Texas Commission on Human Rights v. Morrison, 346 S.W.3d 838 (Tex.App.–Austin 2011 nwh)
Race Discrimination– In this amazing case against the Texas Commission on Human Rights, which is supposed to administer the state laws on discrimination, the jury found the executive director (ED) guilty of race discrimination against one of the investigators of the agency. The TCHR appealed and the Austin Court of Appeals affirmed in part and reversed and rendered in part. There was testimony by one of the investigators that the ED was hiring only whites, mostly male, and that he was a racist. The opinion gives a fascinating look at the allegations of discrimination in an agency that is supposed to prevent such matters. The court held that because the agency only had 44 employees at the time of the discrimination, the compensatory damages had to be reduced to the cap level for that size employee; i.e., $50,000. The opinion discusses the law concerning damages for back pay and front pay, as well as compensatory damages. The court also held that the portion of the judgment awarding future lost retirement and social security benefits was excessive and reduced the judgment on that amount.
Race Discrimination and Retaliation- African American former employee of Dept. Of Transportation filed suit against the department asserting claims of race discrimination and retaliation under Title VII, Sec. 1981 & 1983, and state employment discrimination law. The district court denied the department plea to the jurisdiction for retaliation claims based on alleged failure to exhaust administrative remedies and the department appealed. The court of appeals held (1) that the employee’s attempt to amend original charge of race discrimination filed with EEOC by adding claim of retaliation more than a month after the EEOC completed investigation of the discrimination claim and issued right to sue was ineffective; (2) the employee did not adequately exhaust retaliation claims that were not factually related to the charge of discrimination filed with the EEOC; (3) the employee adequately exhausted claim of retaliation that was factually related to race discrimination charge filed with EEOC; (4) the employee was not required to exhaust administrative remedies with respect to claims of race discrimination and retaliation under U.S. section 1981 and 1983; and (5) the Dept. was entitled to U.S. 11th Amendment immunity from suit brought under section 1981 and 1983. Despite a state’s 11th Amendment immunity, an individual can seek prospective, equitable relief under federal law against employees of a state agency in their official capacity; but this rule does not affect the immunity of the state agency from such suit, even though these suits against the officials for all practical purposes, are against the state agency.
Covenant Not to Compete- Non-Solicitation Agreement– Beauty salon brought action against two former employees seeking damages and injunctive relief arising out of the alleged violation of a non-solicitation covenant contained in their employment contract. The district court entered an order denying a temporary injunction and the salon appealed. The court of appeals examined the non-solicitation agreement and held that it was enforceable. The district court relied on the Texas Supreme Court’s holding in Light v. Centel Cellular Co. of Tex., 883 S.W.3d 642 (Tex. 1994), which held that because an at will contract of employment agreement is unenforceable at the time it is made, it cannot support a covenant not to compete. However, the Texas Supreme Court in 2006 departed from the Light holding in Alex Sheshunoff Management Service, LP v. Johnson, 209 S.W.3d 644 (Tex. 2006). The Supreme Court held that, although the Covenant Not to Compete Act required the covenant to be ancillary to or part of an agreement at the time the agreement is made, the Act did not require the agreement to be enforceable at the time it is made. Instead, the Court held that the agreement could later become enforceable based on performance and, at that point, could support a covenant not to compete. For example, where an employer in an at will employment agreement agrees to provide confidential information or other consideration to an employee, a reciprocal promise by the employee not to use the confidential information in competition with the employer may not be immediately enforceable because the employer’s promise is illusory, since he could terminate the employee before any confidential information is shared. But, once the employer fulfills the promise to divulge the confidential information, the contract becomes enforceable and may support a covenant not to compete. The court in this case then held that because Sheshunoff specifically states a covenant not to compete made part of an employment at will agreement may be enforceable, the district court in this case erred in concluding otherwise.