Deroald Hopkins, an African-American man, served as Chief Operations Officer/Chief Financial Officer for Wayside Schools starting in November 2017. Wayside is a nonprofit organization that operates open-enrollment charter schools in Texas. Hopkins claimed to have reported financial mismanagement at the school, including the misuse of state and federal funds. In response, Wayside allegedly retaliated against Hopkins by making false accusations against him and eventually terminating his employment in January 2020.
Hopkins believed his termination was due to his whistleblowing activities and alleged that he was treated unfairly and subjected to racial discrimination, noting that two non-African-American auditors who reported similar financial mismanagement were not fired. Additionally, Hopkins claimed that the superintendent, who is white, treated him with hostility and engaged in name-calling, behavior that Hopkins asserted was not directed at non-African-American employees.
The district court dismissed Hopkins’s claims, concluding that Wayside Schools was entitled to Eleventh Amendment sovereign immunity as an “arm of the state.” On appeal, the Fifth Circuit Court of Appeals disagreed. The district court’s dismissal of Hopkins’s whistleblower-retaliation claim under 41 U.S.C. § 4712 was reversed. A state’s sovereign immunity extends to “arms of the state,” entities which are effectively the state itself because the state is the real, substantial party in interest to the lawsuit. According to the Fifth Circuit, Wayside failed to establish it was an arm of the state.
The court of appeals nevertheless affirmed the dismissal of Hopkins’s race-discrimination claim brought pursuant to 42 U.S.C. § 1981 and the Equal Protection Clause of the Fourteenth Amendment. The district court agreed that Hopkins had not stated a plausible claim for relief. Hopkins needed to show that a similarly situated coworker outside his protected class was treated more favorably under nearly identical circumstances, but his complaint failed to do so. Specifically, he compared himself to outside auditors who were not employees of Wayside, which was not sufficient. Additionally, Hopkins’s claims of mistreatment by the superintendent lacked details to suggest racial discrimination. The court agreed with the lower court’s dismissal of Hopkins’s race-discrimination claims under 42 U.S.C. § 1981 and the Equal Protection Clause. Hopkins v. Wayside Schools, No. 23-50600, 2024 WL 3738478 (5th Cir. Aug. 9, 2024).
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