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Mission Consolidated Independent School District v. Garcia, 2012 Tex. LEXIS 560 (Tex. 2012)

Age Discrimination- Texas Commission on Human Rights Act– School District employee was terminated and replaced by a woman three years older than the employee and the employee brought an age discrimination claim. The district filed a plea to jurisdiction. The district court and court of appeals denied it.  The Texas Supreme Court accepted the case.  The Supreme Court stated that this case raised a fundamental question of discrimination law: Can a plaintiff establish a prima facie case of age discrimination when undisputed evidence shows she was replaced by someone older? The specific issue was whether, under the Texas Commission on Human Rights Act (TCHRA), such a claimant is ever entitled to a presumption of age discrimination under the McDonnell Douglas burden-shifting framework. The Court answered the question with a big “no”. The Court held that the proof of a prima-facie case by a plaintiff was necessary to establish jurisdiction.  The Court explained:

This conclusion does not mean a plaintiff in Garcia’s position will be required to marshal evidence and prove her claim to satisfy this jurisdictional hurdle. While a plaintiff must plead the elements of her statutory cause of action—here the basic facts that make up the prima facie case—so that the court can determine whether she has sufficiently alleged a TCHRA violation, she will only be required to submit evidence if the defendant presents evidence negating one of those basic facts. And even then, the plaintiff’s burden of proof with respect to those jurisdictional facts must not ‘involve a significant inquiry into the substance of the claims.’  Cases may exist where the trial court decides, in the exercise of its broad discretion over these matters, that the inquiry is reaching too far into the substance of the claims and should therefore await a fuller development of the merits. Nevertheless, some inquiry is necessary because if TCHRA plaintiffs were allowed to stand on talismanic allegations alone, the constraining power of pleas to the jurisdiction would practically be eliminated.

The Court went further to hold that “in a true replacement case, an age-discrimination plaintiff relying on the McDonnell Douglas burden-shifting framework must show that he or she was (1) a member of the protected class under the TCHRA, (2) qualified for his or her employment position, (3) terminated by the employer, and (4) replaced by someone younger. This holding is not meant to suggest that a plaintiff who is replaced by someone older can never survive a plea to the jurisdiction and go on to prove age discrimination to the finder of fact; instead, the plaintiff will simply be limited to the traditional method of proof requiring “direct evidence of discriminatory animus.”

The Court seems to have departed from the Fifth Circuit (and several other federal circuits) in requiring that the plaintiff prove the “fourth element” of being replaced by someone younger. The Fifth Circuit does not always require the proof of being replaced by someone younger but will allow circumstantial proof that the plaintiff was “otherwise discharged because of age” to substitute as the “fourth element”.

The dissent argued that the Fifth Circuit test should be used.  However, the dissent does contain some useful language in that it finds that the other argument of the district was unavailing–  that even though the employee filed suit within 60 days of the issuance of the right to sue, the failure of the employee to actually serve the district within the 60 days was fatal.  The dissent states that the TCHRA does not require service within 60 days of the issuance of the right to sue.  It only requires that suit be filed within the 60 days and that due diligence be used to serve the defendant, even if done after the expiration of 60 days.

Safeshred, Inc. v. Martinez, 365 S.W.3d 655 (Tex. 2012)

Sabine Pilot Case- Punitive Damages– The Texas Supreme Court in Safeshred, Inc. v. Martinez (Tex. 2012) examined punitive damages in relation to a cause of action in Texas commonly referred to as a “Sabine Pilot” action.  This name comes from the case, Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985) in which the Supreme Court created a public policy cause of action that created an exception to the employment at will rule in Texas.  This cause of action made it illegal to terminate an employee for the sole reason that the employee refused to perform an act that was criminally illegal.  Up until the Safeshred case the Supreme Court had not ruled on whether punitive damages were available in such a case.

In Safeshred, the Court held that an employee could recover any reasonable tort damages, including punitive damages.  The Court held that punitive damages were an available remedy for an employee wrongfully discharged for refusal to commit an illegal act provided the employee could prove that the discharge involved malice.  The malice involved must be “actual malice” and something more than the intentional firing.  The firing must involve “substantial injury” and something “independent and qualitatively different from the compensable harms associated with the cause of action.”  To illustrate, the Court gave examples of  this type of malice:

•    where the employer circulates false or malicious rumors about the employee before or after the discharge or actively interferes with the employee’s ability to find other employment.
•    The Court referred to another case where a nursing home made the employee’s conduct look worse than it was before the state nursing board.
•   Another example is damage to the employee’s reputation or future employment prospects, which is a qualitatively different injury from the firing itself, and conscious indifference to a risk of that injury.
•     Harassment in connection with a wrongful firing.
•   Malice might exist when an employer knows the retaliatory firing is unlawful and does it anyway (e.g., in Texas Commission on Human Rights cases where an employer retaliated against and employee with specific intent or gross negligence regarding the employee’s right to be free from such practices.  Also, if employee demonstrates that the employer engaged in a discriminatory practice with malice or reckless indifference to the state protected rights of the employee).

In the Safeshred case, the Court specifically held that, “…malice could be shown in the Sabine Pilot case by evidence that Safeshred, in firing Martinez, consciously ignored a risk of some additional serious harm, such as interference with his future employment, harassment, or terminating his employment knowing the reason for doing so is unlawful.”

The Court specifically refused to consider the dangerousness of the specific illegal acts that Safeshred ordered him to perform in assessing punitive damages.  The Court held that “…the employer’s illegal directive to the employee (and any malice that might have accompanied that directive) cannot form the basis for a punitive damages award.”

The Court stated that a plaintiff may not bring a Sabine Pilot claim immediately after being asked to perform an illegal activity, but must first refuse and be fired.  In reviewing other cases, the Court confirmed that in retaliatory termination cases, the only malice relevant to allowing punitive damages is that surrounding the actual termination itself.

In examining the evidence of malice in the case, the Court stated that the only evidence relevant to the inquiry was that Safeshred designated Martinez as ineligible for rehire in its employment records and the reason given on an internal report for Martinez’s firing was that he abandoned his job, with no mention of the dispute over the safety regulations.  The Court held that this evidence was insufficient to support a firm conviction that Safeshred was consciously indifferent to a risk of interfering with Martinez’s future employment prospects or causing some other serious harm stemming from the firing itself.  Additionally, the Court mentioned that there was not evidence of harassment in connection with the firing or that the firing of Martinez was unlawful.  The Court stated that the Court of Appeals relied primarily on evidence that the managers knew that driving the unsafe truck loads was illegal.  Importantly for future cases, the Court said that: “…a malice finding based on Safeshred’s knowledge of illegality would require a showing that the company was aware that the law did not permit it to fire an employee for refusing to perform an illegal act, but did so anyway.”

Note:  This is the type of question that you must ask the manager that fired the employee, “when you fired my client, you knew, didn’t you, that it was illegal to fire my client for (whatever the alleged wrongful act was).”  Failure to ask this type question may doom your punitive damages and should always be a “starred and underlined” question in your list.

The Court further stated that in evaluating an employer’s actual malice in worker’s compensation retaliation cases, the Court has never looked to the employer’s conduct surrounding the workplace accident as proof of malice in the retaliation claim.  The same is true in whistleblower cases.  A whistleblower action involves both illegal conduct by the employer (which the employee reports) and a retaliatory employment action for blowing the whistle.  The Court only looks to the malice surrounding the employment action, but not in the underlying illegal act reported by the employee.

In examining the evidence, the Court found that the comments of Safeshred in the employment records of the employee did not constitute evidence of malice since there was no evidence that Safeshred subjectively knew or intended that the remarks in the employment records would interfere with the employee’s future employment or otherwise cause him harm.  Further, there was no evidence that Safeshred ever communicated the remarks in the record to other companies in the industry.
The Court reversed the punitive damages but not the actual damages.

Young Men’s Christian Association v. Garcia, 361 S.W.3d 123 (Tex.App.– El Paso 2011 nwh)

Arbitration- A Tiny Ray of Hope– The El Paso Court of Appeals has shined a tiny ray of hope into the darkness of arbitration for employees in employment disputes.  In this case, an employee brought discrimination and retaliatory discharge action against an employer.  The District Court denied the employer’s motion to compel arbitration by way of an alleged arbitration agreement which was part of the employee handbook.  The Court of Appeals examined the language of the dispute resolution policy and stated that “the dispute resolution policy is not a separate document and it does not merely reaffirm Garcia’s status as an at-will employee.  It is one of numerous policies found in a personnel policy manual which required employees to acknowledge that the manual is a ‘general suggestive guideline only’ and does not create an employment contract. The manual pointedly states that ‘this manual is not intended to create any contractual rights in favor of the employee of the [YMCA].’Significantly, it does not except the dispute resolution policy from the reach of the disclaimers.”  In a subsequent case, the El Paso court approved an arbitration agreement because the dispute resolution policy was a separate document and did not refer to the handbook.  Sun Fab Indus. Contr., Inc. v. Lujan, 361 S.W.3d 147 (Tex.App.– El Paso 2011 nwh).

Dallas County, Texas v. Logan, 359 S.W.3d 367 (Tex.App.– Dallas 2012)

Whistleblower Act– Former county deputy constable filed suit against county under Texas Whistleblower Act.  The county filed a plea to the jurisdiction on the grounds of governmental immunity and the district court denied the plea. On appeal the Court affirmed and held that the county judge to whom the deputy made a report of alleged violation of law was “part of a state or local governmental entity or of the federal government” as required by the Act.

Baker Hughes Oilfield Operations, Inc. v. Williams, 360 S.W.3d 15 (Tex.App.– Houston 2011)

Racial Discrimination-Texas Commission on Human Rights Act– In this case, an employee was allegedly discharged based on his race.  He filed a suit against his former employer, survived a motion for summary judgment and convinced a Houston jury that he was fired for discriminatory reasons.  However, he was unlucky and his appeal wound up in a panel of the Houston Court of Appeals containing two judges that reversed his case and, in essence, ruled that the trial judge, a jury, and a dissenting judge of the panel were not reasonable people when it came to this verdict.  It is one of those opinions that no matter the strength of the argument of the appellant, the Court knocks each one of them down.  As the dissenting judge said:
pretext discrimination cases inherently involve a question of credibility because they require the determination of whether the stated reason for the adverse action is true or false – in other words, ‘the defendant’s mens rea.’ Whether the defendant was in fact motivated by discrimination is of course for the finder of fact to decide.’ Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000). For this reason, a jury verdict in a pretext discrimination case should rarely be overturned. See id. At 155, 120 S.Ct. at 2112 (absent conclusive determination that discrimination could not be true motivation, ‘the ultimate question of liability ordinarily should not be taken from the jury’ once plaintiff has introduced evidence establishing prima facie case and evidence that employer’s proferred explanation for adverse action was false).

In Re Misty Jordan, Relator, 364 S.W.3d 425 (Tex.App.– Dallas 2012)

Discovery-Request for Production of Computer Hard Drive- Former employee brought suit against employer for hostile work environment based on employee’s observation of pornographic content on work computers that was offensive to her. The district court, in response to a request for production of employee’s hard drive on her personal home computer, ordered employee to produce the drive to allow the defendant to search her computer for evidence of pornography and other specific purposes. There was no allegation that the employee was engaging in pornography anywhere.  Employee petitioned Court of Appeals for a writ of mandamus challenging the order.  The Court of Appeals held that the order compelling employee to produce the hard of was an abuse of discretion. The Court relied on In Re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009), in which the Supreme Court set forth the procedures to be followed when a party seeks production of another party’s computer hard drives.  As part of those procedures the party seeking production must make a specific request for the information and specify the form of production.  The Court of Appeals stated that in this case, the defendant merely asked for the hard drives without informing the plaintiff of the exact nature of the information sought, the particular characteristics of the electronic storage devices involved, the familiarity of its experts with those characteristics, or a reasonable likelihood that the proposed search methodology would yield the information sought.  The Court also stated that the trial court should consider, at the very least, a protective order addressing the matters that might be revealed.  Because of this ruling, the Court refused to consider the employee’s argument regarding the relevance of the information sought to be discovered.  This appears to have been an attempt by the defendant to not only go on a “fishing expedition” but to dredge up the bottom sludge of the fishing hole.  If you think about the possible precedent of this attempt, if the Court had allowed it, a party could argue that it be allowed to inspect all of the other side’s property, dwellings, and past dealings just to see what damaging information they could find.