Opinion
2:99-CV-122-J
July 2, 2001
ORDER STATEMENT OF THE CASE
Before the Court is Defendant's Motion for Judgment as a Matter of Law in a wrongful discharge case brought by Steven M. Klumpe against IBP. Texas is an employment at-will state. For Plaintiff to prevail in this case, he must show that he was discharged for refusing to commit a criminal act in violation of Texas Penal Code § 32.46, thus bringing himself within the narrow exception to the employment at-will doctrine announced by the Texas Supreme Court in Sabine Pilot Services, Inc. v. Hauck, 687 S.W.2d 733, 734 (Tex. 1985). Defendant contends inter alia that the evidence does not support a finding that Klumpe was discharged for refusing to commit a criminal act.
BACKGROUND
Plaintiff Klumpe was a supervisor at IBP's Amarillo, Texas meatpacking plant. Chris Escamilla, Klumpe's stepson, was injured while working on a hock cutter on April 5, 1997. The cutter severed three and one-half fingers on Escamilla's right hand. At the time, Escamilla had been employed at the Amarillo plant for two and one-half years.
At all relevant times, IBP was a non-subscriber to the Texas Worker's Compensation Program. IBP had established a Workplace Injury Settlement Program (WISP). WISP provided medical disability and lost income benefits to IBP employees which were in many respects similar to Workman's Comp benefits. To obtain any of the benefits, employees were required to execute an after-injury Acceptance and Waiver form which waived all of the employee's rights to sue IBP for damages and which accepted benefits under the terms and conditions of the WISP plan.
At the hospital when Escamilla's fingers were reattached, IBP's medical case manager told Klumpe that Escamilla would need to sign the waiver or medical bills would not be paid. Klumpe then met with IBP management to "kind of bargain with them, you — you know, what they basically intended to do for Chris." Klumpe sought an exception for Escamilla and a cash payment which he had calculated by multiplying $25,000.00 times the number of years until Escamilla's retirement. Klumpe testified that his request for exceptions for Escamilla was rudely rejected and that Kurt Suther, IBP's plant manager, instructed him to secure his stepson's signature on the IBP Workplace Injury Settlement Program Acceptance and Waiver form or he would be fired. Klumpe did not get the waiver signed. Escamilla filed suit in state court and eventually reached a settlement for medical bills and cash payments together totaling over $1,900,000.00. Klumpe was fired June 30, 1997.
Klumpe testified as follows:
Q. Did Mr. Crow give you any indication on whether or not an exception would be made for Chris on signing the waiver?
A. He told me — after awhile, I mean, he told me: There will be no exceptions for him. We'll "F" him over just like we do everybody else.
Q. Did you ever talk — or did Mr. Suther ever specifically talk to you about the waiver?
A. Yes.
Q. What did he tell you?
A. He told me that I will get that waiver signed or I will — I will fire your F'ing ass. And I apologize for my language too, but —
After Escamilla's injury and before Klumpe's discharge, Klumpe engaged in agitated conduct on the job that might well have been objectionable to an employer. However, Suther testified that Klumpe would not have been fired for that conduct and was fired only because he removed crewing guidelines from the plant and delivered them to his attorney, who then faxed them to Escamilla's attorney in the state court case against IBP.
The evidence concerning the circumstances leading to the removal of the crewing guidelines was vigorously contested. The jury rejected Defendant's reason for the discharge and found that Klumpe was discharged solely because he refused to get Escamilla to sign the waiver. The jury found actual damages to Klumpe of eight hundred two thousand dollars ($802,000.00) and punitive damages often million dollars ($10,000,000.00).
The question submitted under Question Number 1:
Do you find from a preponderance of the evidence that Defendant IBP, Inc. discharged Plaintiff Steven M. Klumpe solely because he refused to perform an illegal act?
Answer "Yes" or "No."
Answer: Yes.
The Court will consider whether the evidence is sufficient to support the jury finding that the securing of the waiver by Klumpe would have been a criminal act in violation of Texas Penal Code § 32.46. TEXAS PENAL CODE § 32.46
The Texas Penal Code provides:
§ 32.46. Securing Execution of Document by Deception
(a) A person commits an offense if, with intent to defraud or harm any person, he, by deception:
(1) causes another to sign or execute any document affecting property or service or the pecuniary interest of any person
The Texas Penal Code defines "deception" as:
§ 31.01. Definitions
In this chapter: (1) "Deception" means:
(A) creating or confirming by words or conduct a false impression of law or fact that is likely to affect the judgment of another in the transaction, and that the actor does not believe to be true;
(B) failing to correct a false impression of law or fact that is likely to affect the judgment of another in the transaction, that the actor previously created or confirmed by words or conduct, and that the actor does not now believe to be true;
(C) preventing another from acquiring information likely to affect his judgment in the transaction;
(E) promising performance that is likely to affect the judgment of another in the transaction and that the actor does not intend to perform or knows will not be performed, except that failure to perform the promise in issue without other evidence of intent or knowledge is not sufficient proof that the actor did not intend to perform or knew the promise would not be performed.
The Texas Penal Code defines "harm" as:
(25) "Harm" means anything reasonably regarded as loss, disadvantage, or injury, including harm to another person in whose welfare the person affected is interested.
PLAINTIFF'S CONTENTIONS
Plaintiff argues that obtaining of the waiver, acting together with prior deceptive statements by IBP would have violated Section 32.46. Plaintiff argues that three IBP documents contained deception. They are the Workplace Injury Settlement Program (WISP) document, the Booklet Summary of the Workplace Injury Settlement Program, and the Orientation Presentation for New Employees.There is only one complete copy of the Workplace Injury Settlement Program at the plant. There is no evidence that Escamilla, or for that matter Klumpe, sought access to or read the document.
The Booklet Summary Plan is furnished to each employee at orientation. Employees are asked to take it home with them, review it, and keep it. Because all employees are furnished a copy of the Plan, it is fair to assume that Escamilla received a copy when he was first employed. The evidence does not show whether Escamilla actually reviewed the Summary Booklet or if he relied on statements in it.
The Orientation Presentation is made orally to all new employees. They are not given a written copy; however, a written script of the Orientation Presentation is in evidence. In the normal course of business, Escamilla would have attended an oral presentation when he was first employed two and a half years before the accident.
Plaintiff contends that these documents falsely represent that an injured employee will receive damages for pain and suffering under the WISP program, the effect of an arbitrator's decision, the nature of IBP's restricted duty program, and the employee's rights for lifetime benefits.
Payment for Pain and Suffering
The only reference to pain and suffering is in the Workplace Injury Settlement document in the definitions section. The document does not otherwise make any reference to payments for pain and suffering. It is not necessary to determine if this reference to pain and suffering in the damage definition is a representation that such damages will be paid when taken in the context of the entire document. Escamilla could not have been deceived by any language in the document because there is no evidence that he ever saw it or had been otherwise informed of its contents.
Lifetime Payments
The Workplace Injury Settlement Program document provides
SECTION 3.16. LIFETIME PAYMENTS.
(a) Settlement Payments shall be paid until the death of the Employee for:
(1) total and permanent loss of sight in both eyes;
(2) loss of both feet at or above the ankle;
(3) loss of both hands at or above the wrist;
(4) loss of one foot at or above the ankle and the loss of one hand at or above the wrist;
(5) an injury to the spine that results in permanent and complete paralysis of both arms, both legs, or one arm and one leg; or
(6) and injury to the skull resulting in incurable insanity or imbecility.
(b) The total and permanent loss of use of a member under Subsection (a) of this section is considered equal to the loss of the member.
(c) Lifetime Settlement Payments are payable at the rate of 80 percent of the Employee's average weekly wage. Lifetime payments may not exceed the maximum weekly benefit, except that payments being paid shall be increased three percent a year notwithstanding the maximum weekly payment.
(d) In no case other than Section 3.16(a)(1)-(6) may the period of Settlement Payments be greater than 401 weeks from the date of injury.
The Summary Plan Booklet given to employees provides
— Lifetime Payments: If a covered injury or illness leaves you unable to return to any work whatsoever, the Program provides lifetime payments.
Plaintiff contends that the statement in the Summary Booklet that the program provides lifetime payments if a covered injury leaves the worker unable to return to any work whatsoever is fraud and deception. It should be noted in this connection that there is no evidence that Escamilla suffered that type of injury or that another worker suffered that type of injury, either before or after Escamilla's injury.
The parties have not briefed, and the Court will not consider, whether the summary of the plan or the Workplace Injury Settlement document would control, but see Wise v. El Paso Natural Gas Co., 986 F.2d 929, 937 (5th Cir.) ("clear and unambiguous statements in the summary plan description are binding"), cert. denied, 510 U.S. 870, 114 S.Ct. 196, 126 L.Ed.2d 154 (1993); Hansen v. Continental Insurance Company, 940 F.2d 971 (5th Cir. 1991) (Courts mandated to adopt the most pro-beneficiary interpretation; summary plan description was binding and governed over conflicting terms of master plan or insurance policy).
Binding Arbitration
The Plan document provides:
SECTION 5.04 BINDING ARBITRATION
(b) The Arbitrator's decision on the contest shall be final and binding upon the parties under this Program, provided that the Arbitrator shall not have authority other than to apply the terms and conditions specifically set forth in this Program to the facts, circumstances and interpretations presented to the Arbitrator by the Employee's contest. The Arbitrator shall be asked to submit a written decision within thirty (30) days after the conclusion of the hearing or hearings, as the case may be. The compensation of the Arbitrator shall be a fixed amount paid by the Company. See Exhibit C attached hereto which represents the Arbitration Guidelines in effect for this Program.
The Plan summary provides:
If the employee remains dissatisfied with the ruling, the employee may submit an appeal to an impartial arbitrator selected by rotation from an approved panel. Such arbitration can be requested by writing to the Program Administrator, at the address previously provided.
The Orientation Presentation for New Employees includes the following statement:
In return for the "up-front" settlement of your claim under the provisions of the Program and your agreement not to sue IBP in civil court, the program gives you an alternative to the legal process you would have if we were covered by Workers' Compensation. That is, binding arbitration by a neutral third party. And, by the terms of the Program as submitted to and supervised by the United States Department of Labor, IBP is bound to honor the arbitrator's decision. In addition, you have certain other legal rights under the Employee Retirement Income Security Act of 1974.
Plaintiff complains of the statement in the oral orientation that "IBP is bound to honor the arbitrator's decision." Plaintiff contends that that statement is a fraud and deception because IBP had a right to appeal to District Court if the arbitrator failed to apply the terms and conditions of the program.
Restricted Duty Program
IBP offered a restricted duty work program to employees injured on the job. Restricted duty is available only until the doctor determines the injured worker has reached maximum medical improvement. Restricted duty is not provided on a permanent basis. Following maximum medical improvement, the worker is given a thirty day "placement period" in which to find a regular position in the plant that meets his restrictions by either bidding on a job vacancy which meets the worker's restrictions, or by submitting an internal job application for a management position.
The form furnished to employees at the time they entered the restricted duty program was admitted in evidence for the limited purpose of showing the nature of the program. There is no evidence that Escamilla ever saw that form.
During the thirty day period, he is permitted to continue working restricted duty until he finds a regular position. If at the end of thirty days he has not secured a position, he will not be allowed to continue working restricted duty unless an extension is granted at the discretion of management. At the end of restricted duty, he will be "placed" out of the plant on unpaid leave and allowed to come back to the plant to check for positions or openings. If he has not found a position within a year, he will be administratively terminated.
The WISP program does not include the restricted duty program; however, actions taken by the employee and/or management would affect payments under the WISP program.
The oral orientation presentation contains the following language:
The nurse will take information from you and help you complete an "Employee's First Report of Injury" which tells us what happened. You then may select a doctor from an approved panel and the nurse will initiate a "Medical and Work Related Compensation Form" for you to take to the doctor. This tells the doctor you select that you have authorization from IBP for treatment. Your doctor will complete this form and give it to return to the Health Services Department. You then will be assigned to the restricted duty program in accordance with the restrictions assigned by your doctor.
Plaintiff contends that the oral presentation is deceptive because it does not fully explain the conditions and limitations of the restricted duty program. He also argues that the restricted duty program is demeaning because of the nature of the work in the program and the fact that workers in the program are required to wear purple hats.
Andres Estrada
In 1992, five years before Escamilla's accident, Andres Estrada amputated three fingers on his left hand while using the hock cutter. Steve Klumpe was general foreman and Estrada's "B" shift supervisor at the time of the accident. Klumpe was less than thirty feet from Estrada when the accident occurred and rendered aid to Estrada immediately after the accident. Estrada was flown by air to Parkland Hospital in Dallas, Texas where his fingers were reattached.
Upon returning to work at IBP, Estrada was placed in the restrictive duty program. After reaching maximum medical improvement, he went through the thirty-day bid walk which required him to bid weekly on job openings. He testified that union seniority rules did not permit him to bid successfully on light-duty jobs and that, given his medical restrictions, he had to lie to IBP management about his ability to perform work in order to get a job. The work at IBP was difficult because he did not have full use of his left hand, and the jobs at IBP generally required full use of both hands. At some point, Estrada was placed back on the hock cutter. He had trouble mentally using the same machine which caused his injury. Two years after his accident, he voluntarily terminated employment at IBP. It took him over a month to find a job after he left. At the time of trial, he was employed full time as a shipping and receiving forklift operator and material handler at a tool manufacturing company.
Estrada signed the waiver and was paid $65,000 for medical bills and $12,000 (a total of $77,699) pursuant to WISP.
After Estrada's injury, IBP automated the hock cutters. IBP management concluded that the automated cutters did not work well, de-automated the cutters, and returned to hand-held hock cutters. Only after Escamilla's accident in 1997 did IBP make permanent changes designed to make the hock cutters safer.
Clearly, the history of Escamilla's accident and the subsequent changes in the hock cutters would be a reason for IBP management to seek aggressively to limit its liability by telling Klumpe to have Escamilla sign the waiver, and supports Klumpe's testimony that he was instructed to get the waiver or be fired. Clearly, it was reason for Klumpe to believe, correctly as it turned out, that Escamilla was better off opting for the uncertainties of a personal injury action as opposed to the limited recovery under WISP. Estrada's experience graphically illustrated the recovery that Escamilla could have expected to receive under WISP and the pecuniary effect of signing the waiver, but it does not, without more, support a finding that securing his consent to participate in WISP and waive his right to sue IBP would constitute deception as defined by the Texas Penal Code.
Chris Escamilla
Escamilla did not testify as a witness in the case before this Court. There is no direct evidence that he had a false impression likely to affect his judgment in deciding whether to sign the waiver.There is no evidence that Klumpe would have had to personally make a deceptive statement in order to secure the waiver. Indeed, he testified
Q. Do you believe if you had gone to Chris and asked him to sign the waiver that he would have signed it?
A. Sure he would have.
Further, there is no suggestion in the evidence that Klumpe believed that he would have subjected himself to criminal prosecution if he had asked Escamilla to sign the waiver. He was, instead, convinced that IBP did not deal fairly with its employees and that it would be to Escamilla's financial disadvantage to sign the waiver.
DISCUSSION
Texas adheres to the rule of at-will employment. The Texas Supreme Court has recognized few common-law exceptions to the doctrine. Sabine Pilot created a limited common-law exception holding that an employee cannot be terminated solely for refusing to perform a criminal act.
In Sabine Pilot, the employee was a deckhand for Sabine. He was instructed that one of his duties was to pump the bilge water out of the boat on which he was working into the water. After seeing a posted notice stating that such action was illegal under federal law, and after calling the coast guard to confirm that fact, he refused to comply with his employer's orders. As a result, he was terminated. In Sabine Pilot, the plaintiff was unacceptably forced to choose between risking criminal liability or being discharged from his livelihood. The case holds that the employee cannot be discharged for refusing to commit a criminal act.
The burden is on the plaintiff to prove that the refusal to perform an illegal act was the sole reason for the discharge.
Since Sabine Pilot, the Texas Supreme Court has continued to stress the narrowness of the exception.
See Texas Dep't of Human Servs. v. Hinds, 904 S.W.2d 629, 633 (Tex. 1995); Wornick Co. v. Casas. 856 S.W.2d 732, 735 (Tex. 1993); Schroeder v. Texas Iron Works. Inc., 813 S.W.2d 483, 489 (Tex. 1991). An employee's good faith belief that he will be subject to criminal liability is insufficient to come within the Sabine Pilot exception. Williams v. Enserch Corp., 2000 WL 31802, 31803 (Tex.App.-Dallas 2000, writ denied). No cause of action exists in Texas for breach of a duty of good faith and fair dealing in the context of an employer/employee relationship. City of Midland v. O'Bryant, 18 S.W.3d 209, 215 (Tex. 2000).
The case before the Court is colored by the fact that IBP's supervisor Klumpe was instructed to secure a waiver from his own stepson. However, neither callous disregard for a stepfather's position nor the creation of a WISP program that, together with the restricted duty program, was designed to reduce financial losses to IBP make the obtaining of the waiver in question a criminal act. Likewise, the failure to elaborate on mentioned programs or the inconsistencies in contractual documents in question do not by themselves constitute deception that would support a criminal prosecution under Texas Penal Code Section 32.46 against Klumpe if he obtained the waiver. The record in this case is devoid of evidence that those omissions or discrepancies were likely to affect the judgment of Escamilla in the case before this Court. Essential elements of a violation of Section 32.46 are missing.
Viewing the evidence in the light most favorable to Plaintiff, the Court concludes as a matter of law that it would not be a violation of Texas Penal Code Section 32.46 for Klumpe to secure the waiver in question under the particular facts of this case. This Court, of course, does not find that the securing of such a waiver could never be a violation of that section.
Defendant has sought either a judgment as a matter of law or a new trial on a number of additional grounds. The Court has considered those additional grounds and finds them without merit. However, the Court has concluded that the jury's finding that Klumpe was discharged solely because he refused to commit an illegal act is not supported by the evidence. Judgment as a Matter of Law will therefore be entered for the Defendant.
It is so ORDERED.