Appeals court allows whistleblower lawsuit from former employees who accused Ken Paxton of bribery to proceed

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A state appeals court found Thursday that former deputies of Attorney General Ken Paxton who were fired after accusing the Republican official of abusing his office are protected under the state’s whistleblower law, allowing their lawsuit against Paxton to proceed.

Paxton’s lawyers had argued in court that he’s exempt from the Texas Whistleblower Act because he’s an elected official, not a public employee. But the court upheld a previous lower court decision that denied Paxton’s attempt to dismiss the case.

In its opinion, Texas’ 3rd Court of Appeals rejected the attorney general’s interpretation of the Texas Whistleblower Act, “which would have the effect of stripping whistleblower protections from employees who might report misconduct by the thousands of elected officials throughout the State — particularly by those who direct and lead the agencies of this State.”

Paxton’s office did not immediately respond to a request for comment. The attorney general’s lawyers could request a rehearing by the entire court or appeal to the Texas Supreme Court.

Roughly a year ago, eight senior aides in the attorney general’s office accused Paxton — who has been shadowed by felony securities fraud charges for nearly his entire six years in office — of bribery and tampering with government records, among other things. The allegations were related to Paxton’s involvement in legal matters tied to Nate Paul, an Austin real estate investor and Paxton political donor.

Within weeks, all eight officials had either resigned or been driven to leave the agency. By November, four of those officials — David Maxwell, Ryan M. Vassar, James Blake Brickman and J. Mark Penley — had filed a whistleblower suit against Paxton. Those former employees are seeking compensation for lost wages and other damages, with some also requesting reinstatement to their positions.

Paxton’s lawyers tried to get the case dismissed, arguing before the appeals court that the lawsuit should be thrown out on the grounds that the attorney general is not subject to the whistleblower law. In September, though, a panel of three Democratic justices with the appeals court expressed skepticism with that argument.

In a statement to The Texas Tribune later Thursday, Carlos Soltero, an Austin attorney representing Maxwell, said that the court “followed establish[ed] law and the plain language of the Whistleblower Statute” and reaffirmed “that Texas law protects public servants who complain about violations of the law by high-level government officials like the Attorney General.”

“As we have said from the beginning,” he said, “no one is above the law, not even Ken Paxton.”

In its opinion, the court wrote that the former employees “sufficiently alleged illegal conduct by their employing governmental entity as contemplated by the Act” and disagreed with Paxton’s characterization of the whistleblower law, writing that while “Texas is an employment-at-will state,” the act “provides an exception to that general rule.”

“Although loyalty and confidence are important considerations in employment matters,” it wrote, “the Act provides that a State employer cannot fire an employee because he reports illegal conduct by the employer, even when it is that act of reporting that causes the employer to lose confidence or feel the employee lacks loyalty.”

James Barragán contributed reporting.