By: Vanessa A. Gonzalez*
The Texas Supreme Court recently reviewed the Texas Whistleblower Act in two separate cases, the Okoli case and the Resendez case. The Whistleblower Act protects city and county employees who in good faith report violations of law to an appropriate law enforcement authority. Tex. Gov’t Code § 554.002(a). Both of the recent cases review what constitutes an appropriate law enforcement authority. The Act provides as follows:
[A] report is made to an appropriate law enforcement authority if the authority is part of a state or local governmental entity or the federal government that the employee in good faith believes is authorized to: (1) regulate under or enforce the law alleged to be violated in the report; or (2) investigate or prosecute a violation of criminal law.
Id. § 554.002(b). In 2002, the Texas Supreme Court interpreted this provision to require a plaintiff to prove that the report was made to an appropriate law enforcement authority or that the employee had a good-faith belief that it was. Texas Department of Transportation v. Needham, 82 S.W.3d 314, 320 (Tex. 2002). An employee’s belief is in good faith if: (1) the employee believed the governmental entity qualified, and (2) the employee’s belief was reasonable in light of the employee’s training and experience. Id. at 321. While the first element is subjective, the second element is an objective one: the reporting employee only receives Whistleblower Act protection if a reasonably prudent employee in similar circumstances would have believed the governmental entity to which he reported a violation of law was an appropriate law enforcement authority. Id. at 320-21. Further, whether an employee has a good faith belief that the entity is an appropriate law enforcement authority “turns on more than an employee’s personal belief, however strongly felt or sincerely held.” Univ. of Tex. SW. Med. Ctr. at Dallas v. Gentilello, 398 S.W.3d 680, 683 (Tex. 2013) (emphasis in original).
In the first case recently before the Texas Supreme Court, Oliver Okoli was an employee of the Texas Department of Human Services (TDHS). TDHS has a policy requiring its employees to report any wrongdoing to the supervisor and up the chain of command. The policy indicates that a referral will be made to the Office of Inspector General (OIG) for possible prosecution if the violation amounts to a crime under the Penal Code. Texas Department of Human Services v. Okoli, 440 S.W.3d 611 (Tex. 2014). The policy further states that any employee who fails to report any violation to the supervisor would be subject to disciplinary action up to and including termination of employment.
Pursuant to the TDHS policy, Okoli reported to his supervisor that he believed she was falsifying dates on TDHS benefits forms to avoid delinquencies and he thought that was fraudulent. Okoli claims he was disciplined after his report and put on a three month corrective action plan. Pursuant to the policy, Okoli then made his report up the chain of command to his supervisor’s supervisor. After an unsatisfactory response, he reported the same to the Lead Program Manager. Thereafter, Okoli was terminated from employment. Okoli never reported the violations of law directly to the OIG. The court of appeals held that because Okoli was required by TDHS policy to report up the chain of command, the supervisors were appropriate law enforcement authorities within TDHS, and, alternatively, Okoli had a good-faith belief that he was reporting to appropriate law enforcement authorities. Tex. Dep’t of Human Servs. v. Okoli, 317 S.W.3d 800, 809-10 (Tex. App.—Houston [1st Dist.] 2010, pet. granted).
On appeal, the Texas Supreme Court noted that in order for Okoli’s reports of wrongdoing to reach an appropriate law enforcement authority, Okoli’s supervisors would have had to forward them to the OIG for prosecution. The TDHS policy specifically informed Okoli that if violations constitute a violation of the Penal Code, “a referral to OIG will be made for possible prosecution.” The court concluded Okoli did not report to an appropriate law enforcement authority, nor could have had a good-faith belief that he did so. The court rejected Okoli’s arguments that required reporting up the chain of command gave him a good faith belief he was reporting to an appropriate law enforcement authority. However, the court declared, “We do not hold that a Whistleblower Act report can never be made internally. A police department employee could retain the protections of the Whistleblower Act if she reported that her partner is dealing narcotics to her supervisor in the narcotics or internal affairs division. In such a situation, the employee works for an entity with authority to investigate violations of drug laws committed by the citizenry at large.” Id. at 616 (citing Univ. of Tex. Sw. Med. Ctr. at Dallas v. Gentilello, 398 S.W.3d 680, 688 (Tex. 2013)).
The court held that because Okoli neither reported the alleged violations he witnessed to an appropriate law enforcement authority nor in good faith could have believed he had, he was not entitled to the protections of the Whistleblower Act. Id. at 617.
In the second case recently reviewed by the Texas Supreme Court, Ms. Rosaena Resendez was fired from her position at the Texas Commission on Environmental Quality (TCEQ) after she reported alleged wrongdoing to a supervisor, a TCEQ Director, and to the office of a state senator, Senator Juan “Chuy” Hinojosa. Texas Commission on Environmental Quality v. Resendez, —S.W.3d.—, 2014 WL 6612570, 58 Tex. Sup. Ct. J. 104, Tex., November 21, 2014 (NO. 13-0094). The court stated that even if Ms. Resendez subjectively believed that the TCEQ Director and Senator Hinojosa had authority to investigate the violations of law, Resendez failed to satisfy the objective requirement. The TCEQ Director had internal compliance authority. However, the court stated that internal-compliance authority could not support a good faith belief that the Director had the power of enforcement to pursue criminal charges.
With regard to Resendez’ report to Senator Hinojosa’s office, the court declared any belief that his office is an appropriate law enforcement agency was objectively unreasonable. A state senator’s function is to legislate, to create law, not to enforce it. Resendez tried to argue that she had no special legal training and that it is objectively reasonable for a layperson like herself to believe that a state senator has authority to investigate violations of law, especially fraud on the government. The court stated, “We find no objectively reasonable basis for the belief that a member of the Texas Legislature has the power to enforce any law or engage in a criminal investigation. Resendez’s thirty-four years of service in Texas government renders any such belief all the less reasonable.” Therefore, the court held that Resendez failed to establish that any belief she had that the senator was an appropriate law enforcement authority was in good faith under the Act.
These cases not only reflect the Supreme Court’s interpretation of an appropriate law enforcement authority under the Texas Whistleblower Act, but they also indicate the important role policies can play in these kinds of cases. Counties and cities should review their policies regarding reporting of violations of law and always keep their employment policies up to date.
*Vanessa A. Gonzalez is a partner at Bickerstaff Heath Delgado Acosta LLP and is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization.