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No. 89-1330-K
June 29 1990 Decided
Robert M. Green Roger C. Green Green & Green El Dorado Kansas for Plaintiffs.
Gloria G. Flentje Mikel L. Stout Foulston Siefkin Powers & Eberhardt Wichita Kansas for Defendant.
Patrick F. Kelly United States District Court.
The Hon. Justice Kelly

The matter is before Court on defendant Boeing Military Airplanes' motion for summary judgment. Boeing seeks a dismissal of the claims filed by three of its previous employees Sharon Roles Randy Shinliver and Gary Kiser. The plaintiffs allege that Boeing breached an implied contract of good faith and defamed their reputations when it terminated their employment in June 1988 for allegedly buying illegal drugs on the company's premises. A hearing on Boeing's motion was held on June 21 1989 at which time Counsel for both parties capably and eloquently advanced their respective arguments.

Summary judgment is proper where the pleadings depositions answers to interrogatories and admissions on file together with affidavits if any show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P.56(c). In considering a motion for summary judgment Court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital 854 F.2d 365 367 (10th Cir.1988). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co. 754 F.2d 884 885 (10th Cir.1985). The moving party need not disprove plaintiff's claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co. 812 F.2d 1319 1323 (10th Cir.1987).

In resisting a motion for summary judgment the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby Inc. 477 U.S. 242 256 (1986). Once the moving party has carried its burden under Rule 56(c) the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule the nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp. 475 U.S. 574 587 (1986) (quoting Fed.R.Civ.P.56(e)) (emphasis in Matsushita). One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett 477 U.S. 317 (1986).

The contentions of fact and supporting exhibits submitted to Court permit the following findings of fact. In 1988 Roles Shinliver and Kiser worked the second shift in the Nacelle building at Boeing. Roles and Shinliver were employed as Grade 4 Assemblers Kiser as a Grade 6 Jig Builder. All were members of the collective bargaining unit represented by the International Association of Machinists and Aerospace Workers AFL-CIO.

The terms and conditions of the plaintiffs' employment's were controlled by the October 4 1986 Collective Bargaining Agreement between Boeing and the union. Article 19 of the agreement establishes a grievance and arbitration procedure including a provision allowing for the appeal of employment termination's. In addition to the collective bargaining agreement the plaintiffs' employment rights were also governed by Boeing's company rules. These rules define as unacceptable conduct the "[p]obsession or consumption of alcoholic beverages or drugs on Company premises."

In early 1988 Federal Drug Enforcement Administration officials contacted Boeing and informed the company that they believed a Boeing worker in the Nacelle building was selling marijuana and cocaine from a tool crib during the second shift. Boeing agreed to accept an agent supplied by the DEA who would attempt to investigate and set up drug buys for the DEA.

The agent supplied by the DEA was an individual named Frank Gestel but the DEA told Boeing that the agent's name was John Oates and that he had had previous undercover experience. The DEA also told Gordon Gwinn Boeing's manager of security investigations that Oates was reliable and had no criminal record.

Using the pseudonym Oates Gestel began working at Boeing on the second shift in March 1988 as a Material Man B. During his time at Boeing Gestel reported regularly to the DEA and worked with Boeing security officers. Gestel kept notes on his observations of employees in the Nacelle building tool crib including records of persons purchasing drugs. Gestel attempted to complete a written report each day and forwarded his observations to the DEA and Jerry Bullins a Boeing security officer. In addition to his observations Gestel set up drug purchases with the seller and purchased drugs on and off company premises.

Gestel identified the persons seen purchasing drugs through their Boeing employee badges. All Boeing employees on company premises are required to wear an identification badge containing the employee's name and picture. Gestel also consulted with Bullins and Boeing supervisors to confirm the identity of the persons seen purchasing drugs.

As a result of the information obtained during Gestel's investigation Boeing suspended a total of 23 employees including Roles Shinliver and Kiser on May 24 and 25 1990. According to the affidavit of Gwinn general supervisors were instructed to go to the work areas of the individual employees just prior to or after the change from first to second shift. The supervisors were instructed to tell the workers that they were taking them to be interviewed and not to comment on the reason for the interview. At each interview the employee was notified of the allegations involved and given the opportunity to respond. The employee was also told that he was suspended pending further investigation.

After the interview the employees were escorted off the premises either by a management employee or by uniformed security officers. If the employee had a tool box he was to be escorted back to his work area where he could go through the tool box and check in any company tools with the tool crib attendant. At Boeing which operates a closed plant facility it is general company practice to escort suspended employees off company premises. In addition when an employee is suspended for any reason his identification badge is taken in order to assure that he does not return to the facility. This policy was adopted to in order to maintain security and because the company has had prior problems with suspended employees becoming destructive violent or abusive.

After her interview with Boeing security investigators in which she was notified of her suspension Roles was taken back to her work area where Boeing personnel went with her through her toolbox. She was then escorted out of the facility by a general supervisor. Although coworkers asked her what was happening Roles told them nothing. Roles stated in her deposition that she didn't have time to talk to her coworkers after her suspension and that she thought she was not supposed to talk to them.

Like Roles Shinliver also denied the allegations of drug purchases at his interview with a Boeing security investigator. Informed that he was suspended from work Shinliver was escorted back to his work area by a uniformed security guard. There were very few people in the area and only a few inspectors were around when he left the plant after securing his tool box.

Kiser was notified of his suspension at a separate interview in which he also denied the allegations against him. Kiser was escorted back to his work area by two supervisors got his tool box and pushed it out of the facility. Kiser told four of his coworkers that he was being suspended pending a drug-related investigation.

The parties strongly dispute the validity of the allegations. Boeing cites the notes kept by Gestel indicating the purchase by Roles of a quarter gram of cocaine on April 26 1988; the purchase of the same amount of cocaine by Kiser on May 13 1988; and the purchase of two quarter grams of cocaine by Shinliver on May 4 1988. Plaintiffs Roles Shinliver and Kiser deny purchasing any drugs at Boeing. They also attack the credibility of Gestel by citing his criminal record and the denials of Tom Vice the individual who allegedly sold the cocaine to the plaintiffs. Vice has denied ever selling drugs to any of the plaintiffs.

Following the initial suspensions on May 24 1988 Boeing prepared a statement to be given in response to potential media inquiries on the subject. The statement which identified none of the suspended employees by name stated

20 Boeing Military Airplanes employees including two supervisors were suspended Tuesday evening following an investigation of drug dealing and drug use on company property.

The investigation by company security officers with the cooperation of the federal Drug Enforcement Administration involved selling buying and use of cocaine and marijuana.

The suspension will be in effect until the investigation is completed. At that time appropriate disciplinary action up to and including termination will be taken on an individual basis.

This action underscores the strong policy which Boeing maintains against the possession or use of drugs and alcohol on company premises. The company will continue to enforce this policy vigorously.

A story identical to this statement was carried in the Boeing News May 27 1988 (Wichita Ed). the company's internal newspaper. On June 23 1988 Boeing released a statement to the press stating that 23 Boeing Military Airplanes employees had been suspended following an internal investigation of drug dealing and drug use on company property. The statement did not identify any of the suspended employees. In response to anticipated media inquiries Boeing personnel were instructed to respond that they were not permitted to give any further details on the affected employees.

Plaintiff Roles has acknowledged that Boeing has never publicly connected her name with the drug investigation and suspensions. Roles has testified that she was only able to obtain the names of other suspended employees through the union. Roles on the other hand drew the spotlight of media attention on herself when she contacted a local TV station during the summer of 1988 and subsequently appeared on TV discussing her suspension.

Plaintiff Shinliver has also testified in his deposition that he had seen nothing which would indicate that Boeing had identified him in connection with the drug investigation. Shinliver testified that he is now thought of as a "drug addict" by people in his hometown of Sharon Kansas but admits that they probably know about his termination because people that he told then spread the matter around.

Plaintiff Kiser informed four coworkers at Boeing that he was being suspended at Boeing pending the completion of a drug investigation. Kiser also voluntarily agreed to appear on both radio and TV to discuss his suspension.

According to affidavits filed by Boeing personnel information is considered proprietary information which will be released outside the company only under limited circumstances explicitly identified in company procedural rules. Under these rules personnel information may be released where necessary to meet:

a. The requirements of a Federal state or local statute or regulation.

b. The requirements of a collective bargaining agreement.

c. A lawfully issued administrative summons or judicial order including a search warrant or subpoena.

d. A request that serves to protect the interests of the company against actions that are believed to be illegal when received from a properly identified law enforcement of Federal state or local government investigative agency.

e. A written request for verification of employment received from an established and reputable credit agency or financial institution resulting from the subject employee's application for a mortgage loan or other credit. (The response to such requests is to be made only by the cognizant Personnel Records organization.)

The only information supplied to prospective employers are the former employee's dates of employment and positions held while at Boeing. The company never reveals the reasons for termination.

Following their suspensions plaintiffs Shinliver and Kiser were terminated on June 14 1988. Plaintiff Roles was terminated on June 29 1988. In each case Boeing cited as grounds for the termination the violation of the company's rules prohibiting the possession of drugs on company premises. Of the 23 employees suspended in March 20 were terminated. Of the 20 terminated employees 18 employees (including Roles Shinliver and Kiser) were members of the collective bargaining unit. The union subsequently filed a grievance on behalf of all 18 employees.

After negotiations between Boeing and the union Boeing agreed to reinstate with full seniority and without back pay 14 of the 18 grievants (including the three plaintiffs) if they would agree to (1) participate in a 30-day drug rehabilitation program paid for by Boeing (2) submit to a drug test upon reinstatement and (3) agree to submit to three random drug tests during the first year after reinstatement. Ten of the 14 grievants accepted Boeing's offer and were reinstated in the fall of 1988. Plaintiffs Roles Shinliver and Kiser refused the offer.

After further negotiations proved fruitless on March 30 1989 Boeing and the union jointly requested arbitration of the arbitration of the grievances of the three plaintiffs and a fourth grievant Arthur Duggins. On April 21 1989 the parties designated an arbitrator and the grievances were set for arbitration on July 6 and 7 1989. However on May 23 1989 the three plaintiffs filed a lawsuit against Boeing in state court which was subsequently removed by Boeing to federal court to become the present action. On July 3 1988 the plaintiffs informed their union-appointed Counsel that they were withdrawing their grievances.

Implied Contract

Boeing presents two arguments relating to the plaintiffs' claims for damages. First it contends that the plaintiffs forfeited the right to bring the present action when they abandoned arbitration of their grievances. Second it contends that there is no action in Kansas for violation of an implied contract of good faith and fair dealing where an employment contract exists between the parties. This latter argument is based on Boeing's reading of Morriss v. Coleman Co. 241 Kan.501 738 P.2d 841 (1987). Boeing has spent little time developing the point either in its brief (at 40-42) or in oral argument and Court is unpersuaded of the argument's merit. However Court concludes that it is unnecessary to address the issue.

Boeing's first argument relating to the plaintiffs' abandonment of their arbitration is valid and requires dismissal of the plaintiffs' contract claims. Federal law strongly supports the resolution of employment contract grievances through federal arbitration. Republic Steel Corp. v. Maddox 379 U.S. 650 (1965). Because the essence of the plaintiffs' claims involves an interpretation of their contract rights (i.e. whether they were terminated with proper cause) the plaintiffs were required to submit their claims for resolution under the remedial procedures created by their contracts. Lingle v. Norge Division Magic Chef Inc. 486 U.S. 399 (1988). Here the plaintiffs were clearly covered under a collective bargaining agreement and the procedures for the resolution of their contract grievances by arbitration had been instituted yet the plaintiffs abandoned the process a few days prior to the scheduled arbitration.

An employee is not required to submit his claims for resolution by the procedures created by a bargaining agreement where the action would be futile. Varra v. Dillon Companies Inc. 615 F.2d 1315 (10th Cir.1980). Here the plaintiffs contend in their response to Boeing's motion that their pursuit of arbitration would have been futile and that Boeing was not participating in the process in good faith. However the plaintiffs support these claims only with conclusory allegations unsupported by any tangible evidence that the arbitration process would not have resolved in a satisfactory manner the parties' contract dispute long ago.

The only other argument advanced by the plaintiffs is that they were compel led to abandon arbitration in order to protect their rights at law noting that the statute of limitations for defamation actions in Kansas is only one year. K.S.A. 60-209(j). The plaintiffs therefore argue that they were compelled to file their lawsuit in state court in order to preserve their legal rights since they had been terminated on May 24 1988 and arbitration was not scheduled until July 6 and 7 1989.

The problem with the plaintiffs' argument is that it relates solely to their tort claim of defamation. The plaintiffs could have preserved their tort claim by filing the action prior to May 24 1989. The contract claims could still have proceeded to arbitration and been resolved long before the present. The issue here is why the plaintiffs withdrew their contract grievances from arbitration on July 3 just three days prior to the date arbitration was to begin. The plaintiffs have advanced no satisfactory or credible evidence that their contract claims would not have been fully and fairly resolved at the July 1989 arbitration. The strong federal policy which preempts state litigation involving claims that have not been submitted to the remedial measures created under collective bargaining agreements therefore requires dismissal of the plaintiffs' contract claims.


The plaintiff's claims of defamation also fail. The plaintiffs have failed to provide any evidence that Boeing published the reason for their termination's to third parties. Publication is an essential element of the tort of defamation. Restatement (Second) of Torts Sec. 558.

The plaintiffs have offered no credible evidence based on personal knowledge that Boeing has given unprivileged information on their termination's to the public in general or to any specific persons. In their response the plaintiffs cite the affidavit of plaintiff Shinliver that "[i]t was Mr. Shinliver's opinion . . . that it was the defendant that released information to the news media." (Plf. Response at 6).

This allegation does not satisfy the requirements of Fed. R. Civ. Pro. 56 which requires that testimony in opposition to a motion for summary judgment be based upon personal knowledge of the affiant. None of the plaintiffs offer any evidence based on personal knowledge that Boeing released to third parties information specifying the reasons for their suspension and termination. To the contrary it appears from the record submitted to Court that it was the plaintiffs themselves who voluntarily and energetically communicated the reasons for their dismissals to their coworkers hometown friends and reporters for radio and television stations.

Boeing on the other hand has not been shown to have done anything in the way of directly disseminating unprivileged information relating to the plaintiffs' dismissals. The plaintiffs were escorted off the company premises but it is uncontradicted that this is a standard company practice applied whenever any employee is suspended for any reason. Following the plaintiffs' application for unemployment benefits and pursuant to a request by the Kansas Department of Human Resources Boeing has supplied the reason for the reason for the plaintiffs' termination's to KDHR. Such communication however would be subject to an absolute privilege which attaches to information supplied pursuant to judicial or quasi-judicial administrative proceedings. Clear Water Truck Co. v. M. Bruenger & Co. 214 Kan.139 519 P.2d 682 (1974).

On one matter however Court cannot agree with Boeing. It argues that the plaintiffs need not worry about prospective employers learning the reason for their termination's since it is Boeing's policy never to reveal the reasons for an employee's termination but only to inform prospective employers of the dates of employment and the positions held while at Boeing. While the existence of this policy stands uncontradicted by the plaintiffs and must be accepted as true it is not the end of the issue.

The plaintiffs argue that they themselves may be forced to reveal the reason for their termination's to prospective employers. The plaintiffs provide no case authority is support of their argument and both parties discuss the issue in a limited fashion. Nonetheless the principle underlying the plaintiffs' argument has been adopted in a persuasive trend of recent decisions. These cases from other state jurisdictions recognize that in appropriate cases the publication element of defamation may be satisfied by what has been termed compelled self-publication.

Several Kansas cases have addressed cases involving defamation actions by former employees. However these cases have not directly discussed the issue of publication and instead have discussed the issue only in the context of determining whether the prior employer held a qualified privilege to publish the defamatory information relating to the former employee.

In High v. A.J. Harwi Hardware Co. 115 Kan.400 223 P. 264 (1924) the Kansas Supreme Court held that an employer possessed a qualified privilege to communicate to its customers information relating to the discharge of a former employee. The employer in the case was a wholesale hardware company which had informed its customers that the plaintiff a former salesman was discharged for dishonesty. Because there was no evidence of actual malice which would defeat the qualified privilege Court reversed the trial court's judgment for the plaintiff on his action for libel. Court recognized a qualified privilege on the part of prior employers to communicate information to other parties interested in the subject:

Satisfactory business relations between wholesale dealer and customer maintained by mutual good will confidence and understanding are not merely desirable but are valuable to each. When those relations are likely to be disturbed strained or broken on account of lack of knowledge or misinformation on the part of the customer of the. cause of an incident directly affecting the relationship dealer and customer have a mutual interest in the matter.

115.Kan. at 409.

Court subsequently expanded without explanation this qualified privilege to communications to prospective employers of a discharged employee in Turner v. Halliburton Co. 240.Kan. 1 10 722 P.2d 1106 (1986). In Turner the plaintiff employee was discharged for theft. In his subsequent defamation action the plaintiff relied on the employer's communication of information relating to the discharge to a prospective employer. When applying for employment with the prospective employer the plaintiff gave a false response when asked the reason for his unemployment stating that he had been laid off. When the prospective employer contacted the defendant it was told that the plaintiff had been discharged for stealing company property. The sharply divided court found there was insufficient evidence of actual malice to defeat the qualified privilege. However Court also indicated in dicta that the plaintiff's claim was invalid since he had signed an authorization permitting the prospective employer to contact the defendant to obtain information about his employment history. 240.Kan. at 11 (citing Munsell v. Ideal Food Stores 208.Kan. 909 .Syl. para..1 494 P.2d 1063 (1972) and 50 Am.Jur.2d Libel and Slander Sec. 149). In his dissent Justice Herd strongly took issue with this conclusion as well as with the direct holdings of Court. The plaintiff's signature of the consent portion of the employment application form was not a complete defense to the defamation claim Justice Herd argued since "it must be remembered Turner's consent for Ark City Packing to make inquiry about his employment record did not carry with it consent for Halliburton to make a false statement about him." 240.Kan. at 16-17 (Herd J. dissenting).

The Kansas case law fails to lend much assistance in the resolution of the present issue which relates to the question of the publication of the allegedly defamatory information not whether the publication would be subject to qualified immunity. The passing statement in Turner that the plaintiff's consent to communication with the former employer might itself bar the defamation claim was issued in dicta with Court basing its holding on the lack of any proof of actual malice which might defeat the qualified privilege. Moreover the very authorities cited in support of the Turner dicta recognize that while a defamation claim must fail where the plaintiff himself initiates the publication of the defamatory information this rule applies only where the publication is the product of the voluntary free will of the plaintiff. See Munsell .208.Kan. at 920.

In situations like the present the discharged employee faces tremendous economic pressure to secure additional employment after he has been discharged. Subsequent employers almost invariably ask the reason the applicant left his last employment. Faced with these circumstances the plaintiff who reluctantly states the ostensible reason for his termination can hardly be said to freely and voluntarily consent to the damage to his reputation. To permit such compelled publication to serve as an absolute bar to a subsequent defamation action would present an unjustly discharged employee with the Hobson's choice of attempting to lie and conceal the nature of his prior termination from prospective employers or truthfully repeating the false allegations and face the almost certain rejection of the employment application.

Justice requires that the publication element of defamation is satisfied where the discharged employee can demonstrate that he was compelled to reveal the ostensible reason for the discharge to prospective employees and that his former employer could have reasonably foreseen the need to reveal the information. Churchey v. Adolph Coors Co. 759 P.2d 1336 (Colo. 1988); Lewis v. Equitable Life Assur. Soc'y 389 N.W.2d 876 (Minn. 1986); Neighbors v. Kirksville College of Osteopathic Medicine 694 S.W.2d 822 (Mo. App. 1985); McKinney v. County of Santa Clara 110 Cal. App. 3d 787 168 Cal. Rptr.89 (Cal.Ct.App.1980); First State Bank v. Ake 606 S.W.2d 696 (Tex. Civ. App. 1980); Grist v. Upjohn Co. 16 Mich. App. 452 168 N.W.2d 389 (1969).

Court concludes that the Kansas courts if they addressed the issue directly would accept the strong trend among the recent decisions. The employer would still possess the protection of qualified immunity under Turner v. Halliburton but an employee who is able to prove his employer terminated him for reasons which are not only false but maliciously intended should not be denied recovery simply because the economic necessities of the real world forced the employee himself reveal the information to subsequent employers.

The cited decisions recognize that in cases in which a defamed person applies for prospective employment there may be a strong causal connection between the defendant former employer's action in originating a defamatory statement and the subsequent republication of the statement by the plaintiff. Addressing the issues of causation and publication in McKinney Court recognized that

This causal link is no less strong where the foreseeable republication is made by the person defamed operating under a strong compulsion to republish the defamatory statement and the circumstances which create the strong compulsion are known to the originator of the defamatory statement at the time he communicates it to the person defamed."

168.Cal.Rptr. at 94.

The Supreme Court of Minnesota adopted the modern trend of law in Lewis v. Equitable Life Assurance Soc'y .389 N.W.2d 876 (Minn. 1986). In Lewis the plaintiff employees had been discharged by their former employer for alleged gross insubordination. The former employer did not reveal this information any third parties but the employees revealed the information to prospective employers when asked the reasons they had left their previous employment. The Minnesota Supreme Court found that the publication element of defamation was satisfied stating that the element of publication may be found under the doctrine of compelled self-publication "where the plaintiff was compelled to publish a defamatory statement to a third person [and] it was foreseeable to the defendant that the plaintiff would be so compelled." 389

N.W.2d at 888.

The Lewis court held that the publication element of defamation was satisfied since the former employees had been asked by prospective employers about their reasons for leaving their last place of work and the defendant had admitted such questions were foreseeable. Under such circumstances the employees' only choices were to tell the prospective employers they had been terminated for gross insubordination or to lie. "Fabrication Court stated, is an unacceptable alternative." Id.

However while compelled self-publication if proven would serve to support the defamation claims of the plaintiffs in the present case and require denial of Boeing's motion for summary judgment these claims remain unproved and must be rejected. The plaintiffs have offered no proof that compelled self-publication was reasonably foreseeable by Boeing. The plaintiffs have offered no proof that they have applied for subsequent employment and were forced to reveal the ostensible reason for their termination by Boeing. Instead the plaintiffs have offered mere speculation that they may be compelled to reveal this information at some point in the future.

The speculative nature of the plaintiff's claim of defamation by compelled self-publication requires the approval of Boeing's motion for summary judgment. There is no evidence that the plaintiffs have been compelled to reveal the reason for their termination's to prospective employers. Coupled with the lack of any evidence of publication directly by Boeing to third parties the plaintiff's claim for defamation therefore must be dismissed.

IT IS ACCORDINGLY ORDERED this 29th day of June 1990 that the defendant's motion for summary judgment (Docket No. 31) is hereby granted.