Casas v. Wornick Co.

• Decision Date: 18 September 1991
• Docket Number: No. 13-90-100-CV,13-90-100-CV
• Citation: 818 S.W.2d 466
• Parties: 7 IER Cases 424 Diana CASAS, Appellant, v. WORNICK COMPANY, Ron Wornick, Bill Barth, Executive Vice President, Right Way Foods Corporation, Valerie Hutchins Woerner, President, MRE Division, Appellees.
• Court: Texas Court of Appeals

Page 466

818 S.W.2d 466

7 IER Cases 424

Diana CASAS, Appellant, v. WORNICK COMPANY, Ron Wornick, Bill Barth, Executive Vice President, Right Way Foods Corporation, Valerie Hutchins Woerner, President, MRE Division, Appellees.

No. 13-90-100-CV.

Court of Appeals of Texas Corpus Christi.

Sept. 18, 1991.

Rehearing Overruled Oct. 17, 1991.

Brinkley L. Oxford, Oxford & Oxford, Edinburg, for appellant.

John E. McFall, McFall & Ashcraft, Dallas, Raymond A. Cowley, Ewers & Toothaker, McAllen, Shirley Selz, Valerie Fogleman, Gary, Thomasson, Hall & Marks, Corpus Christi, for appellees.

Before NYE, C.J., and SEERDEN and HINOJOSA, JJ.

OPINION

SEERDEN, Justice.

This is an appeal from a summary judgment. Diana Casas sued appellees, alleging that she was entitled to damages due to being wrongfully terminated from her employment with Right Way Foods Corporation, sometimes called RAFCO, which was a subsidiary of Wornick Company. Appellant's pleadings alleged four independent causes of action: 1) a claim under the Texas Equal Rights Amendment, Texas Const. art. 1, Sec. 3a; 2) the intentional infliction of emotional distress; and 3) a cause of action based upon the doctrine created in Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985), and breach of the duty of good faith and fair dealing. Appellant alleged that each of appellees were liable for the acts of RAFCO. Summary judgment was granted in favor of each of appellees as to all of appellant's alleged causes of action.

By her sole point of error, appellant alleges that the trial court erred in granting the summary judgment because the evidence before the court demonstrated there were genuine issues of material fact concerning each of her causes of action. In a summary judgment proceeding, the burden of proof is on the movant to show that there exists no genuine issue of material fact and that it is entitled to judgment as a matter of law. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972). Once the movant has established a right to summary judgment, the burden shifts to the nonmovant to present issues which would preclude summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 678 (Tex.1979). The question on appeal is not only whether the summary judgment proof raises a fact issue, but whether the summary judgment proof establishes as a matter of law that there is no genuine issue of material fact concerning one or more of the essential elements of the plaintiff's cause of action. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970).

Good Faith and Fair Dealing

Casas asserts a cause of action against Appellees for breach of the duty of good faith and fair dealing, which has been held to exist in Texas in "special relationships", e.g., insurer-insured, workers' compensation carrier-claimant. See Arnold v. Nat'l County Fire Ins. Co., 725 S.W.2d 165 (Tex.1987); Aranda v. Insurance Co. of North America, 748 S.W.2d 210 (Tex.1988). The argument that employers owe their employees an obligation to deal fairly and in good faith when making termination decisions has recently received increased attention.

In McClendon v. Ingersoll-Rand Co., 757 S.W.2d 816, 819-20 (Tex.App.--Houston [14th Dist.] 1988), rev'd on other grounds, 779 S.W.2d 69 (Tex.1989), rev'd, 498 U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), the Court of Appeals held that the obligation did not exist in an at-will employment situation. Though the Texas Supreme Court majority opinion reversing McClendon did not reach the issue of whether a duty of good faith and fair dealing arose, Justice Cook, dissenting, stated his opposition to extending such a duty to the employment relationship. See McClendon, 779 S.W.2d at 71-75. Subsequent opinions by Texas Courts of Appeals have relied upon the McClendon opinions as indicating the Supreme Court's rejection of an invitation to recognize a duty of good faith and fair dealing in an employment context. See Hicks v. Baylor University Medical Center, 789 S.W.2d 299, 303-304 (Tex.App.--Dallas 1990, no writ); Winograd v. Willis, 789 S.W.2d 307, 312 (Tex.App.--Houston [14th Dist.] 1990, no writ); Lumpkin v. H & C Communications, Inc., 755 S.W.2d 538, 540 (Tex.App.--Houston [1st Dist.] 1988, writ denied). McClendon, however, was reversed by the United States Supreme Court based on ERISA ¹ preemption. Concurring, Justice Doggett lamented this result, noting the lack of Congressional intent to preempt state causes of action for breach of the duty of good faith and fair dealing. Cathey v. Metropolitan Life Ins. Co., 805 S.W.2d 387 (1991) (Doggett, J., concurring) (citing Blind Faith Conquers Bad Faith: Only Congress Can Save Us After Pilot Life v. Dedeaux, 21 Loy. L.A.L.Rev. 1343, 1381 n. 303 (1988)). The effect of McClendon, then, leaves unanswered the question of whether a cause of action for breach of the duty of good faith and fair dealing exists in an employer-employee relationship.

Several jurisdictions have permitted suit for breach of the covenant of good faith and fair dealing in an employment contract. ² Texas, however has clung to the judicially-created "employment at-will" doctrine. See Schroeder v. Texas Iron Works, 813 S.W.2d 483, 489 (1991); Winters v. Houston Chronicle Pub. Co., 795 S.W.2d 723 (Tex.1990); Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733, 734 (Tex.1985); East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 (1888). While we are aware of some jurists' and commentators' criticism of the doctrine, ³ we believe that the current mood of the majority of the Texas Supreme Court is to continue to follow the at-will rule. Appellant, however, argues in her petition that she was not an at-will employee because of the conduct and statements of appellee. Absent a specific contractual provision to the contrary, an employer has the absolute right to terminate an employee with or without cause. East Line R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99 (1888). Any alleged oral agreement that is not capable of performance within one year would be unenforceable under the statute of frauds. Tex.Bus. & Com.Code Ann. § 26.01(b)(6); Schroeder v. Texas Iron Works, 813 S.W.2d 483, 489 (1991). Because of our duty to follow the dictates of our higher court, we feel compelled to hold that appellant was an at-will employee and was owed no duty of good faith and fair dealing.

The Texas Equal Rights Amendment

Tex. Const. art. 1 § 3a provides that "equality under the law shall not be abridged because of sex, race, color, creed, or national origin." This amendment does not apply "to activities involving purely private discrimination." Cedillo v. Ewlin Enterprises, Inc., 744 S.W.2d 217, 219 (Tex.App.--Corpus Christi 1987, writ denied per curiam, 756 S.W.2d 724 (Tex.1988); see also Lincoln v. Mid-Cities Pee Wee Football Ass'n, 576 S.W.2d 922, 925 (Tex.Civ.App.--Fort Worth 1979, no writ); Junior Football Ass'n v. Gaudet, 546 S.W.2d 70, 71 (Tex.Civ.App.--Beaumont 1976, no writ). The words "under the law" within the purview of this amendment require that the discrimination complained of be state action or private conduct that is encouraged by, enabled by, or closely interrelated in function with state action. Junior Football Assoc., 546 S.W.2d at 71. Appellees presented summary judgment evidence that both RAFCO and the Wornick Company were private corporations; appellant did not present any summary judgment evidence to controvert this issue. Consequently, summary judgment on this issue was proper.

Sabine Pilot

Next, appellant contends that she has stated a cause of action under the narrow exception to the employment at will doctrine created in Sabine Pilot v. Hauck, 687 S.W.2d 733 (Tex.1985). This exception allows an employee to sue for wrongful termination when she proves by a preponderance of the evidence that she was discharged for the sole reason that she refused to perform an illegal act. Sabine Pilot, 687 S.W.2d at 735. In her affidavit, in response to the motion for summary judgment Casas alleged that "there were many instances which, in retrospect, I know were deceitful and perhaps illegal.... [and] ... [g]iven that my position required me to keep accurate information, I kept detailed notes of many of our meetings some of which, I later learned, could implicate the company and top management individuals in criminal misconduct." Appellant relies on Johnston v. Del Mar Distributing Co., 776 S.W.2d 768 (Tex.App.--Corpus Christi 1989, writ denied), wherein this Court held that a cause of action existed under Sabine Pilot when an employee is fired for investigating into whether an act she is required to perform is illegal. In the instant case, however, the summary judgment evidence does not establish facts which show that Casas was terminated for investigating into possible criminal misconduct, or that she was fired because she refused to perform an illegal act. Rather, she states that the reason for her termination was that she possessed information which could implicate the company in criminal misconduct. Even if we take this information as true, Casas still has not stated a cause of action under Sabine Pilot. Accordingly, we hold that the trial court did not err in granting the summary judgment on this ground.

Intentional Infliction of Emotional Distress

Casas was employed by RAFCO from 1980 until she was terminated in 1986. She was originally employed as a personnel manager and in 1983 was promoted to the position of Director of Human Resources.

When she was hired, she was under the impression and expectation that, provided her work was satisfactory and the company continued to be operational, she would be guaranteed a job with the company. Throughout her career with RAFCO, her efforts were rewarded with superior ratings in her performance evaluations and annual company bonuses. Prior to her sudden and unexpected termination, she had not received any reports or evaluations indicating deficiencies or poor performance....