Fort Worth Court of Appeals Addresses Sabine Pilot “Good Faith Belief” Exception

If an employee refuses to perform an act that he or she believes in good faith may be illegal, and is fired as a result, has the employee been wrongfully discharged under Texas law? This is the question that the Fort Worth Court of Appeals recently addressed in the affirmative. See Young v. Nortex Found. Designs, Inc., No. 02-11-00470-CV, (Tex. App.–Fort Worth, February 7, 2013), available at: http://www.2ndcoa.courts.state.tx.us/opinions/PDFOpinion.asp?OpinionId=24069).  While Texas is an at-will employment state (meaning either the employee or employer can terminate the employment relationship at any time), Texas courts have created an exception to this rule which prohibits an employer from terminating an employee for refusing to commit an illegal act. This type of wrongful discharge claim is known as a “Sabine Pilot” action. The elements of a Sabine Pilot action are as follows:

1.  The plaintiff was an at-will employee;

2.  The plaintiff refused to perform an illegal act; and

3.  The plaintiff was terminated solely as a result.

Sabine Pilot Serv. v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985); Burt v. City of Burkburnett, 800 S.W.2d 625, 627 (Tex.App.–Fort Worth 1990, writ denied). A plaintiff that prevails on a Sabine Pilot claim in Texas may be entitled to recover back pay, future pay, mental anguish damages, exemplary damages, injunctive relief and reinstatement. Safeshred, Inc. v. Martinez, 365 S.W.3d 655 (Tex. 2012);

In the Nortex case, the Plaintiff was formerly a draftsman for a foundation design firm. In 2010, he received a set of plans bearing a black stamp stating “IF THIS STAMP IS NOT RED IT IS AN ILLEGAL SET OF PLANS,” and “REPRODUCTION OF THESE PLANS BY ANY MEANS IS PROHIBITED BY FEDERAL LAW.” The Plaintiff refused to work on a design based on these plans, believing that doing so would constitute illegal copyright infringement, and was fired as a result. After his termination, the company obtained a copy of the red-stamped plans. The Plaintiff sued, asserting a Sabine Pilot claim, and his former employer contended at trial that the Plaintiff was never asked to commit an illegal act, because the homeowner had the original plan. The Plaintiff contended that his good faith belief that he would have been committing an illegal act was sufficient to state a Sabine Pilot claim. The jury found in favor of the Plaintiff and awarded damages in excess of $300,000. The trial court granted the Defendants JNOV motion and set aside the jury verdict. On appeal, the Fort Worth Court of Appeals had to decide whether to adopt this “good faith” doctrine to Sabine Pilot claims. In Johnston v. Del Mar Distrib. Co., the Corpus Christi Court of Appeals held that “the Sabine Pilot exception necessarily covers a situation where an employee has a good faith belief that her employer has requested her to perform an act which may subject her to criminal penalties.” 776 S.W.2d 768, 771 (Tex. App.— Corpus Christi 1989, writ denied). The Fort Worth Court of Appeals, relying on Johnston, held that, by asking the Plaintiff to use the black-stamped copy of the plans, refusing to provide him with the red-stamped copy, and firing him when he refused to use the unlicensed copy, the employer had wrongfully terminated the Plaintiff under the Sabine Pilot doctrine. Accordingly, the Court reversed and rendered judgment in favor of the Plaintiff in accordance with the jury’s verdict.

In dissent, Justice McCoy stated that he did not believe that the “good faith belief” exception was a proper statement of the law, and thus affirmance was appropriate. But Justice McCoy also noted that an affirmance would be “less than satisfying” because it would allow en employer to ask an employee to do an illegal act, fire him for refusing to do so, then avoid liability by proving that the act was not in fact illegal. But Justice McCoy noted that this unfairness was for the legislature or the Texas Supreme Court, not the intermediate appellate courts, to fix. Given the Texas Supreme Court’s insistence (usually in dicta) that the Sabine Pilot doctrine be narrowly construed, and the potential expansion of the doctrine through the “good faith belief” exception, it would not be surprising to see certiorari granted in this case.

Author: Josh Borsellino