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TEXAS COURT OF APPEALS, THIRD
DISTRICT, AT AUSTIN

NO. 03-05-00499-CV

Texas Parks & Wildlife
Department, Appellant

v.

Milburn Dearing, Kenneth Head,
and Mike Warren, Individually

and on Behalf of All
Others Similarly Situated,
Appellees

FROM THE
DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL
DISTRICT

NO. GN102867, HONORABLE LORA J. LIVINGSTON, JUDGE
PRESIDING

O P I N I O
N

This is an interlocutory
appeal from the re-certification of a class action following this Court's
reversal and remand of the original certification order. See Tex.
Civ. Prac. & Rem. Code Ann. § 51.014(a)(3) (West 1997 & Supp.
2006). Appellees Milburn Dearing, Kenneth Head, and Mike Warren,
individually and on behalf of others similarly situated (collectively,
Dearing), sued their employer, the Texas Parks & Wildlife Department,
alleging a disparate-impact theory of age discrimination under
chapter 21 of the Texas Labor Code in regard to the Department's
reclassification of their game-warden positions. See Texas Parks &
Wildlife Dep't v. Dearing, 150 S.W.3d 452, 466 (Tex.
App.--Austin 2004, pet. denied) (Dearing I), cert.
denied, 544 U.S. 960 (2005); see also Tex.
Lab. Code Ann. § 21.051 (West 2006). The plaintiffs sought certification
of a class of approximately 130 fellow game wardens whom they claim were
similarly situated. Eighty-eight of the putative class members have since
intervened as plaintiffs. The district court denied a plea to the
jurisdiction and summary-judgment motions asserted by the Department and
certified the class.

In Dearing I, this
Court affirmed the district court's ruling on the Department's plea to the
jurisdiction but reversed its order certifying the class. The Court
concluded that the district court lacked subject-matter jurisdiction to
certify the class, and that Dearing's claim was not viable, because the
labor code did not permit an age-discrimination claim based on a
disparate-impact theory of liability. The Court construed section
21.122(b) of the labor code to mean that age-discrimination claims based
on a disparate-impact theory of liability were available under the labor
code to the same extent that such claims were available under the Age
Discrimination in Employment Act of 1967 (ADEA). Dearing I, 150
S.W.3d at 465; see Tex. Lab. Code Ann. § 21.122(b) (West 2006);
see also Age Discrimination in Employment Act, 29 U.S.C.A. §§
621-634 (West 1998 & Supp. 2006). The Court thus looked to federal
jurisprudence addressing that question and found persuasive the analysis
by the Fifth Circuit in Smith v. City of Jackson, 351 F.3d 183,
195 (5th Cir. 2003), holding that the ADEA did not permit such claims.
Dearing I, 150 S.W.3d at 465. Dearing filed a petition for review
with the Texas Supreme Court, which was denied. He then sought writ of
certiorari from the United States Supreme Court.

While Dearing's certiorari
petition was pending, the Supreme Court affirmed the Fifth Circuit's
judgment in Smith, but disagreed with its reasoning that claims
based on a disparate-impact theory of liability are categorically
unavailable under the ADEA. See 544 U.S. 228, 232-43 (2005)
(plurality opinion); id. at 243 (Scalia, J., concurring) ("I
agree with all of the Court's reasoning, but would find it a basis, not
for independent determination of the disparate-impact question, but for
deferral to the reasonable views of the Equal Employment Opportunity
Commission" that disparate-impact claims are permitted under the ADEA).
The Supreme Court affirmed the Fifth Circuit's judgment on the bases that
(1) the claimants had failed to identify sufficiently an employment
practice within the city's pay plan that had an adverse impact on older
workers; and (2) the city's plan was based on reasonable factors other
than age. Id. at 242. Subsequently, the Supreme Court denied
Dearing's certiorari petition. 544 U.S. 960 (2005).

After the Supreme Court
denied certiorari, this case was remanded to the district court pursuant
to this Court's mandate "for further proceedings consistent with [our]
opinion." On remand--without amending his pleadings or introducing
additional evidence--Dearing filed a motion to reinstate the original
class certification order. The district court granted Dearing's motion,
issuing an order incorporating its original certification order without
change.

The Department now appeals
the district court's order. For the reasons explained below, we reverse
the order and remand for further proceedings consistent with this
opinion.

BACKGROUND

The underlying
dispute

The factual background of
these proceedings is detailed in Dearing I. 150 S.W.3d 452. The
putative class members were at relevant times employed as game wardens by
the Department. Originally, their job classifications ranged from "Game
Warden I" through "Game Warden IV." Promotions within these classification
levels were based on length of service and were made every four years. In
1994, the Department reclassified the game wardens who had accumulated
over 16 years of service from "Game Wardens IV" to "Field Sergeant Game
Wardens" and assigned them additional duties. The following year, the
legislature passed a pay-parity rider that prohibited the Department from
compensating its state-commissioned peace officers "at a rate less than
the rate paid by any other state agency to a state-commissioned peace
officer performing similar duties." See Act of May 25, 1995, 74th
Leg., R.S., ch. 1063, 1995 Tex. Gen. Laws 5242, 5857 (effective Sept. 1,
1995). The Department's executive director appointed a committee to study
the pay-parity issue. The committee determined that Field Sergeant Game
Wardens performed duties similar to those of sergeants employed by the
Department of Public Safety and recommended increasing these game wardens'
compensation to level C-7, the pay level of the DPS sergeants identified
as their counterparts. In 1996, Field Sergeant Game Wardens received that
raise.

The legislature subsequently
added a new top tier to the game-warden job classification, "Game Warden
V," adopted Salary Schedule C designating compensation for the position at
the C-6 level, and specified that adoption of the salary schedule could
not result in decreased pay for any classified employee. See Act
of May 29, 1997, 75th Leg., R.S., ch. 1452, 1997 Tex. Gen. Laws 5535,
6341, 6345 (effective Sept. 1, 1997) (the pay rider). Legislative
descriptions of the duties of Field Sergeant Game Wardens matched those of
the new Game Wardens V and, when the bill took effect, the Department
reclassified the Field Sergeant Game Wardens to Game Wardens V. Because
the pay rider prohibited reduction of their salaries through the
reclassification, the former Field Sergeant Game Wardens reclassified as
Game Wardens V were "grandfathered" and continued to be paid at the C-7
rather than C-6 level.

In 1999, the legislature
increased salaries for all Texas peace-officer positions. See Act
of Apr. 23, 1999, 76th Leg., R.S., ch. 1589, 1999 Tex. Gen. Laws 5446,
6262-6263 (effective Sept. 1, 1999). The Department reclassified the
grandfathered Game Wardens V (the former Field Sergeant Game Wardens) to a
new C-6 pay level, which had the effect of giving them a pay raise from
$42,084 (the former C-7 level) to $44,600 (the new C-6 level). However,
the new C-6 level pay was less than the new C-7 level pay of $50,600.
Thus, it is alleged, the Former Field Sergeant Game Wardens received a
reduction in pay and other benefits relative to other positions that
remained at the C-7 level. It is further alleged that "[a]ll of the more
than 130 Field Sergeant Game Wardens, save one, were over the age of 40 at
the time of the reclassification."

Proceedings
below

Dearing sued, alleging that
because none of the other sergeant positions at the Department had been
reclassified, the Department's reclassification of the former Field
Sergeant Game Wardens from the C-7 to the C-6 level constituted unlawful
age discrimination. See Tex. Lab. Code Ann. §§ 21.051
(prohibiting employers from discriminating against employees on basis of
race, color, disability, religion, sex, national origin, or age), .101
(West 2006) (defining classification of persons protected against age
discrimination as those age forty or older). Dearing also alleged breach
of contract, sought a declaratory judgment that the Department violated
the 1997 and 1999 appropriations acts, and sought mandamus to remedy the
Department's reclassification of the former Field Sergeant Game Wardens
from C-7 to C-6. Dearing requested certification of a class defined as
"all Field Sergeant Game Wardens employed by the Texas Parks and Wildlife
Department on September 1, 1999, who were reclassified from pay group C-7
to pay group C-6 and from Field Sergeant Game Warden to Game Warden
V."

The Department filed a plea
to the jurisdiction, asserting that the age-discrimination claim was
barred because (1) Dearing's individual complaint had not been timely
filed; (2) even assuming that Dearing's claim had been timely filed, none
of the other plaintiffs had individually exhausted their administrative
remedies before filing suit; and (3) the reclassification had been
legislatively mandated, rationally related to a legitimate state interest,
and not subject to an attack based on age discrimination.
(1) The Department also asserted that the breach-of-contract
claim was barred by sovereign immunity, that mandamus would not lie
because an adequate remedy at law was available, and that the
declaratory-judgment claim did not independently create a basis for
subject-matter jurisdiction. The Department also sought summary judgment
on the grounds that: (1) Dearing's complaint had not been timely filed;
(2) Dearing's suit was barred by limitations; (3) the other class members
had failed to exhaust administrative remedies; and (4) the
reclassification had been legislatively mandated. Dearing subsequently
filed a cross-motion for summary judgment on his breach-of-contract,
mandamus, and declaratory-judgment claims.

After a hearing, the
district court granted the Department's plea to the jurisdiction as to
Dearing's breach-of-contract, declaratory-judgment, and mandamus claims,
but denied it as to his age-discrimination claims. It also denied both
parties' summary-judgment motions. The court granted Dearing's motion for
class-certification "under Tex. R. Civ. P. 42(b)(4)." Its order
incorporated a trial plan identifying "the issues remaining to be tried in
this case" after its rulings on the Department's plea to the jurisdiction
and the parties' summary judgment motions:

a. Plaintiffs' disparate
impact claims for age discrimination in violation of Tex. Labor Code Ann.
§ 21.051,

b. Defendants' affirmative
defense that their actions were rationally related to a legitimate state
interest,

c. Defendants' affirmative
defense that they were required by law to take the actions that they did
in 1999,

d. Defendants' affirmative
defense that they would have taken the same actions that they did with
regard to Plaintiffs . . . irrespective of the[ir] ages.

The plan did not elaborate
on the elements of Dearing's disparate-impact claim or why it would best
be tried as a class action other than to state: "The reclassification
applied to all members of the class at the same time and affected all of
them in the same manner. Thus, all of the proof and evidence relevant to
this issue will be the same for all members of the class, so there is no
need for separate procedures within the trial for individual plaintiffs on
this issue." Nor did the plan explain how this claim would be tried other
than to observe that, "Plaintiffs must first establish that the
reclassification made the basis of this suit has a disproportionate effect
on persons who were 40 years of age or older." The plan went on to
provide, "If a directed verdict is not granted after the Plaintiffs' case
in chief, then the affirmative defenses set out above will need to be
tried," again observing that, "The reclassification applied to all members
of the class at the same time and affected all of them in the same manner.
Thus, all of the proof and evidence relevant to this issue will be the
same for all members of the class, so there is no need for separate
procedures within the trial for individual plaintiffs on this issue." The
plan then stated that, "Damages for each individual member of the class
will be a manner of mechanical calculation" and proceeded to detail
different methodologies to determine damages for class members who had
retired before the date of the judgment and those who had not. The order
set a trial date of June 16, 2003 and various discovery deadlines--all in
the first half of 2003.

Dearing
I

The Department appealed from
the district court's order denying its plea to the jurisdiction and
certifying the class.
(2) In Dearing I, this Court affirmed the district
court's denial of the Department's plea to the jurisdiction, concluding
that Milburn Dearing had filed a timely complaint with the Texas
Commission on Human Rights. Dearing I, 150 S.W.3d at 458-59.
(3) Although the Department had presented undisputed
jurisdictional evidence that no putative class member other than Dearing
had individually filed a timely complaint, this Court permitted the other
putative class members to "piggyback" onto Dearing's timely filed claim by
"adopt[ing] the single-filing rule fashioned by federal courts."
Id. at 459-60.

But the Court reversed the
grant of class certification. It concluded that the sole claim for which
the class was certified--a disparate-impact age-discrimination claim--was
not available under the labor code, an issue that it regarded as going to
both the viability of Dearing's claim and the subject-matter jurisdiction
of the district court, as it controlled whether Dearing's claim came
within the labor code's waiver of sovereign immunity for
age-discrimination claims. Id. at 465-66 & n.8; see State
Farm Mut. Auto. Ins. Co. v. Lopez, 156 S.W.3d 550, 557 (Tex. 2004).
This Court construed section 21.122(b) of the code to "state[] that
disparate-impact claims are available for age discrimination in this state
only if they are available under the ADEA." Dearing I, 150 S.W.3d
at 465. Accordingly, it looked to federal jurisprudence on that issue and
found persuasive the analysis of the Fifth Circuit in Smith that
disparate-impact age-discrimination claims were unavailable under the
ADEA. Because the Court "reverse[d] the order certifying the class on
jurisdictional grounds," it did not address issues raised by the
Department challenging whether the plaintiffs had met the other
requirements for class certification under rule 42, such as numerosity,
commonality, predominance, and superiority. Id. at 466
n.8.

Dearing then filed a
petition for review in the Texas Supreme Court, which was denied, and then
filed a petition for writ of certiorari in the United States Supreme
Court. While Dearing's certiorari petition was pending, the United States
Supreme Court issued its Smith decision. Because Smith
provides the backdrop for many of the issues the parties present in this
proceeding, it is helpful to review it in some detail.

The ADEA and
Smith

Smith construed the
ADEA's general prohibition against employment discrimination, which
provides:

It shall be unlawful for an
employer--

(1) to fail or refuse to
hire or to discharge any individual or otherwise discriminate against any
individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual's age;

(2) to limit, segregate, or
classify his employees in any way which would deprive or tend to deprive
any individual of employment opportunities or otherwise adversely affect
his status as an employee because of such individual's age . . .
.

29 U.S.C.A. § 623(a) (West
1998). Section 623(a) was modeled after section 703(a) of Title VII
of the Civil Rights Act of 1964 and is substantively identical
"[e]xcept for substitution of the word 'age' for the words 'race, color,
religion, sex or national origin.'" Smith, 544 U.S. at 233;
see 42 U.S.C.A. § 2000e-2 (West 2003). The United States
Supreme Court has recognized two basic theories of liability under section
703(a) of title VII: disparate treatment, which requires proof that an
employer's actions were actually motivated by the employee's protected
classification, and disparate impact, which does not require proof of
motive. Disparate-impact claims of employment discrimination challenge
"employment practices that are facially neutral in their treatment of
different groups but that in fact fall more harshly on one group than
another . . . ." Smith, 544 U.S. at 239 (quoting
International Bhd. of Teamsters v. United States, 431 U.S. 324,
335-36 n.15 (1977)).

The Supreme Court first
recognized the disparate-impact theory of liability under title VII in
Griggs v. Duke Power Co., 401 U.S. 424 (1971), which involved a
challenge to facially race-neutral educational requirements and
intelligence tests. The Court assumed that the employer had not adopted
the requirements with intent to discriminate, but nonetheless held that
good faith "does not redeem employment procedures . . . that operate as
'built-in headwinds' for minority groups and are unrelated to measuring
job capability." Id. at 432. It relied principally on what it
perceived to be Congress's intent in enacting title VII: "to achieve
equality of employment opportunities and remove barriers that have
operated in the past to favor an identifiable group of white employees
over other employees" and prohibit "practices, procedures, or tests
neutral on their face, and even neutral in terms of intent . . . if they
operate to 'freeze' the status quo of prior discriminatory employment
practices." Id. at 429-30. The Court explained that, "What is
required by Congress is the removal of artificial, arbitrary, and
unnecessary barriers to employment when the barriers operate invidiously
to discriminate on the basis of racial or other impermissible
classification." Id. at 431. "The touchstone is business
necessity. If an employment practice which operates to exclude Negroes
cannot be shown to be related to job performance, the practice is
prohibited." Id.

Although Griggs
relied primarily on the policy goals of title VII, the Supreme Court
subsequently noted that "our holding represented the better reading of the
statutory text as well." Smith, 544 U.S. at 235 (citing
Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 991 (1988)).
Specifically, the Court emphasized that section 703(a)(2) prohibits not
only actions that "limit, segregate, or classify" persons, but also any
actions that "deprive any individual of employment opportunities or
otherwise adversely affect his status as an employee, because of
such individual's race," color, religion, sex, or national origin."
Id. (citing Watson, 487 U.S. at 991). This statutory
text, the supreme court has concluded, "focuses on the effects of
the action on the employee rather than the motivation for the actions of
the employer." Id. at 236.

Prior to Smith,
disparate-treatment claims were clearly actionable under the ADEA, see
Hazen Paper Co. v. Biggins, 507 U.S. 604, 609-10 (1993), but it was
uncertain whether disparate-impact claims were similarly actionable. In
the aftermath of Griggs, numerous federal appellate courts
had assumed that given the parallel language in the two statutes, the
disparate-impact theory under title VII would also be available under the
ADEA.
(4)

These decisions had prompted
judicial and scholarly debate. See Markham v. Geller, 451 U.S.
945 (1981) (Rehnquist, J., dissenting from denial of certiorari)
(criticizing court of appeals decision that had applied the title VII
disparate-impact analysis to the ADEA); Metz v. Transit Mix,
Inc., 828 F.2d 1202, 1216-20 (7th Cir. 1987) (Easterbrook, J.,
dissenting); see generally Douglas C. Herbert & Lania
Schweiker Shelton, A Pragmatic Argument Against Applying the Disparate
Impact Doctrine in Age Discrimination Cases, 37 S. Tex. L. Rev. 625,
627 nn.6-7 (collecting cases and articles). In its 1993 Hazen
Paper decision--an ADEA disparate-treatment age-discrimination
case--the Supreme Court emphasized that "we have never decided whether a
disparate impact theory of liability is available under the ADEA, and we
need not do so here." 507 U.S. at 610 (citation omitted). Three
justices--Rehnquist, Kennedy, and Thomas--concurred to point out that
"nothing in the Court's opinion should be read as incorporating in the
ADEA context the so-called 'disparate impact' theory of Title VII" and
further observed that "there are substantial arguments that it is improper
to carry over disparate impact analysis from Title VII to the ADEA."
Id. at 617-18 (Kennedy, J., concurring). Hazen Paper
influenced many federal courts to begin holding that disparate-impact
claims were not available under the ADEA. See Smith, 544 U.S. at
237; see also Dearing I, 150 S.W.3d at 462 ("Hazen cast
some doubt on the future of disparate-impact claims."). In Smith,
the Fifth Circuit followed that trend, invoking many of the common
arguments advanced by the judicial and scholarly opponents of extending
title VII's disparate-impact theory to the ADEA. Smith, 351 F.3d
at 463-65; see generally Herbert & Shelton, supra,
at 636-50. We analyzed these arguments in Dearing I. See
150 S.W.3d at 463-65.

Smith involved
facts similar to those in this case: a group of police and public-safety
officers who were over the age of forty and employed by the City of
Jackson, Mississippi sued the city under the ADEA, complaining that
across-the-board salary increases--which were designed to raise the
starting salaries of police officers up to the regional average--resulted
in salary increases that were proportionately greater for officers with
less than five years' service, most of whom were under the age of forty.
Smith, 544 U.S. at 231. Although all police officers received
raises, the claimants alleged that the city deliberately discriminated
against them because of their age (the disparate treatment claim), and the
pay plan adversely affected them because of their age (the
disparate-impact claim). Id.

In holding that the
officers' disparate-impact claims were not available under the ADEA, the
Fifth Circuit acknowledged that the ADEA closely paralleled title VII, but
with an important difference: the ADEA, unlike title VII, explicitly
provided that an employer may "take any action otherwise prohibited . . .
where the differentiation is based on reasonable factors other than age."
Smith, 351 F.3d at 193-94; see 29 U.S.C.A. § 623(f)(1).
The court reasoned that this "RFOA" provision would render the ADEA's
general prohibition against age discrimination a nullity to the extent
that it prohibited disparate-impact discrimination and cause the general
prohibition to "become nothing more than a bromide to the effect that
'only age discrimination is age discrimination.'" Smith, 351 F.3d
at 190 (quoting Mullin v. Raytheon Co., 164 F.3d 696, 702 (1st
Cir. 1999)). Thus, the Fifth Circuit concluded that the ADEA's general
age-discrimination prohibition must permit only the disparate-treatment
liability theory. Id. at 190.

The Fifth Circuit also
pointed to broader differences between the congressional policy objectives
underlying the ADEA versus those of title VII. Id. at 195. During
its deliberations preceding the enactment of title VII, Congress had
considered and rejected the inclusion of older workers among the classes
protected from employment discrimination, but had authorized the Secretary
of Labor to prepare a study "of the factors which might tend to result in
discrimination in employment because of age and the consequences of such
discrimination on the economy and individuals affected." Smith,
544 U.S. at 232. Thereafter,

The ADEA was enacted after
the Secretary of Labor issued a report on age discrimination recommending
that Congress ban arbitrary discrimination, such as disparate treatment
based on stereotypical perceptions of the elderly, but that factors
affecting older workers, such as policies with disparate impact, be
addressed in alternative ways. Smith, [544 U.S.] at 195;
Mullin, 164 F.3d at 702-03; see U.S. Dep't of Labor, The
Older American Worker: Age Discrimination in Employment 2, 6, 21-25 (1965)
(Congress should prohibit "arbitrary discrimination" based on age and age
stereotypes, but factors that "affect older workers more strongly, as a
group, than they do younger workers" should be addressed through
programmatic measures to improve opportunities for older workers.). Title
VII, on the other hand, had a broad remedial purpose: To "achieve equality
of employment opportunities and remove barriers that have operated in the
past to favor an identifiable group of white employees over other
employees." Griggs, 401 U.S. at 429-30, 91 S.Ct. 849, quoted in
Smith, at 194-195; Adams [v. Florida Power
Co.], 255 F.3d [1322,]1325-26 [11th Cir. 2001)] ("history of the ADEA
differs from the legislative history of Title VII, which the Supreme Court
in Griggs relied on to find a cause of action for disparate
impact"); Ellis [v. United Airlines, Inc.], 73 F.3d
[999,] 1008 [10th Cir. 1996)] ("legislative history of the ADEA suggests
it was not enacted to address disparate impact claims"). "The cornerstone
of Griggs's holding that disparate impact is cognizable under
Title VII is thus the link between the history of educational
discrimination on the basis of race and the use of that discrimination to
continue to disadvantage individuals on the basis of their race."
Smith, at 195 (citing Griggs, 401 U.S. at 432, 91
S.Ct. 849). "[A]bsent from the scope of the ADEA are the historical and
remedial concerns that, in the Title VII context, led to the recognition
of disparate impact claims directed at overcoming the consequences of past
societal discrimination."

Dearing I, 150
S.W.3d at 463-64.

Also, as we observed in
Dearing I, federal courts had attributed some significance to
differences between subsequent amendments to the ADEA and title VII.
See id. at 464-65. Following Griggs, an elaborate body
of case law developed under title VII concerning the standards for proving
disparate-impact liability and any proffered "business necessity." In
Wards Cove Packing Co. v. Antonio, 490 U.S. 642 (1989), the
Supreme Court held that to establish a prima facie case of
disparate-impact race discrimination under title VII, a plaintiff was
required to (1) isolate and identify the specific employment practice
challenged; (2) demonstrate any observed statistical disparity that the
practice has on a protected class; and (3) demonstrate a causal link
between the identified practice and the demonstrated disparity.
Id. at 655-56. Assuming that a plaintiff could successfully
assert a prima facie case under this standard, Wards Cove held
that the burden of production shifted to the employer to produce evidence
of a business necessity for the use of the practice in question.
Id. at 658-59. That inquiry entailed consideration of whether the
challenged practice served, in a "significant" (but not necessarily
"essential" or "indispensable") way, the employer's "legitimate"
employment goals and whether there were available alternative practices to
achieve the same business ends. Id. Wards Cove further
held that while the employer had the burden of production in this phase,
the ultimate burden of persuasion remained with the plaintiff.
Id. at 659. The Supreme Court explained that "the ultimate burden
of proving that discrimination against a protected group has been caused
by a specific employment practice remains with the plaintiff at all
times . . . for it is he who must prove that it was because of such
individual's race, color, etc., that he was denied a desired employment
opportunity." Id. at 659-60 (citations omitted). Wards
Cove was controversial, see Smith, 544 U.S. at 240
(characterizing Wards Cove as "narrowly constru[ing] the
employer's exposure to liability on a disparate-impact theory"), and
Congress responded to it and other controversial Supreme Court
employment-discrimination decisions by enacting the Civil Rights Act of
1991. Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071. Among
other changes, Congress added a new subsection (k) to title VII's section
703 that codified the disparate-impact theory of liability for the first
time, clarified the requirements for establishing a prima facie case,
placed on the defendant the burden of both production and persuasion
regarding business necessity, and made plaintiffs' proof of alternative
employment practices easier. Civil Rights Act of 1991, Pub. L. No.
102-166, sec. 105, § 703, 105 Stat. 1071, 1074-75 (current version at
42 U.S.C.A. § 2000e-2(k)). However, while amending other portions of
the ADEA, Congress did not make amendments to section 623(a) that
corresponded to its amendments to title VII, section 723(a). Congress's
insertion of a specific provision into title VII governing
disparate-impact claims while omitting it from the ADEA--even while the
ADEA was undergoing amendments at the same time, in the same
legislation--was viewed by some federal courts as consistent with
Congress's broader intent to preclude such a claim under the ADEA. See
Dearing, 150 S.W.3d at 464.

The Supreme Court granted
certiorari in Smith to address "whether the 'disparate-impact'
theory of recovery announced in Griggs . . . , for cases brought
under Title VII of the Civil Rights Act of 1964, is cognizable under the
ADEA." Smith, 544 U.S. at 230. The Court stated that the
textual parallels between section 703(a)(2) of title VII and section
623(a)(2) of the ADEA made Griggs a "precedent of compelling
importance" and "strongly suggests that a disparate-impact theory should
be cognizable under the ADEA." Id. at 233-37. In fact, the Court
observed, federal appellate courts had "uniformly" interpreted the ADEA
during the decades following Griggs as authorizing recovery on a
disparate-impact theory. Id. at 236-37 & n.8 (collecting
cases). Lower courts had ceased to do so, the Supreme Court
suggested, based on a misunderstanding of its Hazen Paper
decision, and that "there is nothing in our opinion in Hazen
Paper that precludes an interpretation of the ADEA that parallels our
holding in Griggs." See id. at 237-38 (citing Hazen
Paper, 507 U.S. at 612).

However, the Supreme Court
also recognized the important textual differences between the ADEA and
title VII. In particular, the Court observed that the ADEA's RFOA
provision "significantly narrows its coverage" by permitting "otherwise
prohibited" action "where the differentiation is based on reasonable
factors other than age." Smith, 544 U.S. at 233 (quoting 29
U.S.C.A. § 623(f)(1) (West 1999)). The RFOA provision, as the
Smith Court observed, reflected legislative origins of the ADEA
that differed from those of title VII.

Congress' decision to limit
the coverage of the ADEA by including the RFOA provision is consistent
with the fact that age, unlike race or other classifications protected by
Title VII, not uncommonly has relevance to an individual's capacity to
engage in certain types of employment. To be sure, Congress recognized
that this is not always the case, and that society may perceive those
differences to be larger or more consequential than they are in fact.
However, as Secretary [of Labor] Wirtz noted in his report, "certain
circumstances . . . unquestionably affect older workers more strongly as a
group than they do younger workers." Wirtz Report 28. Thus, it is not
surprising that certain employment criteria that are routinely used may be
reasonable despite their adverse impact on older workers as a group.
Moreover, institutional discrimination on the basis of age has not
occurred at the same levels as discrimination against those protected by
Title VII. While the ADEA reflects Congress' intent to give older workers
employment opportunities whenever possible, the RFOA reflects this
historical difference.

Id. at 240-41. But
the Supreme Court drew different inferences from these distinctions
regarding Congress's intent than had the courts of appeals. In the Supreme
Court's view, the RFOA confirmed, rather than negated, Congress's intent
to permit disparate-impact claims under the ADEA. Id. at 238. The
Court reasoned that if the ADEA had permitted only disparate-treatment
claims and an employer in fact had acted based on a factor other than age,
the RFOA provision would have been redundant and unnecessary because the
employer's action would not have been "otherwise prohibited" in the first
place. Id. It suggested that "[i]t is . . . in cases involving
disparate-impact claims that the RFOA provision plays its principal role
by precluding liability if the adverse impact was attributable to a nonage
factor that was 'reasonable.' Rather than support an argument that
disparate impact is unavailable under the ADEA, the RFOA provision
actually supports the contrary conclusion." Id. at
239.

The Supreme Court
held that "[t]he text of the statute, as interpreted in Griggs,
the RFOA provision, and the EEOC regulations [holding that a
disparate-impact claim was available under the ADEA] all support
petitioner's view," and that it "was error for the Court of Appeals to
hold that the disparate-impact theory of liability is categorically
unavailable under the ADEA." Id. at 240. Nonetheless, the Court
emphasized that "[t]wo textual differences between the ADEA and Title VII
make it clear that even though both statutes authorize recovery on a
disparate-impact theory, the scope of disparate-impact liability under
ADEA is narrower than under Title VII." Id. The first was the
RFOA provision. Id. The second was Congress's amendments to title
VII--but not to the ADEA--in the Civil Rights Act of 1991. Id.
Because of the latter distinction, the Smith Court reasoned,
"Wards Cove's pre-1991 interpretation of Title VII's identical
language remains applicable under the ADEA." Id.

The Supreme Court concluded
that the plaintiffs had failed to meet Wards Cove's requirements
for establishing a prima facie case of disparate-impact age
discrimination:

[P]etitioners have done
little more than point out that the pay plan at issue is relatively less
generous to older workers than to younger workers. They have not
identified any specific test, requirement, or practice within the pay plan
that has an adverse impact on older workers. As we held in Wards
Cove, it is not enough to simply allege that there is a disparate
impact on workers, or point to a generalized policy that leads to such an
impact. Rather, the employee is "'responsible for isolating and
identifying the specific employment practices that are allegedly
responsible for any observed statistical disparities.'" 490 U.S. at 656
(emphasis added) (quoting Watson, 487 U.S. at 994). Petitioners
have failed to do so. Their failure to identify the specific practice
being challenged is the sort of omission that could "result in employers
being potentially liable for 'the myriad of innocent causes that may lead
to statistical imbalances . . . .'" 490 U.S. at 657.

Id. at 241. The
Court then stated, "not only did petitioners thus err by failing to
identify the relevant practice, but it is also clear from the record that
the City's plan was based on reasonable factors other than age."
Id. The city had perceived a need to raise the salaries of junior
officers to make them competitive with comparable positions in the market.
Id. at 242. Older officers, who tended to occupy more senior
positions, on average received smaller increases when measured as a
percentage of their salary. Id. The Court concluded that the
disparate impact was attributable to the city's decision to give raises
based on seniority and position, and the city's reliance on these factors
was "unquestionably reasonable," given its goal of raising employees'
salaries to make them comparable with those in surrounding communities.
Id. The Court held that the city's decision to grant a larger
raise to lower-echelon employees to establish salaries that were
equivalent to those of police forces in surrounding communities was based
on a "reasonable factor other than age" and was responsive to the city's
legitimate goal of retaining police officers. Id. On this basis,
the Supreme Court affirmed the judgment of the Fifth Circuit.

The Supreme Court
subsequently denied Dearing's petition for certiorari. Thereafter, our
mandate to the district court in Dearing I issued.

Proceedings after
remand

On remand, Dearing filed a
motion to reinstate the district court's original class-certification
order, relying on the same underlying petition and evidence, without
modification or amendment, on which the court had originally certified the
class. The district court granted the motion, stating simply that its
prior certification order, which was attached, "is hereby reinstated." The
court did not prepare findings of fact and conclusions of law, nor did the
Department request it to do so. The Department appeals this
order.

DISCUSSION

In five issues, the
Department contends that the district court abused its discretion in
reinstating its prior order granting class certification. It argues that:
(1) the district court's re-certification of the class based on the same
pleadings, evidence, and trial plan conflicted with this Court's mandate
in Dearing I; (2) if we revisit Dearing I in light of
the Supreme Court's intervening Smith decision, we should hold
that the labor code permits disparate-impact age-discrimination claims
subject to the same standards of proof identified in Smith; (3)
because the district court's trial plan did not address each element
required by Smith and the ADEA, among other defects, the district
court abused its discretion in certifying the class; and (4) because
Dearing has not, and cannot, plead a proper disparate-impact claim under
these standards, not only was certification an abuse of discretion, but we
should proceed to hold that Dearing's claim is barred by sovereign
immunity and dismiss it. In its fifth issue, the Department urges that if
the Court revisits Dearing I to address the effect of
Smith, it should also revisit Dearing I's holdings
regarding exhaustion-of-remedies requirements and hold that Dearing and
the putative class members failed to exhaust administrative
remedies.

Class-certification
requirements and standard of review

On remand, the decision by
the district court to re-certify the class was governed by rule of
civil procedure 42, as amended in October 2003. Tex. R. Civ. P. 42;
see BMG Direct Mktg. v. Peake, 178 S.W.3d 763, 777 n.10 (Tex.
2005).
(5) Rule 42(a) states the general class-certification
prerequisites of (1) numerosity--"the class is so numerous that joinder of
all members is impracticable"; (2) commonality--"there are questions of
law or fact common to the class"; (3) typicality--"the claims and
defenses of the representative parties are typical of the claims or
defenses of the class"; and; (4) adequacy of representation--"the
representative parties will fairly and adequately protect the interests of
the class." Tex. R. Civ. P. 42(a); Citizens Ins. Co. of Am.
v. Daccach, 217 S.W.3d 430, 438 (Tex. 2007) (citing
Southwest Refining Co. v. Bernal, 22 S.W.3d 425, 435 (Tex.
2000)). Additionally, a class action must satisfy at least one of the
requirements in rule 42(b). The district court's re-certification order
(which, in turn, merely incorporates its original, February 2003
certification order without modification) purports to be based on "Texas
Rule of Civil Procedure 42(b)(4)." Rule "42(b)(4)" was eliminated in the
subsequent amendments to rule 42 in October 2003, but its substance is
reflected in current rule 42(b)(3), which requires that "the questions of
law or fact common to the members of the class predominate over any
questions affecting only individual members," and that "a class action is
superior to other available methods for the fair and efficient
adjudication of the controversy." Tex. R. Civ. P. 42(b)(3). Rule 42(b)(3)
contains a non-exhaustive list of factors to aid courts in determining
whether rule 42(b)(3) certification is appropriate: (A) the interest of
class members in individually controlling the prosecution of separate
actions; (B) the extent and nature of any litigation concerning the
controversy already commenced by class members; (C) the desirability or
undesirability of concentrating the litigation or the claims in the
particular forum; and (D) the difficulties likely to be encountered in the
management of the class action. Id.

The Texas Supreme Court has
rejected a "certify now and worry later approach" and has instead required
courts to "perform a rigorous analysis before ruling on class
certification to determine whether all prerequisites to certification have
been met." Bernal, 22 S.W.3d at 435. A proper analysis requires
courts to "go beyond the pleadings" and identify the substantive issues
that will control the litigation in order to discern which issues will
predominate. Peake, 178 S.W.3d at 777. Trial courts must resolve
disputes affecting the underlying substantive law prior to certification
"as courts can hardly evaluate the claims, defenses or applicable law
without knowing what the law is." Compaq Computer Corp. v.
Lapray, 135 S.W.3d 657, 672 (Tex. 2004). The impact of recent cases
affecting the controlling substantive law must be considered. See
Union Pacific Res. Group, Inc. v. Hankins, 111 S.W.3d 69, 72 (Tex.
2003). The supreme court has further instructed us that dispositive issues
going to the viability of the class claims should be resolved by the trial
court before certification is considered. Lopez, 156 S.W.3d at
557.

Trial plans are required in
every order certifying a class "'to allow reviewing courts to assure
that all requirements for certification under Rule 42 have been
satisfied.'" Peake, 178 S.W.3d at 778 (quoting Lopez,
156 S.W.3d at 556). "The formulation of a trial plan assures that a trial
court has fulfilled its obligation to rigorously analyze all certification
prerequisites and understands the claims, defenses, relevant facts, and
applicable substantive law in order to make a meaningful determination of
the certification issues." Id. The trial-plan requirement is now
codified in rule 42(c)(1)(D):

An order granting or denying
certification under Rule 42(b)(3) must state:

(i) the elements of each
claim or defense asserted in the pleadings;

(ii) any issues of law or
fact common to the class members;

(iii) any issues of law or
fact affecting only individual class members;

(iv) the issues that will be
the object of most of the efforts of the litigants and the
court;

(v) other available methods
of adjudication that exist for the controversy;

(vi) why the issues common
to the members of the class do or do not predominate over individual
issues;

(vii) why a class action is
or is not superior to other available methods for the fair and efficient
adjudication of the controversy; and

(viii) if a class is
certified, how the class claims and any issues affecting only individual
members, raised by the claims or defenses asserted in the pleadings, will
be tried in a manageable, time efficient manner.

Tex. R. Civ. P.
42(c)(1)(D).

We review a trial court's
order certifying a class for abuse of discretion, but we do not indulge
every presumption in favor of the trial court's ruling. Schein v.
Stromboe, 102 S.W.3d 675, 691 (Tex. 2002). "A trial court has
discretion to rule on class certification issues, and some of its
determinations--like those based on its assessment of the credibility of
witnesses, for example--must be given the benefit of the doubt. But the
trial court's exercise of discretion cannot be supported by every
presumption that can be made in its favor." Id. Instead, "actual,
not presumed, conformance with [rule 42] remains . . . indispensable."
Bernal, 22 S.W.3d at 435. We must ensure that the district court
performed the required "rigorous analysis" before ruling on class
certification, as manifested in a detailed, thorough trial plan.
Peake, 178 S.W.3d at 778.

The effect of
Dearing I's mandate

In its first issue, the
Department argues that the district court abused its discretion in
re-certifying the class on the same pleadings, evidence, and trial plan on
which it had relied in Dearing I, in derogation of our mandate.
We agree with the Department.

The mandate is the formal
command from an appellate court commanding the lower court to comply with
the appellate court's judgment. See Tex. R. App. P. 51.1(b),
65.2; In re Grossnickle, 115 S.W.3d 238, 243 (Tex.
App.--Texarkana 2003, orig. proceeding); Lewelling
v. Bosworth, 840 S.W.2d 640, 642-43 (Tex. App.--Dallas 1992,
orig. proceeding); Dixie Gas & Fuel Co. v. Jacobs, 66 S.W.2d
446, 448 (Tex. Civ. App.--Beaumont 1933, writ dism'd w.o.j.) (citing
Black v. Epperson, 40 Tex. 162, 172-73 (Tex. 1874)). Upon
receiving the appellate court's mandate, the lower court has a mandatory,
ministerial duty to enforce the appellate court's judgment. See
Tex. R. App. P. 51.1(b); Grossnickle, 115 S.W.3d at
243. It has no discretion to review, interpret, or enforce the mandate
but, instead, must carry out the mandate. Grossnickle, 115 S.W.3d
at 243.

This Court's mandate in
Dearing I recited its judgment that "the portion of the
[district] court's order pertaining to class certification is reversed,
and that part of the cause is remanded for further proceedings consistent
with this opinion. The remainder of the order is affirmed." For further
guidance, the district court was obligated to look to the Court's opinion.
Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) ("[C]ourts
should look not only to the mandate itself, but also to the opinion of the
court."). The mandate concluded with, "we command you to observe the order
of our Court of Appeals in this behalf and in all things have the order
duly recognized, obeyed, and executed."

This Court has not withdrawn
its mandate, nor has the judgment underlying it been reversed or vacated
by a higher appellate court.
(6) Our command to the district court to conduct further
proceedings in accordance with our Dearing I opinion thus remains
effective unless and until we instruct it otherwise. Because the district
court was bound to apply Dearing I's holdings that
Dearing's claim was not viable and that certification was thus
inappropriate, the district court abused its discretion in re-certifying
the class on the same record.

The district court may have
perceived that Smith nonetheless undermined a central premise of
Dearing I and rendered this Court's judgment erroneous. If so, it
is understandable that the district court, perceiving a choice between the
rationale expressed in an opinion of our nation's highest court versus one
of this state intermediate appellate court, may have seen fit to apply the
higher court's analysis. Such a view, however, would overlook the
implications of both our mandate and the law-of-the-case
doctrine.

Under the law-of-the-case
doctrine, a court of appeals is ordinarily bound by its initial decision
on a question of law if there is a subsequent appeal in the same case.
Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex. 2003);
see also Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d
593, 596 (Tex. 2006) ("[T]he 'law of the case' doctrine is that principle
under which questions of law decided on appeal to a court of last resort
will govern the case throughout its subsequent stages." (citing
Hudson, 711 S.W.2d at 630)). "By narrowing the issues in
successive stages of the litigation, the law of the case doctrine is
intended to achieve uniformity of decision as well as judicial economy and
efficiency. The doctrine is based on public policy and is aimed at putting
an end to litigation." Briscoe, 102 S.W.3d at 716.

The law-of-the-case doctrine
does not extend to questions of fact, nor does it necessarily apply when
either the issues or the facts presented in subsequent appeals are not
substantially the same as those involved on the first trial.
Hudson, 711 S.W.2d at 630. Thus, as the Department suggests,
Dearing "could have redrawn [his] petition and asked the trial court to
certify a class based on a claim under the Smith standard; in
that case, the court's mandate would not have been an obstacle because the
certification would be different." That is not the case here, however. The
district court re-certified the class relying on the same underlying
pleadings, trial plan, and evidence on which it had originally certified
the class.

Nonetheless, "[a] decision
rendered on an issue before the appellate court does not absolutely bar
re-consideration of the same issue on a second appeal," but "[a]pplication
of the doctrine lies within the discretion of the court, depending on the
particular circumstances surrounding that case." Id. A
longstanding exception to the law-of-the-case doctrine (or instance when
courts will exercise their discretion not to apply it) is where the
appellate court concludes, on the second appeal, that its original
decision was "clearly erroneous." Id. (citing Galveston,
Harrisburg & San Antonio Ry. Co. v. Faber, 8 S.W. 64, 65 (Tex.
1888)). The rationale underlying this exception is that:

It would be unthinkable [for
the court] after having . . . reconsidered the case, and arrived at the
conclusion that the opinion on the former appeal was clearly erroneous, to
hold that it is bound by considerations of consistency to perpetuate that
error. Our duty to administer justice under the law, as we conceive it,
outweighs our duty to be consistent.

Id. (citing
Connecticut Gen. Life Ins. Co. v. Bryson, 219 S.W.2d 799, 800
(Tex. 1949)). Under this exception, our sister courts have revisited, on
appeals after remand, prior decisions called into question by intervening
higher-court decisions. See In re Estate of Chavana, 993 S.W.2d
311, 315-17 (Tex. App.--San Antonio 1999, no pet.); McCrea v. Cubilla
Condo. Corp., 769 S.W.2d 261, 262-63 (Tex. App.--Houston [1st Dist.]
1988, writ denied).

Thus, while the
law-of-the-case doctrine contemplates situations where prior appellate
court decisions on legal questions should be reconsidered in appeals after
remand, it is the appellate court--not the lower court--who decides
whether it is appropriate to do so. We sustain the Department's first
issue.

Revisiting
Dearing I

Dearing urges us to revisit
Dearing I in light of Smith and affirm the district
court's order as consistent with the current state of the law. We agree
that we would effectuate the policies underlying the law-of-the-case
doctrine by revisiting certain aspects of Dearing I and should
exercise our discretion to do so.

Disparate-impact
age-discrimination claims under the labor code

When previously concluding
that Dearing's disparate-impact age-discrimination claim was not viable
and that certification was therefore an abuse of discretion, this Court
relied on two basic premises: (1) the Fifth Circuit's analysis in
Smith was "persuasive" regarding whether disparate-impact claims
are available under the ADEA; and (2) section 21.122(b) of the labor code
means that "disparate-impact claims are available for age discrimination
in this state only if they are available under the ADEA." Dearing
I, 150 S.W.3d at 465. Section 21.122(b) of the labor code
provides:

To determine the
availability of and burden of proof applicable to a disparate impact case
involving age discrimination, the court shall apply the judicial
interpretation of the Age Discrimination in Employment Act of 1967 and its
subsequent amendments (29 U.S.C. Section 621 et seq.).

Tex. Lab. Code Ann. §
21.122(b). The Department had argued that section 21.122 required us to
apply to the labor code the then-prevailing view of the Fifth Circuit and
other federal courts that the ADEA did not permit disparate-impact claims.
Dearing had sought to distinguish these federal decisions, emphasizing
that many had rested on the view that the ADEA's RFOA provision manifested
Congress's intent to prohibit disparate-impact claims under that statute.
See Dearing I, 150 S.W.3d at 463-64. Dearing pointed out that the
legislature had patterned the labor code's general employment
discrimination prohibition after section 703(a) of title VII
(7) and had even codified Griggs's "business necessity"
limitation,
(8) but has never explicitly enacted a counterpart to the ADEA's
RFOA provision. While acknowledging the integral role of the RFOA in the
federal ADEA cases on which it relied, see id., this Court did
not consider the labor code's omission of such a provision to be
significant. It dismissed Dearing's arguments as "ignor[ing] section
21.122, which states that disparate-impact claims are available for age
discrimination in this state only if they are available under the ADEA."
Id. at 465.

The Court added that section
21.122 "specifically mirrored" the textual distinctions between the ADEA
and title VII following the 1991 Civil Rights Act amendments. Id.
Specifically, following the 1991 amendments, the legislature had made
corresponding amendments to Texas law that tracked the new subsection
(k)(1) of title VII, section 703, but made these provisions applicable
solely to claims for disparate-impact discrimination involving protected
categories other than age. Act of May 14, 1993, 73d Leg., R.S., ch. 276, §
5, 1993 Tex. Gen. Laws 1285, 1287 (current version at Tex. Lab. Code Ann.
§ 21.122(a), (c)-(d) (West 2006)); cf. 42 U.S.C.A. §
2000e-2(k)(1).

In the aftermath of
Smith, the Department concedes that disparate-impact claims may
be available under the ADEA, and that--consistent with its position in
Dearing I--section 21.122(b) incorporates this principle to
govern such claims under the labor code. But the Department urges that our
ultimate holdings in Dearing I were correct because the district
court still abused its discretion in certifying the class. Central to this
contention is the argument that the Department advances in its second
issue: that section 21.122(b) incorporates into the labor code not only
Smith's holdings regarding the availability of disparate-impact
claims under the ADEA, but also its analysis of the plaintiffs' burden of
proof. Specifically, the Department urges that Wards Cove governs
the standards Dearing must meet to establish a prima facie
disparate-impact age-discrimination case and imposes a
burden-shifting framework for addressing any justifications the Department
proffers. Moreover, it asserts that section 21.122(b) incorporates the
ADEA's RFOA limitation, as interpreted by Smith, into the labor
code. See Smith, 544 U.S. at 243 ("Unlike the business necessity
test, which asks whether there are other ways for the employer to achieve
its goals that do not result in a disparate impact on a protected class,
the reasonableness inquiry includes no such requirement."). Relatedly, the
Department argues that its RFOA justification is addressed in the same
manner under the ADEA as was the business-necessity justification under
Wards Cove--the defendant has the burden of production, but
the plaintiff retains the ultimate burden of proof to prove the
unreasonableness of any proffered RFOA. Based on these contentions, the
Department complains in its third issue that the trial plan on which
certification was based was defective because it failed to properly
address the elements of Dearing's disparate-impact age-discrimination
claim and the RFOA justification. See Tex. R. Civ. P.
42(c)(1)(D); Peake, 178 S.W.3d at 777; Hankins,
111 S.W.3d at 72.

Dearing's arguments largely
parallel those that he advanced in Dearing I, emphasizing the
textual similarities between section 21.051(a)(2) of the labor code,
section 703(a)(2) of title VII, and section 623(a)(2) of the ADEA; the
legislature's omission of an express RFOA provision in the labor code
while including the Griggs "business necessity" limitation; and
his assertion that the labor code's age-discrimination provisions, unlike
the ADEA, share common legislative and policy origins with those
addressing other protected classes. Dearing does not seem to dispute that
Wards Cove would govern proof of his claim. Instead, he contends
that the labor code does not incorporate an RFOA limitation and that, if
it does, the RFOA is an affirmative defense on which the Department would
have the burdens of proof and persuasion.

We agree that Dearing I
was clearly erroneous in its reliance on pre-Smith
jurisprudence holding that disparate-impact claims were categorically
unavailable under the ADEA. See Chavana, 993 S.W.2d at 315-17;
McCrea, 769 S.W.2d at 262-63. However, we conclude that
Dearing I was correct in its construction of section 21.122(b) of
the labor code and that this provision was also intended to incorporate
the ADEA's proof standards as interpreted by Smith-- including
the RFOA justification.

Statutory construction
presents a question of law that we review de novo. State
v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We seek to discern
the legislature's intent, as manifested first and foremost in the
statutory text. Id. We ascertain the legislature's intent from
the plain meaning of the words chosen when possible. Id. To that
end, we consider statutory language in context, not in isolation.
Jones v. Fowler, 969 S.W.2d 429, 432 (Tex. 1988); see
Tex. Gov't Code Ann. § 311.011(a) (West 2005). We also presume that the
legislature acted with knowledge of the background law. Acker v.
Texas Water Comm'n, 790 S.W.2d 299, 301 (Tex. 1990). Words
and phrases that have acquired a technical or particular meaning
shall be construed accordingly. Tex. Gov't Code Ann. § 311.011(b). When
ascertaining legislative intent, we may also consider the objective of the
law, its history, and the consequences of a particular construction.
Id.; see also id. § 311.023(1), (3), (5) (West
2005).

The Texas Supreme Court has
frequently observed that the Texas Commission on Human Rights Act (TCHRA)
and its current incarnation, chapter 21 of the labor code, were intended
to "correlat[e] . . . state law with federal law in the area of
discrimination in employment," Schroeder v. Texas Iron Works,
Inc., 813 S.W.2d 483, 485 (Tex. 1991), and "coordinate and conform
with federal law under Title VII . . . and the Age Discrimination in
Employment Act." Caballero v. Central Power & Light Co., 858
S.W.2d 359, 361 (Tex. 1993). The legislature, in fact, specified "general
purposes" of the statute that include "provid[ing] for the execution of
the policies of Title VII of the Civil Rights Act of 1964 and its
subsequent amendments (42 U.S.C. Section 2000e et. seq.),"
(9) and "identify[ing] and creat[ing] an authority that meets
the criteria under 42 U.S.C. Section 2000e-5(c) and 29 U.S.C. Section
633." Tex. Lab. Code Ann. § 21.001(1), (2). These federal
provisions--contained within title VII and the ADEA, respectively--require
that where a state has its own anti-discrimination laws and fair
employment practices agency, the federal EEOC must defer its processing of
a discrimination complaint for at least 60 days to permit the state agency
to investigate and resolve it. Thus, the legislature created the Texas
Human Rights Commission (now the Civil Rights Division of the Workforce
Commission) to serve as Texas's "deferral agency," i.e., one to which the
EEOC would defer so the investigation and resolution of employment
discrimination complaints could be handled at the state rather than
federal level. See Schroeder, 813 S.W.2d at 485. A related
concern, evident elsewhere in chapter 21 and throughout its legislative
history, was to ensure that Texas anti-discrimination law conformed to
federal law to whatever degree necessary to ensure that the Texas deferral
agency would be recognized as such by the EEOC--and, importantly, could
receive federal funding to help subsidize its operations.
(10)

As Dearing emphasizes, much
of chapter 21 appears to track title VII. Section 21.051, its general
employment-discrimination prohibition, states:

An employer commits an
unlawful employment practice if because of race, color, disability,
religion, sex, national origin, or age the employer:

(1) fails or refuses to hire
an individual, discharges an individual, or discriminates in any other
manner against an individual in connection with compensation or the terms,
conditions, or privileges of employment; or

(2) limits, segregates, or
classifies an employee or applicant for employment in a manner that would
deprive or tend to deprive an individual of any employment opportunity or
adversely affect in any other manner the status of an
employee.

Tex. Lab. Code Ann. §
21.051. Section 21.051 "is substantively identical to its federal
equivalent in Title VII," but adds age and disability to the protected
categories. Toennies, 47 S.W.3d at 475; cf. 42 U.S.C.A.
§ 703(a). Subsection (2) of section 21.051 tracks section 703(a)(2) of
title VII, the provision that the United States Supreme Court has long
identified as the textual basis for the disparate-impact liability theory.
Smith, 544 U.S. at 235 (citing Watson, 487 U.S. at 991).
Language parallel to section 703(a)(2) in the ADEA, the Smith
court observed, "strongly suggests that a disparate-impact theory should
be cognizable under the ADEA." Id. at 236. Furthermore, in
codifying the Griggs "business necessity" concept, the
legislature implicitly recognized the disparate-impact liability theory.
See Tex. Lab. Code Ann. § 21.115 ("An employer does not commit an
unlawful employment practice by engaging in a practice that has a
discriminatory effect and that would otherwise be prohibited . .
. .") (emphasis added); see also Helena Chem Co. v. Wilkins, 47
S.W.3d 486, 497 (Tex. 2001) ("[W]hen the Legislature looks to another
jurisdiction's statute, but modifies rather than adopts some of its
provisions, it does so purposefully.").

However, the only provision
in chapter 21 that explicitly addresses the availability of or burden of
proof for disparate-impact employment-discrimination claims is section
21.122--and the only provision that specifically addresses such issues for
disparate-impact age-discrimination claims is section 21.122(b). The
provision that is now section 21.122 was added to the TCHRA in 1993 as
part of a package of amendments intended to conform the act to the 1991
Civil Rights Act and the 1990 Americans With Disabilities Act. Act of May
14, 1993, 73d Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, (current
version at Tex. Lab. Code Ann. § 21.122 (West 2006)). The legislature's
desire to make Texas employment discrimination law consistent with its
federal counterparts is repeatedly demonstrated in the text and structure
of the amendments.
(11)

The provision that is now
section 21.122, with the exception of subsection (b), is substantively
identical to the new section 703(k)(1) that Congress added to title VII in
response to Wards Cove:

Sec. 5.11. BURDEN OF PROOF
IN DISPARATE IMPACT CASES. (a) An unlawful employment practice based on
disparate impact is established under this Act only if:

(1) a complainant
demonstrates that a respondent uses a particular employment practice that
causes a disparate impact on the basis of race, color, sex, national
origin, religion, or disability and the respondent fails to demonstrate
that the challenged practice is job-related for the position in question
and consistent with business necessity; or

(2) the complainant makes
the demonstration in accordance with federal law as that law existed on
June 4, 1989, with respect to the concept of alternative employment
practices, and the respondent refuses to adopt such an alternative
employment practice.

* *
*

(c) To demonstrate that a
particular employment practice causes a disparate impact, the complainant
must demonstrate that each particular challenged employment practice
causes a disparate impact, except that if the complainant demonstrates to
the satisfaction of the court that the elements of a respondent's
decision-making process are not capable of separation for analysis, that
decision-making process may be analyzed as one employment
practice.

(d) If the respondent
demonstrates that a specific practice does not cause a disparate impact,
the respondent may not be required to demonstrate that the practice is
consistent with business necessity.

Act of May 14, 1993, 73d
Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1287-88 (current
version at Tex. Lab. Code Ann. § 21.122 (West 2006)); cf. 42
U.S.C.A § 2000e-2(k)(1). Other portions of new subsection (k) were also
replicated in the TCHRA, including a provision clarifying that "[a]
demonstration that an employment practice is consistent with business
necessity may not be used as a defense under this Act against a complaint
of intentional discrimination." Act of May 14, 1993, 73d Leg., R.S., ch.
276, § 5, 1993 Tex. Gen. Laws 1285, 1288 (current version at Tex. Lab.
Code Ann. § 21.123 (West 2006)); cf. 42 U.S.C.A. § 2000e-2(k)(2)
(West 2003). But the amendments did not track only federal changes that
tended to expand liability exposure. To the contrary, the legislature also
incorporated portions of subsection (k) and the 1991 act that limited
employers' liability. These included a new liability protection regarding
employers' anti-drug policies, Act of May 14, 1993, 73d Leg., R.S., ch.
276, § 4, 1993 Tex. Gen. Laws 1285, 1887 (current version at Tex.
Lab. Code Ann. § 21.120 (West 2006)); cf. 42 U.S.C.A. §
2000e-2(k)(3) (West 2003), and a prohibition on damage awards, back pay,
and reinstatement in certain mixed-motive cases. Act of May 14, 1993, 73d
Leg., R.S., ch. 276, § 5, 1993 Tex. Gen. Laws 1285, 1288 (current version
at Tex. Lab. Code Ann. § 21.125 (West 2006)); cf. 42
U.S.C.A. §§ 2000e-2(m), 2000e-5(g)(2)(B) (West 2003).

As noted in Smith,
Congress did not make changes to the ADEA corresponding to the new section
703(k) it added to Title VII. In keeping with its intent to retain
consistency with federal law, the legislature, as this Court observed in
Dearing I, "specifically mirrored" this "textual distinction
between the ADEA and Title VII" by adopting "the language added to Title
VII in 1991 [but] treat[ing] disparate impact on the basis of age
distinctly by removing it from the list of other forms of discrimination
that give rise to disparate-impact liability." 150 S.W.3d at 465. The
legislature provided in subsection (b) of section 21.122 that, "To
determine the availability of and burden of proof applicable to a
disparate impact case involving age discrimination, the court shall apply
the judicial interpretation of the Age Discrimination in Employment Act of
1967 and its subsequent amendments (29 U.S.C. Section 621 et seq.)." Tex.
Lab. Code Ann. § 21.122(b).

Ultimately, the parties'
dispute over the construction of section 21.122(b) turns on the meaning of
the "judicial interpretation of the Age Discrimination in
Employment Act of 1967 and its subsequent amendments" that we "shall
apply" to "determine the availability of and burden of proof applicable to
a disparate impact case involving age discrimination." Dearing maintains
that the relevant ADEA "judicial interpretation" in Smith
that we must apply "is simply the analysis of a provision of the
federal statute that exists nowhere in the Texas Labor Code," and that is
therefore distinguishable. The Department contends that section 21.122(b)
requires us to follow Smith's holdings regarding the
availability and burden of proof for ADEA disparate-impact
claims--including the portions of the court's analysis that reference the
RFOA provision. As in Dearing I, we agree with the Department's
construction of section 21.122(b).

The legislature manifested
its intent throughout the 1993 amendments to the TCHRA that Texas
employment-discrimination law conform to federal law in the aftermath of
the 1991 Civil Rights Act. The conforming changes that the legislature
made included not only those expanding liability exposure, but also those
restricting it. The legislature added a new provision specifically to
address the availability and burden of proof in disparate-impact claims
and, like Congress, chose to treat age-discrimination claims differently
from those involving other protected classes. The federal analogue that
the legislature identified for age-discrimination claims, moreover, was
not title VII, but the "judicial interpretation of the Age
Discrimination in Employment Act of 1967 and its subsequent
amendments."

If, as Dearing contends, the
legislature had intended that Texas courts "apply" the ADEA "judicial
interpretation" only to the extent that the ADEA is textually parallel to
the TCHRA, it would have undermined its own manifest goal to restore
consistency between Texas and federal employment-discrimination law. By
the time of the 1993 amendments, as noted, there was already considerable
jurisprudential controversy regarding the availability of disparate-impact
claims under the ADEA, with the RFOA provision and other distinguishing
features of the ADEA being focal points of the debate. See
Markham, 451 U.S. 945 (Rehnquist, J., dissenting from denial of
certiorari); Metz, 828 F.2d at 1216-20; see generally
Herbert & Shelton, supra, at 636-50. While the 1993
TCHRA amendments were pending before the legislature, furthermore, the
Supreme Court handed down its Hazen Paper decision, which was
viewed by many as validating the arguments being made against
disparate-impact claims under the ADEA. We presume that the legislature is
aware of the background law when it enacts a statute. Acker, 790
S.W.2d at 301. Especially given the jurisprudential environment that
existed at the time of the 1993 amendments, it is doubtful that a
legislature intending to keep Texas employment-discrimination law
consistent with its federal counterpart would require Texas courts to
apply ADEA "judicial interpretation" while contemplating that these cases
could be deemed distinguishable and inapplicable. Such inconsistency would
have been further compounded by the legislature's unequivocal mandate
that courts apply the "judicial interpretation of the Age
Discrimination in Employment Act of 1967 and its subsequent
amendments," without regard to whether those future amendments might
be consistent with the TCHRA.

Considering, as we must, the
role of section 21.122(b) in context with the 1993 TCHRA amendments as a
whole, see Jones, 969 S.W.2d at 432, the more plausible
construction of "judicial interpretation of the Age
Discrimination in Employment Act of 1967 and its subsequent amendments" is
that we apply the authoritative holdings governing availability and burden
of proof for ADEA disparate-impact claims as the standards governing the
same issues for such claims under the labor code, without regard to what
might otherwise be distinguishing differences in the underlying statutory
texts. What the legislature intended in section 21.122(b), in other words,
was for Texas law to track federal law regarding the availability of and
burden of proof in disparate-impact age-discrimination cases, in effect
incorporating not only the ADEA's textual features presently governing
those issues, but even their "subsequent amendments." This conclusion is
consistent with Dearing I's construction of section 21.122(b).
Similarly, while Dearing's arguments emphasize textual parallels between
the THCRA and title VII that might have been significant if considered in
isolation, we agree with the Dearing I Court that Dearing "would
have us ignore section 21.122" and its impact. Dearing I, 150
S.W.3d at 465.

Consequently, Dearing must
establish a prima facie case under the standards of Wards Cove,
and the Department may invoke the RFOA limitation, as interpreted in
Smith, as a justification. We are also persuaded by the
prevailing post-Smith case law that the RFOA provision must
operate in the same way as the business-necessity justification under
Wards Cove; that is, the Department has the initial burden of
production regarding this justification, but Dearing retains the ultimate
burden of proof to demonstrate that any proffered RFOA was unreasonable.
See Meacham v. Knolls Atomic Power Lab., 461 F.3d 134,
141-43 & n.7 (2d Cir. 2006) (noting that in Smith, Supreme
Court stated that bona fide occupational qualification was affirmative
defense but did not similarly identify RFOA as affirmative defense and
further, it is "hard to see how an ADEA plaintiff can expect to prevail on
a showing of disparate impact based on a factor that correlates with age
without also demonstrating that the factor is unreasonable."); Pippin
v. Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1200 (10th Cir.
2006) (holding that "to prevail on an ADEA disparate impact claim, an
employee must ultimately persuade the factfinder that the employer's
asserted basis for the neutral policy is unreasonable."); Durante v.
Qualcomm, Inc., 144 Fed. Appx. 603, 607 (9th Cir. 2005) (ruling in
favor of employer that produced "unrebutted evidence" that its termination
decisions were made to satisfy differing business needs of its divisions
and departments); see also Marshall v. Westinghouse Elec. Corp.,
576 F.2d 588, 590 (5th Cir. 1978) ("This circuit has consistently held
that once the plaintiff makes out such a prima facie case the defendant
bears the burden of 'going forward' to demonstrate reasonable factors
other than age for the plaintiff's discharge. Just as consistently we have
said that the burden of persuasion, often called the risk of
non-persuasion, never shifts; it remains upon the ADEA plaintiff.").
Dearing relies on three cases, none of which address Wards Cove,
to argue that the RFOA is an affirmative defense on which the Department
has the burden of persuasion. See Johnson v. Perkins Rests.,
Inc., 815 F.2d 1220, 1221 (8th Cir. 1987); Criswell v. Western
Airlines, Inc., 709 F.2d 544, 552 (9th Cir. 1983); see also Kimel
v. Florida Bd. of Regents, 528 U.S. 62, 87 (2000) (discussing bona
fide occupational qualification as affirmative defense). All of these
cases, moreover, preceded the Supreme Court's opinion in
Smith.

Because the district court's
trial plan does not sufficiently address these elements, it abused its
discretion in certifying the class. We sustain the Department's second and
third issues.

The Department's
jurisdictional arguments

In its fourth issue, the
Department adds that under Smith's requirements, as incorporated
into the labor code through section 21.122(b), Dearing has not pleaded,
and cannot plead, a valid claim for disparate-impact age-discrimination,
rendering his claim not viable, see Lopez, 156 S.W.3d at
557, and barred by sovereign immunity. See Texas Dep't of Parks &
Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004) (citing
Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446
(Tex. 1993)); see also Tex. Lab. Code Ann. § 21.002(8)(D)
(West 2006). The Department relies on challenges to both the
sufficiency of Dearing's pleading allegations and underlying
jurisdictional facts. See Miranda, 133 S.W.3d at 227 (citing
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex.
2000)). To that end, it asks us to consider the evidence it attached to
its pre-Smith, pre-certification plea to the jurisdiction,
summary-judgment motions, and special exceptions. While styling these
arguments as challenges to class certification, the Department
also asks us to dismiss Dearing's claim for want of subject-matter
jurisdiction, or at least remand to afford him the opportunity to
replead in accordance with Smith. See Miranda,
133 S.W.3d at 226-27.

The Department acknowledges
that "the parties [have] not address[ed] the jurisdictional issues" in the
district court after Smith "or the propriety of Plaintiffs'
attempts to certify a class based [on] pleadings that do not mention
Smith's requirements." It attributes the context in which it has
raised these jurisdictional issues to the limited scope of our Dearing
I mandate, observing that the "remand proceedings only involved the
propriety of re-certifying the class." Nonetheless, the Department urges
that because these issues implicate sovereign immunity and, therefore,
subject-matter jurisdiction, we may address them for the first time on
appeal. See Texas Ass'n of Bus. v. Texas Air Control Bd., 852
S.W.2d 440, 446 (Tex. 1993).

In effect, the Department is
seeking to re-urge, in light of Smith, its pre-Smith
plea to the jurisdiction augmented by new challenges to jurisdictional
facts that it seeks to raise for the first time on appeal. This Court
recently held that where a defendant's challenge to jurisdictional facts
also implicates the merits of a plaintiff's claim, Miranda
requires that the challenge be raised first in the trial court rather than
on appeal. Hendee v. Dewhurst, ___ S.W.3d. ___, ___, No.
03-06-00501-CV, 2007 Tex. App. LEXIS 4149, at*53-54 (Tex. App.--Austin May
25, 2007, pet denied) (op. on reh'g). That is the case here--the
Department seeks to conclusively establish that it relied on an RFOA,
which, if successful, would bar liability for any disparate effects of the
reclassifications that Dearing challenges.

Nor can we reach these
dispositive issues in the guise of determining the "viability" of
Dearing's class claims. The supreme court has instructed us that
"dispositive issues should be resolved by the trial court before
certification is considered." Lopez, 156 S.W.3d at 557 (emphasis
added). Contrary to the Department's suggestions, Lopez does not
create a new procedural means by which appellate courts can adjudicate the
merits of dispositive issues not otherwise within their jurisdiction to
consider. Instead, it envisions that such issues should be adjudicated in
the trial court in the first instance, through the established procedural
mechanisms under our rules--such as pleas to the jurisdiction,
summary-judgment motions, and special exceptions--rather than by what are
substantively the same proceedings initiated at the appellate level.
Cf. Lopez, 156 S.W.3d at 157 (declining to reach viability issues
and remanding so trial court could address pending plea to the
jurisdiction and special exceptions).

Furthermore, the concept of
viability addressed in Lopez emanates from the core requirement
that, before certification, trial courts perform a "rigorous analysis" to
determine whether rule 42's requirements are met. Bernal, 22
S.W.3d at 435. To "make a meaningful determination of the certification
issues," Peake, 178 S.W.3d at 778, trial courts must resolve
disputes affecting the underlying substantive law prior to certification
because "courts can hardly evaluate the claims, defenses or applicable law
without knowing what the law is." Lapray, 135 S.W.3d at 672. The
impact of recent cases affecting the controlling law must be considered.
Hankins, 111 S.W.3d at 72. The district court's trial plan does
not reflect any consideration of Smith's implications for
Dearing's claim, beyond allowing the claim (in derogation of our mandate)
to proceed on a class basis. In fact, the court's re-certification order
merely attached and incorporated a trial plan that predated
Smith. Even under the view of Smith's effects accepted
by Dearing, the trial plan falls short. For example, the elements for
establishing a prima facie case under Wards Cove are not
addressed, nor is the burden-shifting framework it requires.
(12)

The Department will have the
opportunity on remand to re-urge its dispositive motions in light of
Smith. Conversely, Dearing will have the opportunity to amend his
pleadings and otherwise respond to the Department's potentially
dispositive issues under the normal procedural framework that our rules
provide to protect and balance the interests of both plaintiffs and
defendants. Cf. Hendee, ___S.W.3d at ___, 2007 Tex. App. LEXIS
4149, at *53-54. The district court's disposition of those issues, in
turn, will inform its "rigorous analysis" of whether the class should be
certified. We overrule the Department's fourth issue.

Single-filing
rule

In its fifth issue, the
Department argues that we should revisit, as "clearly erroneous,"
Dearing I's holding that the claims of putative class members
other than Dearing were not barred by their failure to exhaust
administrative remedies. The supreme court has held that the provisions
now codified in chapter 21 of the labor code, like title VII, impose a
comprehensive and exclusive administrative scheme under which
employment-discrimination claimants must first exhaust their remedies
before filing a civil action. Schroeder, 813 S.W.2d at 486-88.
Failure to exhaust these remedies is a jurisdictional bar to suit.
Id. at 488. In the district court, the Department, in support of
its plea to the jurisdiction, presented undisputed evidence that no class
member other than Milburn Dearing had filed a complaint with the human
rights commission. In affirming the district court's denial of the plea in
Dearing I, this Court purported to "adopt the single-filing rule
fashioned by federal courts" whereby similarly-situated persons can, under
certain circumstances, "piggyback" onto a single plaintiff's filing of an
EEOC complaint under title VII or the ADEA. Dearing I,
150 S.W.3d at 460; see Mooney v. Aramco Servs. Co.,
54 F.3d 1207, 1223 (5th Cir. 1995).
(13) We agree with the Department that Dearing I's
analysis of the single filing issue should be reexamined, a conclusion
that the concurrence shares. ___ S.W.3d at ___ (Waldrop, J.,
concurring).
(14)

Dearing I's
"adoption" of the single-filing rule was predicated principally on (1) a
view that "a person's 'agent' could reasonably include a class
representative" under section 21.201 of the labor code; and (2) what the
Court regarded as the beneficial policies served by the rule in federal
courts. 150 S.W.3d at 460. We agree with the concurrence that Texas courts
are not in a position to incorporate extra-statutory requirements into the
labor code. ___ S.W.3d ___ (Waldrop, J., concurring). Our proper inquiry
is, instead, to ascertain the policies that the legislature intended to
advance in the labor code, as manifested first and foremost by the
statutory text, and as further discerned through our application of the
established statutory construction principles we have reviewed
above.

Section 21.201 provides that
"a person claiming to be aggrieved by an unlawful employment practice
or the person's agent may file a complaint with the commission."
Tex. Lab. Code Ann. § 21.201 (West 2006) (emphasis added). As the
Department observes, "agent" under Texas law ordinarily denotes a
relationship based upon a principal's manifested consent that the agent
act on his behalf. See Bhalli v. Methodist Hosp., 896
S.W.2d 207, 210 (Tex. App.--Houston [1st Dist.] 1995, writ. denied). Under
traditional agency principles, as the Department suggests, a class
representative "filing the complaint is not necessarily in an agency
relationship with the other members of the purported class." Indeed,
especially in the early stages of litigation, members of the putative
class will frequently have no knowledge of their purported
representative's actions. See Tex. R. Civ. P. 42(c)(2)(B),
(e)(3)-(4). Thus, the Department suggests, section 21.201 could not have
been intended to allow class-wide exhaustion of administrative remedies
through a single filing, absent pleadings and proof establishing that the
filer was acting as an agent of each class member.

This intent, the Department
argues, is further demonstrated by comparing section 21.201 to the
administrative-exhaustion requirements of the ADEA. As originally enacted,
the ADEA provided that "[n]o civil action may be commenced by any
individual under this section until the individual has given the
Secretary [of Labor] not less than sixty days' notice of an intent to file
such action." Age Discrimination in Employment Act of 1967, Pub. L. No.
202, § 7(d), 81 Stat. 602, 605 (current version at 29 U.S.C.A. § 626(d)
(West 1998)) (emphasis added). In 1978, Congress amended this provision
into its current form: "No civil action may be commenced by an individual
under this section until 60 days after a charge alleging unlawful
discrimination has been filed [with the EEOC]." Age Discrimination in
Employment Act Amendements of 1978, Pub. L. No. 95-256, § 4(b) 92 Stat.
189, 190 (current version at U.S.C.A. § 626(d)) (West 1998) (emphasis
added). The Department suggests that Congress amended the ADEA
specifically to permit class actions under the single-filing rule, and
there is some support for this view. See Tolliver v. Xerox Corp.,
918 F.2d 1052, 1056 (2d Cir. 1990). Although not disputing that
"[t]he federal courts now universally hold that an individual who has not
filed an administrative charge can opt-in to a suit filed by a similarly
situated plaintiff" under the single-filing rule, see
Mooney, 54 F.3d at 1223, the Department attributes these
developments to the 1978 ADEA amendments, and distinguishes section 21.201
on that basis.

We conclude, however, that
section 21.201's closer federal analogue is section 706(b) of title VII.
See 42 U.S.C.A. § 2000e-5(b). As the Texas Supreme Court observed
in Schroeder, the employment-discrimination provisions of the
labor code, like title VII, do not contain an explicit
exhaustion-of-remedies requirement similar to the ADEA's. 813 S.W.2d at
487 & n.9. Instead, the court determined that the overall structure of
the Texas administrative procedures resembled those of title VII, observed
that the United States Supreme Court had held that title VII's provision
required exhaustion of remedies, emphasized the legislature's explicit
intent to provide for the execution of title VII's policies and concluded
that the Texas law imposes an administrative-exhaustion requirement akin
to title VII. Id. at 487.

Section 706(d) of title VII
resembles section 21.201 of the labor code. It provides that a "charge"
satisfying title VII's administrative-exhaustion requirements can be
"filed by or on behalf of a person claiming to be aggrieved." 42 U.S.C.A.§
2000e-5(b). The phrase "or on behalf of" was added in the Equal
Employment Opportunity Act of 1972. See Pub. L. No. 92-261, sec.
4(a), § 706(a)-(g), 86 Stat. 103, 104. As originally enacted in 1964,
section 706 had stated that a "charge" is filed only "by a person claiming
to be aggrieved." Civil Rights Act of 1964, Pub. L. 88-352, § 706(a),
78 Stat. 241, 259. Even before the 1972 amendment, federal courts had
recognized the single-filing rule under section 706. See Oatis v.
Crown Zellerbach Corp., 398 F.2d 496, 497-99 (5th Cir. 1968); see
also Albermarle Paper Co. v. Moody, 422 U.S. 405, 414 n.8 (1975)
(noting that "[t]he Courts of Appeals . . . are unanimous in recognizing
that backpay may be awarded on a class basis under Title VII without
exhaustion of administrative procedures by the unnamed class members" and
suggesting that "Congress plainly ratified this construction of the Act in
the course of enacting the Equal Employment Opportunity Act of
1972").

The similarities between the
labor code's administrative provisions and those of title VII, like others
throughout each statute, cf. Toennies, 47 S.W.3d at 475,
reflect the legislature's intent to "provide for the execution of the
policies of Title VII of the Civil Rights Act of 1964 and its
subsequent amendments (42 U.S.C. Section 2000e et. seq.)" in regard to
exhaustion of administrative remedies. Schroeder, 813 S.W.2d at
486-88. Both before and after the 1983 enactment of the TCHRA, the
single-filing rule was well-established in title VII cases.
(15) Although the concurrence states a reasonable view of the
statutory language if viewed in isolation, we are to presume that the
legislature was aware of the jurisprudential context in which it drafted
the TCHRA and its implications for the statutory words and structure it
chose. See Acker, 790 S.W.2d at 301.

We conclude that the labor
code manifests the legislature's intent to incorporate
the single-filing rule from title VII jurisprudence. As we explained
in Dearing I, the single-filing rule allows a person who has not
filed an administrative charge to piggyback on another party's
timely-filed administrative charge, if the person attempting to piggyback
is similarly situated to the person who actually filed the administrative
charge, and the charge provides notice of the collective or class-wide
nature of the charge. 150 S.W.3d at 460. Here the plaintiffs are similarly
situated to Dearing for the purposes of the single-filing rule because
they all share the same grievance: that the Department's reclassification
of the former Field Sergeant Game Wardens from the C-7 to the C-6 level
constituted unlawful age discrimination that had a disparate-impact on
employees over the age of forty. See Crawford, 660
F.2d at 665 (holding that plaintiffs were "similarly situated"
for purposes of single-filing rule because "the gravamen of their
complaints"--that they were given improper seniority dates and passed over
for promotion because of their race--was "the same"); Oatis, 398
F.2d at 498 (noting that where employees all had same grievance "it would
be wasteful, if not vain" to require each employee to process identical
complaints with EEOC). Furthermore, Dearing's charge gave notice of the
class-wide nature of the charge. We thus agree with Dearing
I's ultimate holding that the single-filing rule applies to
Milburn Dearing's complaint and that his complaint adequately stated
its class-action intent. 150 S.W.3d at 460. We overrule the Department's
fifth issue.

Other certification
issues

Because Smith's
impact on Dearing's claim and the Department's defenses will be integral
to the district court's consideration of class certification on remand, we
will defer further analysis of the propriety of certification until that
issue is again before us. Nonetheless, we observe that the district court
order reinstated, without modification, a certification order that
predated the October 2003 amendments to rule 42, and that does not comply
with the amended rule. See Tex. R. Civ. P. 42(c)(1)(D). Among
other defects, the plan fails to state the other available methods of
adjudication or adequately explain why a class action is "superior to
other available methods for the fair and efficient adjudication of the
controversy." See Tex. R. Civ. P. 42(b)(3), (c)(1)(D). In
particular, we observe that of the approximately 130 members of the
putative class, eighty-eight have already joined as plaintiffs. Finally,
we note that the trial plan purports to set discovery deadlines and a
trial date in 2003. We trust that if the district court reaches the issue
of certification again on remand, it will comply with amended rule
42.

CONCLUSION

We reverse the district
court's order reinstating its prior class-certification order. On remand,
the parties will have the opportunity to address the impact of
Smith and this decision on the adequacy of their pleadings, the
district court's subject-matter jurisdiction, and any other dispositive
matters. The parties will then have the opportunity to address the impact
of these rulings and Smith on certification. We remand these
issues to the district court for further proceedings consistent with this
opinion.

__________________________________________
Bob Pemberton, Justice

Before Chief Justice Law,
Justices Pemberton and Waldrop;

Concurring Opinion by
Justice Waldrop

Reversed and
Remanded

Filed: August 3,
2007

1. See Kimel v. Florida Bd. of Regents, 528
U.S. 62, 83-84 (2000).

2. Dearing filed a notice of appeal of the district
court's ruling granting the Department's plea to the jurisdiction
regarding his declaratory-judgment and mandamus claims, but not his
breach-of-contract claim. He later withdrew this notice.

3. We also held that the rule of Kimel did
not extend to suits under state anti-discrimination laws and that "the
Department has not pointed us to any legislative or statutory references
from which we can conclude that its reclassification actions were required
by law." Dearing I, 150 S.W.3d at 460-61.

4. See Maresco v. Evans Chemetics,
964 F.2d 106, 115 (2d Cir. 1992); MacPherson v. University of
Montevallo, 922 F.2d 766, 771 (11th Cir. 1991); Wooden v. Board
of Ed. of Jefferson County, 931 F.2d 376, 379 (6th Cir.1991);
Arnold v. United States Postal Service, 863 F.2d 994, 998 (D.C.
Cir. 1988) (assuming disparate-impact theory); Blum v. Witco Chemical
Corp., 829 F.2d 367, 372 (3d Cir. 1987); Holt v. Gamewell
Corp., 797 F.2d 36, 37 (1st Cir. 1986); Palmer v. United
States, 794 F.2d 534, 536 (9th Cir. 1986); Monroe v. United
Airlines, 736 F.2d 394, 404 n.3 (7th Cir. 1984); Dace v. ACF
Industries, 722 F.2d 374, 378 (8th Cir. 1983), modified, 728
F.2d 976 (1984) (per curiam).

5. But see Tex. R. Civ. P. 42(i), (j).

6. In fact, after issuing its Smith opinion,
the Supreme Court did not vacate or otherwise disturb our Dearing
I judgment in light of Smith, but denied certiorari.
Dearing, 540 U.S. 960 (2005).

7. The Texas Labor Code's general prohibition against
employment discrimination states:

An employer commits an
unlawful employment practice if because of race, color, disability,
religion, sex, national origin, or age the employer:

(1) fails or refuses to hire
an individual, discharges an individual, or discriminates in any other
manner against an individual in connection with compensation or the terms,
conditions, or privileges of employment; or

(2) limits, segregates, or
classifies an employee or applicant for employment in a manner that would
deprive or tend to deprive an individual of any employment opportunity or
adversely affect in any other manner the status of an
employee.

Tex. Lab. Code Ann. § 21.051
(West 2006). Section 21.051 "is substantively identical to its federal
equivalent in Title VII," but adds age and disability to the protected
categories. Quantum Chem. Co. v. Toennies, 47 S.W.3d 473, 475
(Tex. 2001); cf. 42 U.S.C.A. § 2000e-2 (West 2003).

8. When enacting the statutory predecessor to chapter
21 of the labor code, the 1983 Texas Commission on Human Rights Act
(TCHRA), the legislature included the following provision:

Notwithstanding any other
provision of this article, it is not an unlawful employment practice . . .
.

(7) for an employer to
engage in any practice that has a discriminatory effect and that would
otherwise be prohibited by this Act if the employer establishes that the
practice is not intentionally devised or operated to contravene the
prohibitions of this Act and is justified by business
necessity.

Commission on Human Rights
Act, 68th Leg., 1st C.S., ch. 7, § 5.07(7), 1983 Tex. Gen. Laws 37, 49
(current version at Tex. Lab. Code Ann. § 21.115 (West 2006)).

9. A similar "general purpose" concerning disability
discrimination was added in 1993: to "provide for the execution of the
policies embodied in Title I of the Americans With Disabilities Act of
1990 and its subsequent amendments (42 U.S.C. Section 12101 et. seq)."
Tex. Lab. Code Ann. § 21.001(3) (West 2006).

10. To that end, the legislature went as far as to
provide:

If a provision of this
chapter is held by the Equal Employment Opportunity Commission to
disqualify the commission as a deferral agency or for the receipt of
federal funds, the commission shall administer this chapter to qualify for
deferral status or the receipt of those funds until the legislature meets
in its next session and has an opportunity to amend this
chapter.

Tex. Lab. Code Ann.
§ 21.006 (West 2006); see also Fiscal Note, Tex. H.B. 14, 68th
Leg., 1st C.S. (1983) (explaining that "EEOC provides grant monies to
state and local governments with acceptable laws and regulations. . . .
During the first year of operation, the State commission would receive
$375 per charge resolution. If it meets the quality standards established
by the U.S. Equal Employment Opportunity Commission in its performance, it
would receive $412.50 per charge resolution beginning in its second year,
and increases are anticipated in succeeding years.").

11. We also note that the legislative record reflects
an understanding by bill proponents that "[w]ith the passage of the Civil
Rights Act of 1991 and the Americans With Disabilities Act, it is
necessary to amend the Commission on Human Rights Act to be equivalent to
these two federal laws in order to maintain the current relationship
between the Commission on Human Rights and the U.S. Equal Employment
Opportunity Commission." House Comm. On State Affairs, Bill Analysis, Tex.
H.B. 860, 73d Leg. R.S. (1993).

12. E.g., how Dearing's statistical proof of
disparate impact will be proved and evaluated--specifically, against what
other group Dearing's claims will be measured to test for disparate
impact.

Dearing observes that the
district court did not enter findings of fact and conclusions of law and
that ordinarily we would presume that the district court made any fact
findings supported by the evidence that were necessary for any legal
theory that could support its order. However, "actual, not presumed,
conformance" with rule 42 is required. Bernal, 22 S.W.3d at 435.

13. As the Fifth Circuit explained this concept, in
the context of the ADEA:

The federal courts now
universally hold that an individual who has not filed an administrative
charge can opt-in to a suit filed by any similarly situated plaintiff
under certain conditions. This so-called "single filing rule" generally
allows a plaintiff, who did not file an EEOC charge, to piggyback on the
EEOC complaint filed by another person who is similarly situated. . . .
The policy behind the single filing rule is that it would be wasteful, if
not vain, for numerous employees, all with the same grievance, to have to
process many identical complaints with the EEOC. As long as the EEOC and
the company are aware of the nature and scope of the allegations, the
purposes behind the filing requirement are satisfied and no injustice or
contravention of congressional intent occurs by allowing
piggybacking.

Mooney, 54 F.3d at
1223.

14. We decline to revisit the Court's prior holding
regarding the timeliness of Milburn Dearing's administrative complaint,
however.

15. See Price v. Choctaw Glove &
Safety Co., 459 F.3d 595, 598-99 (5th Cir. 2006); Crawford v.
U.S. Steel Corp., 660 F.2d 663, 665 (5th Cir. 1981); Wheeler v.
American Home Products Corp., 582 F.2d 891, 897-98 (5th Cir.
1977); Oatis, 398 F.2d at 499.