Court Opinion

ID: 895305
Source: CourtListenerOpinion
Date Created: 2013-06-06 21:45:50.663249+00
Date Added: 2024-06-11T10:24:47.209446
License: Public Domain

IN THE SUPREME COURT OF TEXAS
 
════════════
No. 09-0770
════════════
 
The City of Houston, 
Petitioner,
 
v.
 
Steve Williams, et al., 
Respondents
 
════════════════════════════════════════════════════
On Petition for Review from 
the
Court of Appeals for the Fourteenth District of 
Texas
════════════════════════════════════════════════════
 
 
Argued October 13, 2010
            
Justice Guzman delivered 
the opinion of the Court.
            
Section 271.152 of the Local Government Code, under certain circumstances, 
waives governmental immunity for suits alleging breach of a written contract. 
For a second time on interlocutory appeal, we review the City of Houston’s plea 
to the jurisdiction in a suit by 540 former Houston Firefighters.1 The Firefighters allege wrongful 
underpayment of lump sums due upon termination of their employment, but the City 
claims the Firefighters’ suit is barred by governmental immunity. At issue is 
whether the City’s immunity from suit is waived by section 271.152. The 
Firefighters point to three distinct writings they assert constitute qualifying 
written contracts under that section: (1) certain City of Houston Ordinances, 
(2) Chapter 143 of the Local Government Code, and (3) two Meet and Confer 
Agreements (MCAs) and a Collective Bargaining Agreement (CBA) (collectively, the 
Agreements) negotiated by the Houston Professional Fire Fighters Association 
(the Union) on behalf of the Firefighters with the City. 
            
We hold the Ordinances and Agreements constitute written contracts within the 
scope of section 271.152. But we conclude that Chapter 143, standing alone, does 
not establish a contract between the City and the Firefighters, and as such does 
not fall within the scope of section 271.152’s waiver of immunity. Accordingly, 
we affirm the court of appeals’ judgment in part, reverse in part, and remand 
the case to the trial court for further proceedings consistent with this 
opinion.
            
I. Background
            
The Firefighters assert two claims against the City, both based on alleged 
underpayment of lump sums owed to them when their employment with the City 
terminated. The first is the “debit dock” claim, alleging that previously paid 
overtime amounts were improperly deducted from the termination payment. The 
second is the “termination pay” claim, alleging the improper exclusion of 
premium pay from calculation of the termination payment. Both claims are ably 
described in the original court of appeals opinion, and we do not restate the 
details here. See City of Houston v. Williams, 183 S.W.3d 409, 417–18 
(Tex. App.—Houston [14th Dist.] 2005), rev’d, 216 S.W.3d 827 (Tex. 
2007).
            
This case first came before us after the trial court granted a partial judgment 
in 2004, denying the City’s plea to the jurisdiction and upholding the 
Firefighters’ claims. The court of appeals affirmed that ruling, holding that 
governmental immunity had been waived because (1) the Firefighters were seeking 
a declaratory judgment, and (2) the “sue and be sued” language in the City’s 
Charter, and the “plead and be impleaded” language of Local Government Code 
section 51.075, effectuated a waiver of governmental immunity. See id. at 
426. On petition to this Court, we reversed on both grounds. As to the first, we 
held that because the only conceivable remedy for the Firefighters was money 
damages, the Firefighters “‘cannot circumvent the State’s sovereign immunity 
from suit by characterizing a suit for money 
damages . . . as a declaratory-judgment claim.’” City of 
Houston v. Williams (Williams I), 216 S.W.3d 827, 829 (Tex. 2007) 
(quoting Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 
856 (Tex. 2002)). As to the second ground, we held, applying our then-recent 
ruling in Tooke v. City of Mexia, that immunity was not waived by the 
Charter and statutory language empowering the City to “sue and be sued”2 or “plead and be impleaded.” Id. 
at 828–29 (citing Tooke v. City of Mexia, 197 S.W.3d 
325, 346–47 (Tex. 2006)).
            
However, in the interim between the trial court’s partial judgment and our 
initial review of this case, the Legislature retroactively waived governmental 
immunity for certain contract claims by enacting Subchapter I, Local Government 
Code Chapter 271, particularly section 271.152. See Act of May 23, 2005, 
79th Leg., R.S., ch. 604, §§ 1–3, 2005 Tex. Gen. Laws 1548, 1548–49 
(codified at Tex. Loc. Gov’t Code 
§§ 271.151–.160); Tooke, 197 S.W.3d at 344–45. As a result, numerous 
pending suits against governmental units that had rested on “sue and be sued” 
assertions of waiver were reversed and remanded to the trial courts for 
consideration of whether immunity was waived under section 271.152. See,
e.g., City of Midland v. Goerlitz, 201 S.W.3d 689, 690 (Tex. 2006) 
(per curiam); City of Houston v. Jones, 197 S.W.3d 391, 392 (Tex. 2006) 
(per curiam); City of Houston v. Clear Channel Outdoor, Inc., 197 S.W.3d 
386, 386–87 (Tex. 2006) (per curiam). This case was one such suit. Williams 
I, 216 S.W.3d at 828–29. 
            
Accordingly, on remand to the trial court, the Firefighters argued that certain 
City of Houston Ordinances constituted a written contract for which immunity was 
waived under section 271.152. Both the trial court and court of appeals agreed, 
determining again that the City’s immunity had been waived. 290 S.W.3d 260, 262. 
The Firefighters also argued that Local Government Code Chapter 143, the two 
MCAs from 1995 and 1997, and the 2005 CBA, all likewise constituted written 
contracts within the scope of section 271.152’s waiver of immunity. The court of 
appeals disagreed as to these points, holding Chapter 143 was not executed on 
behalf of the City, and the Firefighters as individuals lacked standing to 
enforce the Agreements. 290 S.W.3d at 265–67, 271. We now review those 
determinations.
            
II. Jurisdiction
            
Interlocutory appeals such as this are generally final in the court of appeals. 
Tex. Gov’t Code 
§ 22.225(b)(3). However, there are exceptions, and, as relevant 
here, we may review an interlocutory appeal when the intermediate court’s 
decision conflicts with a prior decision of another court of appeals, or of this 
Court. Id.
§§ 22.001(a)(2), 22.225(c). The standard governing whether two 
decisions conflict for purposes of interlocutory jurisdiction was broadened by 
the Legislature in 2003.3 Stephen F. Austin State Univ. v. 
Flynn, 228 S.W.3d 653, 656 n.3 (Tex. 2007). Before 2003, two decisions 
conflicted “when the two are so similar that the decision in one is necessarily 
conclusive of the decision in the other.” Id. at 656. The current, 
broader standard grants this Court conflicts jurisdiction when there is 
“inconsistency in [courts of appeals’] respective decisions that should be 
clarified to remove unnecessary uncertainty in the law and unfairness to 
litigants.” Tex. Gov’t Code 
§ 22.225(e). 
            
The parties dispute which standard should apply to this case,4 but we need not decide which governs, 
because jurisdiction would lie under either standard. The court of appeals in 
this case held certain City of Houston ordinances “constitute a contract.” 290 
S.W.3d at 270. In direct conflict with that holding, the First Court of Appeals 
has held that “ordinances alone . . . cannot form a 
contract . . . . The record must evidence a contract in 
writing between the plaintiffs and the city into which the ordinances can be 
read.” Overton v. City of Houston, 564 S.W.2d 400, 403–04 (Tex. Civ. 
App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.). Here, the two decisions would 
be conclusive of each other, thus conferring jurisdiction under the old 
standard, and the inconsistency between the two should be clarified in order to 
prevent uncertainty and unfairness, thus establishing jurisdiction under the 
current rule.
            
Thus, we conclude this Court has jurisdiction over this interlocutory appeal 
under Government Code sections 22.001(a)(2) and 22.225(c).
            
III. Discussion
            
A. Standard of Review
            
Immunity from suit deprives a trial court of jurisdiction. Tex. Dep’t of 
Transp. v. Jones, 8 S.W.3d 636, 638–39 (Tex. 1999) (per curiam). 
Accordingly, a governmental entity properly asserts immunity in a plea to the 
jurisdiction. Tex. Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 
217, 225–26 (Tex. 2004). Whether a trial court possesses jurisdiction is a 
question of law we review de novo. IT-Davy, 74 S.W.3d at 855. Hence, we 
review de novo the central issue in this case: whether the City’s governmental 
immunity deprives the trial court of jurisdiction.
            
B. Governmental Immunity 
            
When performing governmental functions, political subdivisions derive 
governmental immunity from the state’s sovereign immunity.5 See City of Galveston v. 
State, 217 S.W.3d 466, 469 (Tex. 2007). Under the common-law doctrine of 
sovereign immunity, the sovereign cannot be sued without its consent. 
Tooke, 197 S.W.3d at 331. Although this rule was originally justified by 
the fiction that “the king can do no wrong,” id. (citing 3 William Blackstone, Commentaries on the Laws 
of England 254 (1768)), in modern times its “purpose is pragmatic: to 
shield the public from the costs and consequences of improvident actions of 
their governments,” id. at 332. 
            
Sovereign immunity has two components: immunity from suit, and immunity from 
liability.6 Gen. Servs. Comm’n v. Little-Tex 
Insulation Co., 39 S.W.3d 591, 594 (Tex. 2001). First, the state retains 
immunity from suit unless it has been expressly waived by the Legislature. 
Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex. 1997) (superseded 
by statute on other grounds). Like sovereign immunity, governmental immunity can 
be waived, but we defer to the Legislature to do so by statute. City of 
Galveston, 217 S.W.3d at 469. The Legislature has mandated that a statute 
shall not be construed as waiving immunity absent “clear and unambiguous 
language.” Tex. Gov’t Code 
§ 311.034; Tooke, 197 S.W.3d at 328–29. 
            
Second, immunity from liability shields the state from money judgments even when 
the Legislature has given consent to sue. Little-Tex, 39 S.W.3d at 594. 
Nevertheless, immunity from liability is waived when the state contracts with a 
private party. Id. Because immunity from liability constitutes an 
affirmative defense, not a jurisdictional bar, only immunity from suit is 
properly before us today. See Miranda, 133 S.W.3d at 224.
            
C. Local Government Code Section 271.152’s Waiver of Governmental 
Immunity
            
Local Government Code section 271.152 waives qualifying local governmental 
entities’ immunity from suit for certain breach of contract claims, 
providing:
A local 
governmental entity that is authorized by statute or the constitution to enter 
into a contract and that enters into a contract subject to this subchapter 
waives sovereign immunity to suit for the purpose of adjudicating a claim for 
breach of the contract, subject to the terms and conditions of this 
subchapter.
 
Tex. Loc. Gov’t Code § 271.152. 
According to its plain terms, the statute by clear and unambiguous language 
waives a governmental entity’s immunity from suit for breach of written 
contract. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political 
Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 327 (Tex. 
2006).
            
For section 271.152’s waiver of immunity to apply, three elements must be 
established: (1) the party against whom the waiver is asserted must be a “local 
governmental entity” as defined by section 271.151(3), (2) the entity must be 
authorized by statute or the Constitution to enter into contracts, and (3) the 
entity must in fact have entered into a contract that is “subject to this 
subchapter,” as defined by section 271.151(2). Tex. Loc. Gov’t Code 
§§ 271.151–.152. A “contract subject to this subchapter” is defined as “a 
written contract stating the essential terms of the agreement for providing 
goods or services to the local governmental entity that is properly executed on 
behalf of the local governmental entity.” Id. § 271.151(2). 
            
The first and second elements are present as to each of the Firefighters’ 
claims. Regarding the first, the waiver of immunity in section 271.152 applies 
to “local governmental entities,” which include municipalities, public school 
and junior college districts, and various special-purpose districts and 
authorities. Id. § 271.151(3). The City is incorporated as a 
home-rule city—a type of municipality—see id. §§ 1.005, 5.004; Act of 
Mar. 18, 1905, 29th Leg., R.S., ch. 17, 1905 Tex. Spec. Laws 131 (granting 
Houston’s present Charter), and thus is a “local governmental entity” for whom 
immunity is waived for certain contract suits under section 271.152. Concerning 
the second element, because the City is a chartered home-rule city, it meets 
section 271.152’s requirement that it be “authorized by statute or the 
constitution to enter into a contract.” See Proctor v. Andrews, 972 
S.W.2d 729, 733 (Tex. 1998) (noting that home-rule cities possess all powers of 
the state not inconsistent with “the Constitution, the general laws, or the 
city’s charter,” except where limited by statute). Indeed, the City’s Charter 
specifically authorizes it to “contract and be contracted with.” Houston, Tex., Charter art. II, § 
1.
            
The third element presents a more difficult inquiry; that is, whether the City 
has entered into a “contract subject to this subchapter.” Section 271.151(2) 
effectively states five elements a contract must meet in order for it to be a 
contract subject to section 271.152’s waiver of immunity: (1) the contract must 
be in writing, (2) state the essential terms of the agreement, (3) provide for 
goods or services, (4) to the local governmental entity, and (5) be executed on 
behalf of the local governmental entity. Tex. Loc. Gov’t Code 
§ 271.151(2). To answer that inquiry, we turn to the three separate 
writings the Firefighters contend are contracts under sections 271.151(2) and 
271.152: (1) certain City Ordinances, (2) Local Government Code Chapter 143, and 
(3) the Agreements.
D. Certain City Ordinances as Contract for Purposes of Local 
Government Code Section 271.152’s Waiver of Governmental Immunity
            
The Firefighters assert that, when read together, certain sections of Chapter 34 
of the Houston Code of Ordinances constitute a unilateral employment contract 
between the City and the Firefighters.7 The City disagrees, arguing that the 
Legislature did not intend for section 271.152’s waiver of immunity for certain 
breach of contract claims to apply to municipal ordinances. Our inquiry thus 
centers on whether these Ordinances, in aggregate, constitute a unilateral 
employment contract between the City and the Firefighters so as to waive the 
City’s immunity from suit under Local Government Code section 271.152. To 
resolve this dispute, we first examine the law of unilateral contracts before 
applying the requirements of section 271.151(2) to the Ordinances.
            
1. Law of Unilateral Contracts 
            
Unlike a bilateral contract, in which both parties make mutual promises, 
Hutchings v. Slemons, 174 S.W.2d 487, 489 (Tex. 1943), a unilateral 
contract is created when a promisor promises a benefit if a promisee performs, 
Vanegas v. Am. Energy Servs., 302 S.W.3d 299, 303 (Tex. 2009). The 
requirement of mutuality is not met by an exchange of promises; rather, the 
valuable consideration contemplated in “exchange for the promise is something 
other than a promise,” i.e., performance. Restatement of Contracts § 12 cmt. 
a (1932). A unilateral contract becomes enforceable when the promisee performs. 
Vanegas, 302 S.W.3d at 303. We have explained that “‘[a] unilateral 
contract occurs when there is only one promisor and the other 
accepts . . . by actual performance,’” rather than by the 
usual mutual promises. Id. at 302 (quoting 1 Richard A. Lord, Williston on Contracts 
§ 1.17 (4th ed. 2007)). 
            
Although the concept of a unilateral contract has been questioned by some 
authorities, see, e.g., Restatement (Second) of Contracts 
§ 1, rptrs. note on cmt. f (1981), the concept enjoys continued recognition 
among many scholars of contract law, see, e.g., 1 Williston on Contracts § 1.17, and 
has recently been reaffirmed as part of the common law of Texas by this Court, 
see Vanegas, 302 S.W.3d at 302. In Vanegas, we held that 
when an employer offered to share five percent of the proceeds of a sale or 
merger of the company with certain employees if they remained employed until the 
sale or merger, a unilateral contract was formed when the employees remained 
employed for the requested time. Id. at 303. We noted that “‘unilateral 
contract analysis is applicable to the employer’s promise to pay a bonus or 
pension to an employee in case the latter continues to serve for a stated 
period.’” Id. (quoting 2 Joseph 
M. Perillo & Helen Hadjiyannakis Bender, Corbin on Contracts 
§ 6.2 (1995)). Thus, a unilateral employment contract is created when an 
employer promises an employee certain benefits in exchange for the employee’s 
performance, and the employee performs.
            
2. General Standing Ordinances as Unilateral Contracts 
            
Relying on Overton v. City of Houston, the City contends that general 
standing ordinances, however detailed, can never constitute a unilateral 
employment contract.8 See 564 S.W.2d at 403–04. In 
Overton, employees relied on city ordinances in asserting a right to 
termination pay. Id. at 402. The First Court of Appeals declined to treat 
the ordinances as a contract for purposes of determinating the appropriate 
statute of limitations governing the case, stating: “The ordinances alone 
. . . cannot form a contract with the plaintiffs in this case.” Id. at 
403–04 (emphasis added). To the extent the reasoning in Overton suggests 
an ordinance alone can never establish a unilateral contract, we disapprove
it, and conclude that, in some circumstances, an ordinance or group of 
ordinances can constitute a unilateral contract. 
            
A municipality utilizes ordinances as a means to conduct its business. Cf. 
Cent. Power & Light Co. v. City of San Juan, 962 S.W.2d 602, 613 (Tex. 
App.—Corpus Christi 1998, pet. dism’d w.o.j.). It is therefore unsurprising that 
this Court has implicitly recognized that municipalities sometimes contract with 
third parties by way of ordinance. See City of San Antonio v. 
Frizzell, 91 S.W.2d 1056, 1056–57 (Tex. 1936) (noting that an ordinance 
evidenced the entire contract between a city and a third party). When an 
ordinance evidences a contract, and is sought to be enforced as one, we have 
construed it as any other contract. See id. (construing the ordinance as 
a contract, and ruling accordingly). We have further concluded that a statute 
(and ordinances passed pursuant to it) authorizing a pension plan for policemen 
and firefighters was “necessarily a part of the contract of employment.” Byrd 
v. City of Dallas, 6 S.W.2d 738, 740 (Tex. 1928). In Byrd, by virtue 
of their employment with the city and acceptance of the pension scheme, the 
policemen and firemen’s participation in the pension plan became “as much a part 
of the agreed compensation as is the monthly stipend.” Id. at 741. 
Although the pension scheme at the time of the decision was derived from a 
statute, it was also realized through ordinances. See id. at 739.
Similarly, a franchise agreement between a municipality and a gas company 
was “embodied” in a city ordinance, apparently standing alone. See S. Union 
Co. v. City of Edinburg, 129 S.W.3d 74, 76 (Tex. 2003). In reviewing the 
City of Edinburg’s contract claims against a natural gas utility, we construed 
the city’s ordinance as a contract, discerning from it the parties’ intent and 
the scope of their respective obligations. See id. at 84–85. 
            
We have also read two ordinances and related documents together as a single 
agreement, and noted that “a court may determine, as a matter of law, that 
multiple documents comprise a written contract.” Fort Worth Indep. Sch. Dist. 
v. City of Fort Worth, 22 S.W.3d 831, 840–41 (Tex. 2000). It is 
“well-established law that instruments pertaining to the same transaction may be 
read together to ascertain the parties’ intent.”9 Id. at 840. In addition, the 
multiple documents need not contain all of the terms; instead, only the 
essential terms are required. Osborne v. Moore, 247 S.W. 498, 499 (Tex. 
1923). Therefore, different ordinance sections can potentially be read together 
in a single contract. See City of Fort Worth, 22 S.W.3d at 840–41. 
            
Further, no particular words are required to create a contract; therefore the 
fact that an ordinance does not contain the word “contract” in its text does not 
preclude it from having contractual effect. See 14 Tex. Jur. 3d Contracts 
§ 46 (2006); Farmers’ State Bank & Trust Co. v. Gorman Home 
Refinery, 3 S.W.2d 65, 66 (Tex. Comm’n App. 1928, judgm’t adopted); 
Coffman v. Woods, 696 S.W.2d 386, 387–88 (Tex. App.—Houston [14th Dist.] 
1985, writ ref’d n.r.e.).
            
3. City Ordinances as Unilateral Contract Under Section 271.151(2)
            
Guided by these principles, we turn to the particular Ordinances at issue to 
determine if they constitute a unilateral employment contract between the City 
and the Firefighters within section 271.152’s waiver of immunity. As discussed 
above, in order to determine if the Ordinances can collectively constitute a 
contract to which section 271.152 applies, we must determine whether five 
elements are met: (1) the contract must be in writing, (2) state the essential 
terms of the agreement, (3) provide for goods or services, (4) to the local 
governmental entity, and (5) be properly executed on behalf of the local 
governmental entity. Tex. Loc. Gov’t 
Code § 271.151(2). Because the Ordinances at issue here meet each of 
these five elements, we conclude the Ordinances collectively constitute a 
unilateral employment contract between the City and the Firefighters, thereby 
meeting the third requirement of section 271.152’s waiver of immunity. 
            
First, the Ordinances comprise a contract, and that contract is in writing. “A 
promise, acceptance of which will form a contract, ‘is a manifestation of 
intention to act or refrain from acting in a specified way, so made as to 
justify a promisee in understanding that a commitment has been made.’” 
Montgomery Cnty. Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex. 1998) 
(quoting Restatement (Second) of 
Contracts § 2(1)). The City manifested its intention to act in a 
specific way in the Ordinances by its extensive use of the word “shall”10 and similar provisions that make the 
benefits offered to the Firefighters mandatory upon performance. The Ordinances 
are authored by the City, and are addressed to a discrete group of offerees: 
those persons qualifying as “eligible employees,” who are defined as “all 
classified members of the fire department.” Houston, Tex., Code of Ordinances ch. 
34, art. III, § 34-59(a)(2). 
As such, the Ordinances constitute an offer that was communicated to the 
Firefighters, see Restatement of 
Contracts § 22, which the Firefighters accepted by performing, 
see Vanegas, 302 S.W.3d at 303. 
            
The City’s Ordinances further promised the Firefighters specific compensation in 
the form of overtime pay and termination pay. That promise required acceptance 
by performance, making the promise a unilateral contract that became binding 
when the Firefighters performed. See id. The performance the City 
requested is detailed in parts of Chapter 34, Article III,11 of the Houston Code of Ordinances. 
See Houston, Tex., Code of 
Ordinances ch. 34, art. III,
§§ 34-46, 34-48, 34-50. Those sections describe the duties of the 
Firefighters generally, id. § 34-46, and of the three particular 
divisions of the fire department: fire prevention, id. §§ 34-48, 
34-50(d), fire suppression, id. § 34-50(b), and fire alarm, id. 
§ 34-50(c). These duties include valuable services such as 
“extinguishing fires and conflagrations and preventing loss of human life and 
property,” id. § 34-50(b), “operating the fire alarm system,” id. 
§ 34-50(c), and “conducting inspections, reviewing plans for 
construction and conducting public information campaigns to reduce the loss of 
life and property by fire,” id. § 34-50(d). The Firefighters each 
performed such services for various periods of time, rendering the City’s 
promises binding as to each of them individually. Those promises included 
overtime compensation, id. § 34-59(a)(3), (b), (d), holidays, and 
compensation for holidays not taken, id. § 34-59(e)(1), (e)(2), 
(e)(6), sick leave, id. § 34-59(i), vacation leave, id. 
§ 34-59(j), and compensation for accrued sick and vacation leave upon 
termination of employment, id. § 34-3(b). 
            
The contract is also in writing. See generally Houston, Tex., Code of Ordinances, ch. 
34. As explained earlier, “written” contracts may be “embodied in more than one 
document,” Restatement (Second) of 
Contracts § 95 cmt. b, including, as here, multiple ordinances, 
see City of Fort Worth, 22 S.W.3d at 840–41.
            
Second, the Ordinances state the essential terms of the agreement between 
the Firefighters and the City. Section 271.151(2) does not define “essential 
terms,” but we have characterized “essential terms” as, among other things, 
“‘the time of performance, the price to be paid, . . . [and] 
the service to be rendered.’” Kirby Lake Dev. Ltd. v. Clear Lake City Water 
Auth., 320 S.W.3d 829, 838 (Tex. 2010) (quoting Liberto v. D.F. Stauffer 
Biscuit Co., 441 F.3d 318, 324 (5th Cir. 2006)). In the context of 
employment agreements, typical essential terms include, among others, 
“compensation, duties or responsibilities.” Martin v. Credit Prot. Ass’n, 
Inc., 793 S.W.2d 667, 669 (Tex. 1990). Here, the Ordinances plainly reflect 
such terms. The time of performance is specified in the definitions of 
“workweek,” Houston, Tex., Code of 
Ordinances ch. 34, art. III § 34-59(a)(5), “time actually worked or 
actual work,” id. § 34-59(a)(6), and “overtime,” id. 
§ 34-59(a)(3); and in the various holiday, vacation, and leave provisions, 
id. § 34-59(e), (i), (j). The price to be paid or compensation is 
located in the definitions of “overtime,” id. § 34-59(a)(3), and 
“regular rate of pay,” id. § 34-59(a)(4); and in the various 
termination pay, overtime, holiday, vacation, and leave provisions, id. 
§§ 34-3, 34-59(d), (e), (i), (j). The services to be rendered (duties or 
responsibilities) are likewise described in the Ordinances, as discussed above. 
See id. §§ 34-46, 34-48, 34-50 (describing the duties of the 
Firefighters). 
            
Third, the Ordinances provide for goods or services. We have previously held 
that “services” under section 271.151(2) encompass a wide array of activities, 
generally including any act performed for the benefit of another. Kirby 
Lake, 320 S.W.3d at 839. The Firefighters benefitted the City by providing 
fire protection services as defined in the Ordinances themselves. Houston, Tex., Code of Ordinances ch. 
34, art. III, §§ 34-46, 34-48, 34-50.
            
Fourth, the services were provided to a local governmental entity. The 
services were rendered to the City, and the Firefighters’ performance of those 
services was tracked by the fire chief. See id. § 34-59(c); see 
also Byrd, 6 S.W.2d at 740–41 (noting that a pension plan was given to 
retired firefighters as compensation for services rendered to the City of 
Dallas). 
            
Finally, the Ordinances were executed by the City. The City does not deny 
that the Ordinances were duly enacted, but does challenge whether they were 
“executed.” Section 271.151(2) does not define “executed.” We have noted that to 
“execute” means to “finish” or to “complete,” and that it is not necessary to 
sign an instrument in order to execute it, unless the parties agree that a 
signature is required. Mid-Continent Cas. Co. v. Global Enercom Mgmt., 
Inc., 323 S.W.3d 151, 157 (Tex. 2010) (per curiam). No agreement between the 
City and the Firefighters establishing that a signature was required is before 
us. Therefore, the Ordinances, when duly enacted by the City with the intent to 
be bound, were “executed” under section 271.151(2). See id.
            
In summary, the Ordinances meet each of the five elements required by section 
271.151(2), and thus comprise a unilateral employment contract within the scope 
of section 271.152’s waiver of immunity.
            
4. Debt in Violation of Article XI, Section 5, Texas Constitution
            
In an effort to negate contractual intent behind the Ordinances, the City argues 
that it could not have intended to be contractually bound by the Ordinances, 
because doing so would create a debt in violation of Article XI, Section 5, of 
the Texas Constitution. Our Constitution ordains that “no debt shall ever be 
created by any city, unless at the same time provision be made to assess and 
collect annually a sufficient sum to pay the interest thereon and create a 
sinking fund of at least two per cent. thereon.” Tex. Const. art. XI, § 5. But we long 
ago noted that this prohibition does not extend to “that class of pecuniary 
obligations in good faith intended to be, and lawfully, payable out of either 
the current revenues for the year of the contract or any other fund within the 
immediate control” of the municipality. McNeill v. City of Waco, 33 S.W. 
322, 323–24 (Tex. 1895). In practice, municipal contract expenses can be covered 
with current revenues. Cf. Mun. Admin. Servs. Inc. v. City of 
Beaumont, 969 S.W.2d 31, 39 (Tex. App.—Texarkana 1998, no pet.). Therefore, 
Article XI, Section 5 does not necessarily preclude an ordinance-based 
contract.
            
5. Disclaimer of Vested Rights
            
In a further effort to negate contractual intent, the City asserts that Houston 
Ordinance No. 96-1088 disclaims any contractual effect in the Ordinances at 
issue in this case. Houston Ordinance No. 96-1088 provides:
That the 
provisions of article III of chapter 14 of the Code of Ordinances, Houston, 
Texas, as amended in section 2 of this ordinance, are subject to amendment or 
repeal at any time and payment of benefits thereunder is subject to the 
appropriation or allocation of funds for that purpose by the city council. No 
provision of this ordinance shall be construed to create a vested right of 
compensation for sick leave benefits or, where applicable, for termination 
payments. 
 
 Houston, 
Tex., Ordinance 96-1088 § 7 (Oct. 23, 1996).      

            
The City points us to several cases in which documents that might otherwise have 
constituted contracts included statements that effectively disclaimed 
contractual intent, particularly County of Dallas v. Wiland, 216 S.W.3d 
344 (Tex. 2007). In Wiland, the disclaimer stated: “Nothing in this 
[manual] is to be construed as a contract of employment or a provision 
guaranteeing the specific term or tenure of employment.” Id. at 349. We 
recognized that this statement precluded giving the manual in question any 
contractual effect. Id. at 352, 354. The City contends the instant 
ordinance likewise disclaims contractual intent. We disagree.  
            
Disclaiming a vested right to compensation is not equivalent to a disclaimer of 
contractual intent—to the contrary, an employee may have a valid employment 
contract, promising that benefits will accrue upon performance, but those 
benefits will not vest until the employee actually performs. See Vanegas, 
302 S.W.3d at 303 (“But whether the promise was illusory at the time it was made 
is irrelevant; what matters is whether the promise became enforceable by the 
time of the breach.”). The disclaimer amounts to a warning to City employees 
that the City can change the benefits over time—in other words, the offer 
that the City is making, as regards to sick leave benefits, is subject to 
change.12 At most, the disclaimer indicates that 
the promises contained in the Ordinances remained illusory until the 
Firefighters performed. See id. (“Almost all unilateral contracts begin 
as illusory promises.”).
            
Further, the scope of the disclaimer in Ordinance 96-1088 is limited by its 
express language. It refers only to Article III of Chapter 14 of the Houston 
Code of Ordinances. That Article is concerned only with sick leave for City 
civil service employees generally, see Houston, Tex., Code of Ordinances ch. 
14, art. III, while the Ordinances the Firefighters point to as evidencing 
contractual intent are located in the Fire Department provisions of Chapter 34, 
not Chapter 14. The disclaimer is likewise limited to “sick leave benefits or, 
where applicable, for termination payments.” The plain meaning of the clause 
“where applicable, for termination payments” is to include accrued sick leave 
benefits that would give rise to a termination payment. Thus, even if we accept 
the City’s construction of the disclaimer—that it is a contractual 
disclaimer—its scope would only cover the Firefighters’ right to that portion of 
their claims based on sick leave. But, in fact, the Firefighters’ claims are 
based on several other components of compensation, such as premium pay, vacation 
leave, holiday leave, and overtime pay, see City of Houston, 183 S.W.3d 
at 419, 424, all of which fall outside the scope of any disclaimer achieved by 
Ordinance 96-1088.
            
6. Scope of Section 271.152’s Waiver of Immunity
            
The City next claims that the Firefighters seek to avoid, rather than 
enforce, their ordinance-based contract, and their suit is therefore not a suit 
for breach of a contract within the limited scope of section 271.152’s 
waiver. See Tex. Loc. Gov’t Code 
§ 271.152 (waiving immunity “for the purpose of adjudicating a claim 
for breach of the contract”). The pleadings provide some indication that the 
Firefighters’ ultimate recovery could depend on a showing that certain parts of 
the City of Houston Code of Ordinances violated state law, specifically the 
civil service provisions of Chapters 142 and 143 of the Local Government Code. 
See City of Houston, 183 S.W.3d at 424–25. That indeed was the basis for 
much of the court of appeals’ original opinion in favor of the Firefighters. 
See generally id. at 419–26. We decline to decide whether any of 
the Ordinances violate these specific statutory provisions, leaving this merits 
determination to the trial court, see Bland Indep. Sch. Dist. v. Blue, 34 
S.W.3d 547, 554 (Tex. 2000), but conclude the City’s argument fails because the 
Firefighters’ claim is, overall, one for breach of contract.
            
In determining whether jurisdiction is proper, we look to the pleadings, 
“construing them liberally in favor of the plaintiffs and looking to the 
pleader’s intent.” City of Waco v. Kirwan, 298 S.W.3d 618, 621 (Tex. 
2009). Viewing the Firefighters’ pleadings as a whole, the Firefighters 
currently plead a cause of action for breach of contract. 
            
Further, it is “settled that the laws which subsist at the time and place of the 
making of a contract . . . form a part of it, as if they 
were expressly referred to or incorporated in its terms.” Von Hoffman v. City 
of Quincy, 71 U.S. 535, 550 (1867). Relevant statutes can form a part of an 
employment contract. Byrd, 6 S.W.2d at 740 (holding that a state law 
governing civil service pensions was “part of the contract of employment and is 
read into the contract as fully as though it had been actually incorporated 
therein”); see also Wilson v. Andrews, 10 S.W.3d 663, 667–68 (Tex. 
1999) (holding that the Civil Service Act, as amended, becomes part of the 
employment contract between a city and its firefighters when the city adopts 
it). The trial court may determine that at least some portions of the relevant 
statutes form a part of the unilateral contract between the City and 
Firefighters. Therefore, the Firefighters’ suit is properly characterized as one 
for breach of contract. 
            
7. Intersection of Local Government Code Sections 271.152 and 180.006
            
The City asserts the Legislature did not intend for section 271.152 to waive 
immunity in this type of suit, as evidenced by its subsequent enactment of Local 
Government Code section 180.006. The City argues that the Legislature’s 
enactment of section 180.006—which prospectively waives governmental immunity 
from back-pay claims by police and firefighters13—would be a meaningless act if the same 
waiver already existed under section 271.152. The City contends the 
Firefighters’ claims would clearly fall within the scope of section 180.006, but 
for the fact that section 180.006 is not retrospective. See Act of May 
25, 2007, 80th Leg., R.S., ch. 1200, § 3, 2007 Tex. Gen. Laws 4071, 4072. 
Accordingly, the City claims that if the Legislature had intended to waive 
immunity for a suit of this type, it would have made the waiver in section 
180.006 retrospective. The City invokes the rule of statutory construction that 
“the legislature is never presumed to do a useless act.” Hunter v. Fort Worth 
Capital Corp., 620 S.W.2d 547, 551 (Tex. 1981). We disagree that applying 
section 271.152 here would in any way render section 180.006 “useless” given the 
distinctions between the two statutes. 
            
Sections 180.006 and 271.152 differ significantly in scope and effect. Section 
271.152 is a retroactive waiver of immunity, while section 180.006 is 
prospective only. Compare Act of May 23, 2005, 79th Leg., R.S., ch. 604, 
§ 2, 2005 Tex. Gen. Laws 1548, 1549, with Act of May 25, 2007, 80th 
Leg., R.S., ch. 1200, § 4, 2007 Tex. Gen. Laws 4071, 4072. Section 271.152 
applies to breaches of contract generally, while section 180.006 is limited to 
back-pay claims and related penalties only. Compare Tex. Loc. Gov’t Code § 271.152, 
with id. § 180.006(b)–(c). Moreover, section 180.006 does not 
require a contract in writing, while section 271.152 does. Compare id. 
§ 180.006(b), with id. § 271.151(2). Finally, section 180.006 
is limited to a specific class of persons—civil service firefighters or police 
officers—while section 271.152 has no such limitation. Compare id. 
§ 180.006(a), with id. § 271.152.
            
Although the Firefighters’ suit might fall within the scope of both waivers if 
it accrued and were filed today, that does not render section 180.006 “useless.” 
Because section 180.006 does not require a written contract, it also applies to 
those qualifying civil service firefighters and police officers who, unlike the 
Firefighters in this case, cannot point to a written contract, and for whom 
there was previously no waiver of immunity until its enactment. See id. 
§ 180.006(a). Accordingly, the “no useless act” rule of construction does 
not preclude applying section 271.152 to the Firefighters’ claims.14
            
Moreover, section 271.152 is otherwise clear and unambiguous, and so there is no 
reason to speculate further as to legislative intent. See Alex Sheshunoff 
Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 651–52 (Tex. 2006). We have 
determined that a written contract exists here, as embodied in the Ordinances, 
and the contract meets the elements the Legislature set forth in section 
271.151(2). Therefore, by its plain language, section 271.152’s waiver applies 
to this suit.
            
8. Other Considerations and Conclusion
            
Finally, the City and amici raise concerns about the impact of our holding, 
claiming it will transmute vast numbers of ordinances into contracts. But this 
fear overlooks the basic requirements of contract law—just as with any writing 
alleged to be a contract, an ordinance can only be enforced as a contract in a 
court of law if it satisfies the requirements of a contract. Moreover, most 
municipal ordinances will not function as contracts within the meaning of 
section 271.151(2), because most will not contain the detailed request for 
performance and promised compensation found in Chapter 34 of the Houston Code of 
Ordinances, nor will they be cognizable as an offer to identifiable offerees as 
these Ordinances are. In addition, as discussed above, ordinances have long 
functioned at times as contractual instruments in this state, without any 
apparent adverse effect. See, e.g., City of San Antonio, 91 
S.W.2d at 1056–57.
            
In conclusion, because the Ordinances at issue are addressed to the 
Firefighters, promising in detail specific compensation in return for specified 
services, and meet each element in the definition of a contract under Local 
Government Code section 271.151(2), we hold the relevant provisions of Chapter 
34 of the City of Houston Code of Ordinances constitute a unilateral 
contract that became effective and enforceable as to these retired Firefighters 
who have completed the requested performance, and the City’s immunity is thereby 
waived pursuant to section 271.152.15
            
E. Civil Service Statutes as Contract
            
In their cross-petition, the Firefighters assert that certain provisions of 
Local Government Code Chapter 143 likewise constitute a contract between the 
City and the Firefighters. Chapter 143 creates a civil service classification 
system for emergency service personnel in those qualifying municipalities that 
vote to adopt it. Tex. Loc. Gov’t 
Code § 143.002(a); Wilson, 10 S.W.3d at 666. The Firefighters 
argue that, when the City voted to “opt-in” to Chapter 143, the statute became 
an offer by the City that the Firefighters accepted by performing. 
            
In order to qualify as a contract, the document or documents must evidence the 
parties’ intent to be bound. See Owen v. Hendricks, 433 S.W.2d 164, 
166–67 (Tex. 1968). That intention must be manifested in a way that justifies a 
promisee’s understanding that a promise has been made to him. See Montgomery 
Cnty. Hosp. Dist., 965 S.W.2d at 502. Because Chapter 143 was written by the 
Legislature, not by the City, we cannot presume that it is a communication of 
intent by the City. Rather, we must examine the manner in which the City adopted 
Chapter 143 to determine whether the City communicated an intent to be bound to 
any potential promisees. Although the original City Ordinance adopting Chapter 
143 is not part of the record, we note the reference to Chapter 143 that 
currently appears in the Houston Code of Ordinances is as follows:
At an 
election held in the city January 31, 1948, this Act was adopted by a majority 
vote of the votes cast at the election. It differs in many important respects 
from the city’s civil service charter provisions (Art. Va of the foregoing 
charter) and no action should be taken in the matter of civil service, whether 
pertaining to policemen and firemen or to other employees without first 
consulting ch. 143 . . . since some of its provisions touch 
upon the entire subject of composition of the city’s civil service commission 
and of the executive administration of the civil service functions.
 
Houston, Tex., Code of Ordinances app. 
B.
            
Unlike the Ordinances discussed above, which make specific, detailed promises 
to the Firefighters, the above statement is addressed to City policy 
makers and the City’s civil service commission. It is a warning to them that the 
City, having elected to be governed by the Civil Service Act, must comply with 
it, or risk adverse consequences in court. See Wilson, 10 S.W.3d at 668 
(“As long as the Civil Service Act governs [the city], however, it must adhere 
to the Act[] . . . .”). In other words, it fails the basic 
contract requirement of communication of an offer to the offeree. See
Restatement (Second) of Contracts 
§ 24; Restatement of 
Contracts § 23 (“[I]t is essential to the existence of an offer that 
there should be a proposal by the offeror to the 
offeree . . . .”). Accordingly, we cannot say the City has 
adopted Chapter 143 in a manner that communicates a promise or an offer to the 
Firefighters. We thus conclude that Chapter 143 does not, in itself, constitute 
a contract entered into by the City, and so cannot be a “contract subject to 
this subchapter” for purposes of section 271.152’s waiver of immunity. 
            
We of course do not hold that a statute cannot be incorporated by reference into 
a contract—as mentioned above, the trial court may conclude that at least some 
portions of Chapter 143 were incorporated by reference into the unilateral 
employment contract at issue here. Rather, we hold that when a municipality 
adopts Chapter 143—without sufficient manifestation of an intent to be 
contractually bound in the ordinance or other instrument by which it is 
adopted—Chapter 143 does not, in itself, constitute a stand-alone municipal 
contract.16 
            
F. The Agreements as Contracts for Purposes of Local Government Code Section 
271.152’s Waiver of Governmental Immunity
            
As a final basis for waiver of immunity under Local Government Code section 
271.152, the Firefighters’ cross-petition also attacks the court of appeals’ 
holding that those Firefighters whose employment fell within the scope of the 
MCAs and the CBA lacked standing to sue under those Agreements. 290 S.W.3d at 
271. Finding a lack of standing, the court of appeals did not reach the issue of 
whether the Agreements qualify under section 271.152’s waiver of immunity. 
See id. We first address the issue of standing, then determine whether 
the Agreements fall within the scope of section 271.151(2)’s definition of a 
“contract subject to this subchapter.”
            
Standing is a constitutional prerequisite to suit. Williams v. Lara, 52 
S.W.3d 171, 178 (Tex. 2001). It is founded in the separation-of-powers doctrine, 
and in the Texas open-courts provision. Tex. Ass’n of Bus. v. Tex. Air 
Control Bd., 852 S.W.2d 440, 447 (Tex. 1993). The separation-of-powers 
doctrine precludes courts from issuing advisory opinions on abstract questions 
of law that do not bind actual parties. See Tex. Const. art. II, § 1; Brown 
v. Todd, 53 S.W.3d 297, 302 (Tex. 2001). In complementary fashion, the 
open-courts provision guarantees access to the courts, but the purpose is to 
make whole those who have suffered actual injury, not to provide a forum for 
general injuries or hypothetical complaints. Tex. Air Control Bd., 852 
S.W.2d at 444. “Thus, as a general rule, to have standing an individual must 
demonstrate a particularized interest . . . distinct from 
. . . the public at large.” S. Tex. Water Auth. v. Lomas, 
223 S.W.3d 304, 307 (Tex. 2007) (per curiam).
1. Standing Under the MCAs 
            
In holding the Firefighters had no standing to sue for alleged breaches of the 
MCAs, the court of appeals invoked the doctrine of inclusio unius est 
exclusio alterius, 290 S.W.3d at 271, which is the presumption that 
purposeful inclusion of specific terms in a writing implies the purposeful 
exclusion of terms that do not appear. See Newman v. Blum, 9 S.W. 178, 
178 (Tex. 1888). Both MCAs state they were negotiated “by and between the 
Houston Professional Fire Fighters Association and the City of Houston, Texas.” 
Both provide that grievances may be resolved either through the statutory 
grievance procedures of Local Government Code sections 143.127–.134, or by 
judicial resolution under section 143.206 upon “application by either party.” 
Section 143.206 (which the MCAs incorporate by reference) likewise speaks in 
terms of “either party” and “other party.” Tex. Loc. Gov’t Code § 143.206(b). 
“The state district court of the judicial district in which the municipality is 
located has full authority and jurisdiction on the application of either 
party aggrieved by an action or omission of the other 
party . . . .” Id. (emphasis added). From this 
language, applying the inclusio unius doctrine, the court of appeals 
concluded that only the Union and the City had standing to sue for breach of the 
MCAs. 290 S.W.3d at 271. Although inclusio unius is a sound maxim of 
construction, judicial review cannot start and end on such a narrow basis when, 
as here, there is another valid ground to confer standing—the Firefighters’ 
status as third-party beneficiaries under the MCAs.
            
Texas law recognizes that third parties have standing to recover under a 
contract that is clearly intended for their direct benefit. Stine v. 
Stewart, 80 S.W.3d 586, 589 (Tex. 2002) (per curiam). In determining whether 
there is intent to benefit a third party, we look to the entire agreement, 
giving effect to all its provisions. Id. at 590. The contract need not 
have been executed solely to benefit the noncontracting party. Id. 
at 591. We do not create a third-party benefit by implication; the presumption 
is the parties contracted only for themselves, absent a clear showing of intent 
otherwise. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 
651–52 (Tex. 1999). However, the agreement need not state “third-party 
beneficiary” or any similar magic words. See Stine, 80 S.W.3d at 590–91. 
Finally, a third party cannot enforce a contract if the third party benefits 
only incidentally from it. MCI, 995 S.W.2d at 651–52. 
            
 The MCAs reflect an intent to benefit the Firefighters as third parties to 
the agreements—indeed, the Union was required by its duty of representation to 
seek benefits for the Firefighters in the agreements. Both agreements make this 
purpose plain in their preambles by stating that one purpose is to provide 
certain wages, hours, and conditions of employment.17 Both agreements directly guarantee 
benefits to the Firefighters, in particular in terms of salary and termination 
payments,18 overtime pay,19 and vacation leave.20 These benefits are not offered to the 
world at large as a general beneficence, but are limited to the Firefighters 
through the definition of “employee”21 included in the agreements. These 
guarantees of compensation are not promised to the City or to the Union, but to 
the Firefighters. As such, the City and the Union expressed a clear intent to 
benefit the Firefighters when they contracted through the MCAs.22 Accordingly, the Firefighters have 
standing to enforce the agreements.23
            
2. Standing under the CBA
            
The City asserts two arguments to defeat the Firefighters’ claim to standing 
under the CBA: failure to establish a breach of the duty of fair representation 
by the Firefighters’ Union, and failure to exhaust the CBA’s grievance 
procedures. We reject both objections, and conclude the Firefighters have 
standing as third-party beneficiaries to sue for breach of the CBA.
            
The court of appeals held the Firefighters lack standing under the CBA because 
they failed to establish that their Union breached its duty of fair 
representation. The court of appeals reasoned that showing such a breach “is an 
‘indispensable predicate’ to an employee’s action against the City for violation 
of the collective bargaining agreement.” 290 S.W.3d at 271 (quoting Metro. 
Transit Auth. v. Burks, 79 S.W.3d 254, 257 (Tex. App.—Houston [14th Dist.] 
2002, no pet.)). However, that “predicate” only applies to “hybrid” suits—cases 
in which the employee alleges both breach of the collective bargaining agreement 
by the employer, and breach of the duty of fair representation by the 
union, as when the union has mishandled grievance and arbitration proceedings. 
See Reed v. United Transp. Union, 488 U.S. 319, 328 (1989). It 
typically is an issue in suits under federal labor law, such as when an employee 
who is covered by a collective bargaining agreement sues for wrongful 
termination after losing under grievance and binding arbitration 
procedures. See United Parcel Serv., Inc. v. Mitchell, 451 U.S. 
56, 62 (1981). Here, no grievance or arbitration occurred at all, so whether the 
Union breached its duty is not an issue. See id. As such, the 
Firefighters are not required to establish the predicate of any breach of duty. 
In short, the rule invoked by the court of appeals does not apply to this 
case.
            
The City argues in the alternative the Firefighters have no standing under the 
CBA because they have not exhausted the administrative remedies required by 
it.24 This argument ignores the undisputed 
fact that the Firefighters are no longer active employees or members of the 
bargaining unit, but are retirees. As retirees, the CBA’s grievance procedures 
by their own plain language no longer apply to the Firefighters.
            
Once employees retire, they cease to be employees and become retirees. See 
Allied Chem. & Alkali Workers, Local Union No. 1 v. Pittsburgh Plate Glass 
Co., 404 U.S. 157, 168 (1971). “The ordinary meaning of ‘employee’ 
does not include retired workers; retired employees have ceased to work for 
another for hire.” Id. Indeed, such retirees are no longer even a part of 
the collective bargaining unit. Id. at 175–76. This is so not only 
because they are no longer employees, but because their interests are no longer 
adequately aligned with that of active employees so as to be jointly represented 
as a unit. Id. at 172–73. 
            
The CBA’s plain language does not include retired firefighters in the class of 
persons who are bound by the Agreement.25 Article 14 of the CBA makes the 
grievance procedure available only to the Union and active firefighters: “The 
Association or any bargaining unit Firefighter may file a grievance under 
the terms of this Agreement.” (Emphasis added.) Article 1 of the CBA defines 
both “Member of the Bargaining Unit” and “Firefighter” as “any full time, 
permanent paid employee” of the Fire Department. As retirees, the Firefighters 
do not meet that definition: they are no longer full-time employees, nor are 
they paid employees. See id. at 168. Therefore they do not fall within 
the class of persons to whom the grievance procedure is made available. 
            
 Moreover, the terms of the grievance procedures confirm that they do not 
logically apply to retirees like the Firefighters. Article 14, section 2, 
of the CBA encourages an aggrieved firefighter to “verbally inform his/her 
immediate supervisor of the grievance.” As retirees, the Firefighters have no 
immediate supervisors to inform. 
            
Further, because the Firefighters’ cause of action only accrued when they 
received their allegedly deficient termination payments, which was after they 
retired, they had no grievance to assert during the time period when they were 
employees governed by the CBA’s grievance procedures. Accordingly, we conclude 
the Firefighters’ failure to exhaust the CBA’s administrative remedies is not a 
bar to their standing to sue.
            
Finally, as with the MCAs, the Firefighters have standing as third-party 
beneficiaries under the CBA. Like the MCAs, it was negotiated by the Union with 
the clear intent to benefit the Firefighters. Significantly, collective 
bargaining agreements are recognized as a type of third-party beneficiary 
contract. See Restatement 
(Second) of Contracts § 302 cmt. d, illus. 14 (“A, a labor union, 
enters into a collective bargaining agreement with B, an employer, in which B 
promises not to discriminate against any employee because of his membership in 
A. All B’s employees who are members of A are intended beneficiaries of the 
promise.”).
            
The CBA states: 
It is the 
intent and purpose of this Agreement to achieve and maintain harmonious 
relations between the parties, adjust and to establish the rates of pay, hours 
of work, and other conditions of employment for all Bargaining Unit Members and 
provide for the equitable and orderly adjustment of grievances which may arise 
during the term of this Agreement.
 
            
In its references to rates of pay, hours of work, and conditions of employment, 
this is a clear statement of an intent to benefit parties other than the Union 
and the City. As former Bargaining Unit Members, the Firefighters became 
entitled to rights under the agreement by performing in accordance with it. Like 
the MCAs, the CBA made specific promises to the Firefighters when they were 
active employees. In particular, these included terms concerning salary,26 overtime pay,27 sick leave,28 and vacation leave.29 All these provisions in the CBA 
demonstrate a manifest intent to benefit the Firefighters by guaranteeing 
certain terms of compensation to them. As such, we conclude the Firefighters 
have standing as third-party beneficiaries to enforce the CBA.
            
3. Section 271.152’s Waiver of Immunity as to the MCAs and CBA 
            
The MCAs and CBA, like the Ordinances, constitute contracts subject to section 
271.152’s waiver of immunity, because they also meet the five definitional 
elements in section 271.151(2). First, they are indisputably written contracts. 
Second, they each state the essential terms of the agreement, such as salary, 
overtime compensation, vacation leave, and work conditions. Third, like the 
Ordinances, they provide for services, namely the provision of fire protection 
services to the City. Fourth, the services are provided to a local governmental 
entity—the City. Finally, all three Agreements are signed by the mayor of the 
City, who appears to have been duly authorized to do so, thus constituting 
execution of the Agreements. 
            

IV. 
Conclusion           
            
            
Having concluded the City entered into a unilateral contract with the 
Firefighters through its Ordinances, and because the Legislature waived the 
City’s immunity from suit through its enactment of Local Government Code section 
271.152 for a suit claiming breach of that contract, we hold the trial court 
properly denied the City’s plea to the jurisdiction. We also hold that section 
271.152 waives immunity from suit for breach of the MCAs and CBA, and the 
Firefighters have standing to sue under those Agreements. Finally, we hold 
Chapter 143 of the Local Government Code, as adopted by the City, does not, in 
itself, constitute a contract between the City and the Firefighters, and it 
therefore is not a contract within the scope of section 271.152’s waiver of 
immunity. Accordingly, we affirm the judgment of the court of appeals in part, 
reverse in part, and remand the case to the trial court for further proceedings 
consistent with this opinion.
 
                                                                        

                                    
                                                
___________________________________
                                                                                    
Eva. M. Guzman
                                                                                    
Justice
 
OPINION 
DELIVERED: March 18, 2011
 
                                                                        

Appendix
Houston, Tex., Code of Ordinances ch. 
34, art. I, § 34-3(b)—Payment for sick or vacation leave upon firemen’s or 
policemen’s death or termination of employment; repayment upon reemployment.
(a) 
Reserved.
(b) 
Firefighters or police officers who are members of the classified service of the 
fire and police departments of the city may accumulate vacation time to a total 
of 720 working hours; however, any firefighter or police officer who leaves the 
classified service for any reason shall receive, in a lump sum payment, the full 
amount of his salary for the period of his accumulated vacation leave, minus any 
hours of vacation leave previously taken during the calendar year in which the 
termination occurs. However, any fire fighter or police officer who loses his 
life, or is forced to leave the classified service, as a result of a line of 
duty injury or illness, or the beneficiaries of such fire fighter or police 
officer, shall receive in a lump sum payment the full amount of his salary for 
the total number of his working hours of accumulated vacation time. 
(c) For 
purposes of determining the amount to which a fireman or policeman or his 
beneficiaries is entitled under subsections (a) and (b) of this section, 
“salary” shall mean the authorized base pay of the employee plus the longevity 
rate he has attained up to the date of separation or death. For purposes of this 
section, “salary” shall not include educational or training incentive pay or any 
other form of premium pay except as provided above. 
(d) 
Reserved.
(Code 
1968, § 2-35; Ord. No. 71-1592, § 1, 9-1-71; Ord. No. 75-139, § 1, 1-28-75; Ord. 
No. 76-1882, § 1, 11-2-76; Ord. No. 78-180, § 1, 2-1-78; Ord. No. 90-1138, § 2, 
9-19-90; Ord. No. 96-1076, § 5, 10-16-96; Ord. No. 96-1088, § 4, 10-23-96).
 
Houston, Tex., Code of Ordinances ch. 
34, art. III, § 34-46—Created; duties generally.
There 
is hereby created a fire department, the officers and employees of which, 
excepting those attending the firemen’s training school, those designated as 
apprentice fireman and those who are on probation, are charged with the duty of 
preventing and extinguishing fires and conflagrations and preventing the loss of 
human life and property by fire, and doing all such other duties as are imposed 
upon them by ordinance of the city council. In addition to the duties and 
functions specifically set forth in this article for the various officers of the 
fire department, each of such officers and those employees acting under them 
shall perform such other and further duties as may be required of them by the 
mayor or their superior officers, or by the provisions of the state law, the 
Charter and ordinances of the city. 
(Code 
1968, § 18-1; Ord. No. 73-2079, § 1, 11-21-73).
 
Houston, Tex., Code of Ordinances ch. 
34, art. III, § 34-48—Fire prevention division; duties generally.
The 
fire prevention division of the fire department and its personnel shall be 
charged with the primary duty of enforcing all laws of the state and ordinances 
of the city covering the following: 
(1) The 
prevention of fires.
(2) The 
storage and use of explosives and inflammables.
(3) The 
installation and maintenance of automatic and other fire alarm systems and 
protection systems, fire extinguishers and equipment. 
(4) The 
maintenance and regulation of fire escapes.
(5) The 
means and adequacy of exits in cases of fires from factories, schools, lodging 
houses, convalescent homes, hotels, asylums, hospitals, churches, public halls, 
theaters, and in all other places where numbers of persons work, live, or 
congregate from time to time for any purposes. 
(6) The 
investigation of causes, origin and circumstances of fire.
(7) The 
conducting of fire prevention campaigns and the circulation of fire prevention 
literature, for the benefit of civic clubs, labor organizations, business and 
commercial enterprises, schools, factories, lodging houses, hotels, lodges, 
hospitals, convalescent homes, churches, halls, theaters and the general public 
in the interest of fire prevention and public safety. 
(8) 
Such other duties as may be imposed from time to time by the mayor, the laws of 
the state, ordinances of the city, and by the chief of the fire department and 
the fire marshal. 
(Code 
1968, § 18-3; Ord. No. 73-2079, § 1, 11-21-73).
 
Houston, Tex., Code of Ordinances ch. 
34, art. III, § 34-50—Divisions of fire department; general duties and 
responsibilities of each division.
(a) The 
fire department shall consist of three divisions, to be known as the fire 
suppression division, the fire alarm division and the fire prevention division. 

(b) The 
fire suppression division and its personnel shall be charged with the primary 
duty of extinguishing fires and conflagrations and preventing the loss of human 
life and property by fire. 
(c) The 
fire alarm division of the fire department and its personnel shall be charged 
with the primary duty of operating the fire alarm system in the city, and 
performing or causing to be performed such other duties and functions as may be 
assigned to or required of it or them by the mayor, the chief of the fire 
department, by state law and the provisions of the Charter or ordinances of the 
city. 
(d) The 
fire prevention division and its personnel shall be charged with the primary 
duty of conducting inspections, reviewing plans for construction and conducting 
public information campaigns to reduce the loss of life and property by fire. 

(e) In 
addition to the duties of the divisions and their personnel, as hereinabove set 
out, each division and its personnel shall do and perform, or cause to be done 
and performed, such other duties and functions as may be assigned to or required 
of such section by the mayor, the fire chief, and the provisions of the state 
law, the Charter and ordinances of the city. 
(Code 
1968, § 18-5; Ord. No. 73-2079, § 1, 11-21-73; Ord. No. 2010-803, § 9, 
10-13-2010).
 
Houston, Tex., Code of Ordinances ch. 
34, art. III, § 34-59—Workweek; overtime compensation; sick leave; vacation 
leave.
(a) 
Definitions. Unless otherwise indicated, the following words shall, for purposes 
of this section, have the following meanings:
(1) 
Compensatory time or compensatory time off. Hours during which 
eligible employees are not working and which are not counted as hours worked 
during the applicable workweek for purposes of overtime compensation and for 
which the employee is compensated at the employee’s regular rate. 
(2) 
Eligible employee. All classified members of the fire department subject to 
the provisions of articles 1269m and 1269p of the Revised Civil Statutes of 
Texas. 
(3) 
Overtime. Dependent upon the duty assignment and work cycle of the 
firemen, overtime shall be that time worked in excess of either: 
a. 40 
hours in a workweek; or
b. An 
average number of hours of actual work per week over a calendar year of 46.7 
hours as authorized by the provisions of article 1269p. 
(4) 
Regular rate of pay. Regular rate of pay shall include: 
a. Base 
pay;
b. 
Longevity pay;
c. 
Educational incentive pay;
d. 
Assignment pay; and
 
e. 
Higher classification pay where authorized.
The 
term “regular rate of pay” shall not include compensation excluded under Section 
7(e) of the Fair Labor Standards Act of 1938, as amended, or the interpretative 
regulations and administrative or judicial opinions construing that section. 

(5) 
Workweek. Dependent upon the duty assignment and work cycle of the 
fireman, the workweek shall be either: 
a. 
Forty hours of actual work within the consecutive one hundred sixty-eight-hour 
period beginning with the dayshift Saturday; or 
b. An 
average number of hours of actual work per week over a calendar year of 46.7 
hours as authorized by the provisions of article 1269p. 
(6) 
Time actually worked or actual work. The time the employee is 
actually on duty or on a council declared holiday, on authorized sick leave, 
vacation leave, compensatory time off, death in the family leave or any other 
authorized leave, provided that this is for the purpose of overtime calculations 
dealt with in this section only and not for purposes of determining compliance 
with article 1269p, section 6(D) of the Revised Civil Statutes of Texas, which 
shall be governed by state law. Hours spent by a fireman doing the work of an 
injured or ill fireman pursuant to section 26(h) of article 1269m shall not 
count as hours worked for purposes of overtime compensation. Hours worked in 
“substitution” pursuant to subsection (f) hereof shall not be counted as time 
actually worked for purposes of overtime compensation. Calculation of time 
actually worked shall commence upon the arrival of the fireman at his or her 
assigned place of duty for the particular duty day at the time established for 
the commencement of the work shift. 
(b) 
Eligible employees shall have a regularly scheduled workweek on a schedule 
established by the department. Any fireman whose duties involve either the 
extinguishment of fires or the delivery of emergency medical services shall be 
entitled to overtime pay for those hours in excess of the scheduled work cycle 
as established pursuant to article 1269p. Any fireman whose duty assignment is 
not described by the foregoing shall be entitled to overtime pay for all time 
actually worked in excess of his or her forty-hour workweek. 
(c) The 
fire chief shall cause to be maintained accurate, complete and permanent records 
of all employee attendance and time actually worked during each workweek. He 
shall make reports of attendance and time actually worked as may be prescribed 
by the civil service commission. He shall certify the correctness of the 
reports. The reports shall be forwarded to the human resources department on a 
weekly basis. 
(d) All 
eligible employees shall be compensated for working overtime beyond their 
regularly scheduled workweek by the payment of either monetary compensation at 
the rate of 1½ times their regular rate of pay or compensatory time at the rate 
of 1½ hours for each overtime hour worked. The following shall apply to the 
payment of overtime compensation: 
(1) The 
fire chief or his designated subordinate shall verify that the overtime is 
needed to complete a required city service or operation. 
(2) 
Upon request of the fireman, the fire chief may, in his discretion, grant 
compensatory time in lieu of cash payment for overtime. Where overtime is paid 
in cash it shall be paid in the pay period in which it is earned or as soon 
thereafter as is possible, taking into consideration both the work cycle and the 
payroll system used. 
(3) 
Where the employee is granted compensatory time the following shall apply:
a. The 
number of hours of compensatory time which may be accumulated shall not exceed 
480.
b. 
Accrued compensatory time which is given must be used within 365 calendar days 
from the date accrued, provided that it does not unduly disrupt departmental 
operations. The fire chief shall issue appropriate regulations governing the use 
of compensatory time. 
c. 
Accrued compensatory time not taken within 365 days from the date of accrual 
shall be paid for, in cash, at the greater of:
1. The 
employee’s average regular rate of pay over the employee’s last three years of 
employment by the city preceding the date of payment; or 
2. The 
employee’s regular rate of pay as of the end of the pay period preceding the 
date of payment.
Such 
payment shall be made in the pay period following expiration of the three 
hundred sixty-five-day period. 
d. The 
fire department shall maintain detailed records of the accumulation and use of 
compensatory time on a form prescribed by the human resources director. 
e. 
Accumulated compensatory time shall be used in accordance with the 
first-in-first-out (FIFO) accounting principle.
f. Any 
compensatory time accrued prior to April 15, 1986 and not used shall be carried 
on the records of the department until such time as it is used by the employee. 
The employee shall not be entitled to monetary compensation for any compensatory 
time accrued prior to April 15, 1986. 
(e) All 
classified firefighters of the fire department who are subject to the provisions 
of chapter 142 and chapter 143 of the Local Government Code shall be entitled to 
the same number of holidays or days in lieu thereof as are granted to all other 
employees of the city as provided below: 
(1) All 
holidays shall have an accrual value of eight hours. When a classified employee 
is unable to take the holiday, he or she shall have eight hours posted to his or 
her accrued holiday balance. When an accrued holiday day is taken in lieu of the 
regularly scheduled holiday, eight hours will be charged; however, its usage 
value will be dependent upon the shift worked by the classified employee at the 
time the day in lieu of the holiday is taken. Any classified employee in the 
Emergency Operations Division assigned to the average of 46.7 hours per week 
work schedule shall receive 12 hours off for each holiday accrued. Classified 
personnel assigned to ten-hour work days shall receive ten hours of leave and 
all other classified personnel shall receive eight hours off for each holiday 
accrued. 
(2) 
Where a holiday falls on a regularly scheduled day off, any employee so affected 
shall accrue the holiday in the manner described in subsection (e)(1) above. 

(3) 
Employees in the Emergency Operations Division and assigned to the average of 
46.7 hours per week work schedule who are normally scheduled to work on the 
actual dates of July 4th, December 24th, December 25th, and January 1st, as well 
as the following City approved Holidays (Martin Luther King Jr. Day, Memorial 
Day, Labor Day, Veteran’s Day, Thanksgiving Day, and the day after Thanksgiving 
Day) shall accrue two holidays, provided the member is physically on-duty and 
completes the entire 24-hour shift, beginning at 0630 hours of the holiday in 
question. The holidays will accrue as two eight-hour accruals for the holiday 
shift worked. 
Employees in the Emergency Operations Division, not normally 
scheduled to work, that are called in to work on the actual dates of July 4th, 
December 24th, December 25th, and January 1st, as well as the following City 
approved Holidays (Martin Luther King Jr. Day, Memorial Day, Labor Day, 
Veteran’s Day, Thanksgiving Day) shall accrue one eight-hour accrual for the 
holiday shift worked. 
(4) 
Employees in the Emergency Operations Division and assigned to the average of 
46.7 hours per week work schedule who are not normally scheduled to work, that 
are called in to work on the actual dates of July 4th, December 24th, December 
25th and January 1st, as well as the following City approved Holidays (Martin 
Luther King Jr. Day, Memorial Day, Labor Day, Veteran’s Day, Thanksgiving Day, 
and the day after Thanksgiving Day) shall be paid at the rate of time and 
one-half the hourly rate for actual hours worked during the 24-hour period 
beginning at 0630 hours of the holiday in question in lieu of the extra board 
straight time rate. 
(5) 
When a holiday occurs during any paid leave of absence (vacation, sick time, 
injury on duty, etc.), the holiday is considered to have not been observed and 
the holiday shall be accrued and that day’s absence will be changed against paid 
leave. 
(6) Any 
classified employee who terminates his or her employment and has an accrued 
holiday leave-balance shall be paid for such holidays, not to exceed a total of 
11 holidays. The limitation of 11 holidays shall not apply to a classified 
employee who leaves the classified service because of disability or death, and 
in such event, the employee, or his/her estate, shall be paid for all of the 
accrued holiday balance. All holidays for which payment is made upon 
termination, disability or death shall be valued at eight hours, regardless of 
the scheduled work hours or duties assigned to the firefighter at the time they 
were earned. 
(f) The fire chief shall prepare 
and issue administrative guidelines to implement the provisions of section 26(h) 
of article 1269m wherein firemen are authorized to voluntarily do the work of an 
injured or ill fireman. 
(g) If 
the fire chief elects to permit “substitution,” as that term is used in the 
context of the Fair Labor Standards Act and as the practice is described by 
section 7 of article 1269p, he shall prepare and issue administrative guidelines 
to implement the provisions of section 7 of article 1269p subject to all 
applicable provisions of the Fair Labor Standards Act and the interpretations 
thereof. 
(h) The 
fire chief shall prepare and issue administrative guidelines regarding on-call 
status for firemen. Such guidelines shall be structured so as to limit the 
number of firemen on-call to a number reasonably required to meet the needs of 
the department. Further, such policy shall conform with the standards pertaining 
to overtime pay for on-call time under the Fair Labor Standards Act of 1938, as 
amended, and the interpretations thereof. 
(i) 
Employees of the fire department classified pursuant to article 1269m of the 
Revised Civil Statutes of Texas, shall be allowed sick leave consistent with the 
provisions of section 26(b)(a) of article 1269m and Ordinance No. 84-1962, as 
amended. When a sick day is taken, its value will be dependent upon the shift or 
duty assignment held by the fireman at the time the day is taken. Any fireman 
engaged in fighting fires or the actual delivery of emergency medical services 
shall receive 12 hours off for each sick day taken. All other classified 
personnel shall receive eight hours off for each sick day taken. Officers and 
employees whose absences on authorized sick leave are for periods other than a 
full working day as defined herein shall be assessed sick leave in proportion to 
the number of full working days or fraction thereof they are absent. 
(j) 
Officers and employees of the fire department classified pursuant to article 
1269m of the Revised Civil Statutes of Texas, shall earn 15 days of vacation 
with pay per year to be accrued at a rate of 1¼ days per month. After 15 years 
of service employees shall be entitled to a vacation according to the following 
schedule: 

16 years .....

16 days
17 years .....

17 days
18 years .....

18 days
19 years .....

19 days
20 years .....

20 days
21 years .....

21 days
22 years .....

22 days
23 or more years 
.....

22 daysWhen a 
vacation day is taken, its value will be dependent upon the shift held by the 
fireman at the time the day is taken. Any fireman engaged in fighting fires or 
the actual delivery of emergency medical services shall receive 12 hours off for 
each vacation day taken. All other classified personnel shall receive eight 
hours off for each vacation day taken. Officers and employees whose absences on 
authorized vacation leave are for periods other than a full working day as 
defined herein shall be assessed vacation leave in proportion to the number of 
full working days or fractions thereof they are absent. 
(Code 1968, 
§ 18-20; Ord. No. 73-2079, § 1, 11-21-73; Ord. No. 74-2184, § 1, 12-17-74; Ord. 
No. 77-2411, § 1, 11-22-77; Ord. No. 79-1035, § 1, 6-21-79; Ord. No. 80-2873, § 
1, 9-30-80; Ord. No. 81-1319, § 1, 7-8-81; Ord. No. 86-489, § 1, 4-9-86; Ord. 
No. 86-517, § 1, 4-15-86; Ord. No. 92-1412, § 1, 10-28-92; Ord. No. 94-189, § 1, 
2-23-94; Ord. No. 94-1005, § 1, 9-21-94; Ord. No. 96-1290, §§ 25, 26, 12-4-96; 
Ord. No. 98-669, § 1, 8-19-98).javascript:void(0)
 
 
 

1
Houston firefighter Steve Williams is no longer a 
party to this suit, but the parties agreed to keep his name in the style for 
clarity and consistency.  

2
For convenience, we hereinafter use “sue or be 
sued” to refer to the entire class of statutory provisions that do not alone 
waive governmental immunity.  See Tooke, 197 S.W.3d at 328.  
Other examples include “prosecute and defend,” “defend or be defended,” “answer 
and be answered,” and “complain and (or) defend.”  Id.  For a 
partial, but extensive, list of such statutes, see id. 
app.

3
 See Act of June 2, 2003, 78th Leg., 
R.S., ch. 204, § 1.02, sec. 22.225(e), 2003 Tex. Gen. Laws 847, 848–49 
(codified at Tex. Gov’t Code 
§ 22.225(e)).

4
The Firefighters argue that because the original 
suit was filed before 2003, the narrower, pre-2003 standard applies.  
Because our earlier decision denying jurisdiction and remanding the case to the 
trial court took place after 2003, the City argues the prior action was a 
nullity and the current standard applies.

5
 Governmental immunity is distinct from 
sovereign immunity, and refers to the protection afforded to political 
subdivisions such as counties, cities, school districts, and others.  
Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 
2003).

6
For a useful exposition on the two components of 
sovereign immunity in Texas, see generally James L. Hartsfield, Jr., 
Governmental Immunity from Suit and Liability in Texas, 27 Tex. L. Rev. 337 
(1949).

7
The relevant Ordinances appear in full in the 
Appendix to this opinion.

8
The City cites several other court of appeals 
decisions to support this contention as well, but these cases addressed the 
question of what limitations period applies to a statutory right, and 
none of them considered whether there was a contract.  See, e.g., 
Creps v. Bd. of Firemen’s Relief & Ret. Fund Trs. of Amarillo, 456 
S.W.2d 434, 439–40 (Tex. Civ. App.—Amarillo 1970, writ ref’d 
n.r.e.).

9
 This rule is echoed in statute of frauds 
jurisprudence: in order to satisfy a statute of frauds, multiple documents can 
be read together.  Restatement 
(Second) of Contracts § 132. 

10 See, 
e.g., Houston, Tex., Code of Ordinances ch. 
34, art. I, § 34-3(b) (“[A]ny firefighter . . . who 
leaves the classified service for any reason shall 
receive . . . .”) (emphasis added); id. 
§ 34-59(b) (“Any fireman . . . shall be entitled 
to overtime pay . . . .”) (emphasis added).

11  Article 
III is entitled “Fire Department.”

12  This 
warning is not strictly necessary; offerors generally have the power to revoke 
or modify offers until the offeree accepts or performs, assuming the revocation 
or modification is communicated to the offeree before any attempted 
acceptance.  See Antwine v. Reed, 199 S.W.2d 482, 485 (Tex. 1947); 
Restatement (Second) of Contracts 
§ 42 cmt. a, illus. 1 (offer that states it is open for thirty days 
can nevertheless be revoked the next day, unless it was an option 
contract).

13  Section 
180.006 waives governmental immunity for suits by firefighters or police 
officers whose employment falls under (1) Chapters 141, 142, or 143 of the Local 
Government Code, (2) “a municipal charter provision conferring civil service 
benefits of a municipality that has not adopted Chapter 143,” or (3) a municipal 
ordinance enacted under Chapter 142 or 143.  Tex. Loc. Gov’t Code 
§ 180.006(a).  The waiver is limited to “denial of monetary benefits 
associated with the recovery of back pay” and to certain related monetary 
penalties.  Id. § 180.006(b)–(c).  Finally, section 
180.006’s waiver does not apply to contract-based claims.  Id. 
§ 180.006(c).  

14 Indeed, if 
the Legislature had intended to reinstate immunity from a suit like the 
Firefighters’ when it enacted section 180.006, it could have done so by amending 
section 271.152.  See Act of May 25, 2007, 80th Leg., R.S., ch. 
1200, § 2, 2007 Tex. Gen. Laws 4071, 4071–72 (amending Chapter 174 of the 
Local Government Code in light of the addition of section 180.006).  
However, section 180.006’s enabling Act provides that “[a] claim initially 
asserted before the effective date of this Act is governed by the law in effect 
when the claim was initially asserted, and the former law is continued in effect 
for that purpose.”  Id. § 3.   

15 We do not 
decide today whether other documents are incorporated by reference into the 
unilateral contract evidenced in Chapter 34, but simply note that, as with any 
contract, incorporation by reference is possible under contract law.  
See City of Fort Worth, 22 S.W.3d at 840–41.

16  The 
parties’ briefs also contest whether (1) Chapter 143 was “executed on behalf of 
the local governmental entity” within the meaning of Local Government Code 
section 271.151(2), or (2) the City waived that issue in the lower courts.  
Because Chapter 143 does not independently constitute a contract between the 
Firefighters and the City, we do not reach either issue.

17 Both the 1995 
and 1997 MCAs contain the following statement of purpose in their preambles: “It 
is the purpose of this Agreement to achieve and maintain harmonious relations 
between the parties; to establish proper standards for wages, hours and other 
conditions of employment; and to provide for equitable and peaceful adjustments 
to differences which may arise.”

18 Article 16 of 
the 1995 MCA and Article 19 of the 1997 MCA make the following promises, among 
others, as to the Firefighters’ salary: (1) longevity pay of two dollars 
bi-weekly for year of service, up to twenty-five years maximum, (2) 
classification pay as specified in Local Government Code sections 141.033(b) and 
143.111, (3) educational incentive pay, assignment pay, and bilingual pay as per 
Local Government Code sections 143.112 and 143.113 and applicable ordinances, 
and (4) lump-sum termination pay for “all unpaid salary, accumulated overtime, 
and compensatory time.  They shall also receive a lump sum payment for 
vacation leave, holiday leave, and sick leave in accordance with TEXAS LOCAL 
GOVERNMENT CODE §§143.115, 143.1155 and 143.116, and applicable City of Houston 
Ordinances.”    

19 Article 7 of 
the 1995 MCA and Article 9 of the 1997 MCA both state “All overtime pay and 
hours calculations . . . shall be governed by the Fair Labor 
Standards Act, and the TEXAS LOCAL GOVERNMENT CODE Chapter 142 and applicable 
city ordinances.” 

20 Article 17 of 
the 1995 MCA and Article 20 of the 1997 MCA both promise vacation leave as per 
Local Government Code § 143.046, “except that employees with [fifteen] or more 
years of seniority will earn one (1) additional vacation day with pay per year 
for each year of longevity in excess of [fifteen], to a maximum of [twenty-two] 
vacation days per year.”

21 Article 1 of 
both MCAs defines “employee” as: “all fire fighters, as the term fire fighter is 
defined in TEXAS LOCAL GOVERNMENT CODE §143.003(4), in the Houston Fire 
Department except the head of the department and assistant department heads in 
the rank or classification immediately below that of the department head.” 

22 It is worth 
noting that although some language in Local Government Code Chapter 143 likewise 
appears intended to benefit firefighters and police officers, that language is 
not found in a contract, but in a statute (as discussed above).  
Third-party beneficiary status is a rule of contract law, not of statutory 
enforcement or interpretation.  As such, third-party beneficiary analysis, 
while relevant to the MCAs as contracts, is irrelevant to the preceding 
discussion of Chapter 143, because it is not, in itself, a 
contract.

23 The City also 
asserts the Firefighters lack standing because they failed to exhaust the 
grievance procedures under the MCAs.  The court of appeals did not reach 
this issue, having incorrectly found a lack of standing based on the language in 
the MCAs and section 143.206.  We do not decide it either, finding it 
waived by the City’s stipulation that “[a]t the time each Plaintiff received 
their termination pay check, Plaintiffs were no longer subject to the 
jurisdiction of the Civil Service Commission of the City of Houston, Texas or 
the grievance procedure in Texas Local Government Code, Chapter 143.”  
See Shepherd v. Ledford, 962 S.W.2d 28, 33 (Tex. 1998).  Since the 
grievance procedure in both MCAs is simply an incorporation of Chapter 143 by 
reference, the City’s stipulation and waiver extends to them.  Indeed, the 
court of appeals originally acknowledged this stipulation and held the 
Firefighters were not required to exhaust the grievance procedures.  
City of Houston, 183 S.W.3d at 416, 416 n. 4.

24  The 
court of appeals did not reach this issue, finding a lack of standing when it 
incorrectly concluded the Firefighters were required to show a breach by the 
Union of the duty of fair representation, as discussed above.

25 Article 1 of 
the CBA provides: “‘Member,’‘Employee,’‘Firefighter,’ ‘Member of the Bargaining 
Unit’ means any full time, permanent paid employee of the Houston 
Fire Department who has been hired in substantial compliance with Chapter 143 of 
the Texas Local Government Code excluding municipal employees (civilians), 
volunteer fire fighters, applicants and the head of the Fire Department (Fire 
Chief).”  (Emphasis added.)  

26 Article 21 
sets base salary, while Article 23 includes additional salary components, 
including among others: longevity pay, classification pay, and education and 
training pay.

27 Article 29 
specifies regular work hours for Emergency Operations Division firefighters as 
an average of 46.7 hours per week, in twenty-four-hour shifts, within a 
seventy-two-day work cycle.  Article 30 provides: “Except as may otherwise 
be specified in the terms of this Agreement, all Firefighters shall be 
compensated at the rate of time-and-one-half (1 1/2) that of their regular rate 
of pay for all actual hours worked outside that of their regular scheduled 24 
hour shift or work schedule.”

28 Article 20 
governs sick leave by incorporating by reference “Chapter 143 of the Texas Local 
Government Code and applicable federal statutes.” 

29 Article 26 
provides modifications to the Firefighters’ existing vacation leave entitlement, 
allowing them to use vacation leave accrued in a year within the same year, but 
requiring that a “Firefighter may request the use of additional accrued leave 
balances, which shall be subject to the scheduling needs of the 
Department.”