BILL ANALYSIS
H.B. 175
By: Hirschi (Montford)
State Affairs
5-22-95
Senate Committee Report (Unamended)
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
As proposed, H.B. 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 grant any
additional rulemaking authority to a state officer, institution, or
agency.
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 (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) Sets forth limits for the amounts a public employee may
recover compensatory and nonpecuniary damages in a suit
against an employing governmental entity.
(d) Provides that if more than one subdivision of Subsection
(c) applies to an employing governmental entity, the amount
of monetary damages that may be recovered from the entity is
governed by the provision that provides the highest damage
award.
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 from 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 authorize
a public employee of a state governmental entity to sue in a
district court of the county in which the cause of action arises or
in Travis County, rather than in which the employee resides.
Authorizes a public employee of a local governmental entity to sue
under this chapter in certain district courts.
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 $15,000, 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, as follows:
Sec. 554.010. AUDIT OF STATE GOVERNMENTAL ENTITY AFTER SUIT.
(a) Requires the attorney general, at the conclusion of a suit
against a state governmental entity subject to audit under
Section 321.013 and in which the entity is required to pay
$10,000 or more under the terms of a settlement agreement or
final judgment, to provide to the state auditor's office a
brief memorandum describing the facts and disposition of the
suit.
(b) Authorizes the auditor to audit or investigate the state
governmental entity to determine any changes necessary to
correct the problems that gave rise to the suit and requires
the auditor to recommend such changes to the Legislative
Audit Committee, the Legislative Budget Board, and the
governing board or chief officer of the entity involved, no
later than 90 days after the state auditor's office receives
the memorandum required by Subsection (a). Requires the
auditor to have access to all records pertaining to the suit
in conducting the audit or investigation.
SECTION 11. Makes application of this Act prospective.
SECTION 12. Emergency clause.
Effective date: upon passage.