Justice Debra Lehrmann
The Texas Supreme Court has responded to a U.S. Fifth Circuit Court of Appeals certified question arising from an employee’s lawsuit against SMU University and other university employees alleging both statutory discrimination and common-law tort claims.
In Cheryl Butler v. Jennifer M. Collins; Steven C. Currall; Roy P. Anderson; Julie P. Forrester; Harold Stanley; Paul Ward; Southern Methodist University (No. 24-0616; May 23, 2025), Butler, a fifth-year professor at the SMU Dedman School of Law, was denied tenure. A year later, she filed suit, claiming that SMU and its employees discriminated and retaliated against her by denying her tenure application. The lawsuit alleged violations of the Texas Commission on Human Rights Act (TCHRA) (Tex. Lab. Code §§ 21.001–21.306), as well as making common-law claims against SMU for negligent supervision and against her co-workers for fraud, defamation, and conspiracy-to-defame. The Defendants moved to dismiss Plaintiff’s state-law claims under Fed. R. Civ. P. 12(b)(6). The district court granted the motion, finding Plaintiff’s state-law claims against the individual co-workers were preempted by the TCHRA since their “gravamen” was still “discrimination and retaliation in connection with the tenure and promotion process”. Plaintiff appealed.
The Fifth Circuit Court opined that since TCHRA only provides employees with statutory claims against their employers, it does not preempt separate or “factually independent” common-law claims against “individual wrongdoers” like Plaintiff’s co-workers (citing Waffle House, Inc. v. Williams, 313 S.W.3d 796 (Tex. 2010); BC v. Steak N Shake Operations, Inc., 512 S.W.3d 276 (Tex. 2017)). However, as the Fifth Circuit noted, Waffle House and Steak N Shake only considered the TCHRA’s preemptive scope on the employee’s harassment and assault claims against individual co-workers. Consequently, the court expressed uncertainty as to whether pre-emption would apply to other torts such as fraud, defamation, and conspiracy-to-defame, which have their own common-law remedies.
The Post-Waffle House jurisprudence offered no further clarity. The Fifth Circuit reviewed conflicting Texas intermediate court of appeals’ opinions on the question of whether pre-emption applied if the employee’s state-law claims against co-workers arose from the same facts as the TCHRA claims against the employer. Unable to make an Erie guess, the Court certified the following question: “does the Texas Commission on Human Rights Act (“TCHRA”), Texas Labor Code § 21.001, et seq., preempt a plaintiff-employee’s common-law defamation and/or fraud claims against another employee to the extent that the claims are based on the same course of conduct as discrimination and/or retaliation claims asserted against the plaintiff’s employer?”
In an opinion by Justice Lehrmann, SCOTX answered in the negative. Beginning with the proposition that “[a]brogation of a common law right is ‘disfavored’ and requires ‘a clear repugnance between the common law and a statutory standard,” the Justice Lehrmann turned to an examination of Chapter 21’s exclusive remedy language and its precedent in Waffle House and Steak N Shake. Observing that federal courts and courts of appeals have divided on whether Chapter 21 forecloses claims against employees (not just the employer), the Court concluded that “the statute does not deprive a person of longstanding common law claims against other employees who engage in tortious workplace conduct.” That includes defamation and fraud claims, as Plaintiff alleged here. Still, the Court cautioned that its ruling does not entitle Plaintiff to double recovery for alleged tortious activity against her co-workers that caused the same injury. “A plaintiff may allege that an employee’s common law intentional tort and an employer’s unlawful employment practices both contributed to an adverse employment action,” Justice Lehrmann wrote. “But she may recover lost wages or back pay only once. Likewise, she may recover either future lost wages or reinstatement from the employer, but not both.” At the same time, however, Plaintiff’s defamation claims against her co-workers “can also give rise to other redressable injuries such as loss of reputation and mental anguish, irrespective of whether theose [defamatory] statements were a motivating factor in the complained-of employment action.”
The case now heads back to the Fifth Circuit for further consideration in light of the Court’s response.
