City of Midland v. O'Bryant
18 S.W.3d 209 (2000)
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Rule of Law:
Texas law does not recognize a cause of action for breach of a duty of good faith and fair dealing in the employer-employee relationship. This applies to both at-will employment and employment governed by an express agreement.
Facts:
- The plaintiffs, Milton O’Bryant, Leonard Hendon, Jr., Jimmie Cross, Joe Ortiz, and Marvin Rasco, were police officers for the City of Midland.
- O'Bryant had previously filed and voluntarily dismissed a federal lawsuit against the City alleging violations of the Americans with Disabilities Act (ADA).
- Subsequently, the City of Midland announced that it was reclassifying certain police officer positions to civilian roles, which would result in lower pay and benefits.
- The City also implemented more stringent physical requirements for its police officers.
- All five plaintiffs, some of whom had physical disabilities, were affected by these changes.
- O’Bryant and Cross, who worked in the telephone response unit, were reclassified as civilians.
- Rasco and Ortiz, both with disabilities, were transferred to evening patrol shifts after their positions were reclassified.
- Hendon, who had no disability, was also transferred to an evening patrol shift after his position in crime analysis was made civilian.
Procedural Posture:
- Milton O’Bryant and four other police officers sued the City of Midland and two individual officers in state trial court.
- The plaintiffs asserted multiple causes of action, including breach of a duty of good faith and fair dealing, intentional infliction of emotional distress, and constitutional violations.
- The defendants moved for summary judgment on all claims.
- The trial court granted summary judgment for all defendants on all of the plaintiffs' claims.
- The plaintiffs (appellants) appealed to the state's intermediate court of appeals.
- The court of appeals affirmed the summary judgment in part but reversed it on the claims for breach of a duty of good faith and fair dealing and intentional infliction of emotional distress, remanding those for trial.
- The City of Midland and the individual defendants (petitioners) sought review from the Supreme Court of Texas.
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Issue:
Does an employer in Texas owe a duty of good faith and fair dealing to its employees?
Opinions:
Majority - Justice Owen
No, an employer in Texas does not owe a duty of good faith and fair dealing to its employees. The Court has only recognized such a duty where a "special relationship" exists, such as that between an insurer and an insured, due to unequal bargaining power and the insurer's exclusive control over claim resolution. These elements are absent in the employment relationship, where an employee can seek alternative employment. Furthermore, the Legislature has enacted numerous specific statutes to regulate employment relationships, and creating a new broad common-law duty would subvert these detailed statutory schemes and their procedural requirements. The Court declined to alter the fundamental nature of at-will employment in Texas by imposing such a duty.
Analysis:
This decision firmly rejects the judicial creation of a broad, tort-based duty of good faith in Texas employment law, solidifying the state's strong adherence to the employment-at-will doctrine. By refusing to expand common-law remedies, the Court signals its deference to the Legislature as the primary body for defining rights and obligations in the employer-employee relationship. The ruling forces employees alleging unfair treatment to seek recourse through specific, existing statutory schemes, such as the Texas Labor Code, rather than a general common-law claim, thereby reinforcing the procedural prerequisites of those statutes. It effectively prevents litigation that could challenge routine employment decisions like transfers and terminations under a vague standard of "fair dealing."

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