A Waco federal court jury awarded a former employee of Waco-based Wardlaw Consulting Services $504,000 in damages Thursday after finding the company breached its employment contract with her.
Debra Rekiel and Wardlaw executives both violated the terms of Rekiel’s employment agreement, but a seven-person U.S. District Court jury determined Rekiel’s breach was not material and Wardlaw’s was and that Rekiel should be compensated.
Rekiel, 66, worked for the insurance adjustment business out of her home in St. Petersburg, Florida, from 2011 until she was fired in March 2018. She alleged in her lawsuit that Wardlaw defrauded her out of $7 million over the course of her employment by not paying her the amount of commissions she was entitled to.
U.S. District Judge Alan Albright dismissed the fraud claim from the suit, and at trial, Rekiel and her Austin attorneys, Kerry O’Brien and W. Lance Cawthon, asked the jury for about $1 million in damages for the employment agreement violation.
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Wardlaw owners filed a counterclaim against Rekiel, charging that she “stole” sensitive and confidential company information after their dispute intensified by transferring emails containing customer lists, financial information and other proprietary data from her business computer to her personal computer.
Rekiel testified that she took the information to defend herself once she realized Wardlaw was not paying her what she was owed in commissions. She said she never agreed to any reductions in her commissions and did nothing that would damage the company with the information she transferred to her personal computer.
Wardlaw’s attorney, John Ross, of Dallas, told the jury in summations Thursday morning that Rekiel’s “thefts” from the company could have damaged the company’s reputation in the highly competitive insurance adjustment business since the company had to notify insurance companies about the breach in confidentiality.
While he said the damage was significant, he did not assign a dollar amount to it for the jury’s consideration. The jury found the breach was not harmful and did not award the company any damages on its claim.
“I don’t know how the jury calculated the damages,” O’Brien said. “It was less than we asked for, but she needed to hear a jury say to her that they treated her wrongly. And hearing that I think has been almost as valuable as the money.”
Ross said Wardlaw officials are disappointed but respect the jury system.
“We still consider the verdict a quote ‘win’ unquote because the judge dismissed the fraud claim and it is significantly less than the plaintiff was offered before trial. It is not only significantly less than she was offered, it is really significantly less that she demanded, which at one point was $7 million.”
Ross said Wardlaw offered Rekiel $1.25 million to settle the case a year ago and she rejected it.
O’Brien said Wardlaw made an early offer to Rekiel to settle for $600,000. But that offer was rescinded after company officials learned about her forwarding documents to her personal computer in violation of her contract agreement. The last settlement offer before trial was $150,000, O’Brien said.
“If we had settled the case, there would be no public finding that they had taken advantage of her,” O’Brien said.
Rekiel also has a three-year, post-employment contract with Wardlaw that still has about 17 months remaining on it, and O’Brien said he intends to see that the company lives up to those terms. That would bring Rekiel an additional $560,000, O’Brien said.
When asked if the company plans to appeal the case and if it plans to pay out the terms of Rekiel’s post-employment agreement , Ross said, “We will explore all the options.”
Rekiel, who frequently became emotional during her testimony Wednesday, told the jury she grew suspicious that the company was not paying her the contractual amount of commissions for business she brought in when company owner Mike Wardlaw announced at a managers’ meeting in June 2016 that the company had grossed $65 million the year before.
She said his statement surprised her because she grossed less than $400,000 that year. With the total he announced, she should have made more in commissions, she said.
Wardlaw said company officials knew of changes made to employee commission percentages. While Rekiel was questioning her pay, she did not quit and remained with the company, he said.
Rekiel said she was unaware of any changes in her pay structure and never agreed to any modifications of her commissions.
The judge instructed the jury that under Texas law, when an employer notifies an employee of changes in employment terms, the employee must accept the new terms or quit, and, if the employee continues to work, she has accepted those changes as matter of law.
O’Brien told jurors in summations that the company’s mindset is “yes, we may owe you more money, but we are paying you well and we can play fast and loose with the rest of it.”
He called the company’s counterclaim against Rekiel a “very sinister and dark way to try to get out of your obligations.”
“That is not how you treat people,” he said.