BILL ANALYSIS
C.S.H.B. 175
By: Hirschi
May 6, 1995
Committee Report (Substituted)
BACKGROUND
Chapter 554 of the Government code, referred to as the
"Whistleblower" statute, provides a cause of action to an employee
who is terminated, suspended, or discriminated against for
reporting a violation of the law. The act allows employees to sue
for injunctive relief, actual damages, exemplary damages, court
costs and attorneys' fees. In addition, employees may sue for
reinstatement and compensation for lost wages and fringe benefits.
Recent suits filed under the Whistleblower Act have resulted in
large verdicts against state and local governments. The statute
does not contain any limits on the amounts recoverable on the
damages.
PURPOSE
CSHB 175 sets forth protective measures for a public employee who
reports a violation of law and provides a cap on damages.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 554.001, Government Code, to define
"local governmental entity," "personnel action," "state
governmental entity," and to redefine "law," and "public employee."
SECTION 2. Amends Section 554.002, Government Code, as follows:
Sec. 554.002. RETALIATION PROHIBITED FOR REPORTING VIOLATION
OF LAW.
(a) Created from existing text. Prohibits a state or local
governmental entity from taking adverse personnel action, rather
than discriminating, against a public employee who reports a
violation of law by the employing governmental entity or another
public employee to a law enforcement authority.
(b) Provides that a report is made to an appropriate law
enforcement authority if the authority meets certain criteria.
SECTION 3. Amends Section 554.003, Government Code, as follows:
Sec. 554.003. RELIEF AVAILABLE TO PUBLIC EMPLOYEE.
(a) Deletes a provision including exemplary damages in the
list of items for which a public employee whose employment is
suspended or terminated or who is subjected to an adverse
personnel action is entitled to sue.
(b) Entitles a public employee whose employment is suspended
or terminated in violation of this chapter to reinstatement in
an equivalent position or in the employee's former position.
(c) Establishes limits on actual damages related to future
wages, emotional pain, suffering, inconvenience, mental
anguish, loss of enjoyment of life, and other nonpecuniary
losses:
(1) damages are limited to $50,000 if the employing
governmental entity has fewer than 101 employees over
a certain period of time;
(2) damages are limited to $100,000 if the employing
governmental entity has between 101 and 200 employees
over a certain period of time;
(3) damages are limited to $200,000 if the employing
governmental entity has between 201 and 500 employees
over a certain period of time; and
(4) damages are limited to $250,000 if the employing
governmental entity has more than 500 employees over a
certain period of time.
(d) Clarifies what damage schedule would be applicable in
certain situations.
SECTION 4. Amends Chapter 554, Government Code, by adding Section
554.0035, as follows:
Sec. 554.0035. WAIVER OF IMMUNITY.
Authorizes a public employee who alleges a violation of this
chapter to sue the employing governmental entity. Provides
that sovereign immunity is waived and abolished to the extent
of liability for the relief allowed for a violation of this
chapter.
SECTION 5. Amends Section 554.004, Government Code, as follows:
Sec. 554.004. New title: BURDEN OF PROOF; PRESUMPTION;
AFFIRMATIVE DEFENSE.
(a) Created form existing text. Makes conforming changes.
(b) Provides that it is an affirmative defense to a suit that
the employing governmental entity would have taken the action
against the employee that forms the basis of the suit based
solely on information unrelated to the fact that the employee
made a report protected under this chapter.
SECTION 6. Amends Section 554.006, Government Code, as follows:
Sec. 554.006. New title: USE OF GRIEVANCE OR APPEAL
PROCEDURES.
(a) Requires a public employee to initiate action under,
rather than exhaust, the grievance or appeal procedures of the
employing governmental entity before suing. Makes conforming
changes.
(b) Makes a nonsubstantive change.
(c) Makes conforming changes.
(d) Authorizes the employee to take certain actions if a
final decision is not rendered before the 61st day after the
procedures are initiated.
SECTION 7. Amends Section 554.007, Government Code, to restrict
where a suit may be brought:
(a) a public employee of a state governmental entity may file
suit in a district court of the county where the action arises
or in a district court in Travis County
(b) a public employee of a local governmental entity may file
suit in a district court of the county where the action arises
or in a district court of any county in the original county's
council of governments.
SECTION 8. Amends Section 554.008, Government Code, by amending
Subsection (a) and by adding Subsections (d) and (e), as follows:
(a) Provides that a supervisor in violation of this chapter
is liable for a civil penalty of up to $5,000, rather than
$1,000. Makes conforming changes.
(d) Requires a civil penalty to be paid by the supervisor and
prohibits it from being paid by the employing governmental
entity.
(e) Limits the personal liability of an individual to the
civil penalty.
SECTION 9. Amends Section 554.009(a), Government Code, to make
conforming changes.
SECTION 10. Amends Chapter 554, Government Code by adding Section
554.010 relating to an audit of a state governmental entity after
a suit:
(a) The attorney general is directed to supply the legislative
audit committee with a brief memorandum describing the facts
of certain whistleblower cases.
(b) Within 90 days of receiving the memo, the committee may
direct the state auditor to audit or investigate the state
governmental entity.
SECTION 11. Makes application of this Act prospective.
SECTION 12. Emergency clause.
Effective date: upon passage.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The original bill capped actual damages at $250,000. The
substitute caps actual damages (related to future wages, emotional
pain, suffering, inconvenience, mental anguish, loss of enjoyment
of life, and other nonpecuniary losses) at between $50,000 and
$250,000 depending on the size of the employing governmental
entity. The substitute increases the mandatory grievance period
from 30 to 60 days. The original established venue in the county
where the cause of action accrued. The substitute also allows
venue in any county within the original county's COG for local
government cases; state cases may be filed in the county where the
action accrued or Travis County. The substitute adds a provision
establishing a mechanism to audit or investigate certain
whistleblower cases.
SUMMARY OF COMMITTEE ACTION
Pursuant to posting of public notice, the Committee on State
Affairs convened in a public hearing on April 24, 1995 to consider
HB 175. The Chair laid out HB 175 and recognized Rep. Hirschi to
explain the bill. The following persons testified for the bill:
Ann Clarke Snell representing herself; Jim Allison representing the
County Judges & Commissioners Association of Texas; Dorcas A. Green
representing Walsh, Anderson, Underwood, Schulze & Aldridge, P.C.;
Jan P. Patterson representing herself; Don William King, Jr.
representing the City of San Antonio; Arthur L. Walker representing
Walker, Bright & Whittenton; Mark Mendez representing the Tarrant
County Commissioners Court; William W. Krueger, III representing
himself; Sheila Gladstone representing herself; Frank Battle
representing the Texas Association of School Boards; Thomas P.
Brandt representing himself; Robert Lemens representing the Texas
Association of Counties. The following persons testified neutrally
on the bill: Carey Smith representing himself; Toni Hunter
representing herself; Tom Smith representing Public Citizen
members. The following person testified against the bill: Richard
Levy representing TX AFL-CIO. The Chair recognized Rep. Hirschi to
close. The Chair left HB 175 pending. In a formal meeting on May
5, 1995, the Chair laid out HB 175. Rep. B. Hunter laid out a
complete committee substitute which was adopted without objection.
The bill was reported favorably as substituted with the
recommendation that it do pass and be printed by a record vote of
14 ayes, 0 nays, 0 pnv, 1 absent.