A little over a year after the Texas Appeals Court rejected Texas Attorney General Ken Paxton’s argument that the state’s Whistleblower Act does not apply to whistleblowers reporting violations of law committed elected officials, AG Paxton has agreed to a tentative settlement that will leave the Appeals Court’s ruling in place and provide monetary compensation to four former AG employees.  The settlement was revealed in a Texas Supreme Court filing on February 10, 2023, which asked the Texas Supreme Court to defer consideration of Paxton’s pending appeal until the settlement could be finalized.

AG Paxton explained the decision as a “path to save taxpayer dollars” although, under the proposed terms of the settlement, it is the Texas taxpayers who will be funding the $3.3 million settlement payment subject to the legislature’s approval.  State representatives controlling the House Judiciary and Civil Jurisprudence Committee, who would need to approve the $3.3 million payment from state coffers, have publicly stated that they intend to ask further questions of AG Paxton as part of the approval process.

The proposed settlement terms also include an apology by Paxton for referring to the whistleblowers as “rogue employees” and an acknowledgement by Paxton that the employees were intending to act in the public interest.  AG Paxton’s immediate comments on the settlement were not especially apologetic, as he referred to the lawsuit as an “unfortunate sideshow” and an “unnecessary distraction.”

Importantly, the proposed settlement would leave in place the Appeals Court’s ruling that AG Paxton and other elected employees are not exempt from the terms of the Whistleblower Act.  At the Appeals Court, AG Paxton had pressed the argument that the Whistleblower Act’s protections should not apply in cases of accusations of elected officials because elections themselves act as a check on elected officials.  The Appeals Court had rejected that argument because, among other reasons, much of the work of state attorneys general and similar officials is done out of the public eye, and so voters would not be in a position to judge conduct of which they are unaware.  Though not stated by the Appeals Court, AG Paxton’s situation illustrates another issue with AG Paxton’s argument – AG Paxton was re-elected by a wide margin in November 2022 notwithstanding the public allegations, reflecting that elections are blunt tools for the enforcement of accountability. In any event, unless the proposed settlement is not finalized, AG Paxton and his fellow elected officials will remain subject to the Whistleblower Act going forward.