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Celanese Corp. v. McGlory

Court of Appeals of Texas, Fifth District, Dallas

May 16, 2017


         On Appeal from the 193rd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-14-06023-L.

          Before Justices Lang, Lang-Miers, and Myers



         Celanese Corporation appeals the trial court's judgment awarding Preston McGlory $137, 120 plus interest and attorney's fees on his claim for breach of contract. Celanese brings three issues on appeal contending (1) the trial court erred by denying its motion for summary judgment and granting McGlory's motion for summary judgment; (2) the trial court erred by striking certain parts of Celanese's summary judgment evidence; and (3) genuine issues of material fact preclude the trial court's decision to grant McGlory's motion for summary judgment. We reverse the trial court's judgment and render judgment that McGlory take nothing.


         In March 2008, McGlory began his employment with Celanese as its Director of Tax, International & Planning. In October 2009, 2010, and 2011, Celanese awarded McGlory long-term incentive awards (LTI awards) of restricted stock units (RSUs). The agreements provided that after McGlory's interest in the RSUs vested, they would be converted to shares of Celanese stock. If McGlory was terminated without cause or due to his death or disability, then a pro-rated number of RSUs would vest according to formulas set forth in the award agreements. The agreements provided that if McGlory was terminated "for any other reason, " i.e., a reason other than without cause, death, or disability, "the Award shall be forfeited and cancelled without consideration." The agreements' definition of "cause" did not include poor job performance, but "cause" did include violations of Celanese's Business Conduct Policy.

         In January 2012, [1] Celanese decided to terminate McGlory effective March 2 due to his lack of leadership and because of two significant errors he made in tax issues in the preceding year. On February 15, the Vice President of Tax and McGlory's supervisor, John Howard, and an officer in the Human Resources Department, Kristina Maxwell, informed McGlory of his pending termination. They presented him with an unsigned severance agreement providing he would be paid severance pay of twenty-six weeks of his salary plus transition pay of $60, 000. The severance agreement also stated Celanese would "fulfill its obligations to Employee pursuant to the terms of the signed equity award agreements."

         The next day, February 16, McGlory asked Maxwell to double the amount of the severance pay or the transition pay. McGlory also told Maxwell the company's confidentiality policy may have been violated because he had been told by someone outside the company about his pending termination. Celanese decided to launch an investigation into this breach of confidentiality.

         On February 17, McGlory met with Maxwell and with Joseph Fox, Celanese's Vice President of HR Law and Employment Law. They told McGlory his request for additional compensation was denied. They also insisted that McGlory tell them the name of the employee who disclosed McGlory's termination. They told him that if he did not cooperate with the investigation, he would be in violation of the Business Conduct Policy and he would not receive the severance benefits or the RSUs.

         On February 18, McGlory signed the Severance Agreement and returned it to Celanese; Celanese had not yet signed the Severance Agreement. McGlory told Fox and Maxwell that Ronnie Berry, Celanese's new Vice President of Tax and McGlory's new supervisor, was the Celanese employee who had disclosed McGlory's pending termination, and he said that Shelly Lamb was the person outside Celanese who told him about it. McGlory said he did not have contact information for Lamb. He said he thought she worked in sales, but he did not know where she worked, and he was not sure how she spelled "Shelly."

         Fox and Maxwell's investigation uncovered evidence that McGlory's story that Berry told Lamb about McGlory's pending termination and McGlory's claim of lack of knowledge about Lamb was a fabrication by McGlory. In fact, Lamb was McGlory's ex-girlfriend whom he had dated for over a year and with whom he had broken up in January 2012. Fox and Maxwell searched McGlory's company e-mails and found numerous amorous communications between McGlory and Lamb. Those e-mails included the correct spelling of Lamb's name and showed where she worked. McGlory later admitted that Berry had no reason to know or to have communicated with Lamb and that Lamb did not know of McGlory's termination until McGlory told her about it. Fox and Maxwell tried to communicate with Lamb, but she refused to return their telephone calls.

         Celanese's investigation into the breach of confidentiality extended beyond McGlory's termination date. On March 2, McGlory's termination date, the reason for McGlory's termination was listed as "TBD." On March 12, Fox sent McGlory a letter stating McGlory's level of cooperation in the investigation was unacceptable and that the company had concluded McGlory's allegation of a senior leader in the company breaching the company's confidentiality was unfounded. Fox also stated in the letter, "Not cooperating in an investigation and making unfounded allegations of misconduct are violations of the company's Business Conduct Policy. As a result, we have decided to not sign your severance agreement and therefore, we are cancelling it."

         McGlory brought suit for breach of contract, promissory estoppel, and unjust enrichment seeking payment for the value of the stocks he alleges he should have received as part of the long-term incentive awards. Both McGlory and Celanese moved for summary judgment. The trial court granted McGlory's motion for summary judgment on his breach-of-contract claim in part and denied Celanese's in part, [2] and the court awarded McGlory damages of $137, 120, plus attorney's fees and interest. The court declared that McGlory's alternative claims of promissory estoppel and unjust enrichment were moot, and the court dismissed those claims with prejudice.

         STANDARD ...

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