Sears, Roebuck & Co. v. Meadows

878 S.W.2d 171, 1994 WL 382956
CourtCourt of Appeals of Texas
DecidedJanuary 27, 1993
Docket10-91-233-CV
StatusPublished
Cited by5 cases

This text of 878 S.W.2d 171 (Sears, Roebuck & Co. v. Meadows) 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
Sears, Roebuck & Co. v. Meadows, 878 S.W.2d 171, 1994 WL 382956 (Tex. Ct. App. 1993).

Opinions

OPINION ON REHEARING

VANCE, Justice.

In this appeal, we initially determine that a suit brought by Lawrence E. Meadows against Sears, Roebuck & Co. and Glenn Stranahan, an employee of Sears, arising out of Meadows’ employment, is not preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). See 29 U.S.C.A. §§ 1001-1461 (West 1985 & Supp.1992). Because we find no error, we will affirm the judgment.

Meadows’ Fifth Amended Original Petition alleged that: he had been employed by Sears since 1956; in 1986 he was fraudulently induced to give up his position as an Area Department Manager at the Hancock Center store in Austin and take a sales clerk’s position paying substantially less; he retired in 1987 under a plan offered by Sears to induce early retirement; and a release that he signed in connection with the early retire[173]*173ment program should be rescinded, was without consideration, was against public policy, was obtained by Sears under duress, coercion, and undue influence, was not the proper release for the program under which he retired, was induced by the same fraud that induced him to change positions, and was not read to or by him. He further alleged that Sears breached its oral contract of employment with him, that he relied on Sears’ policy not to terminate employees except for good cause, that Sears breached a duty of good faith and fair dealing, and that it intentionally inflicted emotional distress upon him. He asked for actual damages, punitive damages, and attorneys fees.

Sears pled that Meadows executed the release as part of “The Unit Closing Severance Allowance Plan for Timecard Regular Employees,” a plan subject to and regulated by ERISA, that the release stood as a bar to all of Meadows’ causes of action, that Meadows ratified the release by continuing to accept benefits under the Plan and in failing to tender the benefits back to Sears as a condition precedent to his claim for rescission of the release, and that Meadows’ claims are preempted by ERISA.

By the release, signed on June 23, 1987, Meadows released Sears from “any and all actions, causes of action, damages or claims of damage of every character whatsoever” by reason of his employment. Thus, Meadows had no claim against Sears unless he could avoid the effects of the release.

The jury found that: (1) Sears failed to disclose to Meadows that there was no recommendation that he be fired, demoted, or disciplined, and that the failure to do so was fraud; (2) Sears and Meadows agreed that he would be demoted and that Sears would not terminate his employment; (3) the representation of Sears that the release was only a paper pertaining to his retirement that must be signed to obtain benefits under the Plan constituted fraud; (4) Sears and its employees had an agreement that Sears would treat its employees with “good faith and fair dealings”; (5) Sears breached the agreement; and (6) Sears acted with malice toward Meadows. The jury failed to find that Meadows and Sears agreed that he would receive severance pay and retirement benefits in exchange for his agreement to retire or that they agreed to the terms of the release. The jury awarded damages of $221,050 for “loss of salary as Area Sales Manager from January 1, 1987, to January 1, 1997.” It further awarded damages of $125,000 for mental anguish in the past and $250,000 for punitive damages.

In the judgment the court found that there was no consideration for the release, that Meadows received no benefit from it, and that the jury’s answers on the questions about fraud “[vitiate] the General Waiver and Release and all matters tainted by the fraud.” After disregarding the jury’s finding that Sears and Meadows agreed that he would be demoted and that Sears would not terminate his employment, the court entered a judgment against Sears for $596,050 on August 12, 1991.

On September 5, Meadows filed a “tender and deposit” with the court, which alleged that he had been paid the sum of $10,784.80 by Sears at the time of his retirement. He further alleged that the jury had determined his damages for loss of salary to be $231,750 and deducted the sum of $10,700 (presumably ignoring the $84.80) to arrive at the award of $220,050. This assertion was supported by an affidavit of the foreman of the jury. Meadows stated, “I am now depositing and tendering into the Registry of the Court the sum of $84.80, which when taken with the sum of $10,700 that was deducted by the jury, represents the entire sum of $10,784.80 that was paid to me at the time of my retirement.”

The leading authority on the question of ERISA preemption is Ingersoll-Rand Company v. McClendon, 498 U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), where the Supreme Court held that an employee’s suit for wrongful discharge, based on the contention that he was discharged only to avoid the vesting of his benefits,1 was preempted by [174]*174ERISA. Id., at 137-45, 111 S.Ct. at 482-86. The Court grounded preemption on two theories: First, that the express provisions of the act “establish pension plan regulation as exclusively a federal concern.” Id. at 138, 111 S.Ct. at 482. Second, that the claimed cause of action “conflicts directly with an ERISA cause of action” — termination of employment for the purpose of interfering with a participant’s rights under a plan — that the Court found to be a “special feature” of the federal act that would preempt a state-law cause of action even in the absence of an express preemption provision. Id. at 142-43, 111 S.Ct. at 484-85.

Claims are preempted under the express provision if they “relate to” any employee benefit plan governed by ERISA. Id. at 137-38, 111 S.Ct. at 482. “The pre-emption clause is conspicuous for its breadth.” Id. “State law” includes decisions having the effect of law; thus, common-law causes of action may be preempted. Id. at 137-40, 111 S.Ct. at 482-83. A state law may be preempted even if the law is not specifically designed to affect an ERISA plan, or if the effect is only indirect. Id. at 139-40, 111 S.Ct. at 483. Thus, the Court found that the existence of a pension plan was a critical factor in establishing liability for the wrongful discharge under state law and held that the cause of action was preempted. Id. at 139-40, 111 S.Ct. at 483-84.

In addition, claims may be preempted even in the absence of an express statutory provision. Although the mere existence of a federal regulatory or enforcement scheme— even a considerably detailed one — does not by itself imply preemption of state remedies, “special features” of such a scheme may warrant preemption. Id. at 143, 111 S.Ct. at 485. Because ERISA specifically prohibits an employer from discharging, fining, suspending, expelling, disciplining, or discriminating against a plan participant for exercising any right under the provisions of a plan, or for the purpose of interfering with the attainment of any right to which a participant may become entitled under a plan, the Court found that a suit alleging a wrongful discharge to prevent vesting of benefits would be preempted because the activity was regulated by a “special feature” of the federal act. Id. at 144-45, 111 S.Ct. at 486.

In a motion for rehearing citing several recent cases, Meadows asserts that the federal courts have not interpreted Inger-sollr-Rand as expansively as we did on original submission.

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Sears, Roebuck & Co. v. Meadows
878 S.W.2d 171 (Court of Appeals of Texas, 1993)

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Bluebook (online)
878 S.W.2d 171, 1994 WL 382956, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sears-roebuck-co-v-meadows-texapp-1993.