🔴An Act relating to severance pay for political subdivision employees and independent contractors.

HB 762

🔴 HB 762: Local boards can now deny severance by labeling “misconduct”

What it says it does:
HB 762 claims to stop “golden parachutes” by limiting taxpayer-funded severance payouts for public employees or contractors who are accused of misconduct.

What it actually changes:
The bill gives local political subdivisions like school boards and city councils the authority to define misconduct on their own. If they say someone committed misconduct, that person is automatically denied all severance, no matter what their contract says. Even if the person wins a lawsuit, a judge cannot order a payout that exceeds HB 762’s limits. For everyone else, severance is capped at 20 weeks of pay. Public and teaching hospitals are exempt and can still pay full severance even in cases of wrongdoing.

Who is pushing for it:
Texas Public Policy Foundation and Americans for Prosperity are noted supporters. The bill reflects their broader push to limit public sector employee protections.

Who benefits:
Local boards and political appointees who want more power to remove employees without honoring contracts. Government entities that want leverage over whistleblowers or dissenters.

Who gets left out or exposed:
Whistleblowers and public employees who report fraud or abuse. Honest workers can now be labeled as misconduct risks and lose all severance. There is no neutral appeal built into the bill’s process.

Why this matters long term:
The bill expands the power of local political bodies to silence dissent and bypass contract obligations. It also creates a double standard by protecting hospital executives while stripping rights from school staff and other public servants. This shifts public employment toward greater politicization and retaliation risk.

What to watch next:
Whether school boards or city councils begin applying these rules to remove whistleblowers or union organizers. Also, whether exempted hospitals exploit their protected status.

Bottom line:
HB 762 gives local political boards a new tool to punish public employees who speak up, while letting hospital executives off the hook. It claims to stop waste but actually opens the door to abuse.