Hon. David Wade, M.D., Commissioner Opinion No. H- 50
Texas Department of Mental Health and
Mental Retardation Re: Whether Department
Box 12668, Capitol Station of Mental Health and
Austin, Texas 78711 Mental Retardation
can use appropriated
funds to pay wages for
a period of time when
it is claimed the em-
ployee was unlawfully
terminated etc., and
Dear Dr. Wade: related questions.
You have requested the opinion of this office in answer to the following
questions:
“1. Is this Department authorized to use appropriated
funds to pay back wages to a claimant pursuant to a
conciliation agreement under Public Law No. 92-261
or Executive Order 11246 . . . . ?
“2. If your answer . . . is in the affirmative, from
what source . . . .?
“3. If your answer . . . is in the affirmative,
can
such wages be paid for any period of time subsequent
to a rejected offer by this Department to reemploy
. . . , promote . . . or employ the individual . . . ?
In answering . . . , please consider . . . situations:
(a) Where it was agreed that full wages
be paid for the period prior to such offer
. . , ; or
p. 207
The Honorable David Wade, page 2 (H-50)
(b) Where it was not agreed that full wages
be paid for the period . . . and . . . the
claim for such prior wages was preserved; or
(c) Where it was not agreed that full wages
be paid for the period . . . and the . . .
claim for such prior wages was required to
be forfeited as a condition of the offer . . . . ”
Section 6 of Article 8 of the Texas Constitution provides (in appro-
priate part):
“No money shall be drawn from the Treasury but
in pursuance of specific appropriations made by law; nor
shall any appropriation of money be made for a longer
term than two years . . . . ”
There must be a specific appropriation for the purpose for which
,moneys are to be drawn from the State Treasury. National Biscuit Co.
v. State, 135 S. W. 2d 687 (Tex. 1940) ; State v. Angelina County, 150 S. W.
2d 379 (Tex. 1941); Bullock v. Calvert, 480 S. W. 2d 367 (Tex. 1972). The
purpose for which such payments are sought must be matched against the
purposes for which funds have been appropriated.
Pursuant to a conciliation agreement under Public Law No. 92-261
or an agreement under Executive Order 11246, payment of “back wages”
is to be made to a claimant as compensation for a period of time that the
claimant allegedly was unlawfully terminated, denied promotion or denied
employment by the Department because of race, color, religion, sex or
national origin. A conciliation agreement is a contract. Funds would be
available only if the contract is one within the power of your Department
to make. Absent such authority, any contract made would be void.
Article 3, Section 44, Texas Constitution, provides in part, “The
Legislature . . . shall not . . . grant by appropriation or otherwise, any
amount of money out of the Treasury of the State, to any individual, on a
claim, real or pretended, when the same shall not have been provided for
p. 208
The Honorable David Wade, page 3 (H-50)
by pre-existing law . . . , ” Fort Worth Cavalry Club v. Sheppard, 83 S. W.
2d 660 (Tex. 1935); Bullock v. Calvert, supra.
The Equal Employment Opportunity Commission (42 U. S. C. Section
2000 e-4), upon the filing of charges alleging an employer has engaged in
unlawful employment practices, shall investigate the charge, and, if it
determines that there is reasonable cause to believe that the charge is
true, it “shall endeavor to eliminate any such alleged unlawful employment
practice by informal methods of conference, conciliation, and persuasion. ”
42 U.S. C. Section 2000 e-5(b). We assume here that the conciliation
agreement under Public Law No. 92-261 to which you refer would be an
agreement arrived at under such circumstances.
That Act defines certain employment practices as unlawful (42 U. S. C.
Section 2000 e-2) and creates a civil action which may be pursued after ex-
haustinn of specified administrative remedies, including an attempt to
secure a satisfactory conciliation agreement by negotiations between the
Commission and the employer (42 U.S. C. Section 2000 e-5).
The powers of the Texas Department of Mental Health and Mental
Retardation are set forth in Article 5547-202, Vernon’s Texas Civil Statutes.
The power to enter into such a contract does not appear and there is no pre-
existing law specifically authorizing such payments. Although the Legis-
lature has authorized some agencies to settle claims in certain situations
(see, for instance Articles 796-802, 828, 835f, 2351 (lo), 6252-19 Section
10, V. T. C. S.), we find no such power vested in the Department of Mental
Health and Mental Retardation.
The current appropriations bill allocates no funds for payment under
such a contract. The only allocation which possibly could permit such pay-
ment is line item 12 of the appropriation to the Department of Mental Health
and Mental Retardation, reading as follows:
“12. Other Operating Expenses, including main-
tenance and repairs, court costs, $25 per
diem for Board members, capital outlay and
all other activities for which no other pro-
visions are made (including Legal and Claims
Division) but excluding airplane maintenance
and operating expenses. ”
p. 209
The Honorable David Wade, page 4 (H-50)
Senate Bill No. 1, Third Called Session, 1972, p. 11-8. Since no pre-
existing law authorizes the Department to enter the type contract under
discussion, it is our conclusion that payment thereunder would not con-
stitute an “operating expense” within the above appropriation. It is our
opinion that the Department, by reason of Article 8, Section 6, Texas
Constitution, is not authorized to use appropriated funds for payments
under such conciliation agreements based on avoidance of “damages. ”
We turn now to a discussion of conciliation agreements negotiated
under Executive Order 11246. Section 202 of it provides for inclusion of
a lengthy provision in government contracts whereby the contractor (such
as the Department) agrees not to discriminate against employees or
applicants because of race, color, religion, sex. or national origin, and
to comply with certain rules and follow certain practices therein enumerated
or referred to, for the purpose of encouraging equal employment oppor-
tunities. Section 209 of the Order sets forth sanctions and penalties which
may be imposed upon violation of the non-discrimination provisions of the
contract. Section 209(a) (5) permits cancellation or suspension of a con-
tract for failure of the contractor to comply with the non-discrimination
clauses, but Section 209(b) requires that an attempt to secure compliance
by methods including conciliation be made before the contract is cancelled
or suspended under subsection (a)(5). We assume for purposes of this
part of the discussion that the conciliation agreement under Executive
Order 11246 to which you refer is an agreement arrived at under such
circumstances.
The powers of the Texas Department of Mental Health and Mental
Retardation are set forth in Article 5547-202, Vernon’s Annotated Civil
Statutes. Section 2.15 thereof provides as follows:
“The Department may negotiate with any agency
of the United States in order to obtain grants to assist
in the expansion and improvement of mental health and
mental retardation services in this state. ”
We assume the original contracts under consideration were negotiated
under Section 2.15 and contain the non-discrimination clause provided for
in the Executive Order. If such is the case, then it is apparent that a
p. 210
The Honorable David Wade, page 5 (H-50)
renegotiation under Section 209(b), guaranteeing future compliance with
the original provisions and certain “back pay” concessions in exchange
for forgiveness and waiver of any prior violations, would be within the
power of the Department under Section 2.15, especially if matching
federal grants of money are involved, in view of the adoptable language
of Article 3, Section 51a of the Constitution. We think that under such
an agreement the Department would be authorized to use appropriated
funds for payments as required by the contracting federal agency. Such
payments, however, would not be paid as “back wages, ” since they
would not be in payment for services rendered to the Department. In-
stead, they should be understood,as contractual adjustments necessary
to secure continued benefits under federal contracts. Such payments
therefore should be made from the funds appropriated in connection
with securing the federal contract for the continuation of which such
concessions are to be made,
In answer to your third question it is our opinion that payments,
if made, should be made according to negotiated terms the Department
considers fair. In this connection it should be noted that Section 209(b)
of Executive Order 11246 does not specifically mention “back pay” con-
cessions, but merely directs that the contracting federal agency “shall
make reasonable efforts within a reasonable time limitation to secure
compliance with the contract provision of this Order by methods of
conference, conciliation, mediation, and persuasion . . . before a
contract shall be cancelled or terminated. . . .”
SUMMARY
The Department of Mental Health and Mental
Retardation is not authorized by pre-existing law
to use appropriated funds to pay “back wages” to
claimants under Public Law No. 92-261 pursuant
to extra-judicial “conciliation agreements, ” but it
is authorized to adjust its contractual differences
with the federal government pursuant to Executive
Order 11246, which legal adjustments may encompass
arrangements having the same practical effect as
p. 211
The Honorable David Wade, page 6 (H-50)
“back wages” payments. Such adjustments may be
made upon whatever terms (consistent with its
original authority) the Department of Mental Health
and Mental Retardation considers just and fair.
Very truly yours,
u Attorney General of Texas
APPROfiED:
DAVID M. KENDALL, Chairman
Opinion Committee
p. 212