Chapter 9-14 Wrongful Expulsion of Whistleblowing Partner

• Jurisdiction: United States

9-14 Wrongful Expulsion of Whistleblowing Partner

9-14:1 Overview

A partner's status within the partnership is governed under employment-at-will concepts.⁷¹ Partners always have the power to withdraw from the partnership but only sometimes have the right to withdrawal.⁷² In contrast, there are no substantive limitations on when a partnership may expel a partner from its ranks.⁷³

9-14:1.1 Related Causes of Action

Breach of Partnership Duty, Judicial Expulsion of Partner, Wrongful Withdrawal of Partner

MUST READ CASE

Bohatch v. Butler & Binion, 977 S.W.2d 543 (Tex. 1998)

9-14:2 Expressly Rejected in Texas

The Supreme Court has expressly rejected the cause of action for wrongful expulsion of whistleblowing partner.⁷⁴ The Court reasoned that trust among the partners would be irreparably harmed if the Court were to recognize such a cause of action⁷⁵ even if the whistleblowing partner acted in good faith and was entirely accurate in her accusations.⁷⁶

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Notes:

^[71] Bohatch v. Butler & Binion, 977 S.W.2d 543, 545 (Tex. 1998).

^[72] See Tex. Bus. Orgs. Code Ann. § 152.503 (discussing wrongful withdrawal of a partner).

^[73] See Bohatch v. Butler & Binion, 977 S.W.2d 543, 545 (Tex. 1998).

^[74] See Bohatch v. Butler & Binion, 977 S.W.2d 543, 546 (Tex. 1998).

^[75] Bohatch v. Butler & Binion, 977 S.W.2d 543, 546-47 (Tex. 1998).

^[76] Bohatch v. Butler & Binion, 977 S.W.2d 543, 547 (Tex. 1998).