McAllen Hospitals, L.P. D/B/A McAllen Medical Center and South Texas Health Systems v. Yolanda Lopez, Sheryl Hamer, Elmer Deguzman and Richard Wecker, 576 S.W.3d 389

Background

Four long‑term house‑supervisor nurses (Lopez, Hamer, DeGuzman, Wecker) sued McAllen Hospitals alleging an implied agreement to pay fixed annual salaries from Nov. 23, 2007–Dec. 31, 2010, and claimed breach for underpayment.
Nurses pointed to 2009–2010 performance reviews listing an “Annual Rate,” payroll change forms showing a “salary,” handbook statements distinguishing exempt vs. nonexempt employees, and HR policies as evidentiary support for an implied salary agreement.
The Hospital consistently paid the nurses by the hour (payroll calculated by dividing annual amounts by 2,080 hours), and nurses continued working without complaint; some continued to be paid hourly through trial.
At trial the jury found an agreement for fixed pay and awarded about $389,015; the trial court entered judgment for the nurses.
The court of appeals affirmed; the Supreme Court of Texas granted review to address legal sufficiency of the evidence of an implied fixed‑salary agreement and breach.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was there legally sufficient evidence of an implied agreement that nurses would receive a fixed annual salary?	Performance reviews showing “Annual Rate,” payroll forms listing salaries, handbook/exempt classification, and HR policies demonstrate an implied meeting of minds.	Course of dealing shows pay was hourly; reviews and handbook contain disclaimers and payroll forms are ambiguous or unseen by nurses—no mutual agreement to fixed pay.	No. Evidence was legally insufficient to show the Hospital intended to be bound to fixed annual salaries.
If no agreement existed, was there legally sufficient evidence of breach?	If an implied contract existed, failure to pay the listed annual amounts was a breach.	Without an enforceable agreement to pay fixed salaries, there can be no breach.	No. Because no agreement, there is no breach.
Could performance reviews and handbook create contractual obligations despite disclaimers?	Reviews and handbook contextually show intent and acceptance; oral review discussions support reliance.	Handbook expressly disclaims contractual effect; reviews are part of that communication process and cannot create binding commitments.	Disclaimers prevented the reviews/handbook from proving contractual intent; nurses’ testimony was insufficient.
Were payroll change forms and HR policies admissible and probative of intent?	Payroll forms listing salaries and HR policies referencing exempt pay practice evidence intent to pay salaries.	2008 forms ambiguous (both hourly and annual), 2009–2010 forms were unsigned and not shown to nurses; policies either fall under handbook disclaimer or are only scintilla.	Forms and policies did not provide sufficient, non‑speculative evidence of an intent to form a fixed‑salary contract.

Key Cases Cited

City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal‑sufficiency standard for jury findings)
Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607 (Tex. 1972) (mutual agreement necessary for implied contracts; intent inferred from conduct)
Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d 580 (Tex. 2016) (standards for legal sufficiency review)
Suarez v. City of Tex. City, 465 S.W.3d 623 (Tex. 2015) (circumstantial evidence that admits multiple equally probable inferences is no evidence)
Fed. Express Corp. v. Dutschmann, 846 S.W.2d 282 (Tex. 1993) (handbook disclaimers can prevent formation of contractual obligations)
Montgomery Cty. Hosp. Dist. v. Brown, 965 S.W.2d 501 (Tex. 1998) (promise defined as manifestation of intention; acceptance by performance requires promise known to promisee)
In re 24R, Inc., 324 S.W.3d 564 (Tex. 2010) (employee handbook with disclaimer is not a contract)