Exxon Mobil Corp. v. Hines, 14-06-00745-CV.

• Decision Date: 26 February 2008
• Docket Number: No. 14-06-00745-CV.,14-06-00745-CV.
• Citation: 252 S.W.3d 496
• Parties: EXXON MOBIL CORPORATION, Appellant, v. Dwight HINES and Shannon Everett, Appellees.
• Court: Texas Court of Appeals

252 S.W.3d 496

EXXON MOBIL CORPORATION, Appellant, v. Dwight HINES and Shannon Everett, Appellees.

No. 14-06-00745-CV.

Court of Appeals of Texas, Houston (14th Dist.)

February 26, 2008.

Russell S. Post, David M. Rivet, Houston, for appellant.

Robert E. Lapin, Houston, for appellees.

Panel consists of Chief Justice HEDGES, Justice SEYMORE, and Former Justice PRICE.^*

OPINION

ADELE HEDGES, Chief Justice.

This is a double appeal in a lawsuit filed by appellees/cross-appellants, Dwight Hines and Shannon Everett (collectively "appellees"), alleging defamation and age discrimination against their former employer, appellant/cross-appellee, Exxon Mobil Corporation (hereinafter "Exxon"). In regards to the discrimination claims, the trial court granted summary judgment favoring Exxon. After trial on the defamation claims, a jury found that Exxon defamed appellees and awarded damages totaling $467,500. In its appeal, Exxon contends that (1) the allegedly defamatory statements were privileged as a matter of law; (2) the Texas employment at-will doctrine bars appellees' claims; (3) the employment at-will doctrine, at a minimum, prevents appellees from recovering economic damages under the facts of this case; (4) the evidence is legally insufficient to support the award of noneconomic damages; and in the alternative, (5) the trial court erred in its submission of the excessive publication issue to the jury. In their cross-appeal, Hines and Everett contend that the trial court erred in granting summary judgment against their age discrimination claims. We modify the trial court's judgment to render judgment that appellees take nothing on their defamation claims. We affirm the judgment as modified.

I. Background

On November 20, 2003, Exxon Mobil Corporation terminated the employment of Dwight Hines and Shannon Everett. At the time of their terminations, Hines was 52 years old and had worked for Exxon Mobil Chemical Company (a division of Exxon) for 23 years. Also at that time, Everett was 50 years old and had worked for the same division for 19 years. The reason Exxon gave Hines and Everett for their terminations was violation of the guidelines governing Exxon's Educational Matching Gift Program. Through this program, Exxon employees and retirees who contribute to colleges and universities may request that Exxon "match" their contributions (not to exceed $5,000) at a ratio of 3 to 1.

In 2002, Exxon undertook a periodic audit of the Matching Gift Program. In the course of their investigation, two internal auditors, David Hintz and Thomas Barnes, became interested in contributions Hines and Everett made to their alma mater Graceland University in Lamoni, Iowa. At the close of their investigation, the auditors concluded that Hines and Everett had contributed to a scholarship fund at Graceland and had applied for Exxon to match those contributions during the same period of time in which their children were receiving scholarships from the fund. The auditors further surmised that Hines and Everett knowingly participated in a scheme designed to obtain a benefit for their children in violation of Matching Gift Program guidelines, which preclude members of the employees' families from benefitting from the charitable contributions and matching funds.

In July 2003, the auditors presented their findings to the supervisors of Hines and Everett and those of other employees who had been identified through the audit as having made suspect contributions. Subsequently, Charlie Jones, a human resources manager, was assigned to review the findings and recommend discipline. In August 2003, Jones gave his recommendations to the employees' managers. Then, on September 23, 2003, he presented the recommendations by way of a conference call to the division vice presidents responsible for certain of the employees in question. Participating in this meeting were Jones, Bruce Macklin (vice president for chemicals), Don Daigle (vice president for refining and supply), Nate Jenkins (a controller in chemicals, who, according to Jones, helped the auditors with the investigation), and Jack Clark (Jones's supervisor in the human resources department).¹

During this meeting, Jones specifically accused Hines and Everett of participating in an "elaborate funding scheme" with "intent to defraud" the Matching Gift Program.

Subsequently, on October 23, Jenkins gave a substantially similar presentation to Daniel Sanders, President of Exxon Mobil Chemical Company, who then approved Jones's recommendation that Hines' and Everett's employment be terminated. On November 20, 2003, Hines' and Everett's employment was terminated. On December 1, 2003, Exxon sent a letter addressed to all current employees and retirees who had previously applied for matching funds for contributions to Graceland, informing them that Graceland was no longer eligible to receive matching funds as a result of an audit of such contributions. The letter further stated that "[a]buses of the program by a few individuals and institutions jeopardize its continuation. . . . [D]ecisions to rescind an institution's eligibility . . . are made to preserve the integrity of the program."

Hines and Everett sued Exxon alleging defamation and age discrimination. As will be discussed in greater detail below, Hines and Everett asserted that various statements made by Exxon representatives were defamatory and compensable. They further alleged that Exxon's stated reason for the dismissals, i.e., violation of the Gift Matching Program guidelines, was a mere pretext for age discrimination.

Prior to trial, Exxon filed a partial motion for summary judgment asserting principally that appellees/cross-appellants could not provide legally sufficient evidence that the stated reason for the terminations was pretextual. The trial court granted the motion against appellees/cross-appellants' age discrimination claims.

The defamation claims proceeded to trial. After both sides closed, the trial court submitted a jury charge asking whether eleven particular statements or sets of statements were defamatory towards Hines and whether twelve particular statements or sets of statements were defamatory towards Everett. The jury found that four sets of statements were defamatory against both, including statements contained in: (1) an "Issues and Findings" document prepared by the auditors; (2) Jones' September 23 presentation to the division vice presidents, (3) the October 23 presentation to the president of Exxon Chemical, and (4) the December 1 letter to employees and retirees who had contributed to Graceland. In regards to Everett, statements in an additional document, identified in the charge only as "[t]he November 19, 2003 document," were also found to be defamatory. The jury further found that Exxon communicated the September 23 and October 23 presentation statements to people "other than those persons having an interest or duty in the matter to which the statement related." However, the jury concluded that Exxon did not communicate the Issues and Findings document, the December 1 letter, or the November 19 document to anyone "other than those having an interest or duty in the matter."

In answer to the damages submissions, the jury found that Hines suffered $100,000 in past mental anguish, $100,000 in injury to character and reputation, and $100,000 in past and future lost income and lost unemployment benefits. It further found that Everett suffered $75,000 in past mental anguish, $75,000 in injury to character and reputation, and $100,000 in past and future lost income and lost unemployment benefits. Lastly, the jury found that Exxon was responsible for 85% of the damages awarded, and Hines and Everett were each responsible for 15% of their own damages. Based on the verdict, the trial court awarded Hines $255,000 and Everett $212,500 plus pre- and post-judgment interest. As stated, both sides appeal. Exxon attacks the defamation judgment; Hines and Everett challenge the summary judgment against their discrimination claims.

II. The Defamation Claims

In its appeal, Exxon contends that (1) as a matter of law, the allegedly defamatory statements were protected under the qualified privilege for investigations of employee wrongdoing and were not excessively published; (2) the Texas employment at-will doctrine bars appellees' claims; (3) the employment at-will doctrine, at a minimum, prevents appellees from recovering economic damages under the facts of this case; (4) the evidence is legally insufficient to support the award of noneconomic damages; and in the alternative, (5) the trial court erred in its submission of the excessive publication issue to the jury. Appellees dispute Exxon's contentions and further assert that even if the September 23 and October 23 presentations were privileged as a matter of law, the defamation judgment is still supported by Exxon's publication of the December 1 letter to employees and retirees.

A. Damages Issues

We turn first to Exxon's challenges to the jury's damages award. Defamatory statements can be categorized as either per quod or per se. Tex. Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 580 (Tex.App.-Austin 2007, pet. denied). Statements that are defamatory per quod are actionable only upon allegation and proof of damages; thus, before a plaintiff can recover for defamation per quod, he or she must carry the burden of proof on both the existence and amount of damages. Id. (citing Time, Inc. v. Firestone, 424 U.S. 448, 459, 96 S.Ct. 958, 47 L.Ed.2d 154 (1976), and Leyendecker & Assoc., Inc. v. Wechter, 683 S.W.2d 369, 374 (Tex.1984)); see also Black's Law Dictionary 525 (2d Pocket ed.2001). In cases involving defamation per se, however, damages are presumed to flow from the nature of the defamation itself; thus, such an action can be sustained even without specific proof of the existence and amount of harm. See Tex. Disposal, 219 S.W.3d at 580-81...