Joseph Peine v. HIT Services L.P., Wood Group USA, Inc., John Wood Group PLC, Wood Group Power GP, LLC and Wood Group Management Services, Inc. , 2015 Tex. App. LEXIS 10964 ( 2015 )

Affirmed and Opinion filed October 27, 2015.
In The
Fourteenth Court of Appeals
NO. 14-14-00412-CV
JOSEPH PEINE, Appellant
V.
HIT SERVICES L.P., WOOD GROUP USA, INC., JOHN WOOD GROUP
PLC, WOOD GROUP POWER GP, LLC, AND WOOD GROUP
MANAGEMENT SERVICES, INC., Appellees
On Appeal from the 269th District Court
Harris County, Texas
Trial Court Cause No. 2010-60099
OPINION
This is an appeal from an order granting a traditional motion for summary
judgment. Appellant Joseph Peine sued appellees, HIT Services, L.P., Wood
Group USA, Inc., John Wood Group PLC, Wood Group Power GP, LLC, and
Wood Group Management Services, Inc., alleging that he was wrongfully
discharged for refusing to commit a crime. Peine argues on appeal that the trial
court erred in granting appellees’ motion for summary judgment because the
summary judgment evidence showed a genuine issue of material fact on whether
his refusal to commit a criminal act was the sole cause of his termination. We
overrule Peine’s issue because the summary judgment evidence conclusively
proved that he was terminated, at least in part, because he breached his
confidentiality duties when he sent confidential company information to a reporter.
We therefore affirm the trial court’s summary judgment.
BACKGROUND
Peine is a certified public accountant. Appellee HIT Services, L.P., hired
him as its Chief Financial Officer (CFO) in February 2007. HIT Services is part of
the Heavy Industrial Turbines Strategic Business Unit, which is in turn a division
of appellee John Wood Group, PLC, a multinational corporation.
According to Peine’s summary judgment evidence, HIT Services was a
troubled company with a history of inflating its earnings. Peine alleged he was
hired by HIT Services as part of an effort to turn the company’s performance
around. The letter in which HIT Services offered Peine the CFO job stated: “in
this role, you will be responsible for all finance and accounting aspects as it relates
to the management of the business including financial reporting, month/year end
closings, budgeting, forecasting, profitability analyses, management of accounting
department/personnel and other associated responsibilities . . . .” Peine also served
as secretary of Wood Group Power GP, LLC, the general partner of HIT Services.
In that position, Peine served as an officer of the company and was charged with
the responsibility of ensuring “that appropriate filings are made on time and
accurately.”
Due to his various responsibilities, Peine reported to different supervisors.
One of those supervisors was Durg Kumar, the financial director for the Heavy
2
Industrial Turbines Strategic Business Unit. Peine alleged that in December 2008,
Kumar instructed him to overstate HIT Services’ profits by approximately $2.5
million. According to Peine, Kumar ordered him to falsify records by booking the
entire value of a project with a sister company, Wood Power Solutions, even
though HIT Services had not yet completed the project. Peine refused, believing
such an action would violate accounting standards and the law. Peine alleged that
Kumar threatened to “clean house” if Peine and his staff did not follow Kumar’s
orders.
In January 2009, Peine brought the matter to the attention of Scott Jessiman,
the controller of the Heavy Industrial Turbines Strategic Business Unit. As a result
of his conversations with Jessiman, Peine “prevailed and the income was not
overstated in HITS’ books.” Instead, Jessiman authorized Peine to close HIT
Services’ 2008 accounting out of balance with Wood Power Solutions. According
to Peine, HIT Services did not materially misstate its 2008 performance as a result
of Jessiman authorizing this action. The next month, Kumar called Peine into his
office and told him that “it was not working out” and that he needed to learn how
to “play the game.” Peine was not fired at that time, however.
That same month, Peine met with Chris Wilkinson, the president of HIT
Services, to discuss his problems with Kumar. Wilkinson told Peine he would
report the problems to Nick Blaskoski, the president of the Heavy Industrial
Turbines Strategic Business Unit. Peine also reported the issue to Grant Johnston,
the Wood Group’s Western Hemisphere Controller. Johnston asked Peine for time
to fix the problem.
According to Peine, he discovered in July 2009 that Kumar was going
around him and his staff to book substantially inflated earnings estimates for jobs
in June 2009. Peine reported the problem to Johnston. Johnston told Peine that the
3
earnings estimates were internal numbers only and were not reported externally.
Johnston directed Peine to correct the earnings estimates by the end of the year.
In the ordinary course of his responsibilities to certify HIT Services’
financial condition on a quarterly basis, Peine objected to attesting to the accuracy
of the July 2009 quarterly certification because he believed HIT Services’
accounting data contained false information. As a result, Peine believed that
signing the quarterly certification without qualifying language would constitute tax
fraud. Peine sent a letter to Wilkinson explaining his position: “although we are
unaware of any material misstatement in our financial statements, based on our
documented experience, we have serious concerns about the Internal Control
Environment . . . .” Appellees did not order Peine to sign the certification without
qualifying language. Instead, they acceded to his concerns. Wilkinson and Kumar
inserted language qualifying the reported numbers, and with that concession, Peine
signed the quarterly certification.
That same month, Peine reported his concerns about Kumar’s actions to
Todd Harper, a John Wood Group corporate officer working in the Shared Services
Department. Shared Services was absorbing some of the accounting functions that
had been performed internally at HIT Services. Harper, in turn, reported Peine’s
complaints to Christopher Watson, the CFO of the Gas Turbine Division of the
John Wood Group. Watson told Harper to conduct an independent review of
Peine’s allegations.
On July 27, 2009, Harper warned Peine that he would be fired if he did not
withdraw his accusations against Kumar. Harper explained that one or the other
would be fired and it would most likely be Peine because Watson did not believe
his accusations. Peine refused to withdraw his accusations against Kumar. Peine
was not fired at that time. Instead, on July 28, Harper forwarded to Watson the
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documents that Peine had provided to him in support of his claims. Watson then
consulted with Blaskoski, the president of the Heavy Industrial Turbines Strategic
Business Unit, and they ordered the John Wood Internal Audit Department to
investigate Peine’s accusations.
On July 30, Peine, believing “there was an endemic, serious, catastrophic
failure within Wood Group and that they weren’t going to do anything to fix it,”
emailed internal company documents to Robert Gibbons, a Thomson Reuters
reporter. These documents included not only those Peine had previously sent to
Harper, but also additional documents, including earnings forecasts. In his email
to the reporter, Peine wrote: “Let’s give them a chance to fix it . . . . if they choose
not to, you have a front row seat.”
On August 6, Western Hemisphere Controller Johnston emailed Gas Turbine
Division CFO Watson about Peine’s calls reporting problems at HIT Services.
Watson responded: “Joe is a liability and please do not take anything he says at
face value. I will call you later to discuss.” Watson then forwarded Johnston’s
email to Blaskoski, writing: “Nick. We need to take action now. Chris.”
Peine and his staff then sent a letter and accompanying documents to
Wilkinson, HIT Services’ president, explaining their concerns about the company’s
accounting issues. Wilkinson turned those documents over to the personnel
conducting the internal audit. After receiving the documents, Abby Yates, an in-
house attorney involved in the audit, recommended that Peine be placed on paid
leave pending the completion of the investigation. Yates also recommended that
Kumar be removed from his position overseeing HIT Services’ accounting
functions during the investigation. Both recommendations were accepted and
implemented.
During the course of the internal audit into Peine’s accusations, Yates
5
learned that Peine had sent confidential company documents to a reporter. When
confronted with his email to the reporter, Peine admitted that he had sent both the
email and the documents to the reporter. Yates recommended that Peine be
terminated immediately for violating his confidentiality obligations. Company
management did not oppose terminating Peine, and he was terminated on
September 16, 2009.
Peine then sued appellees, alleging that he was wrongfully terminated for
refusing to perform the illegal act of falsifying HIT Services’ financial records by
inflating earnings.1 Appellees eventually filed a traditional motion for summary
judgment, asserting that the summary judgment evidence conclusively proved that
Peine’s refusal to perform an illegal act was not the sole cause of his termination,
thereby defeating his Sabine Pilot cause of action.2 See Sabine Pilot Service, Inc.
v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985) (creating narrow exception to
employment-at-will doctrine to provide cause of action to employee terminated
“for the sole reason that the employee refused to perform an illegal act.”). The trial
court granted the motion and this appeal followed.
ANALYSIS
Peine argues that the trial court erred when it granted appellees’ motion for
summary judgment because the summary judgment evidence he produced
generated a genuine issue of material fact on whether his refusal to commit an
illegal act was the sole cause of his termination. We disagree.
1
Appellees did not move for summary judgment on the ground that the allegedly illegal
act underlying Peine’s lawsuit, falsifying HIT Services’ earnings, was not in fact illegal. We
therefore assume, for purposes of this appeal, that the act appellees ordered Peine to do was
illegal.
2
We previously reversed a summary judgment for appellees because they did not present
grounds for summary judgment in their motion itself. Peine v. HIT Servs., L.P., No. 14-12-
00991-CV, 2014 WL 586430 (Tex. App.—Houston [14th Dist.] Feb. 13, 2014, no pet.). On
remand, appellees did present grounds in their motion as discussed above.
6
I. Standard of review and applicable law
We review a trial court’s order granting summary judgment de novo. Mid-
Century Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007). The movant for
traditional summary judgment has the burden of showing that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. Tex. R.
Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289
S.W.3d 844, 848 (Tex. 2009). A defendant who conclusively negates an essential
element of a plaintiff’s claim is entitled to summary judgment on that claim.
Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).
Evidence is considered conclusive if reasonable people could not differ in their
conclusions. Dias v. Goodman Mfg. Co., L.P., 214 S.W.3d 672, 676 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied).
The general rule in Texas is that an employee may be terminated at will and
without cause. Montgomery Cnty. Hosp. Dist. v. Brown, 965 S.W.2d 501, 502
(Tex. 1998). In Sabine Pilot, the Supreme Court of Texas created a narrow public
policy exception to the employment-at-will doctrine. 687 S.W.2d at 735. This
exception allows an employee to sue for wrongful termination if he is fired for the
sole reason that he refused to perform an illegal act. Texas Dep’t of Human Servs.
v. Hinds, 904 S.W.2d 629, 633 (Tex. 1995); see Safeshred, Inc. v. Martinez, 365
S.W.3d 655, 664 (Tex. 2012) (“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.”). A Sabine Pilot plaintiff has the burden of proving by a
preponderance of the evidence that his discharge was for no reason other than the
refusal to commit an illegal act—in other words, the refusal was the sole cause of
his discharge. Hinds, 904 S.W.2d at 633. If an employer discharges an employee
both for refusing to perform an illegal act and for a legitimate reason, it cannot be
7
liable for wrongful discharge. Id.
II. Appellees conclusively proved a legitimate reason for discharging Peine,
and Peine’s evidence does not create a genuine issue of material fact on
his Sabine Pilot cause of action.
Peine’s Sabine Pilot cause of action is based on his allegation that he was
terminated for refusing to commit an illegal act. Appellees could obtain summary
judgment on this cause of action by proving, as a matter of law, at least one
legitimate reason for terminating Peine. See id. Appellees’ summary judgment
evidence conclusively established that one reason for terminating Peine was his
disclosure of confidential information to a reporter. See Winters v. Houston
Chronicle Publishing Co., 795 S.W.2d 723, 724–25 (Tex. 1990) (declining to
extend Sabine Pilot exception to include employees who are discharged for
reporting illegal activities). This evidence includes, among other things, Peine’s
own admissions that he sent confidential information to a reporter and that a
violation of HIT Services’ confidentiality policy constituted a terminable offense.
See Robinson v. Devereux Foundation, No. 14-01-00081-CV, 2002 WL 1315631,
*3 (Tex. App.—Houston [14th Dist.] June 6, 2002, pet. denied) (holding employer
entitled to summary judgment on Sabine Pilot claim because it conclusively
proved other reasons for termination, including some admitted by employee,
thereby negating essential element that sole reason for termination was refusal to
perform illegal act).
On appeal, Peine does not dispute the evidence showing that (1) he sent
internal company documents to a reporter, and (2) the stated reason for his
termination by HIT Services was his breach of his confidentiality obligations he
owed to his employer. Instead, citing Continental Coffee Products v. Cazarez, 937
S.W.2d 444 (Tex. 1996), Peine asserts that direct evidence and inferences from
circumstantial evidence in the summary judgment record create genuine issues of
8
material fact regarding whether he was terminated for refusing to perform an
illegal act.
In Casarez, the supreme court examined the types of evidence that are
legally sufficient to establish a causal link between an employer’s termination of
an employee and the employee’s filing of a workers’ compensation claim, thereby
shifting the burden to the employer to show a legitimate reason for the termination.
Id. at 450–51; see also Parker v. Valerus Compression Servs., LP, 365 S.W.3d 61,
66–67 (Tex. App.—Houston [1st Dist.] 2011, pet. denied). Because a plaintiff in a
workers’ compensation retaliatory-discharge case is not required to prove that his
termination was caused solely by his filing of a claim, we conclude this standard
from Cazarez does not apply here. Compare Safeshred, 365 S.W.3d at 662
(confirming sole causation standard for Sabine Pilot claim), with Cazarez, 937
S.W.2d at 451 n.3 (stating that plaintiff need not prove that filing of workers’
compensation claim was sole cause of her termination). Instead, we consider
whether the evidence and inferences Peine identifies create a genuine issue of
material fact regarding the element of his claim that he was terminated solely for
refusing to perform an illegal act.
A. Peine has not presented direct evidence that he was fired solely
for refusing to commit an illegal act.
Initially, Peine puts forward what he considers “direct evidence” that he was
terminated solely because he refused to perform an illegal act. This evidence
includes: (1) Kumar’s threat to “clean house” if Peine did not follow his orders; (2)
Harper’s warning to Peine that, if he did not retract his statements about Kumar, he
would be fired; (3) Watson’s email to Grant Johnston that “Joe is a liability and
please do not take anything he says at face value. I will call you later to discuss;”
and (4) Watson’s email to Blaskoski stating: “Nick. We need to take action now.
9
Chris.” According to Peine, this evidence constitutes direct evidence that he was
fired solely because he refused to perform an illegal act. We disagree.
Direct evidence is evidence that, if believed, proves the fact without
inference or presumption. See College of the Mainland v. Glover, 436 S.W.3d 384,
392 (Tex. App.—Houston [14th Dist.] 2014, pet. denied). The evidence detailed
above is circumstantial rather than direct evidence because, among other things, it
does not address whether any of the speakers had a role in Peine’s firing. Thus, an
inference would be required to reach Peine’s suggested conclusion that he was
fired solely for refusing to perform an illegal act. We discuss below whether the
record supports such an inference.
B. Peine’s circumstantial evidence does not generate a fact issue.
In Cazarez, the supreme court listed some types of circumstantial evidence
that an employee can use to establish, as part of his prima facie case, a causal link
between his termination and his filing of a workers’ compensation claim. 937
S.W.2d at 451. This includes evidence that: (1) those making the decision to
terminate an employee have knowledge of the workers’ compensation claim; (2)
expression of a negative attitude toward the employee’s injuries by those making
the termination decision; (3) a failure to adhere to established company policies;
(4) discriminatory treatment in comparison to other similarly-situated employees;
and (5) evidence that the stated reason for the employee’s termination was false.
Id. Even if we assume that such circumstantial evidence could, in some cases, also
create a fact issue on the sole-cause element of a Sabine Pilot claim, we conclude
Peine has not identified a genuine issue of material fact regarding whether he was
terminated solely because he refused to perform an illegal act. We discuss each of
the categories of circumstantial evidence and suggested inferences that Peine
references in his appellate briefing.
10
1. Statements by division-level employees do not support an
inference that Peine was terminated for refusing to perform
an illegal act.
We turn first to the evidence Peine initially argued was direct evidence: (1)
Kumar’s threat to “clean house” if Peine did not follow his orders; (2) Harper’s
warning to Peine that he would be fired if he did not retract his statements about
Kumar; (3) Watson’s email to Johnston, the Wood Group Western Hemisphere
Controller, that “Joe is a liability and please do not take anything he says at face
value. I will call you later to discuss;” and (4) Watson’s email to Blaskoski, the
president of the Heavy Industrial Turbines Special Business Unit, stating: “Nick.
We need to take action now. Chris.” According to Peine, this evidence supports
an inference that his corporate superiors decided to terminate him for refusing to
perform an illegal act because it demonstrates they had a negative attitude toward
him and possessed knowledge of his refusal. We disagree.
With regard to Kumar’s threat, the undisputed summary judgment evidence
established that it was made some eight months before Peine was terminated. The
evidence also was undisputed that Kumar had been removed from any role
supervising Peine and the HIT Services accounting team pending the outcome of
the internal investigation. The undisputed evidence further established that this
removal occurred before the decision was made to terminate Peine. Kumar’s
threat, therefore, cannot support an inference that Peine was terminated for
refusing to commit an illegal act. See M. D. Anderson Hosp. & Tumor Inst. v.
Willrich, 28 S.W.3d 22, 25 (Tex. 2000) (holding that stray remarks, remote in time
from plaintiff’s termination, and not made by a person directly connected with the
decision to terminate the plaintiff, are not enough to raise a fact issue on whether
stated reason for termination was false).
The same reasoning applies to any statements or actions by Harper. Peine
11
has not pointed to any evidence in the summary judgment record demonstrating
that Harper had any role in the decision to terminate him. Therefore, Harper’s
warning cannot support Peine’s suggested inference. Id.
Turning to Watson’s emails, the summary judgment evidence indicates
Watson did not make the decision to terminate Peine, but was instead asked only if
he had any objection to Peine being terminated. Watson testified that he did not
object because Peine had disclosed confidential company documents. Even if we
assume this evidence is sufficient to establish that Watson was directly connected
with the decision to terminate Peine, we conclude that Peine’s suggested inference
from those emails is not reasonable. See Suarez v. City of Texas City, 465 S.W.3d
623, 634 (Tex. 2015) (“Circumstantial evidence can establish actual knowledge but
such evidence must either directly or by reasonable inference support that
conclusion.”) (internal quotation marks omitted).
Although Peine argues that Watson’s emails support an inference that he
was fired for refusing to falsify HIT Services’ internal financial books, other
evidence in the record suggests an alternative view. See AutoZone, Inc. v. Reyes,
272 S.W.3d 588, 592 (Tex. 2008) (stating, in an appeal from a judgment following
a jury trial, that even when the evidence is viewed in the light most favorable to the
challenged verdict, it must be viewed in its proper context with other evidence).
This evidence, including Watson’s own deposition testimony, establishes that an
internal audit had been ordered to investigate Peine’s accusations. According to
Watson, his email to Blaskoski referred not to firing Peine, but to moving forward
on that investigation into Peine’s accusations. There was also evidence in the
record that upper management was growing increasingly concerned about Peine’s
performance as CFO and that management had directly expressed those concerns
to Peine shortly before he went to Harper in July 2009.
12
A fact may not be inferred from circumstantial evidence that could support
multiple inferences if none are more probable than the others. Smith v. Landry’s
Crab Shack, Inc., 183 S.W.3d 512, 514 (Tex. App.—Houston [14th Dist.] 2006, no
pet.); see Suarez, 465 S.W.3d at 634 (“An inference is not reasonable if it is
susceptible to multiple, equally probable inferences, requiring the factfinder to
guess in order to reach a conclusion.”). Even when viewing Peine’s proffered
evidence in the light most favorable to him, his suggested inference is, at best, no
more probable than appellees’ suggested explanation for the emails. Therefore, it
is not reasonable and does not create a genuine issue of material fact sufficient to
avoid summary judgment. See Suarez, 465 S.W.3d at 634 (affirming grant of plea
to the jurisdiction after concluding that plaintiff’s evidence raised two equally
possible inferences, one that governmental entity had subjective awareness of
dangerous condition, the other that it did not, and therefore constituted no evidence
that governmental entity was subjectively aware of the danger).
Additionally, Peine’s proposed view of Watson’s emails—that he was fired
solely for refusing to commit an illegal act—would require the court to
impermissibly stack one inference on another. With respect to Watson’s email to
Johnston, the multiple inferences required include: (1) Watson was referring to
Peine as a liability because he had refused to go along with falsifying HIT
Services’ books (rather than due to poor performance as CFO) more than six
months before; (2) Watson also communicated those same concerns to Yates; and
(3) Yates decided to fire Peine solely for that reason. Turning to Watson’s email to
Blaskoski, we would have to infer: (1) that Watson was referring to Peine; (2) that
the action they had to take immediately was to fire Peine; and (3) that they had to
fire Peine solely because he had refused to falsify HIT Services’ books more than
six months before. We may not stack one inference on top of another to create a
13
fact issue. See Marathon Corp. v. Pitzner, 106 S.W.3d 724, 728 (Tex. 2003)
(explaining that an inference stacked on other inferences is legally insufficient
evidence); Zavala v. Burlington N. Santa Fe Corp., 355 S.W.3d 359, 373 (Tex.
App.—El Paso 2011, no pet.) (“Stacking inferences is insufficient to create a fact
issue precluding summary judgment.”); Rivas v. City of Houston, 17 S.W.3d 23, 28
(Tex. App.—Houston [14th Dist.] 2000, pet. den.) (“[A] vital fact may not be
established by stacking an inference upon an inference.”). Moreover, even if the
first two inferences were reasonable, Watson’s emails would at most suggest that
Peine’s refusal to perform an illegal act was a reason for his firing. Particularly in
light of the evidence discussed above regarding other reasons for Peine’s firing,
Watson’s emails do not support an inference that the refusal was the sole reason
for his firing. Therefore, Watson’s emails do not create a fact issue on the sole-
cause element of Peine’s Sabine Pilot claim.
To the extent Peine argues that Yates—the person the undisputed summary
judgment established made the decision to terminate him—possessed a negative
attitude toward him, he does not point to any evidence in the record supporting that
contention. Accordingly, we conclude this argument also does not create a fact
issue.
2. Peine offered no evidence that the decision to terminate him
was made in violation of company policy.
Peine next argues that the decision to terminate his employment was not
made in compliance with company policy, which creates an inference that the
stated reason he was terminated was false. Here, the evidence was undisputed that
Yates made the decision to terminate Peine’s employment after she learned he had
sent confidential company information to a reporter. According to Peine, an in-
house attorney firing an employee violated company policy. Peine does not,
14
however, point to any evidence in the record establishing which policy was
violated and how Yates firing him violated it. Instead, Peine quotes a statement his
attorney made in posing a question during Watson’s deposition: “Well, Mr.
Blaskoski told me Abby Yates made the decision. But that’s a managerial decision
and not a lawyer decision.” Watson’s answer did not confirm that Yates firing
Peine violated a company policy, and Peine does not point to any other witness
who so testified. Because Peine offered no evidence that company policy was
violated when he was terminated, this argument does not create a fact issue.
3. The outside auditor’s report is not evidence that Peine was
terminated for refusing to perform an illegal act.
Peine also argues that an outside auditor’s report regarding the events
surrounding his termination supports an inference that the stated reason for his
termination was false. According to the report,
[d]uring the year, the financial controller of HIT Services LP made a
number of allegations against his superiors at a local and divisional
level. Since the original allegations were made, the employee was
suspended and later left the Group. These allegations have been made
public and the employee pursued a number of potential legal claims
against the Group, all of which have been unsuccessful.
Peine contends the auditor misstated the facts surrounding his termination because
it reported that he (1) was suspended rather than placed on paid leave, and (2) had
left the Group rather than specifically stating he had been terminated.
We disagree. First, the report does not state how or why Peine left the
Group. Second, the report does not misstate the facts of his termination or his
administrative leave with pay. “Suspended” is defined as “to bar temporarily from
a privilege, office, or function;” while “leave” is defined as “authorized absence
from duty.” The Merriam-Webster Dictionary New Edition (2004). In this context,
then, being “suspended” does not imply anything materially different from being
15
placed on “paid leave.” Accordingly, the report does not support an inference that
the stated reason for Peine’s termination was false.
4. Peine’s expert’s testimony did not create a fact issue that he
was terminated solely for refusing to commit an illegal act.
Peine next cites to the deposition testimony of his retained “governance
compliance expert,” Donna Boehme. According to Peine, Boehme’s testimony
created a fact issue because she testified that this case “presented a textbook case
of retaliation.” Boehme did not, however, render an opinion on whether Peine’s
disclosure to the reporter constituted a breach of his confidentiality obligations to
his employer, or on what role this disclosure may or may not have had in his
termination. Because Boehme did not exclude breach of Peine’s confidentiality
obligations as a reason for his termination, her testimony does not generate a
material issue of fact on the sole-cause element of Peine’s Sabine Pilot cause of
action. See Hinds, 904 S.W.2d at 633 (“An employer who discharges an employee
both for refusing to perform an illegal act and for a legitimate reason or reasons
cannot be liable for wrongful discharge.”).
5. Peine’s co-workers’ experiences after his termination do not
create a fact issue on Peine’s Sabine Pilot cause of action.
In his appellate briefing, Peine recounts the experience of Patricia Solis, a
staff accountant he had hired at HIT Services, following his termination.
Specifically, Peine points out that Solis had to respond to rumors that he had been
fired for “cooking the books at HIT Services,” and that Solis was “relieved of a
fully functional workstation and computer for performing her job.” Without
further explanation, Peine asserts that these episodes support an inference that he
was terminated for refusing to perform an illegal act. But Peine does not explain
how these seemingly disconnected events—a third party responding to rumors and
losing a desk and computer—can support an inference that he was terminated for
16
refusing to perform an illegal act. Without more, these events offer no support for
Peine’s Sabine Pilot cause of action. See Suarez, 465 S.W.3d at 634 (“An
inference is not reasonable if it is premised on mere suspicion . . . .”).
6. Temporal proximity does not support an inference that the
sole cause of Peine’s termination was his refusal to perform
an illegal act.
Peine next asserts that the temporal proximity between his refusal to perform
an illegal act and his termination supports an inference that he was fired in
violation of Sabine Pilot. Peine alleges that he refused to follow Kumar’s orders to
falsify HIT Services’ financial books in December 2008 and that he started
reporting, and then continued to report, Kumar’s attempted accounting
wrongdoings through July 2009. Peine then argues that because he was terminated
six weeks later, temporal proximity supports an inference that he was fired for
refusing to perform an illegal act. Even assuming that temporal proximity could,
in some cases, create a fact issue on the sole-cause element of a Sabine Pilot claim,
we disagree that the evidence on which Peine relies does so in this case. Cf.
Safeshred, 365 S.W.3d at 664 (“[T]he nature of a Sabine Pilot claim means that the
illegal activity an employee is asked to do never actually occurs (because the
employee will have refused to do it and been fired).”); Marx v. Electronic Data
Sys. Corp., 418 S.W.3d 626, 635 (Tex. App.—Amarillo 2009, no pet.) (“[E]ven
under the but for causation standard applicable to Title VII retaliation cases, the
mere temporal proximity between protected conduct and adverse action is
insufficient to show a causal link.”).
As explained above, reporting allegedly illegal acts is not protected by
Sabine Pilot. Winters, 795 S.W.2d at 724–25 (rejecting request to extend Sabine
Pilot cause of action to private at-will employees who are discharged for reporting
illegal activities). Because Peine contends that he made only a single refusal in
17
December 2008, approximately eight months before he was terminated, the timing
of his termination does not support an inference that he was fired solely as a result
of his refusal to commit an illegal act. See Green v. Lowe’s Home Ctrs., Inc., 199
S.W.3d 514, 523 (Tex. App.—Houston [1st Dist.] 2006, pet denied) (concluding,
in workers’ compensation retaliation case, that four-month gap between filing of
compensation claim and termination did not support causal link between the two).
Peine attempts to shorten this gap between his refusal to commit an illegal
act and his termination by citing to Hawthorne v. Star Enterprise, Inc., 45 S.W.3d
757, 761–62 (Tex. App.—Texarkana 2001, pet. denied). In Hawthorne, the
employer issued a standing order to employees that they physically smell water
samples to determine whether hazardous materials had been removed. Id. at 758.
Hawthorne refused the order, directed his subordinates not to comply with it, and
then reported the order to the Occupational Safety and Health Administration.
Hawthorne was then terminated by the employer. Id. at 759. The trial court
granted the employer’s motion for summary judgment based on Hawthorne’s
testimony that he was fired not only for refusing to commit an illegal act, but also
for reporting the order to OSHA. Id. The court of appeals reversed the summary
judgment, concluding that Hawthorne’s report of the illegal order was not a
separate act but instead was a continuation of his initial refusal. Id. at 761. Peine
makes the same argument here: that his reports of Kumar’s order to falsify HIT
Services’ financial records were a continuation of his initial refusal to perform an
illegal act.
We initially note that Hawthorne is not binding on this Court and also that
no other appellate court has cited Hawthorne for the proposition that a Sabine Pilot
refusal to commit an illegal act can be continued over time by reporting the order
to perform an illegal act to governmental authorities. We need not decide today
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whether to follow Hawthorne, however, because it is distinguishable. First, unlike
in Hawthorne, there is no evidence here that Peine continued to refuse to follow an
order to perform any illegal act. Instead, the record reflects that Peine’s superiors
accommodated his demands. Second, the manager involved in Hawthorne’s
termination testified during his deposition that he was not aware that Hawthorne
had made a report to OSHA at the time the decision was made to fire him. This
admission alone created a fact issue on whether Hawthorne was terminated solely
as a result of his refusal to perform an illegal act. Id. at 762. Because there is no
similar testimony here, Hawthorne does not support Peine’s effort to shorten the
time gap between his refusal to falsify HIT Services’ financial records and his
termination.
Finally, Peine makes several public policy arguments that he was justified in
reporting Kumar’s order to falsify HIT Services’ financial records to company
management and the press, and he contends these policies in favor of reporting
illegal activity served to continue his initial refusal. The Supreme Court of Texas
has previously addressed this issue, and it has consistently rejected every attempt
to extend the Sabine Pilot exception and recognize a common-law cause of action
for retaliatory discharge of an employee who reports illegal activities in a private
workplace. Austin v. HealthTrust, Inc., 967 S.W.2d 400, 400 (Tex. 1998)
(“Because the Legislature has been so proactive in promulgating statutes that
prohibit retaliation against whistleblowers in many areas of the private sector, we
decline to recognize a common-law cause of action.”); id. at 403 (rejecting public
policy arguments to extend Sabine Pilot to reporting violations of the law because
doing so “would in large part eviscerate the specific measures the Legislature has
already adopted”); Winters, 795 S.W.2d at 724–25; see also Ed Rachal Found. v.
D’Unger, 207 S.W.3d 330, 332 (Tex. 2006) (“Sabine Pilot protects employees
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who are asked to commit a crime, not those who are asked not to report one.”).
This Court has likewise rejected requests to extend Sabine Pilot to terminations
based on reports or investigations of illegal activity, concluding such expansion
should be left to the Supreme Court of Texas or the Legislature. See Melendez v.
Exxon Corp., 998 S.W.2d 266, 273 (Tex. App.—Houston [14th Dist.] 1999, no
pet.); Mayfield v. Lockheed Eng’g & Scis. Co., 970 S.W.2d 185, 187–88 (Tex.
App.—Houston [14th Dist.] 1998, pet. denied). Because Sabine Pilot does not
apply to reports of illegal activity, Peine’s reports of Kumar’s actions cannot
continue his refusal to commit an illegal act. Accordingly, Peine has failed to
identify evidence that creates a genuine issue of material fact regarding the element
of his claim that he was terminated solely for refusing to perform an illegal act.
CONCLUSION
Having addressed and rejected each argument raised in Peine’s single issue
on appeal, we overrule that issue and affirm the trial court’s judgment.
/s/ J. Brett Busby
Justice
Panel consists of Justices Jamison, Busby, and Brown.
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