Childers v. Product Action International, Inc. ( 2005 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0634n.06
Filed: July 28, 2005
Case No. 04-6193
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
MICHAEL S. CHILDERS, )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
PRODUCT ACTION INTERNATIONAL, ) DISTRICT OF KENTUCKY
INC., )
)
Defendant-Appellee. )
)
_______________________________________ )
)
BEFORE: BATCHELDER and GRIFFIN, Circuit Judges; GADOLA*, District Judge.
ALICE M. BATCHELDER, Circuit Judge. Plaintiff-Appellant Michael Childers appeals
the district court’s order granting summary judgment for Defendant-Appellee Product Action
International, Inc. (“Product Action”) in this diversity action for wrongful termination of
employment. Because we conclude that the undisputed facts demonstrate that Product Action did
not terminate Childers, an at-will employee, for exercising a right conferred by well-established
legislative enactment or for refusing to violate the constitution or a statute, we will AFFIRM the
judgment of the district court.
In September of 2001, Product Action, a corporation that provides sorting, inspection, and
reworking services to automotive manufacturers, hired Childers to work as a quality inspector.
*
The Honorable Paul V. Gadola, United States District Judge for the Eastern District of Michigan, sitting by
designation.
Product Action contracted to provide third-party inspections of the automotive parts being produced
by J.L. French, a corporation that supplies parts to General Motors (“GM”). Childers alleges that,
while working at a J.L. French plant in Glasgow, Kentucky, his superiors instructed him to remove
any defective parts from the production line and return them to the inspection area rather than
recording the defects on data sheets and notifying GM. Childers claims that his boss, Scott Ritchie,
threatened to fire him if he did not obey this instruction, and that Childers did, in fact, obey the
instruction.
Early in 2002, Product Action transferred Childers to Birmingham, Alabama to perform
inspection services for the Ogihara Company. The record reveals that Childers had trouble getting
along with the other Product Action employees assigned to the Ogihara job. Mark Urschel, Product
Actions’s Human Resources Manager, testified that on April 12, 2002, he spoke with other Product
Action Managers concerning Childer’s performance, and all agreed that Childers should be
terminated. Urschel then solicited the opinions of three of Childers’s supervisors who complained
that Childers repeatedly insulted his managers and had made unauthorized disclosures of company
information to J.L. French and Ogihara. On April 17, 2002, Product Action sent Childers a
“Termination Notice,” which specified that Childers was being fired for “unprofessional behavior.”
Childers admits that he followed Ritchie’s order not to record defective parts. Childers also
admits that, aside from posing a hypothetical question (which did not name the parties involved) to
someone at the Attorney General’s office, he did not report Product Action’s conduct to any public
authorities.
On April 15, 2003, Childers filed a complaint in a Kentucky Circuit Court alleging that
Product Action terminated him because he questioned its practice of not recording defective parts
2
and notifying GM. Product Action removed the case to United States District Court on May 16,
2003, and filed a motion for summary judgment. On September 3, 2004, the district court entered
an order granting summary judgment in favor of Product Action. Citing Firestone Textile Co. Div.
v. Meadows, 666 S.W.2d 730, 731 (Ky. 1984), the district court held that Product Action was
entitled to terminate Childers, an at-will employee, for “good cause, no cause, or for a cause that
some might consider morally indefensible,” and that Childers could not rely on any of the narrow
exceptions to Kentucky’s employment-at-will doctrine because Childers did not report any of
Product Action’s alleged improprieties to public officials. Childers’s timely appeal followed.
We review a district court’s grant of summary judgment de novo. Williams v. Mehra, 186
F.3d 685, 689 (6th Cir. 1999) (en banc). A motion for summary judgment should be granted only
if the moving party “show[s] that there is no genuine issue as to any material fact and that [it] is
entitled to a judgment as a matter of law.” FED. R. CIV. P. 56(c). A dispute is genuine only “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The court must take the nonmoving party’s well-
pleaded allegations as true. Miree v. DeKalb County, 433 U.S. 25, 27 n. 1 (1977). In diversity
cases, we apply the law of the forum state, which, in this case, is Kentucky. See Certain Interested
Underwriters at Lloyds, London v. Layne, 26 F.3d 39, 43 (6th Cir. 1994). “We apply state law in
accordance with the then controlling decision of the highest state court.” Twin City Fire Ins. Co.
v. Adkins, 400 F.3d 293, 296-97 (6th Cir. 2005) (quoting John Hancock Fins. Servs. v. Old Kent
Bank, 346 F.3d 727, 733 (6th Cir. 2003)). We may affirm a decision of the district court if that
decision is correct for any reason, including one not considered below. Hoge v. Honda of America
Manufacturing, Inc., 384 F.3d 238, 243 (6th Cir. 2004).
3
Childers does not dispute that he was an at-will employee of Product Action. “[O]rdinarily
an employer may discharge his at-will employee for good cause, for no cause, or for a cause that
some might view as morally indefensible.” Firestone Textile Co., 666 S.W.2d at 731. The Supreme
Court of Kentucky has recognized a narrowly defined exception to this “terminable-at-will” doctrine
for wrongful discharge in violation of public policy. The Court limits at-will “employees’ claims
for wrongful discharge to those situations where the evidence established the employer was
retaliating against the employee for exercising a right conferred by well-established legislative
enactment or for refusing to violate the constitution or a statute.” Nelson Steel Corp. v. McDaniel,
898 S.W.2d 66, 69 (Ky. 1995). To fall within the public policy exception to the “terminable-at-will”
doctrine, an employee must prove: 1) that the discharge was contrary to a fundamental and well-
defined public policy as evidenced by existing law; and 2) the policy must be evidenced by a
constitutional or statutory provision. Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky. 1985). “The
decision of whether the public policy asserted meets these criteria is a question of law for the court
to decide, not a question of fact.” Id.
Childers argues that he was fired for his refusal to falsify business records. In support, he
relies on K.R.S. § 517.050, which states in pertinent part:
(1) A person is guilty of falsifying business records when, with intent to defraud he:
(a) Makes or causes a false entry to be made in the business records of any
enterprise; or,
(b) Alters, erases, obliterates, deletes, removes or destroys a true entry in the
business records of any enterprise; or
(c) Omits to make a true entry in the business records of an enterprise in violation of
a duty to do so which he knows to be imposed upon him by law or by the nature of
his position. . . .
4
As the district court correctly held, viewing the facts in the light most favorable to the non-moving
party, we must assume that Childers was asked not to report defects found in the plant.1 The district
court stated that Childers would have been protected against retaliatory termination had he refused
to violate K.R.S. § 517.050, but held that no wrongful termination exists where the employee does
not report the allegedly illegal activity to the authorities. While the district court’s decision is
reasonable inasmuch as it is supported by an unpublished decision of the Kentucky Court of
Appeals, Zumot v. Data Management Co., No. 2002-CA-002454-MR, 2004 WL 405888 (Ky. App.
2004), we do not think that it was necessary to reach this issue.
Childers argues that his refusal to falsify business records triggers the public policy
exception. Childers is mistaken. The record before this court simply would not permit a reasonable
jury to find that Product Action retaliated against Childers for exercising a right or refusing to
violate the law. Nelson Steel, 898 S.W.2d at 69. First, Childers claims that he did in fact falsify the
records, as he was instructed to do (see Childers’s deposition, J.A. p. 43). His own testimony,
therefore, prevents him from claiming that he was retaliated against for refusing to violate the law
or for exercising a right. Second, when asked during his deposition why he believed that Product
Action terminated him, Childers answered “I believe Scott Ritchie wanted to get rid of me and so
did Joe Pezz because I would not bow down and kiss Joe Pezz’s ass.” When asked “[a]ny other
reasons you believe you were terminated from Product Action,” Childers responded “I would have
to come back on that. I mean my mind is drawing a blank right at this second.” Moreover, none of
Childers’s supervisors testified that he was terminated for refusing to falsify records. Childers’s
allegation in his complaint—that his employment was terminated in retaliation for his attempting
1
We note that Product Action disputes Childers’s contention that he was ordered not to report defects to GM.
5
to correct the falsification of records—is not supported by the evidence in the record, and is wholly
inconsistent with his deposition testimony. Finally, both the allegation in the complaint and the
deposition testimony are wholly inconsistent with the claim that Childers makes on appeal, namely,
that he was fired for refusing to violate the law. (See Childers’s Brief at p. 7: “Mr. Childers was
told to falsify business records . . . He refused. He was fired because he refused.”)
Because the public policy exception to the “terminable-at-will” doctrine does not apply,
Product Action was free to fire Childers, an at-will employee, for good cause or no cause at all.
Accordingly, we AFFIRM the judgment of the district court.
6