AFFIRMED and Opinion Filed November 25, 2014.




                                            Court of Appeals
                                                             S     In The


                                     Fifth District of Texas at Dallas
                                                         No. 05-14-00208-CV

           DALLAS AREA RAPID TRANSIT AND NANCY K. JOHNSON, Appellants
                                      V.
              AMALGAMATED TRANSIT UNION LOCAL NO. 1338, Appellee

                                  On Appeal from the 95th Judicial District Court
                                              Dallas County, Texas
                                       Trial Court Cause No. DC13-05156

                                           MEMORANDUM OPINION
                                    Before Justices O’Neill, Lang-Miers, and Brown
                                            Opinion by Justice Lang-Miers
           Dallas Area Rapid Transit and Nancy K. Johnson, Secretary of the DART Trial Board, 1

bring this interlocutory appeal of the trial court’s order denying their plea to the jurisdiction.

Amalgamated Transit Union Local No. 1338 sued DART for breach of contract. DART argued

that it had governmental immunity and, as a result, the trial court lacked subject matter

jurisdiction. We conclude that the trial court had subject matter jurisdiction because ATU 1338

presented facts alleging that DART breached an agreement that settled a lawsuit in which DART

waived immunity. We affirm the trial court’s order denying DART’s plea to the jurisdiction.

We issue this memorandum opinion because the issues of law are settled. TEX. R. APP. P.

47.2(a), .4.


    1
        We refer to appellants collectively as DART unless the context requires otherwise.
                                         BACKGROUND

       This appeal involves DART’s grievance procedures. The procedures involve multiple

levels. When an employee files a grievance, the employee begins at level one. If the employee’s

request for a hearing is denied, the employee may request a hearing at level two. If the request is

denied at level two, the employee may request a hearing at level three. An employee whose

request is denied at all three levels may request an appeal to the neutral DART Trial Board.

Requests for appeal to the Trial Board must be submitted to the Secretary, who then refers the

requests to the Trial Board. However, the Trial Board does not have jurisdiction to hear all

grievances.

       DART’s Employment Manual also has provisions for newly hired employees. It states

that newly hired employees are on probationary status for the first six months and have limited

rights to file a grievance or request an appeal. An employee on probationary status does not have

the right to appeal a disciplinary action, and the employee may be discharged during the

probationary period with no right to appeal the discharge.

       In 2000, ATU 1338 sued DART alleging that DART was improperly denying its

employees’ grievances and requests for appeal.       DART counterclaimed against ATU 1338

seeking, among other things, actual damages, monetary sanctions, and attorney’s fees. DART

eventually nonsuited its counterclaims. The parties resolved the 2000 lawsuit by signing a

compromise settlement agreement containing a dispute resolution procedure for certain

grievances. ATU 1338 refers to the settlement agreement in the 2000 lawsuit as the Johnson

Agreement. The Johnson Agreement required DART to incorporate the procedure into its

Employment Manual; DART added the procedure as Section 8.11 of the Employment Manual.

       According to the allegations in the current lawsuit, the Johnson Agreement established a

grievance procedure designed to require DART and the Secretary to refer all requests for appeal

                                               –2–
to the Trial Board. However, the procedure also authorized the Secretary to deny requests for

appeal to the Trial Board that the Secretary determined in good faith were general grievances or

outside the jurisdiction of the Trial Board for some other reason. 2 The Johnson Agreement

authorized the employee whose request for appeal to the Trial Board was denied to request an

appeal to a neutral arbitrator for the sole purpose of determining whether the Trial Board had

jurisdiction of the grievance. The Johnson Agreement stated that the arbitrator’s determination

of the Trial Board’s jurisdiction was final and binding on both the employee and DART. And if

the arbitrator determined that the Trial Board had jurisdiction, then the request for appeal was

“deemed submitted” to the Trial Board under Section 8.9 of the Employment Manual. 3

          In December 2010, DART issued a citation for a safety violation to Robert Katz, a newly

hired rail operator. Katz filed a grievance contending that DART treated him differently from

other rail operators who engaged in the same conduct. DART denied Katz’s grievance at all

levels of the hearing process on the basis that Katz had no right to use the grievance process

because he was on probationary status. DART later fired Katz during his probationary period.

          After Katz was fired, Katz and ATU 1338 on behalf of Katz and all DART employees

(collectively ATU 1338) filed a new grievance (the March 3 grievance) alleging that DART

violated provisions in the Employment Manual by retaliating against Katz and terminating him

for filing and pursuing a grievance. ATU 1338 contended that employees on probationary status

   2
       The Johnson Agreement stated:

          [T]he Secretary shall accept and process all appeals to the Trial Board submitted to the Secretary pursuant to Section
          8.9(A) of the [Employment Manual], or any successor thereof other than those which the Secretary determines in good
          faith meet the definition of “general grievances” as defined by Section 8.8(A)(1) or those that DART or the Secretary
          determine, in good faith, are for any other reason, improper and/or outside the jurisdiction of the Trial Board[.]

   3
       The Johnson Agreement stated:

          d. The jurisdiction and authority of the neutral arbitrator is limited to resolving the following issue: Whether the Trial
          Board has jurisdiction to hear the grievance. The decision of the neutral arbitrator is final and binding upon both the
          employee and DART. . . . A finding that the Trial Board has jurisdiction to hear the grievance shall be accepted by DART
          and the Secretary and the request for appeal pursuant to Section 8.9(A) shall be deemed submitted on the date that the
          Secretary receives the final written decision from the neutral arbitrator. . . .



                                                                    –3–
had a right to file a grievance as long as it was not an appeal of a disciplinary action. (It was

undisputed below that the citation Katz received was considered a non-disciplinary action.) At

each stage of the grievance process, DART denied ATU 1338’s request for a hearing, stating that

Katz had no right to use the grievance or appeal process because of his probationary status.

Johnson also denied ATU 1338’s request for appeal to the Trial Board for the same reason.

          ATU 1338 invoked its right to appeal to arbitration under Section 8.11 and the Johnson

Agreement, and the parties selected an arbitrator. After a hearing, the arbitrator determined that

the Trial Board had jurisdiction of ATU 1338’s allegations of retaliation by DART against Katz. 4

But before the Trial Board hearing officer heard the merits of the grievance, DART filed a

motion to dismiss with the Trial Board asking the hearing officer to dismiss the appeal because

Katz was on probationary status and had no right to use the grievance or appeal process. ATU

1338 argued that the arbitrator’s decision regarding the Trial Board’s jurisdiction was final and

binding on the parties. The hearing officer disagreed and ruled that the arbitration “was not the

proper means to decide jurisdiction” and that the arbitrator’s decision was “persuasive but not

binding.” The hearing officer granted DART’s motion to dismiss. ATU 1338 then filed this

lawsuit against DART alleging that DART breached the Johnson Agreement.

          In its plea to the jurisdiction, DART argued, among other things, that it complied with the

Johnson Agreement by incorporating the procedure into Section 8.11 of the Employment Manual

and following the procedure throughout the arbitration process. DART argued that once the

arbitrator made his decision about jurisdiction under Section 8.11, then the parties “moved

forward to” Section 8.9 for appealing a grievance and the hearing officer had the authority under

Section 8.9 to “fashion an appropriate remedy.” It contended that Section 8.9 was unaffected by


     4
       The arbitrator determined that the Trial Board did not have jurisdiction of allegations that Katz was improperly discharged, citing the
provisions of the Employment Manual stating that probationary employees may not appeal a disciplinary matter.



                                                                    –4–
the Johnson Agreement, which addressed only Section 8.11, and that because ATU 1338’s

allegations of breach related to the hearing officer’s authority under Section 8.9, those

allegations did not relate to the Johnson Agreement. The trial court disagreed and denied the

plea to the jurisdiction.

                            STANDARD OF REVIEW AND APPLICABLE LAW

        It is undisputed that DART and Johnson enjoy governmental immunity from suit absent a

statutory waiver. See Dall. Area Rapid Transit v. Amalgamated Transit Union Local No. 1338,

273 S.W.3d 659, 661 (Tex. 2008); Dall. Area Rapid Transit v. Monroe Shop Partners, Ltd., 293

S.W.3d 839, 840 (Tex. App.—Dallas 2009, pet. denied). Governmental immunity defeats a trial

court’s subject matter jurisdiction. Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 637, 638 (Tex.

1999). Whether a trial court has subject matter jurisdiction is a question of law, which we

review de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

        If a governmental entity agrees to settle a lawsuit in which it has waived governmental

immunity, it cannot claim immunity from suit for breach of the settlement agreement. Livecchi

v. City of Grand Prairie, 109 S.W.3d 920, 922 (Tex. App.—Dallas 2003, pet. dism’d) (citing

Tex. A&M Univ.–Kingsville v. Lawson, 87 S.W.3d 518, 518 (Tex. 2002) (plurality op.)).

Accordingly, to avoid dismissal based on a plea to the jurisdiction in a breach of contract suit

against a governmental entity, the plaintiff must allege facts that present a breach of a settlement

agreement and must show the settlement was for a lawsuit in which the governmental entity

waived immunity. Id.




                                                –5–
                                           DISCUSSION

                                     Plea to the Jurisdiction

Allegations of Breach

       In its first issue, DART argues that ATU 1338 did not allege a breach of the Johnson

Agreement. We disagree.

       ATU 1338 contends that the Johnson Agreement required DART to exercise good faith

in determining that a grievance was a general grievance or that the Trial Board otherwise lacked

jurisdiction of the grievance. In its petition, ATU 1338 alleged, among other things, that DART

“did not determine in good faith that the March 3 Grievance met the definition of ‘general

grievances’ . . . and did not determine in good faith that for any other reason the March 3

Grievance was improper and/or outside the jurisdiction of the Trial Board.” ATU 1338 also

contends that the Johnson Agreement authorized an employee whose request for appeal to the

Trial Board was denied by the Secretary to request an appeal to a neutral arbitrator who would

determine whether the Trial Board had jurisdiction and that the arbitrator’s decision regarding

the Trial Board’s jurisdiction was final and binding on the parties. ATU 1338 alleged in its

petition, among other things, that DART “failed to treat the decision of [the] Arbitrator . . . as a

final and binding determination of the Trial Board’s jurisdiction to hear the underlying merits of

Katz’[s] and ATU 1338’s grievance” and that “DART’s motion to dismiss with the Trial Board

hearing officer . . . was in violation of the Johnson Agreement and breached that agreement.”

       Based on these allegations, we conclude that ATU 1338 presented facts alleging breaches

of the Johnson Agreement. See Livecchi, 109 S.W.3d at 922. And we reject, as did the trial

court, DART’s argument that the Johnson Agreement did not limit the Trial Board’s authority to

dismiss ATU 1338’s grievance for lack of jurisdiction.          Under DART’s construction, the

Johnson Agreement’s provision for having a neutral arbitrator decide the issue of the Trial

                                                –6–
Board’s jurisdiction is rendered meaningless if the Trial Board may nevertheless dismiss a

grievance for lack of jurisdiction. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of

Am., 341 S.W.3d 323, 333 (Tex. 2011) (construing writing to give effect to all provisions so that

none rendered meaningless).

Waiver of Immunity

        The plaintiff also must show that the settlement agreement was for a lawsuit in which the

governmental entity waived immunity. Livecchi, 109 S.W.3d at 922 (citing Lawson, 87 S.W.3d

at 518).

        ATU 1338 argued that DART waived governmental immunity in the 2000 lawsuit

because DART asserted counterclaims seeking affirmative relief against ATU 1338. See City of

Dallas v. Albert, 354 S.W.3d 368, 374–75 (Tex. 2011); Reata Constr. Corp. v. City of Dallas,

197 S.W.3d 371, 376–77 (Tex. 2006). DART did not respond to this argument in its plea to the

jurisdiction or now on appeal except to argue that ATU 1338’s allegations of breach in this case

do not relate to the Johnson Agreement. But we have already addressed DART’s argument and

rejected it.

        DART does not argue that it did not waive governmental immunity in the 2000 lawsuit.

And the record shows that DART filed counterclaims in the 2000 lawsuit seeking affirmative

relief against ATU 1338, thereby giving the trial court jurisdiction over its claims in that lawsuit.

See Albert, 354 S.W.3d at 374–75; Reata Constr. Corp., 197 S.W.3d at 376–77. Consequently,

we conclude that ATU 1338 satisfied its burden to show that the Johnson Agreement settled a

lawsuit in which DART waived governmental immunity.

        We resolve issue one against DART and conclude that the trial court did not err by

denying DART’s plea to the jurisdiction.




                                                –7–
                                       13(c) Arrangement

       DART’s second issue asks whether “the Section 13(c) Arrangement, on which ATU

bases its complaint[,] preempt[s] DART’s immunity from suit?” Section 13(c) refers to Section

13(c) of the Urban Mass Transit Act. Dall. Area Rapid Transit, 273 S.W.3d at 660. Section

13(c) “conditions a public transportation authority’s receipt of federal financial assistance on

‘arrangements the Secretary of Labor concludes are fair and equitable’ to protect ‘the interests of

employees affected by the assistance.’” Id. (citation omitted).

       DART asserted below that “[a]ny dispute involving the interpretation, enforcement, or

application of the terms and conditions of the protective arrangements, or resolutions there

under, may be resolved through the [Department of Labor] pursuant to Attachment A, paragraph

16 or other applicable paragraph of the Arrangement.” But in its petition ATU 1338 did not refer

to the 13(c) Arrangement, did not seek a remedy under the 13(c) Arrangement, and did not

address the “interpretation, enforcement, or application of the terms and conditions of the

protective arrangements, or resolutions there under[.]” Instead, ATU 1338 alleged that it sought

compliance with the Johnson Agreement as incorporated into Section 8.11 of the Employment

Manual.

       Additionally, DART argues that “the gist of ATU’s complaint involves ‘final and

binding’ actions” taken by the hearing officer under Section 8.9, which was not encompassed in

the Johnson Agreement and, consequently, ATU 1338’s only “recourse or remedy . . . is through

the [Department of Labor] via the 13(c) Arrangement not through judicial piecemeal

enforcement.”   But the 13(c) Arrangement addresses grievances and appeals related to the

“establishment of, or failure to establish, specified wages, hours or conditions of work.” See id.

at 662. Here, ATU 1338’s request for appeal involved allegations of retaliation, not issues

related to the “establishment of, or failure to establish, specified wages, hours or conditions of

                                               –8–
work.” See id. And DART does not explain how the 13(c) Arrangement applies to those

allegations of retaliation. We resolve issue two against DART.

                                         CONCLUSION

       We conclude that the trial court did not err by denying DART’s plea to the jurisdiction

and we affirm the trial court’s order.




                                                   /Elizabeth Lang-Miers/
                                                   ELIZABETH LANG-MIERS
                                                   JUSTICE

140208F.P05




                                             –9–
                                         S
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

DALLAS AREA RAPID TRANSIT AND                        On Appeal from the 95th Judicial District
NANCY K. JOHNSON, Appellants                         Court, Dallas County, Texas
                                                     Trial Court Cause No. DC13-05156.
No. 05-14-00208-CV         V.                        Opinion delivered by Justice Lang-Miers,
                                                     Justices O’Neill and Brown participating.
AMALGAMATED TRANSIT UNION
LOCAL NO. 1338, Appellee

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

        It is ORDERED that appellee Amalgamated Transit Union Local No. 1338 recover its
costs of this appeal from appellants Dallas Area Rapid Transit and Nancy K. Johnson.


Judgment entered this 25th day of November, 2014.




                                              –10–
