Texas Business Court Narrows Its Doorway: Officer Status and Equity Awards Aren't Enough
Texas employers with officer-level executives must keep employment discrimination claims in district court — the Business Court rejected jurisdiction even where a CEO participated in termination and $5M in RSUs were at stake.
In Brown v. Exxon Mobil, the Texas Business Court (11th Division) remanded a Section 21.051 TCHRA race discrimination suit, holding that employment claims do not qualify as matters of an organization's 'internal affairs' under Chapter 25A of the Texas Government Code. Applying noscitur a sociis, the court read 'internal affairs' alongside 'governance' and 'governing documents,' confining the term to disputes rooted in entity governance rather than any claim touching a corporate officer. The court rejected each of Exxon's three sub-arguments: CEO involvement in a termination decision does not confer jurisdiction; a plaintiff's vice president title does not transform a statutory discrimination claim into an internal-affairs dispute; and forfeited RSUs are damages, not the subject of the disagreement. The court also rejected the 'qualified transaction' theory, finding the incentive program was not a but-for cause of the discrimination claim. Because publicly traded issuers face no amount-in-controversy threshold, a contrary ruling could have swept broad employment litigation into the Business Court. Practitioners should expect continued resistance to removal attempts that rely on officer status or equity components alone.