Texas has a statute that protects public whistleblowers who make a good faith report of a violation of law by a public agency or employee to the appropriate law enforcement agency. According to the statute, “appropriate law enforcement agency” is a governmental agency that the employee in good faith believes is authorized to:

(1)  regulate under or enforce the law alleged to be violated in the report; or

(2)  investigate or prosecute a violation of criminal law.

Tex. Gov’t Code § 554.002(a).

In Resendez v. TCEQ, No. 03-11-00244-CV, 2012 WL 6761529 (Tex. App.—Austin Dec. 28, 2012, pet. filed), Resendez reported to the head of her division that her supervisors knew about fraud being committed against the state but failed to report it. Soon after her report, Resendez was terminated.

According to state law, an administrative head of a department or entity who believes that money received from the state may have been misused is required to report the belief to the state auditor. A failure to make a report is a class A misdemeanor.

Finding that Resendez failed to allege a valid whistleblower claim, the trial court, Honorable Amy Clark Meachum presiding, dismissed the suit.

On appeal, the third court of appeals reversed.

Traditionally, Texas law has provided that a supervisor’s authority to internally investigate and discipline its employees, standing alone, is not sufficient to show that the supervisor is an appropriate law-enforcement agency. However, because Resendez’s supervisor instructed her to report fraud to management, the court of appeals held that there was a fact question as to whether Resendez reasonably believed that the head of her division was an appropriate law-enforcement agency.

To quote Paul in the movie Big, I don’t get it. How do a supervisor’s instructions to report fraud to management evidence a reasonable belief that management is an appropriate law-enforcement agency for the law allegedly violated here? Those instructions evidence the agency’s internal reporting procedures, an irrelevant fact.

The State has filed a petition for review at the Texas Supreme Court. I hope the court grants it. This case deserves a second look.