Court Opinion

ID: 11213
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:02:34+00
Date Added: 2024-06-11T12:07:38.765935
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

                  ___________________________________

                              No. 95-50889
                  ___________________________________

GARY L. SOUTER,
                                                Plaintiff-Appellant,

                                versus

SCOTT & WHITE MEMORIAL HOSPITAL,
SCOTT, SHERWOOD & BRINDLEY FOUNDATION,
SCOTT & WHITE CLINIC, and ROBERT MASON,
                                                Defendants-Appellees.

         _______________________________________________

          Appeals from the United States District Court
                For the Western District of Texas
                           (94-CV-104)
         _______________________________________________

                            December 31, 1996

Before POLITZ, Chief Judge, and WIENER and STEWART, Circuit Judges.

PER CURIAM:*

     Plaintiff-Appellant, Gary L. Souter, appeals the district

court’s (1) summary judgment for Defendant-Appellee, Robert S.

Mason, holding that as a matter of Texas law, Mason could not be

liable for tortious interference with Souter’s employment contract

and (2) judgment, based on the jury’s verdict, that Souter take

nothing from Defendants-Appellees Scott & White Memorial Hospital;

     *
      Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
Scott, Sherwood & Brindley Foundation; and Scott & White Clinic

(collectively,     S   &    W).        Agreeing      that     Mason    cannot   be    held

personally    liable       for     tortious          interference       with    Souter’s

employment contract, we affirm the district court’s grant of

summary judgment.          Additionally, as the district court properly

instructed the jury on the elements of pretext and causation and

did not abuse its discretion in its evidentiary rulings, we affirm

the take nothing judgment in favor of S & W.

                                              I.

                             FACTS AND PROCEEDINGS

       Souter was employed by S & W as Assistant Administrator of

Personnel from July 1990 until his employment was terminated by S

& W, effective November 1993.                 Souter’s direct supervisor at the

Hospital was Mason, and his direct supervisor at the Clinic was

Chuck Gendron.

       While employed at S & W, Souter became concerned about (1)

certain employment practices that he, in good faith, believed

discriminated against minority applicants and employees insofar as

they disproportionately affected such persons when they sought

employment and advancement at S & W, (2)individual complaints of

discrimination     brought        to    his       attention    by     his   department’s

employees, and (3) the absence of an affirmative action plan at S

& W.    In an attempt to ameliorate the situation at S & W, Souter

developed personnel policies that standardized the creation of

positions,   the   assignment          of     salary    grades,       the   posting   and

                                              2
advertising of positions, the screening of applicants based on

qualifications, and the tracking of candidates for positions.

Souter alleged that Mason and other S & W administrators resisted

the implementation of these policies and frequently violated them.

     In   the    summer    of     1993,   Mason       announced   his   retirement,

effective September 1993.           S & W hired Gary Morrison as Mason’s

successor, and Morrison began to work in that position one month

before Mason left.         At about the same time that he announced his

impending retirement, Mason began an investigation of Souter.                     Dr.

Robert Myers, President of Scott & White Hospital, participated in

portions of the investigation and encouraged Mason to write a

report on Souter before leaving S & W.                 Mason submitted a memo to

Myers in which Mason recommended a “thorough discussion before

considering Mr. Souter’s continued employment.”

     Myers then appointed Gendron and Morrision to conduct an

investigation     into      the    advisability         of    continuing   Souter’s

employment. Souter was not notified of the investigation by Mason,

Myers, Gendron,       or   Morrison.          After    hearing    rumors   that   his

employment was in jeopardy, however, Souter confronted Myers who

acknowledged, without revealing any specific information, that an

investigation was pending but denied that any written document had

precipitated the investigation.               Souter expressed his opinion to

Myers that      any   complaints     that      Myers    may   have   received     were

undoubtedly related to personnel policies that Souter had created

and enforced.     After consulting with the Hospital’s legal counsel,

                                          3
Myers wrote a letter to Souter in which he refuted Souter’s

concerns and advised that the investigation was department-wide

rather than individually directed.

       But by October 1993, Souter had learned of the existence of

Mason’s   memo    and   of   the     mendacity     of   Myers’      denial   of   its

existence.    Before commencing any substantive litigation, Souter

filed a    petition     in   Texas    state    court    to   perpetuate      Mason’s

deposition testimony, as Souter was aware of Mason’s impending move

to California and anticipated that Mason’s actions or statements

ultimately could cost Souter his job at S & W.

       Meanwhile, Gendron and Morrison, who were still unaware of

Souter’s “lawsuit,” met and decided to allow Souter’s employment

with S & W to continue.       They informed Myers of their decision that

day.    Myers subsequently learned of Souter’s “lawsuit,” however,

and after a second meeting, Gendron and Morrison informed Souter

that his employment was being terminated.                    The reason for his

termination      ultimately    became        the   subject     of     the    instant

litigation.   According to S & W, it terminated Souter’s employment

after concluding that Souter’s perpetuation of Mason’s testimony

reflected poor judgment, vindictiveness, and a breach of trust with

the    management   team,     thereby    destroying      the     ability     of   the

management team to work effectively with Souter.                      According to

Souter, however, S & W’s proffered reason was pretextual, and he

was actually fired for opposing employment practices that he deemed

to be unlawfully discriminatory.

                                         4
     Souter filed his original complaint in the district court

against Mason, individually, alleging tortious interference with

employment, defamation, and retaliation under Title VII.                Souter

later amended his complaint to add S & W as a defendant, alleging

Title VII claims of retaliation and compensation discrimination.

The district court originally granted Mason’s motion for summary

judgment on all claims except the claim of tortious interference,

but subsequently granted Mason’s second motion for summary judgment

on the tortious interference claim as well as S & W’s motion for

summary judgment on Souter’s Title VII discrimination claims.

     The remainder of the case, consisting only of Souter’s Title

VII retaliation claim against S & W, was tried to a jury.                     It

returned   a   verdict   that   S    &   W   did   not   terminate   Souter   in

retaliation    for   opposing       allegedly      discriminatory    employment

practices at S & W.       The district court entered judgment that

Souter take nothing from S & W and assessed costs to Souter.                  He

timely appealed.

     On appeal, Souter maintains that (1) the district court erred

in granting Mason’s motion for summary judgment on the tortious

interference claim as there was sufficient evidence to raise a

factual issue whether Mason acted with actual malice in violation

of his qualified privilege to terminate Souter’s employment, (2)

the district court’s instructions to the jury did not properly

state Souter’s burden of proof of pretext or his burden of proof of

causation in his Title VII retaliation claim and that the erroneous

                                         5
instructions affected the outcome of his case, and (3) the district

court erroneously excluded evidence that was relevant to Souter’s

Title VII retaliation claim.

                                           II.

                                    ANALYSIS

A.   TORTIOUS INTERFERENCE WITH CONTRACT

       1. Standard of Review

       We review a grant of summary judgment de novo, using the same

standards as the district court.               Summary judgment must be granted

if the court, viewing the facts and inferences in the light most

favorable to the non-moving party, determines that “there is no

genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law.”2              If any element of the

plaintiff’s case lacks factual support, a district court should

grant a defendant’s motion for summary judgment.3

       2. No cause of action against Mason

       The district court held that, under Texas law, Mason could not

       2
      Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5th Cir.
1995)(citing Fed. R. Civ. P. 56(c)).
       3
        Id.

                                           6
be held liable for tortious interference with Souter’s employment

contract.    As Souter’s supervisor, Mason was S & W’s agent, and an

agent cannot be held liable for tortious interference with his

principal’s contract.

     To assert a tortious interference claim successfully, the

plaintiff must prove that (1) a contract subject to interference

exists, (2) the act of interference was willful and intentional,

(3) such intentional act was a proximate cause of the plaintiff’s

damage, and (4) actual damage or loss occurred.4        Even though Texas

is an employment-at-will state,5 an at-will employment agreement

can be the subject of a claim of tortious interference with

contract.6     As   a   matter   of   Texas   law,   however,   one   cannot

tortiously interfere with his own contract; liability for tortious

interference requires the acts of an interfering third party.7

Generally, an agent is not regarded as being a third party but

     4
      Johnson v. Hospital Corp. of America, 95 F.3d 383, 394 (5th
Cir. 1996)(citing Victoria Bank & Trust Co. v. Brady, 811 S.W.2d
931, 939 (Tex. 1991)).
     5
      Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 489
(Tex. 1991).
     6
      Sterner v. Marathon Oil Co., 767 S.W.2d 686, 688 (Tex. 1989).
     7
      Hussong v. Schwan’s Sales Enterprises, Inc., 896 S.W.2d 320,
326 (Tex. App.-Houston [1st Dist.] 1995, no writ)(citing
Schoellkopf v. Pledger, 778 S.W.2d 897, 902 (Tex. App.-Dallas 1989,
no writ)); American Medical Int’l, Inc. v. Giurintano, 821 S.W.2d
331, 335 (Tex. App.-Houston [14th Dist.] 1991, no writ)(citing
Baker v. Welch, 735 S.W.2d 548, 549 (Tex. App.-Houston [1st Dist.]
1987, writ dism’d)).

                                      7
rather as having the legal identity of his principal.8          Therefore,

an agent cannot be personally liable for tortious interference with

his principal’s contracts.9

     A supervisor is considered to be an agent of the employer.10

It follows that the agent/supervisor and the principal/employer are

considered to be one entity; the agent is the principal’s alter

ego, and both have the same financial interests.11           Consequently,

an agent/supervisor who terminates an employee cannot be held

liable     for   tortious   interference   with   an   employment   contract

between the employee and the principal/employer.

     Souter nevertheless maintains that Mason tortiously interfered

with the employment contract between Souter and S & W when Mason

submitted the memo to Myers that questioned Souter’s continued

employment.      At that time, Mason was Souter’s direct supervisor,

and he had the authority to terminate Souter as well as to conduct

investigations of his employment and to relay negative reports to

other members of the management staff. In the capacity of Souter’s

supervisor, Mason was S & W’s agent.        As S & W cannot be liable for

     8
      American Medical, 821 S.W.2d at 335.
     9
      John Masek Corp. v. Davis, 848 S.W.2d 170, 175 (Tex. App.-
Houston [1st Dist.] 1992, writ denied); Massey v. Houston Baptist
University, 902 S.W.2d 81, 85 (Tex. App.-Houston [1st Dist.] 1995,
writ denied).
     10
          See Hussong, 896 S.W.2d at 326.
     11
      Massey, 902 S.W.2d at 85; Hussong, 896 S.W.2d at 326-27;
Masek, 848 S.W.2d at 175.

                                     8
tortiously     interfering   with   its   own   employment   contract   with

Souter, neither can its agent, Mason, be liable for tortiously

interfering with S & W’s employment contract with Souter.

     And if that were not enough, the defendant to a tortious

interference claim may also assert an affirmative defense of

justification based on the exercise of his own legal rights.12 This

privilege is absolute if the defendant acted within his legal

rights.      Accordingly, there can be no examination into such a

defendant’s motive or good faith, but only into whether he acted

within his legal rights. Under Texas’ employment-at-will doctrine,

a supervisor is within his legal rights to interfere with an at-

will employee’s employment contract.13          A court cannot inquire into

a superior’s reason for terminating his supervised employee.             An

employer is not required to make a termination decision in good

faith; in fact, the privilege of termination is not lost even when

the superior acts out of malice or personal motive.14

     We reject out of hand Souter’s argument that Mason lost his

privilege to interfere with Souter’s employment when he allegedly

     12
      A defendant to a tortious interference claim also has an
affirmative defense of justification based on a good faith claim to
a colorable legal right even though that claim ultimately proves to
be mistaken. See Johnson v. Hospital Corp. of America, 95 F.3d
383, 394 (5th Cir. 1996)(discussing our recent clarification of the
relationship between a defendant’s good faith and his affirmative
defense of justification).
     13
      Hussong, 896 S.W.2d at 327; Jones v. Legal Copy, Inc., 846
S.W.2d 922, 925 (Tex. Ct. App.-Houston [1st Dist.] 1993, no writ).
     14
          Hussong, 896 S.W.2d at 327.

                                     9
acted with personal animosity and purely for personal gain.                 The

affirmative defense of justification, based on Mason’s exercise of

his legal rights in terminating an at-will employee, forecloses any

inquiry whatsoever into Mason’s bona fides in terminating Souter.

Texas courts have expressly held that the at-will doctrine bars a

tortious interference claim against a manager based on his decision

to terminate an employee,15 and those courts have extended this rule

to cover a tortious interference claim against a supervisor who

terminates an at-will employee.16           Based on existing precedent and

Texas’ employment-at-will doctrine, Mason acted within his legal

rights in terminating Souter’s employment and therefore may avail

himself of the absolute privilege of justification without being

subject to an inquiry into his good faith.

B. JURY INSTRUCTIONS

     The jury found, by a preponderance of the evidence, that

Souter was not terminated by S & W in retaliation for opposing

employment      practices    that      he      deemed   to     be    unlawfully

discriminatory. On appeal, Souter challenges the jury instructions

which recited      his   burden   of   proof    of   pretext   and   causation,

asserting that the purportedly erroneous instructions affected the

jury’s verdict.        Our review of the jury instructions, both as a

whole and as to those specifically challenged, satisfies us that

     15
          Jones, 846 S.W.2d at 925.
     16
          Hussong, 896 S.W.2d at 327.

                                       10
the district court properly instructed the jury on the applicable

law.

       Broad discretion is afforded to the trial court in fashioning

jury instructions, and we review them for an abuse of discretion.17

We are specifically guided as follows:

       First the challenger must demonstrate that the charge as
       a whole creates ‘substantial and ineradicable doubt
       whether the jury has been properly guided in its
       deliberations.’ Second, even if the jury instructions
       were erroneous, we will not reverse if we determine,
       based upon the entire record, that the challenged
       instruction could not have affected the outcome of the
       case.18

       Souter’s claims that the jury instructions imposed on him a

heavier burden of proof than is required by law to prove the

elements of pretext and causation are completely without merit.

First, the wording of the jury instruction on the element of

pretext is essentially identical to the language of St. Mary’s

Honor Center v. Hicks,19 which sets forth the requirements for

proving pretext in the context of a motion for summary judgment in

a Title VII discrimination case.          According to St. Mary’s, “a

reason cannot be proved to be a ‘pretext for discrimination’ unless

it is shown both that the reason was false, and that discrimination

       17
      EEOC v. Manville Sales Corp., 27 F.3d 1089, 1096 (5th Cir.
1994), cert. denied, ___ U.S. ___, 115 S. Ct. 1252 (1995).
       18
      FDIC v. Mijalis, 15 F.3d 1314, 1318 (5th Cir. 1994)(quoting
Bender v. Brumley, 1 F.3d 271, 276-77 (5th Cir. 1993))(citations
omitted).
       19
            509 U.S. 502, 113 S. Ct. 2742 (1993)(emphasis in original).

                                     11
was the real reason.”20         Correspondingly, the district court’s

instruction to the jury here stated: “A reason is pretextual only

if the Plaintiff shows both that the reason was false and that

retaliation was the real reason for Defendants’ actions.”21

     Even though the instant case was not decided on a motion for

summary judgment but rather at a full blown jury trial on the issue

of Souter’s termination, the elements that Souter was required to

prove to the jury are identical to those that he would have had to

show to defeat a motion for summary judgment.          We have previously

recognized that the elements and the burden of proof in a Title VII

discrimination case are the same in a Title VII retaliation case,

except that the plaintiff in a retaliation case ultimately must

prove that activity protected under Title VII caused him to be

unlawfully retaliated against rather than proving that he was

unlawfully discriminated against.22 Both the language of St. Mary’s

and the instant jury instruction on the element of pretext require

the plaintiff to prove the falsity of the defendant’s proffered

benign     reason   and   the   true   reason   for   the   termination   or

discrimination.     In reciting practically verbatim the language of

St. Mary’s, the jury instruction accurately charged the jury on

     20
          Id. at 2752.
     21
          Emphasis added.
     22
      See McMillan v. Rust College, Inc., 710 F.2d 1112, 1116 (5th
Cir. 1983); Long v. Eastfield College, 88 F.3d 300, 304-05 (5th
Cir. 1996).

                                       12
Souter’s burden for proving pretext.

     Second, the jury instruction on causation properly states

Souter’s burden of proof on that element, as set forth in our

recent decision in Long v. Eastfield College.23                        In Long, we

confirmed      that      the     ultimate     determination      in    an   unlawful

retaliation case is whether the conduct protected by Title VII was

a “but for” cause of the adverse employment decision.24                     The jury

instruction here is wholly consistent with our pronouncement in

Long, as it states that Souter must prove that retaliation was “a

determining         factor”     in   S   &   W’s    decision   to     terminate   his

employment, then defines “a determining factor” to mean that “the

termination would not have occurred but for [Souter’s] opposing

alleged unlawful discriminatory employment practices by [S & W].”25

Thus the district court properly instructed the jury on Souter’s

burden of proof on the element of causation.

C. EXCLUSION   OF   EVIDENCE

     Souter claims that the district court erred in excluding

evidence     of     Souter’s      complaints       of   unlawfully    discriminatory

practices at S & W.            We review evidentiary rulings of the district

     23
          88 F.3d 300 (5th Cir. 1996).
     24
      Id. at 305, n.4 (citing McDaniel v. Temple Indep. Sch. Dist.,
770 F.2d 1340, 1346 (5th Cir. 1985)), 308 (citing McMillan, 710
F.2d at 1116).
     25
          Emphasis added.

                                             13
court under the deferential abuse of discretion standard.26               Our

careful   review   of   the   court’s    rulings   on   the   admission   and

exclusion of evidence during the trial of this case reflects

nothing to show that the district court abused its discretion.

                                   III.

                                CONCLUSION

     Reviewing the jury instructions as a whole — and specifically

the ones addressing the law on unlawful retaliation — and the

evidence in the record, we conclude that, notwithstanding Souter’s

proof, a reasonable jury could have found that S & W’s evidence

carried the day with a valid, non-retaliatory, non-pretextual,

believable, and benign reason for Souter’s termination.           In short,

a reasonable jury could have found that Souter was not fired in

retaliation for his opposition to employment practices at S & W

which he in good faith believed to be unlawfully discriminatory.

Absent that kind of retaliation, S & W is protected by Texas’ at-

will employment doctrine. The jury instructions fairly recited the

applicable law, and the jury’s verdict is consistent with both the

instructions and the evidence in the record.             As for Mason, he

cannot be held liable for tortious interference with S & W’s

employment   contract    with   Souter:    An   agent   cannot   tortiously

interfere with his principal’s contracts; moreover, a supervisor

enjoys absolute immunity when exercising his rights to hire and

     26
      Kelly v. Boeing Petroleum Serv. Inc., 61 F.3d 350, 356 (5th
Cir. 1995).

                                    14
fire under the Texas employment-at-will doctrine.   Based on the

foregoing conclusions, the judgments of the district court are

AFFIRMED.

                               15