BILL ANALYSIS
C.S.H.B. 622
By: Dutton
May 3, 1995
Committee Report (Substituted)
BACKGROUND
The Texas Legislature enacted the Texas Whistleblower Act in 1983.
the underlying purpose of the "Act" was to protect public employees
who expose public officials who have abused their offices by
putting personal gain ahead of the public trust. (See Chapter 554
of Government Code)
However, since the "Act" applies only to public employees and
Texas' courts have failed to recognize a private "whistleblower"
cause of action. Consequently, employees in the private sector may
be suspended terminated or discriminated against for reporting on
activities in the work place that violate the law.
PURPOSE
The purpose is to extend the protection against retaliation in the
work place that currently exists for public employees to private
employees.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does expressly grant
additional rulemaking authority to the Texas Employment Commission
in Section 2, Sec. 23.010(b).
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Subtitle A, Title 2, Labor Code, by adding
Chapter 23 as follows:
CHAPTER 23. EMPLOYMENT DISCRIMINATION FOR REPORTING
Sec.23.001. DEFINITIONS. Defines "employee," "employer,"
"law," and "report."
Sec.23.002. EXEMPTION. Exempts employees of a state agency or
local government subject to Chapter 554 government Code from
Chapter 23.
Sec.23.003. EMPLOYER RETALIATION. Prohibits employer
retaliation against an employee who reports certain activities
to an appropriate law enforcement authority or a supervisor,
officer, or other person who exercises managerial authority
for an employer.
Sec.23.004. BURDEN OF PROOF; PRESUMPTION. Provides that an
employee who sues has the burden of proof, except if the
suspension, demotion, or termination occurred not later than
the 90th day on which the employee reported a violation of the
law.
Sec.23.005. RELIEF AVAILABLE TO EMPLOYEE. (a) An employee who
is suspended, demoted, terminated or discriminated against in
violation of Section 23.003 may sue for injunctive relief,
actual damages, court costs, and reasonable attorney fees.
(b) In addition to relief under Subsection (a) they are
entitled to: (1) reinstatement to employees former
position or a position comparable in terms of
compensation, benefits and other conditions of
employment;
(2) compensation for wages lost during a period of
suspension or termination; and
(3) reinstatement of all benefits and seniority.
Sec.23.006. LIMITATION PERIOD. Provides for an employee to sue
no later than the 90th day after the date on which the alleged
violation occurred or was discussed by the employee.
Sec.23.007. EXHAUSTION OF GRIEVANCE OR APPEAL PROCEDURES. (a)
The employee must exhaust the employer's grievances or appeal
procedures relating to the suspension or terminator of
employment before suing.
(b) The employer must invoke the grievance or appeal
procedure no later than the 90th day after the date on
which the alleged violation occurred or was discussed
by the employee.
(c) Time used by the employee in exhausting the
grievance or appeal procedure is excluded from the
periods established by Section 23.007.
(d) This section does not apply if a final decision is
not rendered before the 31st day after the date the
employee initiated the grievance or appeal.
Sec.23.008. VENUE. Provides for an employee to sue in a
district court of the county which the employee resides.
Sec.23.009. CIVIL PENALTY. (a) An employer in violation is
liable for a civil penalty not to exceed $1000.
(b) The attorney general or appropriate prosecuting
attorney may sue to collect a civil penalty.
(c) A civil penalty collected shall be deposited in the
state treasury.
Sec.23.010. NOTICE TO EMPLOYEES. (a) Each employer shall
inform its employees of their rights by posting a sign in a
prominent location in the employer's workplace.
(b) The Texas Employment Commission by rule shall
prescribe the design and content of the sign required
by this section. Allows the commission to combine this
sign with other signs required to be posted by
employers. Allows the commission to asses fees.
SECTION 2. This act takes effect September 1, 1995 and applies
only to a suspension, termination, or discriminatory action taken
on or after this date.
SECTION 3. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The original bill provided that to establish good faith an employee
must show that the employee reported the activities because of a
sincere desire to further the public good, rather than because of
malice, jealousy, the hope of personal financial gain, or an
analogous motive; and had reasonable cause to believe that the
activities violated the law or would have a probable adverse effect
on the public. The provision is removed in the substitute.
The original bill provided that an employee who sues must prove by
the preponderance of the evidence that the principal motivation for
the employer retaliation was the employee's report. The report
must be the principal reason for the employer's retaliation. The
employee has the burden of showing that the employer had knowledge
of the report before the retaliatory act occurred. If the
suspension or termination of the employee occurs not later than the
90th day after the date on which the employee made the report, the
suspension or termination is presumed, subject to rebuttal, to be
because the employee made the report. To rebut the presumption,
the employer must establish that the suspension or termination was
made for legitimate reasons unconnected with the employee's report.
The substitute changes that so an employee who sues has the burden
of proof, except that if the suspension, demotion, or termination
of the employee occurs not later than the 90th day after the date
on which the employee reports a violation of law, the suspension,
demotion, or termination is presumed, subject to rebuttal, to be
because the employee made the report.
The substitute adds that the commission may combine the contents of
the sign required by this bill with the content of any other sign
required to be posted by an employer by the state. The commission
may assess each employer subject to this bill a reasonable fee to
cover only the costs incurred by the commission in administering
this bill.
The substitute changes from the original bill the definition of
"employer" from a person who employs one or more employees to a
person who employs five or more employees.
SUMMARY OF COMMITTEE ACTION
H.B. 622 was considered by the committee in a public hearing on
April 10, 1995. The committee considered one amendment to H.B.
622. Testifying in favor of the bill was Walter Hinojosa,
representing the Texas AFL-CIO; Russell Burgess, representing
himself; and Glenda L. Pittman, representing herself. Testifying
against the bill was David Pinkus, representing the Small Business
United of Texas; Grace Renbarger, representing the Texas Employment
Law Council; and Robert Howden, representing the National
Federation of Independent Business, Texas. H.B. 622 was referred
to a subcommittee consisting of Representatives Luna (Chair),
Solomons, Van de Putte. H.B. 622 was considered by the
subcommittee in a work session on April 11, 1995. After being
recalled from subcommittee, H.B. 622 was considered by the
committee in a formal meeting on April 24, 1995. The committee
considered a complete substitute for H.B. 622. The substitute was
adopted without objection. H.B. 622 was reported favorably as
substituted with the recommendation that it do pass and be printed,
by a record vote of 5 ayes, 3 nays, 0 pnv, 1 absent.