Opinion
Civil No. 99-1637-AS
May 15, 2001
FINDINGS AND RECOMMENDATION
Golden Valley Farms ("Defendant") seeks summary judgment on all of the claims asserted against by its former employee John S. Comstock ("Plaintiff"). In his complaint filed November 19, 1999, Plaintiff alleged that Defendant violated the Americans with Disabilities Act ( 42 U.S.C. § 12111) ("ADA") and the comparable Oregon statute (O.R.S. 659.436) ("Oregon ADA") by terminating him based on his alcohol and drug addictions. Additionally, Plaintiff asserts claims for breach of employment contract, breach of the duty of good faith and fair dealing, promissory estoppel, defamation per se, unpaid wages under O.R.S. 652.610(3) and civil penalties under O.R.S. 652.150.
BACKGROUND
In early 1995, Plaintiff was working as an independent contractor for Defendant involved in custom hay pressing and hay brokering. In May of that year, Plaintiff met with David Ditchen, a principal of Defendant, to discuss an employment opportunity for Plaintiff as Defendant's Hay Press Operator and Manager. The parties agreed that Plaintiff would be paid a base salary of $4,000 per month and a bonus based on hay Plaintiff purchased from third parties. The amount of the bonus is in dispute. Defendant contends that it agreed to pay Plaintiff $1 per ton of hay purchased while Plaintiff states the figure was $3 per ton. Plaintiff also represents that he was entitled to 50% of the profit earned on Defendant's rye and fescue sold for more than $85/$95 per ton base price, respectively. Plaintiff started working for Defendant in mid-1995.
Plaintiff's independent hay pressing operation was less than successful and he owed Defendant for past compaction services. The parties agreed that these debts would be collected from Plaintiff's first year bonus.
Throughout Plaintiff's tenure with Defendant, he was counseled by Ditchen for poor work performance. The primary concerns were Plaintiff's poor attendance, his inaccessibility to co-employees or customers by phone, pager or radio, the sale of hay after hours with no accounting of the proceeds and his sexist treatment of one of his assistants. On October 17, 1997, Plaintiff and Ditchen met and created a duty list setting forth what was expected of Plaintiff. Among other things, Plaintiff was to cooperate with his assistant, check in with her and let her know where he was and how to get a hold of him at all times. Plaintiff was required to punch a time clock and be at the office when the shift started and stopped and when trucks were arriving and he was to direct customers to pay for bales of hay in the office.
On December 2, 1998, Plaintiff worked half a day and was later involved in a one-car accident near Defendant's haysheds while driving a company truck. After the accident, Plaintiff hid the damaged truck behind the hay sheds and then stayed home from work the following day. Plaintiff was under the influence of alcohol at the time of the accident.
On December 4, 1998, Plaintiff returned to work. That afternoon, he was the subject of an "intervention" in Defendant's main offices which was initiated by Ditchen and attended by a number of other employees. At that time, Plaintiff admitted that he had been involved in an accident and that he had been drinking at the time of the accident. Plaintiff was advised that if he wanted to keep his job, he needed to take a drug test and enroll in a treatment program. Additionally, Plaintiff was restricted to working in the main office until after he enrolled in a treatment program.
Plaintiff took a drug test after the meeting, which came back positive for cannabis. On Monday, December 7, 1998, Plaintiff reported to intake at a local treatment center and on December 10, 1998, he enrolled in a program with Creekside Counseling, Inc., which held evening classes. The next day, Plaintiff returned to work at the hay press facilities. Plaintiff continued to work for Defendant through the next week. However, in the afternoon of Tuesday, December 15, 1998, Plaintiff was again asked to meet with Ditchen in the main offices. Ditchen told Plaintiff that he was fired but that the termination would not become effective if Plaintiff signed and complied with a "Last Chance Agreement" prepared by Defendant (the "Agreement"). The primary provisions of the Agreement required Plaintiff to enroll in and attend a treatment program, to submit to random drug tests and to release any and all claims Plaintiff might have against Defendant. Plaintiff advised Ditchen that he was willing to sign the Agreement with the exception of the release language. Plaintiff felt that he was owed a large amount for past-due bonuses and profit sharing and was not willing to release these claims. On Friday, December 18, 1998, Ditchen informed Plaintiff that he termination was effective in light of Plaintiff's refusal to sign the Agreement. At Ditchen's request, Plaintiff worked the majority of the day on Saturday, December 19, 1998, and a few additional hours the following week.
PRELIMINARY PROCEDURAL MATTER
Plaintiff moves to strike the affidavit of Patience Vidal-Mills on the grounds that he has been unable to serve Ms. Vidal-Mills and, accordingly, has not had the opportunity to depose her. The testimony of Patience Vidal-Mills was not considered by the court in reaching its decision in this matter. The court denies Plaintiff's motion to strike.
LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure allows the granting of summary judgment:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). "[T]he requirement is that there be no genuine issue of material fact." Anthes v. Transworld Systems, Inc., 765 F. Supp. 162, 165 (Del. 1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)) (emphasis in original).
The movant has the initial burden of establishing that no genuine issue of material fact exists or that a material fact essential to the nonmovant's claim is absent. Celotex v. Catrett, 477 U.S. 317, 322-24 (1986). Once the movant has met its burden, the onus is on the nonmovant to establish that there is a genuine issue of material fact. Id. at 324. In order to meet this burden, the nonmovant "may not rest upon the mere allegations or denials of [its] pleadings," but must instead "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324.
An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome of the case. Anderson, 477 U.S. at 248. Factual disputes are genuine if they "properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250. On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citations omitted).
DISCUSSION
First and Second Claims for Relief — Federal and Oregon ADA
Both the ADA and Oregon law prohibit employers from discriminating against people on the basis of a disability. 42 U.S.C. § 12112; O.R.S. 659.425(1). For a plaintiff to prevail under the ADA for a claim of unlawful discharge, he must prove: "(1) that he is a disabled person within the meaning of the ADA; (2) that he is qualified, that is with or without reasonable accommodation * * *, he is able to perform the essential functions of the job; and (3) that the employer terminated him because of his disability." Cooper v. Neiman Marcus Group, 125 F.3d 786, 790 (9th Cir. 1997) (quoting Kennedy v. Applause, Inc., 90 F.3d 1477, 1481 (9th Cir. 1996)). Plaintiff bears the burden of demonstrating he is qualified. Id.
Only if a plaintiff successfully presents a prima facie case of discrimination does the burden shift to the defendant to present evidence that the adverse action was not attributable to discrimination. Wallis v. J.R. Simplot Co., 26 F.3d 885, 889 (9th Cir. 1994). If the defendant successfully offers credible evidence of a legitimate, nondiscriminatory reason for the adverse action, the plaintiff cannot avoid summary judgment by simply restating his prima facie case, but must produce evidence from which a reasonable trier of fact could find that the defendant's proffered reasons were pretextual. Id. at 888-889.
The burden is substantially the same under Oregon law. O.R.S. 659.425. However, under Oregon law, if a plaintiff satisfies the statutory requirements for a disability, the court then looks to the totality of the circumstances surrounding plaintiff's discharge to determine whether the employer discriminated or failed to reasonably accommodate the disabled employee. See Johnson v. Mel-Ken Motors, Inc., 134 Or. App. 81, 894 P.2d 540 (1994).
As evidenced by the Agreement, Plaintiff was terminated on December 15, 1998, for "driving Defendant's vehicle to work while under the influence of marijuana and alcohol." Defendant had a Drug and Alcohol Policy (the "Policy") in effect at the time of the accident which provided that "being under the influence of any intoxicating liquor while on, or in route to, company property * * * may result in immediate discharge" Similarly, the Policy provided that "being under the influence of any illegal drugs while on, or in route to, company property * * * will be subject to discharge." On December 4, 1998, two days after Plaintiff damaged Defendant's truck, Plaintiff admitted that he was under the influence of alcohol and marijuana at the time of the accident. The drug test taken that same day revealed the presence of cannabis in Plaintiff's system. It is evident that Defendant had good cause under its established policies to terminated Plaintiff for driving Defendant's vehicle while under the influence of both alcohol and marijuana. The mere fact that Plaintiff suffers from alcohol and substance abuse problems does not make the termination a discriminatory act under the ADA.
While The ADA prohibits an employer from "discriminat[ing] against a qualified individual with a disability because of the disability * * *." 42 U.S.C. § 12112(a), the Ninth Circuit, like several other Circuits, has recognized a distinction between termination of employment because of a disability and termination because of misconduct. Where the termination is precipitated by misconduct, it does not violate the ADA even if the misconduct was related to the disability. Collings v. Longview Fibre Co., 63 F.3d 828, 832 (9th Cir. 1995) (ADA case). One year after Collings, the Ninth Circuit reiterated this distinction ruling in Newland v. Dalton, 81 F.3d 904, 906 (9th Cir. 1996) explaining:
Alcoholism is a recognized handicap * * * but the majority of courts have held that while the Rehabilitation Act * * * protects employees from being fired solely because of their disability, they are still responsible for conduct which would otherwise result in their termination.
The Ninth Circuit considers Rehabilitation Act cases to be instructive in analyzing ADA claims. Collings v. Longview Fiber Co., 63 F.3d 828, 832 n. 3 (9th Cir. 1995).
The Ninth Circuit then clearly stated that "a termination based on misconduct rather than the disability itself was valid." Id.,
There is no dispute in this case that Defendant terminated Plaintiff because he was under the influence of alcohol and marijuana at the time of the accident. Plaintiff voluntarily chose to drive Defendant's vehicle, which was an unequivocal violation of Defendant's Policy. It is for this misconduct that Plaintiff was terminated.
Plaintiff may still state a claim under the ADA if he is able to establish that the stated reason for the termination is merely a pretext. Schmidt v. Safeway, Inc., 864 F. Supp. 991 (D. Or. 1994). The plaintiff has the burden to produce "specific, substantial evidence of pretext." Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983). This burden requires the plaintiff to do more than merely establish a prima facie case and challenge the credibility of the defendant's witnesses. Wallis v. J.R. Simplot Co., 26 F.3d 885, 890 (9th Cir. 1994). To withstand summary judgment, the plaintiff must produce specific, substantial evidence both that the employer's reason for termination was false and that discrimination was the real reason for the termination. St. Mary's Honor Center v. Hicks, 509 U.S. 502, 511 (1993).
No direct evidence has been submitted which could support a finding that Defendant had a discriminatory intent related to Plaintiff's alcoholism or drug addiction, or that his use of Defendant's vehicle while under the influence of alcohol and marijuana was not the reason for his termination. To the contrary, there is ample evidence that Defendant was unhappy with Plaintiff's attendance record and work demeanor from the start and counseled Plaintiff on numerous occasions in attempts to improve Plaintiff's performance. The court finds that Plaintiff has failed to submit the specific, substantial evidence that is required to create a genuine issue of fact regarding pretext.
After validly terminating Plaintiff for violating the Policy, Defendant gave Plaintiff a chance to continue to work for Defendant under the terms set out in the Agreement. Plaintiff refused to sign the Agreement and the termination became final. The presence of the Agreement in no way effects the court's finding that Plaintiff's termination did not violate either the state or federal ADA. Defendant is entitled to summary judgment on Plaintiff's First and Second Claims for Relief.
Third Claim for Relief — Breach of Employment Contract
Plaintiff alleges in his breach of contract claim that Defendant breached his contract of employment by terminating for not signing the Agreement and for not paying him what he was entitled to under the agreed upon terms of his employment. Defendant argues that Plaintiff is an "at-will" employee and has no claim based upon his termination. Defendant further contends that Plaintiff was paid everything he was entitled to.
In the absence of a contractual, statutory, or constitutional limitation on the right to terminate an employment relationship, an employer may terminate an employee at any time for any reason. Sheets v. Knight, 308 Or. 220, 230 (1989). Statements in personnel handbooks can create implied contracts limiting the right to terminate or creating other terms of employment. Yartzoff v. Democrat-Herald Publishing Co., 281 Or. 651, 656 (1978). Likewise, oral statements can also create implied employment contracts. Seibel v. Liberty Homes, Inc., 305 Or. 362, 365 (1988). Finally, in certain circumstances, an employer's custom and practice can serve as evidence of an employer-adopted plan of action. Rose City Transit v. City of Portland, 271 Or. 588 (1975).
Plaintiff concedes that he was an "at-will" employee. Plaintiff has offered no evidence to establish that Defendants committed to retaining Plaintiff as an employee for a specific period of time or that Defendant agreed to terminate Plaintiff only for cause. Plaintiff has failed to prove a claim for breach of contract based on his termination.
In his memorandum in opposition to the motion for summary judgment, Plaintiff acknowledges that a wrongful discharge claim does not exist where the employee was hired in a "at-will" employment context. Accordingly, he asks the court for leave to amend his breach of contract claim to eliminate his allegations of wrongful discharge in violation of public policy. The court finds this amendment to be appropriate under the circumstances.
On the other hand, Plaintiff has presented evidence that Defendant agreed to pay Plaintiff more than he was being paid. Plaintiff has offered notes of the initial meeting indicating that he would be paid $3 per ton of hay purchased and that he was entitled to 50% of the profit earned on Defendant's rye and fescue sold for more than $85/$95 per ton base price, respectively.
Defendant denies that it agreed to this compensation package and offers evidence that Plaintiff was paid at a rate of $1 per ton of hay purchased and received bonuses that were less than Plaintiff expected. While Plaintiff concedes that he was paid less than he felt he was entitled to, he knew that Defendant was deducting portions from his wages to pay off his debt and he continually expressed concern to Ditchen that he was not getting paid his full wages. Plaintiff testified that Ditchen acknowledged that Plaintiff was entitled to more and assured him that the discrepancy would be taken care of.
The issue of Plaintiff's compensation package presents a genuine issue of material fact which precludes this court from granting summary judgment on Plaintiff's breach of contract claim for unpaid wages. This issue must be determined by a fact finder at trial.
Fourth Claim for Relief — Breach of Duty of Good Faith and Fair Dealing
In his Fourth Claim for Relief, Plaintiff alleges that Defendant breached its duty of good faith and fair dealing. In his memorandum in opposition to the motion for summary judgment, Plaintiff acknowledges that the duty of good faith and fair dealing does not apply to the termination of at-will employees. He then explains that his claim for breach of the duty of good faith and fair dealing is based on Defendant's "failure to provide a timely and accurate accounting and payment during the employment relationship in accordance with the parties agreement."
"The law imposes a duty of good faith and fair dealing in the performance of every contract". Sheets v. Knight, 308 Or. 220, 223 (1990). The duty arises when one party to a contract is given discretion in the performance of some aspect of the contract. The parties ordinarily contemplate that such discretion will be exercised for a particular purpose. However, when the discretion is exercised for other purposes, the party exercising the discretion has acted in bad faith. Best v. U.S. National Bank, 303 Or. 557, 563 (1987).
In Best, the court explained that, while an employer may use its discretion to fire an at-will employee, if the employer fires the employee in order to deprive the employee of benefits to which the employee would otherwise have become entitled to, the employer has breached is obligation to perform in good faith. Id. at 564. This same reasoning was adopted by the court in Sheets, which refused to hold that the duty of good faith and fair dealing will apply to the right to discharge an employee under an at-will employment contract, but specifically recognized that "a duty of good faith and fair dealing is appropriate in matters pertaining to ongoing performance of at-will employment agreements." Sheets, supra, 308 Or. at 233.
Here, Defendant was obligated to pay Plaintiff according to the terms of his employment contract. Defendant did not have the discretion to pay Plaintiff more or less or to withhold payment from Plaintiff. However, Defendant was in sole possession of the figures upon which Plaintiff's compensation was based and had an unspoken duty to provide Plaintiff with an accounting justifying the payments made to Plaintiff. Plaintiff has stated a valid claim for breach of the implied duty of good faith and fair dealing.
Fifth Claim for Relief — Promissory Estoppel
Plaintiff alleges that Defendant promised him a specific compensation package and that he accepted employment with Defendant based on that package. In his Fifth Claim for Relief, he asks the court to enforce the promise under the theory of promissory estoppel. In Oregon,
[p]romissory estoppel is not an independent cause of action. It is a substitute for consideration, and provides a basis for enforcing a promise as a contract despite a lack of consideration, when the promisee has relied on a promise to his or her detriment.
Natkin Co. v. H.D. Fowler Co., 128 Or. App. 311, 314, 876 P.2d 319, 321 (1994). The elements of a promissory estoppel theory of recovery under Oregon law are: "(1) a promise[;] (2) which the promisor, as a reasonable person, could foresee would induce conduct of the kind which occurred[;] (3) actual reliance on the promise[; and] (4) resulting in a substantial change in position." Neiss v. Ehlers, 135 Or. App. 218, 223, 899 P.2d 700, 703-04 (1995). Although the parties may plead alternative theories for recovery, once it is established, either by an admission of a party or by a judicial finding, that there is in fact an enforceable contract between the parties and therefore consideration exists, then a party may no longer recover under the theory of promissory estoppel. Natkin, supra, 128 Or. App. at 315 (where plaintiff had alleged breach of an express contract, court would not consider claim for breach of contract based on a promissory estoppel theory) (citing Chaney v. Shell Oil Co., 111 Or. App. 556, 827 P.2d 196 (1992)).
Here, Plaintiff alleges the existence of an express contract between him and Defendants. While the specific terms of the contract are in dispute, it was the performance of the contract terms that Plaintiff relied on when accepting employment with Defendant. Thus, Plaintiff cannot proceed on a promissory estoppel theory under Oregon law. Defendant is entitled to summary judgment on Plaintiff's Fifth Claim for Relief.
Sixth and Seventh Claims for Relief — Statutory Wage Claims
Plaintiff claims that Defendant failed to pay him all of the wages that he was due in a timely manner and that such failure was willful. There exists a genuine issue of material fact with regard to the compensation package Defendant agreed to pay to Plaintiff. This issue requires the court to send Plaintiff's statutory wage claims to the ultimate factfinder for determination.
Eighth and Ninth Claims for Relief — Attorney Fees and Punitive Damages
Defendant is not entitled to summary judgment on these claims. Plaintiff is entitled to attorney fees if he is successful on his statutory wage claims. Plaintiff's punitive damage claim relies on a finding that Defendant willfully deprived Plaintiff of his agreed upon compensation package. The material facts which support these claims remain in dispute.
Tenth Claim for Relief — Defamation Per Se
In his Tenth Claim for Relief, Plaintiff alleges:
Defendant has, and continues to, intentionally make untrue and highly harmful statements to third persons regarding Plaintiff, which concern characteristics or conduct that adversely affect plaintiff's fitness for occupation or profession. These untrue statements are actionable per se.
Defendant contends that Oregon does not recognize a claim for defamation per se and that the general allegations contained in Plaintiff's claim are "without specific articulation in order for the Defendant to properly defend such actions.
To make out a claim for defamation, the plaintiff must show 1) that the defendant made a defamatory statement about the plaintiff; and 2) that the statement was published or communicated to a third party. Wallulis v. Dymowski, 323 Or. 337, 342-43 (1996). A defamatory communication is one which tends to subject the plaintiff to hatred, contempt, or ridicule, or tends to diminish the esteem, respect, goodwill, or confidence in which the plaintiff is held. Farnsworth v. Hyde, 266 Or. 236, 238 (1973). To be actionable, the statement must be false as well as defamatory. Bahr v. Statesman Journal, 51 Or. App. 177, 180 (1981).
While the Oregon courts do not recognize a claim of defamation per se, the courts do acknowledge a lesser standard of proof where the alleged defamatory statement accuses the person of the commission of a crime, refers adversely to the person's fitness for his or her business, trade or profession, accuses a woman of being unchaste, or accuses the person of having a loathsome disease. Benassi v. Georgia-Pacific, 62 Or. App. 698, 705, 662 P.2d 760, opinion adhered to as modified for other grounds on reconsideration, 63 Or. App. 672, 667 P.2d 532 (affirmed judgment for wage claim), rev. denied, 295 Or. 730, 670 P.2d 1035 (1983); Hinkle v. Alexander, 244 Or. 267, 273, 411 P.2d 829 (1966). In that event, the plaintiff is relieved of the obligation to prove special damages. Id.
Plaintiff alleges that the defamatory statements made by Defendant adversely affect Plaintiff's fitness for occupation or profession. This allegation is enough to relieve Plaintiff of the obligation to prove special damages.
Defendant argues that they are entitled to summary judgment against Plaintiff's defamation claim because he has failed to "prove sufficient facts in order to overcome a Motion for Summary Judgment and take this matter to the Court." It is true that Plaintiff has failed to either allege or prove any facts in support of his claim for defamation. Based on the current record, there is no indication of what defamatory comments were made, who made them, and to whom they were published.
In Rice v. Comtek, 766 F. Supp. 1539 (D.Or. 1990), the plaintiff alleged that the defendants' agents made a statement "the substance of which was that [d]efendants had reliable information corroborating the accusations of drug dealing against [p]laintiff." Id. at 1541. The court held that in the absence of allegations identifying the actual words used, the individuals who made the statements, when the statements were made and whether the statements were oral or written, defendants were unable to determine the defenses available to them prior to engaging in discovery. The court dismissed the claim for failure to state a claim upon which relief can be granted.
We have even less in the way of allegations in this case. Plaintiff did not flesh out the general allegations in either his opposition to the motion for summary judgment or his concise statement of material facts. The court finds that, based on the record before the court, Plaintiff has failed to present sufficient evidence to support its claim for defamation and that such claim should be dismissed.
CONCLUSION
Defendant's motion (18) for summary judgment should be GRANTED in part and DENIED in part. Defendant's motion should be GRANTED with regard to Plaintiff's First and Second Claims under the Federal and Oregon ADA, Fifth Claim for Relief for Promissory Estoppel, and Tenth Claim for Relief for Defamation Per Se. Defendant's motion should be DENIED with regard to Plaintiff's Third Claim for Relief for Breach of Contract, Fourth Claim for Relief for Breach of the Duty of Good Faith and Fair Dealing, Sixth and Seventh Claims for Relief for Statutory Wage Claims and Eighth and Ninth Claims for Relief for Attorney Fees and Punitive Damages. Plaintiff's motion (44) to amend should be GRANTED and Plaintiff's motion (45) to strike the affidavit of Patience Vidal-Mills should be DENIED.
SCHEDULING ORDER
Objections to these Findings and Recommendation(s), if any, are due May 29, 2001. If no objections are filed, the Findings and Recommendation(s) will be referred to a district court judge and go under advisement on that date.
If objections are filed, the response is due no later than June 12, 2001. When the response is due or filed, whichever date is earlier, the Findings and Recommendation(s) will be referred to a district court judge and go under advisement.