The City of Houston is appealing a federal court ruling that struck down the race-based portion of its Minority, Women and Small Business Enterprise program, arguing the decision was wrongly decided.
City officials filed the appeal in federal court on Monday, the latest step in Houston’s effort to preserve a program that has directed a share of municipal contracts toward minority-owned, women-owned, and small businesses since 1984.
U.S. District Judge David Hittner ruled last month that the program’s race-based provisions violate the Equal Protection Clause of the Fourteenth Amendment, barring the city from continuing to use racial preferences when awarding contracts.
City Attorney Arturo Michel called the ruling a “clear error” in the appeal filing and asked Hittner to reconsider. Michel argued the program remains necessary because of a “persistence of racial discrimination in Houston city contracting,” pointing to a disparity study the city council adopted last year as justification for keeping the program in place.
The case traces back to a 2023 lawsuit filed by Jerry and Theresa Thompson, a white couple from Spring who own the landscaping companies Landscape Consultants of Texas and Metropolitan Landscape Management. The Thompsons, represented free of charge by the Pacific Legal Foundation, argued their business could not compete on equal footing with other companies because of the city’s contracting requirements.
The couple has a separate lawsuit pending against Harris County over its minority contracting program, which the county adopted in 2020.
Houston’s program issues certifications to qualifying businesses and tracks annual utilization goals across construction, professional services, and goods and services contracts. According to the city’s own FY2025 report, Houston awarded $2.5 billion in total contracts between July 2024 and June 2025, with $579 million going to certified minority, women, and small business enterprises, an overall utilization rate of about 23 percent.
On the roughly $1.8 billion in contracts that actually carry MWSBE goals, certified firms received closer to 28 percent, with Hispanic-owned businesses receiving the largest share of that money, followed by Asian-owned, Caucasian women-owned, and Black-owned firms. The city also runs separate programs for businesses owned by veterans, people with disabilities, and members of the LGBT community, none of which are affected by Hittner’s ruling.
Programs like Houston’s have come under increasing legal pressure since the U.S. Supreme Court’s 2023 decision ending race-based affirmative action in college admissions. Texas ended its own certification program for minority- and women-owned businesses earlier this year, though a state judge temporarily reinstated it in March.
Harris County is watching the appeal closely, since its own MWBE program is tied up in the Thompsons’ pending lawsuit against the county.
After Hittner’s ruling against the city, Harris County Commissioner Tom Ramsey, the lone Republican on the commissioners court, called for the county to suspend its program rather than wait for a similar order. County officials have defended the program so far, with Interim County Attorney Abbie Kamin noting that minority and women-owned business participation in county contracts grew from 9 percent to nearly 30 percent over the past four years.
