Jordan v. Johnson Controls, Inc.

881 S.W.2d 363, 1994 WL 65650

• Court: Court of Appeals of Texas
• Decided: April 11, 1994
• Docket: 05-93-00132-CV
• Status: Published

Opinions

OPINION

WARREN WHITHAM, Justice (Retired).

In this wrongful discharge case brought under the Texas Workers’ Compensation Act, Tex.Rev.Civ.Stat.Ajnn. art. 8307c (Vernon Supp.1993), the employer-appellee, Johnson Controls, Inc., moved for summary judgment against the employee-appellant, R.C. Jordan, on the ground that, as a matter of law, the after-acquired evidence doctrine bars Jordan’s 8307c claim and precludes Jordan from recovery. The trial court granted Johnson Controls’ amended motion for summary judgment and dismissed Jordan’s claims with prejudice. This appeal presents three issues: first and primary, whether the after-acquired evidence doctrine bars Jordan’s 8307c claim; second, whether the after-acquired evidence doctrine is a function of state law and not preempted; and third, whether the trial court erred in considering a summary judgment affidavit. We conclude that: (1) the after-acquired evidence doctrine bars Jordan’s 8307c claim; (2) the after-acquired evidence doctrine is a function of state law and is not preempted in the present case; and (3) the trial court properly considered the challenged summary judgment affidavit. Accordingly, we affirm.

The Undisputed Summary Judgment Evidence

Before Johnson Controls hired Jordan, Jordan completed an employment application on which Jordan verified that he had “never been convicted of a felony or other serious crime.” Jordan placed his signature on the application directly under the following provision:

I certify this application for employment is complete and accurate to the best of my knowledge and understand that any misstatement or omission of material fact will be sufficient cause for discharge.

Two years later, Jordan was terminated due to repeated violations of Johnson Controls’ attendance policy. At the time of Jordan’s termination, Johnson Controls did not know of Jordan’s fraudulent employment application. After Jordan filed suit for wrongful termination, Johnson Controls learned that, before Jordan was hired, Jordan was convicted of armed robbery and served time in the state penitentiary. Jordan admitted (1) his past criminal record, (2) that he lied on his employment application at Johnson Controls, and (3) that lying on the application constituted grounds for immediate termination. Johnson Controls’ company rules specify that falsification of the employment application is grounds for immediate termination. Jordan acknowledged that he received a copy of Johnson Controls’ company rules. Johnson Controls would not have hired Jordan had Jordan’s falsified application been discovered prior to Jordan receiving an offer of employment or if Jordan had disclosed that he had been convicted of a serious crime such as armed robbery. Johnson Controls would have terminated Jordan when it learned of his falsification. Another employee was promptly terminated by Johnson Controls as soon as Johnson Controls discovered that the employee failed to disclose a prior criminal conviction on his application. Therefore, it is undisputed that (1) Jordan lied on his employment application; (2) Johnson Controls would not have hired Jordan had it known of his falsified application or armed robbery conviction; and (3) Johnson Controls would have terminated him immediately upon discovering that he lied on his application.

The Issues

Jordan’s first and second points of error, present the principal issue before us: whether an employee may recover in an 8307c wrongful discharge action when, after discharge, the employer discovers that the employee gained his job through fraud and deceit by lying on his job application regarding a previous criminal conviction and incarceration for armed robbery. Thus, we reach the question whether the after-acquired evidence doctrine bars the employee’s claim where the employer either (1) would not have hired the employee, or (2) would have fired the employee had the employer discovered the dishonesty or the criminal record. Jordan’s third and fourth points of error raise the issue of whether application of the after-acquired evidence doctrine is a function of state law and is not preempted by the National Labor Relations Act or a collective bargaining agreement. Hence, we reach the question whether the after-acquired evidence doctrine is a function of state law and is not preempted in the present case. Jordan’s fifth and final point of error complains of a summary judgment affidavit. Therefore, we reach the question whether the trial court erred in considering the affidavit.

In light of certain arguments made by Jordan, we emphasize the role played by the after-acquired evidence doctrine in the present case. The doctrine is not urged by Johnson Controls to justify an alleged unlawful termination of employment. Rather, the doctrine is urged to preclude the former employee from maintaining and recovering on his 8307c claim. Indeed, in spite of his various arguments, we conclude that Jordan must know that the doctrine is not invoked in this appeal to justify termination or discharge. We reach this conclusion because Jordan’s brief tells us: “[i]n fact, it is undisputed and both parties agree, that Mr. Jordan was not terminated or discharged because he allegedly ‘falsified his employment application’.”

The After-Acquired Evidence Bar To Recovery

With facts and issues before us, we turn to consider whether the after-acquired evidence doctrine bars the employee’s claim where the employer either would not have hired the employee or would have fired the employee had it discovered the dishonesty or the criminal record.

In his first point of error, Jordan contends that the trial court erred in granting Johnson Controls’ amended motion for summary judgment because in Texas when an employer assigns grounds for discharging an employee an employer cannot later justify the termination on grounds that were not made the basis of the employee’s termination at the time of the discharge, citing Measday v. Kwik-Kopy Corp., 713 F.2d 118, 125-26 (5th Cir.1983). We conclude that Jordan’s reliance upon this rule is misplaced. We reach this conclusion because Jordan treats Johnson Controls’ reliance upon the after-acquired evidence doctrine as the assertion that Jordan was discharged because he falsified his employment application. Thus, Jordan argues that there is no summary judgment evidence establishing that Jordan was terminated or discharged because he “falsified his employment application.” We conclude, however, that Jordan’s premise misses the mark as to application of the after-acquired evidence doctrine sought to be made by Johnson Controls. In the present case, Johnson Controls concedes that Jordan was terminated for violation, by Jordan, of Johnson Controls’ attendance policy. Johnson Controls does not seek to later justify Jordan’s termination on other grounds. Rather, Johnson Controls advances the after-acquired evidence doctrine as precluding former-employee Jordan from maintaining and recovering on his 8307c claim. Hence, we reach a line of cases which Jordan refuses to consider.

Where the employee brings a suit for discriminatory discharge, the after-acquired evidence doctrine bars recovery in a wrongful discharge claim brought by an employee who falsified his employment application even if the falsification was not discovered by the employer until after the discharge. See Summers v. State Farm Mutual Auto Ins. Co., 864 F.2d 700, 708 (10th Cir.1988); Johnson v. Honeywell Info. Sys., Inc., 955 F.2d 409, 415 (6th Cir.1992); Milligan-Jensen v. Michigan Technological Univ., 975 F.2d 302, 304-05 (6th Cir.1992). While after-acquired evidence cannot be said to have been a “cause” for discharge, it is relevant to a claim of “injury,” and does itself preclude the grant of any present relief or remedy to the claimant. See Summers, 864 F.2d at 708. In the present case, Johnson Controls advances the doctrine of after-acquired evidence to preclude Jordan’s claims and entitlement to relief. Johnson Controls does not maintain that the doctrine of after-acquired evidence, or the actual after-acquired evidence, constitutes grounds for Jordan’s discharge. Indeed, as noted above, Jordan concedes that both parties agree Jordan “was not terminated or discharged because he allegedly ‘falsified his employment application’.” It follows that the trial court did not err in granting Johnson Controls’ amended motion for summary judgment and in barring Jordan’s 8307c claim for reasons argued in Jordan’s first point of error. We overrule Jordan’s first point of error.

In his second point of error, Jordan contends that the trial coúrt erred in granting Johnson Controls’ amended motion for summary judgment and in creating or recognizing a complete bar to Jordan’s 8307c wrongful discharge claim. Jordan supports his contention with two arguments. First, Jordan asserts that the Texas Legislature did not provide for an exception to, or for a complete bar to, an employee’s Article 8307c wrongful discharge claim based upon an alleged falsification of an employment application. Second, Jordan maintains that no opinion of the Texas Supreme Court or an appellate court of Texas has judicially recognized such a bar. Johnson Controls concedes that the after-acquired evidence doctrine has not been adopted legislatively or judicially in this State and notes that this is a case of first impression in the Texas state courts.

First, we address the legislature’s failure to provide for an after-acquired evidence defense in 8307c actions. We conclude that one of our sister courts of appeals has provided the answer to the inquiry contrary to Jordan’s assertion that the legislature failed to speak. See Swanson v. American Mfg. Co., 511 S.W.2d 561 (Tex.Civ.App.—Fort Worth 1974, writ refd n.r.e.). Swanson teaches that in an action based upon Article 8307c, where the undisputed facts established the employer’s right to discharge the employee for cause in that he had breached his contract of employment by deliberate falsification of his application for employment, and because the discharge occurred for the false statements contained in the application for employment, and not because of compensation claims filed by him, then a 8307c claimant may not recover. See Swanson, 511 S.W.2d at 565. Thus, in a 8307c case, false statements in an employment application could form the basis for dismissal of the dishonest employee. See Swanson, 511 S.W.2d at 564. The Swanson court explained its reasoning for this holding in a 8307c case:

Were the court to adopt the reasoning and position assumed by the employee in this case and on this appeal it would not only encourage but would serve as an incentive to every person seeking employment to falsify his application, to deceive and mislead the prospective employer in every possible way in order to gain employment. Such a result was never intended by the Legislature when it enacted 8307c.

Swanson, 511 S.W.2d at 565. Applying the rational of Swanson, we conclude that it is immaterial to disposition of the present case that the Texas Legislature did not provide for a complete bar to an employee’s 8307c wrongful discharge claim based upon falsification of an employment application. We reason that if, as in Swanson, false statements in an employment application can form the basis for dismissal of the dishonest employee in an 8307c action without legislative provision, then in the present case, false statements in an employment application can form the basis for barring recovery under an after-acquired evidence doctrine defense in an 8307c action without legislative provision. Moreover, we decline to hold that the legislature must anticipate and provide for each and every circumstance that might bar recovery or relief under a given statute.

Next, we consider Jordan’s argument that the trial court erred because there is no opinion of the Texas Supreme Court or of an appellate court of Texas which has judicially recognized the after-acquired evidence bar to Jordan’s 8307c wrongful discharge claim. This Court is some Texas authority and for the reasons that follow we recognize the after-acquired evidence bar to Jordan’s claim.

In Texas, a federal district court has applied the after-acquired evidence doctrine in a case of discriminatory discharge. See Redd v. Fisher Controls, 814 F.Supp. 547 (W.D.Tex.1992). We will not extend this opinion seeking to improve on Redd’s discussion of the application of the after-acquired evidence doctrine in a case of discriminatory discharge. Instead, we quote and adopt Redd’s language:

[M]ost courts addressing this issue have held that such evidence can be cause for granting summary judgment in favor of an employer/defendant on the grounds that the employee/plaintiff could not have been injured by being discharged, even if he or she was actually discharged for otherwise illegal reasons. See, e.g., Milligan-Jensen v. Michigan Tech. Univ., 975 F.2d 302, 304-05 (6th Cir.1992); Washington v. Lake County, Ill., 969 F.2d 250, 256 (7th Cir.1992); Johnson v. Honeywell Info. Sys., Inc., 955 F.2d 409, 415 (6th Cir.1992); Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d 700, 708 (10th Cir.1988); McKennon v. Nashville Banner Publishing Co., 797 F.Supp. 604, 608 (M.D.Tenn.1992); Bonger v. American Water Works, 789 F.Supp. 1102, 1105-07 (D.Colo.1992); Churchman v. Pinkerton’s Inc., 756 F.Supp. 515, 520-21 (D.Kan.1991); Mathis v. Boeing Military Airplane Co., 719 F.Supp. 991, 994-95 (D.Kan.1989); but see Wallace v. Dunn Constr. Co., Inc., 968 F.2d 1174, 1178 (11th Cir.1992) (Court rejects Summers approach).

The first, and perhaps leading, ease to discuss this issue was Summers v. State Farm Mutual Automobile Insurance Company, decided by the Tenth Circuit Court of Appeals in 1988. Summers, 864 F.2d 700. In Summers, a discharged employee, Summers, brought a suit complaining of discrimination on the basis of age and religion. While preparing for trial, his employer State Farm, which was already aware of several instances of falsified records by Summers and had placed Summers on probation, discovered over 150 instances where Summers had falsified records, 18 of those taking place while Summers was on probation. Id. at 702-03. As a result of that information, discovered after Summers had been discharged, State Farm argued that because it would have terminated Summers had it known of all of those instances, Summers should not, as a matter of law, be entitled to any relief, whether or not he had been terminated on account of his age or religion. Id. at 704

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The majority of courts which have applied the holding in Summers have done so in eases, like this, where an employee brings a claim of discriminatory discharge and the employer discovers after the discharge that the employee had made material misstatements or omissions on his or her job application, which, if known by the employer, would have caused the employer to not hire or to' discharge the employee. See Milligan-Jensen, 975 F.2d at 303-05 (employee omitted prior DUI conviction on employment application for position as public security officer); Reed v. AMAX Coal Co., 971 F.2d 1295, 1298 (7th Cir.1992) (employee denied being convicted of a felony on job application when employee had been convicted of armed robbery two years earlier); Washington, 969 F.2d at 252, (employee stated on job application he had never been convicted of an offense when he had been convicted of third-degree assault and criminal trespass); Johnson, 955 F.2d at 411, 414 (employee stated she had college degree on a job application for a position which expressly required a college degree when, in fact, she had completed only four courses); Banger, 789 F.Supp. at 1104, 1106 (same); Churchman, 756 F.Supp. at 521 (employee made several material misstatements and omissions on job application); Mathis, 719 F.Supp. at 993-94 (employee omitted fact she had pri- or felony conviction and fact she had been terminated for cause by previous employers on job application). Moreover, the plaintiffs in many of those cases were precluded from any recovery because it was discovered they had lied on their job applications about prior convictions. See id.

Redd, 814 F.Supp. at 551-52.

Because Redd notes a case said to reject the Summers approach, we turn to consider the ease noted. Neither party cites Wallace v. Dunn Constr. Co. Inc., 968 F.2d 1174 (11th Cir.1992). In any event, we cannot say that Wallace rejects the Summers approach entirely. Even the majority in Wallace conceded that: “[w]e agree with the abstract proposition, espoused by the Summers court, that after-acquired evidence is relevant to the relief due a successful Title VII plaintiff under 42 U.S.C.A. § 2000e-5(g) (1981).” Wallace, 968 F.2d at 1181. But now let us consider how the majority in Wallace applied the “proposition” to the “relief due.” Wallace applied Summers so as to deny the prospective remedies of reinstatement, front pay and injunctive relief to all of the plaintiffs claims. See Wallace, 968 F.2d at 1184. Hence, we must identify the relief to which the Wallace majority refused to apply the Summers approach. We know that to be relief sought for backpay and lost wages. Indeed, it was only as to whether the after-acquired evidence doctrine mandates an early end to any period of backpay, lost wages and liquidated damages under the involved federal statutes that the majority in Wallace rejected the Summers approach. See Wallace, 968 F.2d at 1184. The majority in Wallace arrived at its “separation of relief sought” stance by its “lapse of time between the employment decision to discharge and discovery” reasoning. The majority in Wallace reasoned that the employee would have remained employed for at least some period of time after he was actually discharged. See Wallace, 968 F.2d at 1179-80. We decline to adopt Wallace’s “lapse of time” modification of the Summers approach. Instead, we follow the majority line of cases represented by Summers and its progeny and deny recovery to the full extent of the relief sought. We conclude that the employee’s act of falsifying his employment application as to criminal offenses committed is too serious a matter as to permit a “lapse of time” window of partial recovery. Indeed, we refuse to reward the deceitful employee for the period in which he escaped detection after his discharge.

In the present case (1) the printed terms of the falsified application submitted by Jordan clearly state that misstatements or omissions will be sufficient cause for discharge; (2) company rules received by Jordan specify that falsification of the employment application is grounds for immediate discharge; (3) Jordan admitted that he lied on his employment application and that such action constituted grounds for immediate termination; and (4) the undisputed summary judgment evidence shows that Jordan would not have been hired had his falsified application been known and that he would have been immediately terminated had it been discovered during his employment.

We adopt the after-acquired evidence doctrine in Texas. We hold that the after-acquired evidence doctrine bars an employee’s 8307c claim where the employer either would not have hired the employee or would have fired the employee had the employer discovered the dishonesty or the criminal record. It follows that Jordan’s employment having been obtained by fraudulent means, and applying the after-acquired evidence doctrine, we must conclude that Jordan’s fraudulent activity bars his wrongful discharge suit under 8307c and precludes him from any recovery under 8807c.

Having rejected both prongs of Jordan’s second point of error, we conclude that the trial court did not err in granting Johnson Controls’ amended motion for summary judgment and in creating or recognizing a complete bar to Jordan’s 8307c wrongful discharge claim. We overrule Jordan’s second point of error. In applying the after-acquired evidence doctrine in the present case, we express no opinion as to the application of the after-acquired evidence doctrine to any other type or manner of claim or cause of action. Certainly, it has long been the rule in this state that misrepresentations in an application for employment do not preclude recovery for injuries under the Workers’ Compensation Act. See Huffman v. Southern Underwriters, 133 Tex. 354, 361, 128 S.W.2d 4, 7 (1939). Here we apply the after-acquired evidence doctrine to a 8307c claim only.

The Preempted Question

In his jointly briefed and argued third and forth points of error, Jordan contends that the trial court erred in granting Johnson Controls’ amended motion for summary judgment because Johnson Controls’ claim that falsification of the employment application “constitutes just cause” for Jordan’s discharge is (1) preempted by the National Labor Relations Act and (2) subject to an arbitration procedure contained in a labor collective bargaining agreement and Johnson Controls has failed to submit its claim to the contractual grievance procedure. Following so stating his third and forth points of error, Jordan refines those two points as follows. We quote:

[t]he trial court erred in granting Johnson Controls’ Amended Motion for Summary Judgment because Johnson Controls’ claim that the falsification of an employment application “constitutes just cause” for Mr. Jordan’s discharge is preempted by the National Labor Relations Act and the resolution of such issue is irrelevant to an Article 8307c claim.

Thus, we read Jordan to contend that the after-acquired evidence doctrine is somehow preempted by Section 301 of the National Labor Relations Act, 29 U.S.C. § 185(a), because a collective bargaining agreement exists between Johnson Controls and the union at the plant where Jordan was employed.

We will not extend this opinion by a discussion of Section 301 preemption. Instead, we will let Jordan’s own words provide the basis of our disposition of his third and forth points of error. We quote from Jordan’s letter brief to the trial court filed in response to Johnson Controls’ argument in support of its amended motion for summary judgment:

Defendant’s late found theory of employment application falsification is pre-empted if Defendant is claiming it as the reason Plaintiff was terminated. If Defendant continues to assert the falsification theory was not one of the reasons Plaintiff was fired then it is not pre-empted and it is simply irrelevant. If Defendant did not and has not at this time terminated Plaintiff for an alleged falsification of his employment application then there is nothing to grieve and it is not pre-empted; however, if Defendant claims Defendant has or is terminating Plaintiff for alleged employment application falsification then such claim is pre-empted by the collective bargaining agreement.

Clearly, the answer to the first sentence of Jordan’s response is that Johnson Controls is not claiming employment application fraud as the reason Jordan was terminated. Rather, Johnson Controls claims on appeal that “under the after-acquired evidence doctrine, the reason for termination is immaterial because Jordan’s falsification of his application bars his suit and precludes any relief for wrongful termination,” citing among authorities, Milligan-Jensen, 975 F.2d at 305; and Summers, 864 F.2d at 708. Indeed, Jordan himself tells us in his brief that: “[i]n fact, it is undisputed and both parties agree, that Mr. Jordan was not terminated or discharged because he allegedly ‘falsified his employment application.’” Looking then to the remainder of Jordan’s above quoted response made to the trial court, we know that application of the after-acquired evidence doctrine in the present ease is not preempted by Section 301 of the National Labor Relations Act.

In the absence of preemption under Section 301 of the National Labor Relations Act, we conclude that the trial court did not err in granting Johnson Controls’ amended motion for summary judgment as complained of in Jordan’s third point of error. Furthermore, in light of Jordan’s admission that he was not terminated or discharged for falsifying his employment application, there is no “discharge” as referred to in Jordan’s forth point of error. In the absence of that asserted “discharge,” we conclude that the trial court did not err in granting Johnson Controls’ amended motion for summary judgment as complained of in Jordan’s fourth point of error. It follows that application of the after-acquired evidence doctrine in the present case is a function of state law and is not preempted by the National Labor Relations Act or a collective bargaining agreement. We overrule Jordan’s third and fourth points of error.

The Challenged Summary Judgment Affidavit

In his fifth point of error, Jordan contends that the trial court erred in granting Johnson Controls’ amended motion for summary judgment for the reason that the trial court’s summary judgment was based upon an affidavit of an interested witness which is not clear, positive and direct, and otherwise credible and free from contradictions and inconsistencies, and such affidavit could not have been readily controverted by Jordan. Jordan complains of the affidavit of Don Wilson. Wilson was personnel manager for Johnson Controls at the time of Jordan’s discharge. Wilson’s statement in the challenged affidavit: “I retired in 1992 and am no longer employed by the Company” remains undisputed. Indeed, the record fails to show any claim of bias on Wilson’s part or benefit to Wilson of any nature from the outcome of this ease. Moreover, the record fails to show either claim or fact that Wilson had an interest, pecuniary or otherwise, in the outcome of the lawsuit or is a party, or relative, or employee of a party to the lawsuit. Hence, we conclude that at the time Wilson made his affidavit, he was not an interested witness. Former employees are not interested witnesses. See Aztec Corp. v. Tubular Steel, Inc., 758 S.W.2d 793, 800 (Tex.App.—Houston [14th Dist.] 1988, no writ); Querner v. George, 336 S.W.2d 903, 904-05 (Tex.Civ.App.—San Antonio 1960, writ ref d n.r.e.). We conclude that the trial court’s summary judgment was not based upon an affidavit of an interested witness. Therefore, the trial court did not err in granting Johnson Controls’ amended motion for summary judgment for the reasons asserted in Jordan’s fifth point of error. We overrule Jordan’s fifth point of error.

The “interested witness” question aside, Jordan suggests that the affidavit of Roy Hernandez, union representative, controverts Wilson’s affidavit. Specifically, Jordan maintains that Hernandez controverted Wilson’s affidavit assertion that Johnson Controls would have discharged Jordan had Johnson Controls been aware of the employment application falsification. Jordan insists that Hernandez’s affidavit opinion establishes that termination for falsification of an employment application would be without just cause under (1) the collective bargaining agreement, and (2) the prevailing federal labor law and arbitration decisions and that, therefore, Jordan would have been entitled to reinstatement and back-pay if Johnson Controls had discharged Jordan for falsifying his employment application. We are at a loss to understand how a genuine material fact issue can be grounded at this point in this appeal upon a “discharge” fact issue when earlier in Jordan’s brief he tells us: “[i]n fact, it is undisputed and both parties agree, that Mr. Jordan was not terminated or discharged because he allegedly ‘falsified his employment application.’” Therefore, we conclude that Jordan's hypothetical “controverted affidavit” argument advanced under Jordan’s fifth point of error affords no basis for us to say that the trial court erred in considering Wilson’s affidavit and in granting Johnson Controls’ amended motion for summary judgment. Again, we overrule Jordan’s fifth point of error.

Affirmed.

McGARRY, C.J., and CHAPMAN, J., dissent with opinions.