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Exxon Mobil Corp. v. Rincones

Supreme Court of Texas

May 26, 2017

Exxon Mobil Corporation, WHM Custom Services, Inc., and DISA, Inc., Petitioners,
Gilberto Rincones, Respondent

          Argued February 7, 2017

         On Petition for Review from the Court of Appeals for the Thirteenth District of Texas

          Justice Lehrmann did not participate in the decision.


          Brown Justice.

         This is a complex employment-discrimination case implicating the Texas Commission on Human Rights Act and multiple common-law tort doctrines. It arises from a report that Gilberto Rincones, a refinery technician, failed an employment-related drug test. Rincones sued his employer, WHM Custom Services, Inc.; the owner of the refinery, Exxon Mobil; and the drug-testing administrator, DISA, Inc. The trial court granted summary judgment for Exxon, WHM, and DISA on all but one claim, which it dismissed for lack of jurisdiction. In a wide-ranging opinion on rehearing, the court of appeals reversed the trial court's take-nothing judgment and reinstated nine of Rincones's claims. We reverse in part, vacate in part, and render judgment reinstating the trial court's final take-nothing judgment against Rincones, holding, among other things, that Texas law recognizes no claim for compelled self-defamation.

         I. Background

         Gilberto Rincones was employed as a catalyst technician by WHM Custom Services. WHM assigned him to work at Exxon's Baytown refinery. Exxon retains WHM as an independent contractor to build and repair the refinery's catalyst systems. Because of the potentially hazardous nature of the work at the Baytown refinery, Exxon requires its contractors, including WHM, to have written drug policies. Those policies must meet the requirements of the Houston Area Substance Abuse Program, a project of the Houston Business Roundtable. When WHM hired Rincones, he signed forms acknowledging its substance-abuse policy and procedures and consenting to drug and alcohol testing.

         The Substance Abuse Program requires random drug testing by third-party administrators, who are responsible for providing collection, testing, and reporting services conducted by government-certified laboratories and licensed medical professionals. The program maintains a list of third-party administrators that satisfy its requirements. Under the Substance Abuse Program, third-party administrators classify contractors' employees as either "active" or "inactive." Any employee who violates the program's requirements, such as testing positive for a forbidden substance, is classified as inactive. Exxon mandates that no person with an inactive status may work at the Baytown Refinery until completion of a rehabilitation process outlined by the program.

         WHM designated DISA, which is on the program's approved list, as its third-party administrator. In early April 2008, DISA randomly selected Rincones to take a drug test, to which he submitted on April 10. On April 14, DISA notified Rincones that his sample tested positive for marijuana use. In accordance with the Substance Abuse Program, DISA designated Rincones as inactive, requiring him to complete certain rehabilitation requirements before returning to work.

         Rincones consistently maintains he did not use illegal drugs. He argued the sample tested was not actually his; he complained to WHM of supposedly "questionable testing procedures he witnessed when he gave the sample"; and he requested that he be allowed to retest with a new sample. A WHM human-resources manager told Rincones he had to work with DISA rather than WHM to regain active status. DISA offered to retest the part of the sample retained by the lab. But Rincones never fulfilled the requirements of the Substance Abuse Program for returning to active DISA status.

         Instead, on April 15, Rincones submitted a urine sample to a private doctor. This test was negative, though the screening threshold used in this non-random test was substantially higher than the level required by the Substance Abuse Program. Rincones informed WHM of the negative test results and offered them as proof that the DISA drug-test results were incorrect. WHM and DISA did not change their position based on these privately obtained results, as the testing was not sanctioned by the program.

         Rincones never attempted to complete a rehabilitation program. And though WHM never formally terminated Rincones, his inactive status precluded WHM from assigning him any work. Rincones filed for unemployment-compensation benefits with the Texas Workforce Commission in August 2008. A month later the commission determined that Rincones had been discharged because of the results of the drug test but was eligible for unemployment benefits. He later obtained employment with another company.

         Rincones filed a discrimination charge with the Texas Workforce Commission - Civil Rights Division in October 2008, complaining "that other non[-]Hispanic employees were treated differently" under the Substance Abuse Program. In April 2009, Rincones filed this lawsuit against WHM and Dallas Mentor, an alleged "misidentified" party in place of DISA. Rincones then amended his original petition in July 2009 to add Exxon as a defendant and amended it a fourth time in August 2010 to add DISA. He asserted various claims against each of the three defendants, the relevant details of which we discuss below.

         Exxon and WHM moved to dismiss Rincones's pattern-or-practice discrimination claim for lack of subject-matter jurisdiction. They argued that Rincones did not exhaust his administrative remedies by failing to include the facts supporting the claim in his Texas Workforce Commission administrative charge. The trial court dismissed the claim. Exxon and WHM also moved for traditional and no-evidence summary judgment on the remainder of Rincones's claims against them. DISA moved for traditional summary judgment. The trial court granted summary judgment against Rincones on the remaining claims against Exxon, WHM, and DISA and entered a take-nothing judgment. Rincones nonsuited all of his other claims, making judgment against him final.

         Rincones timely appealed, raising sixteen issues in the court of appeals. 457 S.W.3d 221, 255 (Tex. App.-Corpus Christi 2015). Withdrawing its first opinion and issuing a new one on rehearing, the court of appeals overruled some of Rincones's issues, but also reversed the trial court's judgment on multiple grounds and remanded. Id. at 231, 254. With respect to Exxon, the court of appeals reinstated three of Rincones's claims: negligence, tortious interference with an employment contract, and pattern-or-practice discrimination. Id. at 249, 251-53. It reinstated four claims against WHM: individual discrimination, retaliation, pattern-or-practice discrimination, and compelled self-defamation. Id. at 223-49. It reinstated two claims against DISA: tortious interference with a contract and negligence. Id. at 253-56.

         We address each of these nine claims against the three petitioners in turn.

         II. Claims against WHM

         WHM, Rincones's employer, argues the court of appeals erred by reversing the trial court's take-nothing judgment as to Rincones's claims for compelled self-defamation, discrimination, retaliation, and pattern-or-practice discrimination. Rincones argues that fact issues precluded summary judgment and the court of appeals correctly revived his claims. We review the trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id. Even under this exacting standard, we nevertheless conclude that the trial court correctly granted summary judgment for WHM and the court of appeals erred by reversing.

         A. Defamation

         The court of appeals affirmed summary judgment for the petitioners on Rincones's defamation claim. Yet it concluded "that Texas law recognizes a cause of action for defamation based on compelled self-publication in certain limited circumstances" and revived Rincones's cause of action for compelled self-defamation against WHM. 457 S.W.3d at 244-48. We disagree and reverse, holding that the publication element of a defamation claim cannot be satisfied by a theory of "compelled" self-disclosure and there is no independent cause of action for compelled self-defamation.

         The elements of a defamation claim "include (1) the publication of a false statement of fact to a third party, (2) that was defamatory concerning the plaintiff, (3) with the requisite degree of fault, and (4) damages, in some cases." In re Lipsky, 460 S.W.3d 579, 593 (Tex. 2015) (citing WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998)). "Publication" occurs if the defamatory statements are communicated orally, in writing, or in print to some third person who is "capable of understanding their defamatory import and in such a way that the third person did so understand." Austin v. Inet Techs., Inc., 118 S.W.3d 491, 496 (Tex. App.-Dallas 2003, no pet.). As a general rule a defendant who communicates a defamatory statement directly to the defamed person, who then relays it to a third person, has not published the matter to the third person. See Restatement (Second) of Torts § 577 cmt. m (1977).

         Nevertheless, some Texas courts of appeals and sister-state courts have recognized an exception to that general rule, often in defamation suits brought by former employees against their former employers. The theory is that a former employee's publication to a third party can satisfy the publication element because the former employee is effectively compelled to publish the defamatory statement to prospective employers when asked why he left his former employment. See Lewis v. Equitable Life Assurance Soc'y of U.S., 389 N.W.2d 876 (Minn. 1986); cf. Cweklinsky v. Mobil Chem. Co., 837 A.2d 759 (Conn. 2004). According to these courts, compelled self-publication holds the originator of a "defamatory statement liable for damages caused by the statement where the originator knows, or should know, of circumstances whereby the defamed person has no reasonable means of avoiding publication of the statement or avoiding the resulting damages; in other words, in cases where the defamed person was compelled to publish the statement." Lewis, 389 N.W.2d at 888.

         A handful of states have recognized the theory in various forms, [1] and a narrow version has gained acceptance in the Restatement (Second) of Torts. The Restatement provides that a publication may occur despite the general rule "[i]f the defamed person's transmission of the communication to the third person was made . . . without an awareness of the defamatory nature of the matter and if the circumstances indicated that communication to a third party would be likely . . . ." Restatement (Second) of Torts § 577 cmt. m (1977).[2]

         Several of our courts of appeals also have entertained the notion of compelled self-defamation. The court of appeals in this case relied on its own precedent from 1980: First State Bank of Corpus Christi v. Ake, 606 S.W.2d 696, 701 (Tex. Civ. App.-Corpus Christi 1980, writ ref'd n.r.e.) ("One who communicates defamatory matter directly to the defamed person, who himself communicates it to a third party, has not published the matter to the third person if there are no other circumstances. If the circumstances indicated that communication to a third party is likely, however, a publication may properly be held to have occurred."). The Dallas and San Antonio Courts of Appeals have relied on Ake to reach similar conclusions. Chasewood Constr. Co. v. Rico, 696 S.W.2d 439, 445 (Tex. App.-San Antonio 1985, writ ref'd n.r.e.) (relying on Ake to conclude that a supervisor, as a reasonably prudent person, should have expected his defamation of the employee would be communicated to others by the employee); DeWald v. Home Depot, No. 05-98-00013-CV, 2000 WL 1207124, at *9 (Tex. App.-Dallas Aug. 25, 2000, no pet.) ("[E]mployers should expect terminated employees to share with prospective employers the alleged reasons for their termination. If an employer gives untrue defamatory reasons for terminating an employee, it should recognize that such conduct creates an unreasonable risk that the defamatory matter will be communicated to prospective employers."); see also Purcell v. Seguin State Bank & Tr. Co., 999 F.2d 950, 959 (5th Cir. 1993) (finding, based on courts of appeals' decisions, that "Texas courts . . . recognize the narrow exception of self-compelled defamation").

         More recently, however, both the Dallas and San Antonio courts hesitated to extend their recognition of the tort, in part because this Court has never adopted it. See Austin, 118 S.W.3d at 499 (noting this Court has not recognized the claim and declining to decide the issue because an element of the claim was negated); Gonzales v. Levi Strauss & Co., 70 S.W.3d 278, 283 (Tex. App.-San Antonio 2002, no pet.) (reciting the elements of self-compelled defamation but finding no evidence to support them); see also AccuBanc Mortg. Corp. v. Drummonds, 938 S.W.2d 135, 148 (Tex. App.-Fort Worth 1996, writ denied) (same).

         Today we resolve the issue. We expressly decline to recognize a theory of compelled self-defamation in Texas. In rejecting it, we join an emerging majority of state courts that have considered the issue, including those in Connecticut, Massachusetts, Hawaii, Tennessee, Iowa, Pennsylvania, and New York.[3]

         The court of appeals here found support for its conclusions in our Neely v. Wilson opinion. 418 S.W.3d 52 (Tex. 2013). That reliance was misplaced. Neely involved a third party's re-publication of a defamatory statement. Id. at 61. Dr. Neely, a neurosurgeon, did not repeat defamatory statements about himself to others. He alleged defamation by a reporter and television station that repeated a third party's allegations. Id. We reaffirmed "a well-settled legal principle that one is liable for republishing the defamatory statement of another." Id. From there, the court of appeals reasoned, "it is a small step to impose liability on one who communicates a defamatory statement knowing or reasonably foreseeing that the plaintiff would be compelled to repeat the defamatory statement to others." 457 S.W.3d at 248. We disagree and refuse to take that step.

         Our holding today is in no tension with Neely. Indeed, our holding today is consistent with our precedent. More than half a century ago, we reaffirmed the rule "that if the publication of which the plaintiff complains was consented to, authorized, invited or procured by the plaintiff, he cannot recover for injuries sustained by reason of the publication." Lyle v. Waddle, 188 S.W.2d 770, 772 (Tex. 1945). Declining to recognize compelled self-defamation is a natural extension of this rule.

         Further, were we to recognize compelled self-defamation, we would risk discouraging plaintiffs from mitigating damages to their own reputations. See Cweklinsky, 837 A.2d at 767. Allowing the claim could enable any employee who disagrees with his employer's reason for firing him to unilaterally create an actionable tort against the employer. And "the availability of increased damages from such a claim might encourage publication of a defamatory statement by a plaintiff who reasonably could have avoided such republication or could have tried to explain to a prospective employer the true nature of the situation and to contradict the defamatory statement." Layne v. Builders Plumbing Supply Co., 569 N.E.2d 1104, 1111 (Ill.App.Ct. 1991).

         Additionally, we fear that accepting the compelled self-defamation doctrine would unacceptably impinge on the at-will employment doctrine. "For well over a century, the general rule in this State, as in most American jurisdictions, has been that absent a specific agreement to the contrary, employment may be terminated by the employer or the employee at will, for good cause, bad cause, or no cause at all." Montgomery Cty. Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex. 1998). We have declined to recognize a claim against employers for negligent investigation of at-will employees' alleged misconduct because, "[b]y definition, the employment-at-will doctrine does not require an employer to be reasonable, or even careful, in making its termination decisions." See Tex. Farm Bureau Mut. Ins. Cos. v. Sears, 84 S.W.3d 604, 609 (Tex. 2002). By its nature, the claim would require employers to conduct investigations and make accurate findings before taking any action against an employee or risk being sued. We have already declined to recognize that duty. Moreover, as the Seventh Circuit has noted, combining the doctrines of self-defamation and defamation per se "gives employees who regret not having negotiated an employment contract a tort surrogate for it." Rice v. Nova Biomedical Corp., 38 F.3d 909, 912 (7th Cir. 1994), cert. denied, 514 U.S. 1111 (1995). For these reasons, we are convinced compelled self-defamation is incompatible with Texas's at-will employment system.

         Recognizing compelled self-defamation could also stifle workplace communication by "chill[ing] honest evaluation and communication about employee performance, as employers strive to protect themselves from defamation claims by adopting policies of providing only 'name, rank and serial number' references." See Markita D. Cooper, Between a Rock and a Hard Case: Time for a New Doctrine of Compelled Self-Publication, 72 Notre Dame L. Rev. 373, 378 (1997); see also White v. Blue Cross & Blue Shield of Mass., Inc., 809 N.E.2d 1034, 1038 (Mass. 2004). And we agree with our sister court in Massachusetts that "[t]he expenditure of time, resources, and money required to defend a claim of compelled self-defamation inevitably will induce self-censorship by employers." White, 809 N.E.2d at 1038.

         Finally, the court of appeals here seems to have understood compelled self-defamation to be an independent cause of action. But it is probably better understood as an exception to the publication requirement of a standard defamation claim. See Cweklinsky, 837 A.2d at 764, 769; see generally Cooper, supra at 11. Texans' right to sue for reputational torts is not impinged by declining to adopt a doctrine that modifies a plaintiff's burden on one element of a defamation claim. See Tex. Const. art. I, §§ 8, 13.

         Because we expressly decline to recognize compelled self-defamation, we reverse the court of appeals and render judgment for WHM on this claim.

         B. Discrimination Based on Race or National Origin

         Rincones alleges he was discharged based on his race (Hispanic) and national origin ("Mexican heritage/descent"). The crux of this claim is that "other non-Hispanic employees . . . were allowed to retest as a result of a false positive result and allowed to return to work, " but he was not.

         As an initial matter, WHM argues that the court of appeals improperly relied on certain late-filed summary-judgment evidence. But the court of appeals' error, if any, has been waived. Even objected-to evidence remains valid summary-judgment proof "unless an order sustaining the objection is reduced to writing, signed, and entered of record." Mitchell v. Baylor Univ. Med. Ctr., 109 S.W.3d 838, 842 (Tex. App.-Austin 2003, no pet.). The record contains no order sustaining the objection.

         The Legislature enacted the Texas Commission on Human Rights Act "to address the specific evil of discrimination and retaliation in the workplace." City of Waco v. Lopez, 259 S.W.3d 147, 153 (Tex. 2008). As relevant here, an employer commits an unlawful employment practice if, because of race or national origin, the employer discharges an individual or discriminates in any other manner against an individual in connection ...

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