Sawyer v. E.I. du Pont de Nemours & Co.

Most of the employees at a La Porte unit (“Unit”) of E. I. du Pont de Nemours and Company (“DuPont”) were covered by a collective bargaining agreement (“CBA”). When DuPont announced plans to spin off part of its operations, including the Unit, into a wholly owned subsidiary, DuPont Textiles and Interiors (“DTI”), almost all of the Unit employees moved to DTI, even though the CBA gave the employees the right to transfer to other DuPont jobs. DuPont subsequently sold DTI to Koch Industries, which reduced the former DuPont employees’ compensation and retirement benefits. Several of the former DuPont employees sued DuPont for fraudulently inducing them to terminate their employment and accept employment with DTI by misrepresenting that DTI would not be sold. The Fifth Circuit Court of Appeals certified questions of law to the Texas Supreme Court, which answered by holding (1) at-will employees cannot bring an action against their corporate employer for fraud that is dependent on continued employment; and (2) employees covered under a cancellation-upon-notice CBA that limits the employer’s ability to discharge its employees only for just cause cannot bring Texas fraud claims against their employer based on allegations that the employer fraudulently induced them to terminate their employment. View "Sawyer v. E.I. du Pont de Nemours & Co." on Justia Law