Scope of Texas Labor Code is on the line

On August 2, the U.S. 5th Circuit Court of Appeals (the federal appeals court covering Texas) asked the Texas Supreme Court to consider whether the Texas Labor Code preempts—that is, displaces and requires dismissal—state law claims such as fraud and defamation made against managers/supervisors. A “yes” answer will allow your frontline managers and above to breathe easier. A “no” answer will complicate not just their lives but yours as well.

Law school professor sues

Professor Cheryl Butler was not offered tenure at Southern Methodist University (SMU) School of Law. In the academic world, being denied tenure means you are allowed to stick around for a year (called by the unfortunate name of a “terminal year”) but then must clean out your office and leave. She completed the terminal year, left, and promptly sued SMU, alleging a variety of claims for unlawful discrimination under the Texas Labor Code. Recall that such claims prohibit suing individual managers/supervisors. But there’s more.

Butler also sued the managers/supervisors involved in the tenure decision for state law claims of fraud and defamation, not for discrimination under the Texas Labor Code.

What is the legal issue?

Here’s current law: If the facts supporting the discrimination claims against an employer—race, sex, religion, etc.—are the same as the facts supporting nondiscrimination claims against the employer, then the nondiscrimination claims (such as fraud or defamation) go poof! The employee gets just one shot at the employer.