The Texas Supreme Court was recently asked by the 5th Circuit Court of Appeals to determine the status of at-will employment in Texas. The Texas High Court made it very clear that at-will employment is the standard in the state. Employees can’t sue former employers for fraud if they “promise” continued employment and but then fail to deliver.
Recent case: Gary and several other long-term employees at the large multinational company DuPont were asked to transfer from one division to another. However, they were concerned that their benefits and retirement plan would be affected if they moved. Their fear: That the company would sell the division, leaving them either unemployed or working for lower wages and lower retirement benefits.
The company assured them it didn’t intend to sell the particular division and the employees agreed to the transfer.
It turned out that DuPont was already in negotiations to sell the division. After the sale went through, the employees did see their wages and benefits lowered. They sued, alleging fraud.
The Texas Supreme Court said that under these circumstances, the employees didn’t have a case. Because they were at-will employees who could be fired for any reason or no reason, continued employment wasn’t guaranteed. The employees couldn’t rely on the promise not to sell the division because they knew their employer could terminate them anytime. (Sawyer, et al., v. DuPont, No. 12-0626, Supreme Court of Texas, 2014)