# Neighborhood Centers Inc. v. Doreatha Walker

> Texas Court of Appeals, 1st District (Houston) · July 30, 2015

URL: https://www.frixlaw.com/law-library/cases/3070598

## Case

- **Court:** Texas Court of Appeals, 1st District (Houston)
- **Decided:** July 30, 2015
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3070598

## How later opinions describe it (automated extraction)

- holding that statute waiving immunity need not be model of “perfect clarity” but must do so beyond doubt
- holding that Chapter 504 waives the governmental immunity of political subdivisions for retaliatory discharge claims under Chapter 451
- recognizing that immunity from suit “remains intact unless surrendered in express and unequivocal terms by the statute’s clear and unambiguous waiver”
- holding that governmental immunity has two components: immunity from suit, which bars suit against governmental entity, and immunity from liability, which bars enforcement of judgment against governmental entity

## Opinion text

Opinion issued July 30, 2015

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-14-00844-CV
———————————
NEIGHBORHOOD CENTERS INC., Appellant and Cross-Appellee
V.
DOREATHA WALKER, Appellee and Cross-Appellant

On Appeal from the 80th District Court
Harris County, Texas
Trial Court Case No. 2014-37034

OPINION

Appellee and cross-appellant Doreatha Walker sued her former employer,

appellant and cross-appellee Neighborhood Centers Inc. (“Neighborhood

Centers”), for its alleged retaliation against her for filing a workers’ compensation
claim.1 She also sued Neighborhood Centers under the Whistleblower Protection

Act.2 Neighborhood Centers filed a plea to the jurisdiction asserting that it had

governmental immunity from Walker’s claims. The trial court granted the plea as

to Walker’s workers’ compensation anti-retaliation claim, and it denied the plea as

to Walker’s claim under the Whistleblower Protection Act.

In its sole issue on appeal, Neighborhood Centers argues that the trial court

erred in denying its plea to the jurisdiction on Walker’s claim under the

Whistleblower Protection Act. Walker argues in her sole issue on cross-appeal

that the trial court erred in granting Neighborhood Centers’ plea to the jurisdiction

on her workers’ compensation anti-retaliation claim.

We affirm.

Background

Neighborhood Centers is a private, non-profit corporation that provides

services—including Head Start, workforce career centers, meals and programs for

seniors, immigration services, tax preparation services, and a community credit

union—to low-income communities in Houston. Neighborhood Centers also

1
See TEX. LABOR CODE ANN. § 451.001 (Vernon 2015).
2
See TEX. GOV’T CODE ANN. §§ 554.001–.010 (Vernon 2012).
2
operates the Promise Community School, an open-enrollment charter school

established pursuant to Texas Education Code chapter 12.3

Neighborhood Centers hired Walker, who has a master’s degree and is

certified in mid-management as a school principal, for the 2013-2014 school year

to work as a third-grade teacher at the Promise Community School. Walker

alleged that while she was employed with Neighborhood Centers she observed

health code violations and various testing irregularities, which she described as

“cheating irregularities,” “[s]pecial education testing irregularities,” and untimely

provision of Individualized Education Plans. Walker also observed health code

violations and eventually filed a workers’ compensation claim for health issues that

she asserts were caused by the health code violations she observed at the school.

Walker alleged that after she filed her workers’ compensation claim

Neighborhood Centers forced her to accept a demotion and reassignment as “an

Interventionist and a Girl Scout Leader,” and Neighborhood Centers’ insurer

denied her workers’ compensation claim. Walker reported her observations

regarding the testing violations and health code violations to the Texas Education

Agency and the Texas Health Department, respectively. She asserts that once her

3
See TEX. EDUC. CODE ANN. §§ 12.001–12.156 (Vernon 2012 & Supp. 2014). The
Education Code provides for three classes of charters: (1) a home-rule school
district charter; (2) a campus or campus program charter; or (3) an open-
enrollment charter. Id. § 12.002 (Vernon 2012). The Promise Community School
operates as an open-enrollment charter, governed by subchapter D of chapter 12.
3
report of these violations came to light Neighborhood Centers terminated her

employment on a pretext.

Walker filed suit against Neighborhood Centers, alleging that its actions in

demoting and subsequently firing her violated Labor Code section 451.001—

which prohibits retaliation against an employee for filing a workers’ compensation

claim—and Government Code section 554.002(a)—a provision of the

Whistleblower Protection Act that prohibits a state or local governmental entity

from retaliating against an employee who has reported a violation of law to an

appropriate law enforcement authority.

Neighborhood Centers filed a plea to the jurisdiction, arguing that its

immunity from suit and liability barred Walker’s workers’ compensation anti-

retaliation claim. It argued that open enrollment charter schools, such as the

Promise Community School, have the same immunity as a public school district.

Relying on the Texas Supreme Court’s opinion in Travis Central Appraisal

District v. Norman, 342 S.W.3d 54 (Tex. 2011), it argued that governmental

immunity is not waived for retaliatory discharge claims under Labor Code chapter

451. Neighborhood Centers also argued that it is not a “political subdivision” or

“local governmental entity” under the Whistleblower Protection Act, as that act

defines “local governmental entity” narrowly. It asserted that all of Walker’s

claims must be dismissed for lack of subject-matter jurisdiction.

4
The trial court granted Neighborhood Centers’ plea to the jurisdiction as to

Walker’s workers’ compensation anti-retaliation claim, and it denied the plea as to

Walker’s claim under the Whistleblower Protection Act. Both Neighborhood

Centers and Walker filed notices of appeal.

Standard of Review

A plea to the jurisdiction challenges the trial court’s subject-matter

jurisdiction to hear the case. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554

(Tex. 2000). Subject-matter jurisdiction is essential to the authority of a court to

decide a case and is never presumed. Tex. Ass’n of Bus. v. Tex. Air Control Bd.,

852 S.W.2d 440, 443–44 (Tex. 1993). The plaintiff has the burden to allege facts

affirmatively demonstrating that the trial court has subject-matter jurisdiction. Id.

at 446; see also Weir Bros., Inc. v. Longview Econ. Dev. Corp., 373 S.W.3d 841,

847 (Tex. App.—Dallas 2012, no pet.) (“[The plaintiff] had the burden to plead

facts that affirmatively demonstrate a waiver of governmental immunity and that

the court has subject matter jurisdiction.”).

We review a trial court’s ruling on a plea to the jurisdiction de novo. See

Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). In

reviewing the ruling, an appellate court “must determine whether facts have been

alleged that affirmatively demonstrate jurisdiction in the trial court.” City of Waco

v. Lopez, 259 S.W.3d 147, 150 (Tex. 2008).

5
When reviewing a trial court’s ruling on a jurisdictional plea, “we first look

to the pleadings to determine if jurisdiction is proper, construing them liberally in

favor of the plaintiffs and looking to the pleader’s intent,” and “we consider

relevant evidence submitted by the parties when necessary to resolve the

jurisdictional issues raised.” City of Waco v. Kirwan, 298 S.W.3d 618, 621–22

(Tex. 2009). We do not adjudicate the substance of the case but instead determine

whether a court has the power to reach the merits of the claim. Bland Indep. Sch.

Dist., 34 S.W.3d at 554; Bd. of Trs. of Galveston Wharves v. O’Rourke, 405

S.W.3d 228, 233 (Tex. App.—Houston [1st Dist.] 2013, no pet.).

If the pleadings affirmatively negate the existence of jurisdiction, the plea

may be granted without allowing the plaintiff an opportunity to amend her

pleadings. Miranda, 133 S.W.3d at 227. If the relevant evidence is undisputed or

fails to raise a fact issue as to jurisdiction, the trial court rules on the plea as a

matter of law. Id. at 228.

“Under the common-law doctrine of sovereign immunity, the [state] cannot

be sued without its consent.” City of Houston v. Williams, 353 S.W.3d 128, 134

(Tex. 2011). Governmental immunity operates like sovereign immunity to afford

similar protection to subdivisions of the state, including counties, cities, and school

districts. Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Like sovereign

immunity, “governmental immunity has two components: immunity from liability,

6
which bars enforcement of a judgment against a governmental entity, and

immunity from suit, which bars suit against the entity altogether.” Tooke v. City of

Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Governmental immunity from suit

deprives a trial court of subject-matter jurisdiction and is properly asserted in a

plea to the jurisdiction, while immunity from liability is an affirmative defense.

See Miranda, 133 S.W.3d at 224–26. Furthermore, “[i]mmunity from suit bars a

suit against the State unless the Legislature expressly consents to the suit.” Tex.

Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002).

“[F]or the Legislature to waive the State’s sovereign immunity, a statute or

resolution must contain a clear and unambiguous expression of the Legislature’s

waiver of immunity.” Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696

(Tex. 2003); see also Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500, 512

(Tex. 2012) (recognizing that immunity from suit “remains intact unless

surrendered in express and unequivocal terms by the statute’s clear and

unambiguous waiver”). The supreme court has “repeatedly affirmed that any

purported statutory waiver of sovereign immunity should be strictly construed in

favor of retention of immunity.” Chatha, 381 S.W.3d at 513 (citing Taylor, 106

S.W.3d at 696); see also TEX. GOV’T CODE ANN. § 311.034 (Vernon 2013) (“In

order to preserve the legislature’s interest in managing state fiscal matters through

7
the appropriations process, a statute shall not be construed as a waiver of sovereign

immunity unless the waiver is effected by clear and unambiguous language.”).

Interlocutory Appeal

As a preliminary matter, Walker argues that Neighborhood Centers is a

private, non-profit corporation that does not enjoy governmental immunity from

suit. She contends that if we agree on that point, then “the Court should dismiss

Neighborhood Centers’ issue on appeal for lack of appellate jurisdiction.” We

disagree.

Civil Practice and Remedies Code section 51.014(a)(8) provides that “[a]

person may appeal from an interlocutory order of a district court . . . that . . . grants

or denies a plea to the jurisdiction by a governmental unit as that term is defined in

Section 101.001.” TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (Vernon

2015). Section 101.001(3), which is part of the Tort Claims Act, provides a four-

part definition of “governmental unit” that includes this broad provision:

(D) any other institution, agency, or organ of government the status
and authority of which are derived from the Constitution of Texas or
from laws passed by the legislature under the constitution.

Id. § 101.001(3) (Vernon Supp. 2014); LTTS Charter Sch., Inc. v. C2 Constr., Inc.,

342 S.W.3d 73, 75–76 (Tex. 2011).

In C2 Construction, a construction company sued LTTS Charter School,

Inc., a private non-profit corporation that operated an open-enrollment charter

8
school called Universal Academy, for breach of contract. 342 S.W.3d at 75. The

Texas Supreme Court analyzed the provisions in Civil Practice and Remedies Code

sections 51.014 and 101.001(3) for the “narrow issue” posed in that case: whether

an open-enrollment charter school is a “governmental unit” as defined in Section

101.001(3)(D) of the Tort Claims Act and thus is able to take an interlocutory

appeal from a trial court’s denial of its plea to the jurisdiction. Id. at 74–75. It

concluded:

Open-enrollment charter schools are governmental units for Tort
Claims Act purposes because: (1) the Act defines “governmental unit”
broadly to include “any other institution, agency, or organ of
government” derived from state law; (2) the Education Code defines
open-enrollment charter schools as “part of the public school system,”
which are “created in accordance with the laws of this state,” subject
to “state laws and rules governing public schools,” and, together with
traditional public schools, “hav[e] the primary responsibility for
implementing the state’s system of public education[”;] and (3) the
Legislature considers open-enrollment charter schools to be
“governmental entit[ies]” under a host of other laws outside the
Education Code.

Id. at 82.

The supreme court held that an open-enrollment charter school is a

governmental unit as defined in Civil Practice and Remedies Code section

101.001(3), and thus a court of appeals has jurisdiction to hear an interlocutory

appeal from the trial court’s order granting or denying the charter school’s plea to

the jurisdiction pursuant to Civil Practice and Remedies Code section 51.014(a)(8).

See id.
9
Here, as in C2 Construction, Walker sued a private, non-profit entity that

operates an open-enrollment charter school for activities related to its operation of

that school. See id. at 73. Based on the supreme court’s precedent in C2

Construction, we hold that Neighborhood Centers is a governmental unit as that

term is defined in Civil Practice and Remedies Code section 101.001 and that,

therefore, this Court has jurisdiction over this interlocutory appeal under the

express language of section 51.014(a)(8). See TEX. CIV. PRAC. & REM. CODE ANN.

§ 51.014(a)(8); id. § 101.001(3); C2 Constr., Inc., 342 S.W.3d at 82.

Plea to the Jurisdiction on Walker’s Workers’ Compensation Anti-Retaliation
Claim

In her sole issue on cross-appeal, Walker argues that the trial court erred in

granting Neighborhood Centers’ plea to the jurisdiction on her workers’

compensation anti-retaliation claim under Labor Code section 451.001. See TEX.

LABOR CODE ANN. § 451.001 (Vernon 2015). She argues that “[g]overnmental

immunity from suit is a common-law doctrine, and its boundaries are carefully

drawn by the judiciary.” She further argues that the anti-retaliation statute creates

a private cause of action and that “Texas courts have not decisively afforded

entities like Neighborhood Centers immunity from suit.” Walker also argues that

the Education Code only provides that open-enrollment charter schools are

immune from liability to the same extent as public school districts and does not

explicitly mention immunity from suit. See TEX. EDUC. CODE ANN. § 12.1056
10
(Vernon 2012); see also Tooke, 197 S.W.3d at 332 (holding that governmental

immunity has two components: immunity from suit, which bars suit against

governmental entity, and immunity from liability, which bars enforcement of

judgment against governmental entity). Finally, Walker argues that “[a]n entity

should not obtain immunity from suit merely by operating an open-enrollment

charter school.” She argues that granting Neighborhood Centers immunity from

suit because it operates an open-enrollment charter school would not serve the

purposes of governmental immunity, i.e., “to shield the public from the costs and

consequences of improvident actions of their governments,” see Tooke, 197

S.W.3d at 331, and that “[n]either Neighborhood Centers nor its open-enrollment

charter school is legislatively endowed with any governmental powers.”

Neighborhood Centers responds that numerous courts of appeals, including

this Court, have held that charter schools enjoy the same immunity from suit as

traditional public school districts. It further argues that, because the Texas

Supreme Court has held that governmental immunity has not been waived for

claims under the Workers’ Compensation Act’s anti-retaliation provision set out in

Labor Code section 451.001, the trial court lacked jurisdiction over Walker’s claim

under the anti-retaliation provision of the Act. We agree with Neighborhood

Centers.

11
As discussed above, the supreme court held in C2 Construction that an open-

enrollment charter school is a governmental unit for purposes of the Tort Claims

Act and, thus, the Dallas Court of Appeals had jurisdiction over an interlocutory

appeal challenging the trial court’s ruling on the charter school’s plea to the

jurisdiction. C2 Constr., Inc., 342 S.W.3d at 82 (hereinafter “C2 Construction I”).

However, the supreme court left undecided the underlying issue of whether the

charter school, Universal Academy, enjoyed immunity from suit on the contract

claim of the plaintiff, C2 Construction. Id. It remanded the case to the Dallas

Court of Appeals for consideration of that question. See id.

On remand, the Dallas Court of Appeals determined, based on the supreme

court’s analysis in C2 Construction I, that Universal Academy had governmental

immunity from suit on the plaintiff’s contract claim. LTTS Charter Sch., Inc. v. C2

Constr., Inc., 358 S.W.3d 725, 735–36 (Tex. App.—Dallas 2011, pet. denied)

(hereinafter C2 Construction II). The Dallas Court of Appeals observed that the

supreme court relied on the following reasoning in reaching its holding in C2

Construction I:

[O]pen-enrollment charter schools (1) are statutorily declared to be
“part of the public school system of this state”; (2) derive “authority to
wield ‘the powers granted to [traditional public] schools’ and to
receive and spend state tax dollars (and in many ways to function as a
governmental entity)” from a “comprehensive statutory regime”; (3)
have “responsibility for implementing the state’s system of public
education”; and (4) “are generally subject to ‘state laws and rules

12
governing public schools,’” including regulation of open meetings and
access to public information.

C2 Constr. II, 358 S.W.3d at 735 (quoting C2 Constr. I, 342 S.W.3d at 77–78).

The Dallas court reasoned that “[t]hose same attributes and circumstances support

a conclusion of governmental immunity” from suit and concluded that “open-

enrollment charter schools have governmental immunity from suit.” Id. at 735–36

(citing Univ. Interscholastic League v. Sw. Officials Ass’n, Inc., 319 S.W.3d 952,

962 (Tex. App.—Austin 2010, no pet.)).

This Court and others have subsequently recognized that an open-enrollment

charter school “enjoys governmental immunity from suit” for a variety of claims.

KIPP, Inc. v. Whitehead, 446 S.W.3d 99, 105 (Tex. App.—Houston [1st Dist.]

2014, pet. denied) (citing LTTS Charter Sch., Inc. v. Palasota, 362 S.W.3d 202,

208 (Tex. App.—Dallas 2012, no pet.)); see also Rosenberg v. KIPP, Inc., 458

S.W.3d 171, 177–78 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) (holding

that plaintiff failed to prove waiver of immunity from suit in discrimination case

and, thus, trial court properly granted open-enrollment charter school’s plea to

jurisdiction and dismissed plaintiff’s claims); Tejano Cntr. for Cmty. Concerns,

Inc. v. Olvera, No. 13-13-00289-CV, 2014 WL 4402210, at *2–5 (Tex. App.—

Corpus Christi Aug. 29, 2014, no pet.) (mem. op.) (applying waiver of immunity

analysis applicable to public school districts to claim against open-enrollment

charter school); El Paso Educ. Initiative, Inc. v. Amex Props., LLC, 385 S.W.3d
13
701, 708 (Tex. App.—El Paso 2012, pet. denied) (citing C2 Construction II

favorably and holding that “the Legislature has waived [the open-enrollment

charter school’s] immunity to suit for the purpose of adjudicating a breach-of-

contract claim” pursuant to Local Government Code section 271.151(2)).

Thus, we conclude that, here, where the suit implicates the nature, purposes,

and powers of the public schools as exercised by Neighborhood Centers’ open-

enrollment charter school, Neighborhood Centers enjoys immunity from suit. See

Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions

Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 325 (Tex. 2006). And because

governmental immunity applies, the trial court lacks subject-matter jurisdiction

absent a clear and unambiguous waiver of that immunity by the Legislature. See

Tooke, 197 S.W.3d at 332–33; Miranda, 133 S.W.3d at 224–26; see also City of

Dallas v. Albert, 354 S.W.3d 368, 374 (Tex. 2011) (holding that waivers of

sovereign immunity or consent to sue governmental entities must generally be

found in actions of Legislature). We therefore turn to whether Neighborhood

Centers’ immunity to suit has been waived for a workers’ compensation anti-

retaliation claim brought pursuant to Labor Code chapter 451.

In Travis Central Appraisal District v. Norman, the Texas Supreme Court

addressed the issue of waiver of governmental immunity under the same statute

Walker relies upon in her pleadings—“the Texas Anti-Retaliation Law, found in

14
Chapter 451 of the Texas Labor Code, [which] prohibits a person from discharging

or discriminating against an employee, who in good faith files a workers’

compensation claim.” 342 S.W.3d 54, 54 (Tex. 2011) (citing TEX. LAB. CODE

ANN. § 451.001(1)). In Norman, the supreme court recognized that the anti-

retaliation provision of the Workers’ Compensation Act “applies to private

employers.” Id. The court acknowledged that it had previously held that, while

the anti-retaliation statute itself did not waive governmental immunity, the 1981

and 1989 versions of Labor Code chapter 504, also known as the Political

Subdivisions Law, reflected a legislative intent to waive governmental immunity

for retaliatory discharge claims under chapter 451. Id. at 56–57 (citing City of

LaPorte v. Barfield, 898 S.W.2d 288, 298–99 (Tex. 1995) (holding that Chapter

504 waives the governmental immunity of political subdivisions for retaliatory

discharge claims under Chapter 451)).

However, the supreme court in Norman also observed that, following the

2005 revisions to the Political Subdivisions Law, the statute no longer contained a

clear and unambiguous waiver of immunity from suit under the anti-retaliation

provision. Id. at 57–59. The court concluded, “Because a retaliatory discharge

claim may not be brought against the government without its consent and the

Political Subdivisions Law no longer provides such consent by waiving the

15
government’s immunity, the underlying claim in this case must be dismissed.” Id.

at 59.

Following the reasoning of the supreme court in Norman, we conclude that

the Legislature has not provided a clear and unambiguous waiver of Neighborhood

Centers’ governmental immunity from suit on Walker’s anti-retaliation claim. See

id. Accordingly, the trial court lacked subject-matter jurisdiction over this claim

and properly granted Neighborhood Centers’ plea to the jurisdiction on this claim.

See Tooke, 197 S.W.3d at 332–33; Miranda, 133 S.W.3d at 224–26.

Walker’s arguments to the contrary disregard the precedent of the supreme

court and this Court and are unavailing. As the supreme court held in C2

Construction I, the Education Code grants open-enrollment charter schools “status

as ‘part of the public school system of this state’” and “authority to wield ‘the

powers granted to [traditional public] schools,’” including the authority “to receive

and spend state tax dollars (and in many ways to function as a governmental

entity).” 342 S.W.3d at 78. Thus, the supreme court recognized that the Education

Code does endow entities operating open-enrollment charter schools with some

governmental powers.

Regarding immunity, several courts of appeals, including this Court, have

extended the reasoning of C2 Construction I to provide open-enrollment charter

schools with immunity from suit in addition to immunity from liability. See, e.g.,

16
KIPP, Inc., 446 S.W.3d at 105; C2 Constr. II, 358 S.W.3d at 735–36; see also TEX.

EDUC. CODE ANN. § 12.1056 (“In matters related to operation of an open-

enrollment charter school, an open-enrollment charter school is immune from

liability to the same extent as a public school district. . . .”). Recognizing

Neighborhood Centers’ immunity from suit serves the public policy interest of

shielding “the public from the costs and consequences of improvident actions of

their governments,” as Neighborhood Centers has been granted the authority “to

receive and spend state tax dollars (and in many ways to function as a

governmental entity)” in its role as operator of an open-enrollment charter school.

See C2 Constr. I, 342 S.W.3d at 78; Tooke, 197 S.W.3d at 332.

We hold that Neighborhood Centers enjoys immunity from Walker’s suit

under the anti-retaliation provision of the Workers’ Compensation Act in Labor

Code chapter 451 and that its immunity has not been clearly and unambiguously

waived.

We overrule Walker’s sole issue on appeal.

Plea to the Jurisdiction on Walker’s Whistleblower Protection Act Retaliation
Claim

In its sole issue on appeal, Neighborhood Centers argues that the trial court

erred in denying its plea to the jurisdiction on Walker’s retaliation claim under the

Whistleblower Protection Act. It argues that, as a public charter school, it is not

17
subject to the Whistleblower Protection Act and, accordingly, Walker cannot

allege any waiver of its governmental immunity from suit under that statute.

Neighborhood Centers acknowledges that the supreme court has held that

open-enrollment charter schools are “governmental units” under the Texas Tort

Claims Act. See C2 Constr. I, 342 S.W.3d at 82. However, it argues that the

definition of “governmental unit” in the Tort Claims Act is broader than the

definition of “local governmental entity” in the Whistleblower Protection Act. It

argues that it is not a “political subdivision of the state” within the meaning of the

Whistleblower Protection Act because it does not have the characteristics of a state

governing board or of a traditional political subdivision of the state, such as the

power to assess and collect taxes, a governing body that is either elected in local

elections or appointed by locally-elected officials, or jurisdiction over a portion of

the state. See Guar. Petroleum Corp. v. Armstrong, 609 S.W.2d 529, 531 (Tex.

1980) (providing characteristics that “political subdivisions” possess).

Neighborhood Centers’ argument thus turns on whether an entity operating an

open-enrollment charter school falls within the definition of “local governmental

entity” in the Whistleblower Protection Act such that its immunity is waived for

anti-retaliation claims filed under the Act.

18
A. Relevant Provisions of the Whistleblower Protection Act and Education
Code

The Whistleblower Protection Act, in Government Code section 554.002,

prohibits retaliation for reporting a violation of law:

A state or local governmental entity may not suspend or terminate the
employment of, or take other adverse personnel action against, a
public employee who in good faith reports a violation of law by the
employing governmental entity or another public employee to an
appropriate law enforcement authority.

TEX. GOV’T CODE ANN. § 554.002(a) (Vernon 2012). In section 554.001, the

Whistleblower Protection Act defines “local governmental entity” as used in

section 554.002 to mean “a political subdivision of the state, including a: (A)

county; (B) municipality; (C) public school district; or (D) special-purpose district

or authority.” Id. § 554.001(2) (Vernon 2012).

“A public employee whose employment is suspended or terminated or who

is subjected to an adverse personnel action in violation of Section 554.002 is

entitled to sue for: (1) injunctive relief; (2) actual damages; (3) court costs; and

(4) reasonable attorney fees.” Id. § 554.003(a) (Vernon 2012). The term “public

employee” is defined for this purpose to mean “an employee or appointed officer

other than an independent contractor who is paid to perform services for a state or

local governmental entity.” Id. § 554.001(4).

The Whistleblower Protection Act also contains a waiver of immunity:

19
A public employee who alleges a violation of this chapter may sue the
employing state or local governmental entity for the relief provided by
this chapter. Sovereign immunity is waived and abolished to the
extent of liability for the relief allowed under this chapter for a
violation of this chapter.

Id. § 554.0035 (Vernon 2012).

The Education Code provides statutes setting out the status and authority of

open-enrollment charter schools. The Education Code unequivocally provides that

“[a]n open-enrollment charter school is part of the public school system of this

state.” TEX. EDUC. CODE ANN. § 12.105 (Vernon 2012); C2 Constr. I, 342 S.W.3d

at 76. Open-enrollment charter schools are publically funded institutions. TEX.

EDUC. CODE ANN. § 12.106 (Vernon 2012); C2 Constr. I, 342 S.W.3d at 77.

The Education Code provides generally that “an open-enrollment charter

school is subject to federal and state laws and rules governing public schools and

to municipal zoning ordinances governing public schools.” Id. § 12.103(a)

(Vernon 2012). The Education Code also grants an open-enrollment charter school

the “powers granted to [traditional public] schools under [Education Code title 2]”

and the authority to “provide instruction to students at one or more elementary or

secondary grade levels as provided by the charter.” Id. § 12.102(1)–(3), 12.104(a)

(Vernon Supp. 2014).

The Education Code also “subjects open-enrollment charter schools to a host

of statutes that govern governmental entities outside the Education Code.” C2

20
Constr. I, 342 S.W.3d at 78. Specifically, the Code provides that open-enrollment

charter schools are: (1) “governmental bodies” for purposes of Open Meetings and

Public Information Laws; (2) a “local government” under laws relating to local

government records; and (3) a “governmental entity,” “political subdivision,” and

“local government” for purposes of public purchasing and contracting laws. See

TEX. EDUC. CODE ANN. §§ 12.1051–12.1055 (Vernon 2012 & Supp. 2014); C2

Constr. I, 342 S.W.3d at 77; see also TEX. EDUC. CODE ANN. § 12.1054–12.1055

(Vernon 2012 & Supp. 2014) (providing for applicability of law relating to conflict

of interest and nepotism laws to open-enrollment charter schools, their governing

bodies, members, and officers).

Finally, section 12.1056 provides, “In matters related to operation of an

open-enrollment charter school, an open-enrollment charter school is immune from

liability to the same extent as a public school district. . . .” TEX. EDUC. CODE ANN.

§ 12.1056.

B. Interpretation of Whistleblower Protection Act

The Dallas Court of Appeals addressed arguments similar to those raised by

Neighborhood Centers in Pegasus School of Liberal Acts & Sciences v. Ball-

Lowder. That court held that, in spite of the differences in the statutory definitions

of “governmental unit” in the Tort Claims Act and “local governmental entity” in

the Whistleblower Protection Act, “the Whistleblower Protection Act’s definition

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of ‘local governmental entity’ must be interpreted to include an open-enrollment

charter school.” Pegasus Sch. of Liberal Arts & Scis. v. Ball-Lowder, No. 05-13-

00482-CV, 2013 WL 6063834, at *5 (Tex. App.—Dallas Nov. 18, 2013, pet.

denied). The court in Pegasus School held that a private, non-profit entity

operating an open-enrollment charter school, such as Neighborhood Centers here,

is subject to the Whistleblower Protection Act and to its waiver of immunity from

suits under that Act. See id.

Neighborhood Centers argues, however, that we should not rely on the

Dallas Court of Appeals’ opinion in Pegasus School. It argues that the Pegasus

School opinion strays from the established precedent of the supreme court in C2

Construction I, that it erroneously applies the broad definition of “governmental

unit” to the more narrowly defined term of “local governmental entity,” and that it

confuses two distinct issues: “(1) the extent of an open-enrollment charter school’s

immunity, and (2) the basic applicability of a law and statutory cause of action to

open-enrollment charter schools.” We disagree for the reasons set out below.

In reaching its conclusion in Pegasus School, the Dallas Court of Appeals

began by discussing both the supreme court’s opinion in C2 Construction I and its

own opinion in that case on remand, C2 Construction II. Id. at *3–5.

In C2 Construction I, the supreme court’s analysis involved the “broad,”

“catch-all” provision in the Tort Claims Act, found in Civil Practice and Remedies

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Code section 101.001(3)(D). Section 101.001(3)(D) states that a “governmental

unit” includes “any other institution, agency, or organ of government the status and

authority of which are derived from the Constitution of Texas or from laws passed

by the legislature under the constitution.” TEX. CIV. PRAC. & REM. CODE ANN.

§ 101.001(3)(D); C2 Constr. I, 342 S.W.3d at 76.

As we stated above, the supreme court concluded in C2 Construction I:

Open-enrollment charter schools are governmental units for Tort
Claims Act purposes because: (1) the Act defines “governmental unit”
broadly to include “any other institution, agency, or organ of
government” derived from state law; (2) the Education Code defines
open-enrollment charter schools as “part of the public school system,”
which are “created in accordance with the laws of this state,” subject
to “state laws and rules governing public schools,” and, together with
traditional public schools, “hav[e] the primary responsibility for
implementing the state’s system of public education[”;] and (3) the
Legislature considers open-enrollment charter schools to be
“governmental entit[ies]” under a host of other laws outside the
Education Code.

342 S.W.3d at 82. It held that an open-enrollment charter school is a governmental

unit as defined in Civil Practice and Remedies Code section 101.001(3), and thus,

a court of appeals has jurisdiction to hear an interlocutory appeal from the trial

court’s order granting or denying the charter school’s plea to the jurisdiction

pursuant to Civil Practice and Remedies Code section 51.014(a)(8). See id.

Accordingly, the Dallas court in C2 Construction II considered the question

of whether the charter school’s immunity had been waived by Local Government

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Code section 271.152, which provides a waiver of immunity for limited breach of

contract claims. 358 S.W.3d at 734.

The provision of the Local Government Code relevant to the claims in C2

Construction II contains its own definition of “local governmental entity”:

According to section 271.151(3), a “local governmental entity” means “a political

subdivision of this state . . . including a . . . public school district and junior college

district.” TEX. LOC. GOV’T CODE ANN. § 271.151(3) (Vernon 2005). In C2

Construction II, the Dallas court concluded that an open-enrollment charter school

is a “local governmental entity” for purposes of the waiver of immunity in Local

Government Code section 271.152. C2 Constr. II, 358 S.W.3d at 742. Noting that

Education Code section 12.103 specifies that “an open-enrollment charter school is

subject to federal and state laws and rules governing public schools,” it reasoned

that the waiver of immunity from contract claims against public schools must also

extend to open-enrollment charter schools. Id. at 741 (citing C2 Constr. I, 342

S.W.3d at 78 n.44).

Against the backdrop of this history of the C2 Construction cases, the Dallas

court in Pegasus School turned to the question of whether an open-enrollment

charter school is a “local governmental entity” under the Whistleblower Protection

Act—the same question we must answer here.

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The Pegasus School court stated that the Whistleblower Protection Act and

Local Government Code section 271.151(3) contain “almost identical” provisions.

2013 WL 6063834, at *5; compare TEX. GOV’T CODE ANN. § 554.002(a)

(Whistleblower Protection Act) (“‘Local governmental entity’ means a political

subdivision of the state, including a . . . public school district”), with TEX. LOC.

GOV’T CODE ANN. § 271.151(3) (“‘Local governmental entity’ means a political

subdivision of this state . . . including a . . . public school district”). The court held

that “[t]he attributes and circumstances” of open-enrollment charter schools relied

on in both C2 Construction I and C2 Construction II—i.e., that they are part of the

public school system, have “responsibility for implementing the state’s school

system of public education, and are subject to state laws and rules governing public

schools, among other factors”—are equally relevant and applicable in determining

whether an open-enrollment charter school is a “local governmental entity” under

the Whistleblower Protection Act. Pegasus School, 2013 WL 6063834, at *5

(citing C2 Constr. II, 358 S.W.3d at 736–37, 741). The Pegasus School court held

that the logic of its opinion in C2 Construction II likewise compelled its holding

that an open-enrollment charter school was a “local governmental entity” under the

Whistleblower Protection Act. Id.

We agree with the conclusions of the Dallas Court of Appeals in C2

Construction II and in Pegasus School. The Education Code grants open-

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enrollment charter schools “status as ‘part of the public school system of this

state’” and “authority to wield ‘the powers granted to [traditional public] schools,’”

including the power “to receive and spend state tax dollars (and in many ways to

function as a governmental entity).” C2 Constr. I, 342 S.W.3d at 78 (citing TEX.

EDUC. CODE ANN. §§ 12.104–12.106). Moreover, the Education Code expressly

provides that “an open-enrollment charter school is subject to federal and state

laws and rules governing public schools” and waives an open-enrollment charter

school’s immunity from liability “to the same extent as a public school district.”

Id. §§ 12.103(a), 12.1056.

Furthermore, as the supreme court recognized, the Education Code “subjects

open-enrollment charter schools to a host of statutes that govern governmental

entities outside the Education Code.” C2 Constr. I, 342 S.W.3d at 78.

Specifically, the Code provides that open-enrollment charter schools are

considered to be “governmental bodies” for purposes of the open meetings and

public information laws. TEX. EDUC. CODE ANN. § 12.1051. They are considered

to be “a local government” under laws relating to local government records. Id.

§ 12.052. And “Section 12.1053 confers ‘governmental entity’ status, ‘political

subdivision’ status, and ‘local government’ status on open-enrollment charter

schools for purposes of myriad public purchasing and contracting laws. . . .” C2

Constr. I, 342 S.W.3d at 77 (citing TEX. EDUC. CODE ANN. § 12.1053 (Vernon

26
Supp. 2014)); see also TEX. EDUC. CODE ANN. §§ 12.1054, 12.1055 (providing for

applicability of law relating to conflict of interest and nepotism laws to open-

enrollment charter schools, their governing bodies, members, and officers).

Here, the Whistleblower Protection Act contains a “clear and unambiguous

expression of the Legislature’s waiver of immunity,” as required to waive

governmental immunity. See Taylor, 106 S.W.3d at 696; see also TEX. GOV’T

CODE ANN. § 554.0035 (providing that public employee “may sue the employing

state or local governmental entity” and that “[s]overeign immunity is waived and

abolished to the extent of liability for the relief allowed” under Act). Thus, there is

no question that the Legislature intended to waive immunity from suit for some

claims under the Whistleblower Protection Act. There is only the question of

whether the scope of affected governmental entities includes open-enrollment

charter schools.

Neighborhood Centers encourages us to consider the text of the

Whistleblower Protection Act’s definition of “local governmental entity” in

isolation to reach the conclusion that an open-enrollment charter school does not fit

squarely within the definition. However, as we have already stated, the Education

Code treats open-enrollment charter schools much like a political subdivision of

the state in numerous respects, and it specifies that such schools are “subject to

federal and state laws and rules governing public schools.” See TEX. EDUC. CODE

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ANN. § 12.103(a); C2 Constr. I, 342 S.W.3d at 78 (citing TEX. EDUC. CODE ANN.

§§ 12.104–12.106). Employees of public school districts can bring whistleblower

claims against their employers because the Legislature waived the schools’

governmental immunity to permit that. See TEX. GOV’T CODE ANN. § 554.0035

(providing express waiver of immunity from suit for “public employee” suing “the

employing state or local governmental entity”); id. § 554.001(2)(C) (defining

“local governmental entity” as “including a . . . public school district”). To hold

otherwise with respect to claims against an open-enrollment charter school would

exempt it from the state whistleblower laws governing public schools, contrary to

the express command of the Education Code that open-enrollment charter schools

are “part of the public school system of this state” and are “subject to federal and

state laws and rules governing public schools.” See TEX. EDUC. CODE ANN.

§§ 12.103, 12.105.

We hold that the Legislature has waived governmental immunity for the

Whistleblower Protection Act claim asserted here by Walker against Neighborhood

Centers. See Taylor, 106 S.W.3d at 697 (holding that statute waiving immunity

need not be model of “perfect clarity” but must do so beyond doubt). Accordingly,

the trial court properly denied Neighborhood Centers’ plea to the jurisdiction on

this issue.

We overrule Neighborhood Centers’ sole issue on appeal.

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Conclusion

We affirm the order of the trial court.

Evelyn V. Keyes
Justice

Panel consists of Justices Keyes, Bland, and Massengale.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3070598. Public record. Not legal advice.