521 S.W.3d 88
Tex. App.2017Background
- The City of Denton adopted Policy No. 106.06 in its Personnel Policies & Procedures Manual setting on-call duties, conduct requirements (30-minute response rule, adherence to other policies), and detailed on-call pay formulas.
- Appellees (Rushing, Patterson, Marshall) are hourly, nonexempt Denton Utilities employees who worked week-long on-call shifts repeatedly from 2011–2015 and claim the City failed to pay the on-call compensation required by Policy No. 106.06.
- Appellees sued for breach of a unilateral contract: they allege the City promised on-call pay in writing (Policy No. 106.06) in exchange for performance, and they performed; City did not pay.
- The City moved to dismiss/for summary judgment arguing its governmental immunity was not waived by Tex. Loc. Gov’t Code § 271.152 because (a) Policy 106.06 is not a contract (discretionary/conditional; at-will disclaimer), (b) it lacks essential terms or execution, and (c) paying back compensation is constitutionally prohibited.
- The trial court denied the City’s plea/motion; the City appealed. The court of appeals reviews jurisdictional issues de novo and considers evidence when jurisdictional facts are disputed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §271.152 waives the City’s immunity for Appellees’ breach-of-contract claim | Policy 106.06 is a written promise of specific on-call pay that Appellees accepted by performing, creating a unilateral contract subject to §271.151(2) and waiving immunity under §271.152 | §271.152 does not apply because no contract exists; Policy is discretionary/conditional, contains an at-will disclaimer, lacks essential terms, was not properly executed, and payment would violate the Texas Constitution | Waiver applies: the City is a local governmental entity authorized to contract, and Policy 106.06 created a unilateral contract that satisfies §271.151(2); immunity is waived |
| Whether Policy No. 106.06 qualifies as a unilateral contract | The written policy promises specific compensation for on-call performance; employees accepted by performing, forming a unilateral contract | The policy’s discretionary language and no-alteration-of-employment-at-will disclaimer preclude contract formation | Policy 106.06 created an enforceable unilateral contract when employees performed; the at-will disclaimer does not bar such a contract |
| Whether Policy No. 106.06 meets the §271.151(2) “contract subject to this subchapter” requirements (writing, essential terms, services, execution) | Policy contains specific calculation charts, duties and conditions for service, and was published/adopted per City Code—satisfying §271.151(2) | Policy lacks essential terms/specification of services and was not properly executed | Policy 106.06 contains essential terms, specifies services, and was properly adopted/executed under City Code—meets §271.151(2) |
| Whether Texas Constitution art. III, § 53 prohibits recovery of on-call pay for services already performed | Appellees seek payment for compensation the City promised for services the City required but had not previously paid | City contends the constitution bars granting extra compensation after service rendered | Article III § 53 prohibits granting extra compensation, not enforcing previously promised compensation; paying promised on-call pay is permissible |
Key Cases Cited
- City of Houston v. Williams, 353 S.W.3d 128 (Texas 2011) (unilateral municipal promises of compensation can form contracts subject to §271.152 waiving immunity)
- Vanegas v. American Energy Services, 302 S.W.3d 299 (Texas 2009) (unilateral employment contracts form when employer promises benefits and employee performs)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Texas 2006) (definition of local governmental entity and limits on relief against governmental entities)
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Texas 2004) (standard for reviewing jurisdictional pleas and when courts consider evidence)
- Bland Independent School District v. Blue, 34 S.W.3d 547 (Texas 2000) (plea to the jurisdiction as a challenge to subject-matter jurisdiction)
- Light v. Centel Cellular Co. of Texas, 883 S.W.2d 642 (Texas 1994) (at-will employment does not preclude enforceable agreements that do not limit termination rights)