Sterner v. Marathon Oil Co.
4 I.E.R. Cas. (BNA) 592, 767 S.W.2d 686, 32 Tex. Sup. Ct. J. 266 (1989)
Rule of Law:
A cause of action exists for tortious interference with an employment contract, even if it is terminable at will, and the privilege of legal justification or excuse for such interference is an affirmative defense upon which the defendant bears the burden of proof.
Facts:
- In 1975, James Sterner, while employed by a construction company, claimed he was injured on Marathon Oil Company's premises due to gas inhalation.
- Sterner filed a lawsuit against Marathon to recover for the injuries suffered, and a jury found Marathon responsible for $25,000 in damages in 1980.
- In November 1980, Marathon entered into a contract with Ford, Bacon & Davis (F, B & D), an independent contractor, to build a hot oil treating plant at Marathon’s refinery.
- The union local sent Sterner to work for F, B & D at Marathon's refinery.
- On his second day of work, Sterner became ill and was departing early when a Marathon safety personnel stated to him, 'not if he had anything to say about it,' regarding Sterner's employment.
- Upon returning for work the next day, Sterner was dismissed by F, B & D.
- Sterner's payroll termination notice from F, B & D gave the sole reason for his dismissal as 'per Marathon’s directive'.
- Marathon denied instructing F, B & D to fire Sterner, claiming it simply did not want him working at its refinery due to his physical inability to perform the required work.
Procedural Posture:
- James Sterner sued Marathon Oil Company in a trial court for tortious interference with his terminable at will employment contract.
- The trial court rendered judgment in favor of Sterner based upon jury findings.
- Marathon appealed to the court of appeals (intermediate appellate court).
- The court of appeals reversed the trial court's judgment and rendered a take nothing judgment, finding no cause of action for tortious interference with an at-will contract and that there was no evidence to support the jury’s negative answer on justification.
- Sterner then appealed to the Supreme Court of Texas (highest court).
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Issue:
Does a cause of action for tortious interference exist for an employment contract terminable at will, and if so, does the defendant or plaintiff bear the burden of proving legal justification or excuse for the interference?
Opinions:
Majority - DOGGETT, Justice
Yes, a cause of action for tortious interference exists for an employment contract terminable at will, and the burden of proving legal justification or excuse for such interference is an affirmative defense that rests with the defendant. The court affirmed the court of appeals' holding that terminable-at-will status is no defense, reasoning that like voidable contracts, a terminable-at-will contract is valid and subsisting until terminated, and thus third parties are not free to tortiously interfere with its performance (citing Restatement (Second) of Torts § 766 comment g). The court held that legal justification or excuse is an affirmative defense, meaning the defendant has the burden of proof, aligning with Texas Rule of Civil Procedure 94 and substantial authority from other jurisdictions. The court further clarified that a jury’s failure to find an affirmative defense, upon which the defendant had the burden of proof, is a refusal by the jury to find that the defendant carried its burden, rather than an affirmative finding against the defendant. Reviewing the evidence, the court found that Sterner’s termination notice explicitly stating 'per Marathon’s directive,' coupled with Marathon personnel's comments and the lack of evidence of inadequate job performance by Sterner, constituted 'some evidence' that Marathon's interference was not a bona fide exercise of its own rights. Additionally, the construction contract between Marathon and F, B & D indicated F, B & D was an independent contractor with sole control, suggesting Marathon did not have a superior right to interfere with Sterner's employment. Therefore, Marathon failed to establish its affirmative defense of legal justification or excuse as a matter of law.
Analysis:
This case significantly clarifies Texas law on tortious interference with contractual relations, particularly for employment contracts. By explicitly extending protection to at-will employees, the court provides a crucial remedy for individuals whose employment relationships are unjustly disrupted by third parties. The decision also definitively places the burden of proving legal justification for interference on the defendant, shifting a significant evidentiary burden away from the plaintiff and making it more challenging for interfering parties to escape liability. Finally, the clarification of the standard for appellate review of jury findings on affirmative defenses offers important procedural guidance for future cases.
