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Arguello v. Conoco, Inc.

United States Court of Appeals for the Fifth Circuit
207 F.3d 803 (2000)


Arguello and Govea (plaintiffs) sued Conoco, Inc. (Conoco) (defendant), alleging that Conoco violated federal statutes when Arguello and Govea were subjected to discriminatory treatment at a Conoco-branded store. Arguello and Govea stopped at the store to buy gasoline and other products. After pumping the gasoline and selecting the other items, Arguello approached the counter and attempted to complete the purchase with a credit card. Smith, the store’s clerk, asked for Arguello’s identification, and when Arguello produced an out-of-state driver’s license, Smith said that she would not accept it. An argument ensued, and Smith yelled profanities and racial epithets at Arguello and Govea. Smith also pushed a six-pack of beer toward Arguello and when Arguello left the store, Smith continued yelling racial epithets over the store’s intercom. When Arguello and Govea complained to Conoco management, Smith was counseled about her actions, but no disciplinary action was taken against her. Five other minority plaintiffs, who encountered racially-motivated hostile actions by employees at other Conoco-branded stores, also sued Conoco for discrimination in violation of federal statutes. The trial court granted summary judgment for Conoco, holding that no principal-agent relationship existed between Conoco and Smith, or between Conoco and the Conoco-branded stores. Regarding the first matter, the trial court held that Smith was not an agent of Conoco, because she had acted outside the scope of her employment when the incident with Arguello and Govea occurred. Regarding the second matter, the district court held that no agency relationship existed between Conoco and the Conoco-branded stores, because the Petroleum Marketing Agreement (PMA) between Conoco and the stores did not give Conoco the right to control the daily operations of the stores.

Rule of Law


Holding and Reasoning (Stewart, J.)

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