» 2014 » February

Indian American Files Federal Employment Discrimination Lawsuit Against Texas Company

An Indian American employee has filed a federal employment discrimination lawsuit against Schwan’s, a Texas home food delivery company, claiming that was subjected to racial discrimination and physical abuse while under the company’s employ.

Sandeep Gupta worked as a location manager in Houston for Schwan’s until he quit in 2013. He said he was subjected to extreme mistreatment, including racial slurs and physical attacks.

Gupta, who was born in India and raised in Hong Kong, said that he was called names such as “turban head” at work, and that coworkers suggested he was a terrorist. Allegedly, they also altered a photograph of him to make it appear that he was surrounded by a SWAT team. Gupta claimed that company managers physically attacked him, holding him down and striking him in the groin. He claims that the abuse continued on a systematic basis even after he reported it to his supervisor.

Gupta said that he needed the job and could not afford to quit until last year. He said he is now looking for work.

Schwan’s issued a statement stating that it is the company’s policy to provide a workplace free of discrimination and harassment, and that Gupta did not report the alleged abuse prior to his resignation.

Multibillion-Dollar Dispute Between Texas Energy Companies to Go to Trial

In Dallas, a trial is set to begin in a business dispute between two large Texas energy companies contesting whether a business partnership had been formed between them.

Dallas-based Energy Transfer Partners filed the lawsuit against Houston-based Enterprise Products Partners and Enbridge Inc. of Calgary, Alberta. Energy Transfer Partners claims that a business partnership had been created between itself and Enterprise to jointly construct a pipeline from Cushing, Oklahoma to Houston, but that Enterprise conspired with Enbridge to cut Energy Transfer out of the deal.

In a motion to dismiss the case, Enterprise and Enbridge claimed that no partnership or joint venture was actually created between Energy Transfer and Enterprise. The motion to dismiss was denied by Dallas County District Judge Emily Toblowsky, and jury selection has now begun.

The case is noteworthy because it involves important business litigation issues and pits prominent Texas trial attorneys against one other. The case is also expected to reveal information about the business strategies of three large, fast-growing oil companies. Testimony from executives of all three companies is expected to be given.

Energy Transfer Partners, which has approximately $50 billion in gas and oil assets, claims that Dan Duncan, the chairman and majority owner of Enterprise, approached Energy Transfer Partners about forming a joint venture before his death in 2010. Enterprise, which has about $38 billion in assets, signed a nonbinding agreement with Energy Transfer Partners in spring 2011.

Energy Transfer Partners claims that over the following few months, the two companies jointly made operational decisions, met with potential customers and marketed the partnership, calling the venture Double E Pipeline and even signing a deal with Chesapeake Energy in August 2011 to ship oil on the installation.

However, Enterprise announced that it was terminating the business relationship less than a month later. Allegedly, the company then started a similar venture with Enbridge, which has annual revenue of about $11 billion and assets of approximately $30 billion.

Energy Transfer Partners claims that Enterprise and Enbridge conspired to end the existing partnership and is suing for $1.2 billion in damages. Enterprise claims that no partnership had been finalized, pointing to language in an April 2011 letter that states that no obligations would exist between the two companies until the parties received approval from their respective boards. Energy Transfer Partners argues that Texas law has a liberal definition for the existence of a business partnership, even sometimes finding a partnership in cases in which the parties claim there is none.

Eye Clinic Denied Injunction Due to Improper Noncompete Agreement

A Texas court has denied an injunction requested by a Houston eye clinic based on an improper noncompete agreement.

LasikPlus of Texas requested a court order to enforce the covenant not to compete against a doctor, formerly employed by the clinic, who planned to open his own clinic nearby. The Fourteenth Court of Appeals rejected the request, finding that the noncompete agreement did not contain language required by statute.

The agreement in question barred the doctor from opening a competing business within 20 miles of LasikPlus and from soliciting its clients for a period of 18 months following the end of his employment. The agreement included terms allowing for reasonable enforcement even if it was found to be unreasonable in scope, and it expressly provided for an injunction if the agreement was violated.

However, the agreement did not include language required by the Texas Covenants Not to Compete Act, which provides that covenants relating to the practice of medicine must include a reasonable buyout provision. The court found that because the agreement in question contained no such provision, it was unenforceable as a matter of law.

Among other arguments, LasikPlus said that there was a mutual mistake with regard to the drafting of the agreement. However, the court noted that the doctor had submitted an uncontroverted affidavit stating that he had raised the possibility of a buyout, and that the suggestion was rejected.

Exxon Wants Texas Supreme Court to End Oil and Gas Royalty Dispute

Exxon Mobil Corporation has filed a brief with the Texas Supreme Court seeking to end a long-running dispute with royalty owners.

The owners allege that they were misled into selling their gas and oil interests for a reduced price; the company argues that the royalty owners should not get a new trial after a previous appeal resulted in the loss of a $21 million judgment in their favor.

The royalty owners claim that Exxon misrepresented the productivity of their wells, leading the owners to believe they were worth less than they were, which in turn influenced their decision to sell their interests to a different company at a reduced price. Exxon argues that the owners’ decision could not have been affected by Exxon’s representations, because the owners repeatedly denied that the wells were losing value.

Exxon’s brief claims that the royalty owners did not justifiably rely on the company’s representations, because they “distrusted everything” the company said and conducted their own investigation, ultimately rejecting Exxon’s suggestion that the leases should be modified.

The underlying dispute began in 1996, when royalty owners sued Exxon, claiming that the company was sabotaging Refugio County wells by plugging them with foreign material. According to the lawsuit, Exxon attempted to negotiate a lower rate on the leases by claiming that productivity was diminishing. When the owners refused to accept less than a 50 percent royalty rate, Exxon terminated the leases. The owners later leased to Emerald Oil and Gas for a 30 percent royalty rate, according to court records.

The fraud claims were dismissed prior to trial, with the trial court finding no evidence that the royalty owners relied on Exxon’s statements. The other claims (for breach of contract and waste) resulted in a $21 million verdict in 1999. But after a series of appeals, the Texas Supreme Court reversed that verdict in 2009.

However, because the appeals court did not address the issue of whether the fraud claims were dismissed improperly, the Texas Supreme Court remanded the case for review of that issue. The lower appeals court then found that the fraud claims were improperly dismissed and sent the case to the trial court for a new trial.

Exxon now argues that the Texas Supreme Court should step in again and reverse the order for a new trial.

According to Exxon’s brief, the appeals court perceived an attempt at fraudulent inducement in Exxon’s statements which, even though they were rejected at the time, were nevertheless relied upon later, in separate negotiations with a different party.

The law, Exxon said, should not go that far.

For a concise case summary and further detail, click here.

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