Mark Ewald v. Wal-Mart Stores ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 97-1009
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Mark Ewald, *
*
Appellant, *
* Appeal from the United States District
v. * Court for the District of Minnesota.
*
Wal-Mart Stores, Inc. *
*
Appellee. *
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Submitted: October 24, 1997
Filed: March 20, 1998
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Before McMILLIAN, BEAM, Circuit Judges, and WEBB,1 United States District
Judge.
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BEAM, Circuit Judge.
Mark Ewald appeals the district court's2 grant of summary judgment to Wal-Mart
on various claims stemming from the termination of his employment. We affirm.
I. BACKGROUND
1
The Honorable Rodney S. Webb, Chief Judge, United States District Court for
the District of North Dakota, sitting by designation.
2
The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota.
Mark Ewald was employed by Wal-Mart as a management trainee in its
Brooklyn Park, Minnesota, store. On May 17, 1995, the store suffered a cash shortage
of $5,000. Kim Walters, Wal-Mart's district loss-prevention manager, investigated the
following day. She concluded that there had been a theft and, based on statements of
co-workers that put Ewald in or near the cash office when the theft had occurred,
identified him as the primary suspect. Walters informed the police and other Wal-Mart
managers of her suspicions.
Ewald was next scheduled to work on May 21. About halfway through his shift,
Ewald was informed that Walters and another district loss-prevention manager,
Jonathon Harris, wanted to see him. Walters and Harris interrogated Ewald for over
an hour and, although they never directly accused him, strongly implied that they
thought Ewald had taken the money. Ewald's account of this interrogation is not
pleasant. Walters and Harris falsely told Ewald they had found his fingerprints on the
containers from which the money was taken and on security equipment which had been
disabled during the theft; they told him that they had his credit report and knew he was
in financial trouble, which was also false. When Ewald did not confess to the theft,
they became more forceful; raising their voices, leaning forward and speaking into
Ewald's face. When Ewald complained that he was uncomfortable, Harris told Ewald
he was free to leave. Ewald told his inquisitors that he had nothing further to say, and
left the store for his dinner break. When he returned, Harris asked Ewald if he would
cooperate further in the investigation. Ewald replied that he would, but only if he could
have another member of management or an attorney present. Walters and Harris
announced that they didn't deal with attorneys. They then told Ewald that he was
suspended.
On May 24, Ewald returned to the store to meet with members of management.
Although Ewald had passed a polygraph examination and brought with him a copy of
the results, management informed Ewald that he was being dismissed. They gave him
an exit interview form that listed "failure to cooperate with an investigation" as the
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reason for his termination. Ewald was then informed that he could never enter a Wal-
Mart again, and was escorted out of the store by two members of management.
Although Walters informed the police of the incident, no charges were ever brought
against Ewald or anyone else in relation to the theft.
Ewald filed suit against Wal-Mart claiming 1) breach of contract; 2) wrongful
discharge; 3) promissory estoppel; 4) retaliation under Minnesota's whistleblower
statute, Minn. Stat. § 181.932; 5) civil conspiracy; 6) defamation; 7) failure to timely
pay his wages; and 8) failure to give him timely written notice of the reasons for his
termination. Wal-Mart moved for, and the district court granted, summary judgment
against Ewald on all claims.
II. DISCUSSION
A grant of summary judgment is reviewed de novo. See Lang v. Star Herald,
107 F.3d 1308, 1311 (8th Cir.), cert. denied, 118 S. Ct. 114 (1997). Summary
judgment is proper if, taking all facts and reasonable inferences from those facts in the
light most favorable to the non-moving party, there is no genuine issue of material fact,
and the movant is entitled to judgment as a matter of law. Id.; see also Fed. R. Civ. P.
56(c). Because jurisdiction in this case is based on diversity of citizenship, Minnesota
substantive law applies. See, e.g., Mudlitz v. Mutual Serv. Ins. Co., 75 F.3d 391, 393
(8th Cir. 1996).
A. Breach of Contract
In Minnesota, employment for an indefinite term is terminable at will. See
Cederstrand v. Lutheran Bhd., 117 N.W.2d 213, 221 (Minn. 1962). However, written
employment policies can create unilateral contracts, requiring discharge to be in good
faith or for just cause. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27
(Minn. 1983). Ewald contends that his employment contract with Wal-Mart was not
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at-will, but a contract allowing his termination only for just cause. He has two bases
for this contention.
First, Ewald argues that Wal-Mart's "Associate Handbook"3 created a unilateral
employment contract entitling him to termination only for good cause. Whether a
handbook constitutes all or part of a contract is determined by the outward
manifestations of the parties. Id. at 626. Thus, an employer's disclaimer of intent to
form a contract in a handbook will prevent it from being construed as an offer. See
Michaelson v. Minnesota Mining & Mfg. Co., 474 N.W.2d 174, 180 (Minn. Ct. App.
1991). In this case, both handbooks contained clear disclaimers. The 1991 handbook
admonishes associates to "Please Note . . . the stated policies and benefits are not
intended to create nor be interpreted in any way as a contract between Wal-Mart and
you. Your employment with Wal-Mart is on an 'at-will' basis." Likewise, in the 1994
Wal-Mart handbook, the company writes that "[t]his handbook is not a contract."
Thus, we find that neither handbook created a contract requiring just-cause termination.
Secondly, Ewald argues that even if the handbook did not create a just-cause
employment contract, Wal-Mart's "Coaching for Improvement" program did. During
the course of his management training, Ewald took a computer tutorial program
instructing him on how to discipline employees under this progressive five-step
program. He contends he was told by management that no Wal-Mart employee could
be dismissed unless Wal-Mart first followed this process.
3
During Ewald's tenure with Wal-Mart, the company produced and disseminated
two different employee handbooks; one in 1991 and another in 1994. The provisions
of the two are substantially similar and any differences between the two have no impact
on our analysis.
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We have painstakingly reviewed the record,4 and can find no support for Ewald's
assertion that he was told that Wal-Mart employees could not be fired outside the
Coaching for Improvement program. Moreover, whatever members of management
may or may not have stated, the company expressly disclaimed any contractual
guarantee of specific discipline. The 1991 handbook acknowledgment (which Ewald
signed) explains that "nothing stated in this handbook or by any member of
management is intended to create any guarantees of any certain disciplinary
procedures."
We find no just-cause employment contract; the relationship was at-will. This
means that Wal-Mart could fire Ewald for any reason or no reason at all. We do not
condone the company's heavy-handed tactics, but find nevertheless, that there is no
legal basis for contract liability in this case.
B. Defamation
Ewald asserts that three sets of communications defamed him: 1) Walters's
identification of Ewald to the police as her main suspect and various statements she
made to Wal-Mart management and employees regarding her suspicions about Ewald;
2) management's statement to Ewald that he was being discharged for "failure to
cooperate with an investigation," which he was compelled to disclose during his search
for other employment; and 3) statements Ewald postulates must have been made to
other Wal-Mart employees by management about the circumstances of his discharge.
4
Although we are not called upon in this case to assess attorney conduct, our
review of the record has required us to sift through deposition transcripts containing
frequent interruptions, unjustified instructions to witnesses not to answer questions, and
argumentative and suggestive objections by Ewald's counsel. We remind counsel that
merely because depositions do not take place in the presence of judges does not mean
lawyers can forget their responsibilities as officers of the court.
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In order to be actionable as defamation under Minnesota law, a statement must
be false and tend to harm the plaintiff's reputation in the estimation of the community.
See Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). However,
even if a defamatory statement has been made, the originators of the statement may
escape liability if they are entitled to a qualified privilege. Lewis v. Equitable Life
Assur. Soc'y, 389 N.W.2d 876, 889 (Minn. 1986). Under Minnesota law, an employer
is entitled to qualified privilege if the communication was made on a proper occasion
and for a proper purpose, and if the statements were based on reasonable and proper
grounds. Id. Communications between an employer's agents made in the course of
investigating or punishing an employee for misconduct are qualifiedly privileged. See
McBride v. Sears, Roebuck & Co., 235 N.W.2d 371, 374 (Minn. 1975) (privilege
applies because an "employer has an important interest in protecting itself and the
public against dishonest or otherwise harmful employees"). Likewise, communications
made to an employee concerning the reasons for his or her discharge are qualifiedly
privileged. See Harvet v. Unity Medical Ctr., 428 N.W.2d 574, 579 (Minn. Ct. App.
1988). Finally, communication to employees about the reasons for another employee's
discharge are also qualifiedly privileged. See Wirig v. Kinney Shoe Corp., 461
N.W.2d 374, 380 (Minn. 1990).
We find that all of Wal-Mart's statements are entitled to qualified privilege.
Walters's disclosures were made in the course of investigating employee misconduct.
The statement to Ewald that he was being terminated for failure to cooperate in an
investigation was made only to explain the reason for his discharge. Finally, even if
Ewald's suspicions about what management told other Wal-Mart employees were
eventually confirmed (and this is not supported by the record), these disclosures would
be qualifiedly privileged as communications to employees as to the reasons for another
employee's discharge.
A qualified privilege may be lost, however, if abused. Lewis, 389 N.W.2d at
890. Abuse is established if the plaintiff demonstrates that the defendant acted with
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actual malice, which exists where the defendant's statements were made from "ill will
and improper motives, or causelessly and wantonly for the purpose of injuring the
plaintiff." Stumpges, 297 N.W.2d at 257 (quotation omitted). Ewald argues that
Walters's investigation was deficient, and that her failure to fully investigate the facts
before making the alleged defamatory statements establishes actual malice.
We find no evidence of such actual malice. The uncontradicted evidence shows
first, that Walters had established that a theft had actually occurred and interviews of
other employees did not contradict that conclusion. Furthermore, no one involved had
any grudge against Ewald, and Walters double-checked the details of the employee
statements, confirming them where possible. Walters conducted an independent
investigation, relying on information from known sources. In sum, the evidence
indicates that Wal-Mart's managers acted on a reasonable belief that Ewald had been
involved in the theft and their statements were based on that belief. Compare Karnes
v. Milo Beauty and Barber Supply Co., 441 N.W.2d 565, 569 (Minn. Ct. App. 1989)
(no actual malice when sole motivation behind allegedly defamatory statements was
proper concern about possible theft) with Smits v. Wal-Mart Stores, Inc., 525 N.W.2d
554, 557 (Minn. Ct. App. 1994) (malice established where store manager told police
he had witnessed shoplifting, even though he had not actually seen the crime, and even
though other employees told him they were not sure a theft had even occurred);
Thompson v. Campbell, 845 F. Supp. 665, 681 (D. Minn. 1994) (malice established
because accusation came from an employee with a motive to retaliate against the
plaintiff, and the company failed to confirm the details of the charge before dismissing
her); and Wirig, 461 N.W.2d at 380 (malice established because employer conducted
no investigation of the charges against the employee, and instead relied on accusations
made by an employee whose credibility was questionable and on secondhand hearsay
from unidentified sources). Summary judgment in Wal-Mart's favor on the defamation
claim was proper.
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We have carefully considered each of the remainder of Ewald's claims and find
them to be without merit.
III. CONCLUSION
For the foregoing reasons, the opinion of the district court is affirmed.
WEBB, Chief District Judge, concurring specially.
I concur in the result of this case because the law is clearly in Wal-Mart's favor.
I write separately, however, to express my concern with the present state of the
Minnesota "at will" employment doctrine as it pertains to employee handbooks. In my
view, courts are placing too much emphasis on disclaimers rather than searching for the
true intent of employee handbooks as a whole. Savvy employers such as Wal-Mart
should not be allowed to hide behind relatively inconspicuous disclaimers when in the
same breath they outline detailed procedures for discipline or termination. These
illusory promises have no purpose other than to provide employees a false sense of
security and stability in their employment, a purpose which should not be so readily
condoned by the courts.
A true copy.
ATTEST:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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