Schwarz v. St. Jude Med. ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA19-395
Filed: 7 April 2020
Mecklenburg County, No. 16 CVS 3613
MOLLY SCHWARZ, Plaintiff,
v.
ST. JUDE MEDICAL, INC., ST. JUDE MEDICAL, S.C., INC., DUKE UNIVERSITY,
DUKE UNIVERSITY HEALTH SYSTEM, INC., ERIC DELISSIO and TED COLE,
Defendants.
Appeal by plaintiff from orders entered 10 January 2019 by Judge Karen Eady-
Williams and 17 January 2019 by Judge R. Kent Harrell in Mecklenburg County
Superior Court. Heard in the Court of Appeals 14 November 2019.
Kennedy, Kennedy, Kennedy and Kennedy, LLP, by Harvey L. Kennedy and
Harold L. Kennedy, III, for plaintiff-appellant.
Parker Poe Adams & Bernstein LLP, by Keith M. Weddington, and Seyfarth
Shaw LLP, by Nancy E. Rafuse and J. Stanton Hill, for defendants-appellees
St. Jude Medical, Inc., St. Jude Medical S.C., Inc., Eric Delissio, and Ted Cole.
Ogletree, Deakins, Nash, Smoak & Stewart, P.C., by Robert A. Sar and Andrew
C. Avram, for defendants-appellees Duke University and Duke University
Health System.
DIETZ, Judge.
Plaintiff Molly Schwarz worked for St. Jude Medical, a medical device
company. In her position, Schwarz visited doctor’s offices and hospitals and
interacted with physicians and patients.
SCHWARZ V. ST. JUDE MED., INC.
Opinion of the Court
Over several years, St. Jude received multiple complaints from doctors and
patients about Schwarz’s unprofessional or inappropriate behavior. Ultimately, St.
Jude fired Schwarz.
Schwarz then sued St. Jude, one of her co-workers, her direct supervisor, and
Duke University Health System, one of St. Jude’s larger customers in the region. She
asserted claims for retaliatory discharge, sex and age discrimination, libel, and
tortious interference with her employment contract.
The trial court granted summary judgment for Defendants and against
Schwarz on all claims. On appeal, Schwarz asserts a series of procedural arguments
about the timing of one of the two summary judgment hearings and argues that her
claims should have been sent for trial. We disagree.
As explained below, the trial court was well within its sound discretion to
conduct the summary judgment hearing when it did, rather than continue it, and
Schwarz’s evidence was insufficient to create a genuine issue of material fact on any
of her claims. Accordingly, the trial court properly entered judgment in Defendants’
favor as a matter of law.
Facts and Procedural History
In 2012, Defendant St. Jude Medical, a medical device company, hired Plaintiff
Molly Schwarz to work as a Clinical Specialist. As part of her duties, Schwarz had to
conduct “patient checks” in doctor’s offices and hospitals to assess and assist with the
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adjustment of implanted medical devices. Schwarz also had to field calls and answer
questions about the devices and provide information at conferences within a defined
territory. During this period, Schwarz worked with Defendant Ted Cole, the Territory
Manager for St. Jude in the Raleigh area. Both Schwarz and Cole were supervised by
Defendant Eric Delissio, St. Jude’s Regional Sales Director.
Beginning in 2014, St. Jude received several complaints from physicians and
patients about Schwarz, including some complaints so serious that physicians
prohibited St. Jude from sending Schwarz to work with them. For example, in June
2014, a physician banned Schwarz from working with him because Schwarz gave the
doctor an expired medical device to implant. Schwarz received a written warning from
Delissio for this incident. Later, in September 2014, St. Jude received a complaint
from another hospital that Schwarz was “like a bull in a China shop” and agitated a
patient when servicing the patient’s medical device. Then, in January 2015, a
physician in Schwarz’s assigned territory prohibited Schwarz from coming to his
office unless absolutely necessary because he claimed Schwarz had challenged his
medical judgment in front of a patient.
In February 2015, St. Jude’s human resources department suggested to
Schwarz’s supervisors that she be placed on a performance improvement plan based
upon her “pattern of behavior that needed to be addressed with [Schwarz] from a
customer standpoint.” One week later, Schwarz’s supervisors received a verbal
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Opinion of the Court
complaint from a patient who alleged that Schwarz was unprofessional, lacked
compassion, and appeared to lack knowledge of how St. Jude’s medical devices
functioned. The patient refused future care from Schwarz.
Finally, in late February 2015, another patient complained that Schwarz
exposed the patient to unnecessary radiation, was argumentative, refused to listen,
and “kept referring to the [x-ray] films backwards.” Cole received a copy of the email
containing these claims and he forwarded the email to Delissio, who in turn
forwarded it to high-level managers at St. Jude.
After considering other, less drastic disciplinary measures, St. Jude ultimately
decided to terminate Schwarz’s employment based on the pattern of behavior
revealed by the repeated physician and patient complaints. In March 2015, St. Jude
notified Schwarz that her employment was terminated. Schwarz then filed this
lawsuit, asserting claims for wrongful termination, defamation, and tortious
interference with contract.
Schwarz does not dispute the existence of the long series of physician and
patient complaints against her. But she insists that these complaints were used as a
pretext to fire her.
She contends that the real reason she was fired was because she informed her
supervisors that a physician at Duke University Health System, with whom St. Jude
worked, was engaged in an extra-marital affair with one of Schwarz’s co-workers at
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Opinion of the Court
St. Jude. Schwarz asserted claims for wrongful discharge based on public policy, sex
discrimination, and age discrimination against St. Jude; libel claims against Cole and
Delissio, the co-workers who forwarded certain patient complaints to superiors within
the company; and tortious interference claims against Cole and Delissio, as well as
against Duke University and Duke University Health System, the employer of the
physician who allegedly had an extra-marital affair with Schwarz’s co-worker.
After full discovery, Defendants moved for summary judgment. The trial court
entered summary judgment for Defendants and against Schwarz on all claims.
Schwarz timely appealed.
Analysis
I. Notice of the St. Jude summary judgment hearing
Schwarz first argues that the trial court improperly ruled on the St. Jude
defendants’ summary judgment motion because Schwarz did not receive adequate
notice of the hearing on that motion.1 We reject this argument.
Under Rule 56(c), the party seeking summary judgment must serve the motion
on the adverse party “at least 10 days before the time fixed for the hearing.” N.C. R.
Civ. P. 56(c). “Although Rule 56 makes no direct reference to notice of hearing, this
Court has held that such notice also must be given at least ten (10) days prior to the
hearing.” Wilson v. Wilson, 191 N.C. App. 789, 791, 666 S.E.2d 653, 654 (2008).
1 We refer to the St. Jude Medical companies and the two St. Jude employees, Cole and
Delissio, collectively as “St. Jude.”
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“Failure to comply with this mandatory 10 day notice requirement will ordinarily
result in reversal of summary judgment obtained by the party violating the rule.”
Zimmerman’s Dep’t Store, Inc. v. Shipper’s Freight Lines, Inc., 67 N.C. App. 556, 557–
58, 313 S.E.2d 252, 253 (1984).
Here, St. Jude complied with this 10-day notice rule. St. Jude served the
motion by fax on 27 December 2018, ten days before the 7 January 2019 hearing on
the motion. This service by fax is permitted by Rule 5 of the Rules of Civil Procedure.
N.C. R. Civ. P. 5(b)(1)(a). Thus, St. Jude notified Schwarz of the summary judgment
hearing at least ten days in advance.
But Schwarz argues that she was entitled to thirteen days advance notice, not
ten. This is so, she reasons, because St. Jude also served its notice by mail. Under the
“mail rule” for service contained in Rule 6(e), Schwarz argues, “three days shall be
added to the prescribed period” of notice, thus meaning she was entitled to a 13-day
notice period rather than a 10-day one. See N.C. R. Civ. P. 6(e); see also Planters Nat’l
Bank and Tr. Co. v. Rush, 17 N.C. App. 564, 566, 195 S.E.2d 96, 97 (1973).
We reject this argument. The purpose of the 10-day mandatory notice
requirement in Rule 56(c) is to ensure that the non-moving party is aware of the
upcoming hearing at least ten days in advance. That occurred here because St. Jude
faxed the notice ten days before the hearing in conformity with the procedural
requirements of both Rule 5 and Rule 56(c).
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II. Motion for continuance
Next, Schwarz contends that the trial court erred by denying her motion to
continue the 7 January 2019 summary judgment hearing. Again, we reject this
argument.
“Rule 56(f) allows the trial court to deny a motion for summary judgment or
order a continuance to permit additional discovery, if the party opposing the motion
cannot present facts essential to justify his opposition.” Fla. Nat’l Bank v. Satterfield,
90 N.C. App. 105, 109, 367 S.E.2d 358, 361 (1988). “The chief consideration to be
weighed in passing upon the application is whether the grant or denial of a
continuance will be in furtherance of substantial justice.” Bowers v. Olf, 122 N.C. App.
421, 426, 470 S.E.2d 346, 350 (1996). The decision of whether to grant a request for a
continuance under Rule 56(f) is left to the sound discretion of the trial court. Fla.
Nat’l Bank, 90 N.C. App. at 109, 367 S.E.2d at 361. This Court cannot override that
determination unless the trial court abused its discretion through a ruling “so
arbitrary that it could not have been the result of a reasoned decision.” Manning v.
Anagnost, 225 N.C. App. 576, 579, 739 S.E.2d 859, 861 (2013).
Here, Schwarz argues that the trial court should have granted a continuance
because her attorneys “were on vacation during the Christmas holidays,” giving them
little time to prepare for the hearing. She also contends that St. Jude’s motion relied
on witnesses that St. Jude failed to disclose during the discovery period. Thus, she
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contends, the interests of justice required the trial court to continue the hearing to
provide Schwarz and her counsel with additional time to prepare.
The trial court’s analysis of this question is a paradigmatic example of a
discretionary decision to which this Court must defer. Schwarz argued the
continuance was necessary in the interests of justice. St. Jude disagreed. Both sides
offered reasonable arguments for their positions. The trial court considered the
parties’ arguments and elected, in its discretion, to proceed with the hearing.
Although the trial court properly could have granted a continuance, the court’s
decision not to do so was a reasoned, non-arbitrary one and thus was well within the
trial court’s sound discretion. Fla. Nat’l Bank, 90 N.C. App. at 109, 367 S.E.2d at 361.
III. Wrongful discharge – retaliation
Schwarz next argues that the trial court erred by granting summary judgment
in favor of St. Jude on her wrongful discharge claim based on unlawful retaliation.
Schwarz contends that her termination was retaliation for her report of adultery by
a co-worker and that this retaliation violates North Carolina public policy. We reject
this argument.
Schwarz was an at-will employee. “Although at-will employment may be
terminated for no reason, or for an arbitrary or irrational reason,” the employer
cannot terminate an employee for a “reason or purpose that contravenes public
policy.” Imes v. City of Asheville, 163 N.C. App. 668, 670, 594 S.E.2d 397, 398 (2004).
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Put another way, employers generally are free to “retaliate” against their at-will
employees by firing them for conduct of which they disapprove. But they cannot fire
an at-will employee for a reason that contravenes North Carolina public policy.
“Public policy has been defined as the principle of law which holds that no
citizen can lawfully do that which has a tendency to be injurious to the public or
against the public good.” Id. at 670, 594 S.E.2d at 399. Public policy is violated “when
an employee is fired in contravention of express policy declarations contained in the
North Carolina General Statutes.” Id.
Here, Schwarz contends that she engaged in conduct protected by North
Carolina public policy because she “reported adultery” by one of her co-workers.
Adultery, Schwarz contends, is an illegal act and a report of this illegal activity to the
employer is a protected act under North Carolina public policy.
There are several flaws in this argument. First, it is far from clear that
adultery is a criminal act in North Carolina. To be sure, there is an aging statute
titled “Fornication and Adultery” which provides that “[i]f any man and woman, not
being married to each other, shall lewdly and lasciviously associate, bed and cohabit
together, they shall be guilty of a Class 2 misdemeanor.” N.C. Gen. Stat. § 14-184.
But this Court has examined this statute and observed that “the State has chosen not
to use it, at least in modern times.” Malecek v. Williams, 255 N.C. App. 300, 305 n.2,
804 S.E.2d 592, 597 n.2 (2017). Indeed, in 2006, a trial court declared Section 14-184
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facially unconstitutional. The court entered a permanent injunction providing that
the State was “hereby permanently enjoined from enforcing N.C.G.S. § 14–184 in any
manner.” Hobbs v. Smith, No. 05 CVS 267, 2006 WL 3103008, at *1 (N.C. Super. Aug.
25, 2006) (unpublished). The State did not appeal that permanent injunction and it
appears to be in effect today. Thus, Schwarz has not identified any currently
applicable statutory basis for asserting that adultery is a criminal act.
In any event, we find no support in either the General Statutes or our case law
for the principle that reporting to one’s employer the private sexual activity of a co-
worker is protected by any “express policy declarations contained in the North
Carolina General Statutes.” Imes, 163 N.C. App. at 670, 594 S.E.2d at 399. The
alleged consensual affair between Schwarz’s co-worker and a married physician is
simply not conduct so “injurious to the public or against the public good” that
reporting it to Schwarz’s employer could be considered a part of the core public policy
of our State. Id. The trial court therefore properly concluded that Schwarz’s wrongful
discharge claim based on public policy grounds failed as a matter of law.
IV. Wrongful discharge - sex and age discrimination
Schwarz next argues that St. Jude committed sex and age discrimination by
firing her and hiring a male employee who was 39 years old. This wrongful discharge
argument, like Schwarz’s previous one, is fatally flawed.
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Opinion of the Court
North Carolina has adopted the legal standard for sex and age discrimination
that was developed through federal employment discrimination doctrine. Johnson v.
Crossroads Ford, Inc., 230 N.C. App. 103, 111, 749 S.E.2d 102, 108 (2013). Under this
standard, the claimant must first establish a prima facie case of disparate treatment
by showing that: (1) she is a member of a protected class; (2) she was qualified for her
job and her performance was satisfactory; (3) she suffered an adverse employment
action; and (4) other similarly situated employees who are not members of the
protected class did not suffer the same adverse employment action. Head v. Adams
Farm Living, Inc., 242 N.C. App. 546, 555, 775 S.E.2d 904, 910 (2015).
Once the claimant meets this standard, the burden shifts to the employer to
articulate some legitimate, nondiscriminatory reason for the adverse employment
action. North Carolina Dep’t of Correction v. Gibson, 308 N.C. 131, 137, 301 S.E.2d
78, 82 (1983). Then, the burden shifts back to the employee to show that the proffered
reason for the adverse employment action was merely a pretext for discrimination.
Id.
Here, even assuming Schwarz’s evidence satisfied her initial burden to show a
prima facie case of sex and age discrimination, her claim fails because the record
contains evidence of a legitimate, nondiscriminatory reason for Schwarz’s
termination—repeated, consistent complaints from physicians and patients about
Schwarz’s inappropriate or unprofessional conduct. Indeed, even a core part of
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Schwarz’s retaliatory discharge claim—that she revealed an extra-marital affair
between a co-worker and a customer—demonstrates that St. Jude’s reason for
terminating Schwarz concerned her conduct toward the patients and physicians on
whom St. Jude depends for its business.
In response, Schwarz did not offer any evidence that these reasons for her
termination were merely a pretext and that St. Jude’s real reason for her termination
was her sex or age. Hodge v. North Carolina Dep’t of Transp., 246 N.C. App. 455, 474,
784 S.E.2d 594, 607 (2016); Head, 242 N.C. App. at 561, 775 S.E.2d at 914. Without
that evidence, Schwarz cannot survive a motion for summary judgment. Accordingly,
the trial court properly entered judgment on this claim as a matter of law.
V. Libel claim
Schwarz next argues that the trial court improperly entered summary
judgment on her libel claim. Schwarz contends that Defendants Ted Cole and Eric
Delissio committed libel per se by forwarding an email up the chain of command at
St. Jude. The email alleged that Schwarz mistreated a patient by misreading an x-
ray and exposing a patient to unnecessary radiation. We reject Schwarz’s argument.
“[L]ibel per se is a publication by writing, printing, signs or pictures which,
when considered alone without innuendo, colloquium, or explanatory circumstances:
(1) charges that a person has committed an infamous crime; (2) charges a person with
having an infectious disease; (3) tends to impeach a person in that person’s trade or
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Opinion of the Court
profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace.”
Renwick v. News and Observer Pub. Co., 310 N.C. 312, 317, 312 S.E.2d 405, 408–09
(1984).
Although this claim can arise in a workplace setting, there are special rules for
libel and defamation claims that occur within a healthcare institution. Healthcare
professionals generally have a qualified privilege to report to management any
employee work performance issues that implicate patient care. Troxler v. Carter
Mandala Ctr., Inc., 89 N.C. App. 268, 272, 365 S.E.2d 665, 668 (1988). This privilege
exists because the “health care industry plays a vital and important role in our
society” and encouraging employees to share concerns about healthcare services
ensures the “quality and trustworthiness of the care which the medical community
provides.” Id.
Here, even taking all the evidence in the light most favorable to Schwarz, her
libel allegations fall squarely within the qualified privilege for healthcare
professionals. Cole and Delissio received an email indicating that Schwarz provided
improper care to a patient. Cole forwarded the email to Delissio, his supervisor, and
Delissio forwarded it to higher-ranking employees at St. Jude. Neither defendant sent
the email to anyone outside this chain of command within St. Jude. This sort of
internal reporting of an allegation of improper patient care is protected from libel
claims by the qualified privilege applicable in the healthcare field. Accordingly, the
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Opinion of the Court
trial court properly entered summary judgment on Schwarz’s libel claims.
VI. Tortious interference
Finally, Schwarz argues that Defendants Cole, Delissio, and Duke University
Health System tortiously interfered with her employment contract by inducing St.
Jude to terminate her employment. Again, this argument is meritless.
To establish a claim for tortious interference with contract, there must be “(1)
a valid contract between the plaintiff and a third person which confers upon the
plaintiff a contractual right against a third person; (2) the defendant knows of the
contract; (3) the defendant intentionally induces the third person not to perform the
contract; (4) and in doing so acts without justification; (5) resulting in actual damage
to plaintiff.” Brodkin v. Novant Health, Inc., __ N.C. App. __, __, 824 S.E.2d 868, 874
(2019).
We begin with Schwarz’s claim against Cole and Delissio, her two co-employees
at St. Jude. When a tortious interference claim based on an employment contract is
brought against the plaintiff’s co-employees, “the plaintiff must show that the alleged
interference was unrelated to a ‘legitimate business interest’ of the employee.” Id.
Here, unrebutted evidence in the record indicates that the alleged
interference—that is, these two employees’ involvement in St. Jude’s decision to
terminate Schwarz—was related to their legitimate business interests. Cole was one
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Opinion of the Court
of Schwarz’s co-workers and interacted with the same clients and patients as
Schwarz. Delissio is the mutual supervisor for both Cole and Schwarz.
Cole reported to Delissio that a number of clients and patient had complaints
and other concerns about Schwarz’s work. Delissio then investigated those concerns
and ultimately provided disciplinary recommendations to St. Jude that included
possible termination.
Reporting and investigating repeated complaints by patients and healthcare
professionals about a co-employee’s work performance is a legitimate business
interest. Id. Accordingly, the trial court properly concluded that undisputed evidence
in the record defeated Schwarz’s tortious interference claim against her two co-
employees at St. Jude as a matter of law.
Schwarz next contends that Duke University Health System tortiously
induced St. Jude to fire Schwarz because she reported a sexual relationship between
a co-worker and a Duke employee. But this claim fails because, even taking all
evidence in the light most favorable to Schwarz, she has not forecast any evidence
that Duke sought her termination from St. Jude. Esposito v. Talbert & Bright, Inc.,
181 N.C. App. 742, 745, 641 S.E.2d 695, 697 (2007).
Duke was, in effect, a customer of St. Jude. One of Duke’s physicians refused
to work with Schwarz. At most, Duke requested that St. Jude not send Schwarz to
work with them, and to use other St. Jude employees instead. There is no evidence
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that Duke “intentionally induced” St. Jude to terminate its employment contract with
Schwarz. Brodkin, __ N.C. App. at __, 824 S.E.2d at 874. Indeed, there is no evidence
that Duke had any interest at all in whether Schwarz remained employed at St. Jude.
Even taking all inferences in Schwarz’s favor, Duke, at most, requested not to work
with Schwarz anymore. There is no evidence that this would have forced St. Jude to
end its employment contract with Schwarz, nor any evidence that Duke believed this
to be true. This, in turn, means Schwarz failed to forecast any evidence that “the
defendant intentionally induce[d] the third person not to perform the contract.” Id.
Accordingly, the trial court properly determined that Schwarz’s tortious interference
claim failed as a matter of law.
Conclusion
For the reasons stated above, we affirm the trial court’s orders granting
summary judgment in favor of Defendants.
AFFIRMED.
Judges DILLON and ARROWOOD concur.
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