The Texas Supreme Court has ruled that at-will employers can blatantly lie to employees under certain circumstances.
The case in question began way back in 2002, when Dupont persuaded some of their workers to transfer to a new subsidiary, claiming they had no plans to sell it. They then promptly sold it to Koch Industries, which cut their wages and benefits.
But, apparently, Texas lets employers to do whatever the heck they want, when they want, regardless of what they’ve promised.
DuPont’s workers had a union agreement that allowed them to transfer within the company instead of working for the new subsidiary. But when they expressed concerns about DuPont selling the new subsidiary to a company that wouldn’t honor their union contracts, DuPont lied in order to falsely reassure their workers.
Dupont then went ahead and sold the subsidiary any way — as MainStreet reports — was their plan the whole time.
Justice Hecht, who wrote the opinion, said:
“To recover for fraud, one must prove justifiable reliance on a material misrepresentation. A representation dependent on continued at-will employment cannot be material because employment can terminate at any time. Nor can one justifiably rely on the continuation of employment that can be terminated at will.”
MainStreet translates Hecht’s opinion into plain English:
“Employees should not rely on their employers to tell them the truth when it comes to continued employment.”
DuPont, apparently, could say whatever it wanted to get its employees to work for the subsidiary, up to and including lying. The fact that the sale negotiations had been going on the whole time indicates that DuPont willfully deceived its workers.
This Texas Supreme Court ruling makes no sense.
One question remains, though. Why does selling a subsidiary fall under Texas’ at-will laws? That makes no sense at all. But, for those who are wondering exactly what fraud is, The Free Dictionary’s legal dictionary defines it like this:
“A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.”
The court goes on to explain that, under the U.S. legal system, the following has to occur to consider something fraud:
“Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact, (2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.”
You commit fraud when you lie to your insurance company to get a payout. You defraud your investors when you lie on your earnings reports to inflate your share prices. Since all five of these occurred between DuPont and its employees, it should be considered fraud on the part of DuPont. But, apparently, under Texas law, employees cannot justifiably rely on any statements made by their employers, because an employer can fire them at any time for any reason, or no reason. That knocks out number 4, nullifying the plaintiffs’ entire case.
So that sends us back to square one. Our supposedly fair and impartial court system has become a travesty. It used to uphold the rights of workers, minorities, women, and other groups subject to abuse and discrimination. Now, it only upholds the rights of the rich and powerful, to the detriment of everyone else.