Wal-Mart Stores, Inc. and Ed Garza, Individually and as Agent for Wal-Mart v. John Clyde Guerra ( 2009 )

i i i i i i
MEMORANDUM OPINION
No. 04-08-00146-CV
WAL-MART STORES, INC., and Ed Garza, Individually and as Agent for Wal-Mart,
Appellants
v.
John Clyde GUERRA,
Appellee
From the 229th Judicial District Court, Starr County, Texas
Trial Court No. DC-04-86
Honorable Alex W. Gabert, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Catherine Stone, Chief Justice
Karen Angelini, Justice
Phylis J. Speedlin, Justice
Delivered and Filed: July 1, 2009
REVERSED AND RENDERED
Appellants Wal-Mart Stores, Inc., and Ed Garza, individually and as agent for Wal-Mart,
appeal from a judgment in favor of appellee John Clyde Guerra, a former Wal-Mart employee.
Guerra sued Wal-Mart and Garza for breach of contract and intentional infliction of emotional
distress. A jury found in favor of Guerra on both claims and awarded Guerra over $2.5 million in
damages. On appeal, Wal-Mart and Garza challenge the legal sufficiency of the evidence to support
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the jury’s findings that Wal-Mart entered into an oral contract with Guerra to employ him for the
duration of his working life, and that Wal-Mart and Garza intentionally inflicted severe emotional
distress on Guerra.1 Because we agree the evidence is legally insufficient to support both of Guerra’s
claims, we reverse and render judgment that Guerra take nothing.
FACTUAL AND PROCEDURAL BACKGROUND
In 1993, Guerra applied for employment as a cashier at a Wal-Mart store. On the employment
application, Guerra signed his initials to the following statement:
I understand that this application is not a contract, offer, or promise of employment
and that if hired I will be able to resign for any reason. Likewise, the company can
terminate my employment at any time with or without cause. I further understand
that no one other than the President of Wal-Mart Stores, Inc. or Vice President of its
People Division has the authority to enter into an employment contract or agreement
with me, and that my at-will employment can be changed only by a written agreement
signed by the President of Wal-Mart Stores, Inc.
(emphasis added).
Guerra was hired to work as a cashier in the electronics department of a Wal-Mart store.
When hired, Guerra was given a handbook outlining company policies and benefits. Upon receipt
of the handbook, Guerra signed another acknowledgment which stated,
[t]he stated policies and benefits are not intended to create nor be interpreted in any
way as a contract between Wal-Mart and you unless otherwise advised in a written
agreement signed by you and the President of the company or the Vice President of
Wal-Mart’s People Division. Your employment with Wal-Mart is on an “at-will”
basis. This means you are free to terminate your employment at any time and that
Wal-Mart equally reserves the right to terminate the employment relationship with
or without good cause and without prior notice.
… Although appellants’ brief also asserts the evidence is factually insufficient to support the jury’s findings,
1
we need not address these issues because they are unnecessary to the disposition of this appeal.
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Over the next eight years, Guerra held various positions at several different Wal-Mart stores.
In 2001, Guerra was promoted to store manager of the Rio Grande City Wal-Mart store. According
to Guerra, immediately after his promotion was announced, he was told by a Wal-Mart regional
director and two Wal-Mart vice-presidents2 that as long as the store made a 4% profit over the
preceding year and the store’s shrinkage was kept under 1%, the Rio Grande City Wal-Mart store
would be “for you for the rest of your life.”
After Guerra served as store manager for sixteen months, Wal-Mart received a complaint
from another Wal-Mart employee that Guerra was violating company policies by auctioning store
merchandise to employees and engaging in other questionable practices with respect to store
merchandise. After the complaint was made, Guerra’s immediate supervisor, regional director Ed
Garza, had a meeting with Guerra. Guerra claimed that during this meeting he was abruptly
confronted with unfounded, uncorroborated, and uninvestigated allegations that he had stolen from
Wal-Mart. Guerra denied the allegations. After conducting an investigation, Wal-Mart decided to
demote Guerra to assistant store manager of another store. Guerra refused to take the demotion and
stopped working for Wal-Mart.
Guerra then filed suit against Wal-Mart and Garza. In his amended petition, Guerra alleged
Wal-Mart, acting by and through its agents, had made an oral agreement to employ him for the rest
of his working life, as long as the Rio Grande store met certain performance goals each year. Guerra
alleged he met these performance goals, and therefore, Wal-Mart breached its employment contract
2
… It is undisputed that neither of these individuals was the Vice President of W al-Mart’s People Division.
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with him. Additionally, Guerra alleged the initial misconduct complaint was mishandled by Garza,
giving rise to Guerra’s claim for intentional infliction of emotional distress.
In answer to Guerra’s suit, Wal-Mart and Garza denied Guerra’s allegations and raised
various defenses. First, Wal-Mart and Garza alleged there was no agreement to modify Guerra’s at-
will employment status. Second, Wal-Mart and Garza alleged that even if there was an agreement
to modify Guerra’s at-will employment status, it was not binding on Wal-Mart because it was not
within the scope of the authority of any agent. Third, Wal-Mart and Garza alleged that even if there
was an agreement, it was unenforceable because it was an oral agreement barred by the statute of
frauds, and it lacked the consideration required for a lifetime employment contract.
The case was tried to a jury. At trial, the evidence showed that Guerra was hired as an at-will
employee in 1993, and was notified of his at-will employment status and that any modification to
his employment status had to be in writing and signed by a particular officer. In 2001, Guerra applied
for and interviewed for a store manager position. Guerra was informed of his promotion to store
manager at a “year-end” meeting held in July or August of 2001 and attended by thousands of Wal-
Mart managers. At the meeting, Wal-Mart Regional Vice President Mike Moore and Wal-Mart
Divisional Vice President Larry Williams announced Guerra’s promotion to manager of Wal-Mart’s
Rio Grande City store. Wal-Mart District Manager Will Tippens and Moore had recommended
Guerra for the position, and Williams had approved the promotion. Guerra, who grew up in a nearby
city, was pleased to be given the opportunity to manage the Rio Grande City store.
After his promotion was announced, Guerra approached Tippens, Moore, and Williams to
thank them for the promotion and to discuss his goals for the Rio Grande City store. One of Guerra’s
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goals was to earn a bonus for the store employees, which was achieved by meeting certain store
performance goals. Guerra testified that he and Moore then had the following conversation:
[Moore said:] “Well I tell you what, if you make, if you meet a 4 percent over last
years net, every year, which qualifies you for the bonus, and you go under 1 percent
in shrink after the year is over, that store can be there it’s for you for the rest of your
life.” I said, what? He says “Yes for as long as you want to be there, that’s your baby
as long as you make the numbers...”
[sic passim].
According to Guerra’s testimony, Williams and Tippens then said:
And, Mr. Larry Williams said, “I vouch for that,” he says, “You make your numbers,
you’re there,” and then Will Tippens says, “And I ... second you,” you know like, so
then they gave me a date to report which was like two weeks later on.
[sic passim].
Guerra started as store manager on September 1, 2001. A week or two later, Williams and
Tippens visited the Rio Grande City store. Guerra testified he had the following conversation with
Tippens and Williams:
[Tippens] says “You know what, this store looks darn good,” he says “Your sales are
up,” he says, uh, “You are still committing to what you told me over there,” I said
“yes, sir, they are up there and I had 10 commitments placed on the hallways and the
number one was to get the bonus, stay up in sales, do shrink, you know, on and on. He
says “Well, and I still say I still repeat myself as long as you make your numbers,” he
says, “You can be here for the rest of your life or wherever you choose to.” I said
okay. And Larry Williams again just said, “That’s the same for you,” and they left.
[sic passim]. At the conclusion of his testimony, Guerra characterized the agreement as follows,
“The agreement was as long as I met my numbers...I was guaranteed to be there at that store.”
Tippens, Moore, and Williams also testified at trial. They each denied making the statements
Guerra attributed to them and they denied entering into any employment contract with Guerra.
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Additionally, Tippens, Moore, and Williams, and other Wal-Mart employees testified that they did
not know of anyone who had an employment contract at Wal-Mart. Guerra, too, testified that he
knew of no other Wal-Mart employee who had an employment contract.
After the evidence was presented, Wal-Mart and Garza moved for directed verdict on both
claims. The motion was denied, and the following issue was submitted to the jury,
Did John Clyde Guerra and Wal-Mart agree that John Clyde Guerra would be
employed as manager of the Rio Grande City Store so long as John Clyde Guerra
met the specific requirement of a 4% net profit over the previous year and shrinkage
of less than 1% so that his position as store manager would continue from year to
year for the duration of his working life?
The jury answered “Yes.” The jury also found that Wal-Mart and Garza breached the employment
contract with Guerra and that Wal-Mart and Garza intentionally inflicted emotional distress on
Guerra and awarded damages. In conformity with the jury’s verdict, judgment was entered against
Wal-Mart in the amount of $2,372,306.14 and against Garza in the amount of $171,059.40. These
amounts included prejudgment interest and attorney’s fees. Wal-Mart and Garza then instituted this
appeal.
STANDARD OF REVIEW
In reviewing a legal sufficiency challenge, we determine whether the evidence as a whole
rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.
City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We will sustain a no-evidence point if
a finding is not supported by anything more than a scintilla of evidence. Siller v. LPP Mortg., Ltd.,
264 S.W.3d 324, 328 (Tex. App.—San Antonio 2008, no. pet.). In making this determination, we
view the evidence in the light most favorable to the verdict, crediting favorable evidence if
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reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. City
of Keller, 168 S.W.3d at 827. Evidence is legally insufficient when the record discloses (1) a
complete absence of evidence of a vital fact; (2) the court is barred by rules of law from giving
weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact
is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital
fact. Id. at 810.
BREACH OF CONTRACT
As to Guerra’s breach of contract claim, Wal-Mart and Garza challenge the jury’s finding of
an oral employment agreement that modified Guerra’s at-will employment status. Specifically, Wal-
Mart and Garza argue Guerra did not establish the existence of an employment contract because (1)
the oral statements made to Guerra did not, as a matter of law, unequivocally indicate a definite
intent by Wal-Mart to modify Guerra’s at-will employment status; (2) there was no evidence that any
of the Wal-Mart officers who made the oral statements to Guerra had authority to bind Wal-Mart to
a contract for lifetime employment; (3) any such oral agreement was barred by the statute of frauds;
and (4) any such oral agreement was unenforceable because it was supported by insufficient
consideration. Alternatively, Wal-Mart and Garza argue that even if Guerra established the existence
of an employment contract, Wal-Mart was justified in breaching the contract because the record
contains conclusive evidence that it had good cause to demote or terminate Guerra.
1. Definite Intent to Modify At-Will Employment Status
The general rule in Texas, and in most states, is that absent a specific agreement to the
contrary, employment may be terminated by the employer or the employee at will, for good cause,
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bad cause, or no cause at all. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex.
1998) (holding an employer’s oral statements did not modify an employee’s at-will status absent a
definite, stated intention to the contrary). Such at-will employment, however, may become
contractual based on oral statements of those in authority. Gilmartin v. Corpus Christi Broad. Co.,
985 S.W.2d 553, 555 (Tex. App.—San Antonio 1998, no pet.). For such a contract to exist, the
employer must unequivocally indicate a definite intent to be bound not to terminate the employee
except under clearly specified circumstances. Midland Judicial Dist. Cmty. Supervision and Corr.
Dept. v. Jones, 92 S.W.3d 486, 488 (Tex. 2002); Montgomery County, 965 S.W.2d at 502. To
determine if particular oral statements manifest the required intent, courts consider both the context
in which the statements were made and the language employed. See El Expreso, Inc. v. Zendejas,
193 S.W.3d 590, 597 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (holding that in the context of
the entire case, supervisor’s statements that employee would not be fired for attempting to make the
company comply with applicable safety regulations were legally and factually sufficient to modify
the employee’s at-will status); Miksch v. Exxon, Corp., 979 S.W.2d 700, 705 (Tex. App.—Houston
[14th Dist.] 1998, pet. denied) (noting that employer’s statement to employee did not contain
ambiguous terminology or require speculation about the parameters of the parties’ alleged
agreement, and therefore, the employer’s statement was not, as a matter of law, insufficient to
modify the employee’s at-will status).
General comments that an employee will not be discharged as long as his work is satisfactory
do not in themselves manifest an intent to modify an employee’s at-will status. Montgomery County,
965 S.W.2d at 502. Similarly, statements that an employee will be discharged only for “good reason”
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or “good cause” do not manifest such an intent when there is no agreement on what those terms
encompass. Id. An employee who has no formal agreement with his employer cannot construct one
out of indefinite comments, encouragements, or assurances. Id. Without such an agreement, the
employee cannot reasonably expect to limit the employer’s right to terminate him. Id. As the
supreme court recognized in Montgomery County,
Courts “must distinguish between carefully developed employer representations upon
which an employee may justifiably rely, and general platitudes, vague assurances,
praise, and indefinite promises of permanent continued employment.” Only when the
promises are definite and, thus, of the sort which may be reasonably or justifiably
relied on by the employee, will a contract claim be viable, not when the employee
relies on only vague assurances that no reasonable person would justifiably rely upon.
There is, thus, an objective component to the nature of such a contract claim in the
form of definite and specific promises by the employer sufficient to substantively
restrict the reasons for termination.
Id. at 503 (quoting Hayes v. Eateries, Inc., 905 P.2d 778, 783 (Okla. 1995) (citations omitted)).
At trial, Guerra relied exclusively on the oral statements of Tippens, Moore, and Williams
to establish the existence of an employment contract. On appeal, Wal-Mart and Garza challenge the
jury’s finding of the existence of an employment contract, arguing there is no evidence Wal-Mart
had a definite intent to modify Guerra’s employment status. In conducting a legal sufficiency review,
we must view the evidence in the light most favorable to the verdict, crediting favorable evidence
if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not.
City of Keller, 168 S.W.3d at 827. Applying this standard, we must accept that Tippens, Moore, and
Williams made the oral statements attributed to them in Guerra’s trial testimony. Then, we must
examine the oral statements made by Tippens, Moore, and Williams, and determine if the oral
statements comprise more than a mere scintilla of evidence of an employment contract.
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In Gilmartin, we applied the standards set out in Montgomery County and concluded the
employer’s oral statements were insufficient to modify an employee’s at-will employment. 985
S.W.2d at 556. In Gilmartin, the employee was told when he was hired that he would work from year
to year under the contract, and the contract would be automatically renewed for successive one-year
terms, so long as his work was satisfactory. Id. The employee was also told that a commitment by
the employer for one to three years was “very doable.” Id. After working for a little over a year, the
employee was terminated and he sued his employer for breach of contract. Id. at 554-55. The trial
court granted summary judgment in favor of the employer, and the employee appealed. Id. In
affirming the granting of summary judgment, we held the evidence presented did not show that the
employer manifested a definite intent not to terminate the employee because the standard set out in
Montgomery County required a more formal agreement. Id. at 556. Thus, we concluded the
employer’s oral statements did not, as a matter of law, modify the employee’s at-will employment
to a specific contractual arrangement. See id.
Under different circumstances, the Fourteenth Court held an employer’s oral statements were
not insufficient to modify the employee’s at-will status as a matter of law and reversed a summary
judgment in favor of the employer. Miskch, 979 S.W.2d at 705. There, the employee was concerned
that her husband’s decision to open a competing gas station would violate her employer’s non-
competition policy. Id. at 702. The employee went to her supervisor and asked him if such action by
her husband could result in her termination. Id. The supervisor stated it would not. Id. When the
employee was later fired for violating the non-competition policy, the employee sued the employer,
claiming that her supervisor had orally agreed that her husband’s operation of a gas station would
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not be grounds for termination. Id. In holding the supervisor’s oral statements were not insufficient
to modify the employee’s at-will status as a matter of law, the appellate court reasoned that the
employee went to her supervisor with a serious question, and the supervisor’s response was specific
and definite, communicating a clear message the employee would not be fired for what would
ordinarily have violated company policy. Id. at 705. The appellate court further recognized that the
oral statement made to the employee by her supervisor had no ambiguous terminology, and the
employer did not have a standing policy requiring employment contracts to be in writing and signed
by a particular officer. Id. at 704-706.
Similarly, in Zendejas, the First Court held the evidence was legally and factually sufficient
to support the existence of an oral employment contract modifying the employee’s at-will status. 193
S.W.3d at 597. In Zendejas, the employee went to his supervisor with concerns that he would be
fired for attempting to bring the company into compliance with specific safety laws. Id. 593. The
supervisor responded specifically and definitely that the employee would not be terminated for doing
so. Id. The appellate court concluded that in the context of the entire case, the oral statements made
by the supervisor communicated the clear message that the employee would not be fired for
attempting to make the company comply with a specific set of applicable safety regulations. Id. at
595-57.
Unlike the oral statements in Miskch and Zendejas, the oral statements here were not made
in the context of a serious inquiry about the employee’s possible termination, or in the context of a
formal discussion about the terms of employment. The first set of statements, made at a public
meeting with thousands of other employees in the room, was prompted by Guerra explaining his
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goals for the store and expressing gratitude for the chance to manage the Wal-Mart store near his
hometown. In fact, when viewed in this context, these statements are mere assurances that Guerra
would not be transferred from the Rio Grande City store to another store. The second set of
statements, made after Guerra began working as store manager, was prompted by performance goals
Guerra had posted on the walls. Williams observed the posted goals, and stated that if the Rio
Grande City store made these “numbers,” Guerra could be at the Rio Grande City store for the rest
of his life, or wherever he chose to be. The record, however, does not contain any evidence reflecting
the various performance goals referenced by Williams in his statement.
Guerra argues he established a clear and specific agreement to modify his at-will employment
status because some of the oral statements mention specific performance criteria—a four percent
increase in profits and under one percent in shrinkage. But the fact that some of the oral statements
mention specific performance criteria is not enough.3 The oral statements in this case are lacking on
a more fundamental level: the statements do not expressly mention modifying Guerra’s at-will status;
nor do the statements expressly mention Wal-Mart limiting its right to terminate Guerra’s
employment. Additionally, the statements do not expressly mention any specific circumstances under
which Guerra might still be terminated.
3
… In fact, a comparison of the oral statements reveals that even these terms lack clarity. In the initial
statements made at the year-end meeting, Moore mentions specific percentages— “if you meet a 4 percent over last
year[’]s net, every year, which qualifies you for the bonus, and you go under 1 percent in shrink after the year is over,
that store can be there it’s for you for the rest of your life.” In the later statements made at the Rio Grande City store,
Tippens refers to a vague set of performance criteria— “as long as you make your numbers”...“[y]ou can be here for the
rest of your life or wherever you choose to.”
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In sum, the statements made by Tippens, Moore, and Williams require speculation about the
most fundamental terms of the purported agreement. Consequently, the statements fail to show
Tippens, Moore, and Williams unequivocally indicated a definite intent to be bound not to terminate
Guerra. After analyzing the statements made by Tippens, Moore, and Williams, we conclude they
did not modify the employee’s at-will employment to a specific contractual arrangement. See
Montgomery County, 965 S.W.2d at 501-503 (holding oral assurances to employee that she would
not be fired as long as she was doing her job and she would not be fired unless there was good cause
were too indefinite to constitute an agreement limiting the employer’s right to discharge the
employee); Runge v. Raytheon E-Systems, Inc., 57 S.W.3d 562, 566 (Tex. App.—Waco 2001, no
pet.) (holding supervisor’s comments that employee had an “opportunity of a lifetime” and a “job
for life” were not specific enough to alter the at-will employment relationship). Accordingly, the
statements made by Tippens, Moore, and Williams fail to comprise more than a mere scintilla of
evidence of an employment contract.
2. Authority to Bind Wal-Mart to an Employment Contract
Wal-Mart and Garza also argue the evidence is legally insufficient to support the jury’s
finding of the existence of an employment contract because Tippens, Moore, and Williams lacked
the authority to enter into a binding contract on Wal-Mart’s behalf. The issue of Tippens’s, Moore’s,
and Williams’s authority to contract on Wal-Mart’s behalf was presented to the jury. The jury was
instructed that in deciding whether the parties reached an agreement, it could consider what the
parties said and did in light of the circumstances, including any other earlier course of dealing. The
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jury was further instructed that a party’s conduct includes the conduct of another who acts with the
party’s authority or apparent authority.
The law does not presume agency. Disney Enter., Inc. v. Esprit Finance, Inc., 981 S.W.2d
25, 30 (Tex. App.—San Antonio 1998, pet. dism’d w.o.j.). Absent actual or apparent authority, an
agent cannot bind a principal. Suarez v. Jordan, 35 S.W.3d 268, 272-73 (Tex. App.—Houston [14th
Dist.] 2000, no pet.). Actual authority denotes that authority which the principal intentionally confers
upon the agent, or intentionally allows the agent to believe he has, or by want of ordinary care allows
the agent to believe himself to possess. Id. at 273. Apparent authority is the power of an agent to
affect the legal relations of another person by transactions with third persons. Ames v. Great S. Bank,
672 S.W.2d 447, 450 (Tex. 1984) (citing RESTATEMENT (SECOND ) OF AGENCY § 8 (1958)).
Apparent authority arises through acts of participation, knowledge, or acquiescence by the principal
which clothe the agent with the indicia of apparent authority. Ins. Co. of N. Am. v. Morris, 981
S.W.2d 667, 672 (Tex. 1998).
A contract for lifetime employment is an extraordinary contract not usually made in the
ordinary course of business. Brown v. Grayson Enter., Inc., 401 S.W.2d 653, 657 (Tex. Civ.
App.—Dallas 1966, writ ref’d n.r.e). Consequently, when evaluating an agent’s authority to make
a binding contract for lifetime employment, courts scrutinize the evidence presented. See Nelms v.
A & A Liquor Stores, Inc., 445 S.W.2d 256, 259-60 (Tex. Civ. App.—Eastland 1969, writ ref’d
n.r.e.) (holding that an oral agreement for lifetime employment between employee and the president
of a corporation was not binding because it was not within the express, implied, or apparent authority
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of the president); Brown, 401 S.W.2d at 657-58 (concluding that in the absence of express authority
corporate officers and agents lacked the power and authority to hire employees for life).
On appeal, Guerra acknowledges Tippens, Moore, and Williams lacked actual authority to
contract with Guerra on Wal-Mart’s behalf. However, Guerra contends that Tippens, Moore, and
Williams possessed apparent authority to contract with Guerra on Wal-Mart’s behalf. We agree that
nothing in the record shows that Tippens, Moore, and Williams had actual authority to enter into an
employment contract on Wal-Mart’s behalf. The only issue is whether there is evidence to support
the jury’s implied finding that Tippens, Moore, and Williams had apparent authority to bind Wal-Mart
to an employment contract.
Certain limitations apply in determining whether apparent authority exists. Lifshutz v. Lifshutz,
199 S.W.3d 9, 22 (Tex. App.—San Antonio 2006, pet. denied); Humble Nat’l Bank v. DCV, Inc., 933
S.W.2d 224, 237 (Tex. App.—Houston [14th Dist.] 1996, writ denied). First, apparent authority is
determined by looking at the acts of the principal and ascertaining whether those acts would lead a
reasonably prudent person using diligence and discretion to suppose the agent had the authority to act
on behalf of the principal. Lifshutz, 199 S.W.3d at 22; Humble, 933 S.W.2d at 237. Only the actions
of the principal may be considered; representations of authority made by the agent have no effect.
Lifshutz, 199 S.W.3d at 22-23; Humble, 933 S.W.2d at 237. Second, the principal must either have
affirmatively held out the agent as possessing the authority, or the principal must have knowingly and
voluntarily permitted the agent to act in an unauthorized manner. Lifshutz, 199 S.W.3d at 23; Humble,
933 S.W.2d at 237. Finally, a party dealing with an agent must ascertain both the fact and the scope
of the agent’s authority, and if the party deals with the agent without having made such a
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determination, he does so at his own risk. Lifshutz, 199 S.W.3d at 23; Humble, 933 S.W.2d at 237.
Apparent authority is not available when the other contracting party has notice of the limitations of
the agent’s power. Humble, 933 S.W.2d at 238.
On appeal, Guerra argues it was reasonable for him to believe that Moore, Tippens, and
Williams had the authority to make a lifetime employment contract because they had made other
employment and personnel decisions in the past which were ratified by Wal-Mart. As support for this
argument, Guerra points to evidence that Tippens and Moore recommended Guerra for the store
manager position, and Williams approved Guerra’s promotion. Guerra also points to evidence that
Wal-Mart’s President and Vice-President of the People Division did not approve his promotion to
store manager or any of his previous promotions.
To determine if the evidence is legally sufficient to support the jury’s apparent authority
finding, we must evaluate the record in light of all three elements of apparent authority. Here, the
record shows Guerra received written notice, through his employment application and employee
handbook, that only the President of Wal-Mart or the Vice President of the Wal-Mart’s People
Division had authority to enter into a contract modifying his at-will employment status. The record
also shows that some employment decisions were made by Tippens, Moore, and Williams; however,
these decisions were limited in scope: Wal-Mart authorized Tippens and Moore to make certain
recommendations with respect to promotions, and authorized Williams to review and approve these
recommendations. However, there is no evidence in the record that Wal-Mart allowed Williams,
Moore, and Tippens to enter into an employment contract to modify the at-will status of Guerra or
any other employee. Nor is there any evidence that Tippens, Williams, and Moore ever entered into
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any other type of contract on behalf of Wal-Mart. Finally, there is no evidence in the record that
Guerra made any effort to confirm the fact and scope of Tippen’s, Moore’s, and Williams’s authority
to make a lifetime employment contract.
We conclude the record does not contain any acts by Wal-Mart from which a reasonable
person could believe that Wal-Mart authorized Tippens, Moore, and Williams to enter into any
contract on its behalf, much less an extraordinary lifetime employment contract. We further conclude
the record does not show that Wal-Mart held out Tippens, Moore, and Williams as having the
authority to enter into an employment contract on behalf of Wal-Mart, nor does the record show Wal-
Mart acted negligently in allowing Tippens, Moore, and Williams to engage in similar conduct in the
past. Based on this record, the evidence is legally insufficient to support the jury’s implied finding
of apparent authority. We, therefore, conclude the evidence is legally insufficient to support the jury’s
finding of the existence of an employment contract between Wal-Mart and Guerra.
Because the evidence is legally insufficient to support the jury’s contract finding, we need not
address Wal-Mart’s and Garza’s remaining breach of contract arguments.
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
According to Wal-Mart and Garza, the evidence is legally insufficient to support the jury’s
finding that Wal-Mart and Garza intentionally inflicted emotional distress on Guerra. We agree.
The elements of the cause of action of intentional infliction of emotional distress are (1) the
defendant acted intentionally or recklessly; (2) the defendant’s conduct was extreme and outrageous;
(3) the actions of the defendant caused the plaintiff emotional distress; and (4) the emotional distress
suffered by the plaintiff was severe. Texas Farm Bureau Mut. Ins. Co. v. Sears, 84 S.W.3d 604, 610
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(Tex. 2002). Extreme and outrageous conduct is conduct so outrageous in character, and so extreme
in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized society. Id. Texas has adopted a strict approach to intentional infliction of
emotional distress claims arising in the workplace. GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605,
612-13 (Tex. 1999) (holding supervisor’s ongoing acts of harassment, intimidation, and humiliation,
and daily obscene and vulgar behavior went beyond the bounds of tolerable work behavior and were
within the realm of extreme and outrageous conduct). While an employer’s conduct in the workplace
may sometimes be unpleasant for the employee, the employer must have some discretion to supervise,
review, criticize, demote, transfer, and discipline its workers. Sears, 84 S.W.3d at 611. Thus, Texas
courts decline to recognize intentional infliction of distress claims for ordinary employment disputes,
recognizing that extreme conduct in this context exists only in the most unusual circumstances. Id.
Here, Guerra’s intentional infliction of emotional distress claim focused on Garza’s conduct
at a meeting held shortly after Wal-Mart received the complaint against Guerra. According to Guerra,
Garza’s conduct was extreme and outrageous because Guerra was “lured” into Garza’s office in the
guise of a business meeting, and then, in violation of well-established company policy, was
confronted with an unfounded, uncorroborated and uninvestigated allegation that he had stolen from
Wal-Mart.
At trial, the evidence showed that Garza telephoned Guerra, and told Guerra to come to
Garza’s office for a meeting the following day. Garza, who was Guerra’s supervisor, did not tell
Guerra the purpose of the meeting, but Guerra assumed the purpose of the meeting was to discuss the
Rio Grande City store’s sales and profits. Before attending the meeting, Guerra learned that Felipe
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Garcia, the Rio Grande City store’s loss prevention specialist, was also scheduled to meet with Garza.
Only Garza, Guerra, and Corey Gonzalez, the district’s loss prevention specialist, were present at the
meeting which took place in a small, private office.
Garza started the meeting by saying, “Look, I am going to ask you some questions and I want
you to be honest.” Then Garza stated, “Well I had an anonymous caller call me, told me they saw you
putting merchandise, you and Felipe Garcia putting merchandise in a vehicle.” Guerra responded to
Garza’s inquiry by acknowledging that he and Garcia “always [did] that.” Gonzalez then informed
Garza that Guerra was the only store manager who personally handled the store’s merchandise
transfers, along with the store’s loss prevention specialist, Garcia. Garza then said that this was not
what he was talking about, and again asked Guerra, “What merchandise did you take from the store
that didn’t belong to you and put in the vehicle?” Guerra then replied that he didn’t “have to steal
from nobody.” Garza then said, “I am not telling you that you are stealing.” Guerra insisted that Garza
was in fact accusing him of stealing, became upset, and told Garza “don’t ever accuse me of stealing.”
Guerra testified he could tell by Garza’s face that Garza realized he had “screwed up” by making this
accusation. Guerra felt Garza should apologize to him for making a false accusation and requested
an apology from Garza. Garza did not apologize. The next day Gonzalez, who was a personal friend
of Guerra’s, called Guerra and apologized for what happened in the meeting the day before.
Assuming, as we must, that Guerra’s testimony accurately depicts the meeting with Garza, we
are of the opinion that Garza’s actions were well within the bounds of decent behavior. Employers
are allowed some leeway in investigating serious accusations made against their employees. Wal-Mart
Stores, Inc. v. Canchola, 121 S.W.3d 735, 741 (Tex. 2003). Although Garza’s conduct in discussing
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the allegations with Guerra was obviously unpleasant for Guerra, it could not be characterized as
extreme and outrageous behavior. See Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644
(Tex. 1995) (determining that investigation of employee’s alleged theft was not extreme and
outrageous even though employer questioned employee in a severe tone, did not explain the facts, and
asked employee how she could have neglected to pay for the alleged stolen item when she paid for
other groceries); Diamond Shamrock Refining and Marketing Co. v. Mendez, 844 S.W.2d 198, 202
(Tex. 1992) (“Mendez argues that Diamond Shamrock’s tortious conduct occurred not by terminating
him, but by falsely depicting him in the community as a thief. Even if Mendez’s charges are taken as
true, however, this conduct is not sufficiently outrageous to raise a fact issue.”).
After viewing the evidence in the light most favorable to the verdict, we conclude there was
no evidence that Garza’s conduct was extreme and outrageous and beyond all possible bounds of
decency. Having concluded the evidence was legally insufficient to support one element of Guerra’s
intentional infliction of emotional distress claim, we need not address Wal-Mart’s arguments
concerning the legal sufficiency of the evidence to support the other elements of this claim. See TEX .
R. APP . P. 47.1 (providing appellate court opinions must be “as brief as practicable” but address
“every issue raised and necessary to final disposition of the appeal.”).
CONCLUSION
In the absence of evidence of an employment contract, Guerra was not authorized to recover
on his breach of contract claim. In the absence of evidence that Garza and Wal-Mart engaged in
extreme and outrageous conduct, Guerra was not authorized to recover on his intentional infliction
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of emotional distress claim. For these reasons, we reverse the trial court’s judgment and render
judgment that Guerra take nothing.
Karen Angelini, Justice
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