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VICTOR DENOBLE Plaintiff
vs.
DUPONT MERCK PHARMACEUTICAL COMPANY Defendant.
 
Case:
C.A. No. 92C-11-161-JEB
 
Location:
SUPERIOR COURT OF DELAWARE NEW CASTLE
 
Date:
April 11 1997 Decided
 
Attorneys:
Bayard Snyder Esquire of Wilmington Delaware. Counsel for Plaintiff.
Joseph Slights III Esquire of Wilmington Delaware. Counsel for Defendant.
 
Court:
John E. Babiarz Jr. Court.
 
Author:
The Hon. Justice John E. Babiarz Jr.
 

Plaintiff Victor DeNoble became employed by defendant DuPont Merck Pharmaceutical Company on January 1 1991 as a research scientist. He was terminated on May 8 1992 for scientific incompetence a charge which he denies. This lawsuit followed. It includes four counts: Count I - breach of an employment contract; Count II - breach of the implied covenant of good faith and fair dealing; Count III - defamation per se; Count IV - injurious falsehood. DuPont Merck has moved for summary judgment on all counts.

DeNoble holds a degree in general psychology and advanced degrees in experimental psychology. After his education DeNoble accepted employment with both Philip Morris Research Center and later with Ayerst Research Laboratories. In 1987 DeNoble was hired by E.I. DuPont De Nemours & Co. At DuPont DeNoble supervised the psychopharmacology labs which conducted experimental drug tests.

In 1990 DuPont and DuPont Merck Pharmaceutical Company began the formation of a joint venture to pursue the commercial development of drugs involved in DeNoble's research. Denoble was offered a position with DuPont Merck (the resulting joint venture partnership) which he accepted. While at DuPont plaintiff worked on an experimental compound designated DuP21. He conducted tests which consisted of administering the compound to monkeys and rats and studying the performance of these animals in certain tasks. These experiments were to act as the basis for submitting an Investigational New Drug Application to the Food and Drug Administration. INDs are used to obtain the FDA's permission to test drugs on humans. The work completed by DeNoble while at DuPont was later taken over by DuPont Merck in an effort to prepare the IND. A Chemistry Pharmacology Metabolism and Toxicology Report was written to present the results of the tests and defendant incorporated much of DeNoble's data into a draft of the IND. It was at this stage that DuPont Merck began to question DeNoble's data.

Ross Reife M.D. and Errol DeSouza Ph.D. were assigned to review DeNoble's work. Reife and DeSouza determined that certain data excluded by DeNoble from the final results materially altered the results by creating an appearance that the drugs worked better than they actually did. Reife and DeSouza concluded that material differences existed between DeNoble's presentation and the actual raw data from experimentation. David W. Martin M.D. the Executive Vice President of Research and Development at DuPont Merck also reviewed DeNoble's work for inaccuracies. As a result of the inaccuracies the IND had to be scrapped.

Based on the above reviews DuPont Merck terminated DeNoble on May 8 1992. The termination was carried out by Lawrence J. Rasero Ph.D. head of defendant's human resource department. Rasero stated that he "considered the discrepancies inadequacies and errors in [DeNoble's] research and presentation" and concluded that DeNoble's conduct rose to the level of "scientific incompetence" and that the presentation of his research was "both incompetent and misleading". Rasero determined that DeNoble's conduct necessitated a discharge under defendant's Service Manual.

The Service Manual provides in pertinent part as follows:

"Discharge for cause results when the accepted standards of personal conduct and work performance required of all employees are seriously violated. It should be used in cases where some serious act contrary to the Company's interest or a series of less serious acts or omissions warrant termination. . . ."

DuPont Merck officially ended DeNoble's employment on June 9 1992.

From June 9 1992 to September 15 1992 DeNoble searched for a new job. DeNoble retained Ellie Cantor an employment consultant to aid in this search. After Cantor began her search she reported to DeNoble that "she was hearing some disturbing rumors . . . from people in the scientific community that [DeNoble] was terminated for falsifying data." Specifically there were three companies that DeNoble was dealing with at the time as employment prospects: ICI Pharmaceuticals Cephalon Pharmaceuticals and Symphony Pharmaceuticals. None of these companies hired him. DeNoble claims that DuPont Merck was the source of this information.

Outside of those three specific employment's situations DeNoble argues that at lease eight other instances exist which support a claim of defamation. Six of those instances involve alleged conversations between DuPont Merck employees. Two of them involve communication connected with this litigation or DeNoble's claim for unemployment compensation.

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party has shown that they are entitled to a judgment as a matter of law. SUPER. CT. CIV. R. 56(c). If after viewing the record in a light most favorable to the non-moving party Court finds that there are no genuine issues of material fact summary judgment is appropriate. Oliver B. Cannon & Sons Inc. v. Dorr-Oliver Inc. Del. Super. 312 A.2d 322 325 (1973).

The moving party bears the initial burden of showing that no genuine issues of material fact exist. Moore v. Sizemore Del. Supr. 405 A.2d 679 680 (1979). Once the moving party makes this initial showing the burden shifts to the non-moving party to show from the record that material issues of fact are present. Id.; see Phillips v. Delaware Power & Light Co. Del. Supr. 59 Del. 179 216 A.2d 281 285 (1966); SUPER. CT. CIV. R. 56(e). Uncontroverted evidence however offered in support of a motion for summary judgment must be accepted as true. Oliver B. Cannon & Sons Inc. v. Dorr-Oliver Inc. Del. Super. 312 A.2d 322 325 (1973); National Fire Ins. Co. v. Eastern Shore Labs. Inc. Del. Super. 301 A.2d 526 528 (1973).

BREACH OF AN EMPLOYMENT CONTRACT

The first count in DeNoble's complaint alleges breach of an employment contract. DeNoble claims that DuPont Merck breached this contract in two ways: (1) through termination without just cause and (2) through DuPont Merck's failure to follow the personnel manual and established personnel guidelines. Therefore no written specifications exist of either a specific duration of employment or standard for termination. DeNoble has no evidence other than that he had an oral agreement of employment that specified neither a duration nor a standard for termination a circumstance which would render him an employee "at will" and subject to termination with or without cause.

DeNoble however argues that DuPont Merck's employment manual and guidelines constitute a term of his oral employment contract.

Delaware courts have held though that the existence of these manuals and guidelines ordinarily does not change an employee's at-will status. "Issuance of an employee handbook standing alone is insufficient to alter the at will status of an employee." Peterson v. BeeBe Medical Ctr. Inc. Del. Super. Civ. A. No. 91C-07-147 at 6 Del Pesco J. (Nov. 13 1992). "A unilateral expression of policy by an employer such as that provided in a handbook does not modify an employee's at will status." Gaines v. Wilmington Trust Co. Del. Super. Civ. A. No. 90C-03-135 at 4 Del Pesco J. (June 3 1991). Heideck v. Kent Gen. Hosp. Del. Supr. 446 A.2d 1095 1097 (1982).

Plaintiff has failed to produce evidence that such guidelines or procedures were negotiated terms as opposed to a unilateral expression of policy. Thus they do not constitute a term of his employment. Plaintiff's claim here is more akin to one for a breach of the implied covenant of good faith and fair dealing. Indeed plaintiff relies on the same argument to claim a breach of the implied covenant in Count II.

Defendant's motion for summary judgment as to Count I of plaintiff's complaint is granted.

BREACH OF THE IMPLIED COVENANT OF GOOD FAITH

AND FAIR DEALING

The second count in DeNoble's complaint alleges a cause of action based on the implied covenant of good faith and fair dealing. DeNoble claims that DuPont Merck breached this implied covenant in two ways: (1) failure to follow its personnel manual and personnel procedures and (2) termination of plaintiff for alleged scientific incompetence despite performance evaluations indicating that plaintiff was meeting expectations and in many cases exceeding expectations of defendant. This covenant applies to at-will employment contracts. See E. I. DuPont De Nemours and Co. v. Pressman Del Supr. 679 A.2d 436 (1996); Merrill v. Crothall-American Inc. Del. Supr. 606 A.2d 96 101 (1992).

In order to breach the covenant "the conduct of the employer must constitute 'an aspect of fraud deceit or misrepresentation.'" Merrill 606 A.2d at 101. The covenant essentially functions as a limitation on the at-will doctrine of employment. Application of the covenant however remains narrow out of concern that the exception will "swallow the doctrine and effectively end at-will employment." Pressman supra at 18.

In Pressman the plaintiff's immediate supervisor set out on a campaign to discredit Pressman by creating fictitious negative information about Pressman's work and hiding positive information. Based on the distorted record he created the supervisor went to his superiors and caused Pressman to be terminated. Court found that the covenant applied to termination's of at-will employment contracts specifically holding "that the covenant permits a cause of action against an employer for the deceitful acts of its agent in manufacturing materially false grounds to cause an employee's dismissal." Id.

The Pressman decision clearly expresses that exceptions to the at-will doctrine such as the covenant are drawn on a case-by-case basis. Indeed that decision reaffirmed "the breadth of the [at-will employment doctrine] and the narrow and carefully crafted nature of the [implied covenant of good faith and fair dealing]." Id. at 3. Reading all of the facts in the case sub Judaic in favor of the plaintiff the Court cannot find that plaintiff's circumstances fit within the covenant as outlined to date by the Supreme Court of Delaware.

First a review of plaintiff's case shows no facts of fraud in the inducement as those set forth in the facts of Merrill. Second the instant case is not similar to the Pressman case. In Pressman the plaintiff's supervisor intentionally set about a course of destroying plaintiff's career at DuPont by manufacturing false and material work-related information. DeNoble has presented no evidence that his supervisors set about a similar course. He simply contends that his supervisors were wrong their assessment of his covenant of good faith and fair dealing. To allow an employee at-will to contest the reasons stated by an employer for discharge would allow the covenant to swallow the rule. Pressman supra.

Accordingly Court grants the defendant's request for summary judgment as to Count II of the plaintiff's complaint.

DEFAMATION PER SE

The third count in DeNoble's complaint alleges a cause of action for defamation per se.

"Defamation consists of the twin torts of libel and slander; in the shortest terms libel is written defamation and slander is oral defamation." Read v. Carpenter Del. Super. Civ. A. No. 95C-03-171 at 3-4 Quillen J. (June 8 1995); see Spence v. Funk Del. Supr. 396 A.2d 967 970 (1978). All of the instances DeNoble claims as representative of defamation concern oral statements; no written statements have been offered. DeNoble's claim therefore is one of slander per se.

In order for DuPont Merck to be held liable for defamation or more specifically slander per se Denoble must show:

1. a false and defamatory statement concerning another;

2. an unprivileged publication to a third party;

3. fault amounting at least to negligence on the part of the publisher; and

4. actionability of the statement irrespective of special harm.

RESTATEMENT (SECOND) OF TORTS 558; see Read v. Carpenter Del. Super. Civ.A. No. 95C-03-171 at 4 Quillen J. (June 8 1995); Durig v. Woodbridge Bd. Of Educ. Del.Super. Civ. A. No. 90C-11-022 at 12-13 Ridgely P.J. (Oct. 9 1992); Los v. Davis Del Super. Civ. A. No. 89C-10-122 at 3 Goldstein J. (Apr. 9 1991) aff'd Del. Super. 602 A.2d 1081 (1991) (TABLE).

Defendant's motion focuses on the second factor. It contends that plaintiff has no evidence to prove: (1) that DuPont Merck made certain alleged comments and (2) that other alleged comments were published to third parties. Further it contends that the remaining comments were privileged.

With regard to the ICI Symphony and Cephalon situations plaintiff has no evidence to trace the rumors reported by Cantor to defendant. Plaintiff merely hypothesizes that a DuPont Merck employee spoke with someone at each respective company and informed them of DeNoble's reason for termination. The plaintiff thus has insufficient evidence to support a defamation claim in the above instances.

With regard to the claims relating to alleged conversations between or among some of defendant's employees DuPont Merck contends that publication to such persons does not constitute publication to third parties. Court however need not decide this issue as plaintiff has produced no evidence that defendant either intentionally or negligently caused such publication. All of the situations evidence employees speaking among themselves. The fact that they claimed to have defamatory information is not evidence that a DuPont Merck manager made any defamatory statements to them. Additionally plaintiff has failed to produce any evidence that defendant failed to observe proper safeguards against the release of the reasons for his discharge assuming that such duty exists. Plaintiff again has failed to present sufficient evidence to avoid the grant of summary judgment.

Finally Court addresses the argument that two admitted communications are protected under a privilege. These two communications involve DuPont Merck's Counsel's comments to plaintiff's Counsel in the course of this litigation and comments to the Delaware Division of Unemployment Insurance.

The defendant argues that DuPont Merck's Counsel's comments to plaintiff's Counsel describing plaintiff's research as "almost fraud " and the director of personnel's statement to the Division of Unemployment Insurance that plaintiff was fired for "scientific incompetence" are protected by an absolute privilege. This privilege protects the statements of Court parties witnesses and Counsels made in the course of judicial proceedings and relevant to a matter at issue in the case. Barker v. Huang Del Supr. 610 A.2d 1341 1345 (1992); accord Tatro v. Esham Del. Super. 335 A.2d 623 626 (1975). It extends to an Counsel's communication preliminary to the proceedings. RESTATEMENT (SECOND) OF TORTS Sec. 586 Both of these statements were made during the course of legal proceedings related to DeNoble's discharge. They are thus privileged. Defendant's motion as to Count III is also granted.

INJURIOUS FALSEHOOD

The fourth and final count in DeNoble's complaint alleges a cause of action for injurious falsehood. The plaintiff relies on the same factual basis for this count as he does for Count III. DeNoble argues that the alleged statements were "intended to injure [his] reputation among his former co-workers and others in the scientific field resulting in pecuniary harm to plaintiff through lost wages and the inability to obtain new employment in his field of expertise."

A claim of injurious falsehood is similar to one of defamation in that "both involve the imposition of liability for injuries sustained through publication to third parties of a false statement affecting the plaintiff." RESTATE (SECOND) OF TORTS SEC. 623 cmt. g. The purpose of an injurious falsehood claim however "is to protect economic interests of the injured party against pecuniary loss" as opposed to the purpose of a defamation claim which is to protect reputation. See id.

The Restatement sets forth the standard for a claim of injurious falsehood:

One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if

(a) he intends for publication of the statement to result in harm to interest of the other having a pecuniary value or either recognizes or should recognize that it is likely to do so and

(b) he knows that the statement is false or acts in reckless disregard of its truth or falsity.

RESTATEMENT (SECOND) OF TORTS Sec. 623A. This as with defamation requires the defendant to publish a statement. Therefore the plaintiff confronts the same problem here as with the defamation claim -- the plaintiff cannot trace the alleged statements to a DuPont Merck management employee or another individual with authority to speak on behalf of DuPont Merck and Court has held that the two admitted statements are privileged.

Therefore Court grants summary judgment on Count IV in favor of the defendant.

John E. Babiarz Jr. Court.