Opinion
Case No. 2:01CV825K.
June 10, 2003.
MEMORANDUM DECISION AND ORDER
This matter is before the court on Defendants Davis Security, Inc., John Davis, and Michael Pitts's Motion for Judgment on the Pleadings, Motion for Partial Summary Judgment on Overtime and Retaliation Claims, Motion for Partial Summary Judgment on the Tortious Interference Claim, and Motion for Protective Order. The court held a hearing on these matters on May 27, 2003. At the hearing, Plaintiff was represented by JoAnn Shields, and Defendants were represented by Mary Anne Q. Wood. Defendants' Motion for Partial Summary Judgment on the Tortious Interference Claim and Motion for Protective Order were not addressed at the hearing because the motion for partial summary judgment was not opposed and the parties agreed the motion for protective order is moot. Having fully considered the motions, memoranda, affidavits, and exhibits submitted by the parties and the facts and law relevant to this motion, the court enters the following Memorandum Decision and Order.
BACKGROUND
Plaintiff Wanda Johnston worked for Davis Security from March 2000 through February 2001, as a security guard at the Foothill Village shopping center. Johnston was hired to work for $8.00 per hour and her overtime and holiday pay was calculated at one and one-half times her regular rate. In September 2000, Plaintiff's regular rate of pay was increased to $8.50 per hour. However, at this time, Davis Security began to alter Plaintiff's regular rate depending on the number of hours she worked overtime so that her total compensation equaled $8.50 per hour. Plaintiff spoke to Defendants several times about the change in her method of pay and Defendants always assured her that it was correct.
When Davis Security lost its contract to provide security at Foothill Village, Plaintiff gave her two-week notice that she was quitting and going to work for IPC, the new security company contracting with Foothill Village. In September 2001, Johnston was injured on a bus and began a medical leave of absence with IPC.
Johnston filed the present lawsuit in November 2001 for overtime pay violations under the Fair Labor Standards Act. Johnston claims that Davis Security then retaliated against her by calling and telling her new employer that she was suing Davis Security, that she was suing her new employer, that she was improperly collecting workers compensation benefits, and that Davis Security was going to call the corporate headquarters about the lawsuit against Davis Security. John Davis with Davis Security also called the property manager of Foothill Village to get a telephone number for IPC and told the assistant he spoke with that Johnston was suing Davis Security.
Plaintiff claims that Davis Security's call to IPC negatively affected her new employer's view of her and her continued employment and that her new supervisor did not appear to believe her side of the story. At the time the telephone call occurred in December 2001, Johnston was still on her medical leave of absence from IPC. Johnston had not returned to work as her doctor had not released her to return to work until January 2002. Her doctor then extended her medical leave until April 2002.
In March 2002, IPC sent Johnston a letter asking her when she would be returning to work and asking her to provide information on her medical condition. She responded to the letter and told IPC that her doctor had told her to remain on leave until at least April 2002. IPC again wrote to Johnston on April 10, 2002, asking for a doctor's verification that her injury would not allow her to return to work and stating that if no response was received it would be treated as a resignation from work. Plaintiff did not respond to IPC's letter and has never notified IPC that she could return to work.
Although IPC never directly indicated that it did not believe her side of the story, Johnston claims that one of the reasons she did not return to work was that she thought IPC no longer trusted her and that her relationship with the company was strained. She stated in her deposition that her supervisor had previously called her to see how her condition was and after the telephone call from Davis Security he stopped calling to inquire. Johnston also states that she suffers from some subjective fears about returning to work for IPC. Johnston also has not sought any other employment because she believes a negative reference from Davis Security would keep her from getting a position.
As a result of the telephone call between Davis Security and IPC, Johnston alleges she began to experience anxiety, panic attacks, depression, and other trauma. Plaintiff has brought claims against Defendants under the Fair Labor Standards Act ("FLSA") for unpaid overtime, liquidated damages, attorney fees and costs and for retaliation. Based on the same facts as her retaliation claim, Plaintiff has also brought state common law claims for defamation per se and false light. She has agreed to entry of summary judgment on her state law claim for tortious interference with an implied contract of employment.
DISCUSSION Defendants' Motion for Judgment on the Pleadings for State Law Claims
Defendants have filed a motion for judgment on the pleadings seeking to dismiss Plaintiff's state common law claims for defamation and false light based on the judicial proceeding privilege and as a matter of law.
A. Judicial Proceeding Privilege
To establish the judicial proceeding privilege, the statements must be (1) "`made during or in the course of a judicial proceeding': (2) `have some reference to the subject matter of the proceeding'; and (3) be `made by someone acting in the capacity of judge, juror, witness, litigant, or counsel.'" DeBry v. Godbe, 992 P.2d 979, 983 (Utah 1999). As a corollary to the absolute judicial proceeding privilege barring defamation claims, the Utah Supreme Court has made it clear that "all claims arising from the same statements are protected." Price v. Armour, 949 P.2d 1251, 1256 (Utah 1997) (applying privilege to claim for intentional interference with business relations claim).
The first element — that the statement was made during the course of a judicial proceeding — is "interpreted broadly." Krouse v. Bower, 20 P.3d 895, 898 (Utah 2001). However, the elements are not met merely because the defendants mentioned the case and were currently litigants. In Lawson v. Wright, 520 P.2d 823 (Utah 1975), the court reversed the dismissal of a defamation claim based on the judicial proceeding privilege, holding that "the majority of American courts have adopted the rule that there is no immunity unless particular statements are in some way relevant or pertinent to some issue in the case." Id. at 825. The mere mention of an ongoing lawsuit does not immunize other potentially defamatory comments made during a conversation. Id. at 825-26.
In Price v. Armour, 949 P.2d 1251, 1256 (Utah 1997), the Utah Supreme Court looked to the Restatement (Second) of Torts § 587 (1977) for its definition of the judicial proceeding privilege. Section 587 states that "[a] party to private litigation . . . is absolutely privileged to publish defamatory matter concerning another in statements preliminary to a proposed judicial proceeding, or in the institution of or during the course and as part of a judicial proceeding in which he participates if the matter has some relation to the proceeding." A comment to Section 587, cited in Kleier Advertising, Inc. v. Premier Pontiac, Inc., 921 F.2d 1036, 1043 (10th Cir. 1990), states that "the privilege extends only to statements made in court documents, attorney conferences and other matters officially related to court proceedings." In Kleier, the Tenth Circuit concluded the allegedly defamatory statements were not privileged because they "were unrelated to any official judicial function" and were directed to "an audience wholly unconnected to the judicial process." Id. at 1044.
In DeBry v. Godbe, 992 P.2d 979 (Utah 1999), the court found that "communications . . . otherwise privileged lose their privilege if the statement is excessively published, that is, published to more persons than the scope of the privilege requires to effectuate its purpose." Id. at 985. A statement is excessively published if it is published to someone with no connection to the judicial proceeding. Id.
Similarly, the comments made by the defendants in this case were not related to any official judicial function and were directed to audiences wholly unconnected to the judicial process. Merely referring to the litigation is not enough to immunize the statements made to individuals with no connection to the present proceedings. Moreover, Defendants were not acting in the capacity of a litigant when they made the statements. Defendants had no reason in their capacity as litigants in an FLSA unpaid overtime case to communicate with Plaintiff's new employer or a property manager for the security company. Therefore, the application of the judicial proceeding privilege is not appropriate in this case and Defendants' motion is denied on this basis.
B. Defamation Claim
Defendants further argue that the contents of the allegedly defamatory telephone conversations are not defamatory as a matter of law. With respect to the conversation between John Davis and the assistant to the property manager for Foothill Village, the only comments alleged to have been made are that Johnston was suing Davis Security for overtime violations. Such a statement is true and cannot be the basis for a defamation action.
In the conversation between Michael Pitts and Dennis Tetrault at IPC, Pitts allegedly stated that Plaintiff was suing Davis Security, suing IPC, and collecting workers' compensation for an injury she received while working at IPC. Again, the statement that Plaintiff was suing Davis Security cannot form the basis for a defamation claim. Plaintiff contends that the statements that she was suing IPC and receiving workers' compensation for an injury she received while working at IPC implies that she was committing a crime and constitutes slander per se. Defendants argue that this statement cannot be defamatory because Tetrault would have known that she was not receiving workers' compensation.
"If no defamatory meaning can reasonably be inferred by a reasonable person from the communication, the action must be dismissed for failure to state a claim." Cox, 761 P.2d at 561. "Under Utah law, a statement is defamatory if it impeaches an individual's honesty, integrity, virtue, or reputation and thereby exposes the individual to public hatred, contempt, or ridicule." West v. Thomson Newspapers, 872 P.2d 999, 1008 (Utah 1994).
Defendants assert that if the only person who heard the comment knew that it was not true, Plaintiff s reputation was not harmed and the statement was not defamatory. Plaintiff contends that she does not need to allege harm to her reputation under a claim of defamation per se because it is illegal under Utah law to fraudulently collect workers' compensation. "[S]lander per se renders irrelevant the absence of evidence that a comment actually sullied the victim's reputation." Starr v. Pearle Vision Inc., 54 F.3d 1548, 1557 (10th Cir. 1995).
A statement that Plaintiff was collecting workers' compensation for an injury received while working for IPC is not, by itself, a statement of criminal conduct. Plaintiff does not allege that Pitts specifically stated that she was doing something criminal or that she was not really injured. Rather, Plaintiff relies on the allegation that Tetrault would have known that Plaintiff was not injured while working for IPC to argue that there is an inference of criminal conduct in the statement that she was collecting workers compensation.
In essence, both parties rely on what they think Tetrault would or should have known. Defendants claim that Tetrault would have known whether Plaintiff was receiving workers' compensation, but there is no specific evidence in the record that Tetrault knew that Plaintiff was not receiving workers' compensation. Plaintiff submitted an affidavit from Tetrault stating that such an injury would have needed to occur while Plaintiff was working at IPC and he knew Plaintiff was not injured while working at IPC. However, there is no other evidence in the record directly from Tetrault as to what Tetrault actually knew. Pitts testified that as soon as he made the comments, Tetrault corrected him and stated that she was injured on a bus and suing UTA. Plaintiff testified that Tetrault asked her after the conversation with Pitts whether she was, in fact, suing IPC. Therefore, the evidence in the record from the parties is somewhat contradictory.
Defendants have moved for judgment on the pleadings. Accordingly, this court looks only to the allegations of the Complaint to determine whether Plaintiff has stated a claim. In this case, the allegations of the Complaint are enough to assert facts that, when read together, could imply criminal conduct. Even if the court were to consider the motion as a motion for summary judgment, it is still required to construe all facts in favor of the non-moving party. The lack of evidence from either of the parties as to what Tetrault knew and did not know with respect to the workers' compensation issue precludes a finding as a matter of law on this claim. Therefore, Defendants motion for judgment on the pleadings to dismiss the defamation claim as a matter of law is denied based on the evidence in the record to date.
C. False Light
To state a claim for false light invasion of privacy, the statements "must be highly offensive to a reasonable person." Restatement (Second) Torts § 652E (1977). Defendants rely on Cox v. Hatch, 761 P.2d 556 (Utah 1988), in which the Utah Supreme Court found that "for essentially the same reasons that the [allegedly defamatory] photograph was not susceptible to a defamatory meaning, it was not `highly offensive to a reasonable person.'" Id. at 564 (finding publication of plaintiffs photograph in campaign materials for Orrin Hatch was not defamatory or placed plaintiffs' in false light). In Cox, the court found that the photograph was not defamatory because it did not harm plaintiffs' reputations and implicitly indicated that this same concern applied to a false light claim.
In this case, Pitts allegedly told Tetrault that Plaintiff was suing Davis Security, that she was suing IPC, and that she was receiving workers' compensation benefits for an injury that occurred while working for IPC. And, Defendant Davis allegedly told Kathleen Riddle at Foothill Village property management that Plaintiff was suing Davis Security.
Whether something is highly offensive to a reasonable person can be determined as a matter of law. Cox, 761 P.2d at 564. The statements that Plaintiff was suing Davis Security were true and, therefore, could not be highly offensive.
With respect to the statements to IPC, Defendants argue that Tetrault knew that Plaintiff was not suing IPC and not receiving workers' compensation benefits for an injury that occurred while she was working for IPC. Therefore, these alleged statements could not be highly offensive or cast plaintiff in a false light. Plaintiff contends that it is for the jury to decide whether a reasonable person would be highly offended by a former employer calling her new employer and making such allegations.
Regardless of whether these statements were highly offensive, for Defendant Pitts to make a statement to just one other person is not enough to give the statements publicity. The Restatement (Second) Torts, § 652D, comment a, states that to establish a false light claim the kind of publicity required "means that the matter is made public, by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge." The statements Pitts made to Tetrault were only to one person and not made in a way that they would become public knowledge. Therefore, Plaintiff's false light claim fails as a matter of law and is dismissed.
Motion for Partial Summary Judgment on Retaliation and Overtime Claims
Defendants move to have Plaintiff's retaliation claim dismissed and for entry of partial summary judgment on Plaintiff's overtime claims in the amount of $1570.38.
A. Retaliation
Plaintiff claims that she was retaliated against in violation of 29 U.S.C. § 215(a)(3) when Defendants called IPC and told her supervisor that she was suing Davis Security, she was suing IPC, and she was collecting workers' compensation benefits for an injury sustained while working for IPC, and when Defendant Davis called the Foothill Village property manager and told the assistant that Plaintiff was suing Davis Security for overtime wages.
To establish a prima facie case of retaliation under the FLSA, Plaintiff must show that
(1) he or she engaged in activity protected by the FLSA; (2) he or she suffered adverse action by the employer subsequent to or contemporaneous with such employee activity; and (3) a causal connection existed between the employee's activity and the employer's adverse action.Conner v. Schnuck Markets, Inc., 121 F.3d 1390, 1394 (10th Cir. 1997).
Plaintiff argues that the court has already ruled that a traditional adverse job action by Plaintiff's new employer is not an element of her retaliation claim. This court's prior Order states that "under the Tenth Circuit's liberal definition of adverse employment action, Plaintiff's allegations that her new employer did not believe her side of the story, that the calls caused her new employer to view her negatively, and the calls caused her significant anxiety about future employment and safety are sufficient to state a prima facie of retaliation under the FLSA." Defendants argue that the court's Order recognizes that there must be some kind of impact on future employment opportunities and even in the post-employment context, a former employee must still demonstrate some adverse employment action. See Rutherford v. American Bank of Commerce, 565 F.2d 1162, 1164-65 (10th Cir. 1977).
The court's prior order relied upon Berry v. Stevinson Chevrolet, 74 F.3d 980, 986 (10th Cir. 1996), in which the employee established a prima facie case of retaliation by former employers. In reaching this conclusion, the Berry court found that (1) the employee filed an EEOC complaint; (2) the former employers caused individuals to report a purported forgery; and (3) that such adverse action would not have occurred if the employee had not filed his EEOC complaint. Id. The Tenth Circuit further reasoned that "[i]t would be illogical to define an . . . employee liberally to include former employees and to simultaneously define an adverse employment action narrowly by limiting it to those formal practices linked to an existing employee/employer relationship." Id. Therefore, in Berry, the court reasoned that although a "tainted employment reference may have a more direct effect on a former employee's future employment prospects," "a criminal trial . . . carries a significant risk of humiliation, damage to reputation, and a concomitant harm to future employment prospects." Id. The Berry court clearly considered whether there were adverse consequences to the plaintiff as a result of the actions taken by the former employer.
This court's prior order, as in Berry, found that the allegations of the Complaint adequately alleged that Defendants' statements carried a significant risk of humiliation, damage to reputation, and a concomitant harm to future employment prospects. However, as a result of discovery taken in this case since the court's prior order, it has become known that nothing adverse happened to Plaintiff or to her future employment opportunities as a result of the telephone calls. Discovery has now shown that when the telephone calls were made, Plaintiff was already on a leave of absence from IPC for an injury that had occurred two months prior. Plaintiff was still on leave for that injury in March when IPC inquired as to her ability to return to work. At that time, she stated that her doctor may allow her to return in April 2002. In April 2002, IPC sent another letter to Plaintiff asking her to provide a doctor's verification of her medical condition. The letter also stated that if she did not provide such information, IPC would consider it a resignation of her employment position. Plaintiff never responded to the April letter and has never tried to return to work for IPC. Plaintiff also has not applied to work for anyone else since the alleged telephone calls.
Plaintiff asserts that her retaliation claim is supported by her deposition testimony that although her supervisor at IPC would call her during her leave of absence about her medical condition prior to Defendants' telephone calls, he stopped calling to check on her after the calls were made. Plaintiff further claims that she did not contact IPC again because she believed that after the telephone calls IPC would not trust her. She also did not apply for another job because she thought Davis Security would give a bad reference if a prospective employer called for a reference.
Based on the facts that have come out in discovery, Defendants argue that there is no evidence that there was any effect on Plaintiff's employment status with IPC or future employment. She has simply made no attempt to return to work after an injury and has made no attempt to apply for any other position.
Neither this court's prior order nor the Tenth Circuit's decision in Berry found that no adverse action is necessary. The court in Berry was asked to determine whether the former employer's malicious prosecution of criminal charges could support a retaliation claim. In ruling that it could, the court focused on the potential impact the conduct could have on the employee's "future employment prospects." 74 F.3d at 986. The public nature of criminal prosecution made damage to future employment prospects implicit in Berry.
The Tenth Circuit has frequently held that an impact on future employment prospects is a necessary part of a retaliation claim. This court's prior order did not depart from these holdings in finding the specific impacts the telephone call was alleged to have had on Plaintiff's employment with IPC. However, after the completion of discovery it is clear that Plaintiff's future employment with IPC was not harmed. In addition, the telephone calls were not of a public nature like the criminal charges in Berry. The telephone calls were not of such a vindictive nature that it would implicitly cause harm to future employment like the criminal prosecution in Berry.
In this case, at the time the telephone calls were made, Plaintiff was on a medical leave from IPC. IPC continued to inquire as to Plaintiff's return to work, with no mention of the telephone calls or anything related to them. The only question was Plaintiff's ability, medically, to return to work. Plaintiff never responded to IPC's final inquiry even though it stated that such inaction would be considered a resignation of her employment with IPC. There is simply no evidence that IPC did not believe Plaintiff's side of the story or caused IPC to view her negatively.
Plaintiff's subjective fears that IPC would not trust her or that she would not find other employment if she had to list Davis Security as a former employer are not supported by any evidence and are too subjective and speculative to survive summary judgment. The Tenth Circuit has found that a plaintiff's "own, untested belief" regarding "speculative harm" does not constitute adverse employment action. Aquilino v. Univ. of Kansas, 268 F.3d 930, 934 (10th Cir. 2001). In this case, Plaintiff's own, untested belief that IPC did not believe her or want her back is belied by the letters IPC sent inquiring as to her ability to return to work. In addition, a failure to apply for any other employment based on an untested belief that Davis Security's bad reference would keep her from obtaining a position is also pure speculation. Therefore, the court concludes that Plaintiff's alleged harm is merely speculative and her retaliation claim is dismissed.
B. Overtime Claims
Davis Security admits that it did not pay Plaintiff overtime compensation for 369.5 hours of overtime that she worked from August 2000 to February 16, 2001. However, it did pay her $8.50, her regular rate of pay, for each of those hours. Because she should have been paid one and one-half her regular rate of pay for each of those hours, Davis Security admits that it owes Plaintiff an additional $1570.38 and asks the court to enter partial summary judgment on this claim in favor of Plaintiff.
Plaintiff argues that she has not had an opportunity to review payroll records in order to verify that the hours calculated by Defendant are correct. However, Plaintiff has received certain pay-related documents in discovery and could have requested but failed to request the payroll records relied upon by Defendants. Furthermore, Plaintiff has not moved under Rule 56(f) for additional discovery on this matter. Therefore, the court concludes that the hours calculations by Defendants are correct and judgment should be entered accordingly.
Plaintiff further argues that Defendants fail to acknowledge her statutory rights to liquidated damages in the amount of double her unpaid overtime. Defendants respond that they did not move for the liquidated damages to be determined. However, the court concludes that there is adequate evidence in the record for it to determine the issue of liquidated damages. "The FLSA provides that an employer who violates the overtime provisions of § 207 ordinarily is liable for unpaid overtime compensation and `an additional equal amount as liquidated damages.'" Department of Labor v. City of Sapulpa, Oklahoma, 30 F.3d 1285, 1288-89 (10th Cir. 1994) (citing 29 U.S.C. § 216(b)). However, 29 U.S.C. § 260 provides that
if the employer shows good faith to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.See also City of Sapulpa, 30 F.3d at 1289. "Thus the district court may eliminate or reduce the award of liquidated damages only if the employer demonstrates `both that he acted in good faith and that he had reasonable grounds for believing that his actions did not violate the Act.'" Id. (quoting Doty v. Elias, 733 F.2d 720, 725-26 (10th Cir. 1984)). "`The good faith requirement mandates the employer have "an honest intention to ascertain and follow the dictates of the Act ."'" Id. (citations omitted). "`The additional requirement that the employer have reasonable grounds for believing that his conduct complies with the Act imposes an objective standard by which to judge the employer's behavior.'" Id. (citations omitted). Courts have found certain evidence, such as reliance on attorneys or other experts in personnel matters, "particularly persuasive in holding FLSA violations reasonable." Pabst v. Oklahoma Gas Elec. Co., 228 F.3d 1128, 1136-37 (10th Cir. 2000).
In this case, the evidence shows that there was no reliance on attorneys or other experts in personnel matters. Defendants method of paying Johnston was clearly not in good faith. Defendants made no attempt to compensate Johnston for overtime hours-they merely reduced her regular rate of pay depending on the number of hours she worked. This method completely ignores the clear mandate of the FLSA to pay workers time and a half for hours above forty hours a week. Because of the blatant violation of the statute that occurred in this case, the court concludes there is no basis for reducing the available liquidated damages. Therefore, in addition to the $1570.38 Defendants admit Plaintiff should be awarded for unpaid overtime, the court awards Plaintiff an additional $1570.38 in liquidated damages.
Supplemental Jurisdiction
The only claim remaining in this lawsuit is Plaintiff s state common law claim for defamation. Pretrial discovery is not completed on this claim and the parties can use any discovery already obtained in any future state court proceeding. See Huntsinger v. Board of Directors of E-470 Public Hwy. Auth., 35 Fed.Appx. 749, 759-60, 2002 WL 853497, *10 (10th Cir. 2002). Therefore, the court declines to exercise supplemental jurisdiction over the defamation claim and dismisses Plaintiff's defamation claim without prejudice to be brought in state court.
CONCLUSION
Based on the above reasoning, Defendants Davis Security, Inc., John Davis, and Michael Pitts's Motion for Judgment on the Pleadings is GRANTED as to the False Light claim and DENIED as to the Defamation claim. Plaintiff's Defamation claim is dismissed without prejudice to be brought in state court. Defendants' Motion for Partial Summary Judgment on Overtime and Retaliation Claims is GRANTED. Plaintiff's FLSA retaliation claim is dismissed, and Plaintiff is awarded judgment on her FLSA overtime claim in the amount of $3140.76. Defendants' Motion for Partial Summary Judgment on the Tortious Interference Claim was not opposed and is, therefore, GRANTED. Defendants' Motion for Protective Order is MOOT.