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Guest Blog: Texas Supreme Court Considers Applicability of Texas Whistleblower Act to Charter Schools

November 29, 2017

In November, I went before the Texas Supreme Court on behalf of Neighborhood Centers, Inc. (Baker Ripley) to argue that public charter schools are not subject to the Texas Whistleblower Act.  You can listen to the oral argument and learn more about the case here

Our primary argument before the Texas Supreme Court focused on the legislative intent behind the 2015 amendments to Chapter 12 of the Education Code and the comprehensive statutory framework set forth by the state legislature for public charter schools in Texas. This framework preserves the fundamentally private nature of the non-profit 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. Since Chapter 12 does not make an open-enrollment charter school a local governmental entity or a political subdivision for all purposes, or for the specific purposes of the Whistleblower Act, and since the Whistleblower Act does not by its own words apply to charter schools, it should not be subject to claims under the Whistleblower Act.

The First Court of Appeals in Houston initially reviewed these new amendments in Neighborhood Centers Inc. v. Walker, 499 S.W.3d 16 (Tex. App.—Houston [1st Dist.] 2016, pet. granted), and held that open-enrollment charter schools can be sued under the Whistleblower Act, because the Whistleblower Act waives immunity for claims against school districts. Neighborhood Centers appealed that decision to the Texas Supreme Court, which granted review.

By way of background, in 2013, the Fifth Court of Appeals in Dallas reversed an earlier decision by that court to hold that private, non-profit corporations that operate open-enrollment charter schools are subject to the Whistleblower Act. In response to this and other cases, the 2015 Texas Legislature enacted House Bills 1170 and 1171, which amended certain provisions of Chapter 12. Under the new law, Chapter 12 states that open-enrollment charter schools and charter holders are immune from suit and liability to the same extent as a school district, whereas they had only previously been immune from liability. Language was also added to clarify that an open-enrollment charter school is not considered to be a “local governmental entity” or a “political subdivision” unless a particular statute specifically says that it applies to charter schools.

The plaintiff’s attorney argued that any type of claim that can be brought against a school district should apply equally to charter schools, and that authorizing this personal cause of action for aggrieved employees is essential to protecting the public school students that make up a charter school’s enrollment.

Applying the Whistleblower Act to Texas charter schools would result in a significant increase in cost and risk to charter school operations. More importantly, ignoring the plain language of Chapter 12 would open the door to other types of claims that the Legislature never intended, and further erode the fundamentally private nature of the non-profit corporate entities that operate charter schools.

We expect the Texas Supreme Court to issue an opinion by the end of June 2018 that answers this important question for all charter schools throughout the state.

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