City of Austin v. Chandler

428 S.W.3d 398, 2014 WL 1568689, 2014 Tex. App. LEXIS 4235, 122 Fair Empl. Prac. Cas. (BNA) 1094
Court of Appeals of Texas·Decided April 18, 2014·No. No. 03-12-00057-CV·Published·Cited by 23 cases

Opinion

OPINION

SCOTT K. FIELD, Justice.

To address the issues raised in appellant’s motion for en banc reconsideration, we withdraw our opinion and judgment dated February 7, 2014, and substitute the following in their place.

The Appellees — a group of public safety officers over the age of 40 who worked for appellant the City of Austin’s now defunct Public Safety Emergency Management Department (PSEM) — sued the City for age-based employment discrimination. The Appellees asserted that the City’s method of consolidating the PSEM into the Austin Police Department (APD) dis-paratear impacted older PSEM employees by stripping them of their years of service. The jury returned a verdict in favor of the Appellees. Damages were determined by the trial court in a separate hearing. The trial court rendered judgment consistent with the verdict. On appeal, the City challenges the trial court’s judgment in five respects. We affirm the judgment of the trial court.

BACKGROUND

APD is Austin’s primary law-enforcement agency. It is a civil-service police agency, and as such, its employment practices are governed by chapter 143 of the Texas Local Government Code and the City’s “meet and confer” labor agreements with the APD employees’ union. See generally Tex. Loc. Gov’t Code §§ 143.021-.047 (describing classification and compensation of civil service firefighters and police officers); see also id. § 143.303 (allowing municipalities to alter certain civil-service employment terms by agreement with employees’ union). APD has strict objective standards' for determining an officer’s pay and rank, including “exam score, seniority points, education points and other requirements.”

Prior to 2009, the PSEM was a separate non-civil-service agency encompassing the City’s airport, park, and municipal-court law-enforcement operations. According to the City, the minimum base salary for PSEM employees was significantly lower than that of APD. Furthermore, there was a wider range of compensation packages for PSEM officers with the same rank and seniority, owing in part to the fact that PSEM officers were eligible for a wider range of pay stipends for various certifications, education levels, and types of assignments.

In 2006, the City began preparing for PSEM’s consolidation into APD, which, according to the Chief of Police, would create a uniform chain of command and improve the City’s ability to meet its law enforcement needs. As a result of its negotiations with the APD employees’ union, the City approved the consolidation in September of 2008 (the Consolidation Agreement), with the consolidation to become effective January 4, 2009. According to the City, PSEM officers did not participate in these negotiations because they were not part of the APD employees’ union.

Under the terms of the Consolidation Agreement, no PSEM employee could transfer to APD at a rank higher than “officer” and no PSEM employee could start with a base salary higher than that of an APD officer with sixteen years’ experience. Furthermore, PSEM employees could include only up to three years of PSEM service as years of APD service. Given that APD officers need five years of APD service before they are eligible to sit for a promotion exam, this meant that no PSEM employee — regardless of previous rank or years of service — could be promot[404] ed to a higher rank for at least two years after the consolidation. However, to compensate for the loss of most of their pay stipends, the City gave all transferring PSEM employees a lump sum payment to ensure that they at least maintained their final PSEM salary for their first two years at APD.

Following the consolidation of PSEM into APD, each of the Appellees timely filed them individual “letter complaints” with the City of Austin Equal Employment and Fail’ Housing Office and the Federal Equal Employment Opportunity Commission (EEOC). See Tex. Lab.Code § 21.01 (specifying procedural and substantive requirements for making employment-discrimination complaints). The EEOC issued “right to sue notices” to the Appellees. Appellees subsequently filed this underlying lawsuit, alleging that the Consolidation Agreement disparately impacted PSEM employees over 40 years of age by stripping them of their years of service.

The City filed a plea to the jurisdiction, asserting that the Appellees’ disparate— impact discrimination claim — which is the sole discrimination claim in their live petition — was not included in the Appellees’ letter complaints to the EEOC. See Pacheco v. Mineta, 448 F.3d 783, 788 (5th Cir. 2006) (discussing distinction between disparate-impact and disparate-treatment employment discrimination claims). Therefore, according to the City, the Appellees failed to exhaust their administrative remedies with respect to their disparate-impact claim, and the trial court lacked jurisdiction to hear this case. After a pretrial hearing, the trial court denied the City’s plea to the jurisdiction and the case proceeded to a jury trial.

At trial, Harvey Corn, the Appellees’ expert statistician, testified that as a result of the consolidation, the average PSEM employee under 40 years of age lost 3.7 years of service when placed on APD’s pay scale, but the average PSEM employee over 40 lost 6.5 years. Because seniority factored heavily into an APD officer’s base pay, this disparity, according to Corn, resulted in the average PSEM employee under 40 receiving a 15.61% pay increase after consolidation, but the average employee over 40 receiving only a 5.68% increase. During cross-examination, the City questioned Corn about the validity of his analysis, and Corn admitted that he did not attempt to valúate the differences in retirement benefits, sick-leave pay, and other factors.2

The City called James Pearce, an economic and statistical analyst, who testified about his analysis of the pay disparities after PSEM was consolidated into APD. Pearce testified that one reason for the larger pay increases for PSEM officers under 40 years of age was that more than half of the younger employees made less than the APD minimum salary prior to consolidation, and thus their salaries would substantially increase when they became APD officers. Pearce asserted that these “outliers” skewed Corn’s analysis. However, Pearce never argued that the consolidation did not result in disparate pay raises between younger and older officers or that this disparity was insignificant. Furthermore, during his damage analysis, Pearce appeared to concede that the eon-[405] solidation did result in a “disparate impact” and “loss” for older PSEM officers.3

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City of Austin v. Chandler, 428 S.W.3d 398, 2014 WL 1568689, 2014 Tex. App. LEXIS 4235, 122 Fair Empl. Prac. Cas. (BNA) 1094 (Tex. Ct. App. 2014).

428 S.W.3d 398 (City of Austin v. Chandler) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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