### IN THE UNI TED STATES COURT OFAPPEALS FOR THE FIF TH CIRCUIT

No. 11-40454

GARY SAWYER; DOUG KEMPF; PETER BARNABA, SR.; GEOFF RORREV; TIM GREGORY; ET AL, Plaintiffs - Appellants
v. E I DUPONT DE NEMOURS & CO, Defendant - Appellee

Appeal from the United States District Court for the Southern District of Texas

Before DeMOSS, CLEMENT, and ELROD, Circuit Judges. DeMOSS, Circuit Judge: Appellants are sixty-three former employees of E. I. du Pont de Nemours and Company (“DuPont”) who worked at the company’s manufacturing facility i n La Porte, Texas. They filed suit against DuPont alleging that they w e r e fraudulently induced to terminate their e m ployment with DuPont and accept employment with a wholly owned subsidiary. The district court granted summary judgment dismissing Appellants’ claims and entered a t a k e -nothing final judgment in favor of DuPont. For the following reasons, we affirm. U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D April 20 , 20 12 Lyle W . Cayce Clerk Case: 11-40454 Document: 00511830056 Page: 1 Date Filed: 04/20/2012No. 11-40454 BACKGROUND The appellants worked in the Terathane Products Unit at DuPont’s manufacturing facility in La Porte, Texas. In February 2002, DuPont announced plans to spin off a portion of its operations to form a wholly owned subsidiary to be known as DuPont Textiles and Interiors (“DTI”). The Terathane Unit was one of the units slated to be tran s f e rr ed to DTI, and was the only unit being transferred from the La Porte facility. The mechanics an d o p e r a t ors at the La Porte facility, including those in the Terathane Unit, were represent e d b y Local 900C of the International Chemical Workers Union Council (“Union”) and were employed under a single collective bargaining agreement (“CBA”) between D u P o nt a nd the Union. The CBA c o n t a ined a detailed seniority system and provided that employees could only be terminated or suspe n d e d for just cause. The CBA also included a provision allowing either party to cancel the agreement at anytime with 60 days’ written notice. Of the sixty-three appellants in this case, f if ty - nine were mechanics or operators in the Terathane Unit and wer e covered by the CBA when they worked for DuPont (“covered employees”). The other four appellants, Jesse Blancas, James Svoboda, Jessie Lloyd, and Tracy Hedrick-Thomas, were administrative staff or laboratory technicians in the Terathane Unit and were not covered by the CBA (“non-covered employees”). In September 2002, DuPont management and the Union began negotiations on how to handle the labor aspect of the Terathane Unit separation. Because DTI would be an independent legal entity, employees who transferred to DTI with the Terathane Unit would no longer be e m p l o y e d by DuPont. However, the CBA’s seniority system gave employees with higher seniority the right to transfer to other units at the La Porte facility. This raised the possibility that some of the Terathane Unit employees would exercise that right in order to stay with DuPont wh en the Terathane Unit transferred. If that happened,

2 Case: 11-40454 Document: 00511830056 Page: 2 Date Filed: 04/20/2012No. 11-40454

DuPont would n e e d t o train new operators for the Terathane Unit and could have been forced to lay off lower seniority employees in other units at the plant. DuPont considered cancelling the plant-wide CBA and bargaining for two new CBAs, one between the Union and DTI for the Terathane Unit employees, and another between the Union and DuPont for the rest of the La Porte employees, but decided against that option out of conc e r n that it would create tension between management and labor and increase the risk of a strike. DuPont and the Union eventually agreed on a two-phase process. During th e first phase, the Terathane Unit employees would be allowed to c h o o s e whether to stay with DuPont or join DTI. The employees who stayed with DuPont would leave the Terathane Unit and transfer to another unit at the La Porte facility. Those who joined DTI would remain with the Terathane Unit and

w o u ld be covered by a new CBA identical to their existing CBA, providing the same pay and benefits they received at DuPont. The second phase consisted of

anoth er round of negotiations between management and the Union , which woul d only be necessary if a significant number of Terathane Unit employees decided to stay with DuPont. The employees were required to make their decision between November 15 and December 16, 2002. B etw e e n O ctob er an d D e c e mber 2002, DuPont management began hol din g meetings with the Terathane Unit e m p l oyees to explain the details of the separation arrangemen t

. These meetings were led by Phil Anderson, the T er ath ane Unit m an a ger , Ro s lyn C acciotti, the Terathane Unit human re s ourc e s manager, and Johnny Ponder, a Terathane Unit first line supervisor. At these meetings, the Terathane Unit employees expressed concerns that DuPont might sell DTI to a third party. Many of the emp l o y e e s h a d worked for DuPont for a long time and wanted to protect their compensation and retirement packages by remaining a part of the DuPont family. Ap p e llants allege that they were repeatedly assured that DTI would remain a part of DuPont. The parties agree
3 Case: 11-40454 Document: 00511830056 Page: 3 Date Filed: 04/20/2012No. 11-40454

that Phil Anderson told the employees that a sale of DTI was “highly unlikely.” Anderson used charts and graphs to show that DTI was too la r ge to be sold b e c a u se it was bigger than any of its potential buyers. He often explained, b y way of analogy, that “we’re the whale, and fish don’t eat whales.” By the end of Phase one, virtually all of the Terathane Unit employees had signed agreements voluntarily transferring to DTI. The new CBA between DTI and the Union became effective on February 1, 2003. On April 14, 2003, DuPont announced that it was in the early stages of negotiations for the sale of DTI with

a third party. The third party turned out to be Koch Industries (“Koch”) and the sale was finalized roughly a year later on May 1, 2004. It was later revealed that DuPont and Koch discussed a possible sale of DTI as early as June 2002. Appellants maintain that their “pensions, pay, and benefits materially changed in a negative way” after Koch acquired DTI. 1 On November 7, 2006, Appellants filed suit against DuPont in the United States District Court for the Southern District of Texas on the basis of diversity jurisdiction. Appellants bro u ght state-law claims of fraud, fraudulent in ducement, and fraud by omission, alleging that DuPont fraudulently

m isrepresented that DTI would not be sold and that they relied on those misrepresentations and suffered damages as a result. On September 3, 2010, the district court granted summary judgment dism i ssing appellants John Clark’s and Tony Dahlquist’s c laims, holding that they are barred by the statute of limitations. On February 3, 2011, the district court filed two opinions granting summary judgment against all remaining plaintiffs. The court concluded that Appellants were at-will employees when they worked for DuPont and are theref o r e u n able to assert fraud claims against DuPont under Texas law. Appellants timely appealed.

The Terathane Unitemp loyeesreceived the sam e pay and benefit s at DTI that they 1
rec eivedatD uPont untilD TI w as pur chas ed by Koch. 4 Case: 11-40454 Document: 00511830056 Page: 4 Date Filed: 04/20/2012No. 11-40454
STANDARD OF REVIEW
This court reviews the grant of summary judgment de novo, applying the same standard used by the district court. Hill v. Carroll Cnty., Miss. , 587 F.3d 230, 233 (5th C i r . 2009). Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” F E D

. R. C IV

. P. 56(a). “A fact is ‘material’ if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Tex. , 560 F.3d 316, 326 (5th Cir. 2009) (quoting Hamilton v. Segue Software, Inc. , 232 F.3d 473, 477 (5th Cir. 2000)). “An issue is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party.” Id. (quoting Hamilton , 232 F.3d a t 477). When determining whether a fact issue exists, the court views “the facts and the inferences to be drawn therefrom in the light most favorable to the nonmoving party.” Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co. , 336 F.3d 410, 412 (5th Cir. 2003). Because jurisdicti o n i n this case is based on diversity, we apply the substantive law of the forum state. Holt v. State Farm Fire & Cas. Co. , 627 F.3d 188, 191 (5th Cir. 2010). Accordingly, Texas law applies to this appeal. We look to final decisions of the Texas Supreme Court to determine issues of Texas law. Chaney v. Dreyfus Serv. Corp. , 595 F.3d 219, 229 (5th Cir. 2010). “In the absence of such

. . . decision[s], we must make an Erie guess and determine, in our best judgment, how that court would resolve the issue if presented with the same case.” Id. (quoting Six Flags, Inc. v. Westchester Surplus Lines Ins. Co. , 565 F.3d 9 4 8, 954 (5th Cir. 2009)). “In making an Erie guess, we defer to int e r m e di a t e state appellate court decisions, unless convinced by other persuasive data that the higher court of the state w o u l d d e c ide otherwise.” Cerda v. 2004-EQR1

5 Case: 11-40454 Document: 00511830056 Page: 5 Date Filed: 04/20/2012No. 11-40454

L.L.C. , 612 F.3d 781, 794 (5th Cir. 2010) (quoting Mem’l Hermann Healthcare Sys., Inc. v. Eurocopter Deutschland, GMBH , 524 F.3d 676, 678 (5th Cir. 2008)).
DISCUSSION Appellants argue that the district court erred in concluding that they were at-will employees under Texas law when they worked for DuPont and that they

are therefore barred from bringing Texas fraud claims agai n s t their former employer. Appellants John Clark and Tony Dahlquist, who were both covered empl o yees while at DuPont, additionally argue that the district court erred in dismissing their claims as barred by the statute of limitations. At-will employees in Texas are precluded from brin gi ng fraud claims against their employers for loss of their employment. See Cahak v. Rehab Care Group, Inc. , No. 10-06-00399-CV, 2008 Tex. App. LEXIS 6011, at *7 (Tex. App.—Waco Aug. 6, 2008, no pet.) (“An at-will employee’s claim for fraudulent inducement is

. . . precluded as a matter of law.”); Mille r v. Raytheon Aircraft Co. , 229 S.W.3 d 3 5 8 , 381 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (“This court has held that an at will employee is barred from bringing a cause of action for fraud against his employer based upon the employer’s decision to discharge th e e mployee.” (internal quotations omitted)); see also Brown v. Swett & Crawford of Tex., Inc. , 178 S.W.3d 373, 379 (Tex. App.—Houston [1st D i s t

. ] 2 0 05,

no pet.); Crow v. Rockett Special Util

. D i s t

. , 17 S.W.3d 320, 329-30 (Tex. App.—Waco 2000, p e t denied), overruled on other grounds by Binur v. Jacobo , 1 3 5 S.W.3d 646, 651 n.11 (Tex. 2004). The question becomes whether Appell ant s ’ employment at DuPont was sufficiently non-at-will under Texas law to support

6 Case: 11-40454 Document: 00511830056 Page: 6 Date Filed: 04/20/2012No. 11-40454

Texas fraud claims against their former employer. We consider the covered and 2 non-covered employees’ employment status at DuPont in turn. 1. Covered Employees Employment in Texas is presumed to be at-will. Midland Judicial Dist. Cmty. Supervision & Corr. Dep’t v. Jones , 92 S.W.3d 486, 487 (Tex. 2002). An atwill employee may be discharged for “good cause, bad cause, or no cause at all.” Id. (quoting Montgomery Cnty. Hosp. Dist. v. Brown , 965 S.W.2d 501, 502 (Tex. 1998))

. To overcome the at-will presumption “the employer must ‘unequivocally indicate a definite intent . . . to be bound not to terminate the employee except under clearly specified circumstances.’” Id. (quoting Brown , 965 S.W.2d at 502);

see also Talford v. Columbia Med. Ctr. at Lancaster Subsidiary, L.P. , 198 S.W.3d 462, 464 (Tex. App.—Dallas 2006, no pet. ). The covered employees argue that they were not at-will when they worked for DuPont because they were employed under a CBA that contained a seniority system and that provided that they could be discharged only for just cause. They argue that the just cause and seniority provisions constituted clear and specific restrictions limiting DuPont’s ability to t erminate their employment, thereby altering the at-will presumption. Du P o n t a r gues that the covered employees

were at-will under T e x a s l aw because the CBA contained a provision allowing either party to cancel the agreement at anytime with 60 days’ written notice. We did not find a Texas S up re m e Court opinion addressing whether a CBA that limits an employer’s ability to discharge its employees, but can be cancelled with notice, alters the at-will presumption in Texas, and the cases cited by the dissent do not address this question nor do they indicate that a CBA will always

We note that App ellant s’ clai ms are not bas ed on any allege d violat ion of the CBA. If 2 they we re, fed eral law wo ul d cont rol and App ellant s’ em plo yment st atus unde r Texas law wo uld not be at iss ue. See Uni ted Pap erw orke rs Int’l Uni on v. Cham pi on Int’l Corp

. , 908 F.2d 1252, 125 6 ( 5th Cir. 199 0). 7 Case: 11-40454 Document: 00511830056 Page: 7 Date Filed: 04/20/2012No. 11-40454

overcome Texas’s strong at-will presumption. However, Texas appellate courts have held that employment agreements that limit the employe r ’ s ability to discharge for just cause, but allow the employer to terminate the agreement at anytime with notice, create an at-will employment relationship. In Hussong v. Sch w an ’ s Sa les Enterprises , 896 S.W.2d 320, 322 (Tex. App.—Houston [1st Di s t

. ] 1995, no writ), the appellant sued his former employer for breach of an employment agreement with terms similar to the CBA in this case. The agreement was for a fixed term of employment, which in Texas means that the employee can only be dischar g e d f o r good cause, but also included a provision allowing either party to cancel the agreement with 30 days’ written notice. Id.

a t 3 2 2 , 3 24–25; see also Lee-Wright, Inc. v. Hall , 840 S.W.2d 572, 578 (Te x . App.—Houston [1st Dist.] 1992, no writ) (“When [a] contract of employment is for a term, as opposed to ‘at will,’ the employer has the burden of showing good

cause for the discharge.”). The court held that despite its good cause component, the employment agreement created an at-will employment relationship because it allowed the employer to cancel the agreement at any time with written notice. Hussong, 896 S.W.2d at 325. Other Texas appellate courts have held the same
way. Se e, e . g., Curtis v. Ziff Energy Grp., Ltd. , 12 S.W.3d 114, 117–18 (Tex. Ap p.—Houston [14th Dist.] 1999, no pet.) (holding that a term empl o y m e n t agreement that could be cancelled by either party with notice created an at-will employment relationship); see a lso McGee v. Abrams Tech. Servs. , No. 01-06- 0 0 5 9 0 -CV, 2008 Tex. App. LEXIS 1616, at *9 (Tex. App.—Houston [1st Dist

. ] Mar. 6, 2008, no pet.) (“A contract that contains a stated term of employment but also contains an unambiguous voluntary termination clause does not ‘une quivo cally indicate’ an intent to alter the at-will employment relationship.”); C.S.C.S., I

nc. v. Carter , 129 S.W.3d 584, 591 (Tex. App.—Dallas 2003, no pet.) (“A contract of employment for a term may still be at-will if the agr e e m e n t allows termination for any reason.”).

8 Case: 11-40454 Document: 00511830056 Page: 8 Date Filed: 04/20/2012No. 11-40454

Lacking a Texas Supreme Court case directly on point, we are force d to make an Erie guess as to whether the CBA in this case altered the Texas at-will presumption. See Chaney , 595 F.3d at 2 2 9. We defer to the Texas appellate courts and conclude that the 60 day t e r m i nation clause rendered the covered employees’ empl o y m ent with DuPont at-will for the purposes of Texas law. Accordingly, they may not bring fraud claims against DuPont for l o ss of their employment. See Miller , 229 S.W.3d at 381. Because this issue is dispositive as to appellants Clark and Dahlquist’s claims, we need not consider the statute of limitations issue. 2. Non-covered Employees Th e non-covered employees argue that DuPont made oral agreements restricting its ability to terminate their employment and that these agreements

were sufficient to modify their at-will status. Specifically, th e y a l lege that D u P o n t agreed: (1) not to terminate their employment without cause; (2) t o adhere to a progressive discipline policy before their employment was terminated; and (3) to provide seniority rights that protected their employment i n the event of layoffs. DuPont argues that the alleged agreements lack the specificity necessary to alter the presumed at-will employment relationship. In Brown , 965 S.W.2d 501, the plaintiff filed suit all e ging that her employer breached an oral employment agreement not to fire her without good

cause. She alleged: “At the time I was hired as well as during my employment, I was told by [the hospital administrator] that I would be able to keep my job at the Hospital as long as I was doing my job and that I would not be fired unless there w a s a go od reason or good cause to fire me.” Id. at 502. The issue was whether the employer’s oral assurance was adequate to modify the plaintiff’s atwill employ m e n t status. The Texas Supreme Court, accepting plaintiff’s allegation as true, concluded that it was not.

9 Case: 11-40454 Document: 00511830056 Page: 9 Date Filed: 04/20/2012No. 11-40454

General statements like those made to Brown simply do not justify the conclusion that the speaker intends by them to make a binding contract of employment. For such a contract to exist, the employer must unequivocally indicate a definite intent to be bound not to t e r m i n a t e th e e m p l o y e e e x c e p t u n d e r c l e a r ly s p e c if i e d circumstances. General comments that an employee will n o t be discharged as long as his work is satisfactory do not in themselves manifest s u c h an intent. Neither do statements that an employee will be discharged only for “good reason” or “good cause” when there is no agreement on what those terms encompass. Without such an agreement the employee cannot reason ab ly expect to limit the employer’s right to terminate him. An employee who has no formal agreement with his employer cannot construct one out of indefinite comments, encouragements, or assurances. Id. The court went on to note that “[i]t would be unusual

. . . for oral assurances of employment for an indefinite term to be sufficiently specific and definite to modify an at-will relationship.” Id. at 503. Brown makes clear th at whil e an oral agreement can modify an employee’s at-will status, to do so it must unequivocally indicate th e employer’s “definite intent to be bound not to terminate the employee except under clearly specified circumstances.” Id. at 502; see also Matagorda Cnty. Hosp. Dist. v. Burwell , 189 S.W.3d 738, 740 (Tex. 2006) (reaffirming the holding in Brown). “To determine if particular oral statements manifest the required intent, courts consider both the context in which the statements were made and the l a n gu a g e employed.” Wal-Mart Stores, Inc. v. Guerra , N o . 04-08-00146-CV, 2009 Tex. App. LEXIS 4955, at *11–12 (Tex. App.—San Antonio July 1 , 2009, pet. denied). The strongest evidence in support of the alleged oral agreements are the non-covered employees’ affidavits, all of which provide as follows: During my employment with DuPont, I understood that I could not be terminated for any reason or no reason. Specifically, I understood that I could only be terminated on th e b a s i s of a reason directly related to my work performance. I n a d dition, if a work-related

10 Case: 11-40454 Document: 00511830056 Page: 10 Date Filed: 04/20/2012No. 11-40454

reason existed, I understood that I could only be terminated after the company’s progressive discipline policy was followed.
I a lso understood that I was protected from termination by my seniority. For example, in the event of a lay-off, I understood I could not be laid off unless everyone less senior to me was laid off. Similarly, I understood that if I elected not to transf e r t o DTI, I would retain my position at DuPont, and someone less senior than me would be laid off. To be clear, I understood that by virtue of my seniority, I would not lose my position at DuPont if I elected not to transfer to DTI. My understanding of these items comes exclusively from what I was t o l d by DuPont management during the years of my employmen t with DuPont. The affidavits provide no information as to the context of the agreements

or the specific language that was used. Nor do they explain when the agreements

were made, who they were made with, or wh ether the person making the agreement had the authority to do so. Appellants also provide no evidence of a separate “progressive discipline policy” for non-covered employees. Rather, they assert that under the alleged agreement, the policy that applied to covered employees applied to them, too. Lacking any evidence as to the specific language or context o f the agreements, the non-covered employees have failed to raise a fact issue as to whether DuPont indicated a definite intent to be bound not to t e r m i nate their employm e n t except under clearly specified circumstances. See Brown , 965 S.W.2d at 502; see also Friend v. CB Richard Ellis, Inc. , No. 2-08-306-CV, 2009 Tex. App. LEXIS 1189, at *6–7 (Tex. App.—Fort Worth Feb. 19, 2009, no pet.). Accordingly, the non-c o vered employees were at-will employees when they worked for DuPont and may not bring fraud claims against the company for loss of their employment.

11 Case: 11-40454 Document: 00511830056 Page: 11 Date Filed: 04/20/2012No. 11-40454

CONCLUSION
For the foregoing reasons, the judgment of the di s tri c t court is AFFIRMED.

12 Case: 11-40454 Document: 00511830056 Page: 12 Date Filed: 04/20/2012No. 11-40454

JENNIFER WALKER ELROD, Circuit Judge, dissenting in part: An employee either is or is not at-will. There is no such th i n g as somewhat at-will, or as the majority puts it “sufficiently non-at-will.” In fact, the majority’s conclusion brings to mind Miracle Max’s diagnosis that Westley was “mostly dead.” See Princess Bride (20th Century Fox released Sep. 25, 1987). 1 Here, the collective bargaining agreement unreservedly limits DuPont’s ability to fire employees “except for just cause.” The covered employees are not at-will. 2 I respectfully dissent. At-will employment in Texas means the employee may be fired “for good cause, bad cause, or no cause at all.” Montgomery Cnty. Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (T e x . 1 9 9 8). Texas law presumes employment is at-will unless the employer “unequivocally indicate[s] its intent to be bound not to terminate the employment except under clea rly specified circumstances.” Midland Judicial Dist. Cmty. Supervision & Corr. Dep’t v. Jones, 92 S.W.3d 486, 4 8 8 (T e x. 2002). It is difficult to conceive of a more unequivocal indication of intent than what DuPont exhibited in the CBA s e c t i o n entitled “Discharge or D i sciplinary Suspension,” which states: “The PLANT agrees that no emplo y e e will be dis c h a rged or given a disciplinary suspension except for just cause.” Indeed, the CBA outlines a detailed grievance procedure whereby f i r e d employees may contest their termination as “an unjust discharge.” This would 3

Inigo Mo ntoya : He ’sd ead

. H e c an’tt alk

. 1 Mi ra cle Max : Whoo- hoo- hoo, look wh o kn ow s so muc h. It just so happ ens that your friend here is only mo st ly d ead

. The re’ s a big dif fer ence betw een mo st ly dea d and all dea d. Mo stly dea d is sli ghtly alive. With all dea d, we ll, w ith all dea d ther e’s usually only one thing you can do. . . . Gothrough his clot hes and lookf or loos e c hange.
I agree wi th the majo rity that the no n - c o v e r e d e m plo yees are at- wi ll and that the 2
sum mary jud gmen t as to thos e a pp ellant s sho uld be aff irm ed. The“ Di sc harge or Di sc iplinary Sus pens ion”s ect ion pr ovide s: 3 An em plo yee, w ho believes he has been unjustly dis char ged, sha ll be allow ed 13 Case: 11-40454 Document: 00511830056 Page: 13 Date Filed: 04/20/2012No. 11-40454

be nonsensical if D u P o nt could fire the covered employees for good cause, bad cause, or no cause at all. 4 In spite of this unambiguous contract, the majority makes an Erie guess that Texas courts would conclude the CBA created an at-will r elationship. In doing so, the majority ignores numerous cases where similar CBAs overcame the at-will presumption. For example, Texas courts have held that CBAs that limit discharge to just cause and provide grievance procedures do not create a t -will employment. See Fort Worth Transp. Auth. v. Thomas , 303 S.W.3d 850, 858–59 (Tex. App.—Fort Worth 2009, pet. denied); Simmons Airlines v. Lagro t t e , 50 S.W.3d 748, 751–53 (Tex. App.—Dallas 2001, pet. denied). Fifth Circuit cases

are in accord. See, e.g. , Weber Aircraft Inc. v. Gen. Warehousemen and Helpers U n i o n , 253 F.3d 821, 823 (5th Cir. 2001) (“Under those provisions, to find i n favor of Weber’s suspension or discharge of an employee, the arbitrator has to find that Weber had just cause for the particular discipli n a ry a c t ion taken.”); Six Flags Over Tex., Inc. v. Int’l Bhd. of Elec. Workers , 143 F.3d 213, 214–15 (5th Cir. 1998) ( same); Gulf Coast Indus. Workers Union v. Exxon Co. , 70 F.3d 847, 849 (5th Cir. 1995) (same); Trahan v. Bellsouth Telecomm., Inc. , 71 F.3d 876, *1 (5th Cir. 1995) (same).

t e n ( 1 0 ) c alend ar days , fr om the dat e of notific atio n of dis char ge, in wh ich t o regis ter a com plai nt wi th the PLANT. A com plai nt allegin g an unjust dis char ge may be pr oce ss ed under Arti cle VI, Adjus tm ent of Gri evance s, beginning wi th the thir d st ep; o r u n d er Arti cle VII, Arbit ration; or both

. If it is agree d or det erm ined that an em plo yee has been unjust ly dis char ge d , t h e P LANT wi ll rein st ate wi t h o u t l os s of se niority and com pens ate suc h em plo yee for los t earnings at his regula r rat e of pay bas ed on his regula r wo rk sc hedu le in eff ect prior to the dis char ge, pr ovide d, how ever, suc h period of paym ent shall n ot excee d six (6) m onth s. Ot her CBA pr ovis ions als o beco me inexp licable if cover ed em plo yees coul d be fir ed for 4 any reas on. For exam ple , “[ d] uring the firs t nine (9) mo nths of empl oyme nt a new em plo yee wi ll be subject to dem oti on, tra nsf er, or ter min atio n by the PLANT and such act ion sha ll not be subject to the ter ms of this Agreem ent. ” If all cover ed em p l o y e es we re at- wi ll, then the CBA w ouldno t dis tinguis h t he ability t o f ire newem plo yeesw ithi n t heirf irs t nine mo nths

. 14 Case: 11-40454 Document: 00511830056 Page: 14 Date Filed: 04/20/2012No. 11-40454

Nevertheless, the majority believes that the CBA’s generic “evergr e e n” provision—that the “Agreement shall continue in full force and effect until terminated by either party with at least s ixty ( 60) calendar days’ notice in writing”—somehow renders the covered employment at-will. This is incorrect. 5 T o b e gi n with, the majority relies on a flawed assumption: that DuPont would be free to fire the covered employees for any reason by simply terminating the CBA with its protections. This ignores the fact that even if the C BA were terminated, federal law imposes an obligation on DuPo n t to maintain the grievance procedures as the status quo until post-contract negotiations reach an impasse —hardly the at-will freedom to fire someone “for good cause, bad cause,

6

or no cause at all.” Brown , 965 S.W.2d at 502. Moreover, similar eve r gr e e n provisions are standard in CBAs, and the notice language here simply restates the requirements already imposed by federal law. See Commc’ns Workers ofAm. v. Sw. Bell Tel. Co. , 713 F.2d 1118, 1122–2 3 (5th Cir. 1983) (noting the federal law requirement that parties must provide sixty days’ notice before terminating

a CBA). Not surprisingly, the majority can cite to no case where a CBA with such a standard notice provision only created at-will employment.

Unli ke the above just caus e pr ote cti ons in the se cti on enti tle d “D isc harge or 5 Di sc ipl inary Suspe nsi on, ” the evergreen pr ovis ion app ears much lat er in the CBA unde r the heading “ Sco pe and Lifeof Agre em ent. ” See Laborers He al th & We l f a re T r u st Fund v. Adv anc ed Lightw eight Concrete Co., 6 Inc. , 484 U. S. 53 9 , 5 4 3 n . 5 ( 1 988) (“ If the partie s we re inde ed at an im pas se , then the em plo yer’s st atut ory duty to mai ntain the st atus quo durin g pos tco ntr act negotiati ons . . . wo uld end. ”) ; Am

. Ship Bldg. Co. v. NLRB , 380 U

. S

. 3 0 0 , 3 18 (196 5) (“ [W] e hold that an em plo yer vi olat es neither § 8(a) (1) nor § 8(a) (3) wh en, aft er a bargaining im pas se has been reac hed, het em por arily shuts dow n his pla nt and lays of hisem plo yeesf or the so le pur pos e of bringin g ec onom ic pr es sur e t o b ear in sup port of his legit im ate bargaining pos itio n.” ); see also Uni ted Steel wo rke rs of Am. v. ASARCO, Inc. , 970 F.2d144 8, 1452 (5t h Cir

. 1992) ; Ele c. Ma ch. Co. v . NLRB , 653 F.2d958 , 963 (5t h Cir. 1981) (“ ‘Imp ass e’ wi thin the me aning of the f e d e r al labor law s pr es upp os es a reas onable eff ort at good faith bargain ing wh ich, des pit e nobleintent ions , doe s notconclu de in an agreem ent bet we en the par tie s. ” (quo ting NLRB v. Big Thre e Indus. , Inc. , 497 F.2d43, 48 (5t h Cir

. 1974) ). 15 Case: 11-40454 Document: 00511830056 Page: 15 Date Filed: 04/20/2012No. 11-40454

Next, the majority cites to a few Texas cases that supposedly answer our Erie question, but those cases are inapposite. Importantly, not one of them dealt with a CBA, and therefore could not overrule the above Texas cas e l a w wh e re CBAs overcame the at-will presumption. Rather, these cases involved employment contracts with individuals that expressly allowed the employer to fire the worker for any reason with sufficient notice. For example, in Hussong, the employment contract allowed the employer to fire the employee immediately under certain circumstances or “without cause” if the employer gave thirty days’ notice. Hussong v. Schwan’s Sales Enters. , 896 S .W.2d 320, 322 (Tex. App.—Houston [1st Dist.] 1995, no writ). See also Curtis v. Ziff Energy Grp., Ltd. , 12 S.W.3d 114, 117 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (finding at-will employment because the contract allowed the employer to terminate the employee’s contract with thirty days’ notice “at any time and for any reason”). By relying on cases with employment contracts with individual employees, the majority misses the distinction between terminating a CBA (after which covered

em p l o y e e s continue to work) and terminating an employee (after which that person is fired). 7 In making the Erie guess, I believe Texas courts would follow the Texas and federal case law where similar CBAs did not create at-will employment. The majority strains inapposite cases to arrive at a strange resu l t : a CBA that expressly limits discharge “except for just cause” actual ly c r eates an at-will rel ationship merely because it includes a boilerplate notice provision that recites the federal law requirements for terminating a C BA. For these reasons, I respectfully dissent in part.

Even Du Pont doe s not argue that the me re act of ter mi natin g the CBA wo uld fir e the 7
cover ed em plo yees , me rely cont endi ng that the CBA’s ter mi natio n wo uld allow Du Pont to bargainf

or a ne w CBA. 16 Case: 11-40454 Document: 00511830056 Page: 16 Date Filed: 04/20/2012No. 11-40454

17 Case: 11-40454 Document: 00511830056 Page: 17 Date Filed: 04/20/2012