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Guest Blog: Final Answer - Texas Whistleblower Act does NOT apply to charter schools operated by nonprofit corporations

April 18, 2018

In December, I reported on this blog about the oral argument before the Texas Supreme Court on behalf of Neighborhood Centers, Inc. (BakerRipley) which had been sued for retaliatory termination under the Texas Whistleblower Act, Chapter 554 of the Government Code. On April 13, 2018, the Court issued its decision, holding that open-enrollment charter schools operated by private nonprofit corporations are not subject to claims brought under the Whistleblower Act. The Court’s opinion, written by Chief Justice Nathan Hecht, can be accessed here

The Court looked closely at the statutory framework in Chapter 12 of the Education Code, and in particular Section 12.1058(c), which states that charter schools are not to be considered a political subdivision, local government, or local governmental entity for the purposes of a given statute unless it specifically applies to charter schools. This provision, the Court said, confirms that Chapter 12 as a whole should not be read to suggest that statutory claims against schools districts are broadly applicable to charter schools. Rather, Sections 12.1058(c) and 12.1056(a) must be read in harmony to say that where a statute specifically applies, the charter school’s immunity from suit and liability is the same as a school district’s. In this case, the Whistleblower Act does not apply, either by its own language or through reference in Chapter 12; therefore, charter schools cannot be sued under that statute.

While different courts of appeals have tackled this question over the years, the Supreme Court’s decision resolves the issue statewide. Moreover, the Court’s holding preserves the fundamentally private nature of the nonprofit corporate entities that operate charter schools, while allowing for treatment similar to that of governmental entities for purposes of some, but not all, specific statutes. 

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