Federal Exp. Corp. v. Dutschmann

• Decision Date: 03 February 1993
• Docket Number: No. D-3185,D-3185
• Citation: 846 S.W.2d 282
• Parties: 126 Lab.Cas. P 57,492 FEDERAL EXPRESS CORPORATION, Petitioner, v. Marcie DUTSCHMANN, Respondent.
• Court: Texas Supreme Court

Page 282

846 S.W.2d 282

126 Lab.Cas. P 57,492

FEDERAL EXPRESS CORPORATION, Petitioner, v. Marcie DUTSCHMANN, Respondent.

No. D-3185.

Supreme Court of Texas.

Feb. 3, 1993.

Phillip R. Jones, William Gary Fowler, Dallas, Connie Lewis Lensing, Memphis, TN, for petitioner.

Jon R. Ker, Hewitt, for respondent.

PER CURIAM.

Marcie Dutschmann sued for wrongful discharge from employment. The jury found that: (1) Dutschmann was discharged in retaliation for filing claims of sexual harassment against fellow employees; (2) Federal Express had contracted to provide a "Guaranteed Fair Treatment Procedure" to Dutschmann; and (3) Federal Express breached a duty of good faith and fair dealing in the conduct of the GFTP. The jury awarded actual damages on the retaliatory discharge and breach of contract claims, and punitive damages on the breach of good faith and fair dealing. Judgment was rendered on the jury findings and the court of appeals, with one justice dissenting in part, affirmed. 838 S.W.2d 804.

We disagree with the court of appeals' opinion that the trial court was correct in submitting a jury question regarding the existence of an employment contract because no contract existed as a matter of law between the parties. However, we affirm the judgments of the court of appeals and the trial court regarding statutory damages because, despite the lack of an employment contract, the statutory damage award is supported by the finding of retaliatory discharge.

Because Dutschmann is not entitled to an award of punitive damages without a finding of actual tort damages, we reverse that portion of the judgments of the court of appeals and trial court awarding punitive damages to Dutschmann.

Federal Express discharged Dutschmann from employment for allegedly falsifying delivery records. Federal Express's employee handbook stated that employment was at-will, that the handbook did not constitute an employment contract, and that the handbook could be modified or withdrawn at any time. Dutschmann signed an agreement acknowledging receipt of the handbook and acknowledging that the handbook did not create an employment contract or otherwise modify her at-will employment status.

The handbook outlined Federal Express's "Guaranteed Fair Treatment Procedure" (GFTP), which permitted discharged employees to receive a review of their termination, with the possibility of reinstatement. Dutschmann availed herself of the GFTP, appealing all the way to the Board of Review, a final discretionary review granted by the chief executive officer of Federal Express. During the GFTP, Dutschmann alleged that she was fired in retaliation for making sexual harassment complaints against a co-worker several years prior to her discharge.

After her termination was upheld by the Board of Review, Dutschmann filed this suit. The jury found Federal Express liable for retaliatory discharge under the Texas Commission on Human Rights Act, TEX.REV.CIV.STAT.ANN. art. 5221k § 5.05 (Vernon 1987) (the "Act"), for breach of contract with regard to the GFTP, and for breach of a duty of good faith and fair dealing with regard to the GFTP. The jury awarded $20,000 in actual damages based on the findings of retaliatory discharge and breach of contract, and $50,000 in punitive damages based on the breach of duty of good faith and fair dealing.

The long-standing rule in Texas provides for employment at will, terminable at any time by either party, with or without cause, absent an express agreement to the contrary. Schroeder v. Texas Iron Works, 813 S.W.2d 483, 489 (Tex.1991); East Line & R.R.R. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 (1888).

The Federal Express employee handbook, which outlined the GFTP, expressly provided that the handbook did not create any contractual rights. Further, the Federal Express Personnel Policy & Procedure Manual, which detailed the GFTP, stated that "the policies and procedures set forth in this manual provide guidelines for management and employees during employment, but do not create contractual rights regarding termination or otherwise." Significantly, Dutschmann signed a "Record of Receipt" for the handbook, acknowledging that "I understand (the handbook) is not a contract and the information provided may need to be changed by the company from time to time."

A disclaimer in an employee handbook, such as the one included by Federal Express, negates any implication that a personnel procedures manual places a restriction on the employment at will relationship. See Wilhite v. H.E. Butt Co., 812 S.W.2d 1, 6 (Tex.App.--Corpus Christi 1991, no writ); Hicks v. Baylor Univ. Med. Center, 789 S.W.2d 299, 302 (Tex.App.--Dallas 1990, writ denied); Berry v. Doctor's Health Facilities, 715 S.W.2d 60, 61-62 (Tex.App.--Dallas 1986, no writ); Zimmerman v. H.E. Butt Grocery Co., 932 F.2d 469, 470 (5th Cir.), cert. denied, 502 U.S. 984, 112 S.Ct. 591, 116 L.Ed.2d 615 (1991) (employee signed acknowledgement that employee handbook did not constitute a contract); Perez v. Vinnell Corp., 763 F.Supp. 199, 200-01 (S.D.Tex.1991) (employee manual expressly provided that it was a guide, not a contract); White v. Federal Express Corp., 729 F.Supp. 1536, 1547-49 (E.D.Va.1990), aff'd, 939 F.2d 157 (4th Cir.1991) (same employee handbook at issue in the current case held not to be a contract modifying at-will employment); Bowser v. McDonald's Corp., 714 F.Supp. 839, 842 (S.D.Tex.1989) (employee manual provided that employment was at will). See also RESTATEMENT (SECOND) OF CONTRACTS § 21 (1979) (manifestation of intention that a promise shall not affect legal relations may prevent the formation of a contract); Mark G. Yudof, Contorts and the Muddled Quest for Bright Lines, 1991 STATE BAR OF TEXAS...