Winters v. Houston Chronicle Pub. Co.

Decision Date06 September 1990
Docket NumberNo. C-9468,C-9468
Citation795 S.W.2d 723
Parties, 117 Lab.Cas. P 56,494, 5 IER Cases 1185 Richard WINTERS, Petitioner, v. HOUSTON CHRONICLE PUBLISHING COMPANY, Respondent.
CourtTexas Supreme Court
OPINION

GONZALEZ, Justice.

This is an appeal from a summary judgment in a wrongful discharge suit. Richard Winters brought this action against his former employer, Houston Chronicle Publishing Company, alleging that he was fired for reporting illegal activities of his fellow employees to upper-level management. The trial court rendered summary judgment against Winters on the basis that his pleadings failed to state a cause of action. The court of appeals affirmed. 781 S.W.2d 408. We affirm the judgment of the court of appeals.

Winters worked as an at will employee for the Chronicle from April 1977 to June 1986. During his tenure with the Chronicle, Winters worked in at least seven departments. Winters asserts that beginning in 1980, he became aware of alleged illegal activities on the part of fellow employees. He claims that the Chronicle was falsely reporting an inflated number of paid subscribers, that several employees were engaged in inventory theft, and that his immediate supervisor offered him an opportunity to participate in a kickback scheme with the manufacturers of plastic bags. Winters orally reported all of these activities to upper-level management in January 1986 but did not make any oral or written report to law enforcement authorities. He was terminated six months later. He alleges that the sole cause for his termination was his report to management of the suspected illegal activities. Winters asserts that the reported conduct "may" violate Texas Penal Code section 32.42(b)(12)(A) governing criminal deceptive trade practices. Winters further contends that the offer to participate in a kickback scheme "purportedly" violates sections 15.01 and 31.03 of the Texas Penal Code dealing with criminal attempt and theft. We must determine whether, under these facts, he has stated a cause of action.

The long standing rule in Texas is that employment for an indefinite term may be terminated at will and without cause. East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 (1888). To date this court has created only two exceptions. In Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex.1985), we recognized a narrow exception for an employee discharged "for the sole reason that the employee refused to perform an illegal act." Winters does not fit within the Sabine Pilot exception because he was not unacceptably forced to choose between risking criminal liability or being discharged from his livelihood. We have also recognized another exception for an employee who demonstrates that the principal reason for discharge was the employer's desire to avoid contributing or paying benefits under the employer's pension fund. McClendon v. Ingersoll-Rand Co., 779 S.W.2d 69, 71 (Tex.1989), cert. granted, 494 U.S. 1078, 110 S.Ct. 1804, 108 L.Ed.2d 935 (1990).

The legislature has also placed restrictions upon the at will employment doctrine. In protecting employees who report illegal activities in the workplace, the legislature has enacted protection for a limited class of employees. Public employees are protected from retaliation for reporting, in good faith, violations of law to an appropriate law enforcement agency. Tex.Rev.Civ.Stat.Ann. art. 6252-16a (Vernon Supp.1990). Certain private sector employees are also protected. A nursing home employee has a cause of action against the institution or its owner if he or she is terminated for reporting abuse or neglect of a resident of the institution. Tex. Health & Safety Code Ann. § 242.133 (Vernon Supp.1990). An employer who uses hazardous chemicals may not discharge an employee who reports a violation of the Hazard Communication Act. Tex. Health & Safety Code Ann. § 502.013 (Vernon 1990). Finally, an employer cannot retaliate against an employee for reporting violations of the Commission on Human Rights Act. Tex.Rev.Civ.Stat.Ann. art. 5221k § 5.05 (Vernon 1989). 1

Winters admits that he does not come within any of the statutory or common law exceptions to the at will doctrine. He is asking this court to recognize a cause of action for private employees who are discharged for reporting illegal activities. 2 We decline to do so at this time on these facts. 3

For the above reasons, the judgment of the court of appeals is affirmed.

Concurring opinion by DOGGETT, J., joined by RAY and MAUZY, JJ.

DOGGETT, Justice, concurring.

In Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985), this court afforded employees protection from retaliatory discharge for refusing to engage in illegal conduct. The central issue presented by this case is the availability of recourse to an employee not asked to participate directly in illegal conduct but instead to condone, by remaining silent, activities in the workplace that have a probable adverse effect upon the public.

Petitioner Richard Winters does not allege that his termination from employment was motivated by his having refused to perform an illegal act. Rather, he asserts his discharge resulted from his having brought to the attention of his supervisors conduct that he believed was fraudulent and illegal. In April 1977, Respondent Houston Chronicle Publishing Company hired Winters as a Division Manager in its Copy Sales Department. For three and one-half years, he worked in that capacity without incident. Beginning in October 1980, and continuing at various times until February 1986, Winters alleges that he informed the Chronicle that some of its managerial employees engaged in circulation fraud, inventory theft, and a "kickback" scheme. Winters alleges that in June 1986, as a result of these reports, he was fired. The trial court rendered summary judgment against him on the basis that his pleading failed to state a cause of action under Sabine Pilot; the court of appeals affirmed.

By stating that it declines to recognize such a cause of action "at this time on these facts," at 725, the court leaves the clear implication that it will do so at a future time on other facts. This conclusion is strengthened by the court's reference to the many states that "protect private sector employees who report illegal activity in the workplace." At 725 n. 3. I very reluctantly concur with the court that this may not be the most appropriate case in which to announce an important new rule of law.

To offer guidance to both employers and employees, I write to define the elements of a cause of action for employees who suffer employer retaliation for exposing from within activities in the workplace that have a probable adverse effect upon the public. Because trial judges and courts of appeals will have the responsibility to enforce this cause of action under appropriate circumstances, 1 it is both necessary and desirable to give them direction to prevent the costly retrial of cases.

In creating such a cause of action, the judiciary must be mindful of our long adherence to the employment-at-will doctrine in Texas, recognizing the right of an employer to fire employees at any time with or without cause. East Line & R.R.R. Co. v. Scott, 72 Tex. 71, 10 S.W. 99 (1888). We must respect the need for employers to make difficult managerial decisions vital to the effective operation of a business organization without unnecessary judicial intrusion. This court has nonetheless been willing to carve out narrow exceptions when the employer's primary motivation for termination of employment directly contradicted important societal interests. Thus, in Sabine Pilot we refused to condone the firing of an employee if grounded upon a refusal to perform an illegal act even though such conduct might have produced a financial benefit to the employer. 2

We have been urged to demonstrate judicial restraint by deferring employee protection exclusively to the legislature. Yet the absence of safeguards stems largely from this court's recognition of the at-will employment doctrine in East Line over a century ago. In carving out narrow exceptions to this rule, the court balances precariously between the need for stability and continuity in the law and the need to preserve the law's vitality and applicability in a changing society. Here, no societal interest can be advanced that would support an employer's retaliation against an employee who reported activities harmful to the public. In this situation, judicial failure to modify the law constitutes neither restraint nor neutrality, but rather an active participation in perpetuating injustice. This is particularly true when the judiciary can craft a narrow exception that protects the interests of responsible, law-abiding employers while holding accountable those whose activities threaten the public interest. 3

The very case that Respondent urges as dispositive, Maus v. National Living Centers, Inc., 633 S.W.2d 674 (Tex.App.--Austin 1982, writ ref'd n.r.e.), demonstrates the shocking result of a judicial refusal to protect workers who report injurious activities. A person described by that court as "a dedicated worker who often worked double shifts and took an active interest in the patients" was discharged, allegedly for complaining to her employer concerning the neglect and poor quality of care provided nursing home residents. Id. at 675. One of her complaints concerned the death of a patient for whom her employer allegedly refused to call a doctor. Moreover, she claimed her firing violated a "substantial, stated public policy" embodied in a statute providing criminal penalties for failure to report cases of abuse and neglect. Id. Not finding a specific legislative remedy for the dismissal, the court apparently viewed itself as incapable of altering a rule...

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