Walmart

Legal Case Analysis

JOHN CLYDE GUERRA v. WAL-MART STORES, INC.

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1. Caption and Procedural History

Case Name: JOHN CLYDE GUERRA v. WAL-MART STORES, INC. and ED GARZA, individually and as agent for WAL-MART

Court that decided the case: Court of Appeals of Texas, Fourth District, San Antonio

Citation: 04-08-00146-CV; (Tex. App. [4th Dist.] 7-1-2009)

Plaintiff-Appellee: JOHN CLYDE GUERRA

Defendants-Appellant: WAL-MART STORES, INC. and ED GARZA

Date of the Decision: July 1, 2009

Court of Appeals of Texas, Fourth District, San Antonio Judges: CATHERINE STONE (Chief Justice), KAREN ANGELINI (Justice) and PHYLIS J. SPEEDLIN (JUSTICE)

Opinion written by: Hon. KAREN A. ANGELINI

Case type: Appeal from the 229th Judicial District Court, Starr County, Texas, Trial Court No. DC-04-86, Hon. ALEX W GABERT (Judge Presiding)

Summary of the lower courts holding: During the trail at 229th Judicial District Court, the Plaintiff, a former WAL-MART employee sued WAL-MART and GARZA for breach of the contract and intentional infliction of emotional distress. alleging that WAL-MART acting by an through its agent, had made an oral agreement to employ him for the rest of his working life; as long as the Rio Grande store met certain performance goals each year. He alleged that he has met the established performance goals, but intentionally WAL-MART has fired him without reasonable motive; as a consequence, WAL-MART has breached its employment contract with him. Additionally, he alleged the initial misconduct complaint was mishandled by GARZA causing intentional infliction of emotional distress. As response to Guerra's suit, WAL-MART and GARZA denied GUERRA's allegations and raised the following defenses: First, they stated that there wasn't agreement to modify GUERRA's at-will employment status. Second, even if there was an agreement to modify GUERRA's at-will employment status, it was not binding on WAL-MART because it was not within the scope of the authority of any agent. And third even if there was an agreement, it was unenforceable because it was an oral agreement barred by the statute of frauds, and it lacked the consideration required for a lifetime employment contract. During the trial, evidence showed that GUERRA was hired as an at-will employee in 1993, and he was immediately notified of his at-will employment status, he was also notified that any modification to his employment status had to be in writing and signed by a particular officer. GUERRA alleged that his promotion to manager store was notified orally, at a "year-end" meeting; attended by thousand of WAL-MART managers, where some of them (TIPPEN, MOORE AND WILLIAMS) expressed orally the conditions needed to keep the position for the rest of GUERRA's working life. After, GUERRA's testimony, some managers testified denying GUERRA's allegations. After the evidence was presented, WAL-MART and GARZA moved directed verdict on both claims; but, it was denied and the cause was submitted to the jury. The jury found in favor of GUERRA on both claims and awarded GUERRA over $ 2.5 million in damages.

2. Facts

In 1993, JOHN CLYDE GUERRA applied for employment as a cashier at the local WAL-MART store; on the employment application, GUERRA signed his initials to the statement that indicated that if he was hired, he will be able to resign for any reason and likewise, the company could terminate his employment at any time with or without cause. Subsequently, GUERRA was hired to work as cashier in the electronic department of a Wal-Mart store; at the moment of hiring, he received a handbook outlining company policies and benefits that stated explicit that he will be free to terminate his employment at any time and that WAL-MART equally will reserve the right to terminate the employment relationship with or without good cause and without prior notice.

Over the next eight (8) years, GUERRA held a variety of positions at several different WAL-MART stores; later in 2001, he was promoted to store manager of the Rio Grande City WAL-MART store. According with the Plaintiff, at the moment of the promotion he was told by WAL-MART regional vice-president that as long as the store made a 4% profit over the preceding year and the store's decline was kept under 1%, the Rio Grande Store City WAL-MART store would be