Texas Supreme Court Reverses Exemplary Damages Award

 In Safeshred, Inc. v. Martinez, 2012 WL 1370862, No. 10-0426 (Tex. 2012), the Texas Supreme Court held there was not legally sufficient evidence to recover exemplary damages. 

The plaintiff (“Employee”) was a truck driver who was fired after refusing to haul an unsafe load.   Employee brought a wrongful termination claim against his employer (“Employer”) seeking lost wages and exemplary damages. The jury awarded $ 7,569.18 in lost wages and $ 250,000 in exemplary damages.   The Austin Court of Appeals affirmed the lost wages and exemplary damages award.

The Texas Supreme Court held that Employee was entitled to exemplary damages under his claim only with a showing of malice surrounding Employee’s firing.  The Texas Supreme Court held that a malice finding, as the basis for exemplary damages, requires more than an employer’s mere intent to fire an employee, or else every jury’s finding of retaliation would warrant exemplary damages.  The Texas Supreme Court further held that malice could only be shown by clear and convincing evidence that an employer, in firing an employee, “intended or ignored an extreme risk of some additional harm (like interference with his future employment, harassment, or terminating him knowing it was unlawful to do so).  In lieu of this standard, the Texas Supreme Court held that the Employee did not present legally sufficient evidence for a reasonable trier of fact to form a firm belief or conviction that the Employer acted with malice in firing him.