White-Owned Businesses File Civil Rights Lawsuit Against Houston Over Racial Discrimination

Landscapers say city rules forcing them to send business to minority-owner contractors run afoul of the U.S. Constitution.
White-Owned Businesses File Civil Rights Lawsuit Against Houston Over Racial Discrimination
Mayor of Houston, Texas, Sylvester Turner speaks during a news conference at the 90th Winter Meeting of United States Conference of Mayors in Washington, on Jan. 19, 2022. (Alex Wong/Getty Images)
Matthew Vadum

A white Houston couple in the landscaping business filed a federal civil rights lawsuit against the Texas city over its racially discriminatory contracting policy that forces them to send a portion of government contracts to minority-owned businesses.

Affirmative action programs and other programs that treat Americans differently on account of their race have come under increasing legal attacks in recent years.

In Richmond v. J.A. Croson Co. (1989), the Supreme Court held that government mandates for contractors to subcontract 30 percent of each job to minority businesses were unconstitutional.

More recently, the Supreme Court struck down the use of racially discriminatory admissions policies at U.S. colleges—a longtime goal of the conservative movement.

In Students for Fair Admissions v. Harvard, Chief Justice John Roberts wrote in June of this year in the majority opinion that for too long, universities have “concluded, wrongly, that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned but the color of their skin.”

“Our constitutional history does not tolerate that choice,” he wrote in the ruling, which does not cover military academies.

Meanwhile, Jerry and Theresa Thompson own Landscape Consultants of Texas and Metropolitan Landscape Management Inc., whose employees maintain parks, playgrounds, and other government-owned properties. The companies, which together have about 50 employees, have been providing full-service landscaping services in the Houston metro area, including irrigation installation, landscape design, and routine maintenance, since 2006.

The legal complaint (pdf) in Landscape Consultants of Texas Inc. v. City of Houston (civil action 4:23-cv-351), was filed on Sept. 19 with the Houston Division of the U.S. District Court for the Southern District of Texas.

The Thompsons are suing both the city and its Midtown Management District for their insistence on awarding public contracts based on the race of the bidding company’s owner. The district is a political subdivision that has its own board of directors appointed by the mayor of Houston and the city council that is responsible for enforcing the minority set-aside program.

The companies say their continuing success depends on winning large, multi-year government contracts with the City of Houston, Harris County, and other local agencies.

But their ability to secure contracts has been drying up in recent years, even when their businesses are the lowest, most-qualified bidder. Government landscaping contracts account for between 80 and 90 percent of the companies’ annual revenue.

The culprit, according to Pacific Legal Foundation (PLF), a national public interest law firm representing the Thompsons, is Houston’s Minority Business Enterprise (MBE) program that requires non-minority-owned businesses to give away a portion of contracts’ value to MBE subcontractors.

The policy, which gives preferences to minority-owned businesses, puts the two companies at a significant competitive disadvantage and violates the equal-protection guarantees of the U.S. Constitution, the companies argue.

Although governments are supposed to treat every citizen equally, regardless of sex, skin color, or place of origin, MBE programs do the exact opposite, classifying businesses based on the owners’ race when all that should matter is which company can do the best job at the best price, PLF says.

“Instead of trying to lift up all small business owners with programs like loan assistance, networking opportunities, lower bond requirements, or other efforts to tear down barriers to success, the City of Houston is boxing out opportunity through racial classifications,” according to the law firm.

Houston has had an MBE program since 1984. Harris County—where Houston is located—created an MBE program in 2020, followed by the Port of Houston Authority, Metro Houston, and the Harris Health System.

Even though Landscape Consultants has a mostly Latino workforce, because the Thompsons themselves are white, their businesses do not qualify for the MBE program’s racial set-asides.

For decades, racial set-asides in public contracting have fostered stereotypes that some racial groups cannot succeed without government help and have led to corruption and fraud. Although some courts have struck down such programs for violating the constitutional guarantee of equality before the law, racial set-asides are growing, supported by questionable disparity studies, according to PLF.

Currently, Landscape Consultants is in year three of a five-year, $1.3 million contract with the city, but the Thompsons are required to subcontract 11 percent of the contract’s total value, or $143,000, to a minority-owned business—even though the company is able to do the work itself.

By way of contrast, competing companies owned by eligible minorities have no obligation to subcontract out some of the work.

“That chunk of [the Thompsons’] business has got to go to a minority-owned competitor, so they believe that violates their right to equal protection,” PLF attorney Erin Wilcox told The Epoch Times in an interview.

“The government doesn’t get to pick and choose who wins and who loses based on skin color,” Ms. Wilcox said.

“And so this is going to be a very interesting and important legal challenge to this kind of a race-based set-aside program that doesn’t just happen in Houston—it happens all over the country.”

Houston and the Midtown Management District are violating the Constitution, Ms. Wilcox said.

“When the government awards public contracts, the only thing that matters should be who could do the best job at the best price. So when they use race to make that decision instead, they’re violating the equal protection rights of the contractors who are bidding—like our clients.”

The office of Houston Mayor Sylvester Turner, a Democrat, declined to comment.

“The City of Houston will respond to the lawsuit at the appropriate time and in the courtroom,” Mayor Turner’s director of communications, Mary Benton, told The Epoch Times by email.