Jottings By An Employer's Lawyer

Friday, January 10, 2003

Texas Courts Back At Work

Yesterday, there were several employment related decisions by the Texas Courts of Appeal. Among the decisions was Bauer v. Bob Thomas (Ct. App. - Fort Worth, 1/9/03) [pdf]. The parties had entered into a venture to open a new office for a logistics company. The agreement contained a statement that "under no circumstances would the [defendant] be required to continue this agreement if the [office] experiences a loss of $100,000 or more." After losing $37,000, the defendant shut the office down. Four employees sued alleging that there was an employment agreement that altered their at will status because of the statement, and for fraudulent inducement. The Court held that the statement was not sufficient to alter the at will status, and that there was no proof of fraudulent statements.

In Laredo Medical Group v. Lightner (Ct. App - San Antonio, 1/8/03), the Court again declined to find a covenant of good faith and fair dealing in the employer/employee relationship. In this case, the jury had been allowed to find such a relationship exists. The Court noted the Supreme Court's holding to the contrary in City of Midland v. O'Bryant, 18 S.W.3d 209 (Tex. 2000). The result in this case was to throw out a five plus million dollar award to the employee, which included over four million in punitive damages.

The same court also threw out an injunction based on misuse of trade secrets as being overbroad. Since the plaintiff had insisted on the broad wording and had not identified a lesser scope, the court found vacating the injunction rather than modifying it to be the appropriate step. Southwest Research Institute v. Keraplast Technologies, Ltd., (Ct. App - San Antonio 1/8/03).

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