Ed Rachal Foundation v. D'Unger

• Decision Date: 21 April 2006
• Docket Number: No. 03-1101.,03-1101.
• Citation: 207 S.W.3d 330
• Parties: THE ED RACHAL FOUNDATION and Paul Altheide, Petitioners, v. Claude D'UNGER, Respondent.
• Court: Texas Supreme Court

Page 330

207 S.W.3d 330

THE ED RACHAL FOUNDATION and Paul Altheide, Petitioners, v. Claude D'UNGER, Respondent.

No. 03-1101.

Supreme Court of Texas.

April 21, 2006.

Chester J. Makowski, Nathan Wesely, Myra K. Morris, Ralph F. Meyer, Royston, Rayzor, Vickery & Williams, L.L.P., Corpus Christi, for Petitioner.

Andrew M. Greenwell, James R. Harris, Harris & Greenwell, L.L.P., Corpus Christi, for Respondent.

PER CURIAM.

Twice in recent years this Court has rejected invitations to create a commonlaw cause of action for all whistleblowers, noting each time that a general claim would eclipse the Legislature's decision to enact a number of narrowly-tailored whistleblower statutes instead. See Austin v. HealthTrust, Inc.-The Hosp. Co., 967 S.W.2d 400, 401-02 (Tex.1998); Winters v. Houston Chronicle Publ'g Co., 795 S.W.2d 723, 723 (Tex.1990). For the same reason, we reach the same result today.

Claude D'Unger was an officer and director of the Ed Rachal Foundation, a charitable organization that owns a ranch in Webb County used for wildlife and farming research studies. The ranch covers more than 100 square miles, including five miles along the Rio Grande. Due to its location, migrants from Mexico frequently cross the ranch on foot.

D'Unger became concerned that the ranch's foreman, Ed DuBose, was harassing migrants, and reported his concerns to Paul Altheide, the Foundation's chief executive officer. According to D'Unger, Altheide told him "to drop it," which he took as an instruction not to report DuBose's activities to any law enforcement officials.

On September 17, 1997, DuBose apprehended three teenage Mexican nationals at the ranch, handcuffed them, and turned them over to Border Patrol agents. When D'Unger saw a ranch report of the incident, he contacted Border Patrol agents, who told him they had no knowledge or record of the incident. Concerned that a crime might have been committed, D'Unger subsequently contacted a congressman, two sheriffs, the Texas Attorney General's office, a senator, the IRS, a district judge, and the Mexican Consulate about the matter. When Altheide learned of D'Unger's activities, he first suspended him, and then fired him when he refused to resign.

D'Unger sued the Foundation for breach of contract and wrongful termination, and Altheide for tortious interference. Shortly after he filed suit, the Border Patrol produced records under the Freedom of Information Act showing his concerns were unfounded—that DuBose had safely delivered the teenagers to Border Patrol custody the day he apprehended them. Nevertheless, a Nueces County jury later found for D'Unger on all his claims, and the trial court rendered judgment for $364,194.12 in lost wages and $193,001.00 in attorney's fees.

A unanimous court of appeals reversed the breach of contract and tortious interference claims. 117 S.W.3d at 357. In a cross-point, see TEX. R. APP. P. 53.3(c)(2), D'Unger challenges only the reversal of his contract claim, arguing that by agreeing to pay him a salary of $80,000 per year the Foundation bound itself to a contract of renewable one-year terms.

In Midland Judicial District Community Supervision v. Jones, we rejected the so-called "English rule" that hiring an employee at a stated sum per week, month, or year always constitutes a promise of definite employment for that term. See 92 S.W.3d 486, 487 (Tex.2002) (per curiam). Instead, we reiterated that employment is presumed to be at-will in Texas absent an unequivocal agreement to be bound for that term. Id. (citing Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex.1998)). Standing alone, an agreement to pay at a stated rate is not enough; if it were, there would be very few at-will employees.

D'Unger's evidence established nothing more here. D'Unger's personal understanding of his contract, or annual renewals of it in the past, do not unequivocally indicate that the Foundation intended to be bound throughout that term. We agree with the court of appeals that there was no evidence to support D'Unger's breach of contract claim.

The court of appeals divided on D'Unger's sole remaining claim, with the majority affirming a judgment for wrongful termination. 117 S.W.3d at 361. We agree with the dissenting justice, and thus reverse.

D'Unger's wrongful termination claim is based on the narrow exception to at-will employment that we created in Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985). This exception makes it unlawful to terminate employees if the sole reason is their refusal to perform an illegal act. Id. at 735. While D'Unger argues that the defendants committed many illegal acts, the only one he points to as the sole reason for his termination is "that he was terminated because he was trying to find out what had happened to the [three] Mexican nationals." The court of appeals concluded there was evidence to support a wrongful-termination finding because the jury could have concluded that Altheide's instructions to D'Unger were an attempt to include him "in a conspiracy to cover up criminal and illegal conduct involving any Mexican National on the Ranch." 117 S.W.3d at 361.

We disagree. Sabine Pilot protects employees who are asked to commit a crime, not those who are asked not to report one. If failing to report a crime were itself a crime, then almost all whistleblowers could claim the Sabine Pilot exception. The plaintiffs in both Austin and Winters claimed they had been terminated for reporting illegal activities, yet we held that Sabine Pilot applied to neither. See Austin, 967 S.W.2d at 403; Winters, 795 S.W.2d at 724.

Generally, failing to report a crime, like any other failure to act, is not a crime unless a specific law "provides that the omission is an offense or otherwise provides that he has a duty to perform the act." TEX. PEN. CODE § 6.01(c). While a few specific laws impose such duties, see, e.g., TEX. FAM. CODE § 261.109 (criminalizing failure to report suspected child abuse), D'Unger points to no specific law that would criminalize his silence here. Like the various whistleblower statutes, specific criminal statutes requiring certain crimes to be reported would be unnecessary if every failure to report a crime were itself a crime.

The court of appeals erred in finding there was some evidence that D'Unger was asked to join a criminal conspiracy. Criminal responsibility as a conspirator requires proof of culpable acts made with an intent to assist in the commission of a crime before it occurs. See TEX. PENAL CODE §§ 7.02(a), 15.02. There is no evidence D'Unger was asked to participate in any impending criminal acts, or that he ever intended to do so.

The court of appeals also believed D'Unger stood in jeopardy of the crime of misprision of felony. That crime is committed by anyone who has "knowledge of the actual commission of a felony" and yet "conceals and does not as soon as possible make known the...