General Mills, Inc. v. Hathaway
| Decision Date | 28 March 1985 |
| Docket Number | No. 05-84-00467-CV,05-84-00467-CV |
| Parties | GENERAL MILLS, INC., Appellant, v. Gregg N. HATHAWAY and Billie Ann Hathaway, Appellees. |
| Court | Texas Court of Appeals |
Robert H. Mow, Jr., Michael Braden, Dallas, for appellant.
Daniel J. Sheehan, Jr., Dallas, for appellees.
Before STEPHENS, VANCE and DEVANY, JJ.
This case involves an employment contract whereby General Mills, Inc., appellant, employed Gregg N. Hathaway, one of the appellees, as a commissioned salesman. A dispute arose between Hathaway and General Mills concerning what commission rate was to be used in calculating commissions on shipments of Izod merchandise starting on February 1, 1980. The trial court granted judgment for the Hathaways based on the findings of the jury. For the reasons below, we reverse and render judgment that the Hathaways take nothing.
General Mills and Hathaway had made an oral agreement that Hathaway would carry the Izod girls' line for a four-state region (Texas, Oklahoma, Louisiana, and Arkansas) and the Izod boys' line of clothing for Arkansas. Hathaway was hired by General Mills in 1978. Hathaway was called to the General Mills headquarters in New York in 1979 at which time he was assigned new rates. General Mills confirmed the new rates by letter, and Hathaway signed the letter acknowledging the new rates. Again, in January, 1980, Hathaway was called to New York and was assigned new rates for the following year. Hathaway did not like the new rates and testified that he made this known to Berkeley, the National Sales Manager for General Mills. He did not sign the follow-up letter confirming the rates. However, Hathaway continued to sell for General Mills. In April, 1980, Hathaway was terminated by General Mills and was paid according to rates assigned to him in January, 1980, and later confirmed in writing. Hathaway sued General Mills for an additional amount representing the difference between the 1979 and 1980 rates.
The issues submitted to the jury resulted in certain findings. Based upon those findings, the trial court entered judgment for $106,042.00, pre-judgment interest and attorney's fees, from which this appeal has been taken. General Mills presents ten points of error. We need only address the first three points of error, which are dispositive of this appeal.
In its first point of error, General Mills contends that the trial court erred in overruling its motions for judgment and new trial and entering judgment for the Hathaways because Mr. Hathaway's act of continuing to work for General Mills after the establishment of the 1980 rates established as a matter of law that Hathaway would be compensated at the new rates. In its second and third points of error, General Mills contends that the trial court erred in overruling General Mills' motions for judgment and new trial which requested the court to disregard the jury's finding that Hathaway did not accept the 1980 rate change since Hathaway's act of continuing to work for General Mills after the assignment of his new rates established as a matter of law his acceptance of those rates. General Mills further contends that it was not necessary for it to prove that Hathaway accepted the new rates since as a matter of law he was bound by them.
Hathaway was not hired for a certain period of time. There was nothing in the contractual arrangement to bind either party as to duration. General Mills could terminate Hathaway's employment at any time, and Hathaway had the right to quit at any time. Texas law recognizes this type of contract as being terminable at will. Maus v. National Living Centers, Inc., 633 S.W.2d 674, 675-676 (Tex.App.--Austin 1982, writ ref'd n.r.e.); Watson v. Zep Manufacturing Co., 582 S.W.2d 178, 179-180 (Tex.Civ.App.--Dallas 1979, writ ref'd n.r.e.). Such a contract may be terminated by either party at any time for any reason, and either party has the right to modify the terms of such a contract. Mitsubishi Aircraft International, Inc. v. Maurer, 675 S.W.2d 286, 288 (Tex.App.--Dallas 1984, no writ). If a change is made, the other party may perform pursuant to the terms as modified or end the relationship.
General Mills contends that the disposition of the instant case is controlled by the decision in L.G. Balfour Co. v. Brown, 110 S.W.2d 104 (Tex.Civ.App.--Fort Worth 1937, no writ), which involved a contract which was terminable at will. In Balfour, an employer brought suit against a former salesman claiming conversion by the salesman of materials and other merchandise belonging to the employer and also claiming recovery for a deficit growing out of former accountings. The salesman counterclaimed to recover commissions on certain sales. In Balfour, the employer had informed the salesman by letter that his bonuses on sales would be reduced and the salesman had protested the change. The trial court found that the salesman did not consent to the modification of the compensation under the original contract and thus the original contract remained in full force. The trial court entered judgment for the employee for the bonuses. The court of civil appeals held, however, that when an employer notifies an employee of a change in the terms of a contract terminable at will, the employee must then elect whether to continue working under the new changes. He cannot continue working relying upon the old terms. Since the salesman continued to work for his employer after receipt of the letter and accepted payments from the employer, he elected to accept the new terms. Balfour, 110 S.W.2d at 107.
In the instant case, Berkeley, the national sales manager, first notified Hathaway of the change in commission rates. According to Hathaway, he expressed to Berkeley that he did not like the new rates. Hathaway further testified that Berkeley advised him to return home and discuss the matter with a Mr. Duncan, another salesman with General Mills. While this is emphatically denied by Berkeley, the record conclusively shows that Duncan had no authority to commit General Mills in any way. Therefore, even if we accept what Hathaway said as true, Duncan could not have changed what Hathaway was told in New York. Hathaway testified that he discussed the matter with Duncan, but admits no resolution was achieved. It was during these discussions with Duncan that Hathaway received the confirmation letter assigning the new rates. If Hathaway had any personal doubts about the new rates, we believe that that letter would have dispelled any such doubts. Hathaway did not acknowledge the letter but continued to work. He was terminated a few months later. Upon termination,...
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Hathaway v. General Mills, Inc.
...court rendered judgment for Hathaway based on jury findings that Hathaway did not accept the modification. The court of appeals reversed, 694 S.W.2d 96. We reverse the court of appeal's judgment and affirm the trial Hathaway began selling La Coste "Izod" shirts for General Mills on a commis......