UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-11008
STEVEN M. KLUMPE,
Plaintiff - Appellant,
versus
IBP, Inc.,
Defendant - Appellee.
Appeal from the United States District Court
For the Northern District of Texas
October 4, 2002
Before KING, Chief Judge, PARKER, Circuit Judge, and ELLISON,*
District Judge.
ROBERT M. PARKER, Circuit Judge:
Plaintiff-Appellant Steven M. Klumpe brought a wrongful
discharge suit against his former employer IBP, Inc., claiming
that he was terminated solely for his refusal to commit an
illegal act. A jury agreed and awarded compensatory and punitive
damages. The district court subsequently entered a take-nothing
judgment, however, concluding there was no evidence that Klumpe’s
conduct would have been illegal. We affirm.
*
District Judge of the Southern District of Texas, sitting by
designation.
BACKGROUND
This matter arises from an on-the-job accident at IBP’s
Amarillo, Texas slaughterhouse. Chris Escamilla, an employee
there, operated a hock cutter at the plant.2 On April 5, 1997,
the cutter severed three-and-a-half fingers from his right hand.
Escamilla is Klumpe’s step son,3 and Klumpe also worked at IBP’s
Amarillo plant. At the time of the accident, Klumpe had been
working at IBP for about 15 years--ever since he had graduated
from high school--and was in the position of superintendent
trainee. Klumpe attended to Escamilla following the accident but
was not his supervisor.
IBP does not participate in Texas’s statutory workers’
compensation scheme, but instead has its own plan--the “Workplace
Injury Settlement Program-Texas” (“WISP”). IBP conducts an
orientation for new employees regarding the benefits of WISP.
During the orientation, an IBP supervisor reads to employees from
a prepared script. Employees are also given a written summary of
the plan, called the “summary plan description” or “SPD.” The
script states that the SPD contains “just about everything you
need to know about your Program, including your rights and
responsibilities.” To receive benefits under WISP, workers must
2
Hock cutters (or “declaw cutters”) are “hydraulic scissors”
used to sever the hoofs from a cow.
3
Escamilla is Klumpe’s legally adopted son, but since both
parties refer to Escamilla as Klumpe’s step son, we will too.
-2-
sign an “Acceptance and Waiver.” According to the script, the
waiver “is an agreement between you and IBP that your claim will
be settled by your participation in the Program and that you will
not sue IBP in civil Court.”
Shortly after the accident, Klumpe was several times asked
to secure a waiver from Escamilla. Each time he refused. On
April 15, 1997, Escamilla sued IBP in state court. Sometime
later IBP’s lawyer Ken Muncy received a subpoena ordering Klumpe
to appear Monday, June 30, 1997, for deposition testimony related
to Escamilla’s suit. The subpoena also ordered Klumpe to produce
“any and all documents which show the crewing guidelines for the
hock cutter at the time of the incident in question.”4 Klumpe
brought the subpoena to the attention of his supervisor, Kurt
Suther, who told Klumpe not to turnover the documents but said
that he would speak with Muncy about the matter. On the Friday
before the deposition, Suther and Klumpe met with Muncy via
teleconference. Muncy told Klumpe to “bring whatever documents
he had in his possession that he thought were responsive to” the
subpoena. No further instructions were given regarding the
documents. On Sunday, Klumpe gave his own attorney, Jeff
Blackburn, the crewing guidelines for the entire plant, which
included specifications for about 170 jobs. Blackburn copied
4
Crewing guidelines describe how IBP’s operations are
staffed. At trial, counsel for IBP stated that “hundreds of
thousands of dollars” are spent developing the guidelines, and
for that reason IBP does not disclose them.
-3-
Escamilla’s attorney and Muncy with the documents the same day.
Klumpe was fired the following Monday, allegedly for removing
confidential documents from the plant. No other reason was given
for Klumpe’s termination. About a year later Escamilla’s suit
was settled for $1.9 million.
Klumpe brought a wrongful discharge action against IBP,
claiming that the sole reason for his termination was his refusal
to secure Escamilla’s waiver. Klumpe argues that to seek
Escamilla’s waiver would have been an illegal act because the SPD
and orientation script misrepresent the benefits provided under
WISP. The jury agreed and awarded Klumpe $802,000 in
compensatory damages and $10 million in punitive damages. The
district court subsequently invited IBP to file a motion for
judgment as a matter of law, which it did, and after briefing,
the court rendered a take-nothing judgment. Klumpe made a timely
appeal.
DISCUSSION
In diversity cases,5 we apply state substantive law together
with the federal rules of procedure. See Ellis v. Weasler Eng’g,
Inc., 258 F.3d 326, amended on other grounds by 274 F.3d 881 (5th
Cir. 2001). The district court’s entry of judgment as a matter
of law is review de novo. See Flowers v. S. Reg’l Physician
5
IBP is a South Dakota corporation with its principal place
of business there.
-4-
Servs., 247 F.3d 229, 235 (5th Cir. 2001). “If during a trial by
jury a party has been fully heard on an issue and there is no
legally sufficient evidentiary basis for a reasonable jury to
find for that party on that issue, the court may determine the
issue against that party and may grant a motion for judgment as a
matter of law . . . .” FED. R. CIV. P. 50(a)(1). In evaluating
the sufficiency of the evidence, we must draw all reasonable
inferences and resolve all credibility issues in favor of the
nonmoving party. See Flowers, 247 F.3d at 235. When the jury
has found for the nonmovant on the disputed issue, we will not
overturn the verdict “unless the facts and inferences point ‘so
strongly and overwhelmingly in the movant’s favor that reasonable
jurors could not reach a contrary conclusion.’” Id. (quoting
Omitech Int’l v. Clorox Co., 11 F.3d 1316, 1322 (5th Cir. 1994)).
Texas adheres to the rule of at-will employment, under which
employment for an indefinite term may be terminated at will and
without cause. See Schroeder v. Texas Iron Works, Inc., 813
S.W.2d 483, 489 (Tex. 1991). An exception to this rule is the
doctrine announced in Sabine Pilot Service, Inc. v. Hauck, 687
S.W.2d 733 (Tex. 1985), where the Texas supreme court gave an at-
will employee the right to sue for wrongful discharge when he was
fired solely for refusing to commit an unlawful act carrying
criminal penalties, id. at 735. In a Sabine Pilot claim, whether
the employee’s conduct would have constituted an illegal act
-5-
requires an examination of the provision that allegedly prohibits
the conduct. The trial court must determine as a matter of law
whether the provision makes its violation a criminal offense.
See id. at 736 (Kilgarlin, J., concurring). After that, the jury
decides whether the employee’s conduct would have been “an
illegal act.” TEXAS PATTERN JURY CHARGES--BUSINESS, CONSUMER & EMPLOYMENT
PJC 107.3 (2000 ed.). To make this finding, the jury is
instructed on what constitutes an offense of the provision at
issue. See id. The plaintiff-employee is responsible for
convincing the jury that he was fired solely for refusing to
commit the illegal act and must do so by a preponderance of the
evidence. See Sabine Pilot, 687 S.W.2d at 735.
Section 32.46 of the Texas Penal Code is the only provision
upon which Klumpe relies in making his Sabine Pilot claim.6 It
prohibits using deception to secure the execution of a document.
See TEX. PENAL CODE ANN. § 32.46 (Supp. 2002). The district court’s
charge to the jury, which is not challenged on appeal, mirrors §
32.46. It says: “A person commits an illegal act if, with intent
6
As an aside, we note that Texas law makes it illegal to fire
or discriminate against an employee who has filed a workers’
compensation claim. See TEX. LABOR CODE ANN. § 451.001 (1996). The
same law does not apply to non-subscribing employers, however.
See Tex. Mex. R.R. Co. v. Bouchet, 963 S.W.2d 52, 55-56 (Tex.
1998). Further, there is no common-law exception to the rule of
at-will employment which protects the employees of non-
subscribing employers against similar retaliation. See Watkins
v. Diversitech Corp., 988 S.W.2d 440, 441 (Tex. App.--Houston
[1st Dist.] 1999, pet. denied). Hence, co-workers like Klumpe
are not protected against retaliation either.
-6-
to defraud or harm any person . . . he, by deception, causes
another to sign or execute any document affecting the pecuniary
interest of any person. Committing such an act subjects the
violator to criminal penalties.”
In its order granting IBP judgment as a matter of law, the
district court determined that there was no evidence of deception
or that the deception (if any) would have caused Escamilla to
sign the waiver. Specifically, the district court said:
[T]he failure to elaborate on mentioned programs or the
inconsistencies in contractual documents in question do
not by themselves constitute deception that would
support a criminal prosecution under Texas Penal Code
Section 32.46 against Klumpe if he obtained the waiver.
The record in this case is devoid of evidence that
those omissions or discrepancies were likely to affect
the judgment of Escamilla in the case before this
Court. Essential elements of a violation of Section
32.46 are missing.
IBP also argues that there is no evidence that the sole reason
Klumpe was fired was his refusal to get Escamilla’s release.
I.
The jury could rightly conclude that Klumpe was fired for
not getting Escamilla’s release. First, the record suggests that
the stated reason for Klumpe’s termination was pretext. Klumpe
discussed with his supervisor the subpoena in the Escamilla suit.
-7-
Having apparently resolved Suther’s objection to releasing the
subpoenaed documents, Klumpe forwarded them to his attorney. IBP
argues that turning over the crewing guidelines for the entire
plant far exceeded the scope of the subpoena, which requested
only the guidelines related to the hock cutter. But IBP’s
attorney never told Klumpe which documents to bring to the
deposition, instead letting Klumpe decide for himself what was
responsive to the subpoena. IBP also argues that Klumpe should
have waited until Monday to hand over the documents. IBP knew,
however, that Klumpe had hired an attorney to represent him in
the Escamilla suit. In a letter Blackburn had advised IBP that
IBP personnel should refrain from discussing the Escamilla suit
with Klumpe unless he was present. Thus, IBP should have known
that Klumpe would make available to his own attorney the
subpoenaed documents and that he would do so before he was
scheduled to be deposed on Monday. Nor should IBP have been
surprised to learn that Blackburn sent copies of the subpoenaed
documents to the other attorneys in the case, as he was required
to do under the Texas Rules of Civil Procedure.
Second, the jury could conclude that IBP attempted to
pressure Klumpe into getting Escamilla’s waiver. Klumpe
testified that immediately after the accident he was met at the
hospital by IBP employee Terry Zimmerman. Zimmerman told him
that unless the release was signed Escamilla’s medical bills
would go unpaid. There was also evidence that Zimmerman had been
-8-
confrontational in extracting a waiver from another injured IBP
employee. A week after the accident, Klumpe met with Suther to
see what the company intended to do for Escamilla. Klumpe
testified that Suther threatened to fire him unless he got
Escamilla to sign the waiver.7 Although Suther denied making any
threats, the jury could have simply chosen to believe Klumpe
instead.
Third, the jury could find that IBP was motivated to get
Escamilla’s waiver by any means necessary. The evidence showed
that an injury virtually identical to Escamilla’s had occurred
several years before. Andres Estrada, like Escamilla, lost three
fingers while operating a hock cutter. Following the Estrada
incident, IBP automated the cutters, but later concluded that
they did not work as well as the manual ones and switched back.
Unlike Escamilla, Estrada elected to receive benefits under WISP,
thus waiving his right to sue. Estrada received a total of
$77,000--$65,000 for medical expenses, and $12,000 in lost wages.
Knowing that the hand-held hock cutters had an established
history of causing severe injury, IBP had an incentive to secure
Escamilla’s waiver before he had a chance to sue. The amount of
7
Q: [D]id Mr. Suther ever specifically talk to you
about the waiver?
A: Yes.
Q: What did he tell you?
A: He told me that I will get that waiver signed or I
will--I will fire your F---ing ass. . . .
-9-
Escamilla’s settlement, as compared to what Estrada got, is
evidence of the exposure IBP was facing. And so, too, is the
fact that the company sought out Klumpe to get the waiver, rather
than Escamilla’s own supervisor or someone besides a close
relative.
In sum, the record would allow the jury to conclude that
Klumpe was not in fact fired for disclosing confidential IBP
documents, and that IBP had a compelling motive to get
Escamilla’s waiver and aggressively sought it. Besides the
incident with the crewing guidelines, there was no material
evidence of any misconduct during Klumpe’s 15 years’ at IBP, and
as stated, no other reason was given for his termination.
Viewing these facts together, the jury could infer that Klumpe
was fired solely for not getting the waiver.
II.
Although the jury could find that IBP fired Klumpe solely
for refusing to get Escamilla’s waiver, there is insufficient
evidence that Klumpe would have committed an illegal act had he
instead agreed to try. Section 32.46 requires deception. In its
charge, the district court defined “deception” to include:
1.) Creating or confirming by words or conduct a false
impression of fact that is likely to affect the
judgment of another in the transaction, and that the
actor does not believe to be true;
2.) Failing to correct a false impression of fact that
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is likely to affect the judgment of another in the
transaction, that the actor previously created or
confirmed by words or conduct, and that the actor does
not now believe to be true; [or] . . .
. . . .
4.) Promising performance that is likely to affect the
judgment of another in the transaction and that the
actor does not intend to perform or knows will not be
performed . . . .
Thus, to be convicted under § 32.46 the defendant must have at
least created a false impression or made an illusory promise.
Klumpe argues that there are at least three areas in which the
SPD and orientation script make deceptive representations.8 If
we conclude that there is no evidence that either document in
fact makes such misrepresentations, a prosecution under § 32.46
8
Even if the SPD and orientation script in fact are
deceptive, IBP argues that Klumpe did no act to create the
deception. If IBP is correct, however, Klumpe could still have
been held responsible for violating § 32.46 as an accomplice.
See TEX. PENAL CODE ANN. § 7.02(a)(2)(1994)(“A person is criminally
responsible for an offense committed by the conduct of another if
. . . acting with intent to promote or assist the commission of
the offense, he solicits, encourages, directs, aids, or attempts
to aid the other person to commit the offense. . . .”). At the
same time, we note that the jury in this case was never
instructed on accomplice liability. Under Texas law, the jury is
not free find the defendant guilty as an accomplice unless the
court’s instructions authorize it to do so and include the
essential elements of proof for making such a finding. See Plata
v. State, 926 S.W.2d 300, 304 (Tex. Crim. App. 1996). Thus, to
sustain his Sabine Pilot claim Klumpe had to prove that his
conduct alone would have constituted an offense under § 32.46.
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could not be sustained. And unless there is proof that seeking
Escamilla’s release would have been unlawful under § 32.46, IBP’s
firing Klumpe for refusing to try does not give rise to a Sabine
Pilot claim. We will examine the SPD and orientation script in
some detail.
The first alleged deception concerns the provision of
lifetime benefits for injured workers. Klumpe contends that the
SPD promises such benefits, but that WISP in fact provides them
only under strictly limited circumstances, and even then only for
a maximum of 401 weeks. The SPD describes the “kinds of
payments” the plan provides, beginning with short-term benefits.
The first kind is “Temporary Disability Payments,” which are
provided until the worker reaches maximum medical improvement.
Second is “Impairment Payments,” which are provided in cases
where the worker has been permanently disabled. The specific
amount paid for impairment depends on “the percent of impairment
to the body as a whole.” Third, the SPD promises “Supplemental
Payments,” which make up for the difference between the worker’s
pre-injury and post-injury income. The SPD does not specify the
length of time for which IBP is responsible for payments of the
first three kinds. The existence of the last category of
payments, entitled “Lifetime Payments,” however, indicates that
the other payments do not continue for the life of the injured
employee. According to the SPD, to receive lifetime payments the
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injured employee must be “unable to return to any work
whatsoever”--a prerequisite that suggests a severe disability.
Six disability categories qualify for lifetime payments.9 For
these, there is no dispute that IBP is bound to provide lifetime
benefits. It is for the other types of payments that the maximum
outlay is 401 weeks. We conclude that the SPD is not deceptive
in describing the lifetime benefits.
The second alleged misrepresentation regards WISP’s
arbitration provision. The orientation script states that IBP is
“bound to honor” the decision of a “neutral arbitrator” regarding
an injured employee’s coverage under the plan. The SPD makes
similar representations. It is undisputed that neither the SPD
nor the orientation script nor the plan itself expressly permit
appeal from the arbitrator’s decision. Klumpe argues that IBP
does not consider itself bound by an arbitrator’s decision, and
he points to a recent example in support of his contention. The
9
Section 3.16 of the plan provides:
(a) Settlement Payments shall be paid until the death
of the Employee for:
(1) total and permanent loss of sight in
both eyes;
(2) loss of both feet at or above the ankle;
(3) loss of both hands at or above the
wrist;
(4) loss of one foot at or above the ankle
and the loss of one hand at or above the
wrist;
(5) an injury to the spine that results in
permanent and complete paralysis of both
arms, both legs, or one arm and one leg; or
(6) an[] injury to the skull resulting in
incurable insanity or imbecility.
-13-
jury heard evidence that former IBP employee Michael Glover
agreed to proceed under WISP, but was dissatisfied with IBP’s
treatment of his claim for benefits. He sought to have his claim
reviewed by a neutral arbitrator in accordance with WISP’s
provisions. The arbitrator found for Glover, but IBP refused to
honor the arbitrator’s decision, claiming that the arbitrator had
exceeded his powers.10
The Federal Arbitration Act (“FAA”) governs actions to
enforce an arbitration clause in cases in which the district
court has original jurisdiction. See Bank One, N.A. v. Shumake,
281 F.3d 507, 513 (5th Cir. 2002). Under the Act, an arbitration
agreement is enforceable unless “such grounds exist . . . for
revocation of the contract.” 9 U.S.C. § 2. One such ground is
where the arbitrator has exceeded his powers. See id. §
10(a)(4). In that case, the aggrieved party may petition the
district court to vacate the award. See id. By contracting for
arbitration, “It is presumed that the parties intended to
relinquish their right to appeal the merits of the dispute, not
their right to appeal an arbitration award that resulted from the
arbitrator’s abuse of authority or bias.” Team Scandia, Inc. v.
Greco, 6 F. Supp. 2d 795, 798 (S.D. Ind. 1998). The parties
10
Glover succeeded in enforcing the arbitrator’s decision in
federal district court. IBP has taken an appeal from that
court’s judgment, see Glover v. IBP, Inc., No. 02-10277 (5th
Cir.), and continues to argue that the arbitrator exceeded his
authority, see Appellant’s Br., passim.
-14-
cannot opt out of the FAA unless they clearly state their intent
to do so. See Roadway Package Sys., Inc. v. Kayser, 257 F.3d
287, 294-95 (3d Cir. 2001)(Becker, C.J.)(construing Mastrobuono
v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995)). In this
case, we see no evidence that the parties sought to require
arbitration under provisions different than those in the FAA. We
therefore conclude that IBP’s appeal in Glover’s case does not
make the SPD or orientation script deceptive.
Finally, we turn to Klumpe’s allegation regarding IBP’s
“Restricted Duty Program.” According to the orientation script,
an injured worker “will be assigned to the restricted duty
program in accordance with the restrictions assigned by your
doctor.” The script says nothing further about this program, and
the SPD says nothing about it at all. Restricted duty is
available until the injured employee reaches “maximum medical
improvement.” Thereafter, the employee has thirty days to find
and bid on a job at IBP that is concomitant with his disability.
If he cannot find such a position, the employee is put on unpaid
leave. While on leave, he may bid on any position for which he
is qualified that becomes available. If he cannot find a
suitable position within one year of being put on leave, the
employee will be terminated.
At trial, Klumpe introduced evidence showing that the
restricted duty program can have a severe effect on an injured
employee. Andres Estrada testified that union rules did not
-15-
permit him to bid for a position unless he had seniority over
other qualified employees. Not surprisingly, light-duty work was
the most sought after at IBP. To qualify for a more strenuous
position, Estrada had to lie about his disability. Working at
IBP was difficult without the use of both hands. Later, Estrada
was returned to the hock cutter, but found it difficult (mentally
and physically) to use the same machine that cut off his fingers.
Never having found another satisfactory position at IBP, he
eventually had to quit.
We agree with the district court that the SPD and
orientation script were not deceptive for failing to include more
information about the restricted duty program. The restricted
duty program is not part of WISP. It was the product of an
agreement between IBP and the worker’s union. Whether or not an
injured employee elects to receive benefits under WISP, he must
find a compatible position within thirty days of reaching maximum
medical improvement. Failure to find a position will not affect
the employee’s eligibly for disability payments unless he refuses
to accept suitable employment. WISP is intended to be an
alternative approach for compensating workers for on-the-job
injuries; the restricted duty program, on the other hand, is a
means for reintegrating them into IBP’s workforce. Neither
directly depends on how or whether an employee proceeds under the
other.
The foregoing notwithstanding, Klumpe claims that IBP
-16-
management themselves admitted that the SPD and orientation
script are deceptive and that employees have in fact been misled.
Based on our own careful review of their testimony, we cannot
agree. Suther, for example, merely admitted that none of the
WISP documents discuss the restricted duty program--a fact that
does not make them deceptive. He also conceded that the WISP
documents do not expressly permit appeal from an arbitrator’s
decision. As we have already shown, however, even a binding
arbitration can be challenged on certain narrow grounds, at least
unless otherwise stated. Nor did Missy Britt, an IBP nurse, or
Barbara Lingenfelter, IBP’s safety manager, admit to knowing of
or making any misrepresentations or that their supervisors at IBP
encouraged them to do so. At most Britt’s testimony shows that
she never elaborated on WISP’s lifetime payment provision or on
the restricted duty program, that not being her job.
Lingenfelter stated that she did not advise employees that they
might receive more if they sue rather than accept benefits under
WISP. But the record does not show that she made a contrary
suggestion, or that she ever discouraged employees from speaking
with an attorney about suing IBP instead.11
CONCLUSION
11
The only evidence we found of an IBP employee having
admitted to misrepresentations came from Klumpe’s own testimony.
He testified that in his meeting with Suther following
Escamilla’s incident, James Crow, another IBP supervisor, told
Klumpe that IBP would “f--- him over just like we do everyone
else.”
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The judgment of the district court is AFFIRMED.12
12
IBP also argues that Klumpe’s Sabine Pilot claim is
preempted by the Employee Retirement Income Security Act, and
that punitive damages are unavailable in this case or,
alternatively, are subject to a statutory cap. Having determined
that there was no evidence of deception, we need not reach these
points. Nor need we take up the district court’s determination
that the deception (if any) would not have caused Escamilla to
execute the waiver.
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Judge Ellison dissenting:
While I concur with much of the majority’s well-written opinion, I dissent on one critical
issue. Specifically, I believe the record does not support the district court’s take-nothing
judgment which was predicated on the theory that no reasonable jury could have concluded that
the act of securing Escamilla’s release would have been a crime.
I. The Legal Standard for Judgment as a Matter of Law
This Court properly reviews de novo the district court’s ruling on a motion for judgment
as a matter of law (“JMOL”), applying the same legal standard used by the district court. Coffel
v. Stryker Corp., 284 F.3d 625, 630 (5th Cir. 2001) (citing Flowers v. S. Reg’l Physician Servs.,
247 F.3d 229, 235 (5th Cir. 2001)). “Although our review is de novo, . . . our standard of review
with respect to a jury verdict is especially deferential.” Flowers, 247 F.3d at 235 (internal
quotations omitted) (quoting Brown v. Bryan County, Okla., 219 F.3d 450, 456 (5th Cir. 2000),
cert. denied, 532 U.S. 1007 (2001)). Therefore, JMOL should only be granted if the facts and
inferences point so strongly and overwhelmingly in the movant’s favor that reasonable jurors
could not reach a contrary conclusion. Id.
Under Federal Rule of Civil Procedure 50, “judgment as a matter of law is proper after a
party has been fully heard by the jury on a given issue, [if] there is no legally sufficient evidentiary
basis for a reasonable jury to have found for that party with respect to that issue.” Ford v.
Cimarron Ins. Co.. 230 F.3d 828, 830 (5th Cir. 2000) (internal quotations omitted) (quoting
Foreman v. Babcock & Wilcox Co., 117 F.3d 800, 804 (5th Cir. 1997)). In entertaining a Rule
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50 motion, the court must review all of the evidence in the record, and draw all reasonable
inferences in favor of the nonmoving party. Ellis v. Weasler Eng’g, Inc., 258 F.3d 326, 337 (5th
Cir. 2001), as amended, (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150
(2000)). The court may not make credibility determinations or weigh the evidence, as
“[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a judge.” Reeves, 530 U.S. at 150-151
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986)). Thus, in reviewing the
record as a whole, the court must disregard all evidence favorable to the moving party that the
jury is not required to believe. Ellis, 258 F.3d at 337 (citing Reeves, 530 U.S. at 151).
II. The Sabine Pilot Criteria
In application to a Sabine Pilot claim, the trial court determines as a matter of law
whether the provision at issue makes its violation a criminal offense, while the jury decides
whether the employee’s conduct would have been “an illegal act.” Sabine Pilot Service, Inc. v.
Hauck, 687 S.W.2d 733, 736 (Tex. 1985); TEXAS PATTERN JURY CHARGES—BUSINESS,
CONSUMER & EMPLOYMENT PJC 107.3 (2000 ed.). The majority opinion rests on affirming the
district court’s reversal of the second of these steps. Although the majority concedes that a jury
could have reasonably found that Klumpe was fired for not getting Escamilla’s release,13 the
majority affirms the district court’s finding that there is no legally sufficient evidentiary basis for a
reasonable jury to find that seeking Escamilla’s release would have been “an illegal act” had
13
The majority also concedes that the jury could have reasonably decided that IBP’s purported reason for Klumpe’s
termination – the removal of the crewing guidelines – was pretextual, that IBP attempted to put pressure on Klumpe
to obtain Escamilla’s waiver, and that IBP was motivated to get Escamilla’s release by any means necessary.
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Klumpe tried. I disagree that the standard of review for a JMOL has been met on this pivotal
issue. I would reverse the district court’s grant of a JMOL and would reinstate the jury verdict.14
Klumpe bases his Sabine Pilot claim on section 32.46 of the Texas Penal Code, which
states in relevant part that “a person commits an offense if, with intent to defraud or harm any
person, he, by deception… causes another to sign or execute any document affecting property…
or the pecuniary interest of any person.” Thus, in order to find that Klumpe would have
committed an illegal act had he sought Escamilla’s release, the facts presented at trial must have
been sufficient for a reasonable jury to find that such an act would have necessarily involved
deception.
As amended effective May 21, 1997, section 32.46 adopts the definition of “deception”
contained in Texas Penal Code § 31.01, which states in relevant part:
(1) “Deception” means:
(A) creating or confirming by words or conduct a false impression of law
or fact that is likely to affect the judgment of another in the transaction,
and that the actor does not believe to be true; [or]
(B) failing to correct a false impression of law or fact that is likely to affect the
judgment of another in the transaction, that the actor previously created or
confirmed by words or conduct, and that the actor does not now believe to be
true[.] (emphasis added).
No evidence at trial supported a finding of deception under Texas Penal Code § 31.01(1)(B). 15
Under Texas Penal Code § 31.01(1)(A), however, the jury could have reasonably found that
14
Although I would reinstate the jury’s verdict, I would review the amount of punitive damages and possibly reduce
them to more closely established precedent. In view of the majority’s opinion, I feel it unnecessary to analyze further
the punitive damages issue, or to consider IBP’s ERISA preemption argument in this dissenting opinion.
15
The majority’s opinion correctly states that Klumpe could have possibly faced liability under the Texas Penal Code
§ 31.01(1)(B) definition of deception had the jury been instructed on accomplice liability. Under Texas law, however,
“the jury is not free to find the defendant guilty as an accomplice unless the court’s instructions authorize it to so and
include the essential elements of proof for making such a finding.” Plata v. State, 926 S.W.2d 300, 304 (Tex. Crim.
App. 1996). While such an instruction would have benefited Klumpe by providing an alternative basis for criminal
liability under the statute, as discussed above it is not dispositive on the issue of liability as accomplicity is not required
under 31.01(1)(A). TEX. PENAL CODE § 31.01(1)(A).
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Klumpe would have been guilty of deception had he tried to obtain Escamilla’s waiver. IBP
claims that the statute requires affirmative deception on Klumpe’s part. The plain meaning of the
statute, however, does not contain this requirement. On its face, the statute merely requires
“creating or confirming by words or actions.” (emphasis added). TEX. PENAL CODE §
31.01(1)(A). For a finding of deception – and thus potential criminal liability – by seeking
Escamilla’s release Klumpe would have had to confirm by words or actions the representations
made by IBP in the orientation script and the Summary Plan Description concerning the WISP
program, and those representations must have actually existed and been known by Klumpe to be
deceptive.
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III. IBP’s Deceptions
As discussed in the majority opinion, new IBP employees receive a booklet containing a
summary of WISP benefits, called the Summary Plan Description (“SPD”) at orientation. The
script read by an IBP supervisor at that orientation states that the SPD “tells you just about
everything you need to know about [WISP], including your rights and responsibilities.”
However, the WISP legal document contains a longer and more detailed explanation of WISP
benefits. The WISP legal document is kept in IBP’s Health and Safety Department, and is not
provided to employees unless they request it. The majority concludes that no inconsistencies exist
between the orientation script, the SPD, and the WISP legal documents, and thus no deception
could have occurred. Not only do I disagree that no inconsistencies exist, but I particularly
disagree that a reasonable jury could not have found the inconsistencies in the materials to be
deceptive such that if Klumpe remained silent or encouraged Escamilla to sign the waiver, he
would have similarly been deceptive.
The first alleged inconsistency concerns lifetime payments under WISP. The SPD states
that “if a covered injury or illness leaves you unable to return to any work whatsoever, the
program provides lifetime payments.” The WISP legal document states that lifetime payments
will only be given if the injury fits one of six categories enumerated in the legal document, such as
total and permanent loss of sight in both eyes. For other injuries not so enumerated, payment will
not exceed 401 weeks.
While the majority concludes that the language concerning being “unable to return to any
work whatsoever” is a prerequisite that suggests a severe disability, the six disability categories
listed in the WISP materials are not exhaustive. In particular, all but one of the six categories
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cover only physical injuries. The sixth category does cover injuries “to the skull resulting in
incurable insanity or imbecility,” but there are a wide range of other work-related illnesses could
leave a person unable to return to any work whatsoever. Debilitating clinical depression, for
example, might well be the result of the injury that Escamilla suffered, and it would definitely not
be covered. More importantly, a reasonable jury could find that the SPD was deceptive in this
regard.
The second alleged inconsistency concerns the binding nature of arbitration under WISP.
According to IBP’s orientation script, “by the terms of the Program as submitted to and
supervised by the United States Department of Labor, IBP is bound to honor the arbitrator’s
decision.” The majority opinion notes that under the governing power of the Federal Arbitration
Act, parties retain the right to appeal an arbitration award that results from the arbitrator’s abuse
of authority or bias, as was the case in the Glover complaint presented as anecdotal evidence of
this misrepresentation at trial. Team Scandia, Inc. v. Greco, 6 F.Supp.2d 795, 798 (S.D. Ind.
1998). Nevertheless, an IBP managerial employee, James Crow, testified that nowhere in the IBP
documents does it state that IBP can appeal the decision if it decides to do so. Nor could I find
any reference in my review of the documents submitted to this Court.16 Whether or not an abuse
of the arbitrator’s authority existed in Glover’s case, testimony at trial concerning Glover merely
illustrated and provided for the jury sufficient evidence to find that, despite telling employees that
IBP is bound to honor the arbitrator’s decision – without any mention of exceptions – IBP can
and does appeal arbitration decisions.17
16
These documents included the orientation script, the SPD, and the WISP legal document.
17
In fact, the orientation script states that “because the appeal process [to a neutral arbitrator] is fairly simple, an
attorney’s service is usually not needed unless you want to hire one.” The help of an attorney would almost certainly
be needed if IBP appealed an arbitrator’s decision. This kind of statement in the orientation script only adds to the list
-24-
The final deception concerns the “Restricted Duty Program.” New employees are told
that, if they are injured on the job, IBP will assign that employee “to the restricted duty program
in accordance with the restrictions assigned by your doctor.” However, the program includes
deadlines not disclosed to the employees during orientation. For example, once the employee
reaches “maximum medical improvement,” the employee has thirty days to find a job within the
plant that will meet the restrictions imposed by the treating physician. If the employee cannot find
a job within that thirty-day period, then the employee is placed on a twelve-month leave of
absence without pay. If the employee cannot find a job within that twelve-month period, the
employee is terminated.
While the Restricted Duty Program is not part of WISP, Klumpe nonetheless presented
evidence at trial concerning the program that adequately demonstrated IBP’s failure to provide
full disclosure of its terms. This evidence, combined with the above discussed inconsistencies,
was clearly enough for the jury reasonably to conclude that deception would have occurred had
Klumpe sought Escamilla’s release because the information given to IBP employee’s concerning
the WISP program and the Restricted Duty Program was misleading and deceptive. Thus, in
order to secure Escamilla’s signature, Klumpe would have had to “confirm” the benefits of the
program by remaining silent about how the program really worked.18 Klumpe testified that no
of evidence the jury could have used in determining the SPD and orientation script were deceptive.
18
In order to illustrate how the program affected an employee who sustained an injury, Klumpe presented the testimony
of Andres Estrada, an IBP employee who suffered an injury very similar to Escamilla’s approximately two years prior
to Escamilla’s accident. After his injury, Estrada signed a waiver, and ultimately received approximately $77,000 in
compensation from IBP. Escamilla, in contrast, received approximately $1.9 million from IBP in settlement of his
personal injury suit. Estrada also testified regarding the difficulties he encountered returning to work at IBP after his
injury, specifically as a result the time deadlines and placement limitations of IBP’s restricted duty program. Estrada’s
experience under WISP and the restricted duty program demonstrated the limitations of those benefits for an individual
with Escamilla’s injury, particularly when considered in light of the significantly greater recovery obtained by
Escamilla as a result of his personal injury suit.
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one with an injury such as Escamilla’s would sign the waiver if he were aware of the
misrepresentations made to him, and of the actual benefits available under WISP and the restricted
duty program. This evidence presented by Klumpe is sufficient to support an inference that
Escamilla would not have signed a waiver if the benefits available under WISP and the restricted
duty program had been fully and accurately presented to him.
Moreover, Klumpe presented evidence at trial that, IBP did not correct the inconsistencies
between the information presented to new employees at orientation and the actual benefits
available to them under WISP and the restricted duty program. For example, IBP employee
Missy Britt testified that she was the first person who generally would consult with an injured
worker about signing the waiver. Britt also testified that she did not discuss any of the differences
between actual benefits provided and the orientation information, and did not discuss the time
limits associated with the Restricted Duty Program when consulting with an injured worker.
Klumpe himself also testified that, as an IBP manager, he previously had secured waivers from
employees without correcting any of the misrepresentations made during orientation, and that he
was fully aware that IBP wanted the waivers signed and did not want any misrepresentations to be
corrected. Estrada and Glover gave anecdotal testimony concerning the Restricted Duty
Program, both relating their experiences that the program did not function as stated in the
orientation script or the SPD. Glover also testified that IBP appealed the arbitrator’s decision in
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his case, something he did not believe was a possibility according to the materials he had received.
Finally, Suther admitted in his testimony that employees were misled during orientation.19
IV. The Property Interests at Stake
An offense under section 32.46 is not complete until a document that would affect
property or a pecuniary interest is executed. Goldstein v. State, 803 S.W.2d 777, 789 (Tex.
App.—Dallas 1991, pet. ref’d) (citing Mills v. State, 722 S.W.2d 411, 416 (Tex. Crim. App.
1986)). The terms “property” and “pecuniary interest” are not defined under section 32.46,
and therefore are to be given their plain and ordinary meanings. Goldstein, 803 S.W.2d at 791
(citing Floyd v. State, 575 S.W.2d 21, 23 (Tex. Crim. App. 1978). The term “property” in
section 32.46 encompasses an individual’s cause of action against another person under the law.
Fisher v. State, 803 S.W.2d 828, 830 (Tex. App.—Dallas 1991, pet. ref’d) (citing BLACK’S LAW
DICTIONARY 1095 (5th ed. 1979)). By signing the waiver, Escamilla would have relinquished his
personal injury cause of action against IBP, and therefore the waiver would have affected his
“property,” irrespective of the outcome of any such lawsuit. Furthermore, in a situation where
the outcome of a lawsuit was just as speculative as Escamilla’s personal injury suit viewed ex
ante, a Texas appellate court has found that even potential legal liability affects an individual’s
pecuniary interest so as to justify conviction of securing execution of a document by deception.
Id. The stipulated facts alone therefore are sufficient to support the jury’s finding that executing
the waiver would have affected Escamilla’s property and/or pecuniary interest, as required to
constitute a violation of section 32.46.
V. The Evidence Supporting the Jury’s Verdict
19
Suther, in his testimony, admitted that IBP’s orientation and SPD materials were false if IBP was seeking to vacate
the arbitrator’s decision in the Glover case, which the record reflects as true.
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Because a Sabine Pilot cause of action will always involve an unconsummated crime, any
testimony about what Escamilla would have done, and why he would have done it, had Klumpe
asked him to sign the waiver inevitably would be speculative. Moreover, if done with the intent
to defraud by deception, any attempt Klumpe would have made to secure Escamilla’s signature on
the waiver would have subjected Klumpe to criminal liability, whether or not that attempt
ultimately proved successful. See TEX. PENAL CODE § 31.01(1)(A). Klumpe meets his Sabine
Pilot burden only if he showed that IBP required him to commit a criminal violation in order to
keep his job; a showing that Klumpe had a good-faith belief that the required conduct would
constitute a violation of criminal law will not suffice.20 Williams, 2000 WL 31802 at *3.
Contrary to the district court’s holding that “[t]he record in this case is devoid of evidence
that those omissions or discrepancies were likely to affect the judgment of Escamilla in the case
before this Court,” the evidence was sufficient to support an inference that, if asked by Klumpe,
Escamilla would have signed the waiver in reliance on misrepresentations made by IBP. 21 The
20
Because the Sabine Pilot standard is an objective one, i.e. did the employer require the employee to commit a crime
or face termination, the suggestion running through IBP’s pleadings and the district court’s opinion that Klumpe’s
claim is somehow tainted because his true motivation was loyalty to his stepson, not fear or criminal prosecution, is
irrelevant. Even if such a factual inference were consistent with the jury’s verdict and thus could be considered by the
Court, Klumpe’s subjective motivation for refusing to obtain Escamilla’s signature does not affect his Sabine Pilot
claim.
21
IBP itself cites the following exchange from the record:
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testimony of the person who signed the relevant document is not required to prove a violation of
section 32.46. Smith v. State, 681 S.W.2d at 74. The testimony of another person who, based on
his personal knowledge, is competent to testify about the state of mind of the signor, is legally
sufficient to support a conviction. Id. In the instant case, the jury could reasonably have inferred
that Klumpe had personal knowledge of Escamilla’s state of mind after the injury, as Escamilla
was Klumpe’s stepson. Klumpe testified that no one with Escamilla’s injury would have signed
the waiver if the benefits actually available under WISP and the restricted duty program had been
known to that person, and that Escamilla, having had the available benefits misrepresented to him,
would have signed the waiver if Klumpe had asked him to do so.
Furthermore, the inconsistencies between the orientation materials and actual plan benefits
adduced by Klumpe are sufficiently material to support an inference of reliance. Although the
availability of lifetime benefits for total permanent disability arguably would not have influenced
Escamilla’s decision regarding the waiver due to the nature of his injury,22 whether arbitration
would have been binding if any dispute over Escamilla’s benefits under WISP arose is an issue
Q: Do you believe if you had gone to Chris and asked him to sign the waiver that we
would have signed it?
A: Sure he would have.
In the context of Klumpe’s testimony in its entirety, this statement does not necessitate an inference that Escamilla
would have signed the waiver, irrespective of the misrepresentations allegedly made to him, simply because his
stepfather asked him to do so. However, when viewed in the light most favorable to Klumpe’s case, it does seem to
indicate, misrepresentations having previously been made by others, that Klumpe simply would have had to maintain
his silence – knowing of the misrepresentations – and that Escamilla would have signed the form upon being asked
to do so by his stepfather.
22
For example, despite the severity of Estrada’s injury, almost identical to the one suffered by Escamilla, he did return
to work. Further testimony by Estrada revealed, however, that he had to eventually terminate his employment with
IBP because of an inability to find suitable work there following his injury. Thus, although the availability of lifetime
benefits for total permanent disability arguably would not have influenced Escamilla under the definition of qualifying
injuries provided in the complete WISP document, it is conceivable that Estrada’s experience could have lead Escamilla
to question his ability to find work after such an injury.
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that cuts across all covered injuries. The jury reasonably could have inferred that an individual
with an injury as serious as Escamilla’s would have found this latter fact material to his decision
whether to accept WISP benefits.
In addition, based on Estrada’s testimony regarding his experience with the Restricted
Duty Program, the jury also could have inferred that the misrepresentations regarding that
program would have been material to Escamilla’s decision. The majority opinion counters that
the Restricted Duty Program is separate from the WISP, and that signing the waiver is not an
agreement to participate in restricted duty. But by signing the waiver, Escamilla would have
relinquished his right to seek damages for future lost earnings after maximum medical
improvement if he could not secure a placement within the program’s time limitations. Escamilla
had not been informed of those time limitations, and did not understand how they might have
affected the amount of his future lost earnings. Accordingly, IBP’s misrepresentations about the
benefit actually available under the Restricted Duty Program reasonably could be believed to have
a direct impact on Escamilla’s willingness to sign the waiver.
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VI. The Roles of Jurors and Judges
In conclusion, the evidence presented at trial does not meet the standard for a JMOL.
Rather, the jury had enough legally sufficient evidentiary support to reasonably find in Klumpe’s
favor. Assessing credibility and making factual determinations are uniquely within the province of
the jury. The jury hears and sees witnesses and evidence first hand – a privilege that is forever
lost when trial ends. Thus, when the majority writes that “the only evidence we found of an IBP
employee having admitted to misrepresentation came from Klumpe’s own testimony”23 (a
proposition I reject), it fails to explain why Klumpe’s testimony would not be sufficient for the
jury. The jury can reasonably decide who to believe, and who to disbelieve. If judges are willing
to set aside jury verdicts as readily as was done in this case, the entire rationale for the civil jury
system is sharply attenuated. At a practical level, trial judges can no longer be credible in
explaining to jurors that – although their service comes at a significant personal cost to them, their
families, and their co-workers – the contribution they make is indispensable.
This case is peculiarly ill-suited to have judges substitute their opinions in place of the
jurors’ verdict. We can leave aside for the moment the fact that the jury listened to nine days of
testimony and deliberated for one more day. We can likewise discount the obvious fact that all
jurors were able to judge the demeanor of the witnesses and then had the opportunity to compare
their reactions. The key point is even more fundamental. Whether an employer’s explanation of
specific employee benefits is or is not deceptive is something that should be determined by men
and women who are chosen from the community in which the conduct occurred and who likely
have had relevant and diverse experiences in receiving explanations of employment benefits and
23
Klumpe testified that in his meeting with Suther following Escamilla’s injury, James Crow, another IBP supervisor,
told Klumpe that IBP would “f--- him over just like we do everyone else.”
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subsequently trying to realize those benefits. In other words, such a determination is one for
which a jury is quintessentially appropriate. Conversely, if any group is uniquely inappropriate to
make such a determination, surely it is Article III federal judges who enjoy the otherwise almost
unheard of luxury of lifetime job tenure and employee benefits many of which are backed by the
full faith and credit of the United States.
A jury’s verdict should be disturbed only when the stringent requirements of JMOL are
met. They are decidedly not met in this case. Accordingly, I respectfully dissent, and would
reverse the district court’s decision and reinstate the jury verdict.
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