Gary Sawyer v. E I DuPont de Nemours & Co
689 F.3d 463
5th Cir.2012Background
- Sixty-three former DuPont Terathane Unit employees at La Porte, TX sued for state-law fraud claims after a spin-off to a new subsidiary, DTI.
- The Terathane Unit was transferred to DTI; most employees were covered by a collective bargaining agreement (CBA) with the Union, which guaranteed just-cause discharge and provided a grievance process.
- DuPont considered separating DTI's fate, potentially canceling the CBA, but chose a two-phase process to let employees choose between staying with DuPont or joining DTI with a new CBA identical to the old one.
- Phase one allowed employees to transfer to DTI or remain with DuPont; Phase two would occur only if many chose to stay with DuPont.
- Phase-one meetings involved DuPont managers who allegedly assured employees that DTI would remain under DuPont or be controlled by DuPont, conflicting with later disclosures of a Koch Industries acquisition.
- After many accepted transfers to DTI and a later Koch purchase, plaintiffs alleged their pensions and benefits deteriorated due to the sale, while their Texas fraud claims were not based on the CBAs themselves.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May at-will employees bring fraud claims for loss of employment under Texas law? | Sawyer contends at-will status does not bar fraud claims. | DuPont contends at-will presumption bars such claims. | Questions certified to Texas Supreme Court; appellate panel did not decide. |
| Does a 60-day cancellation-upon-notice CBA with just-cause protection override at-will status for fraud claims? | Sawyer asserts protections negate at-will status. | DuPont argues cancellation language preserves at-will status. | Questions certified to Texas Supreme Court; appellate panel did not decide. |
Key Cases Cited
- PAS, Inc. v. Engel, 350 S.W.3d 602 (Tex. App.—Houston [14th Dist.] 2011) (fraud claims by at-will employees—preemption context)
- Halper v. Univ. of the Incarnate Word, 90 S.W.3d 842 (Tex. App.—San Antonio 2002) (San Antonio court on at-will implications for fraud claims)
- Curtis v. Ziff Energy Group, Ltd., 12 S.W.3d 114 (Tex. App.—Houston [14th Dist.] 1999) (term contract with cancellation right treated as at-will)
- Offshore Petroleum Divers, Inc. v. Cromp, 952 S.W.2d 954 (Tex. App.—Beaumont 1997) (pre-employment misrepresentations not barred by at-will doctrine)
- Hussong v. Schwan’s Sales Enterprises, 896 S.W.2d 320 (Tex. App.—Houston [1st Dist.] 1995) (cancellation-rights can render term contract at-will)