Texas Dept. of Human Services of State of Tex. v. Hinds, D-4413

• Court: Supreme Court of Texas
• Writing for the Court: HECHT
• Citation: 904 S.W.2d 629
• Parties: 11 IER Cases 79, 38 Tex. Sup. Ct. J. 711 TEXAS DEPARTMENT OF HUMAN SERVICES OF THE STATE OF TEXAS, Petitioner, v. Gary HINDS, Respondent.
• Docket Number: No. D-4413,D-4413
• Decision Date: 14 September 1995

Page 629

904 S.W.2d 629 11 IER Cases 79, 38 Tex. Sup. Ct. J. 711 TEXAS DEPARTMENT OF HUMAN SERVICES OF THE STATE OF TEXAS, Petitioner,
v.
Gary HINDS, Respondent. No. D-4413. Supreme Court of Texas. Argued May 4, 1994.
Decided June 8, 1995.
Rehearing Overruled Sept. 14, 1995.

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Edwin N. Horne, Christopher Johnsen, Dan Morales, Austin, for petitioner.

Howell Cobb, III, El Paso, for respondent.

HECHT, Justice, delivered the opinion of the Court.

The Texas Whistleblower Act provides that certain public employees discriminated against for reporting a violation of the law in good faith to an appropriate law enforcement authority may sue for damages and other relief. ¹ The Act does not expressly state what causal connection a public employee must prove between his report and his employer's conduct before he is entitled to prevail in such a suit--that is, whether the report was the sole reason for the employer's actions, or only one reason among others, or something in between. We conclude that the report need not be the employer's sole motivation, but it must be such that without it the discriminatory conduct would not have occurred when it did. Inasmuch as the lower courts did not apply this rule, we reverse the judgment of the court of appeals and remand the case for a new trial.

I

The Texas Department of Human Services determines applicants' eligibility for assistance under various programs which it administers for the federal government, such as Medicaid, Aid to Families with Dependent Children, and food stamps. From 1976-1988 TDHS employed Gary Hinds as an eligibility caseworker, whose job it was to interview applicants for assistance and determine their eligibility.

For several years before 1987 the federal government had become increasingly strict in requiring that state agency files clearly establish eligibility for assistance. To assure quality control, federal employees audited randomly selected files. If excessive errors were found, states were subject to sanctions, including reductions in the amount of federal assistance provided. In an effort to avoid such sanctions, TDHS developed and instituted a similar auditing program to evaluate caseworkers, identify and correct common mistakes, and improve training. As with the federal quality control program, files were selected at random by a review team for evaluation using what was called a Service Review Instrument. This internal audit was thus referred to as an SRI review.

In 1987 Hinds' supervisor and other supervisors asked for and received permission from their program manager, Ralph Briones, to have caseworkers read over files selected for SRI review to correct any errors before the review. Hinds participated in this "pre-review" process at first but soon complained to Briones that it was illegal. When Briones did not respond, Hinds raised the same concern with Briones' superiors. Shortly thereafter the practice Briones had instituted was abandoned.

Hinds claims that, as a result of his report of what he considered to be illegal activity, his supervisors engaged in a pattern of retaliation. Shortly after his initial report to Briones, Hinds received an official reprimand, his first adverse personnel action in twelve years with TDHS. This was followed by an unfavorable employee performance evaluation for 1987. At Briones' direction, Hinds' immediate supervisor more closely scrutinized Hinds' work, a practice he claims caused more work for him and delayed the

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processing of his benefits applications. Hinds also claims that his supervisor began to refuse to help him handle difficult cases. Hinds' view of how TDHS treated him is shared to some extent by his co-workers.

In 1988 Hinds resigned due to what he contends was persistent, increasing pressure, and filed this suit for damages against TDHS, alleging a violation of the Texas Whistleblower Act. TDHS responded that the process Hinds complained of to Briones was not illegal; that Hinds' reports to Briones and Briones' superiors were not made in good faith; and that the personnel actions adverse to Hinds resulted from documented performance problems completely unrelated to Hinds' questioning of the SRI review process. There is evidence that Hinds had the lowest accuracy scores in his unit, that he repeatedly failed to arrive for work on time, and that he had serious problems getting along with his co-workers and supervisors. Hinds acknowledges his shortcomings but contends they were tolerated without criticism until he complained to Briones of the SRI review process.

The case was tried to a jury, who found: that Hinds reported in good faith that advance correction of SRI case files was illegal; that in retaliation TDHS constructively terminated or otherwise discriminated against Hinds; that TDHS' actions were either grossly negligent, willful or malicious; that Hinds' compensable damages were $18,000.00 past mental anguish, $89,278.98 lost earnings, $127,541.14 lost future earning capacity, and $47,806.38 lost retirement and other benefits; and that $85,000.00 exemplary damages should be assessed against TDHS. The trial court rendered judgment on the verdict, awarding Hinds all of the damages found by the jury plus prejudgment interest, for a total of $520,560.13.

TDHS has raised several complaints on appeal. We focus on one. The second question which the trial court submitted to the jury reads as follows:

Did the Department of Human Services constructively terminate, or otherwise discriminate, against Gary Hinds in retaliation for his report that advance correction of SRI case files was illegal?

The trial court refused to give the jury, in connection with this question, the following instruction requested in writing by TDHS:

You are instructed that the reporting of these activities must have been the principal reason for the Texas Department of Human Services retaliation. You are instructed that "the principal reason" means that the reporting of a violation of law was the cause of the harassment or discrimination.

The court of appeals held that Question 2 correctly submitted the controlling issue to the jury, and that TDHS' requested instruction added nothing. The appeals court, by a divided vote, modified the judgment for Hinds by discounting future damages to present value, which the court determined to be $118,912.81, and affirmed the judgment as modified. 860 S.W.2d 893. The dissenting justice would have reversed the award of mental anguish damages for want of evidence. 860 S.W.2d at 902-903 (Koehler, J., dissenting).

II

We begin our analysis of this case by determining the proper standard of causation applicable in cases brought under the Texas Whistleblower Act. The issue is whether, for the employee to prevail, retaliation must be proved to have been the employer's sole motivation, or a principal or substantial motivation, or some lesser but still necessary factor, or mere animus which did not play at all in the employer's decision to act as he did. In resolving this issue our first recourse is, of course, to the language of the Act, which as we noted at the outset has been recodified since this lawsuit was filed. The Act was also amended a few days ago, and later in this opinion we will describe those amendments as they relate to causation. For our textual analysis, we refer to the pre-amendment recodified provisions inasmuch as they are identical in all material respects to the language of the Act in 1988.

The Act is not mute on the subject of causation, but neither is it outspoken. Section 554.002 of the Government Code states:

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A state agency or local government may not suspend or terminate the employment of or discriminate against a public employee who in good faith reports a violation of law to an appropriate law enforcement authority.

Section 554.003(a) states:

A public employee whose employment is suspended or terminated or who is discriminated against in violation of Section 554.002 is entitled to sue for [damages and other relief].

These two sections require no causal link at all between a report of illegal conduct and the employer's alleged discriminatory conduct. Read very literally, these provisions would allow a public employee to sue for wrongful discharge if he had ever made the kind of report described, regardless of whether the report and discharge were in any way related. By this construction, the statute would give public employees life tenure for reporting activity believed in good faith to be unlawful.

Another provision of the Act, however, suggests the requirement of a causal connection. Section 554.004 states:

A public employee who sues under this chapter has the burden of proof, except that if the suspension or termination of a public employee occurs not later than the 90th day after the date on which the employee reports a violation of law, the suspension or termination is presumed, subject to rebuttal, to be because the employee made the report.

(Emphasis added.) The presumption of causation in certain circumstances implies that it must be proved in others. Otherwise, the presumption would be useless. This is sufficient reason for us to conclude that a public employee can recover under the Whistleblower Act only if he proves that he was suspended, terminated or discriminated against "because"--to use the same word in section 554.004--he reported a violation of the law in good faith to an appropriate law enforcement authority.

Having determined that the statute requires a causal link, we must next determine what that link must be. The prescriptive word, "because", is used not only in the Whistleblower Act but in several other statutes prohibiting employment discrimination based upon various factors. E.g., TEX.CIV.PRAC. & REM.CODE § 122.001 (jury service); TEX.FAM.CODE § 14.43(m) (refusal to hire because of a child support withholding order); TEX.GOV'T CODE § 431.006 (active duty in state military in an...