San Antonio Water Sys. v. Nicholas

• Decision Date: 24 April 2015
• Docket Number: NO 13–0966,13–0966
• Citation: 461 S.W.3d 131
• Parties: San Antonio Water System, Petitioner, v. Debra Nicholas, Respondent
• Court: Texas Supreme Court

461 S.W.3d 131

San Antonio Water System, Petitioner

v.Debra Nicholas, Respondent

NO 13–0966

Supreme Court of Texas.

Argued January 13, 2015

OPINION DELIVERED: April 24, 2015

Cora McGowan Kothmann, Donna K. McElroy, Ellen B. Mitchell, Cox Smith Matthews Inc., San Antonio, Rachel Anne Ekery, Wallace B. Jefferson, Alexander Dubose Jefferson & Townsend LLP, Austin, for Petitioner San Antonio Water System

Alex L. Katzman, Katzman & Katzman, Jeffrey D. Small, Law Office of Jeff Small, San Antonio, for Respondent Debra Nicholas.

Elizabeth Provencio, Patrick Charles Bernal, Denton Navarrro Rochar Bernal Hyde & Zech, P.C., San Antonio, Laura F. Mueller, Texas Municipal League, Austin, for Amici Curiae Texas City Attorneys Association and Texas Municipal League

Opinion

Justice Brown delivered the opinion of the Court.

The Texas Commission on Human Rights Act (TCHRA) protects from retaliation employees who oppose discriminatory employment practices. In this case Debra Nicholas, a former San Antonio Water System (SAWS) employee, contends she was terminated because she confronted a male vice president about his repeated lunch invitations to two female employees outside his department. We hold no reasonable person could have believed the invitations gave rise to an actionable sexual-harassment claim. Accordingly, Nicholas did not engage in a protected activity under the TCHRA when she confronted the vice president about his behavior. We reverse the court of appeals' judgment and dismiss Nicholas's claim.

I

A Bexar County jury heard Nicholas's action against SAWS. The jury found for Nicholas and the trial court entered judgment on the jury's verdict. The following facts were developed at trial.

In 2006, Nicholas was employed as chief of staff to David Chardavoyne, SAWS's CEO. Early that year, Chardavoyne called Nicholas into an in-progress meeting with Frank Stenger–Castro, SAWS's general counsel. Stenger–Castro told them that Lisa Spielhagen, a paralegal, informed him she had been repeatedly invited to lunch by Greg Flores, a recently hired vice president, and was uncomfortable with the invitations. According to Chardavoyne's and Nicholas's testimony, Stenger–Castro told them Spielhagen said she felt harassed and that she would file a formal complaint if the invitations persisted. Nicholas added that Stenger–Castro mentioned that Flores had also invited to lunch a second employee, training consultant Sharon Snoga, though Stenger–Castro said he had not personally spoken with Snoga.

Stenger–Castro, however, testified that Spielhagen did not complain about sexual harassment or suggest she would file a complaint; rather, she simply found the invitations awkward and inappropriate, and wanted them stopped. He testified he went to Chardavoyne out of an abundance of caution because Flores's behavior was “risky,” though he did not believe it violated SAWS's sexual-harassment policy.

Chardavoyne and Nicholas testified they met with Flores shortly after their meeting with Stenger–Castro. Nicholas testified Flores admitted to inviting the women to lunch and once complimented Snoga on her appearance but denied he intended to sexually harass either woman and said he would change his behavior. Chardavoyne testified Nicholas did not say much at the meeting beyond reenforcing his admonishments to stop asking the women to lunch. Nicholas testified Chardavoyne said he would not allow a member of the executive team to sexually harass anyone, and that she told Flores it was “not a good idea for him to be going out with women in the organization ... by himself,” which “can be construed as inappropriate.” Nicholas testified she further told Flores he risked losing his job if his conduct persisted. When asked if Nicholas intended to counsel or reprimand Flores to prevent potential sexual harassment, Nicholas responded, “Absolutely ... because Frank Stenger–Castro ... told us that if it didn't stop, Lisa Spielhagen would file a complaint.” Flores, on the other hand, denied a conversation with Chardavoyne and Nicholas about his lunch invitations ever took place. He did, however, testify to sending Snoga two emails in February 2006 in which he asked if she wore colored contacts and if she was making “an indecent proposal.”

Chardavoyne resigned in 2008. His replacement chose to hire his own chief of staff, and Nicholas was reassigned to an assistant vice president position that reported directly to Flores. In 2009, that position was eliminated as part of what SAWS contends were organization-wide cost-cutting measures, and Nicholas was not interviewed for any other position. Nicholas maintains her termination was retaliation for her confronting Flores, and that the retaliation was delayed because Flores had no authority over her until her reassignment in 2009. Nicholas also complains she was not interviewed for subsequent positions despite being qualified. She sued SAWS under the TCHRA, alleging SAWS retaliated against her for opposing a discriminatory employment practice.

The jury found Nicholas opposed sexual harassment by counseling or reprimanding Flores, was fired because of it, and awarded her nearly $1 million in damages. SAWS appealed, arguing no reasonable person could have believed sexual harassment under the TCHRA had occurred, and therefore Nicholas did not engage in a “protected activity” under the TCHRA when she confronted Flores. SAWS further argued Nicholas could not show a causal link between her confronting Flores and her eventual termination nearly three years later, and that the trial court failed to apply a statutory damages cap to Nicholas's front-pay damages award. The court of appeals affirmed the trial court's judgment on all three issues, and SAWS sought our review. Because we hold Nicholas did not engage in a protected activity under the TCHRA and consequently dismiss her claim, we do not reach SAWS's second and third issues.

II

SAWS is a governmental entity owned by the City of San Antonio that provides water and wastewater services in Bexar and neighboring counties. As a governmental entity, it is generally immune from suit. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex.2004). However, the Legislature has waived immunity for claims properly brought under the TCHRA. Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d 653, 660 (Tex.2008). But that waiver extends only “to those suits where the plaintiff actually alleges a violation of the TCHRA by pleading facts that state a claim thereunder.” Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 636 (Tex.2012) (citing State v. Lueck, 290 S.W.3d 876, 881–82 (Tex.2009) ) (other citations omitted). Accordingly, a plaintiff must state a claim for conduct that would violate the TCHRA. See id. at 636–37. Otherwise, “any superficial reference to the [TCHRA] in a pleading would be sufficient to establish the State's consent to be sued—and additionally, the trial court's jurisdiction over the claim—a result the Legislature did not intend.” Id. at 637 (citing Lueck, 290 S.W.3d at 882 ).

To establish a trial court's jurisdiction over her TCHRA claim, a plaintiff must “plead the elements of her statutory cause of action—here the basic facts that make up the prima facie case—so that the court can determine whether she has sufficiently alleged a TCHRA violation.” Id. Nicholas argues the trial court's jurisdiction vested when she met what she describes as the “very minimal” burden of establishing her prima facie case. But once a case has been fully tried on the merits, the prima facie case is no longer relevant. See Wal–Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex.2003) (“In discrimination cases that have not been fully tried on the merits, we apply the burden-shifting analysis established by the United States Supreme Court. But when a discrimination case has been fully tried on its merits, ... a reviewing court does not engage in a burden-shifting analysis.” (internal citations omitted)). Instead, we simply “inquire whether the evidence is legally sufficient to support the jury's ultimate finding.” Id.

Like a failure of proof at the prima facie stage, a failure to prove the elements of a TCHRA claim after a trial on the merits deprives the trial court of jurisdiction. See Univ. of Hous. v. Barth, 403 S.W.3d 851, 853 (Tex.2013) (per curiam) (holding that plaintiff's failure to satisfy objective component of good-faith test for reporting a violation deprived trial court of jurisdiction); In re United Servs. Auto. Ass'n, 307 S.W.3d 299, 307 (Tex.2010) (recognizing “when elements of a statutory claim involve ‘the jurisdictional inquiry of sovereign immunity from suit,’ those elements can be relevant to both jurisdiction and liability” (quoting Lueck, 290 S.W.3d at 883 )). SAWS argues there is no evidence Nicholas had a good-faith, reasonable belief that she engaged in a protected activity under the TCHRA. If SAWS is correct, the trial court had no jurisdiction over Nicholas's claim.

Nicholas argues SAWS failed to preserve this argument because it was not presented as a legal-sufficiency challenge below. SAWS concedes it presented its argument below as a factual-sufficiency challenge, but contends the point is nonetheless appropriately before this Court because it implicates SAWS's immunity from suit. We agree. The elements of a retaliation claim under the TCHRA are jurisdictional in nature because “the Legislature has waived immunity only for those suits where the plaintiff actually alleges a violation of the TCHRA by pleading facts that state a claim thereunder.” Garcia, 372 S.W.3d at 636. We have consistently held that jurisdictional arguments concerning immunity waiver cannot be waived. See Lueck, 290 S.W.3d at 881 (holding elements of a Whistleblower Act claim are jurisdictional and may not be waived); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex.1993) (holding jurisdiction “may be raised for the first time on appeal” and may not...