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Employee Can Be Canned for Questioning Legality of Employer's Act
Description Jury damage award to at-will employee who was discharged soon after questioning legality of invoice overturned by appeals court. Texas common law only allows wrongful discharge suit when employee refuses to commit illegal act, not when employee questions legality of act.
Topic Employment Law
Key Words At-Will, Wrongful Discharge, Illegal Act
C A S E   S U M M A R Y
Facts Schlapper, advertising director, was fired by Ran Ken, which runs a chain of restaurants, a month after she angered her boss by questioning the legality of an invoice she was told to prepare so a liquor distributor could reimburse the Ran Ken for the cost of an employee's trip to Las Vegas. Since it was not clear if the payment was legal in Texas, the two companies agreed that the invoice would be listed as being for advertising. Schlapper sued for wrongful termination, claiming that she was attempting in good faith to find out whether she was being asked to perform an illegal act. Jury awarded her $143,000 in actual and punitive damages, finding that the sole reason for her dismissal was her good faith attempt to find out if she was being asked to perform an illegal act. Ran Ken appealed.
Decision Reversed. "The long-standing rule in Texas is that employment for an indefinite term may be terminated at will and without cause. The legislature has created a number of restrictions and exceptions to the at-will doctrine. The Texas Supreme Court, however, has created only one exception to the general rule, allowing a cause of action for wrongful termination when the employee has been discharged for the sole reason that the employee refused to perform an illegal act." The invoice in question was probably not illegal. Schlapper "would subject an employer to civil liability for discharging an at-will employee when the employee refuses to perform a legal act, simply because the employee questions or seeks to investigate its legality."
Citation Ran Ken, Inc. v. Schlapper, Slip Copy (1997 WL 671517, Ct. App., Tx.)
or
963 S.W.2d 102 (Ct. App., Tex., 1998)

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