Hocevar v. Molecular Health, Inc.

• Decision Date: 31 October 2019
• Docket Number: NO. 09-18-00329-CV,09-18-00329-CV
• Citation: 593 S.W.3d 764
• Parties: Marci HOCEVAR, Appellant v. MOLECULAR HEALTH, INC., Appellee
• Court: Texas Court of Appeals

593 S.W.3d 764

Marci HOCEVAR, Appellant

v.MOLECULAR HEALTH, INC., Appellee

NO. 09-18-00329-CV

Court of Appeals of Texas, Beaumont.

Submitted on August 12, 2019

Opinion Delivered October 31, 2019

Scott Newar, Beaumont, for Appellant.

David Villarreal, Jason Richardson, Houston, for Appellee.

Before Kreger, Horton and Johnson, JJ.

CHARLES KREGER, Justice

Marci Hocevar sued Molecular Health, Inc. under the Texas Commission on Human Rights Act ("TCHRA") claiming that a Molecular Health Vice President of Sales sexually harassed her, and when she complained, Molecular Health retaliated by unlawfully terminating her employment. See Tex. Lab. Code Ann. § 21.001 et seq. In her first amended petition, Hocevar alleged that Molecular Health's corporate headquarters are in The Woodlands, Texas. Molecular appeared for the first time in the suit by filing an answer to Hocevar's First Amended Petition, and it never contested Hocevar's allegation that it is headquartered in Texas. About six weeks later, Molecular Health filed a plea to the jurisdiction and motion to dismiss contending that because it did not employ Hocevar in Texas, the trial court lacked subject matter jurisdiction. Hocevar later amended her petition to add claims under the Minnesota Human Rights Act ("MHRA") for gender discrimination and retaliatory conduct. See Minn. Stat. §§ 363A.01 – 363A.44. The trial court ultimately granted Molecular Health's plea to the jurisdiction following two hearings and affording Hocevar the opportunity to amend her petition. Per its order, the trial court found that the case "should be dismissed for lack of subject-matter jurisdiction."

Hocevar raises three issues on appeal asserting: (1) the trial court erred in failing to conduct a choice-of-law analysis to determine whether the TCHRA or the MHRA applies; (2) even assuming the TCHRA applies, the trial court erred in granting Molecular Health's amended plea to the jurisdiction because § 21.111 of the Labor Code is not jurisdictional; and (3) even assuming the trial court correctly held that the TCHRA applies and Labor Code § 21.111 is jurisdictional, the trial court erred in granting Molecular Health's amended plea to the jurisdiction because Hocevar raised a fact issue that Molecular Health employed her in Texas. We confine our analysis to the trial court's subject matter jurisdiction and reverse the trial court's judgment.

Background

Molecular Health is an oncological technology company selling products and services to hospitals and physicians. Molecular Health offered Hocevar a job as an Account Director selling and marketing its products and services in the Upper Midwest. Hocevar's assigned sales region included North Dakota, South Dakota, Illinois, Iowa, Wisconsin, and Minnesota. Molecular Health offered Hocevar the position pursuant to a consulting agreement which characterized Hocevar as an independent contractor. Hocevar resided in Minnesota and worked from an office in her home. Deposition testimony provided in support of the plea to the jurisdiction indicated Hocevar did not market or sell products for Molecular Health in Texas. However, Hocevar alleged that she reported to Bruce Mrachek, Molecular Health's Central Regional Vice President of Sales who lived and worked in San Antonio, Texas, via telephone daily. Mrachek's testimony confirmed this. Hocevar further alleged Molecular Health trained her in Texas, and she attended company meetings at its headquarters in The Woodlands, Texas.

In January of 2016, Molecular Health's Vice President of Sales and Business Development for the United States interviewed Hocevar in Minnesota to determine whether she would continue working as an Account Director for Molecular Health. Hocevar alleged that during the meeting, the Vice President of Sales and Business Development engaged in sexual harassment in the form of sexually discriminatory conduct and statements. Hocevar alleged that she reported the harassment to Mrachek, who in turn, reported the conduct to human resources. On February 19, 2016, Molecular Health advised it would not convert Hocevar from a consultant to an employee and declined to renew her contract.

Hocevar filed suit under the TCHRA alleging Molecular Health violated her rights "by discharging and otherwise discriminating against her on the basis of her gender" and "by discharging and otherwise discriminating against her ... in retaliation for her opposition to [Molecular Health's] discriminatory and retaliatory employment practices." See Tex. Lab. Code Ann. § 21.001 et. seq. In her third amended petition, Hocevar added claims under the MHRA. Molecular Health subsequently filed a plea to the jurisdiction asserting that the trial court lacked subject matter jurisdiction because the TCHRA did not apply to employment outside of Texas, and Molecular Health employed Hocevar to work in Minnesota. See id. § 21.111.

Following an initial hearing on the plea to the jurisdiction, the trial court allowed Hocevar an opportunity to replead. Hocevar filed her fourth amended petition asserting claims under both the TCHRA and the MHRA for discrimination and retaliation, including factual allegations: (1) that she reported to a supervisor located in Texas; (2) that Molecular Health trained her in Texas; (3) that Molecular Health required her to attend meetings at Molecular Health's headquarters in The Woodlands; and (4) that Molecular Health dictated the terms and conditions of her employment including her compensation and employment status from its Texas corporate headquarters. Molecular Health then filed a combined motion to dismiss and amended plea to the jurisdiction again arguing that the trial court lacked subject matter jurisdiction, because Hocevar was not employed in Texas and the TCHRA does not apply to employment outside of Texas.¹ The trial court granted the motion to dismiss and amended plea to the jurisdiction for "lack of subject-matter jurisdiction." Hocevar timely appealed.

Standard of Review

Whether a court has subject matter jurisdiction is a question of law we review de novo. Tex. Dept. of Parks and Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004). A court may not decide a case unless it has subject matter jurisdiction. Id. A plea to the jurisdiction challenges the trial court's power to exercise subject matter jurisdiction. Id. ; City of Waco v. Kirwan , 298 S.W.3d 618, 621–22 (Tex. 2009). A plea to the jurisdiction is a dilatory plea typically used to defeat a plaintiff's cause of action without regard to whether the claims have any merit. Cty. of Cameron v. Brown , 80 S.W.3d 549, 555 (Tex. 2002) ; Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). "A plea to the jurisdiction challenges a trial court's authority to hear a case by alleging that the factual allegations in the plaintiff's pleadings, when taken as true, fail to invoke the trial court's jurisdiction." Dillard Tex. Operating Ltd. P'ship v. City of Mesquite , 168 S.W.3d 211, 214 (Tex. App.—Dallas 2005, pet. denied). When we consider a trial court's order on a plea to the jurisdiction, we construe the pleadings in the plaintiff's favor and look to the pleader's intent. See Tex. Ass'n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 446 (Tex. 1993) (citation omitted). If a plaintiff fails to plead facts establishing jurisdiction, but the petition does not contain incurable defects in jurisdiction, it is a pleading sufficiency issue, and the plaintiff should be allowed the opportunity to amend. Brown , 80 S.W.3d at 555.

Analysis

Because Hocevar appeals the trial court's dismissal and grant of Molecular Health's plea to the jurisdiction for lack of subject matter jurisdiction, we consider Hocevar's pleadings and the evidence pertinent to the jurisdictional inquiry. See id.

While no Texas court has squarely addressed whether section 21.111 of the TCHRA is jurisdictional, the rationale of other similar cases guides us to our conclusion that it is not. Rather, a plaintiff is required to prove they are employed in Texas as an element of their TCHRA cause of action. See Arbaugh v. Y&H Corp. , 546 U.S. 500, 516, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (holding that the threshold number of employees in Title VII cases is an element of a plaintiff's claim but not jurisdictional); In re United Services Auto. Ass'n (USAA) , 307 S.W.3d 299, 310 (Tex. 2010) (concluding the TCHRA two-year period for filing suit is mandatory but not jurisdictional); Dubai Petroleum Co. v. Kazi , 12 S.W.3d 71, 73 (Tex. 2000). We are instructed to look to federal law for guidance interpreting the TCHRA. See Mission Consol. Indep. Sch. Dist. v. Garcia , 372 S.W.3d 629, 640 (Tex. 2012) ; see also Tex. Lab. Code Ann. § 21.001(1) (explaining one of the purposes of the statute is to "provide for the execution of policies of Title VII"). Federal district courts in Texas have interpreted Texas Labor Code section 21.111 as nonjurisdictional. See Herrera v. NBS, Inc. , 759 F.Supp.2d 858, 864–65, 867 (W.D. Tex. 2010) ; Rodriguez v. Filtertek, Inc. , 518 F.Supp.2d 845, 848 (W.D. Tex. 2007) (treating a motion to dismiss for lack of subject matter jurisdiction under section 21.111 as a motion to dismiss on the merits rather than a jurisdictional issue).² The Texas Labor Code's reach does not extend to an employer concerning the employment of a person outside of Texas just as Title VII does not afford protections to individuals employed outside of the United States. See Herrera , 759 F.Supp.2d at 861 (citing 42 U.S.C. § 2000e–1(a) ; Tex. Lab. Code Ann. § 21.111 ).

In Dubai Petroleum Co. v. Kazi , the Texas Supreme Court addressed the question of whether the "equal treaty rights" requirement contained in a previous version of Texas Civil Practice and Remedies Code section 71.031 was jurisdictional. 12 S.W.3d at 73. They held the "equal treaty rights" provision limiting the class of individuals who could bring suit was not jurisdictional. See id. Similarly, the provision at issue here, ...