt. Torres worked for the City Fire Department. In 2009, he was assigned to the Arson Division, where he would spend time at the San Antonio Police Department building. As an arson investigator, he had credentials to access a secure area at SAPD. He noticed two former arson investigators using credentials to get into the same secure area. They should have turned in their investigator credentials when they left the Arson Division. So, Lt. Torres mentioned this to his Captain. A few days later, he submitted a report to the Deputy Fire Chief. Believing no action was being taken, a few days later, he submitted a complaint to the City wide Office of Municipal Integrity. OMI investigated and found the two former Arson investigators were indeed retaining their former credentials. Fire Department Chief Hood was aware they were retaining their credentials, but the Chief did not realize that retention violated statute. Changes were made in procedures to keep this from happening again. Lt. Torres left the Arson Division a few months later.

In 2012, Lt. Torres applied to return to the Arson Division. He was turned down in favor of someone less experienced and without the necessary certifications. The persons making the selection included Chief Hood and Torres’ former supervisor, Capt. Casals. Both Hood and Casals said they overlooked Lt. Torres for the position in part because of his prior complaint to OMI. That evidence amounts to a clear violation for he Texas Whistleblower law. Under the statute, a claimant must show: 1) he was a public servant, 2) he made a good faith report of a violation of law by his employer governmental agency, 3) he made the report to an appropriate law enforcement agency, and 4) he suffered retaliation at work for making the report. Yet, the lower court granted summary judgment.

The City presented evidence that Torres made the report not out of good faith belief, but to shield himself from consequences of unilaterally causing the credentials to be cancelled for the two prior former Arson Investigators. Lt. Torres responded with evidence showing that other officers would have made the complaint, and that he only went to OMI after he saw no action was being taken by the Fire Department. The court of appeals found there was genuine issue of material fact regarding whether his report was in good faith. The employer also argued that the plaintiff did not show his being turned down for the position was related to his report to OMI.

The City showed several reasons why Lt. Torres was not selected, other than his prior whistleblower complaint. But, said the Fourth Court, the plaintiff is not required to show his reporting the credentials issue was the sole reason for being passed over. Instead, the employee need only show that but for the report, he would not have been turned down. That is, the employee need only show the report played some role, however small in the action taken against him. The issue should be resolved by a jury, said the court. See the decision here.

 

 

Many employees find themselves in a real quandary when the employer asks them to commit an illegal or unethical act. Texas law protects a worker who is asked to break a criminal statute. But, some employees become so vexed about their situation that s/he goes to the media. That is what happened in Peine v. HIT Services L.P., 479 S.W.3d 445,  2015 WL 6490290 (Tex.App. Hou. 2015). Joseph Peine was a CPA working as a CFO for HIT Services, a heavy turbine business group. According to Peine’s evidence, the company was in financial trouble. It had a history of inflating earnings in the past. He was hired to help turn things around, he alleged. This concerns a motion for summary judgment, so Mr. Peine’s allegations should be assumed as correct. The CFO alleged he was asked to inflate earnings for the year. He was told to claim a project had been completed, when it had not been completed. Mr. Peine refused. His boss, Durg Kumar threatened him and others in the CFO office if the CFO did not follow orders. He said he would “clean house” if the CFO did not comply with his order.

Mr. Peine went around Kumar to talk to higher-ups. Mr. Kumar went around Peine to get things included in the quarterly financial statement. The parent company placed Mr. Peine on leave with pay while it investigated claims made about him. About the same time, Mr. Peine contacted a Thomson Reuters reporter and provided documents. He suggested they wait to see if HIT would fix the problems before going forward with any news report. Soon, the company investigation uncovered the email from Peine to the reporter. The investigator, an in-house attorney, recommended that Mr. Peine be fired for violating the company’s confidentiality policy. Within a couple of months of his initial complaint to the parent company, Mr. Peine was fired.

The CFO filed a lawsuit based on Sabine Pilot Services, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985). Sabine Pilot is that rare case of judge-made law. That decision recognized an action to sue for a termination resulting from a worker’s refusal to follow an illegal order. The employer moved for traditional summary judgment alleging that Mr. Peine violated the confidentiality policy. The employee responded that there was a genuine issue of fact regarding why he was fired. The court of appeals discussed the standard of proof for a Sabine Pilot case. Sabine Pilot actions require a showing that the “sole cause” of the termination was the order to commit an illegal act. The Plaintiff pointed to statement by Kumar that he would “clean house” if the CFO did not do as he wished and a statement by the parent company that Mr. Peine was a “liability.” Those statements represent direct evidence, said the plaintiff. But, the court of appeals did not accept these statements as direct evidence. The court found they were circumstantial evidence, since there was no indication the persons making those statements had a direct role in Mr. Peine’s termination.

The court did not seem to be aware that in acknowledging the possibility of two different motivations, it was implicitly agreeing that that a jury should decide this issue, not a judge. If there is more than one possible interpretation of the evidence, then under the rules, the decision belongs to the jury, not a judge. But, this irony does not help the plaintiff. Since, few, perhaps no, plaintiffs will survive an appeal to the Texas Supreme Court.

The Plaintiff also presented an expert witness in the area of government compliance. That expert testified that this was a classic case of retaliation. But, the court was still troubled by the fact that he might have been fired for violating the confidentiality policy. The expert could not speak to that possible motivation. Mr. Peine then argued that he expressed concerns to a public forum and should be protected. But, no, said the court, Texas does not recognize freedom to report illegal activities in a private work place. That is true. The Texas whistle blower law only applies to government employees, not private sector workers.

So, the court affirmed the grant of summary judgment. Based on the decision, it does not appear the plaintiff contested whether he truly violated the confidentiality clause. Some employers claim to have such a policy, but upon closer examination, it turns out they often ignore it. It is also unfortunate he went to a reporter. Otherwise, his case should have been solid. Many employees, faced with an unjust termination, reach out to any possible avenue of protection. People who are facing the end of their financial well-being do desperate things. See decision here.

There are a lot of myths out there about employment law. From time to time, I talk about a few of those myths.

At will
“At will” employment means an employee can be fired for anything.” Texas is an at-will state. An employee can indeed be fired for a lot of things, but not for sex, religion, race, national origin, disability, violation of laws, etc. So, yes, an employer can fire you for wearing a blue tie to work, but not because you are too old. The anti-discrimination statutes provide several exceptions to the at-will doctrine.

Probation period
“Probation periods means an employee can be fired for anything.” Not quite. A probation period means an employe can be fired for anything except sex, religion, race, national origin, disability, violation of laws, etc. See above paragraph.

Copy of file
“Employees have a right to a copy of his/her personnel file.” That depends on whether the employee is public sector or private. I have found no authority in Texas law saying that employees of private businesses can obtain a copy of their personnel file. As a public sector employee, an employe’s rights are governed by the Freedom of Information Act for federal employees and the Open Records Act for state employees. I can find no authority providing that a private sector employee has a right to a copy of his/her personnel file.

Rest breaks
“Employees get periodic breaks during the work day.” I was told as a young warehouseman that we had a right to a 10:00 o’clock break and another at 3:00 pm. The times could vary slightly. Since then, I have looked for the authority for those breaks. There is no such authority. Most likely, that is or was part of the influence of collective bargaining agreements (union agreements). CBA’s do often provide for such breaks. But, for non-union employees, there is no authority for a mid morning break and a mid-afternoon break. There is no state law or regulation on rest breaks or meal breaks. Federal regulations do not require a meal break. But, Federal regulations encourage work places to provide rest breaks, but such breaks are not required. See 29 CFR Sec. 758.18.

Non-compete agreements
Some folks outside and inside Texas believes non-compete agreements are not enforceable in Texas. Yes, they are and have always been enforceable. They became much more enforceable with the decision in Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2010). I previously wrote about that decision here.

Free speech
The right to free speech exists only for government workers. There is no general right to free speech in a private workplace. But, there is protection for employees who discuss “terms and conditions” of employment. Those sorts of discussions are protected by the National Labor Relations Act. I discussed those protections here. But, as far as discussing politics, football or cooking, there is no right to discuss whatever a worker wishes in the private workplace.

Whistleblowing
There is no general whistle blower protection in Texas. I think most people think of whistleblowing as reporting wrongdoing to some law enforcement type entity. Employees in the private sector do not have protection against whistleblowing. But, there is a protection from asking employees to violate criminal statutes. This sort of lawsuit is known as a Sabine Pilot type action. I discussed Sabine Pilot actions here. These Sabine Pilot actions only apply to violations of law that involve criminal punishment.

Not Written up before termination
People still ask me or tell me that the employer did not write them up before firing them. Well, employers do not have to do that. Yes, most large employers have nice looking employee manuals which state that employees must be wrritten up before termination. But, these manuals are not binding. They have not even been arguanbly binding since about the early 1990’s. This is one employment myth that may never go away. I wrote about employee manuals here.

Privacy
Some folks still think they have some degree of privacy at work. Email is a frequent issue. Generally, email produced with use of the employer’s equipment and server belongs to the employer. The employer may review your email anytime. I wrote about workplace email here and here. The one exception appears to be when the employee accesses his/her private email server which is password protected.

There is no prohibition on private sector employers searching desks to my knowledge. But, the U.S. Constitution Bill of Rights applies to state governments. So, in the public sector, a worker has some protection from unreasonable searches if s/he has a reasonable expectation of privacy” that society is prepared to recognize as reasonable. See O’Connor v. Ortega, 480 U.S. 709 (1987), on remand, Ortega v. O’Connor, 817 F.2d 1408 (9th Cir. 1987). But, the “expectation of privacy” can be limited by office practices and by legitimate regulation. And, HIPAA does protect medical information in most work situations.

So, as I tell folks on occasion, if you want fairness at work, then form a union. Or, persuade your state legislature to make a few changes in the law, so all workers will benefit.

The City of San Antonio runs the city’s airport.  But, the Airport has its own police department.  Until 2009, the airport police department was separate from the San Antonio Police Department.  Airport Police Officer Russell Martin complained about Sgt. Orlandop Battles’ time entries.  In 2008, Officer Martin, a veteran of some 30 plus years in law enforcement, said Sgt. Battles was recording his time inaccurately.  Four days after his complaint, Officer Martin was assigned to work with Sgt. Battles.  A remarkable coincidence.  

Officer Martin asked to not work with Sgt. Battles.  He said working with him would result in "fiscticuffs or shooting."  The officer explained later that he meant the statement as a shock statement to get his supervisor’s attention, not as a threat.  The pairing was changed.  He would not work with Sgt. Battles.  Six months later, having forgotten about the statement, Officer Martin was told he would be terminated for making threats.  As a city employee, Officer Martin appealed the decision to a semi-independent board, the city’s civil commission.  The commission found in favor of the veteran officer, by a vote of 2-1.  But, the City Manager, Sheryl Sculley, overruled the commission’s finding.  She upheld the termination.  Officer Martin filed suit in state district court.  

A year and a half later, he amended his petition to add a federal claim based on 42 U.S.C. §1983.  Sec. 1983 requires that states and local governments provide basic procedural due process when terminating public employees.  The Plaintiff argued that when the City Manager overturned the civil commission’s finding, she did so without affording him a hearing.  She made a paper decision.  She did not first conduct her own hearing before reaching her decision. . 

Some four years after filing suit, the parties have now reached a settlement.  Gilbert Garcia, a San Antonio Express news columinst says it is the largest settlement by the city in recent memory, $225,000.  All because the City Manager ignored the recommendation of her own commission.  And, all because the airport police could not accept one veteran officer making fairly routine complaints about a co-worker.  See San Antonio Express News report here (requires an account).

According to the court’s file, the settlement was actually reached in late July.  It took some three months for the San Antonio City Council to finally address the settlement. The City Council will vote on the settlement the week of Oct. 1.  Settling with public entities takes longer, but the plaintiff does not need to fear the public entity will declare bankruptcy.  Mostly anyway….