City of Denton v. Brian Rushing, Calvin Patterson and Kevin Marshall, 570 S.W.3d 708

Three hourly, overtime-eligible City of Denton utilities employees (Rushing, Patterson, Marshall) worked uncompensated on-call shifts 2011–2015 under City Policy 106.06 in the City’s Policies and Procedures Manual.
Policy 106.06 defined on-call periods, response requirements (30 minutes), and potential discipline for failure to respond; originally (1995) said on-call time was not compensable.
In 2013 the City Manager revised Policy 106.06 to provide an explicit pay schedule for on-call time; these revisions were not enacted by City Council but reviewed by the Executive Committee and published in the Manual.
The Manual contains a broad disclaimer: its contents do not constitute terms of an employment contract, employment is at-will, and the City may alter the Manual at any time.
After the City refused compensation for past on-call shifts, Rushing sued for breach of contract, alleging Policy 106.06 created a unilateral contract; the trial court denied the City’s plea to the jurisdiction, and the court of appeals affirmed.
The Texas Supreme Court reviewed whether Local Government Code §271.152’s waiver of governmental immunity applies, which requires an enforceable written contract properly executed by the governmental entity.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Policy 106.06 is a "written contract" under Tex. Loc. Gov't Code §271.151(2)	Policy 106.06’s mandatory terms create a unilateral contract enforceable by employees	The Manual’s broad disclaimer negates any intent to create contractual terms	Held: Disclaimer negates contractual intent; Manual is not a written contract
Whether the Manual’s disclaimer is limited to preserving at-will status or negates contractual intent generally	Rushing: disclaimer only preserves at-will status and does not defeat a unilateral contract claim	City: disclaimer expressly states manual does not constitute terms of an employment contract and negates contractual intent	Held: Disclaimer disclaims any intent to create employment contract and thus prevents finding a contract
Whether city manager’s 2013 revisions were properly executed on behalf of the City	Rushing: delegation and Executive Committee review suffice to bind the City	City: revisions lacked formal City Council enactment and thus weren’t properly executed (alternative defense)	Court: did not reach execution issue because no contract exists due to disclaimer
Whether §271.152 waives governmental immunity here	Rushing: §271.152 applies because Policy 106.06 is a contract subject to the subchapter	City: §271.152 does not apply because no enforceable written contract exists	Held: §271.152 does not waive immunity because no written contract was created; dismissal rendered

City of Houston v. Williams, 353 S.W.3d 128 (Tex. 2011) (city ordinances can create unilateral employment contracts)
County of Dallas v. Wiland, 216 S.W.3d 344 (Tex. 2007) (employee manual disclaimer can negate contractual intent)
Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (analysis of governmental immunity for municipal acts)
Paniagua v. City of Galveston, 995 F.2d 1310 (5th Cir. 1993) (personnel rules without disclaimer may form enforceable contract terms)
Apache Deepwater, LLC v. McDaniel Partners, Ltd., 485 S.W.3d 900 (Tex. 2016) (court must harmonize competing contract provisions when construing documents)
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (principles for interpreting contractual language and harmonizing provisions)