Fighting Back: Small business owners sue major city to stop race-based contracting

Houston; September 19, 2023: Today, two Texas businesses filed a federal lawsuit challenging the City of Houston’s Minority Business Enterprise (MBE) program that forces locally owned companies doing business with the city to give away a portion of each job to their minority-owned competitors.

Jerry and Theresa Thompson have called Houston, Texas, home for more than 30 years. They love the area, having raised their family and built Landscape Consultants of Texas and Metropolitan Landscape Management, Inc., two thriving companies whose landscapers maintain parks, playgrounds, and other government-owned properties.

Now, however, as the semi-retired couple prepares to hand off the family business to their two adult children, the city they love is squeezing them out of business for one reason: their race.

Landscape Consultants and Metropolitan are among many companies whose success depends primarily on winning large, multi-year government contracts with the City of Houston, Harris County, and other local agencies.

The Thompsons have seen opportunities for these contracts dry up in recent years, even where their business is the lowest, most-qualified bidder. The culprit 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.

Landscape Consultants has a mostly Hispanic workforce. But because Jerry and Theresa are white, their company does not qualify for the MBE program’s racial set-asides.

“The government at all levels is supposed to treat every citizen equally, regardless of skin color,” said Erin Wilcox, an attorney at Pacific Legal Foundation. “Race-based preferences in public contracting do the exact opposite. They prioritize businesses based on the owners’ race when all that should matter is which company can do the best job at the best price.”

Instead, the city’s MBE program takes dollars and jobs away from Landscape Consultants and Metropolitan employees — many of whom are the same minorities the MBE program is supposed to be helping.

“Hustle-Town” is a popular local name for Houston and refers to the city’s importance as a business and cultural hub. Houston should be proud of its entrepreneurial history. But it is egregiously unfair, un-American, and un-Houstonian when the City of Houston stacks the deck against businesses solely based on skin color.

The case is Landscape Consultants of Texas, Inc., et al. v. City of Houston, et al., filed in the U.S. District Court for the Southern District of Texas. More here.

About Pacific Legal Foundation:

Pacific Legal Foundation is a national nonprofit legal organization that defends Americans threatened by government overreach and abuse. Since our founding in 1973, we challenge the government when it violates individual liberty and constitutional rights. With active cases in 39 states plus Washington D.C., PLF represents clients in state and federal courts with 17 victories out of 19 cases decided by the U.S. Supreme Court.

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