Texas Supreme Court Rules for Employee on Contract Claim

12/07/2014 // Dallas, Texas, United States // Attorney Keith Clouse // Keith Clouse // (press release)
The Texas Supreme Court recently ruled that the Local Government Contract Claims Act waives a local governmental entity’s immunity from suit for breach of an employment contract. Damuth v. Trinity Valley Community College, No. 13-0815 (Tex. Nov. 21, 2014), available at http://www.txcourts.gov/media/710075/130815.pdf.

The employee had a written employment agreement for services as a coach/professor with the employer, a local governmental entity. The employer fired the employee five months into the one-year contract, and the employee sued. The trial court and the court of appeals concluded that the Local Government Contract Claims Act did not waive the employer’s immunity from suit, and the employee appealed.

On appeal, the Court rejected the lower court’s reasoning. First, the lower court interpreted the Act too narrowly. While the Act does not specifically refer to employment agreements, it covers contracts for “services”—which includes what an employee provides his employer—and thus encompasses employment agreements. Second, the lower court mistakenly relied on the Act’s headings to limit the meaning of “services;” a heading does not expand or limit the meaning of a statute. Finally, the lower court misconstrued a previous Court opinion regarding firefighters’ employment contracts as limiting the Act’s waiver to civil servants; nothing in the Act or that opinion indicates that the Act’s waiver of immunity is limited to suits by civil servants.

This article is presented by the Dallas employment attorneys at Clouse Dunn LLP. To speak to an employment lawyer about an employment contract, send an email to [email protected] or call (214) 239-2705.

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