Holly Handlon v. Rite Aid Services, LLC

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0120n.06
No. 12-1275
FILED
UNITED STATES COURT OF APPEALS Jan 31, 2013
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
HOLLY M. HANDLON, )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
RITE AID SERVICES, LLC, and
TIMOTHY MICHAEL TEVIS,
Defendants-Appellees.
BEFORE: BOGGS, ROGERS, and STRANCH, Circuit Judges.
ROGERS, Circuit Judge. Holly Handlon appeals the district court’s opinion and order
granting summary judgment to Rite Aid on her claims of false arrest, false imprisonment,
defamation, race-based discrimination, retaliation, and intentional infliction of emotional distress.
Handlon is a former Rite Aid pharmacy employee who was terminated following an investigation
that revealed, according to Rite Aid, that she was stealing hydrocodone pills. In conjunction with
its own actions against Handlon, a Rite Aid manager contacted local police and supplied information
leading to Handlon’s arrest. Handlon brought suit challenging Rite Aid’s role in her arrest, which
she characterized as deliberately misleading and malicious. She also challenged Rite Aid’s
motivations for terminating her, which she believes are grounded in racial animus based on her
having biracial children, and she claimed retaliation for her complaints about unlawful race
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discrimination. Handlon filed suit in the district court based on Michigan’s common law, Title VII
of the Civil Rights Act of 1964, and Michigan’s Elliot–Larsen Civil Rights Act (ELCRA). However,
the district court properly granted summary judgment for Rite Aid on all counts.
Handlon began working at Rite Aid pharmacy number 4574 in Port Huron, Michigan in
2008. R.35-2, at 3, PageID #504. Her official title at the time of her termination in October 2009
was Pharmacy Cashier. R.31-3, at 2, PageID #219. This position is one step lower in the pharmacy
hierarchy than Pharmacy Technician, although the two jobs share many responsibilities, and cashiers
are often in the process of receiving on-the-job training that will qualify them for a promotion to
technician. R.3104, at 3–8, PageID #224–229. As a cashier, Handlon’s responsibilities included
ringing up customers’ purchases on the cash register, entering prescriptions into Rite Aid’s computer
system, printing prescription labels, and dispensing prescriptions. Id. Cashiers and technicians both
work under the supervision of the store’s pharmacists, who are supervised by the store’s Pharmacy
Manager, James Kaski. Kaski reports to the Pharmacy District Manager, Scott Kroczolowski, who
oversees several Rite Aid pharmacy locations in the region.
In August 2009, store employees reported that a staff pharmacist, Joe Carpenter, was
behaving oddly. R.31-9, at 2, PageID #285. He was acting strangely during work and coming to the
pharmacy during times when he was not scheduled to work. Id. This raised concerns with store
management that Carpenter may have been taking controlled substances from the pharmacy, so
management reached out to Timothy Tevis, who was the District Loss Prevention Manager
responsible for the store. R.31-7, at 8, PageID #260. Tevis’s job was to protect corporate assets and
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investigate suspected theft and fraud at Rite Aid stores in the region. R.31-7, at 3–6, Page ID
#255–258. Tevis and Kroczolowski decided to conduct surveillance on the pharmacy in store 4574.
R.31-7, at 9, PageID #261. This consisted of the installation and monitoring of three hidden cameras
and periodic counts of the store’s drug supplies to check for losses. See R.35-13, at 2, PageID #580.
On September 4, 2009 Kroczolowski first counted the drugs he thought were most likely to be
stolen. See R.31-6, at 10, PageID #244. A second count performed on September 7 showed no
losses. R.31-12, at 2, PageID #295. However, the count on September 9, 2009 indicated that the
store was missing approximately one 500-count bottle of the painkiller hydrocodone. R.31-13, at
2, PageID #297.
When Tevis reviewed the videotape from September 8, he observed Handlon acting in a way
that suggested she was stealing a bottle of hydrocodone. R.31-7, at 11, PageID #263. After refilling
a machine that automatically dispenses pills, she took an empty box, along with a full bottle of
hydrocodone, to the area where the stock bottles are kept. R.31-7, at 10, PageID #262. She set the
empty box on the floor and, instead of returning the full bottle to the stock area, she placed the bottle
inside the empty box, closed the box, and took the box with her outside of the pharmacy and into the
storage and employee locker area. Id. Tevis documented this behavior and added three more
surveillance cameras to film more of Handlon’s work areas and the storage area. R.31-18, at 3,
PageID #311.
The drug counts continued to show losses of hydrocodone. In a Septmber 25, 2009 email,
Kroczolowski indicated that over two wholesale bottles—more than 1,000 pills—were missing from
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the store. R.33-1, at 2, Page ID #342. Upon reviewing the videotape, Kroczolowski and Tevis
discovered what they believed to be the cause. The September 22 video appeared to show Handlon
placing two 500-count bottles of hydrocodone in an empty vial box and taking that box and another
box out of the pharmacy and into the employee locker area. R.31-11, at 2–3, PageID #292–3.
Handlon appeared to return one box to a shelf in the storage area, but she kept the second box with
her as she carried it past a garbage can and into the locker area, out of camera view. Id. About thirty
seconds later, she returned to camera view and threw the box into the garbage can that she had
previously bypassed. Id. A short time later, Handlon left the store with a rolled up cashier’s apron
in her hand. Id. When she returned about one minute later, the apron was unrolled, dangling from
her hand. Id.
After viewing the September 22 video, Tevis, Kroczolowski, and Human Resources Manager
Paul Yunker decided to call Handlon in to the store to discuss the investigation. R.31-3, at 3, PageID
#220. The meeting occurred in the Store Manager’s office late at night on October 7 and involved
Tevis, Handlon, and a female employee named Katherine Taylor, who was asked to observe the
interview so that no concerns would exist about the male-female interview. R.31-7, at 18, PageID
#270. Tevis told Handlon about the videotape evidence and informed her that he would notify the
police. Handlon stood up, said, “then call the police,” and walked out of the store. R.31-18, at 3–4,
PageID #311–12. Handlon agrees that the interview lasted less than two minutes. R.33-3, at 14,
PageID #358.
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Tevis then called local police to file a criminal complaint related to the drug theft. R.33-4,
at 3–4, PageID #370–71. Officer Rumley of the Port Huron Police Department took a statement
from Tevis at the Rite Aid store, and Handlon was arrested forty-five minutes later. R.33-5, at 4–5,
PageID #375–76. When Officer Rumley discussed the thefts with Tevis, Rumley was under the
impression that Handlon had stolen drugs on that same day, in addition to the occasions that
management observed earlier in September. R.35-19, at 5 (dep. pg. 13), PageID #598.
Handlon claims that when she first contacted the store following her arrest, she was told that
she had been terminated. R.35-2, at 7, PageID #508. She was later informed that she was suspended
pending the investigation for her refusal to comply with the theft investigation. Id. On October 20,
2009, Handlon called Tevis and asked to meet with him off-premises, and Tevis informed her that
any meeting would have to take place on Rite Aid property. Id. Handlon refused, and HR Manager
Yunker authorized her termination. R.31-3, at 3, PageID #220.
Handlon, who is Caucasian, has two biracial children. R.35-2, at 5, PageID #506. Her
children were with her at times in the Rite Aid store, and at some time around August 2008 a
coworker asked Handlon about Handlon’s race and the race of her children. Id. Handlon
complained to Kaski that a pharmacist, Ann Osburn, overheard the other employee’s questions to
Handlon and subsequently discriminated against her, apparently by yelling at her in front of
customers. Id. At another time, another employee referred to Handlon as “ghetto.” R.35-2, at 6,
PageID #507. Around February 2009, Handlon told the store’s Retail Manager, Bill Smith, that
Osburn cut her hours and yelled at her in front of a customer. Id. On June 15, 2009, Handlon wrote
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a letter to Kroczolowski complaining that Osburn had been disrespectful and yelled at her in front
of customers. R.35-26, at 3, PageID #662. She did not provide any detail linking her race and/or
the race of her children to Osburn’s actions. Id.
After she was terminated, Handlon filed race-discrimination complaints with the Michigan
Department of Civil Rights and the U.S. Equal Employment Opportunity Commission (“EEOC”).
She subsequently brought suit against Rite Aid and Tevis in the United States District Court for the
Eastern District of Michigan, claiming race discrimination under Title VII and ELCRA, retaliation
under Title VII and ELCRA, defamation, false arrest/false imprisonment, racial harassment, and
intentional infliction of emotional distress. The district court granted summary judgment in favor
of Rite Aid on all claims. Handlon appeals the district court’s entire summary-judgment order.
Race Discrimination
The district court properly granted summary judgment on Handlon’s race-discrimination
claim because she did not state a genuine issue of material fact. Her race-discrimination claims
under Title VII and ELCRA alleged that Rite Aid terminated her because she is the mother of
biracial children. The district court held that she failed to make out a prima facie case because she
could not show that she was treated differently from a similarly situated employee. R.37, at 10,
PageID #697. Handlon argues that Carpenter was similarly situated, yet was treated more favorably
by Rite Aid because, although he was fired, the police were not involved. Appellant’s Br. at 22–25.
Handlon does not provide direct evidence of discrimination, and the district court properly
analyzed her case under the McDonnell Douglas burden-shifting framework that applies to claims
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of discrimination based on circumstantial evidence. This framework requires Handlon to show that
“‘(1) she is a member of a protected group, (2) she was subject to an adverse employment decision,
(3) she was qualified for the position, and (4) . . . .’ she ‘was . . . treated differently than similarly
situated non-protected employees.’” Russell v. Univ. of Toledo, 537 F.3d 596, 604 (6th Cir. 2008)
(quoting Carter v. Univ. of Toledo, 349 F.3d 269, 273 (6th Cir. 2003), and Newman v. Fed. Express
Corp., 266 F.3d 401, 406 (6th Cir. 2001)). Handlon argues that Rite Aid’s treatment of pharmacist
Joe Carpenter, a white employee who was caught on videotape taking small amounts of non-
controlled drugs, reveals differing treatment of a similarly situated non-protected employee. Rite
Aid terminated Carpenter after he complied with its investigation, but Rite Aid did not report him
to the police. R.31-9, at 2, PageID #285.
It is not clear that reporting an employee to the police is an adverse employment action for
race-discrimination purposes under Title VII, but we need not address that question because even
if Handlon established a prima facie case, she did not succeed in showing that Rite Aid’s legitimate
non-discriminatory reason for her termination—that she was stealing from her employer—was
pretext for unlawful discrimination. An employer’s proffered reason for termination can be
overturned upon a showing that the employer lacked an honest belief that the employee was guilty
of the alleged violations. Sybrandt v. Home Depot, U.S.A., Inc., 560 F.3d 553, 558–59 (6th Cir.
2009). Although Handlon finds fault with Rite Aid’s methods of investigating theft in her store, she
produced no evidence to indicate that management did not believe the allegations it levied against
her.
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Both parties note that the pharmacy’s investigation did not initially target Holly Handlon.
In fact, the initial reason for the surveillance was Carpenter’s suspicious activity. Rite Aid maintains
that it decided to take action against Handlon based on the results of the manual pill counts and the
contents of the surveillance video. A plaintiff can establish that the employer’s proffered reason for
determination is pretext for unlawful discrimination by showing that the alleged reason “(1) has no
basis in fact; (2) did not actually motivate the adverse employment action; or (3) was insufficient to
warrant the adverse action.” Sybrandt, 560 F.3d at 558. While Handlon contends that the pill counts
were inaccurate, she does not dispute that Rite Aid relied upon them. And while she maintains that
she did not steal drugs and that the video therefore could not have shown her stealing drugs, she
offers no evidence to suggest that Tevis and Kroczolowski did not honestly believe the video showed
her doing so. Although Handlon has not proven her innocence, even if she had, an “employee cannot
establish that the [employer’s proffered non-discriminatory] reason was pretextual simply because
it is ultimately shown to be incorrect.” Id. at 558–59. For these reasons, the district court was
correct in granting summary judgment to Rite Aid on Handlon’s race-discrimination claim.
Retaliation
Summary judgment was also proper with respect to Handlon’s retaliation claims under Title
VII and ELCRA. As the district court properly concluded, her Title VII claim fails because she did
not exhaust administrative remedies. Handlon did not mention retaliation in her EEOC charge, nor
did she ever amend the charge to include this claim. Therefore, only her ELCRA claims are properly
before this court. Even if Handlon engaged in activities protected by ELCRA, she did not show a
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causal connection between her activities and her termination or the involvement of the police. For
that reason, the district court properly resolved this claim in Rite Aid’s favor on summary judgment.
Establishing a prima facie case of retaliation requires a showing that the plaintiff engaged in
a protected activity. Garg v. Macomb Cnty. Cmty. Mental Health Servs., 696 N.W.2d 646, 653
(Mich. 2005). Handlon alleges that she was retaliated against in response to the following three
activities: (1) she complained to Kaski because a coworker asked about her race and the race of her
children and because Ann Osburn later yelled at her in front of customers; (2) she complained to the
store manager, Bill Smith, about her hours being cut; and (3) she wrote a letter to Kroczolowski
claiming “discriminative” treatment and stating that Osburn had disrespected her and yelled at her
in front of customers. It is not clear that, based on these activities, Handlon took the type of stand
against discrimination that warranted protection under ELCRA. We need not resolve the question,
however, because in any event Handlon failed to establish a causal connection between her
complaints to management and her termination. A causal connection is an essential element of a
prima facie case of retaliation under ELCRA. Garg, 696 N.W.2d at 653. Handlon attempts to pin
the causal connection entirely on temporal proximity; however, the Michigan Supreme Court in
interpreting ELCRA has stated unequivocally that “in order to show causation in a retaliatory
discrimination case, ‘[p]laintiff must show something more than merely a coincidence in time
between protected activity and adverse employment action.” Id. at 660 (quoting West v. Gen. Motors
Corp., 665 N.W.2d 468 (Mich. 2003)). Handlon cites this circuit’s decision in DiCarlo v. Potter,
358 F.3d 408 (6th Cir. 2004), for “the premise that in certain distinct cases where the temporal
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proximity between the protected activity and the adverse employment action is acutely near in time,
that close proximity is deemed indirect evidence such as to permit an inference of retaliation to
arise.” See id. at 421. This argument fails because DiCarlo provides an interpretation of Title VII
and not ELCRA, and this court must defer to Michigan’s interpretation of the latter.
Defamation
The district court also properly granted summary judgment on Handlon’s defamation claim
regarding Tevis’s statements to Officer Rumley. Citizens’ statements to law enforcement are
protected by at least a qualified privilege. Such a privilege can be defeated only by a showing of
actual malice. Because Handlon has not presented evidence suggesting that Tevis acted with actual
malice, his statements to Officer Rumley cannot form the basis of a defamation claim.
A defamation claim must have the following elements:
(1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged
communication to a third party, (3) fault amounting at least to negligence on the part
of the publisher, and (4) either actionability of the statement irrespective of special
harm (defamation per se) or the existence of a special harm caused by publication.
Mitan v. Campbell, 706 N.W.2d 420, 421 (Mich. 2005). Handlon’s claim, however, does not
concern an unprivileged communication, but rather a statement made to police. There is some
support in Michigan law, including practice manuals, that statements to police are absolutely
privileged. E.g., Flynn v. Boglarsky, 129 N.W. 674, 676 (Mich. 1911); Shinglemeyer v. Wright, 82
N.W. 887, 890–91 (Mich. 1900); Farokhrany v. Jackson, No. 291616, 2010 WL 2977134, at *2
(Mich. Ct. App. July 29, 2010); 15 Mich. Civ. Jur. Libel and Slander § 47, Complaints and
information directed to police (2012). However, other authority supports the conclusion that such
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statements may only be protected by a qualified privilege. E.g., Hall v. Pizza Hut of Am., Inc., 396
N.W.2d 809, 813–14 (Mich. 1986)1 ; Sanders v. Stanley, 794 F. Supp. 2d 755, 762 (E.D. Mich.
2011). To overcome such a qualified privilege, a plaintiff must produce evidence that the
complained-of statements were “intentionally false or made with reckless disregard for the truth,”
a standard known as “actual malice.” Sanders, 794 F. Supp. 2d at 762. Assuming that a qualified
privilege applies, Handlon failed to meet this burden.
There is little question that Tevis believed, based on the video surveillance and pill counts,
that Handlon had stolen drugs from the pharmacy prior to her arrest and therefore that the allegations
of a pattern of drug theft made to Officer Rumley, without regard to whether they were in fact true,
were made in good faith. These accusations plainly cannot support a defamation claim, because in
relying on the evidence available to him, Tevis plainly evaluated the truth or falsity of his statements.
Although Handlon presents a spirited argument that Tevis’s statement to Officer Rumley regarding
theft on the date of Handlon’s arrest contained false information, she set forth no evidence that Tevis
made that statement with actual malice. Therefore, her defamation claim fails because Tevis’s
statements are protected by the qualified privilege.
1
Hall is sometimes cited for the proposition that “information given to police officers
regarding criminal activity is absolutely privileged.” Hall, 396 N.W.2d at 813. However, after
making this statement, the court immediately appeared to retreat, stating in the next sentence that
“[e]ven if [the defendant’s] statements were not absolutely privileged, a qualified privilege extends
to all communication made bona fide on any subject matter in which the party communicating has
an interest [and in certain other enumerated situations].” Id. The court proceeded to discuss the
defamation claim in terms of qualified privilege, “[h]aving decided that at least a qualified privilege
protected [the] statements.” Id. at 814.
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False Arrest/False Imprisonment
Summary judgment was also proper on Handlon’s false arrest claim that Tevis gave false
information to the police in his report to Officer Rumley. Tevis can only be held liable for
Handlon’s arrest if Officer Rumley acted at Tevis’s direction and not through an exercise of
Rumley’s own judgment, see Lewis v. Farmer Jack Div., Inc., 327 N.W.2d 893, 894–95 (Mich.
1982), and Handlon provided no evidence that Officer Rumley acted at Tevis’s direction.
In Lewis, the Michigan Supreme Court focused on the degree of direction a private citizen
exercises over an official arrest: “It is not enough for instigation that the actor has given information
to the police about the commission of a crime, or has accused the other of committing it, so long as
he leaves to the police the decision as to what shall be done about any arrest, without persuading or
influencing them.” Lewis, 327 N.W.2d at 895 n.3 (quoting Restatement (Second) of Torts, §45A
cmt. c). The court held that, where a store employee contacted police to report that she identified
the man responsible for a previous robbery and the man was arrested based on the information the
employee provided, “[t]he police acted on and in the exercise of their own judgment and not at the
direction of [the employee] or the manager.” Id. at 895. The court further noted that the employee
“communicated facts and circumstances to the officer, her perception that Lewis was the robber. The
officer was left to act on his own judgment and evidently acted on his own judgment in arresting
Lewis.” Id. at 895 n.3. In contrast, the Michigan Supreme Court held in Maliniemi v. Gronlund, 52
N.W. 627, 627–28 (Mich. 1892), that an officer acted upon the judgment of a private citizen where
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the citizen directed the officer to an individual matching the description of a suspect and the plaintiff
was arrested immediately without verifying his identity in any way.
Under the “judgment and direction” analysis suggested by Gronlund and Lewis, plaintiff’s
evidence does not support a genuine issue of fact for the jury. Tevis called the police to make a
complaint, and Officer Rumley arrived and took his complaint, in which he alleged “facts and
circumstances” and his “perception” that Handlon was responsible for the missing pills. See Lewis,
327 N.W.2d at 895 n.3. The officer received the information from Tevis, and, based on that
information, concluded that Tevis’s description supported a charge of embezzlement. Forty-five
minutes later, the officer located and arrested Handlon. Handlon points to no evidence in the record
that Tevis commanded the officer to arrest Handlon, or that she was arrested simply at Tevis’s
request, rather than upon a weighing of his statements. These facts are similar to the facts in Lewis
and support the same result.
Intentional Infliction of Emotional Distress
Finally, Handlon’s claim of intentional infliction of emotional distress (IIED) is without
merit. Under Michigan law, a successful IIED claim must involve (1) extreme or outrageous
conduct, (2) intent or recklessness, (3) causation, and (4) severe emotional distress. Webster v.
United Auto Workers, Local 51, 394 F.3d 436, 442 (6th Cir. 2005). Handlon’s claim founders out
of the gate. “The threshold for showing extreme and outrageous conduct is high,” and Handlon
clearly fails to meet it. See VanVorous v. Burmeister, 687 N.W.2d 132, 142 (Mich. Ct. App. 2004).
For conduct to meet the standards for an IIED claim, it must be “so outrageous in character, and so
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extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious,
and utterly intolerable in a civilized community.” Roberts v. Auto-Owners Ins. Co., 374 N.W.2d
905, 908–09 (Mich. 2004). No interpretation of Rite Aid’s activity—which includes processing
employee complaints of friction in the workplace, performing a theft investigation, reporting
suspected theft to the police, suspending an employee, and terminating an employee—can be
presented as fitting this description.
The judgment of the district court is affirmed.
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