A New Interpretation on Appeal Is a Forfeited Issue: The Eleventh Circuit Clarifies the Issue–Argument Divide in Gould v. Interface

Court: U.S. Court of Appeals for the Eleventh Circuit

Date: October 2, 2025

Case: Jay D. Gould v. Interface, Inc., No. 23-12882

Panel: Judges Jill Pryor, Newsom (author), and Lagoa

Introduction

This appeal arises from the termination for cause of Jay D. Gould, the former CEO of Interface, Inc., following alleged misconduct at a company sales meeting and a prior alcohol-related harassment episode. Under Gould’s employment agreement, a termination “with Cause” dramatically reduced his severance compared to a “without Cause” separation. After Interface’s board fired him for cause, Gould sued for breach of contract. The central question on appeal, however, is not whether Gould’s conduct satisfied the contract’s definition of “Cause,” but whether Gould could advance a brand-new interpretive theory of the contract on appeal—namely, that the company had no discretion to determine the existence of cause—after having litigated in the district court on the premise that the company had qualified discretion subject to a good-faith limitation.

The Eleventh Circuit answered that procedural question with a clarifying rule of appellate practice: when a party advances on appeal an altogether new interpretation of a legal text that departs from the interpretation argued in the district court—and doing so would require consideration of different facts and a different body of law—that new position is a forfeited issue, not a permissible new argument. Because Gould did exactly that, the court held that he forfeited his “no-discretion” theory and affirmed the district court’s judgment for Interface.

Summary of the Opinion

Contract Framework: The employment agreement allowed Interface to terminate Gould “in its sole discretion, whether with or without Cause” (Section 5(c)), defined “Cause” (Section 5(a)(i)), and provided a good-faith proviso relating to whether certain cause events are “remediable.”
Three plausible readings: The contract could be construed as (1) giving Interface absolute discretion to determine cause; (2) giving qualified discretion subject to a duty of good faith; or (3) giving no discretion (i.e., a court decides whether cause existed, as a factual matter).
District Court: Granted summary judgment to Interface on two independent grounds: (a) the contract vested Interface with absolute discretion to determine cause (thus no good-faith inquiry applies), and (b) even if only qualified discretion applied, Gould failed to create a fact issue that Interface acted in bad faith.
Shift on Appeal: Gould abandoned the “qualified discretion with bad-faith” framing he litigated below and, for the first time (in reconsideration and then on appeal), argued the agreement gave Interface no discretion to determine cause.
Holding: Gould’s new “no-discretion” theory is a new issue, not a subsidiary argument. Because he failed to raise it in the district court, it is forfeited. The court declined to revive it because no “extraordinary circumstances” were argued or existed.
Disposition: Affirmed. Gould’s only surviving contention (that his conduct did not satisfy the contractual definition of cause) would challenge at most the district court’s second ground, leaving the first (absolute discretion) untouched; thus, it could not yield reversal.

Analysis

1) Precedents Cited and Their Influence

Yee v. City of Escondido, 503 U.S. 519 (1992): The Supreme Court distinguished between new “claims” (or “issues”) and new “arguments.” While parties may present new arguments in support of a claim properly raised below, they cannot switch to an entirely new claim. In Yee, a regulatory-takings theory was treated as a permissible new argument supporting a takings claim, but an unraised substantive due process claim was not. The Eleventh Circuit used Yee as the “fountainhead” to frame the difference between preserved issues and arguments. Applying Yee here, the court concluded that Gould’s pivot to a “no discretion” construction of the contract was not simply a new argument but a different issue—a different interpretive position about what the contract means.
ECB USA, Inc. v. Chubb Ins. Co. of N.J., 113 F.4th 1312 (11th Cir. 2024): ECB held that a party may cite new interpretive canons or authorities on appeal to bolster the same interpretation advanced below; but a party generally cannot argue that the text means something different on appeal than it argued in the district court. This distinction was decisive. The court emphasized that Gould did not merely add new authorities in support of a consistent reading; he changed the reading—from “qualified discretion subject to good faith” below to “no discretion” on appeal. That is a new “issue” and therefore forfeited.
Hamer v. Neighborhood Housing Services of Chicago, 583 U.S. 17 (2017): Clarified the difference between waiver (intentional relinquishment) and forfeiture (failure to timely assert). The panel corrected the district court’s and parties’ terminology: Gould did not “waive” but rather “forfeited” the new theory by not presenting it earlier.
United States v. Campbell, 26 F.4th 860 (11th Cir. 2022) (en banc): Recognized the court’s limited authority to consider forfeited issues in “extraordinary circumstances.” The court noted Gould neither argued nor satisfied such a standard, so it declined to reach the forfeited theory.
Automatic Sprinkler Corp. of America v. Anderson, 243 Ga. 867 (1979): A Georgia Supreme Court decision providing the substantive contract-law backdrop: when a contract gives a party absolute discretion, courts do not review for good faith; when it gives qualified discretion, courts review for bad faith; when it gives no discretion, courts assess whether the decision was “in fact erroneous.” Although dispositive resolution of which category applied to Gould’s contract was unnecessary given forfeiture, Automatic Sprinkler framed the three possible interpretations of the contract and the district court’s first ground for summary judgment.
Shelnutt v. Mayor, 776 S.E.2d 650 (Ga. Ct. App. 2015): Cited below by Gould for the Georgia law standard of “bad faith” in exercising contractual discretion (e.g., arbitrary, dishonest, capricious, improper motive). The panel noted that Gould’s switch to a no-discretion theory obviated the relevance of this doctrinal line.
Greenlaw v. United States, 554 U.S. 237 (2008) and Castro v. United States, 540 U.S. 375 (2003): Invoked for the adversarial-system premise that courts rely on parties to frame issues and arguments. Allowing a wholesale change of position on appeal undermines that system and breeds confusion—another reason to treat Gould’s new theory as forfeited.
In re Home Depot Inc., 931 F.3d 1065 (11th Cir. 2019) and Secretary of Labor v. Preston, 873 F.3d 877 (11th Cir. 2017): Reinforce that parties can forfeit positions/issues but not subsidiary arguments or authorities if the issue itself was preserved.
CSX Transportation, Inc. v. General Mills, Inc., 846 F.3d 1333 (11th Cir. 2017): Recognizes that a party may press on appeal an alternative interpretation it presented below. The problem here is that Gould did not present the “no discretion” reading in the district court, even in the alternative.
Auriga Polymers Inc. v. PMCM2, LLC, 40 F.4th 1273 (11th Cir. 2022): Standard of review; summary judgment is reviewed de novo, which the court applied here.

2) The Court’s Legal Reasoning

a) Framing the Contract Question and the Three Interpretations

The contract’s termination architecture matters. Section 5(c) says the company may terminate the executive “in its sole discretion, whether with or without Cause.” Section 5(a)(i) defines “Cause,” and in its final proviso affirms that the company may determine in “good faith” whether certain cause-triggering events are remediable. Section 5(d) sets protocols for a without-cause termination, but not the merits of cause. From this text, the court observed three plausible interpretive paths under Georgia law (channeling Automatic Sprinkler): absolute discretion (no good-faith review), qualified discretion (review for bad faith), or no discretion (court independently tests whether cause exists).

b) What Gould Litigated Below vs. What He Claimed on Appeal

In the district court, Gould never argued that Interface lacked discretion to determine cause. To the contrary, he prosecuted the case on the premise that the company had the power to decide cause, but that it exercised that power in bad faith—chiefly by relying on a supposedly “sham” investigation by outside counsel. He doubled down on a good-faith challenge in his summary-judgment opposition and objections to the magistrate judge’s report. Only after losing did he pivot—on reconsideration and then on appeal—to a new thesis that Interface had no discretion whatsoever to decide cause under the agreement.

c) Why the New Theory Is a Forfeited Issue, Not a Permissible New Argument

Textual interpretation switched: Under ECB, a party may not argue a legal text means “B” on appeal after arguing it means “A” below. Gould’s appellate position reads Section 5(c)/5(a)(i) to allocate no discretion, contradicting his litigated position that they allocate qualified discretion subject to good faith.
Different facts: A good-faith challenge hinges on the circumstances of the investigation, board deliberations, motives, and process. A no-discretion theory renders those facts immaterial and instead turns on whether the conduct in fact fits the definition of “Cause.” The wholesale change in relevant factual predicates is a marker that the theory is a new issue.
Different law: The bad-faith framework (Georgia implied covenant cases) is replaced by contract-construction principles regarding allocation of decisionmaking authority. This doctrinal shift further signals a new issue.

Because Gould’s appellate theory is a new issue, Yee and Eleventh Circuit precedent treat it as forfeited. The court also noted it could excuse forfeiture only in extraordinary circumstances (Campbell), but Gould neither invoked that safety valve nor showed it applied.

d) Independent Grounds Doctrine and the Path to Affirmance

The district court granted summary judgment on two independent grounds. Gould’s surviving contention—that his conduct does not fall within the contract definition of Cause—if considered at all, would bear on the second ground (qualified discretion and bad faith), not the first (absolute discretion). Because the first ground stands unchallenged, the court affirmed without reaching the merits of Gould’s remaining argument.

3) Impact and Practical Implications

a) Appellate Practice: The Issue–Argument Divide is Sharpened

Clear rule: Advancing a new interpretation of a legal text on appeal—especially one that changes the relevant facts and governing body of law—is a forfeited issue, not a permissible new argument.
Preservation strategy: Litigants should present alternative textual interpretations in the district court if they want to preserve them for appeal. If a party believes a contract vests no discretion, that theory must be pleaded and argued early, alongside any qualified-discretion arguments.
Use of canons and authorities: Parties may always bring new interpretive canons or authorities on appeal to support a preserved reading (ECB), but not to switch to a different reading.
Independent grounds: Appellants must challenge each independent basis supporting the judgment. Attacking only one ground is insufficient if another remains intact.

b) Contract Drafting and Executive Employment Agreements

Clarity on “who decides” Cause: This case underscores the importance of expressly allocating decisionmaking authority. If parties intend board-level discretion on cause determinations, state it unambiguously and specify whether it is absolute or subject to good faith.
Remediability provisos: The agreement here expressly required a good-faith determination regarding remediability, suggesting an area of qualified discretion even if other aspects might be absolute. Drafters should clarify whether “good faith” applies only to remediability or also to the existence-of-cause determination.
Litigation risk: Ambiguity in the scope of discretion invites Automatic Sprinkler’s three-category debate (absolute, qualified, none). Parties should draft with that taxonomy in mind to avoid post-termination litigation.

Investigations and process: Where qualified discretion applies, a well-documented, independent investigation and deliberative board process can forestall “bad faith” challenges.
Preserving theories: Plaintiffs should plead and brief all plausible constructions of the contract—including “no discretion”—from the outset. Waiting until reconsideration or appeal risks forfeiture.

Complex Concepts Simplified

Waiver vs. Forfeiture: Waiver is the intentional relinquishment of a known right; forfeiture is the failure to timely assert a right. Here, Gould forfeited his new theory; he did not intentionally waive it.
Issue vs. Argument: An “issue” (or “claim”/“position”) is the substantive question presented for decision (e.g., what the contract means). An “argument” is a reason or authority supporting a preserved issue. Parties can add new arguments and authorities on appeal in support of a preserved issue, but may not introduce a new issue.
Absolute vs. Qualified vs. No Discretion (Automatic Sprinkler):
- Absolute discretion: Decision is left to one party’s uncontrolled discretion; courts do not review for good faith.
- Qualified discretion: Decision is vested in a party but must be exercised in good faith; courts review for bad faith (arbitrary, dishonest, capricious, improper motive).
- No discretion: The decision is not left to the party; courts determine whether the decision is “in fact erroneous.”
Independent Grounds for Judgment: When a court gives two separate reasons to grant summary judgment, an appellant must successfully challenge both to obtain reversal. Failure to attack one ground is dispositive.

Additional Observations

Standard of Review: Summary judgment is reviewed de novo, but preservation rules still govern the issues an appellate court will reach.
Reconsideration Orders: The court clarified that to reverse a final judgment, an appellant need not also show error in the denial of reconsideration; reversal turns on error in the judgment itself (ECB).
Adversarial System Concerns: The court emphasized that changing positions on appeal impairs the adversarial process. Parties bear responsibility for framing their best arguments early.

Conclusion

Gould v. Interface does not rewrite Georgia employment-contract law on “cause” determinations; instead, it delivers an important appellate-practice clarification with wide application: a party may not, on appeal, swap in a new interpretation of the contract (or other legal text) that it did not press below, particularly where that change would refocus the factual record and invoke a different body of law. Such a move raises a new issue and is forfeited. Applied here, that rule foreclosed Gould’s attempt to reframe his case as a “no discretion” dispute at the appellate stage.

For litigators, the message is clear: preserve alternative textual interpretations in the trial court and challenge each independent ground supporting summary judgment. For contract drafters—especially in executive employment agreements—state clearly who decides “Cause,” whether discretion is absolute or qualified, and where good-faith constraints apply. The decision thus strengthens both appellate discipline and contractual clarity, ensuring that appeals are fought on the same interpretive battlegrounds the parties chose in the district court.