COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-11-00479-CV

MICHAEL PRIETO APPELLANT

V.

BELL AEROSPACE SERVICES, 

INC., BELL HELICOPTER 

TEXTRON, INC., AND TEXTRON, 

INC.

APPELLEES

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FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY

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MEMORANDUM OPINION1

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This is an appeal from a directed verdict in favor of appellees Bell 

Aerospace Services, Inc. (BellAero), Bell Helicopter Textron, Inc. (BHTI), and 

Textron, Inc. (collectively, Bell) in a Sabine Pilot claim brought by appellant 

 1

See Tex. R. App. P. 47.4.
2

Michael Prieto. Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex. 

1985). We affirm.

Background

Prieto was hired as CEO of BellAero in November 2004. In summer 2005, 

BellAero acquired U.S. Helicopter (USH), a helicopter repair company located in 

Ozark, Alabama whose primary client was the U.S. government. After the 

acquisition, BellAero2 was composed of two divisions: Bell Aero Support 

Services (BASS), which sent contractors directly to the U.S. government to 

perform helicopter repairs and maintenance, and USH. Prieto hired Steve Bolton 

as the General Manager of USH in July 2007.

According to Brian Linden, BellAero’s CFO from 2005 to 2008, although 

2006 was BellAero’s best year ever in terms of sales, it fell short of its annual 

operating plan (AOP) in 2007, in large part because USH was transitioning from 

a “small mom-and-pop shop” to part of a Fortune 500 company. Scheduling and 

quality were problems at USH. Nevertheless, BellAero’s 2007 AOP performance 

was better than its 2004 performance. According to Linden, BellAero’s financials 

could have been better in the first quarter of 2008; it was missing its AOP by 

millions of dollars, mostly due to USH’s performance.

 2

BellAero is owned by BHTI, which in turn is owned by Textron.
3

In January 2008, BellAero executives found out that the U.S. government 

was going to assign a Level III CAR, or Corrective Action Request,3 to USH, its 

third in less than a year. In addition, BellAero compliance employees had been 

investigating Sarbanes-Oxley compliance issues at USH.

By early April 2008, Prieto was so concerned about Bolton’s performance 

at USH that he began to document those performance issues and began 

forwarding emails to his immediate supervisor at BHTI, Mike Blake. In the 

emails, Prieto detailed specific performance issues with Bolton.

Over the next two months, employees in the human resources (HR), and 

ethics and compliance, sections of BHTI began several investigations into 

matters involving Prieto’s and Bolton’s relationship, compliance issues at USH, 

and a complaint by Prieto that Blake had forced him to hire Bolton. Additionally, 

in mid-May 2008, Prieto formed a team of BellAero employees to investigate 

allegations of labor mischarging on U.S. government contracts at USH that had 

been discovered by the DCAA4 during a routine audit of USH.

Before Prieto’s team completed its investigation into the labor mischarging 

issue, the HR director for BHTI terminated Prieto’s employment at a June 5, 2008 

meeting. Prieto subsequently brought a Sabine Pilot claim against Bell, 

 3

A Level III CAR is unusual; the most serious type of CAR is a Level IV, 

which effectively shuts down production.

4

The DCAA is a government accounting agency that performs routine 

audits of facilities such as USH’s. It often shares information with the DCMA, a 

corresponding agency that investigates quality.
4

contending that Bell terminated his employment because he had refused to 

cease an internal investigation into the labor mischarging allegations and 

participate in a cover-up, and because he had refused to go along with a sham 

investigation that would have prevented him from evaluating the true extent of 

the allegations and reporting that information to the U.S. government.

The parties tried the case to a jury over several weeks. On the third day of 

jury deliberations, Bell requested a directed verdict. The trial court took Bell’s 

motion under advisement. That same day, the jury indicated that it was 

deadlocked. Even after the court gave the jury an Allen charge, it continued to 

deadlock, so the trial judge declared a mistrial. However, within the trial court’s 

plenary power, the trial judge vacated the mistrial and granted Bell a directed 

verdict.

Evidence Supporting Claim

In his first issue, Prieto contends that the trial court erred by granting Bell’s 

motion for a directed verdict. Bell contends that Prieto failed to present evidence 

sufficient to raise a material fact issue as to whether the sole reason for his 

termination was his refusal to perform an illegal act. See id.

Standard of Review

A directed verdict is proper only under limited circumstances: (1) when the 

evidence is insufficient to raise a material fact issue, or (2) when the evidence 

conclusively establishes the right of the movant to judgment or negates the right 

of the opponent. See Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 
5

S.W.3d 74, 77 (Tex. 2000); Farlow v. Harris Methodist Fort Worth Hosp., 284 

S.W.3d 903, 919 (Tex. App.—Fort Worth 2009, pet. denied). In reviewing a 

directed verdict, we follow the standards for assessing legal sufficiency of the 

evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). We 

review the evidence in the light most favorable to the person suffering the 

adverse judgment, and we must credit favorable evidence if reasonable jurors 

could and disregard contrary evidence unless reasonable jurors could not. Id. at 

827; Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 215 (Tex. 2011).

Applicable Law

Texas has been an at-will employment state since at least 1888, when the 

supreme court held that absent a contractual agreement to the contrary, an 

employee employed for an indefinite term could be terminated at will without 

cause. See E. Line & R.R.R. Co. v. Scott, 72 Tex. 70, 75, 10 S.W. 99, 102 

(1888); Young v. Nortex Found. Designs, Inc., No. 02-11-00470-CV, 2013 WL 

452181, at *2 (Tex. App.—Fort Worth Feb. 7, 2013, no pet.) (mem. op.). A “very 

narrow” exception to this rule was recognized in the Sabine Pilot case in 1985: 

when an employee is discharged solely because he or she refused to perform an 

illegal act. Sabine Pilot, 687 S.W.2d at 735; Young, 2013 WL 452181, at *3. In a 

wrongful termination case brought under a Sabine Pilot theory, the plaintiff has 

the burden to prove by a preponderance of the evidence that the discharge was 

for no reason other than the refusal to perform an illegal act. Sabine Pilot, 687 

S.W.2d at 735; Young, 2013 WL 452181, at *3.
6

This very narrow exception promotes the public policy of preventing an 

employee from being forced to choose between his livelihood and criminal 

activity. Safeshred, Inc. v. Martinez, 365 S.W.3d 655, 659 (Tex. 2012); Physio 

GP, Inc. v. Naifeh, 306 S.W.3d 886, 888 (Tex. App.––Houston [14th Dist.] 2010, 

no pet.); see Young, 2013 WL 452181, at *3. For the exception to apply, then, 

the act the employee is asked to perform must actually be illegal. Young, 2013 

WL 452181, at *3. An employer who discharges an employee both for refusal to 

commit an illegal act and for a legitimate reason is not liable for wrongful 

termination. See, e.g., Tex. Dep’t of Human Servs. v. Hinds, 904 S.W.2d 629, 

633 (Tex. 1995); Cingular Wireless, L.L.C. v. Lee, No. 13-07-00132-CV, 2009 

WL 866796, at *5 (Tex. App.—Corpus Christi Apr. 2, 2009, pet. denied) (mem. 

op.); McClellan v. Ritz-Carlton Hotel Co., 961 S.W.2d 463, 464 (Tex. App.––

Houston [1st Dist.] 1997, no pet.).

Analysis

This was a lengthy jury trial with seven boxes of exhibits. Although much 

of the testimony is conflicting and of the “he said/she said” variety, the parties 

admitted voluminous emails into evidence. These emails provide the clearest 

picture of how events transpired in this case; thus, our review of the evidence will 

include these emails in great detail. Because the emails reference so many 

different people, we will first identify the primary witnesses for reference.
7

Primary Witnesses

The following people reported directly to Prieto as President and CEO of 

BellAero: Brian Linden, CFO; Ben Durrance, Director of Quality; Lou Ann 

Falkenstein, Director of HR and Administration; and Steve Bolton, General 

Manager of USH. Chris Colby, Quality Manager, reported directly to Durrance, 

and Lisa Baker, HR Generalist, reported to Falkenstein.

The following people were employed by BHTI: Blake, Executive Vice 

President/Chief Operating Officer and Chief Service Officer, to whom Prieto 

reported directly; Lee Tait, Senior Vice President of Quality Assurance and Chief 

Compliance Officer; Martha May, Chief HR Officer and Senior Vice President of 

HR; Ken Reeves, Director and Senior HR Business Partner, who reported 

directly to May; Tena Winkle, Director of Business Ethics and Legal Compliance, 

who reported to Tait; and Gerry Knowles, Ethics Specialist, who reported to 

Winkle. Blake and Tait reported directly to Dick Millman, the President and CEO 

of BHTI. Millman reported directly to William Clegg, the Executive Director of 

Ethics and Compliance for Textron.

Prieto Voices His Concerns About Bolton

The record shows that Prieto was concerned about Bolton’s performance 

beginning in at least January 2008. One of the exhibits is a document entitled 

“Steve Bolton Performance Discussion 8 April 2008.” It details issues Prieto was 

having with Bolton from March 2008 through May 22, 2008. In particular, on 

April 8, Prieto noted that he had given the Level III CAR to Durrance to handle 
8

because he thought that Bolton had not dealt with it timely. Prieto sent a draft of 

this document to Falkenstein on April 16, 2008. Around the same time, Blake 

had complained about Prieto’s performance to HR, and Ethics and Compliance,

personnel even though for the past three years, Prieto’s performance had been, 

in Blake’s opinion, “very good.”

On April 18, 2008, Prieto received an email on Blake’s behalf about setting 

up a meeting with Blake’s “high potentials.” Blake explained at trial that he was 

supposed to meet with and mentor employees, like Prieto, who had been 

identified as high potential in prior reviews.

On April 21, 2008 Prieto sent an email to Blake detailing several 

performance issues he had been having with Bolton; he also told Blake he had 

met with Bolton on April 8 regarding his performance. The email concludes, “We 

have a series of meetings scheduled this week in Ozark and will have a better 

idea of plan forward. But have started exploring options with HR.” Blake 

responded the same day with, “Thanks Mike. Keep me closely informed. This is 

a most unfortunate development.” On April 22, 2008, Prieto forwarded Blake and 

Falkenstein a couple of other emails regarding Bolton.

On April 23, 2008, at 5:09 p.m., Falkenstein emailed Reeves a document 

containing “temporary functional alignment changes” recommended by Prieto. 

Prieto appears to propose that certain direct reports to Bolton at USH also 

become direct reports to BellAero employees within the same functions, such as 

Directors of Quality, Program Management, and Supply Chain. Blake sent Prieto 
9

an email “late” the same day, directing him to return to BellAero from Ozark no 

later than close of business that day and to bring his “things.”

Prieto Voices Concerns About Blake to Tait

On April 24, 2008, Falkenstein forwarded Reeves the April 8 “Steve Bolton 

Performance Discussion” that Prieto had sent her and let Prieto know that she 

did so. She sent Reeves additional performance documentation the next 

morning. On April 25, 2008, at 8:57 a.m., Prieto emailed Tait, describing Blake’s 

email calling him back to BellAero. According to Prieto, “Since that exchange, 

Mike Blake has scheduled [a] meeting for Ken Reeves and I at 10[:]30. Based 

on the circumstances, I perceive I will be terminated at this meeting.” Prieto also 

stated, “I wish to formally go on record about [a] situation that I have dealt with 

now for ten months.” He then told Tait that Blake had directed him to hire Bolton 

in 2007 using “overwhelming” pressure. Prieto continued,

Now after eight months with Steve as General Manager, he is not a 

fit. We have taken a step back rather than forward. I have 

significant documentation to support. I have discussed this with 

Mike and declared a change with Steve is necessary. I perceive my 

termination is intended to protect Steve.

I cannot effectively perform under these conditions. This is not an 

acceptable work environment. It might not be an ethics issue but I 

don’t know who else to turn to.

Prieto met with Reeves in the morning on April 25 and with Tait later that 

afternoon. After Prieto’s meeting with Reeves, Blake sent Prieto the following 

email:
10

As a follow up to the meeting with Ken today I want to be clear on 

my expectations going forward. Pending further review and 

discussion that will be done in an expeditious manner, I am asking 

you to focus on the work at U.S. Helicopter. It is noted that some of 

the difficulties that were discussed today may make that difficult. 

However, the work being done at USH is far too important to our 

customers and shareholders for such distraction.

Accordingly, until further notice please execute to the established 

business objectives with the organization in place until I notify you 

directly. [Emphasis added.]

Investigation into USH Procurement Practices Begun

On April 28, 2008, Colby emailed Prieto, Linden, Bolton, Durrance, and 

Falkenstein about “serious process compliance issues” that had been uncovered 

“within the procurement process” at USH. These issues involved USH 

employees circumventing the normal purchasing process. Prieto forwarded the 

email to Tait, Winkle, Blake, Falkenstein, and Reeves, among others, on April 29, 

2008, with the following message:

Attached email outlines a series of serious compliance issues at US 

Helicopter. Based on our discussion last week regarding other 

ethics and personnel issues which have triggered investigation, I 

believe it necessary and appropriate to solicit your assistance 

investigating these additional issues, outlined below.

It appears USH management was involved in these issues. In 

addition, one of our employees has stepped forward with written 

documentation substantiating the issues below. Obviously, we are 

keeping the identity of the individual confidential.

Tait forwarded the email to BHTI’s legal department, copied to Prieto, with her 

own message:

I sent the below email to [BHTI legal]. We will be starting an 

investigation on the issues raised below immediately, and Charles 
11

[with BHTI Legal] suggests using the privilege. I will address all 

correspondence to you, and try to touch base in person later this 

afternoon.

That afternoon, Bolton emailed Blake that Prieto “said he was taking 

charge” of the procurement investigation and had directed Falkenstein to contact 

Textron and BHTI to request an investigation. In that same email trail, also 

responding to Colby’s April 28, 2008 email about the procurement issue, Bolton 

told Prieto that he had been briefed on the procurement issue and was ready to 

begin investigation when Colby’s additional information made the issue 

potentially “much deeper.” Bolton stated that he was ready to support whatever 

action was necessary and recommended meeting with Prieto, Linden, Colby, and 

others to discuss the matter. Bolton also forwarded the email chain to Blake, 

with the message, “I want to make sure you see this.” Blake in turn forwarded

this email chain to Tait and Reeves, saying,

[H]ere is another viewpoint you both needed to see.

In any event it appears none of us knew of the purchasing issue 

before the startling em from [Prieto] yesterday. Lee you will probably 

recall my insistence on looking at the purchasing system after we 

were gigged with a Level III CAR on property. I’ll ask Steve for the 

results of that review which may not catch an intentional violation as 

described.

On May 1, 2008, Durrance sent a letter terminating the services of a third 

party contractor at USH. That same day, Durrance emailed Prieto, Bolton, and 

others, including Colby, about the termination. Durrance also emailed Prieto and 

Colby indicating that he had tried to terminate the contract in the fall, but another 
12

USH employee had persuaded Bolton to continue the contract even though it 

was problematic. Prieto forwarded Durrance’s email to Tait, Falkenstein, Blake, 

and Reeves, with the message, “Attached is another ethics & compliance issue 

for Monday [May 5].”

Prelude to May 5, 2008 “Investigation Team” Visit to USH

On May 1, 2008, Blake emailed Prieto, Bolton, Tait, and Reeves, “The 

[May 5] visit is intended to review H.R. and Compliance issues at USH and BA 

first hand.” The same day, Prieto emailed Tait the following:

Discussed Monday[’]s visit with Mike B today.

Understand agenda will be to review: 1) 2008 objectives and 

performance to-date, 2) Bolton performance issues, and 3) ethics 

and compliance issues.

. . . .

Have concerns regarding: 1) addressing my ethics issues with Mike 

B in front of Mike B, 2) making sure right resources (people) are 

available, 3) visit will create significant distraction to our 2nd Q 

priorities, and 4) moving quickly through this investigation period.

The next day, Friday, May 2, 2008, Prieto emailed Blake, Tait, Reeves, and 

Falkenstein, recommending an agenda for the May 5 meeting:

2008 GDP Performance YTD

Level III CAR Performance

Other Performance Issues

Ethics & Compliance Issues

. . . .

It is important to move expeditiously through this investigation. 

Based on these performance issues, I have personally made 

commitments to our customers this week that I need help with.
13

Blake responded, “I am sure Lee and Ken will want to speak with several folks to 

air out any and all issues. Once back from Athens I will do the same. So I 

foresee folks getting their ‘say.’”

On May 2, Tait emailed Reeves and May:

There are a number of issues that have come jointly to the attention 

of Ethics and HR regarding Bell Aero/US Helicopters, and I thought I 

would try to clarify the issues and the actions being taken. . . .

Issue #1

Process used to hire Steve Bolton as GM for USH

(Meeting with Prieto on 25 April 2008)

Mike Prieto has discussed with both of us his concerns regarding 

this issue. My perspective is that HR should conduct an initial 

review to determine if, in fact, the process was followed to identify, 

vet and hire Steve Bolton for this position. Upon conclusion of this 

action, HR should turn the findings over to Ethics, and we will 

determine if any undue influence (as alleged) took place.

Issue #2

Allegation of violation of Procurement/Finance Processes

(Email from Prieto on 29 April 2008)

Since the allegations raised in this email are related to process 

violations, I believe the investigation should be conducted by Ethics 

and Compliance, and we will involve HR as necessary when/if the 

disciplinary phase of the process is reached.

Issue #3

Relationship, roles and responsibilities between [sic] Blake, Prieto 

and Bolton

(Various soft/hard copy documentation and conversations)

I will document separately for your review and edit my perspective 

on what should take place to clarify this issue, and then would 

suggest we issue a joint recommendation to Mr. Blake for his 

approval.
14

Tait and Reeves collaborated on a May 2, 2008 “‘Go Forward’ Plan,” a 

recommendation to Blake from Ethics and HR regarding Prieto and Bolton. Tait 

and Reeves’s recommendations consisted of weekly meetings between Bolton 

and Prieto to clarify objectives, Prieto’s putting Bolton on a performance 

management plan with clear performance objectives and regular meetings to 

review, and a plan for Blake to follow up in a couple of months. Tait forwarded 

the plan to Blake on May 2, 2008.

On May 4, 2008, Prieto emailed Tait in the same thread in which he had 

recommended an agenda for the May 5 meeting:

Am a little confused on couple of issues and would like to get some 

clarification. . . .

One, last Friday I raised with you and Ken Reeves what I believe is 

an ethics issue regarding Mike Blake directing me to hire Steve 

Bolton in July 2007. I provided written documentation of this ethics 

issue to Ken. Since that time, I have not received any response 

regarding my concern from you or Ken. The only feedback I have 

received is from Mike Blake. Consequently, I assume Mike is 

leading the investigation of the Steve Bolton performance issues, 

various compliance issues, and the ethics issue I have raised 

regarding Mike directing me to hire Steve.

Honestly, this approach seems very peculiar. I am certainly no 

expert on the investigation process but based on the situation there 

certainly appears to be a clear conflict of interest with Mike B either 

leading or participating in this investigation. Based on this conflict of 

interest, I believe the appropriate step would be for Mike B to recuse 

himself from the process and if he didn’t then someone needs to ask 

him to stand aside. Honestly, I don’t appreciate being put in the 

position of raising my issues with Mike B when he is leading /

participating in the investigation. Let alone the issues regarding 

Steve Bolton when Mike B directed me to hire Steve. Lee, this just 

doesn’t feel good to me. And for me that is a sign, there maybe [sic] 
15

an ethical issue with the investigation. I would appreciate if you 

could help shed some light on the situation.

Two, not clear what the plan is for overall investigation let alone 

Monday’s visit. Understand the investigation team arriving Monday 

will include Mike B, you, Ken, and Shannon. Agenda will include: 

1) 2008 YTD Performance, 2) DMCA Level III CAR Performance, 

3) Other Bolton Performance Issues, and 4) Various ethics and 

compliance issues. . . .

IMHO, the situation with Steve is untenable and needs to be dealt 

with quickly.

Tait responded,

I tried to call you twice on Friday, but was told you were in a 

meeting. I also sent you an email to that effect. Steve Bolton’s 

hiring is being looked at by HR to ensure we followed our processes. 

In addition, Ethics is reviewing the concern you expressed to me 

regarding undue pressure. In neither instance to my knowledge is 

Mike Blake involved, nor did I share any of our conversation with 

him. . . .

Prieto responded, acknowledging that Tait had tried to reach him. He elaborated 

further on his concerns:

One, until Ethics completes the investigation of my concern, Mike 

potentially has a conflict of interest in participating in the Bolton 

investigation. IMHO, until the Ethics investigation is complete, Mike 

B should be recused from the Bolton investigation. My position is 

that Mike directing me to hire Steve is directly linked to the 

performance issues I am dealing with. Bottom-line, Steve believes 

he reports to Mike B and not I. Consequently, I can’t get him to 

respond and he obviously doesn’t appear to be concerned about the 

performance issues I have raised with him.

Two, the fourth item on our agenda Monday is to review the ethics 

and compliance issues. One of the items will be to address in more 

detail my allegation that Mike B directed me to hire Steve B. It will 

be awkward for me to address that in front of Mike B.
16

On the morning of May 5, before the scheduled meeting at USH, Prieto 

emailed the following to Millman, to whom Blake reported:

Believe the following situation warrants your attention.

First of all, in July 2007 Mike Blake directed me to hire Steve Bolton. 

I have email documentation which I have provided to Ken Reeves. 

On Friday 25 April, I filed an ethics issue and discussed the issue 

with Lee Tait and Ken Reeves.

Second, Mike B and Team are scheduled to initiate an investigation 

today into Bolton performance issues and ethics and compliance 

issues at USH. Based on the situation, I believe Mike B has a 

conflict of interest and should recuse himself or someone should ask 

him to step aside from leading or participating in this investigation. 

IMHO, it is not appropriate for someone who has been accused of 

ethically contributing to a situation to investigation [sic], let alone 

judge. One of the various ethics issues to address is the very one I 

brought forward on 25 April.

Millman responded, “Thank you for sharing this with me. We must always err on 

the side of disclosure, as you have done. I will engage.”

The evidence, viewed in the light most favorable to Prieto, thus shows that, 

as of the May 5 meeting, Prieto was primarily concerned about Blake’s 

participating in an investigation of Bolton’s performance at USH because he 

perceived Blake was biased in Bolton’s favor and, instead of objectively 

evaluating USH’s performance, would blame any deficiencies on Prieto rather 

than Bolton.

May 5, 2008 Meeting at USH

As of May 5, 2008, there were apparently at least three pending 

investigations related to USH that had been documented: (1) an investigation by 
17

Tait and Reeves, initiated by and reporting to Blake, into Prieto’s and Bolton’s 

relationship and performance; (2) an investigation by Tait and Reeves into 

Prieto’s allegation that Blake had forced him to hire Bolton; and (3) an 

investigation into procurement issues being performed primarily by Colby. At the 

same time, Prieto was evaluating Bolton’s performance and exploring potential 

organizational changes in USH’s reporting structure.

There were at least two meetings that day. Before the first meeting, Tait 

told Prieto privately not to discuss the investigation into the alleged improper 

hiring of Bolton. According to Prieto, he told her that Blake had a conflict of 

interest with respect to evaluating Bolton’s performance issues, but she told him 

that she would not ask Blake to recuse himself. Blake participated in the 

meetings, at which USH’s performance was discussed. According to Prieto, 

Blake began by saying that he had a long-term relationship with Bolton and he 

was distancing himself from any aspect of Bolton’s hiring. At the conclusion of 

one of the meetings, Blake asked Prieto and Bolton to work out their differences; 

the testimony differs regarding Prieto’s response. According to Prieto, Blake 

affirmed at the meetings that as President of BellAero, Prieto “had the authority 

to take any action necessary . . . at” BellAero.

Aftermath of May 5 Meeting at USH

After the meeting, Durrance forwarded documentation to Tait about issues 

he had been having with Bolton. On May 6, Prieto emailed Millman again:
18

I apologize for taking your time. But, I was disappointed with results 

of the Blake Investigation Team yesterday and not sure who else to 

turn to.

First, prior to the meeting, Lee Tait asked to speak one-on-one. Tait 

apologized for not linking up last week regarding status. She 

explained my ethics issue (Mike Blake directing the hire of Steve 

Bolton) had been placed in process with two investigations, an 

ethics and human resources investigation. I appreciated the 

response but voiced concern about the Bolton performance 

investigation and Blake’s potential conflict of interest.

My perspective is since Blake directed the hire of Bolton[,] he was 

burdened with a conflict of interest regarding Bolton’s performance 

and consequently needed to recuse himself from any investigation 

into Bolton’s performance. And if Blake did not recuse himself, 

someone needed to ask him to step aside pending the investigation. 

Otherwise, his conflict of interest could damage the fairness and 

objectivity of the investigation into the Bolton performance issues. 

Tait explained Blake was not aware of my ethics issue and the 

pending investigation. Consequently, Blake cannot recuse himself. 

Tait asked me not to address this issue during our meeting. Tait’s 

position was Blake had no conflict of interest until the investigation is 

complete. I disagreed. It was my opinion, the company should err 

on the side of conservatism and have Blake removed from the 

investigation into Bolton performance, rather than potentially 

perpetuate an ethical issue.

On 25 April, I fully disclosed my ethics issue to both Ken Reeves and 

Tait. In addition, I provided Reeves copies of emails from Blake 

documenting his direction to hire Bolton. Tait asked me not to 

address this issue during the investigation into Bolton performance 

issues on 5 May. At the end of this 5 May meeting, I was held 

culpable for interpersonal relationship issues with Bolton and was 

asked to resolve them. With the information Tait and Reeves had, 

neither made any attempt to bring this information forward to weigh 

in on the investigation. I don’t know what to say other than I feel the 

company has betrayed me. I provided the company information to 

help deal with an ethical situation and the company did not step 

forward to help me. . . .

Two, during the meeting intro, Blake made a point of acknowledging 

a long standing relationship with Bolton. Blake went on to say that 
19

recognizing this relationship he made a point of disassociating 

himself from any activity regarding the consideration and hiring of 

Bolton. . . .

Three, in the 5 May meeting I presented what I thought was 

overwhelming evidence of Bolton performance issues, including 

2008 YTD AOP Performance, DCMA Level III CAR Performance, 

Other Performance Issues, and Ethics & Compliance Issues. 

However, there were no findings from the Blake Investigation Team 

of performance issues with Bolton, even with several examples of 

insubordination. Again, the conclusion was I was held culpable for 

an interpersonal relationship issue with Bolton and was asked to 

resolve. I was very disappointed with this conclusion. I am trying to 

make my team accountable to achieve our objectives and did not 

receive the support I need from the company.

It is clear from Prieto’s email that he felt he was being unfairly blamed for what he 

perceived as Bolton’s performance problems.

Prieto emailed Tait again on May 9, 2008 and copied the email to Blake, 

Reeves, Falkenstein, and Winkle:

On 29 April . . ., I requested your assistance to investigate the 

following issues [attached email thread is about procurement issues 

raised by Colby on April 28]. Via subsequent email on 1 May, I 

identified additional ethics and compliance issues for investigation 

[the third party contract termination issue]. During 5 May meeting in 

Ozark, I again presented a list of ethics and compliance issues for 

investigation.

I need to know if you are able to support my request for assistance 

with this ethics and compliance investigation. If so, I would 

appreciate specifics on your plan including – what, who, and when. 

Otherwise, I need to move forward with the investigation.

He explained at trial that he was concerned because he had not heard back on 

the procurement investigation and he had a responsibility to make sure it was 
20

completed. He was shocked when Tait responded in the same thread three days 

later:

Since you sent me the original email below, we have spoken in 

person twice, on the phone at least twice, and exchanged a number 

of emails regarding the subject below. As I informed you in Ozark 

on Monday last, the investigation is in process, with some aspects 

being handled by HR and some by Ethics and Compliance. It is not 

policy to provide you with interim updates, so I am somewhat at a 

loss to understand the purpose of your email.

By coming to me and to Ken Reeves, you have put the matter in our 

hands. It is inappropriate and unnecessary for you to be conducting 

any ancillary investigation, and if you are so doing, I must ask you to 

immediately cease.

The next day, Millman responded to Prieto’s May 6 email, in which Prieto 

had expressed concern about Blake’s being biased in the investigation of 

Bolton’s performance: “Thank you for sharing your perspective with me. I have 

asked Lee Tait to handle the issues below, coordinating as appropriate with 

Human Resources, and ensuring that we follow the established Bell and Textron 

processes. She will status me once the investigations are concluded.”

Although Prieto argues that the above emails from Tait and Millman are 

relevant to his claim that Bell told him to stand down on the labor mischarging 

investigation, they were sent before anyone at BellAero or BHTI was aware of 

any labor mischarging allegations, as explained below.

Prieto Proposes Organizational Changes Within USH

Meanwhile, on May 9 and 10, Falkenstein and Prieto had discussed

“organizational scenarios and staffing options” for USH. Prieto indicated that he 
21

wanted to put Bolton on a performance improvement plan (PIP),

5 reassign him to 

BellAero headquarters in Bedford, Texas, on special assignment to Prieto, and 

make Durrance the acting General Manager of USH. Falkenstein sent Prieto an 

email entitled “PIP update,” stating “Reeves will get with me this weekend on his 

evaluation of the USH investigation status . . . . I’m meeting with Martha May at 

7:30 Monday morning via phone.”

On May 13, 2008, Prieto emailed Falkenstein, Linden, Durrance, and 

Bolton, among others, the following email entitled “Organization Alignment”:

Under current BellAero reporting relationship, we have two 

relationships with Process Owners. One, Process Owner (Quality, 

Supply Chain, Program Mgmt/Engrg, M&S) has process but no 

functional responsibility. Two, Process Owner (F&A, Contracts, and 

HR/Admin) has both process and functional responsibility.

I would like to move forward with proposed Organization Alignment, 

reference attachment[

6

]. The proposed relationship, in effect, 

creates two solid line reporting relationships. To effectively 

communicate and implement, we must better define the RAA at the 

intersections between Process Owner and General Manager. I 

would like you to take the lead in defining that relationship. Most 

important we . . . understand and can effectively apply our 

guidelines.

. . . Ideally would like to roll-out . . . next week.

Durrance forwarded the email to Tait the same day.

On May 14, 2008, Prieto sent Reeves an email regarding Bolton:

 5

With respect to Bell, a PIP is a tool to help improve an employee’s 

performance and is not part of a routine evaluation.

6

This attachment appears to show the direct reporting changes that Prieto 

and Falkenstein had been discussing in April 2008.
22

Based on review of Steve Bolton’s performance and skill sets, Lou 

Ann and I believe the facts warrant action, ranging from performance 

Improvement Program (PIP) and reassignment up to termination. 

But we will stand down until you complete your investigation.

. . . .

Time is of the essence in addressing these performance issues.

Bolton emailed Blake the morning of May 15, 2008, forwarding emails from 

Prieto and complaining about Prieto’s having taken over a project; Blake 

forwarded the email to Tait and Reeves with the message, “His response 

indicates an unraveling situation.” The same evening, Bolton forwarded another 

set of emails from Prieto to Blake, in which Prieto discussed the need for an 

executive on the second shift at USH and gave Bolton the “opportunity” to 

volunteer; Blake forwarded this email to Reeves and Tait as well, appending, “I 

called Steve tonight and asked him to forward this e mail. Working nights may 

not be unusual but the tone and other behavior is approaching that . . . . My 

reason for calling Steve is to keep open and hopeful lines of communication to 

the ‘inside.’” Reeves responded on May 16 in the same thread, indicating, “I 

concluded my discussions at Bell Aero today and will be ready to make a 

recommendation on my findings as soon as I sort through my information.”

The Labor Mischarging Allegations Surface

At 9:40 a.m., on May 15, 2008, Durrance received an email from Colby 

indicating that USH “had 8 different people tell the DCAA auditor that they had 

been instructed to charge to a project other than the one they were working on. 
23

It is probable that DCAA will share the results with DCMA. Would some preemptive strikes and disclosure be appropriate?” Durrance forwarded the email to 

Prieto that morning, saying, “Suspect you are already on top of this. Chris made 

a recommendation worthy of your consideration – wanted to pass it to you 

promptly.” Late that evening, Durrance received an email from Suzi Prescott, a 

USH payroll employee, indicating that during a government audit on May 13 and 

14, at least nine employees had told the auditor that their foreman had either 

changed time on their timecards or directed them to change time on their 

timecards. Durrance forwarded the email to Prieto, Falkenstein, Bolton, Linden, 

and Colby with a “High” importance designation. He stated, “Just received this 

minutes ago. Very serious allegations about mis-charging of labor. Recommend 

immediate disclosure to Bell and agreement on investigation – resolution 

strategy.”

Prescott’s email stated that she had started timecard training with the USH 

employees on May 14, 2008. She additionally stated, “As of right now[,] I am in 

the process of pulling these employees[’] timecards for the past couple of months 

and will give the status of those findings asap. The auditor stated he would give 

preliminary findings to me Monday.” Her email listed by name all of the 

employees who had been interviewed and included the specific allegations made 

by one of the employees.
24

In response to Durrance’s email, Bolton replied,

You are absolutely correct that this is a potential serious violation. It 

seems to be isolated to one foreman. We have timekeeping pulling 

the time cards in question, checking the AWR system and work 

instructions. You can be assured that if deliberate mischarging 

occurred, action will be taken swiftly. There are specific written 

disciplinary procedures and actions that will be taken as appropriate. 

As soon as I have the facts, I will provide HR and Mike my 

recommendation.

Falkenstein responded the next day, May 16, with the following, which she 

forwarded to Prieto, Bolton, Linden, and Colby:

I have already notified Bell Ethics of this issue. Ethics is in 

agreement with our investigating the issue.

Kim [in USH HR] is working with Finance and Steve to investigate. 

I’ll be kept informed and team with them on the resolution.

We’ll report the investigation findings and resolution to Ethics. If we 

need help in investigating, we’ll let them know.

On May 16, 2008, Bolton emailed Blake complaining about Prieto’s 

involvement during the second shift at USH:

Mike, I do not know how much longer I can hold my team together 

with Mike P. here every week and not having any idea what he will 

be telling the employees. I know he is the boss and I respect that, to 

a point. I have done my best to keep from blowing-up and saying 

things I will regret. I will continue to be respectful, but the situation is 

becoming critical.

Blake forwarded Bolton’s email to Reeves and Tait, noting “Latest report from 

USH. This was not requested.”
25

Bolton Forwards a Confidential Email to USH Staff

On May 17––in the same email thread containing Prescott’s email that was 

forwarded to Durrance––Bolton emailed Prieto, Blake, Durrance, Falkenstein, 

Linden, and several USH employees:

I want to acknowledge and confirm the guidance received from 

yesterday’s review of the ongoing annual DCAA audit. You directed 

me and the US Helicopter team to stand down on the investigation 

we had initiated and coordinated with the BellAero Human 

Resources and Ethics officer and Bell Helicopter Ethics office in 

response to a potential mischarging violation. The reason for the US 

Helicopter stand down is that you did not think it appropriate for me 

personally or US Helicopter to conduct the investigation for the 

following reasons:

1. US Helicopter has had three Level III CARs . . . 

from DCMA

2. US Helicopter is late on one response and 

significantly late on another

3. Fear of retribution

4. US Helicopter has been ineffective in resolving 

issues

5. This could potentially become a Level IV CAR in 

your opinion

It is my understanding that BellAero will send an investigation team 

to US Helicopter headed by Ben Durrance and include Lou Ann 

Falkenstein, Brian Linden, Chris Colby, and others as required. In 

addition to the investigation of the potential violation, this team will 

conduct a 100% timecard audit of US Helicopter personnel. I 

request that Ben coordinate directly with me on his schedule and 

timeline to visit US Helicopter. I would also ask that Ben provide me 

a list of documents his team would like to review so we can assist in 

conducting this investigation as smoothly and efficiently as possible.
26

Prieto responded the next day at 4:06 p.m., “Your email yesterday shared 

confidential info and, consequently, was inappropriate. It is my direction you 

cease all written and verbal communication on this issue. . . . [U]ntil further 

notice it is my direction you stand down on all activities related to this issue.”

At 4:52 p.m., also in the same email thread as Bolton’s May 17 email, 

Prieto emailed Blake; he copied May, Reeves, Falkenstein, Tait, and Millman:

Last week during an annual DCAA Labor Audit at USH, auditor 

discovered several discrepancies. Initially, auditor reviewed twentyfive records with approximately seven discrepancies. One 

discrepancy was an employee declared his management directed to 

charge to work order other than what he was working on. Auditor 

came back next day and interviewed an additional fifteen 

employees. Of which, eight declared management had directed to 

charge to work order other than what they were working on. So, we 

have nine of forty declaring management directing labor 

mischarging. When the nine were asked why they did not step 

forward and report this prior to the audit, their response was 

“concerned about retaliation”.

On Friday 1700-1900 hours, Steve Bolton briefed background and 

facts regarding situation. Based on the seriousness of the situation, 

I had no choice but to direct USH to stand down on any further 

investigation and directed a separate team [Falkenstein, Linden, and 

Durrance] conduct an independent investigation. This investigation 

will consist of three elements: 1) further investigate specific 

discrepancies including interviews, 2) conduct thorough and 

complete audit of USH labor charging, and 3) conduct complete 

process review. Team is scheduled to start Monday with a 

completion scheduled for 30 May.

Steve Bolton sent the following email on Saturday. Bolton’s email 

shared confidential information and was totally inappropriate. This 

email was a breach of confidentiality. There are three issues: 

1) documents confidential discussion without proper notification, 

2) distribution includes individuals that have no reason to know this 

information, and 3) disclosed employees who had declared concern 
27

about retaliation. Via separate email, I have directed Steve Bolton to 

cease from any further activities or discussion of this issue.

This further demonstrates the performance issues with Steve Bolton 

that I have brought to your attention. I appreciate the investigation in 

process but it is time to act. Lou Ann and I have reviewed the facts 

and are ready to discuss our conclusion. [Emphasis added.]

Blake responded to all parties four minutes later, at 4:56 p.m.: “As you know 

Michael we are in the middle of a complicated and thorough review led by Lee, 

Ken and myself with oversight from Felipe [in BHTI Legal]. Please unde[r]stand 

we can[]not comment on your input.”

After receiving this response, at 5:05 p.m., Prieto forwarded the 

“Organization Alignment” email he had sent to Falkenstein, Linden, Durrance, 

and Bolton on May 13 to Blake, Reeves, Falkenstein, and Tait, with the following 

addition:

During the conclusion of your Investigation Meeting in Ozark on 5 

May, as I recall you confirmed I was the President of BellAero with 

corresponding authority. You asked what I planned to do and I 

responded with my intent to clarify and align Process Owner 

responsibility and authority.

I intend to implement this change next week and want to make sure I 

have your support. Please confirm.

Blake responded to this email at 5:09 p.m. with, “You are to stand down pending 

my review and approval.”

Prieto testified at trial that Tait called him after these emails were sent and

basically repeated the direction that she had sent me on the 12th of 

May; which was, if - - I’m to cease any investigations, ancillary 

investigations and that I will not be receiving any interim updates. 
28

She said that: I just want to make sure you understand that my 

12 May e-mail also applies to this labor mischarging situation.

Prieto acknowledged that Blake did not expressly tell him to stand down

from the labor mischarging investigation but rather it “was [his] perception of what 

[Blake] was telling” him. According to Prieto:

Again, that was my perception of his response to me is, any time 

that you bring forward evidence of fraud against the United States 

government, and the executive vice president of Bell Helicopter 

responds that, We cannot comment on your input, is inappropriate.

Prieto said that he nevertheless proceeded with the investigation he had 

proposed because it would have been criminal not to. He said he formed an 

investigative team of Falkenstein, Durrance, and Linden, who met on May 16, 

2008, and that they also brought on HR Generalist Baker. The team’s 

investigation into the labor mischarging allegations began on May 19, 2008.

BellAero Investigation into Labor Mischarging

On May 19, 2008, Falkenstein emailed Prieto that she had spoken with 

May that morning. The next day, Linden emailed Durrance, Falkenstein, Bolton, 

and Prieto, outlining Finance and Accounting’s role:

• First Finance and Accounting will research any recent potential 

changes in labor charging that can be identified via time cards. 

To accomplish this, I’ve spoken with Joe and his team is in 

process of reviewing all time cards over the past three months to 

identify any cards that have had changes in time charging that 

required the employee and supervisor to initial. This will give us 

an idea of the scope of labor changes in relation to the total 

population over those months. We will also check to ensure that 

appropriate documentation (e.g. initialing of the changes) was 

done. This subset of data (the time cards with changes) will then 

be further evaluated to determine the cause/reason for the 
29

changes. The purpose of this analysis will be to determine the 

depth and breadth of potential mischarging (if any) as it relates to 

changes in time cards. Any mischarging impact from here will be 

documented in relation to total hours charged and the 

aircraft/programs where changes may have occurred.

. . . . 

• . . . Typically, the gathering of this information will be incomplete 

at best as the auditor usually withholds information such as this 

until after the audit report is released. We are projecting that the 

audit will be completed and report submitted to DCMA around the 

end of the month.

Prieto responded to the BellAero team, telling them not to share any information 

with Bolton because of his May 17 email breaching confidentiality.

Prieto Goes Up the Chain

On May 21, 2008, Prieto forwarded to Millman Blake’s “we can[]not 

comment” response. Prieto added,

I again apologize for bringing another issue to your attention. But, in 

the attached email I have raised three serious and significant issues 

(mischarging, fear of retaliation, and breach of confidentiality) to 

members of the Bell Executive Leadership Team and the only 

response I received was “we can not comment on your input”. 

IMHO, this response was negligent and irresponsible. If Mike Blake 

and the other members have recused themselves due to an 

investigation, so be it. But, these are serious and significant issues 

that warrant quick, decisive attention and action. Consequently, 

Mike Blake should direct this request to someone who should 

assume responsibility to respond to my request.

BellAero has a plan to conduct a complete investigation into the 

mischarging situation. But relative to the fear of retaliation and 

breach of confidentiality, I have requested support. I have 

employees who have stepped forward to share their perspective and 

we, as a company, have betrayed their trust with a breach of 

confidentiality. That is unacceptable. And as President of BellAero, 

I have been directed by my supervisor, Mike Blake, to stand down 
30

on any organizational changes. Consequently, I do not have the 

authority to respond and implement actions I believe are necessary 

to deal with this situation. [Emphases added.]

It appears that Prieto was asking Millman to allow him to implement the 

organizational changes he had proposed and been told to stand down on.7

 In 

other words, he was advocating that those organizational changes would

alleviate the potential of retaliation by USH management.

Millman’s response the same day was noncommittal: “[T]he investigation 

is in the hands of the BHTI compliance officer and we will all be guided by the 

decisions of that office. Your point of view is of course important in that regard.” 

In response, Prieto noted,

Appreciate your response yesterday on Bolton “breach of 

confidentiality.[”] Will stand-by but recommend expeditious closure.

On another subject, on 25 April I raised ethics issue (Blake directing 

hire of Bolton) to Lee Tait and Ken Reeves. As part of the 

investigation, I assume someone from Ethics will be contacting me 

to schedule an interview. It has now been four weeks and no one 

has attempted to schedule an interview. Consequently, am 

concerned about the thoroughness and timeliness of this 

investigation.

Millman responded, “[T]he investigation is proceeding. The pace is set by the 

investigators and their intent on thoroughness. . . . All issues will be reviewed 

and resolved.”

 7

Prieto testified that this email shows he let Millman know he was 

investigating the labor mischarging issues after Tait had told him not to. He also 

testified that Millman’s use of the word “investigation” in his response referred to 

the labor mischarging investigation.
31

On May 22, Prieto forwarded two emails to Clegg, Millman’s boss: (1) his 

May 6, 2008 email to Millman, in which he raised his concerns about the initial 

hiring of Bolton and Blake’s continuing to head the HR investigation into Bolton’s 

performance, and (2) Millman’s response that Tait was coordinating the issues 

with HR. Prieto added the following message:

From my perspective, there are several ethics issues here.

1. Mike Blake directs me to hire Steve Bolton . . . prior to any 

interviews. . . . Violates BellAero Hiring Policy and Conflict of 

Interest.

2. I raise significant issues with Steve Bolton performance and 

intend to make organizational changes to address. Mike Blake 

directs me to stand down on any changes. Mike Blake leads 

Investigation Team into Bolton performance issues. Violates Conflict 

of Interest.

3. Prior to Investigation Team, I share information regarding 

ethics issues that have bearing on Investigation with Lee Tait and 

Ken Reeves. Neither brought this information forward during the 

Investigation.

4. Prior to Investigation Team, I bring to Tait’s attention concern 

about Blake participating, let alone, leading investigation into

Bolton’s performance with burden of Conflict of Interest (Blake 

directed hire of Bolton). Tait disagrees and requests I not bring this 

information forward during the Investigation.

Clegg emailed the same day in response, “I have asked Lee to run down the

facts so I’m sure someone will be in touch asap.”

Prieto’s Email to Clegg Prompts Response

On May 23, the next day, Millman and Blake came to the USH building but 

Prieto did not meet with them; according to Blake, Prieto “‘hid’ in his office,” but 
32

according to Prieto, he was at his hotel, and he thought he did not need to be 

there because the visit was tentative and would be quick. That afternoon, Ethics 

Specialist Knowles interviewed Prieto in his hotel room for about four or five 

hours; Prieto gave Knowles a large stack of documents regarding what had been 

going on vis a vis Blake, Bolton, and Prieto. Knowles’s notes state that Prieto did 

not trust Blake, that he would never trust him again, and that he complained 

about Blake’s telling him to stand down on the performance investigation of 

Bolton but then leading it himself.

Prieto testified at trial that Knowles told him that same day that he had 

substantiated Prieto’s complaints about (1) the hiring of Bolton, (2) Blake’s 

having a conflict of interest in ordering him not to make any organizational 

changes and heading the Bolton performance investigation, and (3) Blake’s 

“direct[ing] [Prieto] to stand down after Bolton [had] breached confidentiality.” But

in his May 27, 2008 report to the Deputy General Counsel, Knowles stated that 

the first two complaints were unsubstantiated, that Blake would have acquiesced 

if Prieto had declined to hire Bolton, and that Blake’s directive not to make any 

organizational changes was “a business decision and not a conflict of interest.”

He also found unsubstantiated Prieto’s allegation that Reeves and Tait had failed 

to bring forward “ethics issues that have bearing on [the] Investigation.” He 

noted that “[e]thics investigations are never discussed in open forum and it would 

have been improper for either Prieto or Tait to have surfaced them during the 

meeting.” Knowles did, however, substantiate Prieto’s allegations that Bolton 
33

had breached confidentiality of the labor mischarging investigation by forwarding 

the Prescott email to USH employees.

Knowles’s notes also state that when he asked Prieto about Blake’s 

May 18 “we can[]not comment” email, Prieto said that he “discern[ed] [Bolton’s 

May 17 email] as a major breach of confidentiality and want[ed] to take 

immediate action. In his interview with this investigator he planned to place 

Steve Bolton on investigative suspension, but was not allowed to do so by Mike 

Blake.”

Additionally, Knowles’s notes reflect that he asked Prieto why he sent both 

Millman and Clegg emails within twenty-four hours, and Prieto said he was “not 

happy with the pace of the investigation.” When asked if he had any final 

comments, the notes reflect that Prieto said Bolton “has turned his unsatisfactory 

performance at USHELO into a personality conflict between him and Prieto.” 

Knowles noted that Prieto “believes that he can hire and fire all who work at Bell 

AeroSpace Services except Steve Bolton who i[s] under the protection of Mike 

Blake.”

Knowles did not recall whether Prieto revealed that he was told to stand 

down on the labor mischarging investigation. According to Knowles, if Prieto had 

done so, he would have written something like that in his notes.

The record contains a May 29, 2008 email from Knowles to his boss, 

Winkle, noting, “When the shop floor workers ask, ‘[W]hy are we working such 

long hours[?] Did we mess up?’ Prieto tells them your management failed you. 
34

In effect throwing Bolton and his staff ‘under the bus.’ Poisonous relationships. 

He needs to be ordered to stay away from here. My opinion.” Winkle forwarded

the email to Tait the same day.

The Labor Mischarging Investigation Continues

On May 29, 2008, USH HR sent a letter to one of the foremen implicated in 

labor mischarging by employees, which stated,

As you know based on the results of a recent audit we are currently 

conducting an investigation of improper labor charging, during this 

review we have discovered information in your work area that will 

require further investigation.

Based on this information we feel it would be in the best interest of 

all concerned to place you on a paid suspension pending the 

completion of the investigation. We expect the final result of the 

investigation to be completed no later than 9 June 2008.

That same day, Blake and Prieto had a phone call, which Falkenstein 

documented in an email to May:

1. Mike Blake asked Mike Prieto “Have you made any 

headway in resolving the personal conflict with Steve Bolton?” 

Mike Prieto responded that “No,” he had not. He didn’t 

perceive it to be a personal conflict but an issue with Steve’s 

performance.

2. Mike Prieto indicated that he raised a breach of 

confidentiality issue regarding Steve Bolton to Mike Blake’s 

attention and only received a response from Mike that he had 

no comment. Mike Blake indicated that he had not responded 

in that manner, that it was Lee Tait that responded. Mike 

Prieto indicated, No, the e-mail was from him.

3. Mike Blake asked Mike Prieto why he didn’t attend a 

meeting with him and Dick Millman when they recently visited 

US helicopter. Mike Blake also asked him if he knew that they 

were coming. Mike Prieto responded that he was aware of 
35

their visit but wasn’t invited to participate. He also stated that 

he raised ethics and legal issues to Mike Blake’s boss 

regarding Mike and didn’t feel it was appropriate to participate 

in the meeting.

At that point Mike Blake indicated that he didn’t have anything else 

to say and the call ended.

Also on May 29, Prieto emailed Millman, Tait, and May with the following:

The following is an update to our investigation into the DCAA Audit 

(conducted on 13-14 May) and allegations of mischarging and fear 

of retaliation at USH. This investigation consists of three elements: 

1) further investigate specific discrepancies including interviews, 2) 

conduct thorough and compete audit of USH labor charging, and 3) 

conduct complete process review. Our independent Team started 

the investigation on Monday, 19 May. Lou Ann Falkenstein, our 

Compliance Director, is leading this Team. 

• Eight employees (direct charging) have stepped forward with 

signed statements that their management directed them to 

mischarge and were reluctant to come forward for fear of 

retaliation. Two of these employees were Leads who 

acknowledged they were directed by their supervisor to complete 

or change their employees’ timecards. These eight employees all 

report to one supervisor. This supervisor has been placed on 

paid suspension pending investigation.

• Two additional employees (direct charging) have stepped forward 

with statements alleging their management directed them to 

mischarge and were reluctant to come forward for fear of 

retaliation. However, they were not willing to sign a statement. 

These individuals report to a different management chain from 

the supervisor placed on suspension. So we have reason to 

believe this issue is not isolated to just one supervisor.

• We continue the interviews to better define the breadth and depth 

of the issue across the organization. We have an additional thirty 

interviews scheduled. We expect to complete the interviews by 6 

June.
36

• Once we understand the breadth and depth of [the] issue across 

organization, we will then conduct another series of interviews to 

quantify the size of the problem.

• We have reviewed the timecard procedures and training. Will 

start comprehensive training program next week. The labor 

reporting process is also under review but do not believe we have 

any issues.

• On 23 May, we disclosed our discovery and action plan to DCMA 

Enterprise. They appreciated our disclosure, especially having 

preceded the DCAA Audit results.

• Tomorrow, Lou Ann and I will brief DCMA Enterprise with latest 

information.

The attached email trail documents the issues I have previously 

brought to your attention. These are serious and significant issues 

(mischarging, fear of retaliation, and breach of confidentiality) that 

warrant quick, decisive attention and action.

On 17 May, Steve Bolton sent the following email. Bolton’s email 

shared confidential information and was totally inappropriate. This 

email was a clear “breach of confidentiality”. There are three issues: 

1) documents confidential discussion without proper notification, 

2) distribution that includes individuals that have no reason to know 

this information, and 3) disclosed employees who had declared 

concern about retaliation. Via separate email, I have directed Steve 

Bolton to cease from any further activities or discussion of this issue.

Relative to the fear of retaliation and “breach of confidentiality”, I 

have requested support. I have employees who have stepped 

forward to share their perspective and we, as a company, have 

betrayed their trust with a “breach of confidentiality”. That is 

unacceptable. And as President of BellAero, I have been directed 

by my supervisor, Mike Blake, to stand down on any organizational 

changes. Consequently, I do not have the authority to respond and 

implement actions I believe are necessary to deal with this situation.

On 21 May, you, Mike Blake, and Bob Kenney, all members of BHTI 

ELT, visited USH and participated in discussions with Steve Bolton. 

You and Mike Blake both had knowledge of Steve Bolton’s “breach 

of confidentiality”. To my knowledge, you and Mike Blake failed to 
37

take any action on this ethical issue. Failure to take action on this 

“breach of confidentiality” condones this inappropriate action. This is 

not the kind of support I was requesting especially in the middle of 

conducting an investigation.

Not withstanding [sic] the fact that I have raised three serious and 

significant issues (mischarging, fear of retaliation, and breach of 

confidentiality) to members of the Bell Executive Leadership Team 

and the only response I received was “we can not comment on 

your input”. IMHO, this response was negligent and irresponsible. 

If Mike Blake and the other members have recused themselves due 

to an investigation, so be it. But, these are serious and significant 

issues that warrant quick, decisive attention and action. 

Consequently, Mike Blake should direct this request to someone 

who should assume responsibility to respond to my request.

Prieto forwarded the email to Clegg asking for “support and action.”

Only Tait responded:

Thank you for your update regarding the labor charging issues at 

USH. Regarding your briefing to DCMA Enterprise today, please 

ensure that you confine your discussion with them to the facts 

surrounding the mischarging issue, and the actions taken to date. 

Your ancillary concerns regarding Steve Bolton’s email are being 

investigated, and are not appropriate to discuss with DCMA at this 

time.

If you would like to discuss this matter with me, I am available at 

either my office or cell phone number at your convenience.

[Emphases added.]

Prieto contends that this email from Tait shows that he was ordered to 

stand down from further investigating the full extent of the labor mischarging and 

from informing the government that the investigation had been compromised. 

But he admitted at trial that he had not seen this email before his meeting with 

the DCMA and that he did not disclose to the DCMA that Bolton had breached 

confidentiality by forwarding the Prescott email.
38

Prieto Continues to Elicit Assistance Regarding Bolton

On June 1, 2008, the day Prieto and Falkenstein met with the DCMA, 

Prieto sent the following email to Tait, May, and Millman:

FYI, regarding performance and ethics investigations. The following 

is an outline of a phone conversation with Mike Blake Thursday 29 

May around 1530 hours. Blake was calling from Italy and appeared 

to be in a taxi with others. It was somewhat difficult to hear with 

other conversations in taxi. Lou Ann Falkenstein took the call in 

Bolton’s office. I did not see his email, reference attachment, until 

after our call.

Blake – I called to find out if you have made any progress on your 

interpersonal relationship issue with Steve Bolton.

Prieto – First of all, the issues I have with Bolton are performance, 

ethics, and legal. On 5 May and subsequently, I have presented 

overwhelming evidence and documentation of Bolton’s performance 

issues which warrant disciplinary action. In addition on 17 May, 

Bolton sent an email regarding an investigation into mischarging and 

fear of retaliation. His email was a breach of confidentiality and 

compromised our investigation. This situation warrants disciplinary 

action.

Prieto – On 18 May, I shared this information with you and requested 

support and assistance. You responded with “we cannot comment 

on your input”. Also on 18 May, you directed me to stand down on 

any organizational changes. This is at least the 2nd time you have 

directed me to stand down on any organizational changes intended 

to address these performance issues. Your response to my request 

for assistance with mischarging, fear of retaliation, and a breach of 

confidentiality was negligent and irresponsible.

Blake – I did not send you that email. That was from Lee Tait.

Prieto – Mike that email was from you.

Blake – Lee Tait directed me to use those words.

Prieto – I have no idea but the emails I reference both came from

you.
39

Blake – Did you know Millman and I visited USH last week and why 

didn’t you attend?

Prieto – Yes I was aware of a short visit for a facility tour along with 

other stops but I was not invited. But more importantly, I have legal, 

ethics, and performance issues with Bolton and ethics issues with 

your behavior. These are serious and significant issues. I cannot 

condone this behavior. Consequently, did not feel it appropriate to 

attend. I have shared on several occasions these issues and my 

concerns with your boss and corporate.

Blake – I guess I don’t have anything else to say to you. [Emphasis 

added.]

Prieto forwarded this email to Clegg, who replied on June 3, 2008, “I will catch up 

w/Lee Tait to learn the status of the matters you raise. One of us will respond in 

the next several days.”

Despite Clegg’s response, Prieto emailed him the following on the same 

day:

I am absolutely bewildered by what appears to be a very slow, weak 

investigation process with certainly no feedback or action. Lack of 

quick, decisive disciplinary action condones these inappropriate 

behaviors. On several occasions, I have raised serious and 

significant legal, ethical, and performance issues to the BHTI ELT. 

On at least two occasions, Blake, my supervisor, has directed me to 

stand down on any organizational changes intended to address 

these issues.

The following is a quick summary of the issues requiring resolution.

1. July 2007, Mike Blake directs me to hire Steve Bolton 

(General Manager, US Helicopter reporting to President, BellAero) 

prior to any interviews. Also directs to cease consideration of other 

candidates even though Bolton has disconnects with position 

requirements. Blake implies TXT and Millman were involved in this 

decision. Violation of Hiring Policy and Conflict of Interest. 
40

2. March 2008, I raise significant issues with Steve Bolton 

performance and intend to make organizational changes to address. 

Mike Blake directs me to stand down on any changes. Mike Blake 

leads Investigation Team into Bolton performance issues. Violation 

of Conflict of Interest.

3. April 2008, I disclose ethics issues to Lee Tait and Ken 

Reeves regarding Mike Blake directing hire of Steve Bolton.

4. May 2008, prior to Blake Investigation Team I bring my 

concern about Blake participating, let alone, leading investigation 

into Bolton performance with burden of Conflict of Interest (Blake 

directed hire of Bolton) to Tait’s attention. Tait disagrees and 

requests I not bring this information forward during the Investigation. 

Violation of Conflict of Interest.

5. May 2008, during Blake Investigation Team, Tait and Reeves 

have information which I have previously provided and they do not 

bring forward to bear on the investigation. Violation of Trust and 

Integrity.

6. May 2008, Bolton’s email creates breach of confidentiality 

which compromises investigation into mischarging and fear of 

retaliation. Ethical and Legal Violation. I disclose to Blake, Tait, 

May, and Millman and request support. Blake’s response was “we 

cannot comment on your input”. Mike Blake directs me to stand 

down on any organizational changes. At this point, Bolton should 

have been placed on “Paid Suspension Pending Investigation”. 

BHTI response was negligent and irresponsible.

7. May 2008, BellAero investigation confirms USH management 

directed mischarging and fear of retaliation, via signed statements 

from employees. BellAero has place[d] one supervisor on “Paid 

Suspension Pending Investigation”. Even having validated the 

mischarging issue and fear of retaliation, BHTI ELT has still not 

taken any action on Bolton’s breach of confidentiality. Ethical and 

Legal Violation.

8. May 2008, Blake denies sending email with “we cannot 

comment on your input” and places responsibility with Tait.
41

I have been dealing with this situation for over a year now. Again, I 

would appreciate some support and action with serious and 

significant legal, ethics, and performance issues.

I trust your office is actively leading or participating in the review of 

these issues. [Emphases added.]

Clegg again replied,

Mike—I am indeed reviewing the investigatory [sic] alluded to in your 

emails. As I noted earlier, I have been in communication w/Lee Tait 

and her staff. I have every confidence in their thoroughness and 

abilities and have no reason to doubt their objectivity. I am sure that 

Lee or her staff will be responding to the matters raised once they 

have satisfied themselves with their assessment.

Prieto’s Employment Terminated

On June 2, 2008, Reeves called Prieto and asked to meet him on June 5, 

2008 at 12:30 “to brief findings from [the] HR Investigation.” Reeves terminated 

Prieto’s employment at the June 5 meeting. He also informed Prieto that 

Bolton’s employment had been terminated. The last signed interviews by Baker 

are dated June 5, 2008.

The day after Reeves fired Prieto, June 6, Falkenstein emailed the 

following to Reeves and May, entitled “Update – BellAero communication/work 

environment”:

Just a note to give you both an update on the communication held 

yesterday among the BellAero leadership team.

1. Ken held a conference call with the USH direct reports to Steve 

Bolton and announced that Steve was no longer with the 

organization. The meeting was short and there were a number of 

questions regarding – who’s in charge? What is next? And will there 

be an end to the constant audits, CARs etc.
42

2. Ken held a conference call with the BellAero ELT reporting to 

Mike Prieto and announced that both Steve and Mike were no longer 

with the organization. Discussion involved what should be 

communicated to the rest of the organization and customers. It was 

determined that nothing would be communicated with the customers 

at this time.

3. I coordinated a joint meeting immediately following the above with 

the two leadership teams to discuss consistent communication and 

next steps:

a. Verbal communication to employees would indicate that 

both leaders were no longer with the organization

b. The team decided nothing should be communicated to the 

customers at this point

c. Ben Durrance would contact the DCMA

d. Stressed the need to continue business as usual – keeping 

the customer focus

e. Teaming among the leadership team to address issues and 

support each other in support of the business

f. Be aware of how the leadership responds impacts the 

culture of the organization.

The meetings were well received from the standpoint of 

communicating the information as soon as possible. Everyone was 

shocked at the changes but are looking forward to making the 

business successful.

Finally, on June 11, 2008, Falkenstein emailed Tait, Knowles, and Winkle: 

“Let’s discuss the results of the labor mischarging investigation. I’d like your 

input before we take disciplinary action. . . . Attached is a summary of the 

investigation for reference.”
43

The attachment, entitled “Internal Investigation Interviews @ BellAero-US 

Helicopter Site,” states that fifty-five internal investigation interviews had been 

completed since May 19, 2008, that eleven of the fifty-five interviewed “made 

allegations of labor mis-charging,” that the allegations were made in avionics, 

that an avionics foreman had been suspended pending the investigation, that he 

and another foreman implicated a manager who denied involvement in labor 

mischarging but was nevertheless placed on suspension, that one of the foremen 

admitted guilt on June 5, 2008, that the team was “able to substantiate 53.4 

hours of labor mis-charging from looking at timecards,” and that the manager had 

admitted to using “1199 indirect time[

8

] for rework . . . to move the work along.” 

The attachment also shows that “HR and line management” recommended 

“[t]ermination for both employees based on labor mis-charging.”

Falkenstein testified that the investigation ended June 11, 2008.

The DCAA’s formal audit report is dated June 20, 2008. The record also 

contains Bell’s response dated July 7, 2008. That response, written by 

BellAero’s “Controller EDA,” notes that BellAero and USH investigated by pulling 

every time card over the “previous three month period.” Of the time cards pulled, 

 8

Indirect, or 1199, time appears to be time that is not attributable to any 

one contract, which was used by at least one of the departments to avoid cost 

overruns by keeping time actually billed to a project artificially low. It is time 

billed to USH and not the government on any contract. Thus, for any labor 

mischarging involving overruns that were charged to indirect time, the 

mischarging did not transfer hours to a different government contract, mitigating 

the effect of the mischaracterized hours.
44

4.4% had “line throughs,” but some were mistakes that did not affect billing (such 

as vacation time that was marked when it had not yet been earned). As reported 

by Bell, this search

netted 8 time card changes that may have represented directed 

mischarging. Note that even these could include valid reasons for 

generating the ‘line through’ but from an objective standpoint, it was 

the only way to identify potential problems via analysis of the time 

card itself. The conclusion to this analysis was that the worst case 

for ‘line through’ mischarging was .7% (8 possible mischarged line 

throughs’/ 50 sample size * 744 total ‘line throughs’ / 17,000 total 

time cards) of the total time cards (Note – line throughs on a time 

card do not usually amount to a full day so the % in hours will be 

much less).

BA/USH recognizes that this analysis is a limited approach to 

investigation of the incidents. It is possible for time to be mischarged 

without having a ‘line through’ although the extent of this type of 

incident cannot be determined via time card analysis. Therefore, 

BA/USH initiated the second prong of the approach to the 

investigation which consisted of a series of interviews with fifty five 

(55) employees . . . . A second round of interviews was conducted 

with this group. To facilitate discussion in the interview their 

timecards were pulled for the prior 12 months and all ‘line throughs’ 

were tagged. Eight of the eleven work in the Avionics Station under

the same supervisor. This in depth round of interview[s] yielded 53.4 

hours that were substantiated as being mischarged.

. . . . 

. . . The interviews documented much of the mischarging went from 

charging “direct” to “indirect” and not to another USG contract thus 

further mitigating any other contract overages. [Emphases added.]

Although Falkenstein’s report and this report mention fifty-five initial 

interviews and a second round of interviews, the record contains written interview 
45

reports for only fifty-one employees9 and no evidence that a second round of 

interviews was conducted as described.

Testimony About Labor Mischarging Investigation

Falkenstein, Linden, Durrance, and Baker––all of whom were on Prieto’s 

labor mischarging investigation team and all of whom testified that they regularly 

met with Prieto as a team about the investigation––testified that no one ever told 

them to stand down from investigating the labor mischarging allegations. The 

suspended foreman testified by deposition that he did not recall being

interviewed by anyone other than a female BellAero employee, who could have 

been Baker, about the labor mischarging allegations. That foreman also testified 

that he never intentionally instructed an employee to intentionally mischarge time 

from one category to another and that he only instructed an employee to charge 

time to overhead instead of an individual machine when authorized to do so by 

his supervisor.

Falkenstein and Durrance testified that the team did not do all of the thirty

interviews Prieto had contemplated in his May 29 email to Millman because they 

found that the employees had exaggerated the extent of the mischarging. One of 

the employees had said that she had a spreadsheet about the actual time 

mischarged, but Baker testified that the employee could not produce the 

spreadsheet when Baker asked for it. Prieto testified that he had talked to the 

 9

One of Prieto’s emails references the fact that some employees were too 

afraid to sign a written statement.
46

employee himself, told her he would come back for the spreadsheet later, and 

was convinced that she had it and would have given it to him had he not been 

terminated. Prieto testified, and the employee’s written interview shows, that she 

was worried about retaliation. This employee was interviewed by Baker on 

May 22, 2008 and did receive “counseling” as discipline for participating in 

mischarging.

Although Baker did not participate in pulling timecards, she conducted the 

majority of the interviews into the labor mischarging allegations. She testified 

that she met with Prieto daily while doing the interviews to update him and that 

after he was terminated, she met with Falkenstein. Although Falkenstein said 

Baker gave her both a written and oral final report, Baker testified that she did not 

prepare a final written report and no such report was introduced into evidence. 

Baker interviewed only those employees who had visible alterations on their 

timecards, and she did not do a second round of interviews. Three employees 

who had said they had written documentation of mischarging were not able to 

produce that documentation when Baker followed up. She confirmed that the 

allegations were isolated to ten or eleven employees who worked for the same 

foreman. Baker testified that she did not discontinue the investigation when 

Prieto was terminated and that the results that Bell reported to DCAA are what 

she reported to Falkenstein.

Tait testified that although some employees were disciplined for knowingly 

participating in the labor mischarging, they were not disciplined for participating in 
47

the investigation itself.

10 According to Tait, Bell fired Prieto because 

management had lost confidence in his ability to lead. She did not recommend 

firing him, but she agreed with the decision. She attended the meeting where the 

decision to fire him was made in late May or early June 2008; Blake may or may 

not have been involved in that meeting. Tait denied that Prieto was fired to stop 

his reporting illegal conduct. She confirmed that Falkenstein took over the 

investigation after his employment was terminated.

May testified that the decision to fire Prieto was made in late May or early 

June 2008, but before that, Reeves had come to her recommending that he be 

terminated. Millman decided to terminate Prieto.11 Reeves and Tait updated 

Millman, but Blake was not at the meeting. According to May, Bell had lost 

confidence in Prieto’s ability to lead.

Reeves confirmed that on or a little before April 25, 2008, Blake had asked 

him to “sit down with” Prieto and Bolton and “explore those issues” regarding 

their relationship. He confirmed that the decision to fire Prieto was made at a 

meeting in Millman’s office and that he had earlier recommended in a meeting 

with Bell counsel that Prieto be fired. He said that May and Tait decided to fire 

Prieto but that Millman had the final decision. Reeves testified that both Prieto’s 

 10The evidence shows that a foreman and manager were suspended for 

several days and two leads received written reprimands.

11Prieto’s counsel read from discovery in which Bell initially answered that 

Blake decided to fire Prieto; that discovery was later supplemented to state that 

Millman decided to do so.
48

and Bolton’s teams thought the relationship was not salvageable. Reeves also 

said that he told Prieto he was being fired for failing to work out his relationship 

with Bolton.

Millman testified that he thought Prieto had been allowed to handle the 

labor mischarging investigation and that Tait had appointed him to do so. He 

knew Prieto was moving forward on that investigation because of Prieto’s May 29 

email. Millman testified that he personally did not take steps to report the labor 

mischarging or to quantify the amount of labor mischarging. Millman said it was 

his decision to fire Prieto, that the final decision was made between a week to ten 

days before Prieto’s final termination date, and that he decided to do so because 

of the poor performance of Prieto’s unit, complicated by the serious wrongdoing 

that had occurred at USH “for which [Prieto] was ultimately responsible.” He 

agreed that “the violations going on in labor charging were a trigger point for [his] 

decision to terminate” Prieto’s employment. He also agreed that Bolton’s 

performance had not been good. He said he never told anyone to stop the labor 

mischarging investigation.

Prieto testified that as of April 2008, he had received positive feedback 

from Blake and had received a raise, which was tied to performance. At the 

April 22 meeting, Blake told him he was a high potential employee, was doing 

great things with little oversight, and was setting the standard for ethics and 

compliance. According to Prieto, he never got feedback about the 2008 AOP,

and BASS was exceeding its AOP. He said he told Blake that the 2008 AOP 
49

was a “stretch target” but Blake told Prieto to “give it your best shot.” Prieto was 

under the impression that after the April 25 meetings, he would hear back from 

Reeves and Tait because Reeves told him he would get back to him quickly and 

Tait said she would get back to him within the week.

According to Prieto, before he was fired, he had a plan to quantify the 

amount of mischarging that had occurred and had prepared a matrix containing 

estimates of potential mischarging amounting to between nine and seventy-five 

million dollars that USH would have had to pay back to the U.S. government. But 

he never showed this matrix to anyone and it was not introduced into evidence. 

According to Prieto, based on the facts he saw and the information he had before 

he was terminated, the investigation into the labor mischarging allegations was 

not completed as planned.

Evidence Not Sufficient to Raise a Material Fact Issue

Viewing the record in the light most favorable to Prieto, the following facts 

are supported by some evidence: (1) Blake was protecting Bolton to Prieto’s 

detriment, (2) the timing of Blake’s “we can[]not comment” email suggests he did 

not wish to communicate with Prieto about the labor mischarging investigation 

even though the email was clearly in response to Prieto’s email asking to make 

organizational changes at USH as a way of addressing Bolton’s performance, 

(3) Tait verbally ordered Prieto to stop the labor mischarging investigation 

sometime between May 18 and May 29, 2008, (4) no additional employee 

interviews were completed after the day of Prieto’s termination, and no second 
50

round of interviews was conducted as communicated by Prieto to Tait, Millman, 

May, and Clegg on May 29, 2008 and by BellAero to the DCAA in its final report, 

and (5) Millman’s reasons for terminating Prieto’s employment differed from the 

reason given to Prieto by Reeves.

Nevertheless, the evidence that cannot be disregarded also shows that 

(1) even if the missed AOP in the first quarter of 2008, the three Level III CARs, 

and the compliance issues at USH were not Prieto’s fault and his hands were 

tied to make organizational changes to address his issues with Bolton, they all

occurred while he was the President of BellAero, (2) none of Prieto’s labor 

mischarging investigative team––with whom he was regularly meeting during the 

interview process––testified that they were ordered to cease investigating or 

were told not to perform a thorough investigation, (3) in Prieto’s emails to upper 

management, he never complained about being told to cease the labor 

mischarging investigation, only his inability to make the organizational changes 

he thought necessary to deal with the USH management problems, including the 

employees’ fear of retaliation regarding the labor mischarging allegations that 

Prieto attributed in part to Bolton’s confidentiality breach, (4) in response to 

Prieto’s May 29, 2008 email detailing the investigation his team had been 

conducting, Tait knew he was discussing the “labor mischarging issue” and 

asked him specifically to confine his discussion with the DCMA to that issue, 

rather than expressing surprise that he had continued the investigation or 

ordering him to stop, (5) Blake had already initiated an active investigation into 
51

Prieto’s relationship with Bolton, which had been eroding, before the labor 

mischarging allegations were discovered by the DCAA auditor, and (6) there is 

no evidence to support that more than 53.4 hours of labor mischarging occurred 

at USH.

Thus, although we are not convinced there is sufficient evidence in the 

record to support a conclusion that Prieto was terminated to cease the 

investigation and cover up more extensive labor mischarging than the 53.4 hours 

reported by BellAero to the DCAA, even if there were sufficient evidence to 

support such a conclusion, Prieto has not raised a material fact issue that this 

was the sole reason for his termination. Although he claims all of the other 

reasons urged by Bell are pretextual, he has not presented evidence sufficient to 

raise a material fact issue disputing those reasons, i.e., that his unit was suffering 

from performance and compliance issues and he was not able to work out his 

differences with Bolton. That Blake may have helped contribute to these reasons 

by refusing to allow Prieto to fire, demote, or reassign Bolton is not sufficient; the 

other reasons for termination need only be legitimate, not necessarily fair. See 

Hinds, 904 S.W.2d at 633; Cingular Wireless, 2009 WL 866796, at *6–8; 

Robinson v. Devereux Found., No. 14-01-00081-CV, 2002 WL 1315631, at *2–3

(Tex. App.––Houston [14th Dist.] June 6, 2002, pet. denied) (not designated for 

publication); Griffith v. Wyndham Travel, Inc., No. 05-97-00372-CV, 1999 WL 

595818, at *4 (Tex. App.––Dallas Aug. 10, 1999, no pet.) (not designated for 

publication); cf. Ball v. Duty Free Ams., Inc., No. 4:08-CV-0232, 2009 WL 
52

780915, at *5 & n.70 (S.D. Tex. Mar. 23, 2009) (mem. op. and order) (“Topiol’s 

documented dissatisfaction with Ball’s work clearly was a legitimate reason for 

her termination, whether or not Ball agrees with his assessment of her 

performance.”). Accordingly, we conclude and hold that the trial court did not err 

by granting the directed verdict. See also Roberson v. Corp. for Econ. Dev. of 

Harris Cnty., Inc., No. 01-03-00566-CV, 2004 WL 2366937, at *3 (Tex. App.––

Houston [1st Dist.] Oct. 21, 2004, no pet.) (mem. op.) (holding that Sabine Pilot

claim was not available to plaintiff because she alleged that she was fired for

continuing to act legally rather than refusing to do something illegal). We 

overrule Prieto’s first and dispositive issue.

Conclusion

Having overruled Prieto’s dispositive issue,12 we affirm the trial court’s 

judgment.

TERRIE LIVINGSTON

CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; WALKER and MEIER, JJ.

DELIVERED: October 17, 2013

 12See Tex. R. App. P. 47.1.