The Texas Supreme Court heard oral arguments Tuesday in a case that will determine whether a former Southern Methodist University law professor will be allowed to proceed with a defamation claim against her former coworkers, who she alleges played a role in her being denied tenure in 2016.
The U.S. Court of Appeals for the Fifth Circuit sent the state’s high court a certified question on the issue in August, asking for guidance as to whether the Texas Commission on Human Rights Act preempts an employee’s common law defamation or fraud claims against another employee when the basis of that claim mirrors claims being asserted against the employer.
Cheryl Butler sued the university and several former colleagues in 2016, bringing claims for defamation, fraud and conspiracy to defame. She appealed to the Fifth Circuit in January 2023, the same month U.S. District Judge Ada Brown dismissed her case with prejudice after agreeing that the TCHRA preempted the claims.
“Although the district court’s assessment of the TCHRA’s preemptive reach may ultimately prove correct, we are more circumspect,” the Fifth Circuit panel wrote in a 13-page opinion seeking input from the Texas Supreme Court. “Notably, in both cases in which the Supreme Court of Texas addressed the TCHRA’s preemption of common-law tort claims, the only claims at issue were asserted against the plaintiff-employee’s employer, not the plaintiff’s supervisor, manager, or other coworker.”
Justice Debra Lehrmann asked attorney Ezra Ishmael Young of Ithaca, New York, who represents Butler, if he disagreed with the Fifth Circuit’s characterization that his client’s claims against SMU are the same as those against the individual defendants.
“I believe there is some overlap, but there is not complete overlap,” he said, explaining the discrimination and retaliation claims against SMU are that the university failed to follow its tenure rules and employee policies, while the claims against the individual defendants are for defamation. “Not all of those things are part of the tenure denial allegations, but there is overlap.”
Justice Evan Young asked Ezra Young whether the Fifth Circuit’s framing of the certified question instructs the Texas Supreme Court to “treat all of the conduct as … part of the claims against the university.”
The lawyer responded that the Fifth Circuit imposed “suggested parameters” on the question.
“But this court can alter those parameters,” he said.
Ezra Young argued that twice the Texas Supreme Court has held there is no preemption of common law tort claims against one’s coworkers — in its 2020 opinion in B.C. v. Steak N Shake and its 2010 opinion in Waffle House v. Williams.
“Did we hold that, or did we simply say in those cases the facts did not present the issue of claims brought against the coworker?” Justice Jane Bland asked. “In both cases it was the corporate representative as defendant.”
Ezra Young said in his reading of the court’s rulings in those cases, the court held there is no preemption against coworkers because under the TCHRA, there is no individual liability, only liability against one’s employer.
Ezra Young explained that the reputational harm caused to his client by the allegedly defamatory statements about her made by colleagues is particularly harmful in this case because Butler is a lawyer, and a lawyer’s reputation is wholly intertwined with an ability to earn a living.
Justice Jimmy Blacklock posed a hypothetical question to Kirsten Castañeda of Alexander Dubose & Jefferson, who represents SMU and the individual defendants. Imagine a boss decides he wants to fire someone because of their religion and instructs other employees to spread rumors about that individual as a way to justify the firing.
“And they do that, and they defame their coworker,” he said. “Is there any possibility of recovering for the reputational harm stemming from that defamation, or is that person, all they’ve got is the claim against their employer for lost wages?”
Castañeda said the remedies available are laid out by the legislature in the TCHRA.
“So, the answer is yes? The defamation component is just unrecoverable no matter who said the words? As long as it was a coworker?” Justice Blacklock asked.
Castañeda clarified that it’s not just if it’s a coworker defaming another. She also explained Chapter 21 only allows employees to bring claims against an employer, managers and supervisors in their official capacity.
Justice Brett Busby told Castañeda the court has a “high standard” for finding the common law is preempted by statute.
“It seems pretty surprising that the result would be, if an individual — who is an employee in Justice Blacklock’s hypothetical — goes out and defames you and causes all of these collateral consequences beyond just what happened with your employment, that they would be immune.”
She said that’s not what’s alleged in this case and that Butler has made no allegations that the defamatory statements spread to other law schools.
“If employees go out and defame somebody as a pretext for unlawful discrimination, they say all these bad things about them that aren’t true and it gets out to other people and it damages employment prospects at other institutions, your statement was they’re not liable for that, that Chapter 21 is their exclusive remedy?” he asked. “Is that correct?”
“Yes, that is correct,” Castañeda said.
Later in arguments, Castañeda addressed the crux of the hypothetical questions she fielded from the justices about the interaction between TCHRA and common law torts.
“I do see the point, that we have to find a way for TCHRA to interact with common law torts, so that there’s no injustice — or at least as little injustice as we can manage,” she said. “At the same time, the legislature has given us TCHRA.”
Butler and her son were present in the courtroom for arguments in Austin Tuesday. She is also represented by Warigia M. Bowman of the University of New Mexico School of Law.
SMU is also represented by Kim Askew of DLA Piper.
The case number is 23-10072.