Rieves v. Buc-ee's Ltd.

532 S.W.3d 845
CourtCourt of Appeals of Texas
DecidedOctober 12, 2017
DocketNO. 14-15-01061-CV
StatusPublished
Cited by11 cases

This text of 532 S.W.3d 845 (Rieves v. Buc-ee's Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rieves v. Buc-ee's Ltd., 532 S.W.3d 845 (Tex. Ct. App. 2017).

Opinion

OPINION

J. Brett Busby, Justice

This summary judgment appeal presents the question whether provisions in an employment agreement that require an employee to repay substantial parts of her compensation upon termination of employment are unlawful restraints of trade. Because the provisions lack reasonable limits and impose a substantial penalty on the exercise of an at-will employee’s right to quit her job, we hold that they are unenforceable. We therefore reverse the trial court’s judgment and (1) render judgment that appellee Buc-ee’s Ltd. take nothing on its claims against appellant Kelley Rieves; (2) render judgment declaring the “Additional Compensation” and “Retention Pay” provisions in Rieves’s employment contracts to be unenforceable restraints of trade; and (3) remand the question of Rieves’s entitlement to attorneys’ fees to the trial court for further proceedings.

Background

Buc-ee’s operates a well-known chain of convenience stores in Texas. Rieves, a graduate of Texas Tech University with a degree in restaurant and hotel management, was working for TGI Fridays restaurants when she began to explore a potential new job as a Buc-ee’s assistant manager. During this process, Rieves met with Don Wasek, Buc-ee’s president. Wa-sek asked Rieves what payment she would need to take a job with Buc-ee’s. Rieves responded that she would need to be paid at least the salary she was earning at TGI Fridays, which was approximately $55,000 per year. Wasek agreed.to that amount and told Rieves it would be split between an hourly pay rate and a flat monthly amount. Wasek then told Rieves that she could pick, within specified limitations, the percentage split between the two. The split requirement was not negotiable. Rieves picked a 70-30 split. Rieves accepted an assistant manager position at one of Buc-ee’s convenience stores.

Rieves signed an employment agreement with an effective date of August 25, 2009 (the 2009 Agreement). The 2009 Agreement provided that Rieves would be an at-will employee and that she would be paid an hourly wage of $14 plus a “fixed monthly bonus of $1,528.67.” The monthly bonus provision is found in Article 3, entitled ‘Additional Compensation.” This article states, in pertinent part:

3.02 For the additional compensation to be paid Employee under Paragraph 3.01, Employee shall be required to work for Employer a minimum of 60 months from the Effective date of this Agreement and shall also provide Employer with a minimum of 6 months written separation notice. In the event Employee does not meet the above requirements, regardless of the reason for termination or regardless of the reason Employee did not provide the required notification, Employee shall be required to repay all of the Additional Compensation to Employer.... In other words, in the event Employee’s employment with Employer ... terminates for any reason, - with or without cause, and the above requirements are not meet [sic] by Employee, Employee will be required to repay all of the additional compensation received.

About a year later, Wasek met with Rieves again. This meeting produced a new employment agreement (the 2010 Agreement). Under the terms of the 2010 Agreement, Rieves remained an at-will employee and would receive a weekly salary of $862.75. Buc-ee’s reserved the right to modify this salary. Article 3 of the 2010 Agreement is entitled “Retention Pay.” Under that article, Rieves would be “advanced a monthly retention payment of 1.2652% of Buc-ee’s # 32 net profit paid monthly and a one time payment of $1000.00.” Buc-ee’s reserved the right to modify this pay as well. To earn the Retention Pay, Rieves was “required to work for [Buc-ee’s] a minimum of 48 months from the Effective date of this Agreement and shall also provide [Buc-ee’s] with a minimum 6 months written Separation Notice to be given only after [Rieves] fulfills [the] required minimum number of months worked.” Like the 2009 Agreement, the 2010 Agreement required Rieves to repay all Retention Pay if she did not work a minimum of 48 months and give the minimum six months’ written notice of separation, regardless of the reason both requirements were not met. If not repaid within 30 days of termination, the retention pay and additional compensation would accrue interest at 10 percent per year, compounded annually. Article 3 also provided that Rieves “completely understands that there is a clear and mutual understanding that Retention Pay. is for. all hours worked.”

Among other terms, the 2010 Agreement contains the following pertinent sections:

6,06- In the event [Rieves] has- prior Employment Contract(s) with [Buc-ee’s] which.required [Rieves] to repay Additional Compensation, the obligation to repay the Additional Compensation shall continue to exist unless [Rieves] complies with all the terms of this Agreement. Except as provided in the previous sentence, this Agreement supersedes all other agreements, either oral or in writing, between the parties to this Agreement with the exception of any non-solicitation, non-competition, non-compete, non-disclosure agreements that may be in place.
[[Image here]]
6.08 In the event it becomes necessary for [Buc-ee’s] to sue to enforce the provisions of this Agreement, -and/or in the event-that [Buc-ee’s] is involved in litigation wherein [Buc-eye’s] defends itself in whole or in part, based, upon this Agreement, [Buc-ee’s] shall be entitled to collect from [Rieves] all attorney’s fees and other costs and expenses of litigation incurred by [Buc-ee’s].
[[Image here]]
6.09 The following definitions shall apply to this Agreement. In the event it is determined that a definition is ambiguous, the meaning given to it by [Buc-ee’s] shall control.
1. Net, Food Service Net, Car Wash Net, Store Net, Company Net, Net Income; Net Profit, Bottom Line; Net Profit (Loss) . (collectively referred to, as “Net”) ■ are collectively defined as the amount of sales less costs of sales less expenses, at store(s) or the entire, Company. [Buc-ee’s], at its sole discretion, shall determine, at any time (including, without limitation, monthly, quarterly and annually), sales, costs of goods and all expenses. [Buc-ee’s] determination of Net shall be conclusive, final .and binding upon Employee. Employee willingly agrees to accept [Buc-ee’s] determination' of Net. [Buc-ee’s] reserves the right to modify Net, prospectively and retrospectively. In the event, [Buc-ee’s] modifies Net retrospectively; [Buc-ee’s] shall have the right to adjust any compensation, bonuses, or pay based upon said modification.

Rieves received Additional Compensation under the 2009 Agreement and later Retention Pay under the 2010 Agreement, and she paid federal income taxes on these amounts. Rieves resigned from her employment with Buc-ee’s effective July 12, 2012—-about three years after she began work. A year later, Buc-ee’s sent Rieves a demand for payment of $66,720.29, plus interest and attorneys’ fees. Buc-ee’s asserted this was the amount of Additional Compensation and Retention Pay Rieves had been paid during her employment with Buc-ee’s.

Rieves responded by filing this lawsuit seeking a declaration that these provisions of the Agreements function as unreasonable restraints of trade and are therefore unenforceable.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

O'Brien v. Smoothstack, Inc.
E.D. Virginia, 2025
Cantor Fitzgerald, L.P. v. Ainslie
Supreme Court of Delaware, 2024
GLOBUS MEDICAL INC. v. SHARP
E.D. Pennsylvania, 2022

Cite This Page — Counsel Stack

Bluebook (online)
532 S.W.3d 845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rieves-v-buc-ees-ltd-texapp-2017.