Matagorda County Hospital District v. Burwell, Christine ( 2002 )

                                 NUMBER 13-00-00271-CV

                             COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                      CORPUS CHRISTI B EDINBURG

MATAGORDA COUNTY HOSPITAL DISTRICT,                       Appellant,

                                                   v.

CHRISTINE BURWELL,                                                Appellee.

   On appeal from the 130th District Court of Matagorda County, Texas.

               OPINION ON MOTION FOR REHEARING

                    Before Justices Dorsey, Hinojosa, and Castillo

                                 Opinion by Justice Hinojosa

Appellant, Matagorda County Hospital District (AMCHD@), has filed a motion for rehearing asserting Athis Court wholly failed to address a properly preserved point of error/issue raised by the Hospital District@ regarding the revocability of the employment manual.  MCHD does not explain why it contends the revocability issue was Aproperly preserved.@^[1] Nevertheless, because MCHD complained on appeal that the evidence was legally and factually insufficient, we will address the revocability issue as part of MCHD=s sufficiency complaint.

MCHD asserts the evidence conclusively established that its employment manual was unilaterally revocable at will.  MCHD=s district administrator testified that MCHD could revise its employment manual without the employees= consent.

MCHD contends this Court=s opinion in Reynolds Mfg. Co. v. Mendoza, 644 S.W.2d 536 (Tex. App.BCorpus Christi 1982, no writ), stands for the proposition that where there is no express agreement limiting the employer=s right to unilaterally amend or withdraw the personnel manual, no modification of the at-will employment doctrine will be found.  See also Williams v. Wal-Mart Stores, Inc., 882 F. Supp. 612, 616 (S.D. Tex. 1995); Brown v. City of Galveston, 870 F. Supp. 155, 160 (S.D. Tex. 1994) (citing Reynolds Mfg. Co., 644 S.W.2d at 539).  We conclude the Reynolds case is factually distinguishable from the instant case.

In Reynolds, we reversed jury findings in favor of a discharged employee because, Athere is no evidence of any express agreement which dealt with procedures for discharge of employees, unless the employee handbooks can be read as such.@ Reynolds Mfg. Co., 644 S.W.2d at 539.  We reviewed and analyzed the express terms of Reynolds=s employee handbook.  In conducting that analysis, we distinguished cases involving employee manuals containing express procedures for employee discharge.  See id. (citing Mansell v. Tex. & Pac. Ry. Co., 135 Tex. 31, 137 S.W.2d 997, 999-1000 (1940); Hardison v. A.H. Belo Corp., 247 S.W.2d 167, 168 (Tex. Civ. App.BDallas 1951, no writ)).

The remaining cases cited by MCHD in the motion for rehearing also distinguish cases involving employee manuals which limit the employer=s right to terminate an employee, see Brown v. City of Galveston, 870 F. Supp. 155, 159-60 & n.3 (S.D. Tex. 1994), or are factually distinguishable, see Werden v. Nueces County Hosp. Dist., 28 S.W.3d 649, 651 (Tex. App.BCorpus Christi 2000, no pet.) (handbook expressly providing that it is not a contract, can be changed at any time, and that employment is at-will); Gamble v. Gregg County, 932 S.W.2d 253, 255 (Tex. App.BTexarkana 1996, no writ) (manual expressly providing that county may unilaterally change).

In the instant case the evidence includes the internally conflicting language of MCHD=s employee manual which expressly limits MCHD=s right to terminate an employee.  The record also includes the testimony of MCHD=s business office manager and chief financial officer.  Both of these individuals were involved in the decision to terminate Burwell, and both testified that the personnel manual provided they could only terminate a subordinate employee for cause.

To rebut the presumption of employment at-will, an employment contract must directly limit in a Ameaningful and special way@ the employer=s right to terminate the employee without cause.  Rios v. Tex.-Commerce Bancshares, Inc., 930 S.W.2d 809, 815 (Tex. App.BCorpus Christi 1996, writ denied).  An employer=s statements concerning termination rights in employment literature may modify the at-will relationship if the statements specifically and expressly curtail the employer=s right to terminate the employee.  Vida v. El Paso Employees= Fed. Credit Union, 885 S.W.2d 177, 181 (Tex. App.BEl Paso 1994, no writ); McAlister v. Medina Elec. Coop., Inc., 830 S.W.2d 659, 664 (Tex. App.BSan Antonio 1992, writ denied).

We hold the evidence is legally and factually sufficient to support the jury=s finding that a contract for employment existed between Burwell and MCHD. We deny MCHD=s motion for rehearing.

FEDERICO G. HINOJOSA

Justice

Justice Castillo is dissenting.

Publish.  Tex. R. App. P. 47.3.

Opinion delivered and filed this the

19^th day of December, 2002.

* * * * * * * * * * * *

      DISSENTING OPINION ON MOTION FOR REHEARING

                    Before Justices Dorsey, Hinojosa, and Castillo

                          Dissenting Opinion by Justice Castillo

I respectfully dissent.    The majority departs, without explanation, from our own precedent.  See Reynolds Mfg. Co. v. Mendoza, 644 S.W.2d 536 (Tex. App.BCorpus Christi 1982, no writ).  I would hold that the evidence was insufficient as a matter of law to support the jury=s finding of the existence of an employment contract between appellant Matagorda County Hospital District and appellee Christine Burwell.  I would grant MCHD=s motion for rehearing, reverse the judgment, and render a take-nothing judgment against Burwell.

                                  THE UNILATERAL-REVOCATION RULE

Our complete holding in Reynolds was this:

[T]here is no evidence of any express agreement which dealt with procedures for discharge of employees, unless the employee handbooks can be read as such. We do not believe that they can be so read. Reynolds was in no way prevented from unilaterally amending or even totally withdrawing its handbook. In fact, the original handbook was amended once during Mendoza's employment. We believe that the handbooks constituted no more than general guidelines.

Reynolds, 644 S.W.2d at 539 (emphasis added).  Here, the undisputed evidence at trial proved that MCHD retained the right to unilaterally revoke its Personnel Policy Manual.  This single fact is not only dispositive but also indistinguishable from the facts in Reynolds.

For compelling reasons, on occasion we do overrule earlier decisions.  I dissent here because the unilateral-revocation rule we articulated in Reynolds is ensconced firmly in Texas jurisprudence.  In the twenty years since we handed down that decision, Reynolds= progeny in case after case have followed our unambiguous holding:  when an employer retains the right to revoke or amend an employee manual, termination procedures outlined in the manual do not alter the employees= at-will status.  Id.^[2] The majority disregards our own precedent as well as a basic tenet of Texas employment law. 

Federal courts also have followed Reynolds.^[3]  The Fifth Circuit cited our opinion in analyzing the effect in Texas of employee manuals on at-will status:  ATexas law >general[ly] reject[s] the claim that employment manuals issued unilaterally by an employer can per se constitute written employment contracts and create specific limitations which take the cases out of the at‑will doctrine.=@  Zimmerman v. H.E. Butt Grocery Co., 932 F.2d 469, 471 (5th Cir. 1991) (emphasis added) (quoting Aiello v. United Air Lines, Inc., 818 F.2d 1196, 1198 (5th Cir. 1987)). 

Nonetheless, the majority focuses on two facts: (1) MCHD=s Personnel Policy Manual details procedures for employee discharge;^[4] and (2) MCHD=s representatives testified they believed they only could terminate an employee for cause.  As to the first circumstance, the unilateral revocability of MCHD=s Personnel Policy Manual renders any limitation contained in the manual on MCHD=s right to terminate an employee of no legal consequence.  Reynolds, 644 S.W.2d at 539.  Thus, I do not find that evidence of detailed termination procedures in the manual supports the jury=s verdict in this case.  As to the second circumstance, the subjective belief of an employer=s managers in the necessity of compliance with termination procedures in an employee handbook does not create an exception to the at-will doctrine.  Zimmerman, 932 F.2d at 472.  Thus, I also do not find relevant, or dispositive, the testimony of Burwell and other MCHD managers that they understood that an MCHD employee could be terminated only for cause.  Id.  Finally, MCHD=s Personnel Policy Manual not only specified grounds supporting termination for cause but also inconsistently provided that A[e]mployment at the Hospital is by mutual arrangement and may be terminated by either the employee or the employer.@  Accordingly, I would hold that evidence of the unilateral revocability of MCHD=s Personnel Policy Manual conclusively established as a matter of law the opposite of Burwell=s claim of a binding employment contract.  Merrell Dow Pharms. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). 

                                                    CONCLUSION

We follow precedent for reasons of efficiency, fairness, and legitimacy.  Strong policies^[5] support our practice of adhering to settled rules of law Aunless there exists the strongest reasons for chang[e].@  Benavides v. Garcia, 290 S.W. 739, 740‑41 (Tex. Comm=n App. 1927, judgm=t adopted).  My dissent should not be read to condemn reasoned evolution when continued application of a judicially created rule of law no longer furthers the interests it once served and Athe general interest will suffer less by such departure, than from a strict adherence.@  See Lehmann v. Har‑Con Corp., 39 S.W.3d 191, 215 (Tex. 2001) (quoting Benavides, 290 S.W. at 740).  In that event, we should not hesitate to revisit a prior holding. 

The majority does not give a reason for our departure today from Reynolds, and with that I also disagree. The majority should announce a repudiation of Reynolds so that employers, particularly publicly funded entities like MCHD, know they may rely no longer on the unilateral-revocation rule as a bulwark against breach-of-contract claims by terminated employees.    

ERRLINDA CASTILLO

Justice

Publish.

Tex. R. App. P. 47.3.

Dissenting Opinion delivered and filed

this 19th day of December, 2002.

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^[1] The revocability issue was not raised in MCHD=s original motion for summary judgment, in its motion for new trial, or in a motion for judgment notwithstanding the verdict.

^[2] See, e.g., Stephens v. Dallas Area Rapid Transit, 50 S.W.3d 621, 635 (Tex. App.BDallas 2001, pet. denied) (supp. op. on mot. for reh=g); Mott v. Montgomery County, 882 S.W.2d 635, 638-39 (Tex. App.BBeaumont 1994, writ denied); Alcorn v. Vaksman, 877 S.W.2d 390, 422 (Tex. App.BHouston [1st Dist.] 1994, writ denied); Day & Zimmermann, Inc. v. Hatridge, 831 S.W.2d 65, 69-70 (Tex. App.BTexarkana 1992, writ denied); Ryan v. Superior Oil Co., 813 S.W.2d 594, 596 (Tex. App.BHouston [14th Dist.] 1991, writ denied); Hicks v. Baylor Univ. Med. Ctr, 789 S.W.2d 299, 302 (Tex. App.BDallas 1990, writ denied); Berry v. Doctor=s Health Facilities, 715 S.W.2d 60, 61 (Tex. App.BDallas 1986, no writ).  I find only one exception in Texas to a straightforward application of the unilateral-revocation rule.  United Transp. Union v. Brown, 694 S.W.2d 630, 633 (Tex. App.BTexarkana 1985, writ ref=d n.r.e.).  Brown is distinguishable in that the jury found that the employer on hiring had expressly promised the employee, who resigned at the employer=s request from a union that guaranteed certain employment conditions, that she would not lose any job protection rights.

^[3] See, e.g., Glagola v. N. Tex. Mun. Water Dist., 705 F.Supp. 1220, 1222 (E.D. Tex. 1989).

^[4] The majority concludes that we distinguished in Reynolds cases involving employee manuals containing express procedures for employee discharge.  However, the facts in Reynolds included just such a manual. 

^[5] We should give due consideration to the settled expectations of litigants who justifiably rely on the principles articulated in our precedents.  See Quill Corp. v. N. Dakota, 504 U.S. 298, 321 (1992) (Scalia, J., concurring) (A[R]eliance on a square, unabandoned holding of the Supreme Court is always justifiable reliance. . . .@).