Watkins v. Rolling Frito-Lay Sales, LP Dallas Court of Appeals, No. 05-16-00367-CV (June 21, 2017) Justices Evans, Stoddart (Opinion, linked here), and Boatright

The Sabine Pilot exception to Texas’s employment-at-will doctrine holds that, at-will or not, an employee can’t lawfully be fired if “the sole reason [is] that the employee refused to perform an illegal act.” But “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.”Texas Dep’t of Human Services v. Hinds, 904 S.W.2d 629, 633 (Tex. 1995). And that’s where Watkins’s lawsuit ran aground.

Watkins alleged he was terminated from his job as a route sales representative for a Frito-Lay distributor because he refused his supervisor’s directive to “short” or falsify his delivery manifest—to say that fewer products were delivered to him than were actually received—a practice Watkins characterized as theft under Texas Penal Code § 31.03(a). After a protracted back-and-forth with the employer dealing with Watkins’s accusations against the supervisor and some of Watkins’s own arguable failures to comply with company policy—and a lengthy suspension with pay—the company gave Watkins an ultimatum: return to work by a date certain, subject to a disciplinary agreement, or be terminated under the company’s “no-show policy.” Watkins rejected the ultimatum as “unfair,” did not return to work, and was fired.

Watkins sued, invoking Sabine Pilot. But the trial court granted a directed veridct against him at the close of his evidence at trial, and—emphasizing that Sabine Pilot is a “very narrow [public policy] exception to the employment-at-will doctrine”—the Dallas Court of Appeals affirmed.

There was “indisputable evidence” that Watkins failed to return to work, which gave the employer cause to fire him. So, the Court said, it didn’t matter whether the supervisor’s directive would’ve amounted to theft, because Watkins’s refusal to follow that directive was not the “sole” cause for his termination. The Court rejected Watkins’s argument that his failure to report was a mere excuse or pretext, finding it to be a legitimate, independent reason for termination. It also declined to find he had been constructively discharged earlier, because the constructive-discharge doctrine—which may operate to preserve a Sabine Pilot claim when an employee feels compelled to resign rather than wait to be formally discharged—did not apply to the facts here, since Watkins testified he continued to be employed after raising the illegal-conduct issue, did not resign, and was paid even during his suspension.