Phillips v. Goodyear Tire & Rubber Co.

• Decision Date: 27 July 1981
• Docket Number: No. 79-2011,79-2011
• Citation: 651 F.2d 1051
• Parties: 115 L.R.R.M. (BNA) 4173 Ira Blake PHILLIPS, Plaintiff-Appellee, v. The GOODYEAR TIRE & RUBBER COMPANY, Defendant-Appellant. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1051

651 F.2d 1051

115 L.R.R.M. (BNA) 4173

Ira Blake PHILLIPS, Plaintiff-Appellee, v. The GOODYEAR TIRE & RUBBER COMPANY, Defendant-Appellant.

No. 79-2011.

United States Court of Appeals, Fifth Circuit.

Unit A

July 27, 1981.

Preston Shirley, Galveston, Tex., for defendant-appellant.

Kronzer, Abraham & Watkins, W. James Kronzer, Houston, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before BROWN, THORNBERRY and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

In this diversity case, Appellee Ira Blake Phillips sued his former employer, Appellant Goodyear Tire and Rubber Company (Goodyear) for wrongful discharge, contending that Goodyear terminated his employment in retaliation for Phillips' having given truthful deposition testimony in a federal trial. The jury found that Phillips' testimony was the sole reason for his discharge and awarded him $400,000 in actual damages. The district court entered judgment based upon the jury verdict. Concluding that neither Georgia nor Texas the only two states whose substantive laws might govern this case recognize a cause of action for retaliatory discharge in favor of an employee hired for an indefinite period, we reverse the judgment of the district court.

Phillips was employed by Goodyear in 1958 at Columbia, South Carolina. He worked for Goodyear at various locations in the United States until May, 1969, when he was promoted to the position of District Manager of the company in San Antonio, Texas. On August 1, 1971, Goodyear made Phillips District Manager in Houston, Texas. Shortly before June of 1973, Phillips was summoned to Goodyear's office in Atlanta, Georgia, where he was advised of his promotion to Assistant Region Manager-Retail. In June of 1973, Phillips and his family moved to Atlanta, and Phillips began working in Goodyear's Atlanta office. The record clearly shows, and Phillips has consistently admitted, that he had no written contract of employment with Goodyear and that he was hired for an indefinite period.

During the time Phillips was employed at Goodyear's Atlanta office, the Texas Tire Company located in Houston brought an antitrust suit against Goodyear in the federal district court in Houston. In July and August of 1974, Phillips gave deposition testimony in connection with the antitrust suit. Approximately one-half of his deposition was taken in Houston. The deposition was then adjourned and was concluded in Atlanta in August of 1974. On December 1, 1975, Goodyear terminated Phillips' employment. Phillips subsequently moved from Atlanta to Texas, where he now resides.

On June 18, 1976, Phillips filed a diversity suit against Goodyear in federal district court in Texas, asserting that Goodyear wrongfully and maliciously discharged him in retaliation for giving truthful deposition testimony in the Texas Tire antitrust litigation that was harmful to Goodyear's interest. In response to Phillips' contentions, Goodyear denied that Phillips was fired because his testimony was harmful or because Phillips refused to perjure himself, arguing that other reasons, including Phillips' alleged misconduct and incompetency, provoked the discharge.

A jury trial spanning twenty-three days was held. Goodyear moved for a directed verdict after Phillips rested his case and again at the close of all of the evidence, contending, inter alia, that neither Georgia nor Texas law recognized Phillips' asserted cause of action. The district court denied the motions. The court also overruled all of Goodyear's objections to the proposed jury charge and denied the questions and special instructions proffered by Goodyear. The district court charged the jury that Goodyear would be liable to Phillips for actual damages resulting from the discharge if the "real and only reason" for the discharge "result(ed) from something that (Phillips) was legally required to do, such as to the best of (his) ability providing testimony in a legal or administrative proceeding affecting (his) employer...." ¹

In response to the questions submitted to it, the jury found that "the real and only reason for (Phillips' discharge by Goodyear) was testimony he gave in the (Texas Tire antitrust) case," and that Phillips "would not have been (discharged) but for such testimony." However, it found that the discharge was not motivated by bad faith or ill will with specific intent to harm Phillips. The jury determined that the sum of $400,000 ² would fairly compensate Phillips for the injuries proximately caused by the discharge. No exemplary damages were awarded based upon the jury's finding that Goodyear did not act with malice toward Phillips in terminating his employment. The district judge denied Goodyear's motion for judgment notwithstanding the verdict and entered judgment against Goodyear for $400,000 plus interest from the date of judgment.

On appeal, Goodyear challenges the judgment against it on a number of grounds, including alleged insufficiency of the verdict to support the judgment, ³ error in the court's charge to the jury on damages, and impropriety of the jury's amended answer on the issue of actual damages. Goodyear's primary contention, however, is that, as an employee hired for an indefinite period, Phillips has no cause of action against his former employer, regardless of the motives underlying the discharge. Goodyear argues that Texas choice-of-law rules ⁴ dictate that Georgia substantive law governs the suit, and that Georgia law supplies Phillips with no cause of action. Alternatively, Goodyear contends that even if Texas substantive law applies, Texas would not recognize Phillips' asserted cause of action. Phillips argues for the application of Texas law, but contends that both Texas and Georgia would permit his recovery under the circumstances of this case.

For purposes of analyzing the issue whether Phillips has a cause of action, we view Phillips' contentions and the jury's findings in the light most favorable to him. Therefore, we assume without deciding that the sole reason for Phillips' termination was that he gave truthful testimony harmful to Goodyear's interests or that he refused to perjure himself. Because we conclude that neither Georgia nor Texas law supplies Phillips with a cause of action against his former employer arising from his discharge, we need not decide the choice-of-law issue. Likewise, because our conclusion that Phillips has no cause of action requires reversal of the judgment in toto, we have no occasion to resolve the remainder of the issues raised by Goodyear.

Like the majority of the states, Georgia and Texas follow the rule that when an employee is hired for an indefinite period, the employment relationship may be terminated at will by either party. Under this "at will" rule, the employer may, without liability, discharge the employee for a good reason, a bad reason, or no reason at all. See the recent, thorough Note, Protecting At Will Employees Against Wrongful Discharge: The Duty to Terminate Only in Good Faith, 93 Harv.L.Rev. 1816 (1980).

In Georgia, application of the at will rule is grounded in Ga.Code Ann. § 66-101, which specifically provides that "(a)n indefinite hiring may be terminated at will by either party." According to the Supreme Court of Georgia, "(t)he motives of the employer in discharging his employee at will are legally immaterial." Georgia Power Co. v. Busbin, 242 Ga. 612, 250 S.E.2d 442, 445 (1978). The Georgia courts have uniformly followed the at will rule, holding that an employee at will has no cause of action, whether characterized as sounding in tort or in contract, against his employer for an alleged wrongful discharge. See, e. g., id. at 444-45; Runyan v. Economics Laboratory, Inc., 147 Ga.App. 53, 248 S.E.2d 44 (1978); McElroy v. Wilson, 143 Ga.App. 893, 240 S.E.2d 155 (1977), cert. denied, 435 U.S. 931, 98 S.Ct. 1506, 55 L.Ed.2d 528 (1978); Hill v. Delta Air Lines, Inc., 143 Ga.App. 103, 237 S.E.2d 597 (1977); Ely v. Stratoflex, Inc., 132 Ga.App. 569, 208 S.E.2d 583 (1974).

In Texas, the at will rule flows from common law rather than statute, but the content of the rule is the same as in Georgia. Under Texas law, an employee at will may be discharged by the employer with or without cause and regardless of the employer's motive without liability. See, e. g., St. Louis Southwestern Railway Co. v. Griffin, 106 Tex. 477, 171 S.W. 703 (1914); East Line & R. R. R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99 (1888); United Services Auto Ass'n v. Tull, 571 S.W.2d 551 (Tex.Civ.App. San Antonio 1978, writ ref'd n. r. e.); Cactus Feeders, Inc. v. Wittler, 509 S.W.2d 934 (Tex.Civ.App. Amarillo 1974, no writ); NHA, Inc. v. Jones, 500 S.W.2d 940 (Tex.Civ.App. Ft. Worth 1973, writ ref'd n. r. e.); Magnolia Petroleum Co. v. Dubois, 81 S.W.2d 157 (Tex.Civ.App. Austin 1935, writ ref'd); 38 Tex.Jur.2d Master and Servant § 12 (1962). See also Perdue v. J. C. Penney Co., 470 F.Supp. 1234 (S.D.N.Y.1979); Bowen v. Wohl Shoe Co., 389 F.Supp. 572 (S.D.Tex.1975).

Phillips contends that neither Georgia nor Texas has decided a case in which an employee, as we are assuming without deciding in this case, was discharged for refusing to perjure himself or for giving truthful trial testimony. Thus, Phillips asserts that neither Georgia nor Texas law forecloses recovery under the assumed circumstances of this case. He argues that, if confronted with these facts, both states would adopt an "emerging exception" to the at will rule designed to protect employees who are discharged in contravention of an important public policy of the state. This "public policy" exception to the at will rule has been adopted, in one form or another, by a small but ever increasing minority of the states. See Note, supra, 93 Harv.L.Rev. at 1816-24. Phillips argues that in light of the strong state and federal public policies ⁵ in favor of protecting witnesses who are called upon to...