25th ANNUAL UPDATE: RECENT
CASE LAW AND DEVELOPMENTS IN
EMPLOYMENT LAW
November 2, 2016
Dallas Bar Association – Labor and Employment Section
Hal K. Gillespie
Mark A. Shank
Partner
Partner
Gillespie Sanford LLP
www.gillespiesanford.com
Gruber Elrod Johansen Hail Shank LLP
www.getrial.com
TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................ ii
TABLE OF AUTHORITIES .................................................................................................. iii
FREE SPEECH ................................................................................................................... 1
EXHAUSTION OF ADMINISTRATIVE REMEDIES ................................................................... 2
NON-COMPETE/TRADE SECRETS ...................................................................................... 4
FLSA .............................................................................................................................. 7
DISCRIMINATION/HARASSMENT/RETALIATION ...............................................................22
WHISTLEBLOWER/WRONGFUL TERMINATION .................................................................20
ARBITRATION ..................................................................................................................22
ADA/FMLA ..................................................................................................................29
ERISA ............................................................................................................................35
WAIVER OF ARGUMENTS .................................................................................................36
SECTION 1983 .................................................................................................................36
LABOR LAW ....................................................................................................................37
ATTORNEYS’ FEES ...........................................................................................................37
MISCELLANEOUS .............................................................................................................38
ii TABLE OF AUTHORITIES
Alamo Heights ISD v. Clark,
No. 04-14-00746, 2015 WL 6163252 (Tex. App.—San Antonio, Oct. 21, 2015, pet.
filed) ........................................................................................................................... 13
Arndt v. Pinard Home Health, Inc.,
No. 08-15-00094-CV, 2016 WL 1055870 (Tex. App.—El Paso 2016, Mar. 16, 2016,
pet. filed) .................................................................................................................... 39
AutoZone,Inc. v. Reyes,
272 S.W. 3d 588 (Tex. 2008) .................................................................................. 17
Azleway Charter School v. Hogue,
No. 12-15-00257-CV, 2016 WL 2585963 (Tex. App.— Tyler, May 4, 2016, no pet.) ... 2
Black v. Smith Protective Servs., Inc.,
No. 01-14-00969-CV, 2016 WL 5400565 (Tex App.—Houston[1st Dist.] Sept. 23,
2016, no pet. h.) ..................................................................................................... 43, 44
Brandon v. Sage Corp.,
808 F.3d 266 (5th Cir. 2015) .............................................................................. 18, 19
Brown v. Nero,
477 S.W. 3d 448 (Tex. App.—Austin 2015, pet. denied) .......................................... 40
Cannon v. Jacobs Field Services North America, Inc.,
813 F.3d 586 (5th Cir. 2016) ................................................................................... 33
Cleveland v. Policy Management Systems Corp.,
526 U.S. 795 (1999) ................................................................................................ 31
Combs v. City of Huntington, Texas,
829 F.3d 388 (5th Cir. 2016) ................................................................................... 38
CRST Van Expedited, Inc. v. EEOC,
___U.S.___, 136 S.Ct. 1642m,194 L.Ed.2d 707 (2016)........................................ 37, 38
iii Delaval v. PTech Drilling Tubulars, L.L.C.,
824 F.3d 476 (5th Cir. 2016) ................................................................................... 34
Diaz v. Kaplan Higher Educ., L.L.C.,
820 F.3d 172 (5th Cir. 2016) ................................................................................... 36
Dillard v. City fo Austin, Texas,
15-50779, 2016 WL 4978363, at *1 (5th Cir. Sept. 16, 2016) ............................... 30, 31
Dixie Elec. Membership Corp. v. N.L.R.B.,
814 F.3d 752 (5th Cir. 2016) ................................................................................... 37
Donaldson v. Tex. Dep’t of Aging & Disability Servs.,
No. 01-14-00736-CV, 2016 Wl 27316752 (Tex. App.—Houston[1st Dist.] May 5,
2016, pet filed) ....................................................................................................... 32, 33
Edwards v. KB Home,
3:11-CV-00240, 2015 WL 4430998 (S.D. Tex. July 18, 2015).............................. 10, 11
EEOC v. Bass Pro Outdoor Worold, L.L.C,
826 F.3d 791, (5th Cir. 2016) .................................................................................... 3
EEOC v. Rite Way Serv., Inc.,
819 F.3d 235 (5th Cir. 2016) ................................................................................... 19
EEOC v. Vicksburg Healthcare, L.L.C.,
No. 15-60764, 2016 WL 5939424 (5th Cir. Oct. 12, 2016)(unpublished) ................... 31
El Paso County v. Vasquez,
No. 08-15-00086-CV, 2016 WL 2620115 (Tex. App.—El Paso May 5, 2016, pet. filed) .16
El Paso Healthcare System, Ltd. v. Green,
485 S.W. 3d 227 (Tex. App.—El Paso 2016, pet. field) ............................................ 24
El Paso ISD v. Kell,
465 S.W. 3d 383 (Tex. App.—El Paso 2016, pet. filed) ............................................ 20
iv Encino Motorcars, LLC v. Navarro,
___U.S.___, 136 S.Ct. 2117, 195 L.Ed.2d 382 (2016) ................................................. 8
Espinosa v. Aaron’s Rents, Inc.,
484 S.W.3d 533 (Tex. App.—Houston[1st Dist.] 2016 no pet.) ........................... 40, 41
Fairchild v. All Am. Check Cashing, Inc.,
815 F. 3d 959 (5th Cir. 2016) ............................................................................ 10, 18
Firstlight Federal Credit Unioin v. Loya,
478 S.W.3d 157 (Tex. App.—El Paso 2015, no pet.)................................................ 25
Flynn v. Distinctive Home Care, Inc.,
812 F.3d 422 (5th Cir. 2016) ................................................................................... 33
Francisco v. Sw. Bell Tel. Co.,
CV H-14-3178, 2016 WL 4376610 (S.D. Tex. Aug. 17, 2016) .................................. 34
Giles v. Gen. Elec. Corp.,
245 F.3d 474 (5th Cir. 2001) ................................................................................... 31
Goad v. St. David’s Healthcare P’ship, L.P., LLP,
1-16-CV-044 RP, 2016 WL 2853573 (W.D. Tex. May 13, 2016) .............................. 27
Gomez v. Ericsson, Inc.,
828 F.3d 367 (5th Cir. 2016) ................................................................................... 35
Green v. Brennan,
___U.S.___, 136 S.Ct. 1769, 195 L.Ed.2d 44 (2016) ................................................ 11
Greenville Automatice Gas Co. v. Automatic Propane Gas & Supply, LLC,
465 S.W. 3d 778 (Tex. App.—Dallas 2015) ............................................................... 6
Heffernan v. City of Paterson,
___U.S.___. 136 S. Ct. 1412, 194 L.Ed. 2d 508 (2016) ............................................... 1
v Heinsohn v. Carabin & Shaw, P.C.,
832 F.3d 224 (5th Cir. 2016) .............................................................................. 34, 35
Houston Methodist San Jacinto Hospital v. Ford,
483 S.W.3d 588 (Tex. App.—Houston[14th Dist.] 2015) .................................... 16, 17
In re M-I L.L.C.,
___S.W.3d____, 2016 WL 2981342 (Tex. 2016) ........................................................ 5
Jacobs Field Services N.Am., Inc. v. Perez,
15-60342, 2016 Wl 4427`57 (5th Cir. Aug. 19, 2016) ............................................... 36
Jefferson County Constables Assoc. v. Jefferson County,
No. 13-14-00188_CV, 2016 WL 2609313 (Tex. App.—Corpus Christi, May 5, 2016,
pet. filed) ............................................................................................................... 25, 26
JTB Tools & Oilfield Services, L.L.C. v. United States,
831 F.3d 597 (5th Cir. 2016) ................................................................................... 36
Juan Bazaldua, Jr. v. City of Lyford, Texas,
No. 13-16-00004-CV, 2016 WL 4578409 (Tex. App.—Corpus Christi, Sept. 1, 2016,
no pet. h.) ................................................................................................................... 17
Kmart Stores of Texas, LLC, et al. v. Norma Ramirez,
No. 1055870, 2016 WL 1055870 (Tex. App.—El Paso, Mar. 16, 2016, pet. filed) 26, 27
Kubala v. Supreme Prod. Services, Inc.,
830 F.3d 199 (5th Cir. 2016) ................................................................................... 23
Levatino v. Apple Tree Café Touring, Inc.,
486 S.W.3d 724 (Tex. App.—Dallas 2016, pet. denied) ........................................... 39
Los Fresnos Consolidated Indepenedent School District, et al. v. Vazquez,
481 S.W. 3d 742 (Tex. App.—Austin 2016, pet. denied) .......................................... 42
Magee v. RBG USA, Inc.,
No. 14-14-00829-CV, 2016 WL 1729030 (Tex. App.—Houston[14th Dist.] Apr. 28.
2016, no pet.) ................................................................................................................ 4
vi McMillen v. Texas Health & Human Services Commission, et al.,
485 S.W.3d 427 (Tex. 2016) .............................................................................. 21, 22
Miller v. Metrocare Services,
809 F.3d 827 (5th Cir. 2016), cert. denied, 136 S.Ct. 2463 (2016) .......................... 36, 37
Morales v. Hidalgo County Irrigation Dist. No. 6,
No. 13-14-00205-CV, 2015 WL 5655802 (Tex. App.—Corpus Christi Sept. 15, 2015,
pet. denied) ............................................................................................................ 42, 43
Murphy Oil USA, Inc. v. N.L.R.B.,
808 F.3d 1013 (5th Cir. 2015) ............................................................................ 22, 23
Nelson v. Watch House Intern., L.L.C.,
815 F.3d 190 (5th Cir. 2016) ................................................................................... 24
Neurodiagnostic Tex, LLC v. Robert “Josh” Pierce, et al.,
No. 12-14-00254-CV, 2-16 WL 3704807 (Tex. App.—Tyler, July 12, 2016, no pet.) ... 7
Nicholson v. Securitas Sec. Services USA, Inc.,
830 F.3d 186 (5th Cir. 2016) ................................................................................... 18
Office of the Attorney General v. Weatherspoon,
472 S.W.3d 280 (Tex. 2015) ................................................................................... 22
Olibas v. Barclay,
15-10919, 2016 WL 5239699 (5th Cir. Sept. 20, 2016) ............................................. 10
Olibas v. Native Oilfield Services, LLC,
104 F. Supp. 3d 791 (N.D. Tex. 2015)..................................................................... 10
Ortiz v. City of San Antonio Fire Dept.,
806 F.3d 822 (5th Cir. 2015) .............................................................................. 38, 39
Parker v. Schlumberger Tech. Corp.,
475 S.W.3d 914 (Tex. App.—Houston [1st Dist.] 2015, no pet.) ......................... 27, 28
vii Peine v. Hit Servs. L.P.,
479 S.W. 3d 445 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) ..................... 21
Peterson v. Bell Helicopter Textron, Inc.,
806 F.3d 335 (5th Cir. 2015), cert. denied, 136 S.Ct. 1714, 194 L.Ed.2d 811 (2016) .... 12
Porter v. Houma Terrebonne Hous. Auth. Bd. of Com’rs,
810 F.3d 940 (5th Cir. 2015) ................................................................................... 12
Pullen v. Caddo Par. Sch. Bd.,
830 F.3d 205 (5th Cir. 2016) ................................................................................... 14
Ramin Corp. v. Wills,
No. 09-14-00168-CV, 2015 WL 6121602 (Tex. App.—Beaumont Oct. 15, 2015, no
pet.) .............................................................................................................................. 9
Rent-A-Ctr., W., Inc., v. Jackson,
561 U.S. 63 (2010) ................................................................................................. 23
Rivas v. Southwest Key Programs, Inc.,
No. 08-14-00010-CV, 2015 WL 6699532 (Tex. App.—El Paso, Nov. 3, 2015, no pet.)20, 21
Stage Stores, Inc. v. Gunnerson,
477 S.W.3d 848 (Tex. App.—Houston [1st Dist.] 2015, no pet.) ......................... 28, 29
Steele v. Leasing Enterprises, Ltd.,
826 F.3d 237 (5th Cir. 2016) ..................................................................................... 9
Tex. Dep’t of Aging & Disability Servs. v. Loya,
491 S. W. 3d 920 (Tex. App.—El Paso 2016, no pet.) .............................................. 13
Tex. Dep’t of Family & Protective Servs. v. Whitman,
No. 11-15-00074-CV, 2016 WL 28541149 (Tex. App.—Eastland, May 12, 2016, no
pet.) ............................................................................................................................ 15
Tex-Fin, Inc. v. Ducharne,
492 S.W. 3d 430 (Tex. App.—Houston [14th Dist.] 2016, no pet.) ...................... 41, 42
viii Tochril, Inc. v. Texas Workforce Comm’n,
No. 06-15-00078-CV, 2016 WL 3382747 (Tex. App.—Texarkana June 17, 2016, no
pet.) ............................................................................................................................ 43
Tyson Foods, Inc. v. Bouaphakeo,
___U.S.___, 136 S.Ct. 1036, 194 L.Ed.2d 124 (2016) ................................................. 7
Univ. of Tex. at Austin v. Kearney,
No. 03-14-00500-CV, 2016 WL 2659993 (Tex. App.— Austin, May 3, 2016, pet. filed)
.............................................................................................................................. 3
Univ. of Tex. Sw. Med. Ctr. v. Saunders,
No. 05-15-01543-CV, 2016 WL 3854231 (Tex. App.—Dallas, July 13, 2016, pet.
denied) ....................................................................................................................... 14
Ward v. Lamar Univ.,
484 S.W. 3d 440 (Tex. App.—Houston [14th Dist.] 2016, no pet.) ............................. 1
Wheat v. Flordia Par. Juvenile Justice Com’n,
811 F.3d 702 (5th Cir. 2016) ................................................................................... 29
Williams v. J.B. Hunt Transp., Inc.,
828 F.3d 806 (5th Cir. 2016) .............................................................................. 29, 30
Zamora v. Tarrant Cnty. Hosp. Dist.,
No. 08-14-00104-CV, 2016 WL 1403254 (Tex. App.—El Paso Apr. 8, 2016, pet. filed)
.............................................................................................................................. 2
Zhao v. XO Energy, LLC
493 S.W.3d 725 (Tex. App.—Houston [1st Dist.] 2016, no pet.) ................................ 4
STATUTES
29 United States Code
Section 213(b)(1)(A) .............................................................................................. 8
ix FREE SPEECH
Heffernan v. City of Paterson, — U.S. —, 136 S. Ct. 1412, 194 L.Ed.2d 508 (2016).
This case involved the Third Circuit’s holding that an employee’s Section 1983 free speech
claim is only actionable if the government employer’s action was prompted by the
employee’s actual, rather than his perceived, exercise of his free-speech rights. The Supreme
Court reversed, holding that when an employer takes an adverse action against an employee
out of a desire to prevent the employee from engaging in free speech, the employee is
entitled to challenge that unlawful action under the First Amendment and Section 1983,
even if the employer’s actions are based on a factual mistake about the employee’s motive.
In this case, a government official demoted an employee because the official believed, but
incorrectly believed, that the employee had supported a particular candidate for mayor.
Specifically, a police officer was demoted after he was seen holding a campaign sign (that he
had picked up for his mother, at her request, who was bedridden), which enforced a
mayoral candidate who was running against the incumbent mayor who had appointed the
police officer’s police chief. In doing so, the police officer was punished for his “overt
involvement” in a campaign when he, in fact, did not have any involvement in the
campaign. The police officer subsequently filed suit, and his case was dismissed on
summary judgment. The Third Circuit affirmed, finding that a free-speech retaliation claim
is actionable under Section 1983 only where the adverse action at issue was prompted by the
employee’s actual, rather than perceived exercise of constitutional rights.
The issue before the Supreme Court was whether an official’s factual mistake makes a
critical difference in a Section 1983 claim when the employee did not actually engage in
protected political activity but was nonetheless retaliated against for the incorrect perception
of engaging in protected political activity. The Court held that an employee who did not
engage in protected speech may still bring a Section 1983 suit where the employer
mistakenly thought that the employee had engaged in protected speech. In so finding, the
Court emphasized that it was the employer’s motive, and in particular the facts as the
employer reasonably understood them, that mattered.
Ward v. Lamar Univ., 484 S.W.3d 440 (Tex. App.—Houston [14th Dist.] 2016, no pet.).
This case involved a trial court’s sua sponte dismissal of an employee’s request for a
declaratory judgment that her employer, Lamar University, and the Texas State University
System had violated the Texas Constitution. The court of appeals found that the trial court
could not, based on a failure to plead supporting facts, sua sponte, dismiss the employee’s
free speech retaliation claim against the university.
State employee, serving as university associate vice president for finance, brought an action
against Lamar University and the Texas State University System, alleging that they violated
the Texas Whistleblower Act by taking adverse personnel actions against her after she
reported in good faith a violation of law to an appropriate law enforcement authority.
University and system filed a plea to the jurisdiction. Subsequently, employee amended her
petition to add claims for declaratory judgments that university and system violated the free
–1–
speech provision of the Texas Constitution. The trial court, inter alia, issued an order
dismissing employee’s constitutional claims sua sponte.
On appeal, the university and system argued that the employee’s free speech claim under
the Declaratory Judgments Act and Texas Constitution became moot because she resigned
her position at Lamar University after the trial court’s dismissal but before any party filed a
brief on appeal. The court of appeals concluded that the employee’s claim was not moot
because she sought attorney’s fees under the Declaratory Judgments Act. Further, the court
of appeals found that there was a fact question regarding whether the employee had suffered
an adverse employment decision—i.e., decreased supervision, reported to lower ranking
official—at the hands of the university for exercising her free speech rights.
EXHAUSTION OF ADMINISTRATIVE REMEDIES
Zamora v. Tarrant Cnty. Hosp. Dist., No. 08-14-00104-CV, 2016 WL 1403254 (Tex.
App.—El Paso Apr. 8, 2016, pet. filed).
This case involved a trial court’s dismissal of a wrongful termination claim (under a plea to
the jurisdiction and alternative motion for summary judgment) under the TCHRA based
upon its finding that: (1) the relation-back doctrine does not apply to government
defendants; and (2) the plaintiff’s suit was therefore untimely because she failed to timely
serve her state government employer within 60 days after receiving her notice of right to sue.
The court of appeals reversed, finding that: (1) the 60-day deadline to “bring a civil action”
is not jurisdictional; and (2) the relation-back doctrine applies to service on government
defendants. In so finding, the court of appeals remanded to the trial court for a
determination of whether plaintiff had exercised due diligence in serving process for purpose
of the relation-back doctrine.
Azleway Charter School v. Hogue, No. 12-15-00257-CV, 2016 WL 2585963 (Tex. App.—
Tyler May 4, 2016, no pet.).
This case involves the appeal of a trial court's order denying a plea to the jurisdiction where
an open-enrollment charter school superintendent filed suit against the school for breach of
contract. The appellate court affirmed the denial.
The Texas Education Code provides exclusive jurisdiction over actions or decisions of any
school district board that violate any provision of a written contract between a school
district and a school district employee. The school here argued that this provision applied to
Plaintiff's suit, and the trial court lacked jurisdiction. In rejecting that argument, the court
reasoned that although the open-enrollment charter school is generally subject to several
provisions of the Texas Education Code and often treated in the same manner as a school
district, nothing in the Texas Education Code or common law dictates that the openenrollment charter school and school districts are universally equivalent. Therefore the court
concluded that the charter school was not a "school district" as defined by statue, and
affirmed the trial court's denial of the school's plea to the jurisdiction.
–2–
Univ. of Tex. at Austin v. Kearney, No. 03-14-00500-CV, 2016 WL 2659993 (Tex. App.—
Austin May 3, 2016, pet. filed).
This is a constructive discharge claim based on disparate treatment and retaliation filed by a
female African American track coach at the University of Texas who had an undisclosed
relationship with a student athlete. The University filed a plea to the jurisdiction challenging
only the sufficiency of the pleadings with no evidence to support the challenge. The court
ultimately found that the track coach did not fail to exhaust her administrative remedies
under THCRA when she pled prior discriminatory acts “as background facts to support
her” claim. However, the prior discriminatory acts were insufficient to support constructive
discharge based on retaliation, but were sufficient to support constructive discharge based
on disparate treatment. Thus, the court reversed the district court’s denial of plea to the
jurisdiction as to the retaliation claim and affirmed the district court’s denial to plea of the
jurisdiction based on disparate treatment.
Here, the track coach was terminated for having a relationship with the student ten years
prior to her termination. Before her termination, the track coach met with the University’s
attorneys and expressed past incidences of racial and sexual discrimination. After her
termination, the coach used the meeting with the attorneys to demonstrate discrimination
even though these acts had occurred over 180 days after her termination. To bolster her
discrimination, relation, and disparate treatment complaints, the coach alleged past
incidents where white University coaches and professors had relationships with students
and were not terminated. The University did not counter with any evidence to demonstrate
that the coaches and professors were not similarly situated employees.
The court found the prior discriminatory acts could be used to support the track coach’s
constructive discharge claim; however, they were not sufficient to meet the element of
causation for her retaliation claim. The court reasoned that the University properly showed
that the reason for the track coach’s termination was the relationship with the student
athlete. On the disparate treatment claim, the court found that the track coach demonstrated
a prima facie case that she was treated less favorably than other former white coaches who
had relationships with students. The court reasoned that the University only offered
argument and failed to offer any evidence to negate any elements of disparate treatment.
Equal Employment Opportunity Comm'n v. Bass Pro Outdoor World, L.L.C., 826 F.3d 791,
(5th Cir. 2016).
The Equal Employment Opportunity Commission sued Bass Pro under Sections 706 and
707 of Title VII of the Civil Rights Act for damages and equitable relief, claiming that it
engaged in a practice of racially discriminatory hiring. Bass Pro moved for summary
judgment, arguing that claims alleging a “pattern or practice” of discrimination can be
brought only for equitable relief and only under Section 707 of the Civil Rights Act, adding
that the EEOC did not satisfy administrative prerequisites to suit. The district court
disagreed, allowing the litigation to proceed. The Fifth Circuit affirmed.
The Fifth Circuit held that Congress did not prohibit the EEOC from bringing pattern or
practice suits under Section 706 and in turn, from carrying them to trial with sequential
–3–
determinations of liability and damages in a bifurcated framework. Furthermore, Bass Pro’s
arguments that the EEOC failed to make sufficient conciliation and investigation efforts
(because charges were not filed on behalf of all individual class members before proceeding
as a class), was misplaced because it wrongly assumed that a pattern and practice charge
brought on behalf of a class by the EEOC must be conciliated and investigated individually
rather than as a class.
NON-COMPETE/TRADE SECRETS
Zhao v. XO Energy, LLC, 493 S.W.3d 725 (Tex. App.—Houston [1st Dist.] 2016, no pet.).
This case involved a trial court’s temporary injunction requiring a former employee to
deposit over $500,000 in bonus payments into the court’s register. The former employee
challenged this act through an interlocutory appeal and writ of mandamus. The court of
appeals held that: (1) the pretrial order to deposit funds into the registry was not a temporary
injunction from which interlocutory appeal could be taken; and (2) the trial court acted
within its discretion in ordering former employee to pay bonus funds into court registry.
Former employer filed action against former employee for breach of employment contract
and breach of employment duties, and also sought injunction prohibiting former employee
from removing bonus money from his bank and retirement accounts. The trial court entered
a temporary injunction requiring former employee to deposit amount of bonus payments
into the court’s registry because there was evidence the funds were intended to be used in
competition with the employer and could not be recovered.
The court of appeals held that the pretrial order to deposit funds into the Court’s registry
was not appealable through a interlocutory appeal because: (1) the term “injunctive relief”
was not controlling; and (2) the requirement that the employee deposit funds was not
injunctive relief, but rather attachment relief. In addition, the court of appeals held that the
trial court did not abuse its discretion because the employee was given an opportunity to
controvert the employer’s evidence, but refused to appear to give testimony at the temporary
injunction hearing.
Magee v. RBG USA, Inc., No. 14-14-00829-CV, 2016 WL 1729030 (Tex. App.—Houston
[14th Dist.] Apr. 28, 2016, no pet.).
This is an employment contract dispute where two employees, Ian Magee (“Magee”) and
Michael Queen (“Queen”), shared RBG’s confidential information with another company
and were subsequently terminated. After a bench trial, the trial court entered judgment
against Magee and in favor of Queen.
Here, Magee was RBG’s country manager and Queen was hired by Magee to be RBG’s
safety director; however, Queen’s employment agreement was never put in writing with
RBG. Magee then hired another employee, Neils Kastrup (“Kastrup”) as a business
manager who was subsequently promoted by RBG. Magee filed a grievance complaint
against Kastrup and in response, RBG told Magee that he would now be reporting to
Kastrup. Magee became especially disgruntled when he learned that Kastrup lost a $2
–4–
million deal. In an attempt to recoup the $2 million, Magee and Queen secretly approached
another company. When the two met with the other company, they presented RBG’s
“profit margin rates, labor rates, and equipment list.”
Magee and Queen returned from their business proposal and were summoned to a
disciplinary hearing without notice. Magee first denied that he had gone to another
company, but eventually admitted he had. Per RBG’s employment contract, both were
terminated for sharing confidential information under the contract’s “gross misconduct”
clause. Magee and Queen brought this suit alleging breach of contract, quantum meruit, and
libel. RBG cross-claimed for breach of contract against both Magee and Queen, and for
failure to repay advanced funds against Magee.
The court first turned to the issue on repayment for money had and received. The court
found that Magee’s testimony that he “thought” he received money to purchase a car as a
bonus was insufficient to support a finding that Magee did not repay. However, the court
found that Magee failed to present any evidence to support his affirmative defense of
repayment for the bonus overpayment that he “thought” was deducted from his paycheck.
For the termination for gross misconduct, the court turned to the employment contract.
Magee and RBG conceded that if there was finding of “gross misconduct” that Magee was
not entitled to notice of a disciplinary hearing and could be terminated immediately. Both
parties further conceded that they had disclosed confidential information, but Magee and
Queen argued that the other company was not RBG’s competitor. The court found that due
to Magee’s disclosure of confidential information and his dishonesty during the disciplinary
hearing, he had engaged in “gross misconduct” and could be dismissed.
In regards to Queen, however, the court found that he did not meet his burden to establish
that he was not an at-will employee who could be terminated without notice. The court
reasoned that despite (1) that human resources did not consider Queen an at-will employee,
(2) RBG sent Queen a letter stating he could appeal his termination in accordance to the
“terms of the Disciplinary and Dismissal Procedure,” and (3) RBG was in the process of
drafting Queen’s employment contract, these “beliefs” were not evidence to overcome the
strong presumption of at-will employment. This finding was further supported by Queen’s
testimony that he had never signed a written contract and was unaware of RBG’s
disciplinary procedures until after he was terminated.
In re M-I L.L.C., __ S.W.3d __, 2016 WL 2981342 (Tex. 2016).
This case concerns a trial court’s discretion in refusing to conduct an in-camera review of a
party’s trade secret information and requiring production of an affidavit containing trade
secret information in connection with a temporary injunction hearing involving those trade
secrets. The Supreme Court of Texas held that the trial court abused its discretion in both
instances and conditionally granted mandamus relief in favor of the plaintiff, who had
sought to prevent disclosure of its trade secret to its opponent’s representative.
Plaintiff, M-I Swaco, an oilfield services company, alleged that a former employee and his
current employer, National Oilwell Varco (NOV), misappropriated M-I Swaco’s trade
–5–
secrets. At the temporary injunction hearing, the trial court refused plaintiff’s request that
Defendant NOV’s corporate representative be excluded from the courtroom during portions
involving testimony about plaintiff’s trade secrets. The trial court reasoned that it would be
“a total violation of due process” to exclude defendant’s representative. The Texas Supreme
Court disagreed, stating that the due process right of a party to have a designated
representative present is not absolute, and the trial court abused its discretion by failing to
balance the competing interests at stake. The Court explained that courts have discretion to
exclude parties and their representatives in limited circumstances when “countervailing
interests overcome [the] presumption” in favor of participation.
Likewise, the trial court’s ordering that the plaintiff produce his witness’s affidavit over
plaintiff’s assertions that it contained trade secret information was an abuse of its discretion.
In so holding, the Court explained that the trial court’s blind ordering of the affidavit’s
production to the other side, without knowing its contents, demonstrated that the trial court
had not determined whether it contained trade secrets and whether any protective measures
were required to be taken to protect the interests of the plaintiff.
Greenville Automatic Gas Co. v. Automatic Propane Gas & Supply, LLC, 465 S.W.3d 778
(Tex. App.—Dallas 2015).
This is case involves claims for tortious interference and misappropriation brought in
connection with a covenant not-to-compete agreement entered into between a former
employer, Greenville, and route driver former employee, Anderson. The trial court entered
judgment in favor of Anderson and his new employer and Greenville competitor,
Automatic Propane. On appeal, the Dallas court of appeals affirmed the trial court’s
judgment that Greenville take nothing on its counterclaims for tortious interference with
contract, trade secret misappropriation, conspiracy, and unfair competition, but reversed
and remanded on Greenville’s breach-of-contract counterclaim.
The court of appeals reasoned that the trial court erred in submitting to the jury the question
of whether Greenville had proved that Anderson agreed to the terms in the Employment
Agreement, because Anderson and Automatic Propane failed to comply with Texas Rules
of Civil Procedure 93(7)’s requirement that their denial of execution of the agreement be
verified.
In upholding the trial court’s order granting summary judgment on Greenville’s tortious
interference with contract claim, the court of appeals held that Greenville failed to come
forward with summary judgment evidence that: (1) indicated Automatic Propane had
knowledge of Anderson’s non-compete prior to hiring him; or (2) that Greenville could
prevent its customers from obtaining a tank and propane from a competitor. As to the
misappropriation counterclaim, the court of appeals agreed that Greenville failed to bring
forward evidence of use of the allegedly confidential information, where the only evidence
Greenville pointed to was Anderson’s testimony that he serviced some of the same clients at
both employers. Without misappropriation, the trial court correctly concluded that
Greenville lacked a claim for conspiracy to commit misappropriation. Likewise, without an
underlying tort or illegal conduct, the trial court did not err in granting summary judgment
on Greenville’s unfair competition claim, since unfair competition is a derivative tort.
–6–
Neurodiagnostic Tex, LLC v. Robert “Josh” Pierce, et al., No. 12-14-00254-CV, 2016 WL
3704807 (Tex. App.—Tyler July 12, 2016, no pet.).
Neurodiagnostic Tex (“Neuro Tex”) filed suit against Pierce for breach of covenant not to
compete and breach of fiduciary duty and against Synergy for tortious interference. Synergy
and Pierce argued that the covenant not to compete was unenforceable and that Neuro Tex
could not recover on its tortious interference and fiduciary duty claims. The trial court
granted Synergy and Pierce’s motion for summary judgment ordering that Neuro Tex take
nothing.
The appellate court reversed and remanded the grant of summary judgment in favor of
Pierce on the claims for breach of covenant not to compete and breach of fiduciary duty. It
affirmed the summary judgment in favor of Synergy.
The court found that the employment agreement between Neuro Tex and Pierce required
Neuro Tex to employ Pierce as a technician each to provide 14 days of advanced notice of
intent to terminate the agreement, provide certain training for Pierce and required Pierce to
work for Neuro Tex for 48 months following his board certification or to reimburse Neuro
Tex for the sum of $5,000. The court found that this record established that the employment
agreement qualified under the statute as an “otherwise enforceable agreement.” The court
also found that the covenant was “ancillary to or part of” an otherwise enforceable
agreement. In the agreement Neuro Tex promised to train Pierce and provide him training
both in-house and externally through board certification exam preparatory courses.
Following this training he received two additional board certifications. The court found that
the training received by Pierce was “specialized” training, therefore qualifying it as an
interest worthy of protection. The court also found that the training was “designed to
enforce the employee’s consideration or return promise in the agreement.” There was a
clear nexus between the covenant’s effect of preventing Pierce from competing with Neuro
Tex by utilizing the specialized training he received to benefit a future employer. The court
also directed the trial court to determine whether any particular provision of the covenant
was unreasonable or overbroad and to reform it accordingly.
FLSA
Tyson Foods, Inc. v. Bouaphakeo, — U.S. —, 136 S. Ct. 1036, 194 L.Ed.2d 124 (2016).
This wage and hour case involved whether a class was property certified under Rule 23
when representative evidence was to be used for each class member. The Supreme Court
affirmed the Eighth Circuit, holding that representative proof from a sample, based on an
expert witness’s estimation of average time that employees spent donning and doffing
protective gear, could be used to show predominance of common questions of law or fact.
The class members worked in the kill, cut and retrim department of the employer’s meat
processing plant. The class members’ work required them to wear protective gear, but the
exact composition of the gear depended on the tasks a worker performs on a given day. The
employer compensated some, but not all employees for their donning and doffing, and did
not record the time each employee spent on those activities.
–7–
A wage and hour suit was filed under the FLSA and Iowa wage law, and was certified
under Rule 23 and as a collective action. Because the employer failed to adequately keep
records of time spent donning and doffing, the class members relied upon a industrial
relations expert, who calculated the average time it took to don and doff. The employer
argued that the varying amounts of time it took employees to don and doff different
protective gear made the representative evidence improper. The district court disagreed and
the Eight Circuit affirmed.
The issue before the Supreme Court was whether it was proper to permit the employees to
pursue their claims as a class based upon representative evidence. The Supreme Court held
that the district court did not error in certifying and maintaining the class because the
representative proof from a sample, based on an expert witness’s estimation of average time
that employees spent donning and doffing protective gear, could be used to show
predominance of common questions of law or fact. In so finding, the Court noted that a
categorical exclusion against the use of representative evidence would make little sense
because each class member would be able to independently rely on the sample to establish
liability.
Encino Motorcars, LLC v. Navarro, — U.S. —, 136 S. Ct. 2117, 195 L.Ed.2d 382 (2016).
This case involved the Ninth Circuit’s reversal of a district court’s dismissal of an overtime
compensation action brought by service advisors, wherein the Ninth Circuit relied upon a
recent DOL regulation that held service advisors were entitled to overtime compensation.
The Supreme Court reversed and remanded, finding that Chevron deference would not be
applied to the DOL regulation at issue, because it was promulgated with little to no
explanation for its decision.
In 1970 the DOL issued a regulation that excluded service advisors, who sell repair and
maintenance services, but not vehicles, from the overtime exemption of the FLSA. In 1978,
the DOL issued a new opinion, consistent with the cases decided by the courts, stating that
service advisors could be exempt from the overtime provisions of the FLSA. The DOL
explained that for approximately 30 years, the DOL continued to espouse this
interpretation, which was consistent with enforcement by the Courts. In 2011, the DOL
issued a final rule that followed the original 1970 regulation and interpreted the statutory
term “salesmen” to mean only an employee who sells vehicles. The DOL gave little
explanation for its decision to abandon its decades-old practice of treating service advisors
as exempt from the overtime provisions of the FLSA. Based upon this new final rule, service
advisors at an automobile dealership brought suit under the FLSA alleging their employer
failed to pay them overtime. The district court dismissed the action; however, the Ninth
Circuit reversed in part, holding that service advisors were entitled to overtime
compensation.
The question before the Supreme Court was whether the overtime exemption—i.e., 29
U.S.C. § 213(b)(1)(A)—should be interpreted to include service advisors. When an agency is
authorized by Congress to issue regulations, its interpretation receives deference, under the
Chevron analysis, if the statute is ambiguous and the agency’s interpretation is reasonable.
Here, the Court found that Chevron deference was not warranted, because the 2011
–8–
regulation was issued without a reasoned explanation that was required in light of the
DOL’s change in position and the significant reliance issues involved. Accordingly, the
matter was remanded to the Ninth Circuit to interpret the statute in the first instance.
Steele v. Leasing Enterprises, Ltd., 826 F.3d 237, 249 (5th Cir. 2016).
This FLSA case involves the question of whether an employer may deduct credit card
transaction fees from tips received for employees via credit card in order to cover the
expense of the credit card transaction. Here, the employer withheld a flat 3.25% from tips
that were paid via credit card.
While an employer may withhold a portion of tips to cover the credit card fees associated
with that tip, they may not withhold more than actually incurred. In this case, the employer
was withholding approximately 1% more than they were being charged by the credit card
transaction process. Defendant argued that they needed to do so to cover other expenses
associated with the tip process (paying employees daily in cash for tips received by credit
card and also having multiple armored deliveries of cash per week). The Fifth Circuit
found that these business decisions were not legitimately borne by the employees and that
the tips were improperly reduced.
Ramin Corp. v. Wills, No. 09-14-00168-CV, 2015 WL 6121602 (Tex. App.—Beaumont
Oct. 15, 2015, no pet.).
This case involved an employer's claim that the employee breached the duty of loyalty, and
the employee’s claim that the employer failed to pay the employee overtime under the
FLSA and that it converted the employee’s property. The trial court found that the
employee violated the duty of loyalty by competing, but awarded no damages. In addition,
the court found that the employee was not paid for overtime work; that the employer
converted her property; and that she should recover damages from the employer. The court
of appeals affirmed in part, and reversed and remanded in part.
Certain employees are exempt under the FLSA and not entitled to overtime. Exemptions
under the FLSA are narrowly construed against the employer, who has the burden of
proving that its employee is exempt under the FLSA. To qualify for the “executive”
exemption, the primary duty of the employee must be the performance of exempt work. The
court of appeals found that there was sufficient evidence to support the trial court’s
conclusion that Wills was not exempt under the FLSA.
The court noted that Wills’ claim for unpaid overtime spanned two and a half years,
including a slight overlap with her work for the competitor. Therefore, the court found there
was insufficient evidence to establish that Will’s breach of fiduciary duty was directly
connected to her recovery of overtime and, therefore, the trial court did not abuse its
discretion by failing to require Wills disgorge her overtime damages. The court further
found sufficient evidence that the employer exercised dominion and control over property
that belonged to the employee.
–9–
Fairchild v. All Am. Check Cashing, Inc., 815 F.3d 959 (5th Cir. 2016).
This case involved a female employee’s Title VII retaliation claims related to pregnancy
discrimination and her FLSA claims regarding overtime. Following a bench trial regarding
her FLSA claims and jury trial regarding her Title VII claims, the district court entered
judgment in employer’s favor.
Regarding Fairchild’s FLSA overtime claims, the Fifth Circuit ruled that because the
employer had an overtime policy that (1) prohibited employees from working overtime
without prior approval from a manager and supervisor, and (2) required employees to
accurately report their hours in its designated timekeeping system, that the plaintiff was not
entitled to overtime under the FLSA because there was no evidence in this case that the
employer had constructive knowledge of the employee’s alleged overtime. The Court also
noted that there was no evidence in this case that the employer had encouraged the plaintiff
to work additional amounts or to falsify her time records.
Olibas v. Barclay, 15-10919, 2016 WL 5239699 (5th Cir. Sept. 20, 2016).
This FLSA case involved the jury trial of 104 truck driver opt-in plaintiffs who sought
overtime. The defendant alleged that the Motor Carrier Act exempted them from the
FLSA.
At trial, Plaintiffs obtained a final judgment on their FLSA claims awarding them
$1,673,145.00 in unpaid overtime compensation, $1,673,145.00 in liquidated damages,
$371,759.59 in attorneys' fees, and $10,564.32 in costs. Olibas v. Native Oilfield Services, LLC,
104 F. Supp. 3d 791, 813 (N.D. Tex. 2015).
On appeal, Defendant sought reversal on several grounds, all of which were denied. Worth
noting is the discussion of the court’s discretion in denying the Defendant’s request to
submit an over 400-page jury instruction that contained 108 four-page spreadsheets to
calculate the damages of each opt-in plaintiff for each workweek covered under the lawsuit.
Instead, the trial court allowed (and the Fifth Circuit affirmed) the use of representative
testimony from five percent of the 104 opt-in plaintiffs. Additionally, the Fifth Circuit
affirmed the trial court’s decision to itself calculate the regular rate of pay and overtime
premium as a matter of law.
Edwards v. KB Home, 3:11-CV-00240, 2015 WL 4430998 (S.D. Tex. July 18, 2015).
This FLSA case involves a determination by the district court regarding KB Home’s motion
for protective order in an effort to not waive attorney client communications. KB Home
asserted a good faith defense under the FLSA in this misclassification case, but then sought
a protective order to prevent deposition questions (and other discovery) regarding
communications between KB Home management and its attorneys. After a hearing on the
matter, the Court ordered that KB Home provide a declaration regarding whether or not
management had sought legal advice regarding the classification of the employees and if so
– 10 –
when. KB’s declaration admitted to having sought legal advice on the subject but then
attempted to claim that KB Home’s good faith defense in this case was not based upon such
advice but rather management’s independent analysis. The district court found that KB
Home could not “parse” the privilege in this way and that the privilege was waived as to
these communications. The district court succinctly summarizes the issue in stating:
Two basic aspects of the good faith defenses compel the Court to conclude
that KB Home is drawing too fine a line: the defenses require a good
faith belief about the lawfulness of a classification decision. Communications
from lawyers-whose very job is to advise the company on the lawfulness of its
policies-concerning the company's classification decision necessarily influence
the reasonableness of any belief the company has about the lawfulness of its
policy. Otherwise, why seek legal advice (which isn't cheap) at all? And as a
psychological matter, it seems very difficult, if not impossible, for a witness to
compartmentalize his reliance on what he may have independently
understood regarding the law and what he was told by attorneys.
DISCRIMINATION/HARASSMENT/RETALIATION
Green v. Brennan, — U.S. —, 136 S. Ct. 1769, 195 L.Ed.2d 44 (2016).
This case involved the Tenth Circuit affirming summary judgment in favor of the employer
in a Title VII retaliation lawsuit involving the U.S. Postal Service, based upon limitations
issues. The Supreme Court reversed and remanded, finding the 45-day clock for a federal
employee’s constructive discharge claim under Title VII begins running only after the
employee resigns.
After an employee complained to his employer, the Postal Service, that he was denied a
promotion because he was black, his supervisors accused him of the crime of intentionally
delaying the mail. In an agreement signed December 16, 2009, the Postal Service agreed not
to pursue charges, provided the employee agreed to retire or to accept another position in a
remote location for much less money. The employee chose to resign, effective March 31,
2010. On March 22, 2010—41 days after resigning and 96 days after signing the
agreement—the employee reported an unlawful constructive discharge to an EEO
counselor. Eventually, the employee filed a lawsuit, which was dismissed as untimely
because he had not contacted the counsel within 45 days of the “matter alleged to be
discriminatory.” The Tenth Circuit affirmed, holding that the 45-day limitations period
began to run on December 16, i.e., the date the employee signed the agreement.
The question before the Supreme Court was when does the limitations period begin to run
for an employee who was not fired, but resigns in the face of intolerable discrimination, i.e.,
a “constructive” discharge. The Court held that in such circumstances, the “matter alleged
to be discriminatory” includes the employee’s resignation, and that the 45-day clock for a
constructive discharge claim beings running only after the employee resigns. The Court
came to this conclusion for three reasons: (1) in the context of a constructive discharge
– 11 –
claim, a resignation is part of the “complete and present cause of action” necessary before a
limitations period ordinarily begins to run; (2) nothing in the regulation creating the
limitations period suggests an alternative intent; and (3) practical considerations also
support this consideration because starting the clock before a plaintiff can actually file suit
would negate Title VII’s remedial structure.
Peterson v. Bell Helicopter Textron, Inc., 806 F.3d 335 (5th Cir. 2015), cert. denied, 136 S. Ct.
1714, 194 L. Ed. 2d 811 (2016).
This case involved an age discrimination claim under the TCHRA wherein the jury made a
mixed-motive finding in favor of the plaintiff but also ruled that the plaintiff would have
been terminated as part of reduction-in-force despite the illegal animus. After trial, upon
plaintiff’s post-verdict motion, the trial court entered an injunction against Defendant and
awarded plaintiff attorneys’ fees.
On appeal, the Fifth Circuit ruled that the post-verdict motion seeking judgment and
injunction was too late and that it prejudiced the defendant from being able to respond and
defend itself from the injunction. The panel found that the plaintiff’s prayer, which included
a broad request for any and all remedial relief to which plaintiff was entitled under law or
equity, did not put defendant on notice of the potential injunctive relief. The court of
appeals reversed the judgment of the lower court and vacated the award of attorneys’ fees
and costs.
Porter v. Houma Terrebonne Hous. Auth. Bd. of Com’rs, 810 F.3d 940 (5th Cir. 2015).
In this case, the Fifth Circuit considered a retaliation claim by an employee whose attempt
to rescind her resignation was denied. Plaintiff worked for the defendant for several years
and she offered her resignation in June of 2012, but before finishing her employment, she
testified against her boss, claiming sexual harassment. When plaintiff attempted to rescind
her resignation at the urging of other superiors at work, her boss rejected her rescission.
While prior cases in the Fifth Circuit have held that an employer’s refusal to allow an
employee to rescind their resignation was not an adverse employment action, those cases
were decided prior to (or without citing to) Burlington Northern. Here, while analyzing the
context of the denied rescission, the Fifth Circuit has affirmed that such an action can (and
in this case did) constitute an adverse employment action.
The Court also ruled that the temporal proximity (six-and-one-half weeks) between the
protected activity and the denial of recession supported a prima facie case of but for
causality and suggested pretext.
The Court also ruled that the evidence plaintiff presented regarding the lack of credibility of
her boss created substantial evidence of pretext.
– 12 –
Alamo Heights ISD v. Clark, NO. 04-14-00746, 2015 WL 6163252 (Tex. App.—San
Antonio Oct. 21, 2015, pet. filed).
This case is about sexual harassment and retaliation. The trial court denied the employer’s
plea to the jurisdiction. The court of appeals affirmed.
In employment-discrimination cases, the plaintiff is entitled to a presumption of
discrimination if she can establish a prima facie case of discrimination. Once the burden
shifts, the employer must show a legitimate basis for the adverse employment decision.
Furthermore, while the AHISD is generally immune from suit, it lacked sovereign
immunity for claims under the TCHRA where the employee pleads sufficient facts to allege
a violation of the TCHRA.
With regard to the sexual harassment claim, the court of appeals held that the “repeated
nature” of sexual comments, humiliating jokes, insults, ridicule, and intimidation that Clark
was allegedly subjected to, constituted “pervasive” enough conduct to affect her terms,
conditions or privileges of employment (an element of a sexual harassment claim based on
hostile work environment). Because the court of appeals held sufficient evidence of a prima
facie case of sexual harassment, it affirmed the trial court’s decision to deny AHISD’s plea
to the jurisdiction.
With regard to the retaliation claim, the court held that the temporal proximity between the
activity by the employee and the adverse action by the employer can provide the “causal
connection” required for the prima facie retaliation case. However, even though many
months had passed between Clark’s EEOC filing and the retaliatory act, the court also
found that other evidence (such as the fact she was found to be “in need of assistance” just
days after the EEOC notice) demonstrated that Clark raised a fact issue regarding retaliation
and the trial court did not err in denying AHISD’s plea to the jurisdiction.
Tex. Dep't of Aging & Disability Servs. v. Loya, 491 S.W.3d 920 (Tex. App.—El Paso 2016,
no. pet.).
This case involved a suit against a governmental entity by a former employee for sex
discrimination, hostile work environment, and retaliation under the TCHRA. The court of
appeals considered whether the trial court erred in denying the employer’s plea to the
jurisdiction based on sovereign immunity. Because a governmental entity is generally
entitled to sovereign immunity, Loya had to demonstrate a prima facie case for her claims
in order to bring them within the limited waiver of sovereign immunity available under the
TCHRA. The court of appeals, finding that Loya failed to plead a prima facie case for any
of her claims, reversed the trial court’s order and dismissed Plaintiff’s claims for lack of
jurisdiction.
With regard to her sex discrimination claim, Loya did not plead facts to show she was
treated less favorably than “similarly situated” members of the opposite class, which is an
essential element of gender discrimination. A “similarly situated” employee must be in
circumstances that are “nearly identical” to the employee of the protected class. Following
Fifth Circuit precedent, the court of appeals dismissed this claim because (1) Loya was
– 13 –
replaced by a woman; (2) there were no male administrative assistants (i.e., “similarly
situated” males) to use as male comparators; and (3) Loya was unable to show she was
“otherwise discharged due to her sex.”
When determining whether Loya’s working environment was hostile or abusive, the court
of appeals considered the “totality of the circumstances,” including the frequency and
severity of the conduct, the existence of physical threats or humiliation and whether the
abusive conduct "unreasonably interfered with the employee’s work.” Because Loya alleged
only one instance of allegedly abusive conduct, the court of appeals found she did not show
harassment that was “pervasive” or “sufficiently severe” and dismissed Loya’s hostile work
environment claim.
The court summarily dismissed Loya’s retaliation claim because Loya’s only evidence of
retaliation occurred after she had been terminated and, therefore, there was no causal link
between the activity protected by the TCHRA and the termination.
Pullen v. Caddo Par. Sch. Bd., 830 F.3d 205 (5th Cir. 2016).
Kandice Pullen, an employee of the Caddo Parish School Board, claimed that she was
sexually harassed by Timothy Graham, another board employee, in violation of Title VII.
Graham was Pullen’s supervisor for certain periods of the alleged harassment, but Pullen
claims that the harassment continued after she had transferred to a different department.
The district court granted the board’s motion for summary judgment. On appeal, summary
judgment as to the period during which Graham was Pullen’s supervisor was reversed and
affirmed as to the period during which he was not.
This case is noteworthy because of its discussion of the fact dispute regarding the sufficiency
of the defendant’s efforts to prevent sexual harassment in the workplace and whether
defendant had established the Ellerth/Faragher affirmative defense as a matter of law. While
the defendant presented evidence that it had a detailed anti-sexual harassment policy and it
contained reporting mechanisms and procedures, and that it posted the policy on bulletin
boards and the policy was available electronically, that evidence was contrasted with the
testimony of numerous witnesses who testified they were unaware of the policies, had not
seen the policies, and had not received training on the policies. The fact dispute precluded
summary judgment.
Univ. of Tex. Sw. Med. Ctr. v. Saunders, No. 05-15-01543-CV, 2016 WL 3854231 (Tex.
App.—Dallas July 13, 2016, pet. denied).
This is a disability discrimination and retaliatory discharge complaint, where a nurse at the
UTSW alleged that the hospital failed to make reasonable accommodations and terminated
her because of a complaint she filed under the EEOC for failure to make reasonable
accommodations. Both UTSW and the nurse filed interlocutory appeals. UTSW appealed
the trial court’s denial of its plea to the jurisdiction for the nurse’s retaliatory claims, and the
nurse filed an appeal on the trial court’s order granting UTSW’s plea to the jurisdiction on
her disability discrimination complaint. The appellate court reversed and dismissed the trial
– 14 –
court’s order on the retaliatory claim, and affirmed dismissal of the disability discrimination
claim for cause for lack of jurisdiction.
Prior to filing her claim with the EEOC, the nurse was injured on the job and filed a
“Request for Accommodation due to Disability.” UTSW offered the nurse a job
reassignment and the nurse accepted. The nurse then filed a claim for disability
discrimination with the TWC. Eventually the hospital fired the nurse because she failed to
renew her nursing license, which is a job requirement. The nurse subsequently filed a
retaliation claim for filing the disability discrimination complaint.
On the retaliation claim, the appellate court reasoned that the nurse failed to establish a
prima facie case of retaliation because she pled, but failed to provide, any evidence to
support that it was UTSW’s customary practice to suspend nurses whose licenses lapse
rather than to terminate their employment. Furthermore, the court found that the temporal
evidence of the nurse’s termination and the filing of federal suit was insufficient to support a
causal link between the nurse’s protected activity and the adverse employment action. Based
on the facts and pleadings, there was no evidence that the UTSW employer was aware of
the federal suit when she terminated the nurse.
On the disability discrimination claim, the appellate court reasoned that despite the fact
that the nurse was not offered a reassignment position with a comparable salary, the nurse
failed to timely file a complaint with the EEOC and the TWC. The nurse accepted her
reassignment position as an accommodation for her disability more than 180 days prior to
filing her complaint. Moreover, the nurse had “failed to exhaust her administrative remedies
with the TWC” and had failed to demonstrate that the discriminatory action was a
continuing violation. Thus, the claim was time-barred and the trial court did not have
jurisdiction over the complaint.
Tex. Dep't of Family & Protective Servs. v. Whitman, No. 11-15-00074-CV, 2016 WL
28541149 (Tex. App.—Eastland May 12, 2016, no pet.).
This is a sexual harassment case where a former female employee alleged that female
employees at Texas Department of Family and Protective Services (“Department”) made
“continuous and unrelenting” sexual comments before recommending that she be
discharged. The Department filed a plea to the jurisdiction, which the trial court denied.
The court of appeals reversed and remanded because the Department presented undisputed
facts that the trial court did not have subject matter jurisdiction.
In this case, a former employee filed suit when her former employer made several lewd
sexual remarks during her training and while on probationary employment. Among the
several comments, some included asking the employee whether she knew what “long bone”
was, whether she used a vibrator, and whether “she liked the weenie” while she had a corn
dog. Prior to her termination, the Department recommended that she not be given full
employment. The Department reasoned that she did not have good client relations, was not
prepared to give testimony, was not courteous, and had disclosed confidential client
information. The employee filed a complaint with the EEOC claiming quid pro quo
harassment, hostile work environment, harassment, and retaliation.
– 15 –
In reversing the trial court’s decision, the court of appeals reasoned that under Title VII, the
employee did not raise a genuine issue of material fact that the Department employees that
she named were her supervisors for the purposes of quid pro quo harassment claim. In
relation to the hostile work environment claim, the trial court erred because the employee
did not demonstrate how the sexual comments were directed only to females, rather than to
both sexes generally, and how the comments affected the terms of her employment. These
comments did not rise to the level of conduct that a reasonable person would find
permeated the workplace to “alter the terms, conditions, or privileges of the victim’s
employment.” The court reasoned that the former employee even testified that she did not
consider leaving her job and that she liked working with her coworkers. On the retaliation
claim, the court found that by only making one passing and undated complaint about the
lewd comments to the Department, the employee failed to demonstrate a causal or temporal
connection between her complaint and her termination.
El Paso County v. Vasquez, No. 08-15-00086-CV, 2016 WL 2620115 (Tex. App.—El Paso
May 5, 2016, pet. filed).
This is a discrimination and retaliation case where a former employee, who suffered a heart
attack and tuberculosis, was discharged after violating her employer’s policies and
procedures. In this interlocutory appeal, the court of appeals found that the former
employee’s retaliation claim was “separate and distinct” from her other claims and, as such,
she did not fail to exhaust her administrative remedies by failing to submit her relation
complaint to the Texas Workforce Commission. However, because the employee had fully
recovered from her heart attack and tuberculosis at the time she was terminated, her
termination did not constitute relation or discrimination based on her disability.
Here, the employee worked for the County as a collections specialist and was transferred
from her position to the Hot Checks department after she returned from her medical leave
and had fully recovered. The employee found out that her employer had disclosed to her
other coworkers that she had tuberculosis, and that several employees refused to work with
her because of her sickness.
When the employee filed her suit, she alleged that the heart attack and the tuberculosis were
“regarded as” disabilities. The court of appeals agreed and found that these did qualify as
disabilities, but the court reasoned that the employee failed to show that she suffered these
disabilities at the time of her termination. Thus, she could not successfully allege that she
was discriminated against based her disabilities. On the employee’s cause of action for
disclosure of confidential health information, the court found that because this cause of
action does not exist in Texas, as it does in federal law, the County’s immunity could not be
waived.
Houston Methodist San Jacinto Hospital v. Ford, 483 S.W.3d 588 (Tex. App.—Houston
[14th Dist.] 2015).
This case involved a claim of retaliation under the Texas Commission on Human Rights
Act (TCHRA) based on an employee’s alleged termination because she reported sexual
harassment to her hospital employer. In reversing the trial court’s judgment, the Court of
– 16 –
Appeals determined that the evidence was legally insufficient to support the jury’s verdict in
favor of the former employee, and rendered judgment that she take nothing.
While employed by the hospital, Plaintiff and then employee, Ford, denied workplace
rumors that she and her supervisor were engaged in a romantic relationship. After Ford’s
supervisor was fired, the hospital uncovered photos he had of Ford and a love letter he had
written to her on his phone. The hospital undertook an investigation through which Ford
disclosed that more than three years prior, her supervisor had attempted to kiss her on two
occasions, and that it was unwelcomed conduct. Ford was fired shortly thereafter, and she
brought suit against the hospital under the TCHRA for retaliation. The jury found in Ford’s
favor, and the hospital appealed claiming there was no evidence to support the jury’s finding
that Ford had reported the sexual harassment. On appeal, the Houston court of appeals
agreed, finding there was no evidence that Ford’s belief was reasonable that her supervisor’s
two attempts to kiss her nearly four years earlier altered a term, condition, or privilege of
Ford’s employment or created an abusive working environment.
In reaching its conclusion, the court of appeals examined the TCHRA’s reporting
requirement. Under the TCHRA, the court of appeals emphasized that the focus was
whether the employee had a “good-faith, reasonable belief that the underlying
discriminatory practice violated the TCHRA” and that the employee believed that the
conduct is a violation of Texas’ civil rights law, as opposed to conduct the employee simply
considers offensive. Ford argued that her belief must have been reasonable since the conduct
in question met the hospital’s own anti-harassment policy’s definition. The court of appeals
found Ford’s argument lacking, clarifying that the TCHRA, not the employer’s policy, is the
standard for the definition of protected activity.
Juan Bazaldua, Jr. v. City of Lyford, Texas, No. 13-16-00004-Cv, 2016 WL 4578409 (Tex.
App.—Corpus Christi Sept. 1, 2016, no pet. h.).
This was an age discrimination case filed by Juan Bazaldua (“Bazaldua”) against the City of
Lyford (“Lyford”). The court granted the City’s plea to the jurisdiction. The trial court
granted the City’s plea to the jurisdiction and the court of appeals affirmed.
The City argued Bazaldua failed to present a prima facie case of age discrimination because
he was replaced by an older employee. Bazaldua responded that his supervisor would
routinely address him as “viejo”, which means “old man” in Spanish.
The court noted that the prima facie elements of a discrimination claim are jurisdictional
facts properly challenged in a plea to the jurisdiction. The court also noted that in a
“replacement case” the prima facie case include being replaced by someone younger. Since
Bazaldua was replaced by an older worker he was unable to establish a prima facie case of
discrimination. The court also did not consider the remarks made by Bazaldua’s supervisor
as direct evidence of discrimination because the comments appeared wholly unrelated to
Bazaldua’s termination citing AutoZone, Inc. v. Reyes, 272 S.W.3d 588, 593 (Tex. 2008).
– 17 –
Fairchild v. All Am. Check Cashing, Inc., 815 F.3d 959 (5th Cir. 2016).
This case involved a female employee’s Title VII retaliation claims related to pregnancy
discrimination and her FLSA claims regarding overtime. Following a bench trial regarding
her FLSA claims and jury trial regarding her Title VII claims, the district court entered
judgment in employer’s favor.
Regarding Fairchild’s Title VII retaliation claims, she alleged that she was terminated
within two days of a new manager learning that she was pregnant, whereas the Employer
alleged that Fairchild was terminated within two months of telling prior management that
she was pregnant (and after a lengthy and documented history of performance problems).
The Fifth Circuit, as a matter of first impression, ruled that in a pregnancy discrimination
and retaliation case, that temporal proximity alone cannot prove pretext. Specifically, the
Court held that, “although the temporal proximity between the employer learning of the
plaintiff’s pregnancy and her termination may support a plaintiff’s claim of pretext, such
evidence – without more – is insufficient.” In this case, the record as stated by the Fifth
circuit makes it clear there was no evidence other than temporal proximity and therefore
pretext could not be proven.
Nicholson v. Securitas Sec. Services USA, Inc., 830 F.3d 186 (5th Cir. 2016).
Age discrimination case involving 83 year-old receptionist working for staffing agency who
was replaced and released by staffing agency after third party requested that she be replaced
because she could allegedly not perform new technology-related tasks. The district court
granted summary judgment on two grounds, the first of which was where it sua sponte
determined that the staffing agency was not the plaintiff’s employer for purposes of the
ADEA. The Fifth Circuit reversed on this point, explaining that the “right to control” test
was not implicated when there were multiple admissions within the record by the defendant
that it was the plaintiff’s employer.
In addition, the Fifth Circuit found that there was a disputed fact issue as to whether the
staffing agency knew or should have known of the client’s discrimination but failed to take
corrective measures within its control. Here, because the staffing agency took actions
inconsistent with its policies and standard procedures, in failing to investigate the requested
removal and in failing to attempt to counsel or further train the plaintiff through her alleged
performance deficiency, sufficient fact issues warranted denial of summary judgment. The
Fifth Circuit restated its prior holding that “an employer’s variation from standard
evaluation practices is evidence of discriminatory intent.”
Brandon v. Sage Corp., 808 F.3d 266 (5th Cir. 2015)
This case exemplifies the adage, “work now and grieve later.” Plaintiff was a management
employee at a truck driving school who was treated badly after she hired a transgender
employee. Another management level employee visiting the facility (who the Fifth Circuit
calls a “co-worker”) was hostile toward the plaintiff and said awful things about the
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transgender employee. The co-worker also stated that she would have the plaintiff receive a
50% pay cut for having hired the transgender employee. Plaintiff resigned shortly thereafter.
Summary judgment was granted against the plaintiff because she failed to establish that she
suffered an adverse employment action that would sufficiently deter the average person
from complaining of or opposing discrimination. The Fifth Circuit ruled that as a member
of management, she should have known that the co-worker did not have authority to
change her pay level and that she should have taken time to hear back from the owner of the
company before resigning. Not helping the plaintiff was the fact that immediately upon the
owner’s return (he had been out of town at the time of the incident and resignation), he
promptly stated that the co-worker’s statements and threat of pay decrease were
inappropriate.
E.E.O.C. v. Rite Way Serv., Inc., 819 F.3d 235 (5th Cir. 2016)
It has long been the law in this and other circuits that a plaintiff contending that she was
retaliated against for proactively reporting employment discrimination need not show that
the discrimination rose to the level of a Title VII violation, but must at least show a
reasonable belief that it did. This case establishes that the same “reasonable belief” test is
extended to third party witnesses who bring a retaliation claim related to protected activity
on behalf of others.
Here, the plaintiff was a general manager for a janitorial service contractor. As part of an
investigation that the company was performing related to another employee’s sexual
harassment complaint, plaintiff provided a written report to management as part of the
investigation. Over the next five weeks following her protected opposition clause activity, a
new manager (who was the brother-in-law of the alleged harasser who was moved to
another location) gave plaintiff two written warnings and two oral warnings regarding
alleged per performance. She then received a third strike and was terminated soon
thereafter.
The Fifth Circuit determined that the “reasonable belief” test was extended to plaintiff in
this case and that because of company training she had recently been through, which
highlighted the inappropriate nature of sexually harassing activities and labeled them
“discriminatory”, and because of the nature of the company’s investigation, it was
reasonable to believe that she was providing a statement regarding activities that violated
Title VII.
Regarding the issue of pretext, the Court held that the plaintiff presented the following
evidence of pretext: (1) strong temporal proximity between her written report and her
termination, (2) a positive two year employment history that was unimpeached until her
protected activity, (3) a statement from the human resources manager who took her report
wherein human resources warned the plaintiff, “you know what they do to people who do
stuff like this” and (4) a statement by the newly assigned manager (the brother-in-law of the
alleged harasser) on his first day over plaintiff that “Mississippi is an at will state” and that
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she would be denied unemployment benefits when she was fired. All of these items created
sufficient evidence of pretext.
WHISTLEBLOWER/WRONGFUL TERMINATION
El Paso ISD v. Kell, 465 S.W.3d 383 (Tex. App.—El Paso 2016, pet. filed).
This case involves a reversal of a trial court's denial of summary judgment in a case based
on the Texas Whistleblower Act, where a teacher exercised the wrong grievance procedure
after termination.
A school principle, Kell, was terminated in the wake of a cheating scandal. Kell said she
was terminated for cooperating with the FBI in the investigation, in violation of the Texas
Whistleblower Act.
On appeal, the court held that before a state employee claiming whistleblower status can sue
her employer in district court for retaliation under the Texas Whistleblower Act, the
employee must first invoke her employer's “applicable grievance or appeal procedures”
within ninety days. Here, after Kell was terminated, she filed a grievance under the school
district's internal grievance policy, instead of filing for a statutory termination hearing under
Tex. Educ. Code Ann. § 21.256(e), which was the appropriate applicable procedure.
Chapter 21 created a quasi-independent administrative proceeding that took place under the
same conditions as a bench trial for teachers to challenge proposed terminations, and the
procedure Kell attempted to invoke only applied if Chapter 21 had been exhausted or did
not apply. Therefore the court of appeals held that Kell failed to initiate the applicable
grievance procedure, and the trial court did not have jurisdiction to hear Kell's
whistleblower claim.
Rivas v. Southwest Key Programs, Inc., No. 08-14-00010-CV, 2015 WL 6699532 (Tex.
App.—El Paso Nov. 3, 2015, no pet.).
This case involves a claim for wrongful discharge. At issue for the court of appeals was
whether the trial court erred by granting summary judgment in the employer’s, Southwest
Key, favor, which argued that Rivas did not timely file his lawsuit. The court of appeals
reversed and remanded the case.
The main question the court of appeals had to consider was the timing of Rivas’
termination. Rivas claimed that he was terminated from his job because he filed a work
injury claim. Southwest Key moved for summary judgment on the grounds that the suit was
barred by the two-year statute of limitations that governs wrongful termination claims under
Section 451.001 of the Texas Labor Code, which occurs when the worker receives
unequivocal notice of termination (or when he reasonably should have known of the
termination). The court further explained that the discrimination claim accrues when the
discrimination occurs, regardless of when its effects are felt.
– 20 –
Rivas also asserted a hostile work environment claim, which can avoid limitations defense
so long as one of the acts contributing to the claim occurred within the firing period.
Because Rivas including an affidavit in his summary judgment response that was in conflict
with an entry in the official TWC record, and especially because the TWC record did not
include a sworn statement from Rivas or a sponsoring witness, the court of appeals held that
the trial court could not “pick and choose” between conflicting evidence in the summary
judgment record and, therefore, found a fact issue regarding the date of Rivas’ termination
existed.
Peine v. Hit Servs. L.P., 479 S.W.3d 445 (Tex. App.—Houston [14th Dist.] 2015, pet.
denied).
This case involves a claim for wrongful discharge. At issue for the court of appeals was
whether the trial court erred in granting summary judgment for the employer. The court of
appeals affirmed, finding the summary judgment conclusively proved that the
termination occurred, at least in part, because the employee breached his confidentiality
duties and not solely, as the employee alleged, because he refused to commit a crime.
Although Texas adheres to the at-will doctrine for employment, where an employee can be
terminated at will and without cause, the Texas Supreme Court created a narrow public
policy exception (Sabine Pilot) that prevents an employee from being terminated solely
because he refused to commit an illegal act. However, the employee cannot bring a Sabine
Pilot claim before he: (a) refuses to commit the act; and (b) is fired for his refusal.
Furthermore, the employer can obtain summary judgment if it proves at least one legitimate
reason for terminating the employee, even if another of its reasons was the employee’s
failure to perform the act.
Because the court of appeals concluded that the employer conclusively proved that one of its
reasons for terminating Peine included the fact that he sent confidential information to a
reporter, and because the court held that Peine’s evidence failed to create a genuine issue of
material fact that his termination was solely caused by his failure to falsify financial
information, the court of appeals affirmed the trial court’s summary judgment in favor of the
employer.
McMillen v. Texas Health & Human Services Commission, et al., 485 S.W.3d 427 (Tex. 2016).
This is a Whistleblower Act claim that considers whether a state employee’s alleged report
of a legal violation was made to an appropriate law-enforcement authority. The court below
held that the former employee did not report to such an authority and the court of appeals
disagreed. It held that since the “reported-to persons” had power beyond internal discipline
to regulate under or enforce the law allegedly violated, they were an appropriate lawenforcement authority under the Whistleblower Act. Accordingly, the case was reversed
and remanded.
McMillen was an attorney who served as Deputy Counsel for the Commission’s Office of
the Inspector General (“OIG”). After his termination, he sued under the Whistleblower Act.
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McMillen alleges that he provided a memorandum concluding that the Commission’s
practice of obtaining payments from certain recipients of Medicaid benefits lacked legal
justification. He gave that memorandum to a Deputy Inspector General for the Commission
who gave copies to other Deputy Inspectors General. McMillen also asserts that he made
another report to the head of the OIG Internal Affairs Division as well as to the
Commission’s Executive Commissioner. The court held that the OIG is an appropriate lawenforcement authority under the statutes then in effect, the OIG was responsible for the
investigation of fraud and abuse in the provision of Health and Human Services and the
enforcement of state law relating to the provisions of these services. Therefore, McMillen
reported to an appropriate law-enforcement authority.
Office of the Attorney General v. Weatherspoon, 472 S.W.3d 280 (Tex. 2015).
This Whistleblower Act case deals with whether reports of alleged violations of law are
protected if made to supervisors with power only to oversee internal compliance within an
entity, even if the supervisors must forward the complaints to another department with
outward-looking authority to regulate under or enforce the law alleged to be violated or
investigate or prosecute criminal violations against third parties. The Dallas Court of
Appeals held otherwise. The Supreme Court reversed.
Weatherspoon was an assistant Attorney General in the Child Support Division. She alleges
that two attorneys tried to get her to sign a false affidavit. She alleged violations of penal
statutes including subornation of perjury, and abuse of official capacity and official
oppression.
The OAG required employees to report a potential criminal violation to their division chief
who must then refer to the OAG’s office of special investigations for further action.
Weatherspoon adhered to the policy, reported a wrongful conduct to her managing attorney
and an attorney in the open records department, among others. She alleged she was
eventually retaliated against for making these reports, leading to her termination. The court
held that to be in good faith an employee’s belief about the reported-to-authority must be
“reasonable in light of the employee’s training and experience.” The authority must have
outward-looking powers and a policy that requires reporting violations only to employee’s
supervisors who then must send the complaints to the appropriate law-enforcement
authority, is not enough for a good faith belief. As a result Weatherspoon’s reports were
insufficient. There was no evidence that the persons to whom she reported had outward
looking enforcement authority. Weatherspoon argued that if she had gone outside her chain
of command, she would have been disciplined. The court said that this concern was
unfounded because the agency could not use internal policy to do what the act does not
permit: discipline employees for making a protective report.
ARBITRATION
Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013 (5th Cir. 2015).
Relying on Fifth Circuit precedent in D.R. Horton, the Fifth Circuit ruled in Murphy Oil that
individual arbitration agreements that deny employees the right to assert collective or class
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actions are not a violation of those employees’ NLRA right to engage in concerted activities
in pursuit of their mutual aid or protection.
While ruling against the NLRB on the primary issue in the case, the Fifth Circuit ruled in
favor of the NLRB’s finding that an earlier version (pre-2012) version of Murphy Oil’s
arbitration agreement violated the NLRA because its overly broad language that any and all
claims related to employment must be heard in arbitration created the reasonable
impression that an employee was also waiving his or her right to bring claims to the NLRB.
The NLRB has appealed to the Supreme Court
Kubala v. Supreme Prod. Services, Inc., 830 F.3d 199 (5th Cir. 2016).
Kubala brought a proposed FLSA collective action against his employer. Two days after
the action was filed but, according to the employer, before it had learned of the suit, the
company announced a new policy requiring employees to arbitrate employment disputes,
including FLSA claims. The agreement indicated that an employee's continued employment
was expressly conditioned on his acceptance of the terms of the agreement; it contained a
“delegation clause” that assigned to the arbitrator the power to make gateway
determinations as to the arbitrability of a specific claim.
The district court denied the motion to compel arbitration based upon a finding that the
arbitration agreement did not indicate an intent to arbitrate preexisting disputes. However,
the district court did not rule on the impact of the agreement’s delegation clause, which
required issues of arbitrability to be heard by the arbitrator.
The delegation clause in this agreement was:
The arbitrator shall have the sole authority to rule on his/her own
jurisdiction, including any challenges or objections with respect to the
existence, applicability, scope, enforceability, construction, validity and
interpretation of this Policy and any agreement to arbitrate a Covered
Dispute.
This clause is strikingly similar to the delegation clause in Rent-A-Ctr., W., Inc. v. Jackson, 561
U.S. 63(2010) which read:
The Arbitrator, and not any federal, state, or local court or agency, shall have
exclusive authority to resolve any dispute relating to the interpretation,
applicability, enforceability or formation of this Agreement including, but not
limited to any claim that all or any part of this Agreement is void or voidable.
Id. at 66.
Given the valid delegation clause, the issue of arbitrability was properly before the arbitrator
rather than the district court, and remand to arbitration was appropriate on the limited issue
of arbitrability.
– 23 –
Nelson v. Watch House Intern., L.L.C., 815 F.3d 190 (5th Cir. 2016).
In this case, the district court’s order compelling arbitration was overturned based upon the
Fifth Circuit’s determination that the agreement at issue did not contain an appropriate
Halliburton savings clause.
In the process of reaching this decision, the Fifth Circuit restated and further clarified the
three-prong test to determine whether a Halliburton-type savings clause sufficiently restrains
an employer's unilateral right to terminate its obligation to arbitrate. Retaining termination
power does not make an agreement illusory so long as that power (1) extends only to
prospective claims, (2) applies equally to both the employer's and employee's claims, and (3)
so long as advance notice to the employee is required before termination is effective. In this
case, the employer argued that the third prong of this test (advance notice before
termination is effective) was not necessary under Texas law, but the Fifth Circuit – after
analyzing recent Texas court precedent – found that that the third prong of this test is still
appropriate and that it was not met by the arbitration agreement in this case.
El Paso Healthcare System, Ltd. v. Green, 485 S.W.3d 227 (Tex. App.—El Paso 2016, pet.
filed).
This case involves the affirming of a trial court's denial of a motion to compel arbitration
where 19 months of merit discovery and motion practice occurred before the defendant
attempted to compel arbitration. The trial court found that the defendant had waived its
right to enforce the arbitration clause, and the court of appeals affirmed.
Green, a 55 year-old African American woman, worked for the defendant, Las Palmas
Medical Center, as a laboratory manager. At the time of her employment, she signed an
arbitration agreement. After her termination, Green filed a discrimination and retaliation
charge with the EEOC. Green then filed suit in state court, and the parties exchanged
discovery. Multiple depositions were taken of defendant's employees, but Plaintiff's
deposition was canceled due to scheduling issues. In light of the voluminous discovery
production, the parties jointly moved to continue the state court proceeding. Green filed two
motions to compel discovery, and upon filing the second motion to compel, the defendant,
the same day, sought to move the case to arbitration. The trial court denied the defendant's
request, and defendant appealed.
The court of appeals used the 13 Ellman factors to determine if Las Palmas had waived its
right to enforce the arbitration agreement. The court reasoned that the vast majority of the
Ellman factors weighed in favor of finding that the defendant waived their right to arbitrate.
The court noted that while Texas courts will enforce valid arbitration agreements and will
strongly resolve any doubts in favor of arbitration, the court could not condone
brinksmanship, and it could not allow parties who have substantially invoked litigation to
strategically keep arbitration agreements in their back pockets as a failsafe, or to deploy
them on the eve of trial as a delay tactic to gain interlocutory review. The court said such a
situation undermines the integrity of the judicial forum and subverts the purpose of
arbitration as a genuine means of alternative dispute resolution.
– 24 –
Firstlight Federal Credit Union v. Loya, 478 S.W.3d 157 (Tex. App.—El Paso 2015, no
pet.).
This case involved a trial court’s denial of an employer’s motion to compel arbitration on a
former employee’s discrimination and retaliatory discharge claims, where the former
employee had received, but not signed the underlying arbitration agreement. The court of
appeals found that the trial court abused its discretion in refusing to compel arbitration and
reversed and remanded.
After her termination from Firstlight, Loya complained to the EEOC. Upon receiving her
notice of right to sue, Loya sued Firstlight under the Texas Commission on Human Rights
Act for discrimination and retaliatory discharge. Firstlight moved to compel arbitration
under an arbitration agreement that Loya had not signed, but had previously acknowledged
receiving. Specifically, Loya signed a “Receipt Acknowledgment” that she had received a
copy of the arbitration agreement at the time that Firstlight distributed it to its employees,
including Loya.
The court of appeals reasoned that as an at-will employee, Loya, was bound by the
arbitration agreement even though she did not sign it because she continued working for her
then employer, Firstlight, after receiving notice of the arbitration agreement.
While the arbitration agreement contained a delegation clause which provided that all
“gateway issues” should be determined by the arbitrator, the court of appeals held that the
trial court determines the scope of the arbitration agreement. Based upon that analysis, the
court of appeals determined that Loya’s claims fell within the scope of the arbitration
agreement because they were legal claims “arising from [her] employment,” as provided in
the agreement. Similarly, the question of whether an agreement to arbitrate existed to begin
with was also a matter for the trial court to decide where the delegation clause did not
“clearly and unmistakably” delegate the issue of contract formation to the arbitrator.
Instead, based on the limited wording of the delegation clause in the agreement at issue, the
only “gateway issues” that could be addressed by the arbitrator concerned the validity and
enforceability of the arbitration agreement.
Jefferson County Constables Assoc. v. Jefferson County, No. 13-14-00188-CV, 2016 WL
2609313 (Tex. App.—Corpus Christi May 5, 2016, pet. filed).
This case concerned the validity of an arbitration award interpreting a collective bargaining
agreement entered between the Jefferson County Constables Association and Jefferson
County. The court of appeals reversed the trial court order vacating the arbitration award
rendered in favor of the constables, holding the arbitrator did not exceed his jurisdiction and
had the inherent power to issue the arbitration award and the award did not violate the
Local Government Code or any statute.
The County and constables entered into a collective bargaining agreement, which contained
a mandatory arbitration agreement. While in effect, the County laid off several deputy
constable positions, which the constables claimed violated the collective bargaining
agreement’s requirement that seniority be the sole factor for layoffs. Following an
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arbitration on the issue, the County filed an original petition seeking to vacate the
arbitration award entered in the constables’ favor. The County argued: (1) that the arbitrator
lacked jurisdiction to reinstate the deputy constables, because Texas Local Government
Code Section 86.011 vested the authority for the appointment of that position with the
commissioner’s court for the County; and (2) the arbitrator exceeded his jurisdiction by
ignoring the collective bargaining agreement’s provision that provided the County with the
authority to “lay off for lack of work or funds (and) the right to abolish positions.”
As to the parties’ standing to enforce the terms of their collective bargaining agreement and
the court’s subject-matter jurisdiction to hear the appeal, the court of appeals held the
constables had standing to bring suit under chapter 174 of the Texas Local Government
Code, titled the Fire and Police Employee Relations Act (FPERA), on the basis that
constables are: (1) paid employees; (2) who are sworn, certified, and full-time; (3) regularly
serve in a professional law enforcement capacity; and (4) like sheriffs, serve in the police
department of a political subdivision.
In reviewing the arbitration award, the court of appeals first determined their review was
limited to common law grounds asserted by the County, since the County failed to identify
any applicable statutory grounds. As such, the court could only vacate the arbitration award
if it violated public policy or the law or if the award exceeded the scope of the arbitrators
authority. The court of appeals found that the arbitrator’s award did not usurp any statutory
authority of the County concerning the appointment of deputy constables under Section
86.011 of the Local Government Code and, therefore, did not violate the law or public
policy. The court further held that the arbitrator had not exceeded his jurisdiction by
ignoring the “lay off for lack of work or funds (and) the right to abolish positions” provision.
Since the record established that the arbitrator consulted the contractual provisions when
reaching his decision, the court could not conclude that the arbitrator exceeded his authority
as it was for the arbitrator, not the court, to interpret the agreement in determining whether
the County violated the agreement and in awarding reinstatement of certain deputy
constables.
Kmart Stores of Texas, LLC, et al. v. Norma Ramirez, No. 1055870, 2016 WL 1055870 (Tex.
App.—El Paso Mar. 16, 2016, pet. filed).
This case involves a motion to compel arbitration in a disability discrimination case. The
question is whether the testimony of Ramirez that she had never received or knew about the
agreement to arbitrate created a fact issue given that the electronic login credentials used to
access and acknowledge the agreement online. The court of appeals found that Ramirez did
raise a fact issue and the trial court did not abuse its discretion in denying the employer’s
motion to compel.
About two years after she started her employment Kmart introduced an arbitration policy.
The company established a deadline by which all employees were required to complete a
series of acknowledgements on the online portal which included the arbitration agreement.
When the agreement was posted the employees were required to undertake several steps to
access and acknowledge it. First, the employee must enter her user id and password
information into the login page. After doing so, the employee was directed to a home page
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which included a link entitled “SHC Policy Acknowledgements.” The employee was
required to undertake an additional series of steps which ended with a link to an
acknowledgement of receipt form. It also gave the employee the option to opt out of the
arbitration agreement within 30 days but stated if the employee did not opt out then the
employee would be deemed to agree to be bound by the agreement.
After her termination, Ramirez filed suit for disability discrimination and Kmart moved to
arbitrate. She accessed the system and admitted to having reviewed some policies
electronically at the beginning of her employment but denied logging into the network on
the date that the company records indicated that she did so. She also testified that she never
saw the language on the portal directing her to the arbitration agreement. The court found
that Kmart properly proved through its compliance program manager that its records
indicated that on a specific day the employee’s login information was used to access and
view the arbitration agreement. The court then stated that it believed that Ramirez’s “denial
was sufficient to create a fact issue that the trial court could resolve.” It noted that notice
was a fact question which “boils down to which version of facts the trial court credits.”
Goad v. St. David’s Healthcare P'ship, L.P., LLP, 1-16-CV-044 RP, 2016 WL 2853573
(W.D. Tex. May 13, 2016).
In similar case, the key question was whether the plaintiff, Goad, had sufficient notice of the
arbitration Policy such that, coupled with her continued employment, the Policy was
properly considered to be binding. In Goad, there was a fact dispute between the parties as
to whether the arbitration agreement had been presented during the plaintiff’s orientation
session. The Company testified that it had, the employee testified that it was not. The trial
court found this fact dispute sufficient to deny a motion to dismiss and compel arbitration.
Furthermore, the trial court ruled that the FAA provided Goad a right to a jury trial on the
issue of whether there was a binding arbitration agreement.
Parker v. Schlumberger Tech. Corp., 475 S.W.3d 914 (Tex. App.—Houston [1st Dist.] 2015,
no pet.).
This case involves a motion to compel arbitration in a covenant not to compete dispute. The
trial court denied the motion to compel arbitration and granted a temporary injunction to
enjoin Parker and Myers from competing. Parker and Myers appealed both interlocutory
orders. Parker settled leaving Myers as the remaining appellant. The court of appeals
reversed and remanded.
Parker sold Parker Energy Services, an Oklahoma based oilfield services company to
Production Wireline and Cased Hole Services Group, LLC, Schlumberger’s (“STC”)
predecessor-in-interest. Parker and Myers were the key employees of Parker Energy. The
sale document called an Asset Purchase Agreement (“APA”) included a covenant not to
compete and non-solicitation provisions which requires Parker and Myers to execute
standard employment agreements that include covenants not to compete. Myers also signed
a “retention bonus contract” which prohibited him from disclosing confidential information
and competing during his employment and for a period of 1 year afterward. The APA
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contained an arbitration clause, but the other agreements did not. The APA also carved out
claims for injunctive relief in the event any party violated its non-compete or nonsolicitation provision.
STC sued Parker and Myers for breach of contracts, tortious interference, with existing
contracts and business relationship, breach of fiduciary duty, and aiding and abetting breach
of fiduciary duty. It sought damages and injunctive relief against Parker and Myers. At the
court of appeals Myers argued that the parties were bound by the agreement to arbitrate
contained in the APAs. STC argued that Myers was not a party to the APA and that its
claims were outside the scope of the APA. The court of appeals held that because (1) STC
was a signatory to the APA; (2) STC agreed to arbitrate any disputes arising “under or in
connection with” that agreement; and (3) Myers’s agreement to the employment covenants
was necessary to the consummation of the APA, the doctrines of estoppel and incorporation
by reference apply and therefore the trial court erred in denying the motion to compel
arbitration.
The court next addressed the temporary injunction against Myers. The court found that
since the APA specifically “carved out” injunctive relief, the court properly heard the
injunction matter. Myers also attacked the choice of law provision choosing Texas law
rather than Oklahoma law where he lived and worked. The appellate court found that the
trial court acted within its discretion concluding that Oklahoma law does not have a
materially greater interest than Texas. Myers also contended that the temporary injunction
was overbroad in that it imposed unenforceable “industry-wide” prohibitions on work,
unreasonably prohibiting him from engaging in broad categories of work, such as janitorial
tasks and contained unreasonable geographic restraints and no temporal restraints. The
court of appeals agreed. First the injunction was improper because it contained no
expiration date only that it would expire upon the entry of a final judgment. The injunction
was also improper because there were no findings as to reasonableness or necessity and no
findings as to whether the contractual provisions for extension of the initial one year period
were triggered. Thus, the court deemed this “an open ended injunction against
competition.” Having found that the injunction order did not provide for a reasonable
limitation of time, the court had no need to reach the remaining challenges to the
injunction, including those relating to geographic and substantive scope.
Stage Stores, Inc. v. Gunnerson, 477 S.W.3d 848 (Tex. App.—Houston [1st Dist.] 2015, no
pet.).
This case involves an application to vacate an arbitration award involving an employment
agreement where the executive invoked the “by the executive for good reason” method of
terminating his contract. Stage, the former employer refused to pay Gunnerson, the former
executive, benefits available under that method. Gunnerson initiated an arbitration
proceeding challenging the refusal. The court of appeals reversed and remanded.
The agreement required that the arbitrator issue a reasoned award. The court held that the
arbitrator was not complete and successful in providing a reasoned award, but the award
“largely conforms to the requirements for being a reasoned award.” The arbitration award
summarized all but one of the parties’ main arguments. Stage argued that the award was not
– 28 –
a reasoned award because it failed to address one of its key defenses: that Gunnerson failed
to provide the requisite notice and opportunity to cure in order to avail himself of the goodcause termination provision. Gunnerson argued that this notice and cure provision was not
one of Stage’s key defenses and that the arbitration award did not need to address it in order
to be a reasoned award. The court found that the award generally conformed with the
requirements for an award to be reasoned but the award’s failure to provide any reason
regarding Stage’s notice and cure contention prevents a determination that the award was
reasoned. Because the award failed to address this defense, the court of appeals could not
conform the award. It did not vacate the award, instead it required the trial court to remand
it to the arbitrator to decide the issue that was raised but not completely adjudicated by the
original award. Thereafter, the matter will be returned to the trial court for final
determination of whether the award should be confirmed or vacated.
ADA/FMLA
Wheat v. Florida Par. Juvenile Justice Com’n, 811 F.3d 702 (5th Cir. 2016).
Plaintiff was a former Juvenile Detention Staff Officer who had previously been terminated
while on FMLA leave and who had previously litigated with and settled prior claims. As
part of her prior settlement, she was reinstated. Upon being reinstated, she suffered a series
of conditions which she argued where retaliatory and then she was ultimately discharged.
Her complaints regarding pre-termination retaliatory events were determined by the district
court and Fifth Circuit to not be materially adverse events. The Court determined that her
being assigned to janitorial duties for the first three weeks upon return was not materially
adverse, that being passed over for a 4% raise was not materially adverse, and that a denial
of transfer was not materially adverse. In reaching these conclusions, the Court made case
specific determinations and referenced that in other instances such events may rise to the
level of being materially adverse.
Despite dismissing her pre-termination retaliation claims, the Court found there were
sufficient fact issues regarding her termination, and whether she was treated differently than
other employees, to warrant reversal of summary judgment and remand. Specifically, the
plaintiff established that Defendant’s stated reasons for termination shifted throughout the
course of the litigation.
This case is worthy of mention because it draws attention to the continuing difficulty that
courts have in determining what events are sufficient to be materially adverse acts of
retaliation. The dissent in this case takes umbrage with the majority’s decision that an
employee being assigned to janitorial duties was not considered a materially adverse event.
Williams v. J.B. Hunt Transp., Inc., 826 F.3d 806 (5th Cir. 2016).
This case involved a truck driver who had a medical incident wherein he passed out at home
during a coughing fit. He took medical leave and was promptly seen by his treating
physician. The personal treating physician diagnosed him with a condition called syncope
– 29 –
and suggested a full medical workup and a return to work in approximately two weeks. He
later extended the leave approximately one month and also diagnosed the truck driver with
an irregular and rapid heartbeat.
The truck driver then saw a second doctor for an insurance company, he did not tell the
second doctor about the first doctor or his diagnosis. The second doctor gave him a clear
bill of health.
The first doctor sent his report to the employer, who already had the report from the second
doctor. Seeing a conflict of information, the employer (a large trucking company) sent the
reports to a third doctor for review. The third doctor decided that the truck driver was not
cleared to drive pursuant to DOT regulations. The first doctor eventually also sent a clean
bill of health to the employer.
The employer terminated the truck driver saying he was not cleared to drive pursuant to
DOT regulations. The truck driver filed an EEOC charge alleging an ADA
violation. Importantly, the truck driver did not attempt to utilize the DOT process for
challenging the medical diagnosis.
The district court dismissed the case finding that it lacked jurisdiction due to the plaintiff’s
failure to exhaust the administrative remedies of the DOT process. The Fifth Circuit
reversed that “jurisdictional” decision because it was not one of jurisdiction. However, the
Fifth Circuit went on to grant summary judgment on other grounds, stating that the DOT
regulations conflicted with the ADA but the conflict would be resolved in favor of the DOT
regulations because of safety concerns and policy reasons (DOT has power to regulate
safety). Because the truck driver had failed to establish that he was a “qualified” truck
driver pursuant to DOT regulations, he failed to make out a prima facie case under the
ADA.
Dillard v. City of Austin, Texas, 15-50779, 2016 WL 4978363 (5th Cir. Sept. 16, 2016).
This case involves a City of Austin employee who worked as a Street and Drainage
Maintenance Senior Manager for the city when he was hurt in an on the job car accident
that required him to be on leave for an extended time and which also prevented him from
initially returning to work in his former position. After exhausting FMLA leave and the
city’s leave policy, the city nevertheless kept him in an “inactive” status until he was able to
return to a new light duty position as an administrative assistant through the city’s return to
work program for injured employees.
While he accepted the administrative duty position he expressed worry that he would not be
able to do it (he lacked the skills for the job and it was not similar to his former more
manual labor and oversight of other laborers position). He was unable to complete tasks in
a timely fashion and struggled in the new position. The city allowed him to take training
classes on the job and pointed him to other training opportunities. He did not take any
extra training opportunities. Worse, he was repeatedly late to work, caught surfing the
– 30 –
internet and playing games on his computer rather than working, making personal calls, and
lying about his attendance. Worse still, when confronted about these issues (at work and
later on summary judgment) he did not contest his bad performance. The city terminated
him for poor performance.
After suing under the ADA, summary judgment was granted because (1) he failed to
establish that the city’s stated reason for termination was pretextual and (2) he failed to
establish that the city failed to make reasonable accommodations.
The Fifth Circuit focused on his reasonable accommodation claim. While it was
uncontested that his doctor continued to provide updates to the City that his condition was
improving and there were numerous positions within the City other than the admin position
to which he could have returned, the fact that he had severe performance problems in his
light duty position undercut his accommodations claim. The Court reasoned that it would
be one thing if he simply had difficulty in his new position because he lacked the necessary
skills, but here there was evidence of intentional poor performance (playing video games
etc.) and dishonesty issues which did not relate to his physical condition. After accepting
the new position, he had a duty to try and make it work and he did not. The Court points
out that the “interactive process” is a two-way street and requires not only the employer but
the employee’s efforts. Here, the breakdown in the interactive process was traceable to the
employee.
E.E.O.C. v. Vicksburg Healthcare, L.L.C., No. 15-60764, 2016 WL 5939424 (5th Cir. Oct.
12, 2016)(unpublished).
On appeal from summary judgment, the Fifth Circuit examined whether the employee’s
temporary disability claim barred a claim under the ADA. The employee requested an
additional two weeks of leave after her FMLA entitlement exhausted to recuperate from
rotator cuff surgery, which the employer denied. The employee’s doctor then released her to
work in a “light duty” capacity. The day after the hospital terminated her, the employee
applied for temporary disability benefits. Despite the disability-benefits claim, the Fifth
Circuit explained that the EEOC could maintain a discrimination claim if it supplied a
“sufficient explanation” for the apparent inconsistency, citing Cleveland v. Policy Management
Systems Corp., 526 U.S. 795 (1999), and Giles v. Gen. Elec. Corp., 245 F.3d 474 (5th Cir. 2001).
Reversing, the court held that it was error not to recognize that the EEOC’s explanation that
the employee could have returned to work with a reasonable accommodation sufficed. The
Fifth Circuit also found disputed fact issues concerning whether the hospital offered a
reasonable accommodation in the form of a clerical position, whether the employee
requested a “light duty” accommodation, and whether “light duty” was inconsistent with
the job’s essential functions.
– 31 –
Donaldson v. Tex. Dep't of Aging & Disability Servs., No. 01-14-00736-CV, 2016 WL
27316752 (Tex. App.—Houston [1st Dist.] May 5, 2016, pet. filed).
This is an ADA failure to accommodate case, where the trial court improperly granted
summary judgment in favor of an employer who failed to accommodate an African
American psychologist employee for his medical ailments and medical treatments despite
his continued requests. The employee filed suit alleging race, age, and disability
discrimination, retaliation, and hostile work environment.
Here, the psychologist received several job performance evaluations due to his tardy,
substandard, and untimely corrected patient reports. In response, the psychologist presented
medical documents showing his several mental health treatments. After his second job
performance evaluation, the psychologist was diagnosed with cancer and requested
accommodations. To accommodate, employer provided the psychologist with a Caucasian
associate who was promoted after one week. The psychologist did not receive more
assistance. As a consequence to his subpar reports, the psychologist was then reassigned to
an unfavorable position. At this position, the psychologist was injured during a patient
altercation. The psychologist alleges that his manager presented him his third job
performance memo while waiting for treatment to his job related injuries. Eventually the
psychologist took FMLA for his cancer treatments. When he returned, he was reassigned.
The psychologist alleged that several procedures had changed and that, despite continually
reminding his employer of his medical ailments, he was not accommodated. Following
more performance evaluations, the psychologist was terminated.
Turning to the race discrimination claim, the court granted summary judgment finding that
there was (1) no direct evidence that the psychologist was discriminated against and (2) that
the psychologist was unable to establish a prima facie case of discrimination under the
McDonnel Douglas analysis. Under the first analysis, the court reasoned that deposition
testimony of co-workers, stating that Caucasians are treated more favorably and that the
psychologist was “singled out” or “picked on,” was insufficient to show that these
comments or acts were at or near the time the decision was made to terminate the
psychologist. Under the second analysis, the court found that the psychologist was unable to
meet his burden on the fourth prong of the McDonnel Douglas test: to show that he was
replaced by an employee outside of his protected class, and was thus treated less favorably.
The psychologist relied on the same deposition testimony and identified two co-worker
“comparators,” whom he alleged were treated more favorably. However, the court found
that the testimony was insufficient, and that the comparators, while had received
promotions, were not comparable in all material respects.
Regarding the disability discrimination claim, the court found that there was little to no
evidence that he was fired because of his disability. The court considered the numerous job
performance evaluations as a legitimate non-discriminatory reason for the psychologist’s
termination. The psychologist only provided his affidavit, that disagreed with the
employer’s evaluations. Similarly, in the retaliation claim, the psychologist again failed to
establish a prima facie case that could overcome the employer’s legitimate nondiscriminatory reasons for firing him. Thus, he was unable to show that the reason was
“pretext for discrimination,” based on disability.
– 32 –
However, the court found that there was a fact issue as to whether the employer provided
reasonable accommodations. The court reasoned that even though the employer had
initially accommodated the psychologist during his cancer treatment by assigning him an
associate, the associate left after one week, and the employer did not respond to his
continued requests for help. Thus, summary judgment was improper.
With regard to the retaliation claim, despite the fact that the psychologist engaged in a
protected activity, the evidence was insufficient to show that the employer’s actions were
materially adverse to the psychologist. The psychologist presented evidence that he had to
share an office with a coworker, that he was given a smaller case load, and that he was
reassigned to another position. The only materially adverse action was his firing and his
knowledge of his employer’s complaints. Thus, there was no issue of material fact.
On the hostile environment claim, the court found that summary judgement was proper
because the psychologist failed to show that any of the employer’s complaints about him
were based on his race or disabilities. Further, there was no evidence to show that the
complaints were “severe or pervasive” enough to be considered an abusive environment.
Thus, summary judgment was proper.
Flynn v. Distinctive Home Care, Inc., 812 F.3d 422 (5th Cir. 2016).
A contract pediatrician performing services for a government subcontractor at an Air Force
base was terminated soon after being diagnosed with Autism Spectrum Disorder-Mild,
formerly known as Asperger’s Syndrome. Conceding that she could not bring suit under the
ADA because she was a contractor, the Fifth Circuit, as a matter of first impression, held
that Section 504 of the Rehabilitation Act applies to contractors because the Rehabilitation
Act does not incorporate Title I’s requirements that the defendant be the plaintiff’s
“employer” as that term is defined under the ADA. In so finding, the Fifth Circuit has now
agreed with the Ninth and Tenth Circuits.
Cannon v. Jacobs Field Services North America, Inc., 813 F.3d 586 (5th Cir. 2016).
This ADA case involved an employer that rescinded a job offer that it had made to a field
service engineer after it was revealed during the pre-employment physical exam that the
engineer had an inoperable rotator cuff that prevented him from raising his arm above his
shoulder (and required other accommodations). The Fifth Circuit reversed the trial court’s
erroneous reliance on pre-2008 ADA definitions of “disability” under the Act, stating that
the evidence “easily passes muster” under the revised standards of the ADAA.
Furthermore, the Fifth Circuit found sufficient evidence of fact issues that the plaintiff could
perform the required functions of the job without or with reasonable accommodations.
Finally, the Fifth Circuit ruled that pretext was established in this case not because it was
demonstrated that the stated reason for termination was false, but that if found to be true (by
the jury) the stated reason in this case established that the employer terminated the plaintiff
because of his disability or perceived disability.
– 33 –
Delaval v. PTech Drilling Tubulars, L.L.C., 824 F.3d 476 (5th Cir. 2016).
This ADA case involved a plaintiff who worked for a drilling company who had an email
exchange with his boss regarding needing to take time off to get medical testing. The boss
then went out of town and the employee (plaintiff) missed a week of work due to medical
testing. The employer promptly terminated the employee for missing more than three
consecutive days at work in violation of the company’s attendance policy.
The district court and Fifth circuit both held that based upon the “thin record” which
contained only one doctor’s note submitted a month after termination, that it appeared that
the employee had requested time off but then failed to keep the employer apprised of the
situation. An employer that fails to engage in the interactive process in good faith violates
the ADA, but where the breakdown “is traceable to the employee,” there is no violation.
Francisco v. Sw. Bell Tel. Co., CV H-14-3178, 2016 WL 4376610 (S.D. Tex. Aug. 17,
2016).
The FMLA provides that if “an employee does not comply with the employer's usual notice
and procedural requirements, and no unusual circumstances justify the failure to comply,
FMLA-protected leave may be delayed or denied.” 29 C.F.R. § 825.302(d). Based on this
provision, many courts have applied the “unusual circumstances” exception to prevent a
defendant from raising the plaintiff's noncompliance with its FMLA procedures as a defense
to the plaintiff's interference claim. While each case will be fact specific, cases wherein the
“unusual circumstances” exception was followed involved circumstances where either (i)
the employee was physically unable to comply with the employer's notice requirements or
(ii) the employer was at least partially to blame for the employee's failure to comply.
While the plaintiff in Francisco initially established what appeared to be good facts that
established “unusual circumstances” (he had relocated to another state and was not
receiving the employer’s mail or messages and one of this treating doctors was unavailable
due to his own open heart surgery), the employer established on a motion for
reconsideration that it had instructed the plaintiff to notify his supervisors of any change in
address or contact information and that the employer had repeatedly contacted the two
treating medical professionals requesting the needed medical certification prior to the
doctor’s personal surgery. Therefore, under the facts in this case, the unusual circumstances
were not sufficiently established and the plaintiff’s failure to timely comply with the
employer’s usual notice and procedural requirements.
Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224 (5th Cir. 2016).
This case involves a reversal of summary judgment in a TCHRA pregnancy leave
termination case. The plaintiff, a legal assistant at a firm handling Social Security
Administration cases was terminated after she left on pregnancy leave. At the time of the
– 34 –
termination, the firm chose to only tell her via letter, “[b]ased on a review of your work it
has been decided that your employment with [the defendant] has been terminated on
October 19, 2012.” Later, in litigation, the employer claimed that the employee was
terminated because when she went on leave it was discovered within her file that deadlines
had been missed and that letters had gone to clients without approval. However, the
employer’s failure to put these reasons in writing (or otherwise communicate them) at the
time of the termination and the plaintiff’s deposition testimony that she did not miss
deadlines, that records had been tampered with, and that it was not against any policy to
send letters out without prior approval, was sufficient to establish material fact disputes that
warranted reversal of summary judgment.
A reversal of summary judgment because of material fact disputes is not that noteworthy,
but this case serves as a prime example of the risk employers take when (1) they fail to
articulate a legitimate reason for termination at the time of the termination, (2) they have
poor record systems in place, (3) they do not have written workplace rules in place, and (4)
they terminate someone shortly after they undertake protected leave such as pregnancy
leave. While courts will not serve as super personnel departments, they will allow juries to
do so when there are material fact disputes which if weighed in the non-movant’s favor
establish pretext.
ERISA
Gomez v. Ericsson, Inc., 828 F.3d 367 (5th Cir. 2016).
This case involved the determination of whether a severed employee’s breach of contract
claim regarding unpaid severance payments were governed by ERISA or not. The
severance agreement in this case contained a provision that required the employee to return
all company property in order to receive severance. The employee allegedly deleted
important data from his work issued laptop before returning it during the severance process.
The employer argued that such deletion (some of which allegedly contained files that were
important to the employer but not backed up elsewhere by the employer) violated the
severance agreement and the employer refused to pay severance.
The Fifth Circuit held that while not all severance plans are governed by ERISA, this one
was because it was part of an ongoing administrative plan that required discretion, an
eligibility determination, calculations of the payment amount, provision of additional
services beyond the severance payment (such as insurance), and the establishment of
procedures for handling claims and appeals.
Once it was determined that ERISA governed this severance plan, the plaintiff was unable
to establish that the Plan’s Administrator’s decision to deny severance benefits was arbitrary
or capricious under the facts of this case.
– 35 –
WAIVER OF ARGUMENTS
JTB Tools & Oilfield Services, L.L.C. v. United States, 831 F.3d 597 (5th Cir. 2016).
Repeated conclusory assertions within Fifth Circuit appeal brief, without supporting
argument or citation to authority, inadequately briefs the court on those claims and
therefore waives those claims.
Jacobs Field Services N. Am., Inc. v. Perez, 15-60342, 2016 WL 4427157 (5th Cir. Aug. 19,
2016).
Two of three arguments on appeal (an appeal for review of an underlying administrative
order) were not raised below to the administrative agency and were therefore forfeited and
waived on appeal.
Diaz v. Kaplan Higher Educ., L.L.C., 820 F.3d 172 (5th Cir. 2016).
“Because Diaz failed to discuss pretext at all in response to Kaplan’s motion for summary
judgment, he necessarily failed ‘to articulate the precise manner in which the presented
evidence supports his claim’ of pretext.” Under the Fifth Circuit’s general rule, arguments
not raised before the district court are waived and will not be considered on appeal unless
the party can demonstrate extraordinary circumstances.
SECTION 1983
Miller v. Metrocare Services, 809 F.3d 827 (5th Cir. 2016), cert. denied, 136 S. Ct. 2463
(2016).
Former human resources director (Miller) was terminated for
required criminal background checks on himself and several
indicating in company’s record system that such checks had
terminated, Miller’s counsel sought and obtained a Section 1983
with the board of employer.
allegedly failing to run
other employees while
been run. After being
“name-clearing hearing”
Miller argued that the district court erred in dismissing his procedural due process claim
because Metrocare failed to provide an adequate forum to clear his name, failed to provide
proper notice of the charges against him, failed to allow Miller to confront key witnesses,
and allowed the employer to present secret evidence to the Metrocare Board of Trustees
without notice to Miller.
In affirming the district court’s summary judgment disposition of Miller’s claims, the Fifth
Circuit restated the “stigma-plus-infringement” test under 1983 for determining whether a
government employee was deprived of liberty without notice or an opportunity to clear his
name. Specifically, the employee must show: (1) he was discharged; (2) stigmatizing
charges were made against him in connection with the discharge; (3) the charges were false;
– 36 –
(4) he was not provided notice or an opportunity to be heard prior to the discharge; (5) the
charges were made public; (6) he requested a hearing to clear his name; and (7) the
employer denied the request.
Under the facts in this case, the Fifth Circuit determined that the right to “confront
witnesses” at the name-clearing hearing was not a mandatory requirement for an adequate
name-clearing hearing.
LABOR LAW
Dixie Elec. Membership Corp. v. N.L.R.B., 814 F.3d 752 (5th Cir. 2016).
This case involved management’s unilateral effort to take two positions out of the
bargaining unit by reclassifying those positions as supervisory positions over the protests of
the union during an existing collective bargaining agreement. The Board granted (and Fifth
Circuit affirmed) the Unfair Labor Practice charge of the union. It was determined that the
company’s arguments regarding whether or not the positions were supervisory was moot
because prior contracts had permissively included those positions within the bargaining
unit. Once a bargaining unit is established, management cannot unilaterally alter the
bargaining unit or else the contract would be rendered meaningless. Furthermore,
management’s petition to the Board to change the bargaining unit (filed after the Union’s
ULP charge) was untimely because it was filed approximately four months after the parties
had entered into a new contract.
ATTORNEYS’ FEES
CRST Van Expedited, Inc. v. EEOC, — U.S. —, 136 S. Ct. 1642m 194 L.Ed.2d 707 (2016).
This case involved the Eighth Circuit finding that a defendant can be a “prevailing party”
under Title VII only by obtaining a “ruling on the merits.” The Supreme Court reversed and
held that a favorable ruling on the merits is not a necessary predicate to find a defendant is a
prevailing party.
The EEOC sued employer, a large interstate trucking firm for hostile work environment
sexual harassment against female long-haul driver and a class of similarly situated female
employees under Title VII. The district court granted summary judgment for the employer
on various claims for three plaintiffs and barred EEOC from seeking relief for remaining
claimants based on its failure to conciliate in good faith. Following dismissal, the district
court held that the employer was a prevailing party and awarded the company over $4
million in fees. On appeal, the Eighth Circuit only reversed dismissal of two claims, but this
led it to vacate, without prejudice, the attorney’s fees award. On remand, the EEOC settled
the claim with respect to one of the plaintiffs and withdrew the other. The district court
again awarded over $4 million in attorney fees, because of the EEOC’s failure to satisfy the
pre-suit requirements regarding the other employees. This award was reversed by the Eighth
Circuit.
– 37 –
On appeal, the Supreme Court held that a favorable ruling on the merits is not a necessary
predicate to find that a defendant has prevailed under Title VII’s attorney fee provision. In
so finding, the Court noted that there is no indication that Congress intended that
defendants should be eligible to recover attorney fees only when courts dispose of claims on
the merits. Rather, Title VII’s fee-shifting statute allows prevailing defendants to recover
whenever the plaintiff’s “claim was frivolous, unreasonable, or groundless.” Thus, this
principal should also apply in frivolous, unreasonable, or groundless litigation when the
case is resolved in the defendant’s behavior, whether on the merits or not.
Combs v. City of Huntington, Texas, 829 F.3d 388 (5th Cir. 2016).
Plaintiff brought a Title VII sexual harassment suit against the City of Huntington, asserting
hostile work environment, quid pro quo, and retaliation claims. Plaintiff succeeded only on
her hostile work environment claim and was awarded a fraction of the damages she sought
and then moved for attorney’s fees. After calculating the lodestar, the district court reduced
the fee award, concluding that the ratio between attorney’s fees and damages was
excessively disproportionate. Plaintiff appealed, contending that the district court abused its
discretion by reducing the award.
Plaintiff sought approximately $320,000 in damages based on multiple causes of action.
However, she only prevailed on one cause of action (hostile work environment) and the jury
only awarded $5,000 in damages. The district court applied a reduction of the sought
attorneys’ fees from $94,612 (a number which already included a voluntary 20% decrease
due to the limited recovery) to a total attorneys’ fee award of $25,000 based upon a claim
that Migas v. Pearle Vision mandated that the fee award be reduced to something less than 6.5
times the actual damages awarded.
The Fifth Circuit clarified that Migas does not propose a strict proportionality rule and that
to hold otherwise is reversible error. The fee award was therefore vacated and remanded to
the trial court for recalculation without any strict proportionality rule.
MISCELLANEOUS
Ortiz v. City of San Antonio Fire Dept., 806 F.3d 822 (5th Cir. 2015).
Employee of a city fire department appealed from summary judgment on his claims that the
department’s mandatory wellness program violated Title VII and the Genetic Information
Nondiscrimination Act (GINA). The Fifth Circuit affirmed, holding that the employer’s
wellness program did not violate GINA because the statute expressly permits certain
wellness programs and the department’s program did not request “genetic information” as
opposed to permissible “medical information.” The court also affirmed summary judgment
on the GINA retaliation claim because the employee’s grievances--which failed to mention
GINA or genetic information--were not protected, and the placement on alternate duty,
even if an adverse action, occurred before his EEOC charge. Last, the court affirmed
summary judgment on the employee’s national-origin discrimination claim because the
wellness program’s stated goal of ensuring that firefighters could “safely and effectively
– 38 –
perform their job[s]” was a legitimate non-discriminatory reason to requirement medical
examinations and assigning alternate duty, and the employee did not create a dispute fact
that this explanation was a pretext.
Levatino v. Apple Tree Cafe Touring, Inc., 486 S.W.3d 724 (Tex. App.—Dallas 2016, pet.
denied).
As a matter of first impression, the Dallas Court of Appeals ruled that an attorney’s pre-suit
demand letter to the opposing party regarding defamation claims is not a protected act
under the Texas anti-SLAPP statute, Chapter 27 of the Texas Civil Practice and Remedies
Code. The Court of Appeals reasoned that a pre-suit demand letter is not a petitioning
activity as defined by the statute because the suit has not yet been filed. The Court of
Appeals also determined that a lawyer and his client do not have a protected right of
association that flows from an attorneys’ letter on behalf of his client to opposing counsel.
Arndt v. Pinard Home Health, Inc., No. 08-15-00094-CV, 2016 WL 1055870 (Tex. App.—
El Paso 2016, Mar. 16, 2016, pet. filed).
This case involves an appeal from the denial of a plea to the jurisdiction where the court
considered whether a state accounts examiner, performing an audit of a company for the
Texas Workforce Commission ("TWC"), had authority to ask the company for the personal
records of the company's owner/officer. The court concluded that the state actor did indeed
have the authority to do so, and the company's suit against the state examiner was barred by
sovereign immunity, therefore the trial court lacked jurisdiction over the suit.
The appellant, Anne G. Arndt ("Arndt") worked as an accounts examiner for the TWC. The
TWC assigned her to audit Plaintiff's records for the 2013 tax year. During the audit, Arndt
requested the personal bank account number, bank statements, bills, and 2013 tax return of
the officer and owner of the corporate Plaintiff. Plaintiff refused, and filed a complaint with
the TWC against Arndt. The TWC stated it had taken appropriate action, and the Plaintiff
filed suit against Arndt, asserting an ultra vires action for declaratory and injunctive relief,
arguing that the examiner's requests exceeded her authority as an accounts examiner for the
TWC.
The court first concluded that ultra vires suits against government officials to comply with
statutory or constitutional provisions are not prohibited by sovereign immunity, and
therefore fall within this sovereign immunity exception: the plaintiff must allege and
ultimately prove that the officer acted without legal authority or failed to perform a purely
ministerial act. The testimony revealed that Arndt was tasked with determining the
Plaintiff's compliance with the Texas Labor Code. In doing so, she found that none of the
documents the company provided had the company's owner's compensation listed, despite
consistently listing him as an employee of the company. The court concluded that Arndt did
have the authority to request the information (although not concluding Arndt was entitled
to it) therefore the trial court lacked jurisdiction to hear the claim under the doctrine of
sovereign immunity.
– 39 –
Brown v. Nero, 477 S.W.3d 448 (Tex. App.—Austin 2015, pet. denied).
This case involves a dispute between a police officer and her employers where the trial court
granted the employers' plea to the jurisdiction under the Fire Fighters' and Police Officers'
Civil Service Act (the "Act").
The appellant, Officer Brown, was investigated by her employer, the Georgetown Police
Department, for drug use. As a result of the investigation, Brown was indefinitely
suspended. In addition, as a result of her suspension, the prosecutors for the District
Attorney issued a joint letter to the chief of police stating that they would no longer accept
cases in which Brown had played a role. Following the administrative procedure prescribed
by the Act, Brown appealed her suspension to an independent third party hearing examiner.
The hearing examiner reduced Brown's suspension to fifteen days, and ordered her
reinstated with back pay and benefits. However, when she returned to work, the next day
she was terminated by the chief of police. The chief's reason was that because prosecutors
refused to sponsor her as a witness, Brown could no longer fulfill one of the essential
functions of her job, and therefore lacked an essential qualification for continued
employment. The chief emphasized that this was a non-disciplinary termination, because
non-disciplinary terminations were not subject to appeal under the Act.
After her request for appeal was denied, Brown filed suit against the chief of police in his
official capacity, and other city officials, as well as the city itself. The defendants filed a plea
to the jurisdiction, arguing that Brown failed to establish a justiciable claim and had not
invoked the Court's jurisdiction under the Act because the Act gave officers no right to
appeal to a district court non-disciplinary terminations. The trial court granted the plea to
the jurisdiction, and Brown appealed. The appellate court, in concluding that Brown's
second termination was disciplinary in nature, reasoned that Brown's second termination,
which occurred just a day after she was reinstated as ordered by the hearing examiner, was
ultimately based on the same allegations as her first termination. The court noted that
instead of abiding by the hearing examiner's decision in reducing Brown's disciplinary
action and reinstatement, the chief of police allowed the defendants to nullify Brown's
statutory right to appeal merely by relabeling her termination as "non-disciplinary." The
Court concluded because Brown's termination was disciplinary, the commission was
required by statute to hear her appeal.
Espinosa v. Aaron’s Rents, Inc., 484 S.W.3d 533 (Tex. App.—Houston [1st Dist.] 2016, no
pet.).
This case involves a trial court's granting of summary judgment in favor of an employer who
was sued by a former employee for defamation, among other claims, after the employer
reported the former employee to the police for fraudulent activity and suspected theft. The
court affirmed the trial court's summary judgment ruling.
Aaron's, a furniture and household goods rental store, initiated an investigation regarding
several delinquent rental accounts linked to a former store manager, Espinosa. Aaron's
suspected that Espinosa had created false or misleading customer rental accounts and had
instead personally sold the merchandise and kept the proceeds. Aarons reported the incident
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to police, and the District Attorney sought to prosecute Espinosa, but a grand jury declined
to indict Espinosa. Espinosa then sued for malicious prosecution, intentional infliction of
emotional distress, defamation, and unpaid performance bonuses.
As a preliminary matter, the Court noted that Espinosa was not judicially estopped from
bringing his claims by not listing them as an asset in bankruptcy, because the error in the
bankruptcy proceeding had been corrected. Further, in affirming summary judgment, the
court of appeals reasoned that defendant cannot be liable for malicious prosecution when
the decision to prosecute is left to the discretion of another, such as a law enforcement
official or a grand jury, unless the defendant knowingly provided false, material information
and the false information caused a criminal prosecution. Here, there was no evidence
Aaron's knowingly provided false information to police or prosecutors. In addition, the
court reasoned that Aaron's was entitled to a conditional or qualified privilege for the
defamation claim, which attaches to communications made in the course of its investigation
following a report of employee wrongdoing. When such a privilege applies, the Plaintiff has
to prove actual malice rather than mere negligence in order to succeed on a defamation
claim. Lack of malice in this instance may be proven by uncontested affidavit or sworn
declaration, which was present here. Finally, to the Intentional Infliction of Emotional
Distress claim, the court held that, while such a claim can exist where the circumstances are
“beyond all possible bounds of decency,” reporting activity to the police here did not
constitute extreme and outrageous conduct, and there was no alternative factual basis for
Espanosa's Intentional Infliction of Emotional Distress claim than was present for his other
tort claims.
Tex-Fin, Inc. v. Ducharne, 492 S.W.3d 430 (Tex. App.—Houston [14th Dist.] 2016, no
pet.).
This case is about a wage claim under the Texas Payday Act. At issue for the court of
appeals is whether the trial court erred by setting aside the TWC and remanding the case
back to the TWC, after the TWC had dismissed Ducharne’s case against Tex-Fin. The court
of appeals reversed the portion of the trial court’s opinion that remanded the case back to
the TWC for further proceedings.
Decisions from the TWC are reviewed for “substantial evidence”. Because the actions of the
TWC are presumed valid, Ducharne had the burden of showing that less than substantial
evidence supported its decision. In reviewing the trial court’s decision, the court of appeals
focused on the agreement between Ducharne and Tex-Fin because, under the Payday Act,
wages are due according to such agreements.
The agreement between the parties predicated Ducharne’s receipt of a sales bonus on
various conditions, none of which required Ducharne to work a full year before earning his
bonus. The court of appeals found that the TWC incorrectly applied the law, to the extent it
relied on parol evidence to conclude that the employer did not intend to pay Ducharne a
bonus based on a partial year of work. Therefore, the court of appeals found that the trial
court did not err with regard to setting aside the TWC’s decision. However, the court of
appeals found that the trial court did not have the authority under Texas law to remand to
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the TWC for further proceedings regarding a wage claim, and that its decision to do so
constituted error.
Los Fresnos Consolidated Independent School District, et al. v. Vazquez, 481 S.W.3d 742 (Tex.
App.—Austin 2016, pet. denied).
This case involved an appeal of a district court’s judgment reversing the Commissioner’s
Order upholding the School District’s decision not to renew Vasquez’s term teaching
contract. The district court reversed the Commissioner’s Order concluding that substantial
evidence did not support the School District’s non-renewal decision based on its reliance on
hearsay in a form of written student statements submitted by the School District at the
hearing. The Court of Appeals reversed and rendered.
Vazquez was a 9th grade teacher. In investigating Vazquez’s 3rd written warning the principal
became concerned about Vazquez’s classroom behavior. During his investigation the
principal gathered statements from students selected randomly from the class roster. This
resulted in a recommendation of non-renewal of Vazquez’s contract. Vazquez appealed his
non-renewal to the Board which upheld the non-renewal decision. On appeal the
Commissioner decided that substantial evidence supported the Board’s decision. Vazquez
then filed suit for judicial review.
The court found that the Board could establish its own rules which could include
consideration of hearsay, and that the Board’s consideration of the students’ statements was
not unlawful. Since Vazquez had no property interest in the renewal of his term contract, he
was not due any particular minimum due process that would exclude consideration of the
students’ statements.
Morales v. Hidalgo County Irrigation Dist. No. 6, No. 13-14-00205-CV, 2015 WL 5655802
(Tex. App.—Corpus Christi Sept. 15, 2015, pet. denied).
This appeal involves an employment contract between Morales and the Hidalgo County
Irrigation District No. 6 (“District”). The employment contract provided Morales a cash
severance if he was terminated for any reason other than death or disability. The District
argued that since Morales had a 5-year contract, and could theoretically receive five years of
severance, the severance provision constituted a gratuitous grant of public funds to an
individual in violation of the Texas Constitution. The trial court granted summary judgment
because the contract was illegal and void and unenforceable for lack of consideration. The
court of appeals reversed and remanded.
Under Morales’s contract he was to serve as a general manager for five years and it provided
for a “cash severance payment in an amount equal to the remaining compensation due for
the term of this agreement.” The District did terminate Morales and failed to pay severance.
The court of appeals held that the contract did not constitute a gratuitous payment of public
funds to Morales. It’s clearly served a legitimate public purpose—the employment of the
District’s general manager. The District received “return consideration”, namely
performance by Morales of the duties of general manager. Therefore, the employment
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contract did not authorize gratuitous payment of public funds and was not void for lack of
consideration.
Tochril, Inc. v. Texas Workforce Comm’n, No. 06-15-00078-CV, 2016 WL 3382747 (Tex.
App.—Texarkana June 17, 2016, no pet.).
This case involves an appeal of a claim by Tochril for a refund of taxes paid under protest
pursuant to the Texas Unemployment Compensation Act. Tochril asserted that the workers
although classified by a TWC as employees for tax purposes, were actually independent
contractors. The TWC filed a successful summary judgment in the trial court on appeal the
court of appeals affirmed the trial court’s judgment.
Tochril provided registered nurses, licensed vocational nurses, and certified nurse assistants.
The summary judgment evidence established that the nurses filled out an application, were
required to pass a drug test, required to pass medical/surgical screening and other
proficiency examinations and a background check. The independent contractor agreement
with the nurses indicated that the nurses had discretion to work when they want, if they
want, and where they want. Tochril did not provide any training, the nurses did not spend
time at the company office, and they could work for other companies or hospitals. Tochril
did not direct nurses how to do their jobs, did not pay for their licenses and does not provide
transportation or reimburse them for travel or business expenses. The court walked through
the 20 factor test to determine whether or not the nurses were employed. The court
concluded that Tochril was a nurse’s employer for tax purposes because (1) a substantial
majority of relevant factors indicated that the nurses were employees, and (2) it fell into the
category of a temporary help firm.
Black v. Smith Protective Servs., Inc., No. 01-14-00969-CV, 2016 WL 5400565 (Tex. App.—
Houston [1st Dist.] Sept. 23, 2016, no pet. h.).
This case involves an appeal from a summary judgment in favor of Smith Protective
Services (“Smith”) in Black’s suit regarding negligent hiring, training, supervision, and
retention. The court sustained the trial court’s granting of summary judgment on the
negligent hiring issue but overruled summary judgment on the issue of training, supervision,
and retention.
Black was a resident of The Oaks of Woodlake Townhomes (“The Oaks”) and allegedly got
into an altercation with a Smith security guard at the front entry The Oaks. Eventually, the
security guard, Muhammad Zaffar (“Zaffar”) filed a criminal complaint alleging that Black
had “physically assaulted” him, threatened him, and “swung a baseball bat” at him. Two
days later law enforcement officers in plain view of other residents surrounded Black in the
parking lot of The Oaks and pointed a shotgun at his head. He was subsequently arrested for
aggravated assault with a deadly weapon. He was not indicted for this offense but complains
of the public record of the arrest and charges against him.
Zaffar had made previously similar claims against guests at other times in The Oaks on at
least two occasions.
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Black alleged that Smith in hiring Zaffar solely on Zaffar’s application was negligent. The
court found that Black did not present any evidence that Zaffar’s conduct against him was a
foreseeable consequence of the hiring of Zaffar and therefore sustained the motion for
summary judgment.
The court also addressed the claim for negligent training, supervision, and retention. The
record revealed that prior to filing the police report against Black, Zaffar had twice within
the preceding weeks accused guests of having threatened to shoot him. The court found that
taking all evidence favorable to Black as true there was more than scintilla evidence that the
retention of Zaffar created a foreseeable risk of arrest to other visitors of The Oaks.
Therefore, the court erred in granting Smith’s summary judgment on Black’s claims for
negligent hiring, training, supervision, and retention.
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