Court Opinion

ID: 9464538
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:36:48.948846+00
Date Added: 2024-06-11T17:38:42.009968
License: Public Domain

AINSWORTH, Circuit Judge,
dissenting:
I respectfully dissent from the failure of the court to reverse that portion of the district court judgment which denied relief to plaintiff Mercer. I agree, however, that the judgment should be affirmed insofar as it denies defendant’s counterclaims.
In my view the Texas statute of frauds, Tex.Bus. & Comm.Code § 26.01, does not apply to the oral employment contract between plaintiff Mercer and defendant C. A. Roberts Company involved in this case, for the following reasons.
First, I would hold that the employment agreement was an annual agreement beginning on January 1 of each year, and thus was to be performed within one year from the date of its making. See Tex.Bus. & Comm.Code § 26.01(b)(6) (Texas statute of frauds applies only to “an agreement which is not to be performed within one year from the date of making the agreement . . .”). The parties may have contemplated that it would take Mercer three to five years to develop the Dallas office of C. A. Roberts Company to maturity, but they specified no definite time for performance. On the contrary, the parties treated the agreement as if executed on an annual basis. See Miller v. Riata Cadillac Co., 517 S.W.2d 773 (Tex.1974); Bratcher v. Dozier, 162 Tex. 319, 346 S.W.2d 795 (1961); Hall v. Hall, 158 Tex. 95, 308 S.W.2d 12 (1957).
Second, and most importantly, Mercer has fully performed the agreement upon which he now sues. He does not seek recovery for prospective employment compensation, but only for the months during which he was actually employed and fulfilled his employment obligations. The majority points out that the Texas courts have on occasion held that partial or full performance by an employee of an oral employment contract is insufficient to render the statute of frauds inoperative. At least two of those courts, however, have stated there are circumstances in which an employee’s performance of the oral agreement does call for equitable relief — when nonen-forcement of the agreement would amount to fraud. Chevalier v. Lane’s, Inc., 147 Tex. 106, 213 S.W.2d 530, 534 (1948); Paschall v. Anderson, 127 Tex. 251, 91 S.W.2d 1050, 1051 (Tex.Comm.App.1936, opinion adopted).
Thus the Texas statute is subject to the exception that its provisions will not be maintained where to do so would amount to a denial of equity to a plaintiff in circumstances which show that employment for the year involved was induced by defendant’s fraud. It must be emphasized that it was not until August 1974 — of the year sued upon — that defendant C. A. Roberts unilaterally notified plaintiff Mercer that his compensation, bonus and salary, would be substantially reduced retroactive to January 1, 1974. Mercer had first been employed by defendant in 1968. It is undisputed that in August 1970 the parties agreed that Mercer’s compensation would be $870 per month plus 15% of defendant’s Dallas office contribution to profits for the year, retroactive to January 1, 1970. Thereafter, for four consecutive years, 1970-1973, Mercer was paid in accordance with this agreement. But defendant seeks nevertheless to abort its agreement and deprive Mercer of money fully earned, by resorting to the Texas statute of frauds. Defendant C. A. Roberts is thus attempting by fraudulent means to obtain an advantage over plaintiff which equity clearly forbids. Mercer was induced to work for defendant in the year 1974, believing his compensation would be the same as in the four previous years, but defendant changed the basis of compensation in August 1974 without mutual agreement and retroactive to January 1974. Certainly defendant should be estopped from attempting to avoid payment of just compensation in this inequitable way.
The majority concedes that C. A. Roberts Company changed Mercer’s compensation formula simply because his compensation had become disproportionate to that of oth*1241er employees. The court’s opinion observes that “The result may seem harsh since Mercer worked from January to August 1974 under the assumption that he would receive his incentive pay.” Yet Mercer’s earnings had risen only as a result of his doing what the company hired him to do — develop the Dallas office into a profitable enterprise. As C. A. Roberts Company made money, Mercer was to make money; that was the agreement. We should not and need not reach a “harsh” result in this case since neither the Texas statute nor the Texas decisions require it. The laborer is worthy of his hire. An appropriate order should be entered requiring that he be paid.