      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                      NO. 03-09-00726-CV



           Texas Commission on Human Rights, Texas Workforce Commission,
                     David Powell, and Robert Gomez, Appellants

                                                v.

                                   Marilou Morrison, Appellee


    FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
    NO. D-1-GV-03-000863, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING



                                          OPINION


                    Appellee Marilou Morrison filed suit against appellants Texas Commission on

Human Rights, Texas Workforce Commission, David Powell, and Robert Gomez for discrimination

and retaliation under the Texas Commission on Human Rights Act (TCHRA). See Tex. Lab. Code

Ann. §§ 21.001-.556 (West 2006 & Supp. 2010). After a trial, the jury found in favor of Morrison

and awarded back pay and compensatory damages. The district court rendered judgment on the jury

verdict, awarding back pay, compensatory damages, future lost retirement and social security

benefits, reinstatement, and attorney’s fees. We affirm the judgment in part and reverse and render

judgment in part.
                                           BACKGROUND

                  Morrison began working at the Texas Commission on Human Rights (the

“Commission”)1 in 1991 as an Investigator II and was later promoted to Investigator V, the highest

possible investigator position.2 Prior to working as an investigator at the Commission, Morrison had

worked for the State of Texas for fourteen years, first as an investigator in Child Protective Services,

and then as an investigator of nursing-home neglect, Medicaid fraud, and insurance fraud for the

Attorney General. At the time of her termination, Morrison had 26 years of service working for the

State of Texas.

                  As an Investigator V, Morrison was assigned cases of alleged employment

discrimination or retaliation and, after conducting an investigation, issued a recommendation in each

case as to whether the Commission should issue a finding of cause or no cause. A finding of cause

indicates that the Commission found “reasonable cause to believe that the respondent engaged in an

unlawful employment practice as alleged in the complaint.”3 Tex. Lab. Code Ann. § 21.206. A

plaintiff must file a complaint with the Texas Workforce Commission and exhaust the available


       1
          To avoid confusion, we will refer to the Texas Commission on Human Rights as it existed
at the time of Morrison’s employment as “the Commission,” and, because the Commission was later
subsumed by the Texas Workforce Commission, refer to appellants in this action collectively as “the
TWC.”
       2
            The facts recited herein are taken from the testimony and exhibits admitted at trial.
        3
           When an investigator recommends a finding of cause, the case is presented to a panel of
Commissioners, and, if the Commission panel agrees that cause exists, the executive director issues
a written determination stating that the evidence supports the complainant’s allegations. See Tex.
Lab. Code Ann. § 21.206 (West 2006). If, after his or her investigation, the investigator recommends
that a finding of no cause be issued, the executive director issues a written determination stating that
the evidence does not support the complaint and dismissing the complaint. See id. § 21.205 (West
2006).

                                                   2
administrative remedies before she may proceed with a claim under the TCHRA in court. See id.

§ 21.201; Waffle House, Inc. v. Williams, 313 S.W.3d 796, 804-05 (Tex. 2010).

                In February 2001, the Commission’s executive director, Bill Hale, resigned. Hale was

replaced in August 2001 by David Powell, a Caucasian male. Morrison testified at trial that Powell

made numerous comments to her that she viewed as discriminatory.4 For example, according to

Morrison, Powell described himself as a “good ol’ boy from Tennessee” and stated, “I don’t have

much patience for these undisciplined blacks. We’ve got too many of them working here.”

Morrison also testified that Powell made offensive gestures that mocked African-Americans.

                Other employees also testified that they believed Powell was racist. Yvonne Tabares,

who worked at the Commission for seventeen years and supervised three units within the

Commission, recalled that Powell used negatively stereotypical gestures when telling a story about

African-Americans. Tabares testified that, after this story, she “looked at the expressions of the

investigators who were black, Hispanic, Anglo, male, female, and everyone was pretty stunned . . .

it was offensive.” Tabares also testified that Powell told her that, though he came to the Commission

from the Army, he had experience with equal-employment-opportunity work because “a black had

filed a complaint against him when he was in the military” and he “never ever got over

that.” Tabares explained that “whenever there was discussion about the performance of black

employees . . . [Powell] couldn’t give any substantive, measurable rationale for what he was saying,




       4
           Morrison is a Caucasian female.

                                                 3
but he would just say, well, you know, they just don’t impress me. And he did not do that in contrast

with the white employees.”5

               Robert Hood, an Army veteran who worked as an investigator at the Commission for

twelve years, also testified that Powell “was a racist.”6 Hood testified that Powell told him that as

a child “he agreed with his father that he was not going to participate in integrating with blacks at

the schools.” Hood also stated that Powell told the Commissioners that the Commission would

never issue cause findings, that no employees would bring complaints, and that “if a citizen . . . had

a complaint, [the Commission] would let it fall through the cracks, and . . . would not pursue it on

behalf of the complainant party.”

               In addition to these alleged comments, witnesses complained that shortly after he

arrived, Powell restructured the Commission’s management hierarchy and hired Caucasian males

to fill many of the new positions.7 According to Hood, Powell believed that “blacks and Hispanics

were not prepared to be in leadership” and were being denied leadership positions in favor of “less

qualified white men.” Morrison testified that Hispanics and African-Americans within the



       5
           Tabares further testified that she had a pending Equal Employment Opportunity
Commission (EEOC) complaint at the time Powell was hired, and she believed that Powell retaliated
against her for this complaint by hiring a white male with no relevant experience as a supervisor
instead of promoting her.
       6
         Before joining the Commission, Hood worked for 30 years as a Los Angeles County
Deputy Sheriff.
       7
          Vicki Chesney, a Caucasian female who worked as an investigator at the Commission for
fifteen years, testified that Powell “was only hiring whites, mostly male, and military” and that “he
was a racist . . . because there were several qualified Hispanics” that applied for the positions but
never received an interview. Patricia Herrera, a former department investigator, testified that
“several of the staff . . . lodged verbal complaints” regarding Powell’s hiring practices.

                                                  4
Commission applied for these jobs but did not get them, even though they had more equal-

employment-opportunity experience than the candidates offered the positions.8 She stated that she

believed Powell was engaged in discriminatory hiring practices and told him in person that she felt

this way. In June 2002, Morrison applied for a management opening within the enforcement

division. After losing the position to another applicant, Morrison submitted an open records request

for the candidates’ applications, composite score forms, and interview recordings. Morrison testified

that she received a higher composite score than any other applicant but was not offered the job.

               On September 20, 2002, Ray Hammarth, Morrison’s direct supervisor, conducted a

performance review of Morrison.        After giving her the highest possible rating, Hammarth

recommended her for a two-step merit increase in pay.

               On December 6, 2002, Morrison received a written warning from Hammarth and

Vickie Covington, Hammarth’s direct superior, notifying her of two alleged deficiencies in her job

performance. First, the warning stated that Morrison failed to meet her case-closure goal for the

previous quarter, having closed only 24 of the expected 31 cases.9 The warning further stated that

in order to make up for this deficiency, Morrison would be required to close an average of fifteen




       8
         Vickie Covington, an African-American female, acknowledged that she was offered her
job as manager of employment investigations only after a meeting between Powell and a state
senator.
       9
         As of November 1, the number of monthly case closures for Investigator Vs had increased
from ten to eleven cases and therefore Morrison’s target closures for the months of September,
October, and November were ten, ten, and eleven, respectively. Morrison closed seven cases in
September, ten in October, and seven in November.

                                                 5
cases per month during the next quarter.10 Second, the written warning stated that a 2.5-hour absence

by Morrison on November 21 put Hammarth in an “untenable position” because she did not notify

anyone in advance of her absence. Morrison claimed that this absence was due to an emergency

plumbing issue at her residence. The warning concluded by stating that “failure to correct the above

deficiencies will result in additional disciplinary sanctions.”

               Morrison testified that case-closure rates were usually calculated on a yearly rather

than monthly basis. Morrison further testified that it was common for investigators’ closure rates

to be lower during the holiday season but that during her twelve years at the Commission, she never

failed to meet the annual case-closure goal. Although month-to-month case-closure fluctuations

were common, Morrison testified that she was unaware of any other investigator who had received

a written warning for failing to meet the average monthly closure rate in any particular quarter.

Hammarth testified that Powell instituted quarterly reviews for all investigators, and that Morrison

was the only investigator under his supervision who did not make her quota for that quarter. On

cross-examination, Covington acknowledged that, during the prior year, Morrison met her yearly

quota and received a perfect evaluation even though Morrison closed fewer than ten cases per month

during three months of that year.

               As to the second deficiency identified in the written warning, Morrison testified that

one of the 2.5 hours of leave constituted her lunch break, and that she missed little more than the

office Thanksgiving luncheon. When she returned, she completed a leave-request form for the time.


       10
           Morrison noted at trial that in order to make up for the missing seven cases in three
months, she needed only to close thirteen to fourteen cases per month, rather than the fifteen cases
dictated by the written warning.

                                                  6
Morrison also testified, as did Chesney, that it was common for individuals to leave the office when

an emergency arose and submit a leave-request form upon returning. Morrison was not aware of any

other employee who received a written warning for failing to notify a supervisor before leaving the

office during an emergency.

               Three days after receiving the written warning, Morrison sent an email to Hammarth

and Covington responding to the allegations. Hammarth replied to Morrison’s email with a

memorandum stating, “Please be advised that your past performance as an Investigator V is not in

question. Based on your last performance evaluation . . . , I have every confidence that you will

continue to do an excellent job now and in the future.”

               On December 19, Morrison spoke at a Commission meeting and informed the

Commissioners that she believed Powell had engaged in discrimination against African-Americans

and Hispanics. Morrison stated that Commission employees had filed sixteen complaints against

Powell in the fourteen months he had been at the Commission. She also relayed two comments by

Powell that she believed to be discriminatory: that “it came as a revelation to him that there was

discrimination in housing” and, in response to a Juneteenth celebration, that “his family celebrates

freedom every day.” Morrison further claimed that Powell “ha[d] lied . . . repeatedly,” hired

unqualified managers, including Covington, who Morrison stated “doesn’t understand how civil

rights works,” and refused to allow his employees to find cause (i.e., discrimination) in the

Commission’s cases. The Commission later conceded that Morrison’s comments at the Commission

meeting were protected speech.11


       11
           This concession was contained in a document filed with the EEOC as a part of the
investigation into Morrison’s retaliation complaint.

                                                 7
               Nearly a month later, on January 17, Morrison was asked to meet with Hammarth and

Covington in Covington’s office. On Hood’s advice, Morrison brought fellow investigator Patricia

Hererra as a witness and tape recorded the conversation with a device concealed in her pocket.12 At

the meeting, Covington presented Morrison with a letter of counseling notifying her of several

behaviors that purportedly violated the Commission’s policy manual. The letter of counseling also

claimed that Morrison had behaved rudely and unprofessionally on a number of occasions during

the previous three months and had “continuously tried to discredit and undermine” Covington.

Morrison testified that she had never before been told that any of her behavior was rude or

unprofessional.

               The letter claimed that on October 23, Morrison provided false and misleading

information about a case file. Morrison testified that this allegation referred to an occasion on which

Hammarth asked Morrison whether she had a certain file in her office, and Morrison responded “no.”

According to Morrison, she later realized that she was mistaken and did have the file, at which time

she apologized and gave it to Hammarth. Hererra testified that it was common for files to go missing

on a daily or weekly basis, and that she had experienced missing case files in the past, but was never

disciplined for them.




       12
          Hood testified that he advised Morrison that she “better take a tape recording” and a
witness because, as a former police officer, he had “profil[ed] [Covington] and her temperament”
and knew that Morrison was “in trouble, and she needed all the backup that she could possibly
have.”

       An audio recording of the meeting was admitted into evidence at trial.

                                                  8
                The letter of counseling also characterized Morrison’s behavior during several

meetings as violating the policy manual, including a November 12 meeting between Hammarth and

Morrison (Covington was not in attendance) in which Morrison had communicated her concerns that

the case load was being assigned in a discriminatory manner. Further, the letter alleged that

Morrison had been “rude, unprofessional, and combative” to Covington and others at the

December 19 Commission meeting.

                The letter of counseling also accused Morrison of modifying her weekly report to

include vacation time and sick leave “in an attempt to justify [her] inability to meet [her] case closure

standard.” Finally, the letter stated that Morrison sent Covington an email alleging that, after leaving

two completed cases in Hammarth’s inbox, she had not gotten credit for them and that Covington

or another supervisor must have reviewed them and failed to give her credit.

                As a result of these alleged policy-manual violations, the letter stated that Hammarth

would monitor Morrison’s behavior for the next year. The letter indicated that Morrison’s failure

to comply with the conditions outlined therein “may lead to further disciplinary action up to and

including termination.”13

                During the January 17 meeting in which Covington and Hammarth presented

Morrison with the letter of counseling, Morrison reiterated her belief that she was being targeted

because of her complaints about discrimination at the Commission, stating:




       13
          The letter’s conditions included exhibiting “professional behavior,” being truthful, and
ceasing her “efforts to undermine [Covington] . . . and the agency as a whole.”

                                               9
       Talk about rude and unprofessional. Rude and unprofessional goes two ways, Ms.
       Covington. You are rude and unprofessional to me on a consistent basis. You
       discriminate against and retaliate against me and others. Is that not rude and
       unprofessional?

       ....

       You’re not watching anybody else—except maybe Patty [Hererra]—because she filed
       a[n EEOC] complaint.

       ....

       OK. I’ve read [the letter]. Actually, I see there is no point in discussing anything
       with you because your efforts to retaliate against me for opposing unlawful
       discrimination is obvious and on the record.


              At the conclusion of the meeting, Morrison asked to be excused. As Morrison exited

the room, the following exchange took place:


       Covington:     You can’t intimidate me, Marilou.

       Morrison:      I’m not trying to intimidate you.

       Covington:     Get out of my face.

       Morrison:      I beg your pardon?

       Covington:     Get out of my space.

       Morrison:      Your space? Is it all your space? Well, I beg your pardon. I won’t
                      come into your office ever again.

       Covington:     Ray [Hammarth], whenever Marilou comes into my office you are to
                      come with her.

       Morrison:      Oh, and will you not come into my office unescorted?

       [Covington agrees]



                                             10
       Morrison:       Good, I suggest that you not.

       Covington:      I take that as a threat.

       ....

       Morrison:       OK, please do.


               Shortly afterward, Covington sent an email to Powell and the Commission’s general

counsel alleging that at the end of the meeting, Morrison stood up, bent over her, and looked at her

in a threatening manner. She claimed that Morrison attempted to physically intimidate and threaten

her and recommended that Morrison be terminated. At trial, Covington testified, “The way she

looked at me, I never wanted to be in a room with her alone ever again.” Hammarth agreed that there

was tension between the two women during the meeting and that Morrison “stood over

Ms. Covington.”14

               Hererra testified that Covington’s behavior during the meeting was condescending,

and that Covington would not respond to Morrison’s questions about the allegations. In a written

statement, Hererra said that she “did not see or feel any threatening behavior.” Morrison testified

that she and Hererra stood during the entire meeting due to lack of space and that she did not

threaten Covington.

               On the next work day, January 21, Morrison filed an EEOC charge of discrimination

and retaliation against the Commission and presented a copy to Powell. Within two hours of giving


       14
           Hammarth issued two statements for Morrison’s employee file regarding the meeting’s
events. His first statement contained no mention of any intervention during the women’s argument.
In his second statement, Hammarth claimed that he got out of his chair and stood between the two
women to reduce the tension.

                                                  11
Powell a copy of the charge, Morrison received a letter notifying her that the Commission was

conducting an investigation regarding the events of the January 17 meeting and that she had been

placed on administrative leave.

               On January 23, 2003, Morrison’s employment with the Commission

was terminated “based upon conduct that seriously put in danger the safety of Ms. Vicki

Covington. . . . Specifically, [Morrison] exhibited unprofessional behavior towards Ms. Covington

on January 17, 2002 [sic], that culminated in a severe act of threat and intimidation.” Pursuant to

the Commission’s appeals procedure, Morrison appealed her termination. After a telephone

conference between the commissioners designated to hear her appeal, in which Morrison was not

invited to participate, the Commission affirmed her termination.

               Morrison filed suit March 18, 2003 against the Commission, the TWC, Powell, and

Robert Gomez, Powell’s successor, for retaliation under the TCHRA. Shortly thereafter, the

legislature passed a bill abolishing the Texas Commission on Human Rights and delegating the

duties and obligations of the Commission to the Civil Rights Division of the Texas Workforce

Commission. See Act of June 18, 2003, 78th Leg., R.S., ch. 302, 2003 Tex. Gen. Laws 1279.

               Claiming growing debts and difficulties in finding replacement employment,

Morrison filed for retirement benefits with the State of Texas several months after her termination

at the age of 58. Morrison chose to receive a $25,000 initial lump sum and $1,975 in monthly

retirement benefits. At age 62, Morrison began receiving social security benefits of $1,024 per

month. Morrison testified at trial that had she not been terminated, she would have retired at age 66




                                                 12
and would have received monthly retirement benefits of $3,705 and social security benefits of $1,419

per month.

               After a five-day trial, the jury answered “yes” to the question, “Did [the defendants]

take adverse personnel actions against Marilou Morrison because of her opposition to an unlawful

discriminatory practice?” and awarded $300,000 in back pay, $150,000 in past compensatory

damages, and $150,000 in future compensatory damages. After the jury verdict but before judgment

was issued, the original trial judge passed away. The case was reassigned to another judge, who,

after a post-trial hearing on reinstatement, rendered judgment on the jury verdict awarding $149,801

in back pay, $300,000 in compensatory damages, $254,880 in future lost retirement and social

security benefits, reinstatement as an Investigator V in the Labor Division of the Texas Workforce

Commission, and attorney’s fees. The TWC now appeals.


                                           DISCUSSION

               In four points on appeal, the TWC argues that: (1) the jury charge allowed the jury

to base liability on an invalid legal theory; (2) the trial court erred in refusing to apply a cap on

compensatory damages; (3) the future benefits award erroneously included compensatory damages

subject to the damages cap; and (4) reinstatement within the TWC is neither permissible nor feasible.


Jury Charge

               In its first point of error, the TWC argues that the jury charge allowed the jury to base

liability on legally invalid theories. In the jury charge, the jury was asked, “Did the Texas

Commission on Human Rights (TCHR) take adverse personnel actions against Marilou Morrison



                                                  13
because of her opposition to an unlawful discriminatory practice?” The charge provided no

definition or instruction regarding the term “adverse personnel actions.” The TWC argues on appeal

that the jury could have concluded that the “adverse personnel actions” taken against Morrison

included events either not included in Morrison’s EEOC charge, such as her rejected application for

the management position, or events that were not materially adverse as required by law, such as the

written warning.

                During the jury charge conference, counsel for the TWC objected to the phrase

“adverse personnel actions” not because it allowed the jury to base liability on legally invalid

theories, but because it allowed the jury to reach a verdict without unanimity. Counsel argued that

under the question as worded, liability could be imposed based on three jurors believing that the

written warning was the adverse personnel action, three believing the letter of counseling was the

adverse personnel action, and four believing that the termination was the adverse personnel action.

The TWC raised no objection to the charge indicating that it was concerned about legally invalid

theories of liability.

                Texas Rule of Civil Procedure 274 provides that “a party objecting to a charge must

point out distinctly the objectionable matter and the grounds of the objection. Any complaint as to

a question, definition, or instruction, on account of any defect, omission, or fault in pleading, is

waived unless specifically included in the objections.” Tex. R. Civ. P. 274. A “party is confined

to the jury-instruction objection made at trial; any variant complaint on appeal is waived.” Lakeway

Land Co. v. Kizer, 796 S.W.2d 820, 825 (Tex. App.—Austin 1990, writ denied). The objection

raised in the trial court, that the phrase “adverse personnel actions” allowed for a non-unanimous

jury verdict, does not conform with the complaint now raised on appeal and did not inform the trial

                                                14
court of any concern as to potential liability based on an invalid legal theory. See State Dep’t of

Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 240-41 (Tex. 1992) (stating that trial court

must be made aware of complaint “timely and plainly”). Because the objection did not bring the

present complaint before the trial court’s attention, the issue has not been preserved for appellate

review.     See Celanese Ltd. v. Chemical Waste Mgmt., Inc., 75 S.W.3d 593, 601

(Tex. App.—Texarkana 2002, no pet.) (holding that trial objection claiming jury question submitted

improper measure of damages did not preserve appellate argument that same question was

incomplete); see also Lakeway Land Co., 796 S.W.2d at 825 (holding that trial objection claiming

instruction was surplusage did not preserve appellate argument that instruction improperly

commented on weight of evidence).

               At oral argument, counsel for TWC argued that the objection, when viewed alongside

the requested instruction (replacing “adverse personnel action” with “termination”) and the TWC’s

concerns and objections throughout the course of trial, made the trial court aware of its objection to

the scope of the phrase “adverse personnel action.” However, the TWC’s attorney specifically

objected to the issue regarding jury unanimity and nothing further. The TWC was required to

“timely and plainly” communicate to the trial court any problems with the charge language. See

Payne, 838 S.W.2d at 240-41. It failed to do so. Because the argument on appeal does not correlate

with any objection to the charge, it was waived. See Tex. R. Civ. P. 274; Tex. R. App. P. 33.1. We

overrule TWC’s first point of error.


Damages Cap

               In its second point of error, the TWC argues that the trial court erred in refusing to

apply the damages cap required by the TCHRA. We review this statutory interpretation question de

                                                 15
novo. See City of Desoto v. White, 288 S.W.3d 389, 395 (Tex. 2009). Section 21.2585 of the act

permits an award of compensatory damages under a TCHRA action, but limits the amount available

in compensatory damages based on the size of the respondent employer:


       (d) The sum of the amount of compensatory damages awarded under this section . . .
       may not exceed for each complainant:

               (1) $50,000 in the case of a respondent that has fewer than 101 employees;

              (2) $100,000 in the case of a respondent that has more than 100 and fewer
       than 201 employees;

              (3) $200,000 in the case of a respondent that has more than 200 and fewer
       than 501 employees; and

               (4) $300,000 in the case of a respondent that has more than 500 employees.

       (e) for the purposes of subsection (d), in determining the number of employees of
       a respondent, the requisite number of employees must be employed by the respondent
       for each of 20 or more calendar weeks in the current or preceding calendar year.


Tex. Lab. Code Ann. § 21.2585(d)-(e). The “current year” refers to the year of the alleged retaliatory

act, not the date of judgment.      Ancira Enters., Inc. v. Fischer, 178 S.W.3d 82, 88 (Tex.

App.—Austin 2005, no pet.). This damages cap, if applied, would limit the trial court’s award for

compensatory damages but would not affect the $149,801 back pay award, as back pay is considered

equitable relief rather than compensatory damages.15 See Tex. Lab. Code Ann. § 21.258.

               The trial court declined to apply the damages cap to its judgment on the ground that

the TWC did not plead the cap and therefore waived the affirmative defense. See Tex. R. Civ. P. 94



       15
          The TWC argues in its third issue on appeal that part of the $254,880 award for future lost
retirement and social security benefits is also compensatory damages subject to the damages cap.

                                                 16
(requiring parties to plead all affirmative defenses). The TWC argues that the trial court erred

because the damages cap is not an affirmative defense. Instead, according to the TWC, the

cap is part of the legislature’s waiver of sovereign immunity, and is therefore jurisdictional and

cannot be waived.

                Two previous courts of appeals have held that the damages cap in section 21.2585

is waived if a defendant fails to plead the cap as an affirmative defense. See O’Dell v. Wright,

320 S.W.3d 505, 515-16 (Tex. App.—Fort Worth 2010, pet. denied); Shoreline, Inc. v. Hisel,

115 S.W.3d 21, 25 (Tex. App.—Corpus Christi 2003, no pet.). However, because neither of these

opinions involved suits filed against governmental entities, the relationship between the TCHRA’s

damages cap and sovereign immunity has not yet been addressed.

                 Sovereign immunity includes two distinct principles: immunity from suit and

immunity from liability. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224

(Tex. 2004) (citing Texas Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999)). The State is

afforded sovereign immunity both as to suit and as to liability unless the legislature expressly waives

it. State v. Lueck, 290 S.W.3d 876, 880 (Tex. 2009). Sovereign immunity from suit deprives a court

of subject-matter jurisdiction, while sovereign immunity from liability is an affirmative defense.

Miranda, 133 S.W.3d at 224. Like other affirmative defenses, immunity from liability must be

pleaded or else it is waived. Jones, 8 S.W.3d at 638 (citing Tex. R. Civ. P. 94; Davis v. City of San

Antonio, 752 S.W.2d 518, 519-20 (Tex. 1988)). Immunity from liability does not affect a court’s

jurisdiction to hear a case. Id.

                The TCHRA provides a limited waiver of both immunity from suit and immunity

from liability as to those governmental entities meeting the act’s definition of “employer.” See

                                                  17
Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d 653, 660 (Tex. 2008) (agreeing that

TCHRA “clearly and unambiguously waive[d] immunity”); see also Tex. Lab. Code Ann.

§ 21.002(8)(D) (defining “employer” to include political subdivision of state or county, municipality,

state agency), § 21.055 (outlining circumstances under which employer commits retaliation).

                Section 21.254 of the act waives a governmental employer’s immunity from suit. It

provides, “Within 60 days after the date a notice of the right to file a civil action is received, the

complainant may bring a civil action against the respondent.” Tex. Lab. Code Ann. § 21.254. The

act waives a governmental employer’s immunity from liability by allowing courts to award equitable

relief and compensatory damages.16 Id. § 21.258 (equitable relief), § 21.2585 (compensatory

damages). Compensatory damages are damages awarded to repay actual losses, see Black’s Law

Dictionary 445 (9th ed. 2009) (defining compensatory damages), and, for the purposes of the

TCHRA, do not include back pay, interest on back pay, or other equitable relief, such as front pay

or reinstatement, authorized by the statute. See Tex. Lab. Code Ann. § 21.2585(c).

                Within section 21.2585, the statute also provides for a limit to this waiver via the

damages caps found in subsection (d). The result is that a governmental employer’s sovereign

immunity is waived as to compensatory damages in an amount up to, but not greater than, the

damages cap.17 Unlike immunity from suit, however, the immunity from liability provided for by

the damages cap is an affirmative defense, rather than a jurisdictional matter. See Jones, 8 S.W.3d

at 638-39 (citing Davis, 752 S.W.2d at 520). Because it is an affirmative defense, the TWC was


       16
         Punitive damages may not be recovered from a governmental entity. See Tex. Lab. Code
Ann. § 21.2585(b) (West 2006).
       17
            Equitable relief, such as back pay and front pay, is not subject to the cap.

                                                  18
required to plead it or else it was waived. See Tex. R. Civ. P. 94. Though the TWC did not

specifically mention the damages cap in its answer, it did plead as an affirmative defense “sovereign

immunity from suit and/or liability from one or more of Plaintiff’s claims.” Since immunity from

liability was pleaded, application of the statutory cap was not waived. We therefore hold that

the trial court erred in failing to apply the statutory damages cap provision to the compensatory

damages award.

               In order to apply the damages cap, we must next determine which agency was

Morrison’s employer. The TWC argues that the Commission, which had at most 44 employees,

should be considered the employer, while Morrison argues that because the TWC subsumed the

Commission, the TWC, which has over 500 employees, is the applicable employer in calculating any

potential damages cap.18 The Commission became a part of the TWC over six months after

Morrison’s appeal to the commissioners had concluded. See Act of June 18, 2003, 78th Leg., R.S.,

ch. 302, 2003 Tex. Gen. Laws 1279 (abolishing Commission effective September 1, 2003).

Morrison was never employed by the TWC and never alleged any adverse personnel actions by the

TWC, nor was there any testimony that the TWC exhibited any oversight of the Commission until

after September 2003. Because the Commission was Morrison’s employer at the time of the

discriminatory conduct, we conclude that a damages cap of $50,000 applies. See Vance v. Union

Planters Corp., 279 F.3d 295, 300 (5th Cir. 2002) (holding that entity under which employee worked




       18
          Morrison argues in the alternative that the State of Texas was her employer. However,
the delineation of “state agencies” and “state instrumentalities” within the TCHRA’s definition of
“employer” indicates that the legislature intended each agency to be considered separate and apart
from the State itself. See Tex. Lab. Code Ann. § 21.002(8)(D) (West Supp. 2010).

                                                 19
directly was employer for damages cap purposes).19 We accordingly sustain the TWC’s second point

of error, reverse the trial court’s compensatory damages award, and render judgment as to

compensatory damages in the amount of $50,000.


Future Benefits Award

                In its third point of error, the TWC asserts that the award of future lost retirement and

social security benefits must be reversed because it includes compensatory damages subject to the

damages cap. The trial court’s award for future lost retirement and social security benefits

constitutes front pay, an equitable remedy awarded to compensate the plaintiff for future lost wages

and benefits. See Giles v. General Elec. Co., 245 F.3d 474, 489 n.27 (5th Cir. 2001) (defining front

pay); see also Wal-Mart Stores, Inc. v. Davis, 979 S.W.2d 30, 45 (Tex. App.—Austin 1998, pet.

denied) (affirming award of front pay under TCHRA). We review a trial court’s decision to grant

or deny equitable relief by an abuse-of-discretion standard. Carmona v. Southwest Airlines Co.,

604 F.3d 848, 863 (5th Cir. 2010) (citing Brunnemann v. Terra Int’l, Inc., 975 F.2d 175, 180

(5th Cir. 1992)). An abuse of discretion occurs if the trial court (1) acts arbitrarily and unreasonably,

without reference to guiding rules or principles or (2) misapplies the law to the established facts of

the case. Butler v. Arrow Mirror & Glass, Inc., 51 S.W.3d 787, 791 (Tex. App.—Houston [1st

Dist.] 2001, no pet.).

                The TWC first claims that the $254,880 awarded by the trial court for lost future

retirement and social security benefits should not be classified as front pay because it erroneously


        19
           See Hoffman-La Roche Inc. v. Zeltwanger, 144 S.W.3d 438, 445-46 (Tex. 2004) (noting
that TCHRA is modeled after Title VII and that “federal case law may be cited as authority in cases
relating to the Texas Act”).

                                                   20
includes the losses incurred by Morrison’s early retirement. The TWC contends that the benefits lost

due to Morrison’s early retirement should be considered compensatory damages subject to the

damages cap. The trial court calculated the future benefits award by subtracting the benefits

currently earned by Morrison ($3,000 per month) from the benefits Morrison would have earned had

she retired at age 66 ($5,124 per month) and multiplying by 120 months. The TWC argues that this

calculation is incorrect because the difference in benefits was a consequence of Morrison’s early

retirement, rather than her termination.

               The purpose of front pay is to provide the wages and benefits an individual would

have received had she continued employment. Because there was evidence that Morrison would

have received $5,124 per month in benefits had she not been terminated, it was not an abuse of

discretion for the trial court to use this number in calculating Morrison’s lost future benefits. The

TWC correctly points out, however, that, when calculating the benefits that Morrison would have

received had she continued working, the trial court never accounted for the extra $25,000 Morrison

collected as an early-retirement lump sum. Morrison would have never received this $25,000

payment if she had continued working until age 66, the scenario on which the trial court’s

calculations are based. Therefore, under the trial court’s lost benefits calculation, Morrison received

a $25,000 windfall. We hold that the trial court’s award of lost future retirement and social security

benefits is excessive by $25,000.

               In its second challenge to the future benefits award, the TWC claims that the separate

award for future benefits is duplicative of the $150,000 jury award for future compensatory damages.

At the conclusion of trial, the jury awarded Morrison $150,000 in past compensatory damages and

$150,000 in future compensatory damages. The jury was instructed that future compensatory

                                                  21
damages included “economic losses.” The TWC argues that as a result of this jury instruction,

Morrison’s future lost retirement and social security benefits were erroneously awarded to her twice:

first by the jury in the future compensatory damages award (as “future economic losses”) and again

by the trial court in its award of future lost retirement and social security benefits. The TWC,

however, made no trial objection to the jury charge question on damages, and is therefore barred

from challenging the charge’s definition of future compensatory damages on appeal. See Tex. R.

Civ. P. 274; Tex. R. App. P. 33.1. Further, to the extent that the compensatory damages and future

lost benefits awards overlapped, this Court’s reduction of compensatory damages to $50,000 cures

any error. The $150,000 awarded to Morrison in past compensatory damages included only

noneconomic losses and therefore did not duplicate the award for future benefits at all. These past

compensatory damages justify the $50,000 award despite any error in future compensatory damages.

                We reverse the trial court’s $254,880 award for future lost retirement and social

security benefits and render judgment of $229,880 in its place.


Reinstatement

                In its fourth and final point on appeal, the TWC argues that the trial court’s

reinstatement of Morrison was neither permissible nor feasible. It first argues that the trial court’s

award of front pay for future lost benefits precludes reinstatement. Front pay is an equitable remedy

awarded to compensate the plaintiff for future lost wages and benefits. Giles v. General Elec. Co.,

245 F.3d 474, 489 n.27 (5th Cir. 2001). Therefore, the trial court’s award for future lost retirement

and social security benefits constitutes front pay. Front pay is generally considered an alternative

to reinstatement where reinstatement is not a feasible option. See Suggs v. ServiceMaster Educ.


                                                 22
Food Mgmt., 72 F.3d 1228, 1234 (6th Cir. 1996). Thus, the remedies of reinstatement and front pay

are traditionally viewed as alternative, rather than cumulative. Id. This view exists because

discrimination and retaliation awards must be reasonable. Their purpose is to fully compensate an

injured party and put her in the same position she would have been absent retaliation. Id. TCHRA

remedies should not create a windfall for the plaintiff. Id.

               Morrison’s circumstances, however, create a unique situation in which reinstatement

does not fully compensate Morrison for her losses. Because Morrison took early retirement, her

retirement account could not be reinstated, even were she to return to work. The lost value of her

retirement accounts can only be remedied via front pay. Therefore, reinstatement only resolves one

aspect of front pay: future lost wages; it does nothing to remedy any lost benefits. Because Morrison

was not awarded any future lost wages, no windfall was created by the trial court’s award of both

future benefits and reinstatement. As the reasoning behind the traditional rule that front pay and

reinstatement may not coexist does not apply in this instance, we cannot say that the trial court

abused its discretion in awarding both.

               The TWC also argues that reinstatement is not feasible due to continuing hostility

between the parties. The feasibility of reinstatement is a fact-intensive question. The trial court

found that: (1) Morrison is able to work; (2) Morrison can perform some service to the TWC Labor

Division (to which reinstatement was ordered) or other appropriate division; and (3) there is no

evidence of antagonism between Morrison and the TWC’s Labor Division. These conclusions are

supported by Morrison’s testimony that she could successfully perform an Investigator V position

within the Labor Division and the testimony of John Moore, the TWC’s former general counsel and

current director of regulatory integrity, that Investigator V within the Labor Division was one of five

                                                  23
jobs to which Morrison could be reinstated. Given this testimony, we cannot say that the trial court

abused its discretion in awarding reinstatement. The TWC’s fourth point of error is overruled.


Attorney’s Fees

                The trial court’s judgment includes a $50,000 award for appellate attorney’s fees that

is contingent upon the TWC’s appeal being “ultimately unsuccessful.” Because Morrison has

prevailed on three of four appellate issues, we conclude that Morrison is entitled to $50,000 in

appellate attorney’s fees.

                                          CONCLUSION

                Because we hold that a $50,000 statutory damages cap applies, we reverse that portion

of the trial court’s judgment awarding $300,000 in compensatory damages and render judgment that

Morrison take $50,000 in compensatory damages. We further hold that the portion of the judgment

awarding future lost retirement and social security benefits is excessive in the amount of $25,000

and reverse and render judgment that Morrison take $229,880 on that claim. We affirm the

remainder of the trial court’s judgment.20



                                               __________________________________________

                                               Diane M. Henson, Justice

Before Justices Puryear, Pemberton and Henson

Affirmed in part; Reversed and Rendered in part

Filed: July 8, 2011


       20
            The TWC does not challenge the trial court’s award of $149,801 in back pay.

                                                 24
