More v. Intelcom Support Services, Inc.

Court of Appeals for the Fifth Circuit·Decided May 20, 1992·No. 91-1325·Published

Opinion

United States Court of Appeals, Fifth Circuit.

No. 91–1325.

Romarico S. MORE, et al., Plaintiffs–Appellants, v.

INTELCOM SUPPORT SERVICES, INC., Defendant–Appellee.

May 11, 1992.

Appeals from the United States District Court for the Northern District of Texas. Before REYNALDO G. GARZA, GARWOOD and DUHÉ, Circuit Judges.

REYNALDO G. GARZA, Circuit Judge:

PROCEDURAL HISTORY

Plaintiffs are 146 citizens of the Philippines who were employed by Intelcom Support Services, Inc. ("Intelcom") to work at the U.S. Air Force Base on Wake Island. At all relevant times a treaty was in effect; to wit:

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES RELATING TO THE RECRUITMENT AND EMPLOYMENT OF PHILIPPINE CITIZENS BY THE UNITED STATES MILITARY AND CIVILIAN AGENCIES OF THE UNITED STATES GOVERNMENT IN CERTAIN AREAS OF THE PACIFIC AND SOUTHEAST ASIA.

19 U.S.T. 7560, T.I.A.S. 6598 ("Treaty").

Plaintiffs filed suit on March 24, 1987, alleging wrongful discharge and breach of the Treaty, as well as breach of the covenant of good faith and fair dealing and deceptive trade practices.

Plaintiffs filed a Motion for Partial Summary Judgment requesting that the court rule that the Treaty "conferred rights upon Plaintiffs" and that "Christmas bonus equivalent ... is owing by the Defendant ..." The district court denied Plaintiffs' Motion and held that "the agreement between the government of the United States of America and the government of the Republic of the Philippines does not give Plaintiffs a private right of action for Christmas bonuses, as the treaty is not self-executing." The district court held t hat therefore "Plaintiffs do not have standing to claim a violation of its terms."

Defendant thereafter filed a Motion to Dismiss stating that Plaintiffs' claims under the Texas Deceptive Trade Practices Act ("DTPA") and fo r breach of the covenant of good faith and fair dealing fail to state valid causes of action. The district court granted Intelcom's Motion and dismissed Plaintiffs' claims under the DTPA and the covenant of good faith and fair dealing.

Plaintiffs filed a Second Motion for Partial Summary Judgment requesting that the trial court reconsider its ruling on their first Motion for Summary Judgment. This Motion remained pending through a bench trial.

After the bench trial, the district court ruled in favor of Intelcom, finding that Defendant had not wrongfully discharged Plaintiffs, that the Treaty was not self-executing and that Plaintiffs were not covered by its terms.

FACTS

Plaintiffs were all recruited in the Philippines to work for a defense contractor at the U.S. Air Force Base on Wake Island. Most had worked for a succession of defense contractors, all using virtually the same written employment agreement.

The Philippine Government, pursuant to the dictates of the Treaty, approved both a recruitment agreement and a standard employment agreement for the employment of Filipino workers by Intelcom to fulfill an Air Force contract. Intelcom, which had succeeded to the Wake Island Air Force Base contract, employed Plaintiffs from approximately 1983–86. Plaintiffs signed employment agreements, each with identical language, which lasted for a period of one year. The commencing and ending dates of the individual employment agreements with Plaintiffs varied, but all extended beyond September 30, 1986.

According to Section 6(a) of the written agreements:

Severance Pay: In the event that the Employer's contract with the United States Government for service on Wake Island is terminated or otherwise curtailed for any reason or, if a general reduction in the work force becomes necessary, the Employer may terminate his individual Employment Agreement with the Employee by giving the Employee written notice specifying the date on which the Employer will schedule return transportation for the Employee. Such notice shall not be less than thirty (30) calendar days prior to date of termination. The Employee's termination becomes effective only upon the Employee's return to point of hire. Employees so terminated shall be required to work in accordance with the terms of the individual Employment Agreement until transportation is made available from Wake Island. Employees not receiving thirty (30) calendar days notice prior to their return to the point of hire shall be paid normal wages in lieu of notice not to exceed thirty (30)

calendar days on a prorated share for the days not worked. In addition, the Employee shall be paid all earned vacation as provided for in paragraph 5(d) of this Agreement.

Intelcom's contract with the Air Force was scheduled to expire on September 30, 1986. In 1986, the Air Force accepted competitive bids from many sources for the 1986–90 Base Services Contract. The Philippine Overseas Employment Agency ("POEA"), which had sole authority to negotiate employment agreements for the Filipino workers and insisted on long-term wage escalation, refused to negotiate an employment agreement until after the Air Force announced the low bidder. Intelcom submitted two bids, one with the Filipino workers and a lower bid with Thai workers, which the Air Force accepted. A new contract was awarded and took effect October 1, 1986. The old contract referenced by number in the employment agreements with the Filipino workers expired.

Intelcom gave initial notice to Plaintiffs on July 14, 1986, via letter explaining that the POEA's refusal to reduce its proposed wage escalation led to the unhappy outcome. Intelcom gave Plaintiffs official notice on August 16 via letter stating in part: "In accordance with your personal contract, please be advised your 30 day notice of termination is now in effect and your transportation to Clark AFB, Philippine Islands will depart on or about 15 September 1986." Intelcom paid all vacation and transportation costs due under the individual agreements.

Plaintiffs, however, objected and made written protest of their discharge, claiming that the expiration of Defendant's contract with the Air Force was not a "termination" or a "curtailment" of the contract as envisioned in the employment agreements. Plaintiffs also noted that they expected Christmas bonuses and severance pay specified by the Treaty. According to Article II, section 7 of the Treaty:

Additional benefits—Employees shall receive as a minimum, in addition to their basic wages, the following benefits:

.....

(c) Christmas bonus: Equivalent to one-half month's pay, which shall be computed on base pay, overseas differential, and subsistence allowance.

.....

(d) Severance pay: Except when separation is for cause, severance pay benefits shall be granted to those employees whose employment is terminated involuntarily, including termination by reduction in force caused by disestablishment or deactivation of a function, activity, or command.

Intelcom paid no Christmas bonuses. It did give at least 30 days notice according to the severance pay section in the individual agreements, but Plaintiffs claim that this did not suffice according to the Treaty.

ANALYSIS

While the parties and the court have referred to the action below as a bench trial, there were no fact issues. The parties contested only issues of law. The district court stated in its ruling from the bench that "[t]his may in retrospect have been a summary judgment case ..." As this was a trial on stipulated facts, we review it as we would a summary judgment because findings of law in bench trials are reviewed de novo. Seal v. Knorpp, 957 F.2d 1230, 1234 (5th Cir.1992).

I. The Treaty is not Self–Executing as to Plaintiffs.

As did the district court, we note that

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