Franklin County Appellate Court Rejects Discrimination Claims Based on Criminal Conviction and Non-Substantially Limiting Impairments

[Editor's Note:  On August 3, 2023, the Court deleted its original opinion and re-issued it after a request for reconsideration on the issue (noted below) about whether a request for a reasonable accommodation may constitute protected activity for purposes of a retaliation claim.  Without resolving that issue, the Court deleted the paragraph discussing that issue (as noted below) and modified the opinion, but not the result: " In light of appellant’s reconsideration motion and the accompanying amicus brief filed with this court, we reissue our June 20, 2023 decision without original paragraph 102 and with a slight modification to original paragraph 103 (now 102). Whether a request for accommodation constitutes protected activity under Ohio law is a question that warrants full briefing before definitive resolution by this court."]

Last month, a unanimous Franklin County Court of Appeals affirmed an employer’s summary judgment where the plaintiff had alleged that he had been terminated on account of his race, disability and in retaliation for engaging in protected conduct.  Childs v. Kroger Co., 2023-Ohio-2034.  The plaintiff had been hired into a bargaining unit position despite a murder conviction from when he was a juvenile and was ultimately promoted to a salaried assistant manager position before he was fired when management learned about his prior murder conviction.  The Court found that he was unqualified for his position because the company policy at the time of his termination precluded the employment of convicted murderers.

According to the Court’s opinion, the plaintiff was convicted of murder in 1996 from when he was a juvenile.  He was hired by Kroger into an hourly bargaining unit position in 2014.  He had truthfully reported that he had a criminal conviction on his employment application and claimed to have explained the details to his interviewer.  The background check only reviewed the prior 7 years and so did not pick up the earlier murder conviction.   His job history listed his prison employment as well as his current job.  It apparently did not occur to the individuals reviewing his job application that his prison employment was as a prisoner instead of as a private contractor.  In 2015, he applied for and was selected for a management training position.  In 2017, he began suffering panic attacks after the store was robbed and he was physically threatened.  He was given a poor performance evaluation a couple of months later and put on a performance plan.  He then accused his manager a few months later of being racist based on observed favoritism.  A month later, he then submitted a medical statement about his depression and asked to be transferred to another store.  He then complained again in October 2017 about his manager, who was then transferred.  The plaintiff was also transferred from Reynoldsburg to Sunbury in February 2018 and he received a better performance evaluation.

While in Sunbury, the plaintiff learned in April 2018 that an employee had been convicted as a sexual offender.  He recommended termination and participated in the union grievance process that resulted in the employee’s termination as a risk to minor employees.  Shortly thereafter, an employee was searching for information about the plaintiff’s recent motorcycle accident and discovered his 1996 murder conviction.  It was reported to management and he was fired at the end of May 2018 because company policy provided that it was a disqualifying offense.  More than a year later, the plaintiff filed suit alleging race and disability discrimination and retaliation and wrongful discharge in violation of public policy, as well as unlawful aiding and abetting and defamation.  The trial court eventually granted summary judgment to the defendants on all claims and it was affirmed on appeal.  Much of the lengthy appellate decision involves procedural and discovery issues.

The Court concluded that, despite the fact that the plaintiff had worked more than three years at Kroger and been promoted, he could not satisfy his prima facie case and show that he was qualified for his position before being fired because his 1996 murder conviction rendered him unqualified.  The plaintiff “is unable to establish the third element of his prima facie case, because his murder conviction rendered him unqualified for employment at Kroger.” Evidence was presented that the company refused to hire individuals with certain convictions and fired them if a disqualifying conviction was later discovered.   Even if murder was not a disqualifying conviction at the time he was hired, it was at the time he was terminated.

The Court also rejected his claim for disability discrimination, which was based on his depression, anxiety and PTSD.  The Court found that the plaintiff failed to show that his depression substantially limited any major life activities because he admitted that he was able to continue to work and the remaining limitations were relatively insignificant.  Although the plaintiff

 indicated that his depression impacted his ability to sleep and do household chores on some days, he did not claim that his depression affected his ability to sleep or do chores for significant amounts of time. [The plaintiff] presented no evidence indicating that his depression substantially limited his ability to think or otherwise engage in major life activities, and he affirmed that he could hold a job despite his depression. Accordingly, [he] failed to demonstrate that his depression occurred in sufficient duration and with sufficient severity to significantly limit any major life activity.

In any event, even if the plaintiff could show that he were statutorily disabled, he “also could not establish that he was qualified for his assistant store manager position either with or without a reasonable accommodation, because his murder conviction rendered him unqualified for any position of employment with Kroger.”

As for his retaliation claim, the Court initially rejected his argument that he was retaliated against for requesting a transfer as a reasonable accommodation. “A request for reasonable accommodation does not amount to “participation in any manner in any investigation, proceeding, or hearing” or “opposition to an unlawful discriminatory practice” under R.C. 4112.02(I).” In other words, Ohio law does not consider a reasonable accommodation request to be protected activity for purposes of asserting a retaliation claim.  However, the Court withdrew that part of its opinion on August 3, 2023 as noted in the Editor's Note above. 

Similarly, the Court concluded that it was not protected conduct under ORC 4112 to report the sexual offender conviction of a subordinate to management when he asserted that his termination was motivated by reporting the sexual offender despite the store manager’s resistance.

Nonetheless, his other retaliation claim had more merit.  He claimed that he was placed on a performance improvement plan after asking his supervisor if he was racially biased against him.  However, the company contended that it was based on his earlier, year-end performance evaluation.  Sadly for the plaintiff, his own comments on his performance evaluation acknowledged that his performance needed to improve and commented on specific mistakes or shortcomings that he had shown.  He also could not disprove that the company always placed low-performing employees on performance plans.  Therefore, the Court dismissed the retaliation claim.

Because all of his ORC 4112 claims were dismissed, the aiding and abetting allegations against the individual employees and managers were similarly dismissed.

The Court also dismissed the wrongful discharge claim on the basis that his murder conviction motivated his termination and not his earlier report of the sex offender employee.  He could not show that public policy was jeopardized by his reporting of the sex offender to management.  Even if that report had motivated his termination, he could not identify a public policy which was violated by his termination:

[His] termination would not have jeopardized the public policy expressed in R.C. 2950.034(A). The statute prohibits sexually oriented offenders from residing in specific locations; it does not prohibit sexually oriented offenders from working at specific locations.

Finally, the Court dismissed the defamation claim based on the incorrect report that he had failed to previously disclose his murder conviction.  He claimed – without contradiction – that he had disclosed it in his job interview.  However, he could not prove that the HR employee passed that information along to management or that the individuals who allegedly defamed him knew that he had previously disclosed it in a 2014 interview.   Further, management has a qualified privilege to discuss other employees.

Furthermore, “ ‘a communication made in good faith on a matter of common interest between an employer and an employee, or between two employees concerning a third employee, is protected by qualified privilege.’ ” . . . “Once the defense of qualified privilege attaches, a plaintiff can only defeat the privilege with clear and convincing evidence that the defendant made the statements at issue with actual malice.”

Ms. Gray and Mr. Shepard were both managers at Kroger, and their communication regarding [the plaintiff’s] failure to disclose his murder conviction was a matter of common business interest between them. As such, Ms. Gray’s statement to Mr. Shepard was subject to a qualified privilege. Because the evidence demonstrates that [he] failed to disclose his murder conviction to Kroger [in writing], Mr. Childs cannot establish that Ms. Gray made her statement to Mr. Shepard with actual malice.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Applies Tort Cap to $800K Defamation Judgment Against Employer

This morning, a divided Ohio Supreme Court remanded a $1.55M defamation judgment entered against an employer which a jury found had defamed a nurse who had been involved with a union organization effort.  Wayt v. DHSC, L.L.C., Slip Opinion No. 2018-Ohio-4822.  The Court found that the jury’s $800K compensatory damages award was subject to the $250K non-economic damages cap under Ohio Revised Code §2315.18 because its prior precedent had found defamation to be a personal injury.  

According to the Court’s opinion, the plaintiff nurse was fired by her hospital employer for neglecting her duties and falsifying a medical record. The  head of nursing then reported the plaintiff to the Board of Nursing for patient neglect.  The plaintiff was unable to find another nursing job.   In the meantime, a nursing union filed an unfair labor practice charge with the NLRB asserting that the defendant hospital had  violated the NLRA by refusing to bargain with it and had terminated the plaintiff because of her involvement with the union. After an ALJ ruled in favor of the union, the NLRB successfully petitioned a federal court to order the reinstatement of the plaintiff to her former job at the hospital and the hospital to retract the complaint made to the Nursing Board about the plaintiff.  Nonetheless, one of the plaintiff’s co-workers stated to other nursing that the court order did not make the plaintiff a good nurse or mean that she deserved reinstatement. 

The plaintiff filed a defamation action against the hospital.  A jury awarded her $800K in compensatory damages and $750K in punitive damages.  The hospital sought to have the damages reduced under Ohio’s tort reform act, but was denied by both the trial and appellate courts.  The Ohio Supreme Court agreed only to decide the hospital’s appeal of the amount of compensatory damages.  In particular: whether the cap in R.C. 2315.18 that applies to tort actions seeking noneconomic loss as a result of an alleged injury or loss to person or property also applies to defamation.

The Court initially appeared to agree that injuries to reputation are different than personal injuries. 

R.C. 2315.18(A)(7) provides: “ ‘Tort action’ means a civil action for damages for injury or loss to person or property.”  R.C. 2315.18(B)(2) provides that the maximum noneconomic damages that can be awarded to a plaintiff in a tort action is, barring certain exceptions that do not apply here, $ 250,000.

{¶ 17} Property “means real and personal property.”  R.C. 1.59(E).  The term “property” as used in R.C. 2315.18(A)(7) does not include reputation, and neither party argues to the contrary.

The plaintiff asserted that the Ohio Constitution recognizes the four separate types of injuries. Article I, Section 16 of the Ohio Constitution, provides that courts shall be open to redress injuries to “land, goods, person, or reputation.”

That being said, the Court’s majority held that its decision was not resolved by the plain meaning of the statute because

 We have held for 90 years, however, that defamation is an injury to a person.  See Smith v. Buck, 119 Ohio St. 101, 162 N.E. 382 (1928), paragraph two of the syllabus.

                 . . . .

                We hold that under the plain language of R.C. 2315.18(A)(7), defamation is a “civil action for damages for injury or loss to person.”  This holding, as explained above, is in accord with prior decisions of this court and several other courts that were interpreting similar language.  We see no reason to overturn the well-established precedent that defamation is a “personal injury” according to the plain meaning of the term.

                 . . .

                Assuming arguendo only that the court must look to the canons of statutory construction to determine what the legislature intended by using the phrase “injury or loss to person or property,” the result in this case would be the same.  It is well established that the legislature is presumed to have full knowledge of prior judicial decisions. . . . Moreover, the legislature could easily have drafted the statute to prevent the holding from that case from affecting the outcome of this case; the legislature merely needed to add “defamation” to the list of actions enumerated in R.C. 2315.18(A)(7) to which the caps do not apply.

In addition, the Court declined the plaintiff’s invitation to only apply the damages cap to negligence cases.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney. 

Sixth Circuit Affirms Dismissal of Defamation and Hybrid §301/Fair Representation Claims Against Chillicothe Employer

On Friday, the Sixth Circuit Court of Appeals affirmed a summary judgment entered in favor of a Chillicothe employer on defamation and hybrid §301/fair representation claims brought by a terminated union employee. Blesedell v. Chillicothe Telephone Co., No. 15-354 (6^th Cir. 1-22-16).   In that case, the plaintiff had been terminated after an investigation revealed potential misconduct and then an attempted cover-up by the employee (as well as additional allegations).  His union ultimately decided not to pursue arbitration of the decision after its own investigation.  The plaintiff challenged the termination and also alleged defamation based on what the Human Resources Manager allegedly told the union and the sheriff’s office.  The trial court granted summary judgment because the union did not breach its duty of fair representation and because the statements made by the HR Manager could not be proven to be false and/or were protected by a qualified privilege.   Although the employee provided the union with written statements from witnesses (who were not interviewed by the union) and was prevented from attending grievance meetings, he could not show unfair representation by the union.    The Court of Appeals affirmed.

According to the Court’s opinion, the employer frequently recorded conversations between employees and with customers.  The plaintiff was suspected of shirking work and falsifying his time card on December 4.  An investigation could not substantiate that he had performed the work he claimed on his time card to have performed on the afternoon in question.  After he was questioned, he requested another employee to modify a work ticket to reflect that he had performed certain work recorded on December 9 on December 4.  However, there were recorded conversations about the December 9 work which called that version into question.  Then, the employee claimed that he had performed the work on both dates. 

Then, a caller reported that the plaintiff had performed work on their property on December 4 (and later substantiated that with a written statement).  However, after listening to a recording of that conversation, the employer and union believed that the plaintiff was the caller.  Then, the plaintiff reported to the union that he had performed a third work request on that afternoon as well.   A union officer attempted to recreate the plaintiff’s version of events, but found it to be physically impossible to have occurred as he had described.  For instance, it believed that he would have had to have driven his truck to have gotten all of the work done as described, but the GPS showed that his truck never moved that afternoon.   In the meantime, another employee accused him of inappropriate conduct, and of trading company equipment for illegal drugs.   The Company decided to terminate his employment and the grievance process ensued.  The plaintiff was awarded unemployment compensation, but the union officers voted to not pursue arbitration of his claim because they believed that it would be fruitless and never provided the employer with written statements it had obtained from the plaintiff or his alleged witnesses. 

Finally, the plaintiff reported to the Sheriff’s office that he had been threatened by the co-worker who had accused him of inappropriate conduct and taking illegal drugs.   A deputy contacted the HR manager and wrote down that she was told that the plaintiff had been fired because there had been allegations that he was trading parts for illegal drugs.  The plaintiff filed suit claiming that he had been terminated without just cause under the bargaining agreement (the §301 claim), that the union had failed to fairly represent him, and that the HR manager had defamed him by statements made to the union and to the deputy sheriff.  The trial court granted summary judgment to the employer.

In order to prevail on his hybrid claim against the employer and the union, the plaintiff was required to prevail on both his §301 claim and his fair representation claim.  Because the plaintiff could not prevail on his fair representation claim, the court never addressed whether his termination had been for “just cause” under the bargaining agreement.   “A plaintiff may prove breach of duty by showing that ‘the union’s actions or omissions during the grievance process were arbitrary, discriminatory, or in bad faith.’”   With respect to a union acting arbitrarily, a plaintiff must prove that the union’s “conduct “is so far outside a wide range of reasonableness as to be irrational.”  Because the union here had conducted its own investigation, reviewed and reasonably weighed the evidence and consulted with the international union, its actions could not be deemed arbitrary.  Its internal investigation need only be reasonable, not perfect.  “[U]nion agents are not lawyers,” and “mere negligence or poor judgment” alone is not sufficient to prove breach of duty.  The union had requested and reviewed all of the employer’s evidence, attempted its own re-creation of the alleged events and reasonably determined that the plaintiff’s version was not credible even if supported by written witness statements and even if the union did not personally interview those witnesses.   There was no evidence that a more thorough investigation by the union would have changed its decision. 

The Court also rejected the plaintiff’s argument that he was unfairly excluded from the grievance process.  The union’s policy was to exclude grievants from the step 3 meetings and the employer refused to permit him back onto its property after his termination.   Otherwise, the grievant was kept informed of the process and was regularly updated.  In any event, a “union’s mere negligence in keeping the grievant informed about the grievance process was not enough to prove breach of duty.”

The union’s refusal to contest more vigorously the employer’s evidence was also not inappropriate.  The recordings of the telephone conversations which attempted to substantiate the plaintiff’s version of events reasonably “posed an insurmountable hurdle” to prevailing in any arbitration.  It was not irrational to believe that none of the evidence provided by the plaintiff would have caused the employer to reconsider its decision.  

There was also no evidence that the union’s actions were motivated by discrimination or that he was treated differently than substantially similar grievants.  The Court also rejected the bad faith argument even though the plaintiff had been removed as a union steward because of a belief that he was undermining the union’s business manager.  The Court also found that the union officer’s desire for a non-union management position at the employer was insufficient evidence of bad faith in the absence of proof of personal animosity. 

As for the defamation claims, the court found that the alleged statements to the deputy sheriff by the HR Manager could not be defamatory because the plaintiff himself had relayed substantially similar information to the deputy approximately 30 minutes earlier.  “A plaintiff may therefore prove defamation only if the third party receiving the publication understands its defamatory meaning.”  Because the deputy could not have understood the statements to be defamatory after hearing much the same information earlier from the plaintiff, the alleged statement is not actionable.   Further, it was true that allegations about drug use had been made against the plaintiff and there is no indication that the HR Manager conveyed that he believed those allegations to be true or that he simply conveyed that the plaintiff had been trading company equipment for drugs.  Instead, he relayed that such allegations had been made.  

In addition, the HR Manager’s statements to the union officers during the grievance meetings about the plaintiff’s alleged misconduct were protected by qualified privilege.  In any event, playing recordings for the union officers – of the co-worker’s allegations about inappropriate conduct and trading company equipment for drugs --  is not actionable as a defamatory statement.   The HR Manager never indicated that he believed the allegations, but was simply informing the union that the allegations had been made.  

Finally, telling the union officers that the plaintiff falsified a company record was protected by a qualified privilege because the HR Manager – while probably incorrect – had interviewed a couple of employees to determine if someone else had amended the work ticket to reflect that the work had been performed on December 4 instead of or in addition to the work performed on December 9. “Ohio extends a privilege to statements made in good faith, where ‘an interest [is] to be upheld, [the] statement [is] limited in its scope to this purpose, [there is] a proper occasion, and publication [is] in a proper manner and to proper parties only.’”  In this case, his “statement about the ticket was published only to necessary parties, the Union officers in charge of the grievance.  Finally, [his] statement was limited in scope because it was couched as a “belief.”  The plaintiff could not overcome this privilege without evidence of actual malice, i.e., evidence that the HR manager knew or recklessly disregarded that the information was false.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Divided Ohio Supreme Court Addresses Unfair Competition Battle Brought Against Former Employees

Last week, a divided Ohio Supreme Court issued a decision in a well-publicized case initially brought by a large non-profit employer against a small company started by former employees.  American Chemical Society. v. Leadscope, Inc., Slip Opinion No. 2012-Ohio-4193.   The initial lawsuit was brought in 2002 and involved claims for breach of employment agreements, misappropriation of trade secrets, unfair competition, breach of fiduciary duty and the duty of loyalty, and conversion, etc.    The defendant company brought counter-claims for unfair competition, tortious interference and defamation on the grounds that the lawsuit was unfounded and brought solely to drive it out of business and because of statements made to the plaintiff employer’s employees and the media.  After an eight-week trial in 2008, the jury awarded the defendant company $26.5M on its claims for unfair competition and defamation. The Franklin County Court of Appeals affirmed the verdict.   The Supreme Court held that before an unfair competition claim can be based on the filing of a lawsuit, the lawsuit must be objectively baseless – which is a higher standard than the lack of good faith.  Although the plaintiff’s claims survived a directed verdict motion, the Court’s majority nonetheless found that the plaintiff failed to produce any evidence to support its claims and, thus, the claims were objectively baseless.   More surprisingly, a majority of the Court (almost all of the justices) supported the dismissal of the defamation claim even though the jury had found that the plaintiff had abused its privilege to report the status of the litigation.  The Court found the statements in context only repeated the company’s position and that the company could not be held liable for the statements of its attorney unless it affirmatively ratified them.

With respect to the unfair competition claim, the trial court had borrowed the standard from the law of malicious prosecution and instructed the jury that they could find for the defendant company if the plaintiff’s lawsuit was not brought in good faith, but was brought with the intention of injuring the defendant.   The Supreme Court held that this standard was too low (in light of a citizen’s First Amendment right to petition government for redress) and instead, adopted the following standard:

To successfully establish an unfair competition claim based upon legal action, a party must show that the legal action is objectively baseless and that the opposing party had the subjective intent to injure the party’s ability to be competitive.

Several of the dissenting/concurring justices would have remanded the case for another trial under the new standard. (After all, the plaintiff had survived a directed verdict motion, which indicates that the trial court found some objective basis to exist).   However, the majority concluded that the plaintiff had failed to introduce any evidence to support its claims and, therefore, a new trial – more than 10 years after the facts at issue – was unnecessary and burdensome.    In short, the Court found the plaintiff company’s concerns that the defendant employees had misappropriated a software program had not been proven when the defendants’ competing program was written in a different language and, according to expert opinions, did not share any code.  That the competing software accomplished the same objective was not actionable.  (The Court’s discussion of the plaintiff company’s evidentiary objections was interesting in that the plaintiff company objected to the introduction of evidence that may have actually supported its decision to bring the lawsuit).

The defamation claim was based on a memorandum written to the plaintiff’s employees about the lawsuit and directing them not to comment on it.   The jury found that the plaintiff had abused its qualified privilege by indicating that the defendant employees had misappropriated intellectual property.  The Court found that, in context, the memorandum was nothing than the typical directive for employees to not comment on a lawsuit (which, coincidentally, the NLRB has indicated would be inappropriate).  The syllabus holding on this is stated as follows:

In determining whether a statement is defamatory as a matter of law, a court must review the totality of the circumstances and read the statement in the context of the entire publication to determine whether a reasonable reader would interpret it as defamatory.

The second allegedly defamation statement was contained in a news article about the litigation and quoted the plaintiff’s attorney discussing the claims made.  Again, the jury found the attorney to be speaking as an agent of the plaintiff and that the statements exceeded the applicable qualified privilege.  Nonetheless, the Court again found the statements were appropriate in context.  More importantly, the Court found that the plaintiff client could not be held vicariously liable for statements made by its attorney unless it authorized or ratified them.

 The Court was unusually divided on this case.  Three justices joined the majority opinion.   One justice would have affirmed the trial court on all claims, but joined the majority to affirm the unfair competition judgment.   Two other justices concurred with all of the syllabus paragraphs (i.e., the rules of law) and the reversal of the defamation claim, but dissented on the failure to remand the unfair competition claim.   Finally, one justice agreed with the higher standard for unfair competition, but would have affirmed the defamation claim and remanded the unfair competition claim.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Court of Appeals: No Rehire Recommendation is Protected Opinion, Not Defamation

Last week, the Cuyahoga County Court of Appeals affirmed summary judgment in favor of University Hospitals arising from, among other things, a no-hire recommendation placed in the plaintiff’s personnel file following her voluntary resignation. Byrne v. Univ. Hosps., 2011-Ohio-4110. The Court found the statement to be too vague to constitute a false statement of fact about the plaintiff’s job performance because it was based purely on her supervisor’s subjective overall opinion. Therefore, the plaintiff could not show that it was defamatory, and it was also protected opinion. The Court also found that it was not sufficiently publicized to place the plaintiff in a false light and that there could not be any tortious interference with contract when other departments and locations of the hospital relied on the no-hire recommendation when considering subsequent applications for employment.

According to the Court’s decision, the plaintiff had been promoted into a position for which she had not applied and which she was ultimately uncomfortable in performing. After two months, she requested and received a demotion back to a staff position. Shortly thereafter, she voluntarily resigned and obtained another job. In filling out the exit interview paperwork, her supervisor marked her personnel file as “not recommended for rehire” because the plaintiff had raised invalid complaints about her compensation, had not tried sufficiently to adopt new skills for her supervisory position before requesting a demotion two months after her promotion, and had taken off a significant amount of paid personal time after her promotion. None of these reasons were indicated anywhere in the personnel file.

After the plaintiff was subsequently rejected for three other positions at the hospital, she discovered the no-rehire recommendation and brought suit for defamation, false light and tortious interference with contract. The trial court granted the employer summary judgment on all three claims. The Court of Appeals affirmed.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Inflammatory Investigation Report Produced in Public Records Request Can Create Liability for Defamation

Last week, the Franklin County Court of Appeals issued a decision concerning the never-ending saga involving the Engineering Department plagiarism scandal at Ohio University. Mehta v. Ohio Univ., 2011-Ohio-3484. In a case brought by a different plaintiff and attorney in federal court, the Sixth Circuit held in 2009 that the plaintiff was entitled to a public name-clearing hearing after the University released a report concerning his culpability which he disputed and which did not present his side of the story. The Mehta case presented a straight-forward claim of defamation based on the same report and circumstances, which the Court of Claims had dismissed following a bench trial on the grounds that the statements were constitutionally protected opinion. The Court of Appeals reversed in part. Troubling for public employers, the Court found that the University could be liable for the defamatory investigative report simply for producing it as required by Ohio law in response to a public records request.

According to the decision, three separate investigations were conducted by the University after a student raised a concern in 2004 about plagiarism. The first investigation concluded that it had no jurisdiction because the allegations concerned former students. The second investigation did little more than categorize the types of plagiarism alleged and make recommendations. The third investigation was conducted by two administrators and is the focus of the litigation. Neither had been trained in what constituted plagiarism. Their draft report contained what the Dean perceived as “inflammatory and inappropriate content.” Although the Provost requested that they tone it down, they refused. Nonetheless, the Provost handed out the draft report to the media during a subsequent press conference about the scandal. Among other things, the draft report referred to “rampant and flagrant plagiarism.” The plaintiff was removed from graduate advising duties, but the Dispatch reported that he had been fired (purportedly because that is what the legal affairs director reported).

The Court of Claims found that the challenged defamatory statements constituted protected opinion and, thus, were not actionable. The Court of Appeals disagreed and found the following statements were capable of proof, rather than mere opinion, and that “a reasonable reader would perceive the specific language as a factual assertion that appellant failed to perform his duties as an advisor”:

• "faculty members who either failed to monitor the writing in their advisees' theses or simply ignored academic honesty, integrity and basically supported academic fraudulence."
• faculty members "blatantly [chose] to ignore their responsibilities by contributing to an atmosphere of negligence toward issues of academic misconduct in their own department."

“Because [the authors] implied that they had first-hand knowledge of facts supporting their conclusions, the statements in the [their] Report are verifiable.” Although it was a close call about whether the Report was the author’s opinion (in light of the self-righteous tone, flamboyant phrases, and impassioned pleas), the Court ultimately concluded that the Report purported to reflect a thorough and factual investigation, not merely a call to action.

Finally, the Court was persuaded that the University intended the Report to reflect a factual investigation because it was released to the media with a press release. It later rejected the Court of Claims finding that the report was not actionable as a matter of law because it had been produced pursuant to a public records request. While not discussing whether any qualified privilege exists, it rejected any argument that there is a blanket privilege from defamation for public records.

The University then raised qualified privilege issues (i.e., matters of public concern, etc.) which the Court refused to consider on appeal. The Court of Claims never considered those issues when it dismissed on grounds or constitutionally protected opinion. Therefore, the Court of Claims would need to consider the qualified privilege issues when the matter is remanded for further consideration.

With respect to the statement by a University attorney that the plaintiff had been fired, the Court of Claims determined that neither the reporter nor the attorney seemed to have a clear memory of the issue, but the attorney denied that he would have made any statement like that which was not true. Accordingly, the Court found that there was insufficient proof that the statement had been made to the reporter as alleged.

In that this case has been remanded, we can look forward to another opinion in the future on the scope of the claimed qualified privileges.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court: Nothing is Reasonably Reliable In a RIF or Public Litigation.

Last month, the Franklin County Court of Appeals affirmed the dismissal of a defamation and wrongful discharge suit brought by the former head of security for Capital University whose job was eliminated in 2006 during a budget crisis. Woods v. Capital Univ., No. 2009-Ohio-5672. Although the 54-year old plaintiff had been told in writing during his exit interview that his performance played no role in the elimination of his position (and he had received nothing but promotions prior to his termination), the university’s attorney was quoted in two local newspapers as attributing part of the termination decision to “job performance issues.” His responsibilities were divided and his public safety management responsibilities were given to a 28-year old safety officer. Nonetheless, the Court affirmed dismissal because the allegedly defamatory statements related to a matter of public concern, which required proof of actual damages or actual malice, and the redistribution of duties to existing employees cannot support an inference of age discrimination. Finally, his promissory estoppel claims were dismissed because the three verbal promises of continued employment were contracted by the terms of his written contract with the university.

According to the Court’s opinion, the plaintiff was eight years away from retiring from another college when he was hired by Capital to reorganize its public safety department. When he expressed reluctance to leave a secure position so close to his retirement age – particularly with friction that was likely to develop during the planned reorganization, he was assured by the VP/Treasurer that he would be employed at least eight years to retire at Capital. However, his offer letter only promised one year of employment. He was promoted the following year and given two more one-year appointments. When rumors surfaced about a possible budget deficit, he again sought reassurance about his job security and was again assured by the VP/Treasurer that his job was safe. When the VP/Treasurer was then fired, he sought and obtained similar assurance from the President, who then shortly thereafter left.

When an impending $12.5M deficit was revealed, a committee examined all positions and recommended the elimination of 72 positions, including that of the plaintiff. His termination letter informed him that his job was eliminated because of the budget difficulties and not because of his job performance. His public safety duties were reassigned to a 28-year old officer and his auxiliary duties to other employees. He then filed a lawsuit for $4.6M against Capital for age discrimination and promissory estoppel. The lawsuit received publicity in the local media and Capital’s attorney was quoted in two newspapers as stating that the plaintiff had been let go because of the budget difficulties and “job performance issues.” The plaintiff amended his claims to include the allegedly defamatory statements by the attorney. The trial court granted summary judgment to the defendants and the plaintiff appealed.

Defamation Claim

The Court of Appeals addressed the defamation claim first and found the attorney’s statement about the plaintiff being fired in part because of his job performance to be defamatory on its face (or defamation per se) since it had the tendency to hurt plaintiff’s career and ability to find another job. The Court rejected the defense attempt to

characterize this statement as vague and contend that if it is defamatory at all, it is only defamatory per quod. We disagree. No employer fires an employee for good job performance. The only reasonable reading of [the attorney’s] statement is that Capital terminated [the plaintiff’s] employment for two reasons, and one of those reasons was [the plaintiff’s] poor job performance. Thus, the statement in and of itself tends to injure [the plaintiff] in his occupation as any employer would hesitate before hiring a potential employee who underperformed in his previous job. Such a statement is defamatory per se.

Typically, damages in such situations are presumed without proof or pleading. However, in this case, the Court found the statement to also have limited protection from the First Amendment. Because the plaintiff worked for a private college, he was not a general public figure. Moreover, the fact that he filed a lawsuit – by itself – did not render him a limited purpose public figure. However, the fact that he sought $4.6M in damages from a significant private institution which was having very public budget difficulties rendered the issue of the reduction in force and his lawsuit a matter of public concern – as evidenced by the significant media coverage. Therefore, the claim was governed by the United States Supreme Court’s decision in Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 345-46, which concluded that:

in such cases, the states could define for themselves an appropriate standard of liability, so long as they did not impose liability without fault. Gertz, 418 U.S. at 347. Subsequently, Ohio adopted the ordinary negligence standard as the standard of liability for actions involving a private individual defamed in a statement about a matter of public concern. Landsdowne v. Beacon Journal Publishing Co. (1987), 32 Ohio.St.3d 176, 180. In addition to requiring an element of fault, the Gertz court also limited the type of damages recoverable in defamation cases involving private individuals and statements regarding a matter of public concern. Given the constitutional command of the First Amendment, . . . the states could no longer permit recovery of presumed or punitive damages, at least when liability was not based upon a showing of actual malice. Gertz, 418 U.S. at 349, . . . Thus, in Ohio, a plaintiff must prove either: (1) ordinary negligence and actual injury, in which case he can receive damages for the actual harm inflicted; or (2) actual malice, in which case he is entitled to presumed damages.

Thus, the plaintiff was required to show actual malice or actual injury (i.e., “out-of-pocket loss, impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering”). However, the plaintiff’s testimony that he felt that his job hunt was impaired by “google searches” of the attorney’s statement was too speculative to support proof of actual injury. Moreover, he failed to introduce any evidence that the attorney knew that his statement was false at the time it was made. Therefore, summary judgment on his defamation claim was upheld.

Retaliation

The plaintiff also claimed that the attorney’s defamatory statement was made in retaliation for the plaintiff’s consultation with an attorney following his termination. However, the Court refused to infer causation (i.e., the defamatory statement from the consultation with counsel) based on the passage of two months between the demand letter from the plaintiff’s attorney and the newspaper accounts repeating the defamatory statement. Because there was no other evidence of causation or proving a link between the two events, the Court affirmed summary judgment.

Age Discrimination

Typically, a discrimination claim requires that the plaintiff show that he was replaced by someone outside the protected class. The Court noted that this is extremely difficult, if not impossible, to show when the plaintiff was fired in a reduction in force:

When a discharge results from a work force reduction, an employee is not replaced, instead his position is eliminated. Barnes v. GenCorp Inc. (C.A.6, 1990), 896 F.2d 1457, 1465. Logically, then, a plaintiff discharged as part of a work force reduction cannot offer evidence that he was replaced by a substantially younger person to satisfy the fourth element of the prima facie case. Moreover, even if such a plaintiff demonstrates that his discharge permitted the retention of substantially younger persons, no inference of discriminatory intent can be drawn. Id. In the context of a work force reduction, the discharge of the plaintiff and retention of a substantially younger employee is not "inherently suspicious" because a work force reduction invariably entails the discharge of some older employees and the retention of some younger employees. Brocklehurst v. PPG Industries, Inc. (C.A.6, 1997), 123 F.3d 890, 896. Permitting an inference of intentional discrimination to arise from the retention of younger employees "would allow every person age 40-and-over to establish a prima facie case of age discrimination if he or she was discharged as part of a work force reduction." Barnes at 1465.

{¶57} Consequently, when a plaintiff's position is eliminated as part of a work force reduction, courts modify the fourth element of the prima facie case to require the plaintiff to " 'com[e] forward with additional evidence, be it direct, circumstantial, or statistical, to establish that age was a factor in the termination.' " Kundtz v. AT & T Solutions, Inc., 10th Dist. No. 05AP-1045, 2007-Ohio-1462, ¶21 . . . The purpose of this modified requirement is to ensure that, in work force reduction cases, the plaintiff has presented evidence to show that there is a chance that the work force reduction is not the reason for the termination. Asmo v. Keane, Inc. (C.A.6, 2006), 471 F.3d 588, 593 . . .

Nonetheless, the plaintiff can also show discrimination if he was in fact replaced instead his duties being eliminated, consolidated or distributed among a number of different people:

An employee is not eliminated as part of a work force reduction when he or she is replaced after his or her discharge. However, a person is not replaced when another employee is assigned to perform the plaintiff's duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work. A person is replaced only when another employee is hired or reassigned to perform the plaintiff's duties.

In this case, the plaintiff’s 2004 promotion involved him assuming certain duties outside the public safety department. When his position was eliminated in 2006, those duties were reassigned and only his public safety duties were given to the 28-year old officer. The reassignment of his auxiliary duties were more than cosmetic or superficial duties. Thus, there was sufficient evidence to show that his position was eliminated and his duties distributed in a genuine reduction in force. Therefore, without additional evidence or direct evidence of age discrimination, summary judgment on this claim was affirmed.

Promissory Estoppel.

Plaintiff brought this claim based on the three separate promises of job security which he received both before and after he was hired by Capital. As explained by the Court:

Promissory estoppel provides an equitable remedy for a breach of an oral promise, absent a signed agreement. Olympic Holding Co. v. ACE Ltd., 122 Ohio.St.3d 89, 2009-Ohio-2057, ¶40. In order to succeed on a claim for promissory estoppel: "The party claiming the estoppel must have relied on conduct of an adversary in such a manner as to change his position for the worse and that reliance must have been reasonable in that the party claiming estoppel did not know and could not have known that its adversary's conduct was misleading." . . . The elements necessary to prove a claim for promissory estoppel are: (1) a clear, unambiguous promise, (2) the person to whom the promise is made relies on the promise, (3) reliance on the promise is reasonable and foreseeable, and (4) the person claiming reliance is injured as a result of reliance on the promise.

The fatal flaw in his argument, however, is that he signed written contracts which promised him only employment for a year at a time. Therefore, his reliance on the oral promises was not reasonable under the circumstances:

[C]ourts cannot enforce an oral promise in preference to a signed writing that pertains to exactly the same subject matter, but has different terms. Ed Schory & Sons at 440. Thus, "[p]romissory estoppel does not apply to oral statements made prior to the written contract, where the contract covers the same subject matter.

The Court rejected the plaintiff’s argument that his employment letters were not binding contracts, but only acknowledgment of certain terms. The Court also rejected the argument that the plaintiff’s reliance on promises made during the budget crises were reasonable under the circumstances. In any event, the plaintiff did not provide any evidence that he relied on the promises to his detriment since there was not evidence that he rejected a job offer in reliance on the promises. On the contrary, despite the promises being made to him during the budget crises, he promptly began searching for another job and submitting his resume to other employers.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5672.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Court of Appeals Dismisses Supervisor’s Defamation Claims Against Union Officer.

The Trumball County Court of Appeals affirmed the dismissal of a libel suit brought by a beleaguered night-shift supervisor against a local union officer arising out of statements made about the manager in the union newsletter more than ten years ago. Jacobs v. Budak, No. 2007-T-0033 (6/9/08). In the article, the supervisor was referred to as the “midnight cowgirl” and was accused of not following the collective bargaining agreement in assigning overtime opportunities. The Court ultimately affirmed dismissal of the lawsuit because the supervisor could not show with clear and convincing evidence that she suffered actual harm from the article or that the union officer acted with actual malice (i.e., actual knowledge of the falsity, or reckless disregard for the truth, of the statements).

Following the publication of the union newsletter, the supervisor “was subjected to callow harassment by her employees and fellow co-workers. [She] testified that the harassment lasted for a period of two to three months following the publication of the article and that she was subjected to numerous cat-calls and “mooing” sounds as she walked or drove her scooter through the plant. She received prank phone calls where unidentified persons would yell such quips as “yippy-ti-yi-o,” “moo-ooo”, and “got your spurs on.” In addition, cow horns and a cowboy hat were placed on her work scooter subjecting her to further ridicule as she drove through the plant.”

Because the dispute arose out of a “labor dispute” (i.e., a dispute between management and a union over the bargaining agreement and other terms and conditions of employment), the supervisor was required to prove her claim by clear and convincing evidence (which is a higher standard of proof than the regular preponderance of the evidence or more likely than not standard used in most civil cases). She was also required to prove that the allegedly false and defamatory statements were made with actual malice without privilege to a third party and that she suffered actual damage from the statements. “A statement is published with actual malice when it is made with the ‘the knowledge that it was false or with reckless disregard of whether it was false or not.” The Ohio Supreme Court has previously noted that “[a]ctual malice ‘cannot be implied from the character and content of a publication. *** It is not sufficient for a libel plaintiff to show that an interpretation of facts is false; rather, he must prove with convincing clarity that defendant was aware of the high probability of falsity.’”

Therefore, “[m]ere negligence is not enough to establish actual malice . . . Thus, ‘reckless conduct is not measured by whether a reasonably prudent man *** would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.’” In fact, courts have been clear that the failure to investigate has been found to constitute malice only “where the defendant has serious doubts that the statement is true.”

In this case, the union officer was able to show that he conducted an investigation and there was some factual basis for his allegations against the supervisor. Although the supervisor alleged that the union officer conducted his investigation negligently, even if that were true, the court found “no evidence that [the union officer] had any serious doubts as to the veracity of the statements.”

“It is clear that access to equalization records was an ongoing debate as the issue was discussed in union-management meetings before, during, and after the article was released. Indeed, [the defendant union officer] was not even familiar with Ms. Jacobs until he was ordered to investigate [an employee’s] complaints in early May of 1997 by his supervisor. Although the statements were certainly negligently made, we cannot say that they were made with such reckless disregard or knowledge as to their falsity.”

The Court also concluded that the supervisor was required to prove actual damages from the allegedly defamatory statement because it arose out of a union dispute and that she failed to do so. “As evidenced by the numerous medical records that were entered into the record, [the supervisor] has a long history of physical and mental distress that may or may not have been exacerbated by this incident. According to her employment evaluations and her own testimony, her employment was unaffected. Indeed, following the release of the article she was given a six percent raise and has been consistently rated in her job performance as “satisfactory” or above. The testimony and medical records [the supervisor] did submit failed to evidence that the article was the proximate cause for the stress she was facing at that time. Indeed, [her] own physician, Dr. Meyers, could not differentiate between the stress that was caused by the article and the stress that resulted from the ensuing legal battle.”

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/11/2008/2008-ohio-2756.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney

Defamation and Privilege in the Workplace

Last month, the Ohio Court of Appeals affirmed the dismissal of most of the claims of defamation and tortious interference brought by a discharged supervisor against the employees’ and union officials whose allegations had led to his termination. Gintert v. WCI Steel, Inc., 2007-Ohio-6737 (12/14/07). In that case, the supervisor had been accused over the course of a couple of years of, among other things, sexually harassing two male co-workers, making racial slurs and leaving work early without permission to begin his vacation. He then brought suit against the employees who made the allegations and the union stewards who brought the allegations to the attention of management, which terminated. (The lawsuit against the employer was stayed when the employer filed for bankruptcy).

The Court dismissed all but one of the claims because the challenged statements were reasonably connected with the union grievance procedure and, therefore, were protected by a qualified privilege. “Under the doctrine of qualified privilege, statements made in good faith on a matter of common interest between an employer and an employee, or between two employees, concerning a third employee are protected in an action for defamation. . . . If the requirements for the qualified privilege are established, then the burden falls on the plaintiff to show by clear and convincing evidence that the statements were made with actual malice, i.e., that the statements were made with knowledge or reckless disregard for their truth or falsity.” In addition, Ohio recognizes “that "union officers and employees are immune from personal liability for acts undertaken as union representatives, on behalf of the union."

However, the court found that one of the sexual harassment accusations could have been made with actual malice because the plaintiff supervisor denied categorically to having made any of the alleged sexually harassing statements and this raised a question of fact as to whether the defendant made the accusation with knowledge or reckless disregard for the truth. Nonetheless, the court dismissed the tortious interference claims because of the same privilege and held that the accusations were not outrageous enough to sustain an emotional distress claim.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/newpdf/11/2007/2007-ohio-6737.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with an attorney.