The first question answered by the Supreme Court was whether at-will employees could sue for fraud. The Court easily answered “No” to that question. The second question asked whether the employees’ collective bargaining agreement which contained a “just cause” provision would affect the analysis. Again, the Court answered “No” and held that the employees’ exclusive remedy would be under the collective bargaining agreement, not common law.
Perhaps the most interesting part of the decision is in footnote 24, where the Court cites to a Restatement of the Law dealing with the commonly arising situation where an employee is induced to leave a job in another state and move to Texas after being promised a job which never materializes. The Restatement would allow such an employee to sue for “the costs of moving her family across the country and for other loss occasioned by her relinquishing her former position … but not the value of the promised career.” The Court does not adopt the Restatement per se, but states that it is “consistent with our analysis.”
The takeaway from this case is that the at-will doctrine is alive and well in Texas. That said, the Court adds new support for an exception to the at-will doctrine in the limited circumstance of an employee who incurs a financial loss in reliance on a promise of employment which is later rescinded.