LABOR & EMPLOYMENT NEWSLETTER - Supreme Court Defines "Adverse" Personnel Action Under Whistleblower Act

“Adverse” Personnel Action

In Montgomery County v. Park, the Texas Supreme Court recently adopted an employer-friendly definition of “adverse” personnel action for purposes of the Texas Whistleblower Act. Specifically, the Court held that “for a personnel action to be adverse within the meaning of the Act, it must be material, and thus likely to deter a reasonable, similarly situated employee from reporting a violation of the law.” The Court further held that this determination is to be made as a matter of law, thereby increasing a public employer's chance of success in obtaining summary judgment on a whistleblower claim.

Statutes that Protect "Whistleblowers"

Park involved a whistleblower claim brought under the Texas Government Code, which prohibits state and local government employers from taking “adverse” personnel actions against employees who, in good faith, report violations of the law to the appropriate law enforcement authority.¹ This whistleblower statute under the Texas Government Code applies only to public employers. While the Texas Legislature has not adopted a similar, general whistleblower statute applicable to private employers, several other employee-specific statutes that do apply to private employers effectively prohibit such employers from taking adverse action against employees who report misconduct:

Employees cannot be retaliated against for opposing or reporting discriminatory practices in the workplace.²
Physicians cannot be retaliated against for reporting to the Texas Medical Board the acts of another physician that pose a continuing threat to the public welfare.³
Nursing home employees cannot be retaliated against for reporting abuse or neglect of a nursing home resident.⁴
Employers who use hazardous chemicals may not retaliate against employees for reporting a violation of the Hazard Communication Act.⁵
Agricultural laborers cannot be retaliated against for reporting a violation of the Agricultural Hazard Communication Act.⁶

Background of Park v. Montgomery County

In Park, the plaintiff, David Park, worked as a patrol lieutenant with the defendant, Montgomery County Sheriff’s Department. Park also served as security coordinator for the county’s convention center events, arranging the hiring of off-duty deputies to provide security for private events held at the center. While Park conducted these activities during regular business hours from his office in the sheriff’s department, Park received no additional compensation from either the County or the convention center. In 2002, Park reported to the sheriff the alleged sexual harassment of two administrative assistants by a county commissioner and a remark that the commissioner allegedly made about the two assistants in Park’s presence. The County initiated an investigation, and, during the investigation, the county commissioner accused of the sexual harassment allegedly ordered the convention center’s director to relieve Park of his security coordination duties. Park sued the County, alleging that the county violated the Texas Whistleblower Act (“Whistleblower Act” or the “Act”) by reassigning the security coordinator duties in retaliation for Park’s report of the county commissioner’s alleged sexual harassment. The trial court granted the County’s motion for summary judgment and the appellate court reversed.

Adoption of U.S. Supreme Court’s Objective Standard

While the Act defines “personnel action” as “an action that affects a public employee’s compensation, promotion, demotion, transfer, work assignment, or performance evaluation,”⁷ the Act provides no definition for “adverse.” Thus, the Texas Supreme Court was presented with the question of what qualifies as an “adverse” personnel action. The United States Supreme Court had recently confronted a similar issue in Burlington N. & Santa Fe Ry. Co. v. White, when it determined how serious the harm from an allegedly retaliatory action must be to sustain a claim under the anti-retaliation provision of Title VII.⁸ Finding the anti-retaliation provision of Title VII and the Whistleblower Act to serve similar purposes, the Texas Supreme Court adopted the Burlington standard, requiring plaintiffs to show objective, material harm.

We hold that a personnel action is adverse within the meaning of the Whistleblower Act if it would be likely to dissuade a reasonable, similarly situated worker from making a report under the Act. This objective test strikes an appropriate balance between the need to shield whistleblowers (and thereby encourage the reporting of governmental lawbreaking) and the need to protect government employers from baseless suits, and, in addition, provides lower courts with a judicially manageable standard.

Notably, the Court held that the question of whether a challenged action amounts to an “adverse” personnel action for purposes of the Whistleblower Act is generally a question of law.

Park Did Not Suffer “Adverse” Personnel Action

Applying this standard, the Court held that the changes to Park’s security coordinator responsibilities did not constitute an adverse personnel decision within the meaning of the Whistleblower Act. The Court reasoned that the loss of Park’s security coordination responsibilities did not affect Park’s “prestige, opportunity for advancement in the department, or the difficulty of his work conditions” and did not reduce Park’s pay or preclude Park from obtaining outside employment. While Park argued that, as security coordinator, he had the ability to assign himself extra jobs at the convention center events, the Court observed that Park presented no evidence that the ability to assign himself convention center jobs actually increased Park’s access to work and, therefore, his compensation. Thus, the Court held that Park’s loss of security coordination duties would not, as a matter of law, be likely to deter a similarly situated, reasonable employee from reporting a violation of the law and was not materially adverse.

Park’s Effect Upon Employer Liability

While embracing the Burlington standard, the Texas Supreme Court seemingly adopted a much more restrictive view of what constitutes an adverse personnel action than did the U.S. Supreme Court. In Burlington, the U.S. Supreme Court held that an employment action other than a loss of pay can constitute an adverse personnel action. The Texas Supreme Court, however, held that Park did not suffer an adverse personnel action because the loss of the security coordination duties did not, inter alia, reduce his compensation.

Moreover, many have viewed the Burlington standard as creating a fact issue for the jury’s determination, rather than being susceptible to determination by a court as a matter of law. However, the Park Court made clear that the issue of whether a personnel action is adverse is to be determined by the courts as a matter of law. Indeed, the Texas Supreme Court had all of the facts it needed to conclude that Park did not suffer an adverse personnel action. Accordingly, employers should fare better in obtaining summary judgment in whistleblower cases, particularly so in trivial cases where the perceived harm is purely subjective in nature.

¹ Tex. Gov’t Code §§ 554.001-554.010.

² Tex. Lab.Code § 21.055; see also Tex. Lab.Code § 411.082 (prohibiting employer from retaliating against employee for using the Workers' Compensation Commission's toll-free telephone service to report, in good faith, an alleged violation of an occupational health or safety law).

³Tex. Occ. Code § 160.003, 160.012.

⁴Tex. Health & Safety Code § 242.133.

⁵Tex. Health & Safety Code § 502.017.

⁶ Tex. Agric. Code § 125.013(b).

⁷ Tex. Gov’t Code § 554.001(3).

⁸Burlington N. & Santa Fe Ry. Co. v. White, 126 S.Ct. 2405 (2006).