Texas State Employees Union v. T.W.C.

• Decision Date: 02 March 2000
• Parties: (Tex.App.-Austin 2000) Texas State Employees Union/CWA Local 6184 A.F.L.C.I.O.; Pat McCowan; Betty McCoy; Ed Carpenter; and Lydia DeLeon, Individually and on Behalf of Others Similarly Situated, Appellants v. Texas Workforce Commission; Council on Workforce and Economic Competitiveness; Michael Sheridan, Individually and in his Official Capacity and his successors in office; and George Bush in his Official Capacity as Governor of the State of Texas and his successors in office; Gulf Coast Workforce Development Board; and Coastal Bend Workforce Development Board, Appellees NO. 03-99-00171-CV
• Court: Texas Court of Appeals

Page 61

16 S.W.3d 61 (Tex.App.-Austin 2000)

Texas State Employees Union/CWA Local 6184 A.F.L.C.I.O.; Pat McCowan; Betty McCoy; Ed Carpenter; and Lydia DeLeon, Individually and on Behalf of Others Similarly Situated, Appellants v. Texas Workforce Commission; Council on Workforce and Economic Competitiveness; Michael Sheridan, Individually and in his Official Capacity and his successors in office; and George Bush in his Official Capacity as Governor of the State of Texas and his successors in office; Gulf Coast Workforce Development Board; and Coastal Bend Workforce Development Board, Appellees

NO. 03-99-00171-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

March 2, 2000

Rehearing Overruled May 18, 2000.

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT NO. 97-13071, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING

[Copyrighted Material Omitted] Larry Daves, Larry R. Daves & Assoicates, San Antonio, for appellants.

Lucinda J. Garcia, Wood, Boykin & Wolter, P.C., Corpus Christi, for Coastal Bend.

David S. Morales, Asst. Atty. Gen., Austin, for Texas Workforce; Michael Sheridan; and George Bush.

Marcy Hogan Greer, Fullbright & Jaworski L.L.P., Austin, for Gulf Coast.

Before Justices Jones, Kidd and Patterson

MACK KIDD, Justice.

This is an appeal of a trial-court order granting appellees¹ their plea to the jurisdiction, thereby dismissing each of appellants' causes of action. In ten issues, appellants, former employees of the Texas Workforce Commission, contend that the trial court erred in ruling that their claims were jurisdictionally barred by the doctrine of sovereign immunity and a lack of standing. Concluding that the trial court erred in dismissing appellants' causes of action for lack of jurisdiction, we will reverse the trial court's order and remand this cause for further proceedings.

BACKGROUND

This suit arises out of the complaints of former employees of the Texas Workforce Commission (the "Commission") who lost their jobs as a result of the Commission's decision to privatize several of the State's workforce-development programs. The Commission was established in 1995 to operate Texas's integrated workforce-development system that had been created by consolidating the State's various job training and employment-related programs. See Act of May 26, 1995, 74th Leg., R.S., ch. 655, 301.001, 1995 Tex. Gen. Laws 3543, 3581. It was also created to administer Texas's unemployment compensation program. See id.

In 1997, the Commission decided to overhaul its structure by transferring to the private sector the responsibility of administering several of the State's workforce-development programs. Specifically, it chose to shift all authority over the administration of these programs to certain certified local workforce-development boards.² In turn, these boards were required to hire private service providers that would directly administer these programs on a contractual basis. As a result, the Commission terminated many of the employees who had been assigned to work on the affected programs.

The Texas State Employees Union (the "Union") then filed suit against the Commission on behalf of the terminated employees, all of whom were members of the Union, complaining that the Commission had unlawfully granted public property-namely office space, computer equipment, and office supplies-to private entities in violation of the Texas Constitution. See Tex. Const. art. III, 51; art. VIII, 3; art. XVI, 6(a). The Commission responded by filing a special exception and a plea to the jurisdiction, contending that the cause of action was barred by the doctrine of sovereign immunity and, furthermore, that appellants lacked standing to sue. Several amended petitions followed, as did further answers and pleas to the jurisdiction. Following the filing of appellants' fourth amended petition, the trial court dismissed the Union as a party, finding that the Union lacked standing to bring suit on behalf of the employees. Appellants thereafter amended their pleadings to substitute four terminated employees in place of the Union.

By the time appellants filed their sixth and final amended petition, the suit had been expanded to include three causes of action; appellants had also added as defendants the Council on Workforce & Economic Competitiveness, the Governor, and the Gulf Coast Local Workforce Development Board ("Gulf Coast") and the Coastal Bend Workforce Development Board ("Coastal Bend") (collectively, the "local development boards").³ Appellants' pleadings alleged that: (1) the Commission had violated, and would continue to violate, the Texas Constitution by transferring state property to private entities without restricting the use of the property to state, rather than private, purposes; (2) the Commission had deprived appellants of a property interest in their continued employment, as well as their interest in participating in the State's retirement system, without due course of law; and (3) the local development boards had breached their contracts with the Commission by failing to provide appellants, theintended beneficiaries of the contracts, with hiring preferences. With respect to all three claims, appellants sought declaratory and injunctive relief as their sole remedy.

The Commission and the local development boards responded once again by filing pleas to the jurisdiction, arguing that each of appellants' claims was barred by sovereign immunity, a lack of standing, or both. After considering the pleadings and arguments of counsel, the trial court granted the Commission's plea to the jurisdiction and dismissed all of appellants' claims with prejudice. Appellants now appeal the district court's judgment in ten issues, arguing that the trial court erred in dismissing their suit because neither a lack of standing nor sovereign immunity deprived the trial court of jurisdiction over their causes of action.

PLEA TO THE JURISDICTION

A plea to the jurisdiction challenges the trial court's authority to determine the subject matter of a specific cause of action. See Fountain Parkway, Ltd. v. Tarrant Appraisal Dist., 920 S.W.2d 799, 803 (Tex. App.-Fort Worth 1996, writ denied); Dolenz v. Texas State Bd. of Med. Exam'rs, 899 S.W.2d 809, 811 (Tex. App.-Austin 1995, no writ). The plea alleges that there are incurable jurisdictional defects visible on the face of the plaintiff's pleadings, taking the pleadings' allegations as true. See Bybee v. Fireman's Fund Ins. Co., 331 S.W.2d 910, 917 (Tex. 1960); Firemen's Ins. Co. v. Board of Regents of the Univ. of Tex. Sys., 909 S.W.2d 540, 541 (Tex. App.-Austin 1995, writ denied). The truth of the plaintiff's allegations is at issue only if the defendant pleads and proves that the allegations were fraudulently made to confer jurisdiction on the court. See Curbo v. State, 998 S.W.2d 337, 341 (Tex. App.-Austin 1999, no pet.); Flowers v. Lavaca County Appraisal Dist., 766 S.W.2d 825, 827 (Tex. App.-Corpus Christi 1989, writ denied); cf. Bernard Hanyard Enter. v. McBeath, 663 S.W.2d 639, 642 (Tex. App.-Austin 1983, writ ref'd n.r.e.). Therefore, unless fraud is pleaded and proven, dismissing a cause of action for lack of subject-matter jurisdiction is proper only when incurable jurisdictional defects are shown on the face of plaintiff's pleadings, thus rendering it impossible for the plaintiff's petition to confer jurisdiction on the trial court. See Curbo, 998 S.W.2d at 341; Dolenz, 899 S.W.2d at 811; Flowers, 766 S.W.2d at 827.

When reviewing a trial-court order dismissing a cause for want of jurisdiction, we are to "construe the pleadings in favor of the plaintiff and look to the pleader's intent." Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993); Pearce v. City of Roundrock, 992 S.W.2d 668, 671 (Tex. App.-Austin 1999, pet. denied). Because the question of subject-matter jurisdiction is a legal question, we review de novo a trial court's ruling on a plea to the jurisdiction. See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); Firemen's Ins. Co., 909 S.W.2d at 542.

WRONGFUL TERMINATION

We first address appellants' claim for wrongful termination of employment and decide whether the doctrine of sovereign immunity deprived the trial court of jurisdiction to entertain this claim. Rather than seeking dismissal of this claim on the basis of sovereign immunity through a motion for summary judgment, the Commission sought a dismissal in a plea to the jurisdiction. We observe that, had the bar of sovereign immunity been presented in conjunction with a motion for summary judgment, both parties would have had the opportunity to present summary-judgment evidence, such as the written employment policies that appellants allege establish their right to continued employment. See Tex. R. Civ. P. 166a. The trial court could then have made an informed decision on the merits. Here, the Commission instead chose to make this challenge through a plea to the jurisdiction. The trial court was thus obliged, as are we, to take the pleadings as true and construe the pleadings liberally in favor of conferring jurisdiction. See Texas Air Control Bd., 852 S.W.2d at 446; Curbo, 998 S.W.2d at 341.

Appellants alleged in their pleadings that they enjoyed a "protected expectancy of continued employment as state employees" based upon the "written policies and practices of the Commission," and that by terminating them, the Commission unlawfully deprived appellants of this property right "without due course of law."⁴ Appellants pleaded in the alternative that they held a property right in their continued participation in the State's retirement system.

In support of its plea to the jurisdiction, the Commission did not allege that these pleadings were fraudulently made for the purpose of conferring jurisdiction upon the trial court. Nor did it specially except to the claim on grounds that the pleadings were deficient.⁵ Rather, the Commission argued...