495 S.W.3d 316
Tex. App.2016Background
- Magee (country manager) and Queen (safety director) worked for RBG USA; Magee had a written employment contract, Queen did not.
- After RBG lost a $2M contract, Magee and Queen covertly approached Surface Technology and provided confidential RBG materials (including pricing and labor breakdowns) to solicit business.
- RBG investigated after learning of the meeting; Magee initially denied then admitted the trip and sharing documents; both were terminated for "gross misconduct."
- Magee sued for breach of contract and other claims; RBG counterclaimed for repayment of funds (vehicle advance and bonus overpayment).
- Bench trial: judgment for RBG on most claims against Magee (including bonus repayment), judgment for Queen on his breach-of-contract claim (court found an oral contract entitling him to three months’ notice).
- On appeal, the court affirmed in part, reversed in part: reversed RBG’s claim for repayment of the vehicle funds (insufficient evidence); reversed trial court’s judgment for Queen on his breach claim (insufficient evidence that oral agreement altered at-will status); otherwise affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RBG’s counterclaim that Magee must repay vehicle advance | RBG: advanced funds to Magee for a vehicle that Magee was required to repay | Magee: denied obligation to repay and testified he was told he didn’t have to | Reversed — insufficient evidence RBG met its burden to prove Magee was required to repay the vehicle funds |
| RBG’s counterclaim that Magee must repay bonus overpayment | RBG: Magee was overpaid and did not reimburse via payroll deductions | Magee: thought he had repaid the amount but offered no proof | Affirmed — legally sufficient evidence RBG proved bonus overpayment unpaid; Magee failed to prove payment (affirmative defense) |
| Whether Magee was justifiably terminated for gross misconduct (divulging confidential info and dishonesty) | Magee/Queen: conduct aimed at business development / partner, and policies should allow investigation and notice | RBG: sharing confidential materials and dishonesty fit gross misconduct and allow summary dismissal under contract/policies | Affirmed — sufficient evidence Magee disclosed confidential info and was dishonest; summary dismissal for gross misconduct was permitted |
| Whether Queen had an oral employment contract that modified at-will status (entitling him to 3 months’ notice) | Queen: supervisor (Magee) offered contract terms similar to Magee’s; parties acted consistent with a contract; RBG drafted but did not deliver written contract | RBG: no express, clear, specific agreement was established before termination; presumption of at-will not overcome | Reversed — insufficient evidence that RBG unequivocally intended to be bound to alter at-will status; Queen’s claim fails |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency review standards for evidence)
- Montgomery Cnty. Hosp. Dist. v. Brown, 965 S.W.2d 501 (Tex. 1998) (presumption of at-will employment; employer must unequivocally agree to limit termination)
- Fischer v. CTMI, L.L.C., 479 S.W.3d 231 (Tex. 2016) (agreements to agree and enforceability when parties perform)
- Durckel v. St. Joseph Hosp., 78 S.W.3d 576 (Tex. App.—Houston [14th Dist.] 2002) (general statements insufficient to modify at-will status)
- T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218 (Tex. 1992) (each contract’s material terms must be identified)
- Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006) (use of Restatement principles in employment-contract analysis)