Opinion
NO. 14-19-00121-CV
03-02-2021
Leasa R. ROY, Appellant v. ALKUSARI, L.L.C., Alkusari Stone of Houston, Inc., T. Marketing Design, Inc., and Bertram Architectural Stone, Inc., Appellees
Elizabeth Harris, Houston, for Appellant. John William Escover, Georgetown, for Appellees.
Elizabeth Harris, Houston, for Appellant.
John William Escover, Georgetown, for Appellees.
Panel consists of Justices Jewell, Spain, and Wilson.
Randy Wilson, Justice
In this sex-discrimination case, a former employee challenges the trial court's granting of two defendants' plea to the jurisdiction. Addressing an issue of apparent first impression in this court, we conclude that a non-governmental defendant's failure to have enough employees to qualify as an employer under Texas Labor Code section 21.002(8)(A) does not deprive a trial court of subject-matter jurisdiction over claims against the defendant under Chapter 21 of the Texas Labor Code (the "Act"). Even if the substance of the plea to the jurisdiction were a motion for summary judgment on the merits, the trial court would have erred in granting summary judgment based on any of the grounds expressly presented in the motion. Because the trial court erred in granting the plea to the jurisdiction, we reverse and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
Appellant/plaintiff Leasa R. Roy filed suit in the trial court asserting a sex-discrimination action under the Act based on the following allegations:
• The trial court has jurisdiction over this action because the amount in controversy is within the jurisdictional limits of the trial court.
• Roy timely filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), and Roy filed this suit within sixty days after receiving notice of her right to sue from the EEOC.
• Upon information and belief, appellee/defendant Alkusari, L.L.C. and appellee/defendant Alkusari Stone of Houston, Inc. (collectively the "Alkusari Parties") operate as an integrated enterprise.
• The Alkusari Parties employed Roy for almost two years as a design consultant in the Houston salesroom.
• Roy's supervisor was Tarif Alkusari, the owner of the Alkusari Parties.
• In December 2015, four days after Roy informed Alkusari that she was twelve-weeks pregnant, Alkusari informed Roy that her employment was terminated, giving no reason for the termination other than that Roy's employment was "not working out."
• The Alkusari Parties are an employer withing the meaning of the Act.
• In violation of the Act, the Alkusari Parties terminated Roy's employment because of her pregnancy and treated her differently and less favorably than similarly situated males under the same or similar circumstances.
The Alkusari Parties filed a First Amended Motion to Dismiss for Lack of Jurisdiction (the "Plea to the Jurisdiction") asserting that there is no evidence to establish that the trial court has jurisdiction over Roy's claims against them. In the Plea to the Jurisdiction, the Alkusari Parties stated that Alkusari Stone of Houston, Inc. employed Roy. The Alkusari Parties contended that the trial court lacks jurisdiction "because [the Alkusari Parties] did not have at least 15 or more employees for each working day in each of 20 or more calendar weeks in 2015."
Roy responded in opposition to the Plea to the Jurisdiction and submitted her affidavit. The Alkusari Parties moved the trial court to strike Roy's affidavit. Roy amended her petition to add appellees/defendants Bertram Architectural Stone, Inc. and T. Marketing Design, Inc. as defendants. In her live pleading Roy alleges that upon information and belief, the Alkusari Parties, Bertram Architectural Stone, Inc., and T. Marketing Design, Inc. (collectively the "Allegedly Integrated Companies") operate as an integrated enterprise and employed Roy for almost two years as a design consultant in the Houston salesroom. Roy asserts that the Allegedly Integrated Companies are an employer withing the meaning of the Act and that in violation of the Act, the Allegedly Integrated Companies terminated Roy's employment because of her pregnancy and treated her differently and less favorably than similarly situated males under the same or similar circumstances.
The trial court struck Roy's affidavit as conclusory and lacking foundation and granted the Plea to the Jurisdiction.
The Allegedly Integrated Companies then filed a "Motion to Dismiss With Prejudice and Request for Attorney's Fees" (the "Second Motion"), asserting that Roy's claims were clearly without foundation, seeking an award of attorney's fees, and asking the trial court to dismiss Roy's claims against the Allegedly Integrated Companies with prejudice. The trial court signed a final order, granting the Second Motion in part and denying the motion in part, dismissing without prejudice all of Roy's claims, and denying the Allegedly Integrated Companies' request for attorney's fees. In the final order, the trial court stated that "[t]his dismissal is the result of the Court's grant of Defendants['] plea to the jurisdiction."
II. ISSUES AND ANALYSIS
On appeal, Roy asserts that the trial court erred in granting the Plea to the Jurisdiction and in striking her affidavit. We begin by addressing a threshold issue as to whether a non-governmental defendant's failure to have the number of employees required in Texas Labor Code section 21.002(8)(A) affects the trial court's subject-matter jurisdiction.
A. Would a non-governmental defendant's failure to have enough employees to qualify as an employer under Texas Labor Code section 21.002(8)(A) deprive a trial court of subject-matter jurisdiction over claims against the defendant under the Act?
A person falling within the Act's definition of "employer" commits an unlawful employment practice if because of sex the person fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with compensation or the terms, conditions, or privileges of employment. Tex. Labor Code Ann. § 21.051 (West, Westlaw through 2019 R.S.). In a section of the Act entitled "Definitions," the Legislature defines "employer" as follows:
(A) a person who is engaged in an industry affecting commerce and who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year;
(B) an agent of a person described by Paragraph (A);
(C) an individual elected to public office in this state or a political subdivision of this state; or
(D) a county, municipality, state agency, or state instrumentality, regardless of the number of individuals employed.
Tex. Labor Code Ann. § 21.002(8) (West, Westlaw through 2019 R.S.).
Roy did not sue any governmental entities in this case, nor did Roy assert that the Alkusari Parties fell within the Act's definition of "employer" based on subsection (B), (C), or (D). See id. Under section 21.002(8)'s unambiguous language, to fall within the definition of employer based on subsection (A), a person must have 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. See id. In the context of today's case, to fall within the definition based on subsection (A), a person must have 15 or more employees for each working day in each of 20 or more calendar weeks in either 2014 or 2015. See Miles v. Lee Anderson Co. , 339 S.W.3d 738, 742 (Tex. App.—Houston [1st Dist.] 2011, no pet) ; Ancira Enters., Inc. v. Fischer , 178 S.W.3d 82, 89 (Tex. App.—Austin 2005, no pet.). The parties have not cited, and research has not revealed, any cases from the Supreme Court of Texas or this court addressing whether a non-governmental defendant's failure to have enough employees to qualify as an employer under section 21.002(8)(A) deprives a trial court of subject-matter jurisdiction over claims against the defendant under the Act.
Both the Supreme Court of the United States and the Supreme Court of Texas have recognized that the sometimes-intemperate use of the term "jurisdictional" has caused problems in the jurisprudence. See Arbaugh v. Y&H Corp. , 546 U.S. 500, 510, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ; In re United Servs. Automobile Assoc. , 307 S.W.3d 299, 306 (Tex. 2010). Characterizing a statutory requirement as jurisdictional means that the trial court does not have—and never had—power to decide the case. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 306. The parties may raise an issue of subject-matter jurisdiction for the first time on appeal, and a court is obliged to ascertain that subject-matter jurisdiction exists regardless of whether the parties question it. See id.
In Dubai Petroleum Company v. Kazi , the Supreme Court of Texas observed that classifying a matter as an issue of subject-matter jurisdiction makes judgments vulnerable to delayed attack for a variety of irregularities that "perhaps better ought to be sealed in a judgment." 12 S.W.3d 71, 76 (Tex. 2000) (quoting Restatement (Second) of Judgments § 12 cmt. b at 118 (1982)). The Kazi court overruled Mingus v. Wadley to the extent that Mingus characterized the plaintiff's failure to establish a statutory prerequisite as jurisdictional. See Kazi , 12 S.W.3d at 76 (overruling Mingus v. Wadley , 115 Tex. 551, 285 S.W. 1084, 1087 (1926) ). Although Mingus represented the dominant approach when it was decided, the Kazi court concluded that the modern trend is to reduce the vulnerability of final judgments to attack on the ground that the trial court lacked subject-matter jurisdiction. Kazi , 12 S.W.3d at 76. The high court held that a plaintiff's right to maintain a suit, while frequently treated as going to the question of jurisdiction, has been said to go in reality to the right of the plaintiff to relief rather than to the jurisdiction of the court to afford the relief. See id. at 76–77.
The Mingus court held that the requirements of the 1917 Workmens' Compensation Act were jurisdictional, and that "[t]he general rule is that where the cause of action and remedy for its enforcement are derived not from the common law but from the statute, the statutory provisions are mandatory and exclusive, and must be complied with in all respects or the action is not maintainable." Mingus , 285 S.W. at 1087.
Since Kazi , the Supreme Court of Texas has been reluctant to conclude that a provision is jurisdictional, absent a clear legislative intent to that effect. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 305–10 (holding that time limitation for bringing a civil action under the act was an affirmative defense and did not deprive the trial court of jurisdiction); In re Dep't of Family & Protective Servs. , 273 S.W.3d 637, 644–45 (Tex. 2009) (holding that the failure to comply with dismissal dates in parental-rights-termination cases did not deprive trial court of jurisdiction); Hubenak v. San Jacinto Gas Transmission Co. , 141 S.W.3d 172, 191 (Tex. 2004) (holding that the statutory requirement that a condemnor and a property owner be "unable to agree" on damages was not jurisdictional but that a failure to satisfy the requirement would result in abatement); Univ. of Tex. Sw. Med. Ctr. v. Loutzenhiser , 140 S.W.3d 351, 354 (Tex. 2004) (holding that the Tort Claims Act's notice provision was "a complete defense to suit but [did] not deprive the court of subject matter jurisdiction"), superseded by statute , Act of May 25, 2005, 79th Leg., R.S., ch. 1150, § 1, 2005 Tex. Gen. Laws 3783, 3783 (current version at Tex. Gov't Code Ann. § 311.034 (West, Westlaw through 2019 R.S.)).
The Supreme Court of Texas has been careful to emphasize, however, that a statutory requirement commanding action, even if not jurisdictional, remains mandatory. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 307. And some requirements, such as a timely notice of appeal, remain jurisdictional. See id. Moreover, when elements of a statutory claim involve "the jurisdictional inquiry of sovereign immunity from suit," those elements can be relevant to both jurisdiction and liability. See id. ; State v. Lueck , 290 S.W.3d 876, 883 (Tex. 2009) ; see also Tex. Dep't of Transp. v. Esters , 343 S.W.3d 226, 231 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (holding that a plaintiff's failure to exhaust administrative remedies against a governmental entity under Texas Labor Code section 21.201 deprived the trial court of jurisdiction over retaliation claims under Texas Labor Code section 21.055 ).
Roy did not sue any governmental entities in this case, and this case does not involve any issue of sovereign or governmental immunity. Thus, we do not address how the Kazi precedent should be applied when the defendant is a governmental entity.
Under section 21.002(8)'s plain text, to fall within the definition of employer based on subsection (A), a person must have 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. See Tex. Labor Code Ann. § 21.002(8). We must presume that the Legislature did not intend to make this provision jurisdictional, and only a clear legislative intent to the contrary overcomes this presumption. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 307. When a plaintiff relies upon section 21.002(8)(A) to establish that a defendant is an employer under the Act, proving that the defendant has the required number of employees during the required time period is an element of the plaintiff's claim. See Miles , 339 S.W.3d at 742 ; Ancira , 178 S.W.3d at 89. Nothing in section 21.002 or the rest of the Act indicates that a trial court lacks subject-matter jurisdiction over a person alleged to be an employer under section 21.002(8)(A) if the person does not have 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. See Tex. Labor Code Ann. § 21.001, et seq. ; In re United Servs. Automobile Assoc. , 307 S.W.3d at 308. The Texas Legislature enacted a statute making all statutory prerequisites to a suit against a governmental entity jurisdictional. See Tex. Gov't Code Ann. § 311.034 ; In re United Servs. Automobile Assoc. , 307 S.W.3d at 308. Though the Texas Legislature could have enacted a statute making the issue of whether a defendant falls within section 21.002(8)(A) jurisdictional, the Texas Legislature has not done so. See Solis v. Greater Learning, L.P. , No. SA-15-CA-239-FB (HJB), 2016 WL 11582200, at *2 (W.D. Tex. Jan. 11, 2016) ; King v. Enterp. Leasing Co. of DFW , No. 3:05-CV-0026-D, 2006 WL 784885, at *1 (N. D. Tex. Mar. 28, 2006) ; Ancira , 178 S.W.3d at 89, n.8.
We also consider the statute's purpose. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 308. The Texas Legislature enacted the Act to "provide for the execution of the policies of Title VII of the Civil Rights Act of 1964" and modeled the Act after federal civil rights law. See Tex. Labor Code Ann. § 21.001(1) (West, Westlaw through 2019 R.S.); In re United Servs. Automobile Assoc. , 307 S.W.3d at 308. One of the main goals of the Act is to coordinate state law with federal law in the area of employment discrimination. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 308. Thus, analogous federal statutes and the cases interpreting them guide our interpretation of the Act. See id.
Title VII of the Civil Rights Act of 1964 ("Title VII") has a provision substantially similar to section 21.002(8)(A) of the Act. See 42 U.S.C. § 2000e(b) (stating that "[T]he term "employer" means a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person, but such term does not include [listing several exclusions from the definition]."). In a unanimous opinion, the Supreme Court of the United States concluded that when a plaintiff asserts a Title VII claim against an alleged employer, satisfaction of this definition constitutes an element of the plaintiff's claim, not a jurisdictional prerequisite. See Arbaugh , 546 U.S. at 510–16, 126 S.Ct. 1235 ; In re United Servs. Automobile Assoc. , 307 S.W.3d at 309. In reaching that conclusion, the Arbaugh court adopted a "readily administrable bright line" rule:
If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue ... But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.
Arbaugh , 546 U.S. at 515–16, 126 S.Ct. 1235 (footnote omitted). This is not unlike the Supreme Court of Texas's post- Kazi approach, in which the high court has been reluctant to conclude that a provision is jurisdictional, absent manifestation of a clear legislative intent to that effect. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 309. The Arbaugh court's conclusion that a substantially similar statute does not affect subject-matter jurisdiction constitutes important persuasive authority given the Act's goal of coordinating state law with federal law in the area of employment discrimination. See In re United Servs. Automobile Assoc. , 307 S.W.3d at 308.
Although the Supreme Court of Texas and this court have not addressed whether a non-governmental defendant's failure to have enough employees to qualify as an employer under section 21.002(8)(A) deprives a trial court of subject-matter jurisdiction over claims against the defendant under the Act, several courts have held that this failure does not deprive a trial court of subject-matter jurisdiction. See Solis , 2016 WL 11582200, at *2 ; King , 2006 WL 784885, at *1 ; Ancira , 178 S.W.3d at 89, n.8 ; see also Miles , 339 S.W.3d at 742–743 (treating satisfaction of section 21.002(8)(A) as an element of the claim and disposing of the case on the merits due to the plaintiff's failure to raise a fact issue on employer status under section 21.002(8)(A), without expressly addressing whether this point affects the trial court's jurisdiction). The parties have not cited, and research has not revealed, any case holding that such a failure deprives a trial court of subject-matter jurisdiction over claims against the defendant under the Act.
In addressing a waiver argument at the end of its opinion, the Miles court, without explanation appeared to refer to the argument that the defendant did not have enough employees to satisfy section 21.002(8)(A) as a "jurisdictional argument." See Miles , 339 S.W.3d at 743. This statement in passing does not constitute a holding and does not change the fact that the Miles court treated section 21.002(8)(A) as an element of the plaintiff's claim and affirmed the trial court's summary judgment on the merits, without concluding that the trial court lacked subject-matter jurisdiction. See id. at 742–43.
Based on the Act's language, the Kazi line of cases, the Act's purposes, the Supreme Court of the United States's interpretation of a substantially similar provision in Title VII, and persuasive authority from other courts, we conclude that a non-governmental defendant's failure to have enough employees to qualify as an employer under section 21.002(8)(A) does not deprive a trial court of subject-matter jurisdiction over claims against the defendant under the Act. See Tex. Labor Code Ann. § 21.002(8) ; Arbaugh , 546 U.S. at 510–16, 126 S.Ct. 1235 ; Solis , 2016 WL 11582200, at *2 ; King , 2006 WL 784885, at *1 ; In re United Servs. Automobile Assoc. , 307 S.W.3d at 305–10 ; Kazi , 12 S.W.3d at 76–77 ; Miles , 339 S.W.3d at 742–43 ; Ancira Enters., Inc. , 178 S.W.3d at 89, n.8. In short, statutory pre-requisites to suit against a non-governmental defendant are not jurisdictional absent a clear legislative intent to make it so.
B. Presuming that the substance of the Plea to the Jurisdiction is a motion seeking a summary judgment on the merits, did the trial court err in granting summary judgment?
We give effect to the substance of the Plea to the Jurisdiction, not its title or form. See State Bar of Tex. v. Heard , 603 S.W.2d 829, 833 (Tex. 1980). We presume, without deciding, that the Plea to the Jurisdiction's substance is a motion for summary judgment on the merits. Under this presumption, the summary-judgment grounds expressly presented in the motion would be:
(1) The Alkusari Parties did not have at least 15 or more employees for each working day in each of 20 or more calendar weeks in 2015.
(2) "Pursuant to discovery requests and attached hereto, [the Alkusari Parties] produced [their] employment records for 2015. The records conclusively establish ... that [the Alkusari Parties] employed at most nine employees during any time period during the relevant 20 week time period from August 2015 until December 2015."
(3) Roy has no evidence contrary to the proposition that the Alkusari Parties "employed at most nine employees during any time period during the relevant 20 week time period from August 2015 until December 2015."
Each of these grounds is based on a premise that the relevant time period under section 21.002(8)(A) is either the twenty weeks before Roy's employment was terminated or 2015. But, under section 21.002(8)'s unambiguous language, in the context of today's case, to fall within the definition of employer based on subsection (A), a person must have 15 or more employees for each working day in each of 20 or more calendar weeks in either 2014 or 2015. See Tex. Labor Code Ann. § 21.002(8)(A) ; Miles , 339 S.W.3d at 742 ; Ancira Enters., Inc. , 178 S.W.3d at 89. On this basis alone, the trial court would have erred in granting summary judgment on the merits based on the grounds presented in the Plea to the Jurisdiction.
None of the three grounds provides a proper basis for the trial court to grant a no-evidence motion for summary judgment. To state a no-evidence ground the movant must assert clearly that there is no evidence of one or more essential elements of a claim or defense on which the adverse party would have the burden of proof at trial. See Tex. R. Civ. P. 166a(i) (stating that a no-evidence movant seeks "summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial" and that "[t]he motion must state the elements as to which there is no evidence"); Lamell v. OneWest Bank, FSB, L.P. , 485 S.W.3d 53, 58 (Tex. App.–Houston [14th Dist.] 2015, pet. denied). In the first two grounds, the Alkusari Parties do not make a no-evidence assertion. In the third ground, the Alkusari Parties contend that Roy has no evidence contrary to the proposition that the Alkusari Parties "employed at most nine employees during any time period during the relevant 20 week time period from August 2015 until December 2015." But, in this ground, the Alkusari Parties do not clearly assert that there is no evidence of one or more essential elements of a claim or defense on which Roy would have the burden of proof at trial. See Lamell , 485 S.W.3d at 58. Roy does not have the burden of proving at trial that the Alkusari Parties employed more than nine employees "during any time period during the relevant 20 week time period from August 2015 until December 2015." See Tex. Labor Code Ann. § 21.002(8)(A) ; Miles , 339 S.W.3d at 742 ; Ancira Enters., Inc. , 178 S.W.3d at 89. Rather, Roy has the burden of proving that any person she alleged was her employer under section 21.002(8)(A) had 15 or more employees for each working day in each of 20 or more calendar weeks in either 2014 or 2015. See Tex. Labor Code Ann. § 21.002(8)(A) ; Miles , 339 S.W.3d at 742 ; Ancira Enters., Inc. , 178 S.W.3d at 89. Thus, the Alkusari Parties did not state a valid no-evidence ground. See Lamell , 485 S.W.3d at 58.
Even treating the Plea to the Jurisdiction as a traditional motion for summary judgment, the motion does not contain any grounds on which the trial court properly could have granted summary judgment. The party moving for a traditional summary judgment carries the burden of establishing that no material fact issue exists and that the party is entitled to judgment as a matter of law. M.D. Anderson Hosp. & Tumor Inst. v. Willrich , 28 S.W.3d 22, 23 (Tex. 2000). Though the Alkusari Parties indicated that they had attached their employment records for 2015 to the Plea to the Jurisdiction, they did not attach any evidence to the Plea to the Jurisdiction. The only evidence that the Alkusari Parties had submitted to the trial court in support of the Plea to the Jurisdiction when the trial court granted it was an exhibit attached to their reply to Roy's response to the Plea to the Jurisdiction. This exhibit contained two unauthenticated pages that did not establish the Alkusari Parties' entitlement to judgment as a matter of law on any ground raised in the Plea to the Jurisdiction. Thus, the Alkusari Parties did not show their entitlement to a traditional summary judgment on the merits. See id.
For these reasons, presuming, without deciding, that the Plea to the Jurisdiction's substance is a motion for summary judgment on the merits, the trial courts still erred in granting the Plea to the Jurisdiction.
III. CONCLUSION
Addressing an issue of apparent first impression in this court, we conclude that a non-governmental defendant's failure to have enough employees to qualify as an employer under Texas Labor Code section 21.002(8)(A) does not deprive a trial court of subject-matter jurisdiction over claims against the defendant under the Act. Thus, the matters raised by the Alkusari Parties in the Plea to the Jurisdiction would not deprive the trial court of subject-matter jurisdiction. Presuming, without deciding, that the Plea to the Jurisdiction's substance is a motion for summary judgment on the merits, the trial court still erred in granting the Plea to the Jurisdiction because even construing the grounds in the Plea to the Jurisdiction as merits arguments, none of the grounds provided a proper basis for the trial court to grant summary judgment on the merits. To the extent Roy argues under the first issue that the trial court erred in granting the Plea to the Jurisdiction, we sustain the first issue. We reverse the trial court's final order and remand the case to the trial court for further proceedings consistent with this opinion.
We need not and do not address the remainder of the first issue or the second issue.