Ted Stiles v. Dave Molnaa ( 2014 )

FILED
MAY 1,2014
In the Office of the Clerk of Court
W A State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
TED STILES, a married man, ) No. 31306-9-111
)
Appellant, )
)
v. )
)
DAVB MOLNAA, a married man; ) UNPUBLISHED OPINION
HANFORD ATOMIC METAL TRADES )
COUNCIL, a labor organization; )
ROBERT HAWKS, a married man; and )
TEAMSTERS LOCAL UNION NO. 839 )
BUILDING ASSOCIATION, a labor )
organization, )
)
Respondents. )
LAWRENCE-BERREY, J. Theodore Stiles sought a position with Washington
River Protection Solutions (WRPS). WRPS contacted one of Mr. Stiles's former
employers, Robert Hawks of Teamsters Loca1839, and Dave Molnaa, who is president of
the union's umbrella organization. Both gentlemen provided unfavorable reviews, which
caused WRPS to rescind its tentative offer of employment. Mr. Stiles thereafter sued Mr.
Molnaa, Mr. Hawks, and their employing organizations for defamation and tortious
interference with a business relationship. The defendants moved for summary judgment
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on both causes of action, and the trial court granted the motion. Mr. Stiles raises only the
defamation claim on appeal. The defendants assert three bases for affirming the trial
court: (1) that the National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169, preempts
plaintiffs cause of action; (2) that a blanket release exonerates them from liability; and
(3) that RCW 4.24.730, which provides qualified immunity to a former employer
responding to a job reference, insulates them from liability. We affirm only upon the
NLRA preemption argument, and do not reach the other two arguments.
FACTS
The people and employers at issue in this case are primarily Hanford contractors or
unions representing employees ofthose Hanford contractors. Mr. Stiles started at
Hanford as a truck driver for Battelle where he was also his union's shop steward. From
there, he moved onto an internal union position with Teamsters Local Union No. 839
Building Association. He worked for Local 839 from 1998 to 2002, representing union
workers in contract negotiations and in grievance hearings.
In 2002, Mr. Stiles left Local 839 to take a position on the opposite side of the
bargaining table, representing Sysco in their labor dealings. After a few years, Mr. Stiles
moved on to employer-side labor relations at Conoco Phillips.
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Then in 2011, Mr. Stiles learned of an opening at WRPS for an industrial relations
manager who would represent WRPS in union contract negotiations and grievance
adjudications. Mr. Stiles applied for the position. After interviewing Mr. Stiles, WRPS
sent Mr. Stiles a letter confirming a contingent offer of employment, including a
$140,000 annual salary, bonus, and benefits.
Mr. Stiles also agreed in his employment application to permit WRPS to conduct a
background investigation and to hold harmless anyone who provided information during
this investigation:
I hereby voluntarily give the company the right to conduct a background
investigation and agree to cooperate in such investigation, and release from
aU liability or responsibility all persons, companies or organizations
supplying such information.
Clerk's Papers (CP) at 133. In the course of its investigation into Mr. Stiles's
background, Dominic Sansotta of WRPS spoke with Robert Hawks and Dave Molnaa.
This was a logical decision considering Mr. Stiles's history with these two men, but also
because Mr. Stiles would have to sit on the opposite side of the bargaining table from
these two men if hired.
Mr. Hawks is the secretary-treasurer of Local 839, and was also Mr. Stiles's boss
throughout his four years at Local 839. During his deposition, Mr. Hawks testified that
he told Mr. Sansotta that he was "going to have a real trust issue with Ted ifhe's
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employed at WRPS." CP at 80. Mr. Sansotta inquired further, but Mr. Hawks refused to
elaborate, telling Mr. Sansotta that it was confidential and that he did not feel comfortable
getting into specifics.
In his deposition, Mr. Hawks elaborated on the specifics that he refused to disclose
to Mr. Sansotta. Mr. Hawks explained that Mr. Stiles was a womanizer, had an incident
just after being hired in 1998 where he got drunk at a semi-annual union dinner and hit on
Mr. Hawks's sister, and also used to tell stories about how he would cheat on his wife
whenever he was out of town on union business. Mr. Hawks also relayed an incident
where Mr. Stiles racked up a large bill at a Kinko's doing copies for an out-of-state
grievance hearing with UPS when he should have done those copies at the union office
prior to leaving. Mr. Hawks, however. could not remember the date of this incident. He
also testified that Mr. Stiles sought to have Mr. Hawks's executive assistant fired when
she confronted him about the Kinko's charges. Mr. Hawks next testified that he
disciplined Mr. Stiles a couple times for doing outside work on union time. Mr. Hawks
again could not remember the dates of any of these incidents, but noted that Mr. Stiles
took the discipline/criticism appropriately. Finally, Mr. Hawks testified to an event after
Mr. Stiles left Local 839, when he sought a favor from Mr. Stiles to get Local 839 to
negotiate with Sysco, but Mr. Stiles refused to help. TestifYing in summation, Mr. Hawks
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said that his opinion was based on the fact that he could not trust a person who cheats on
his wife and does not use union money efficiently.
Mr. Sansotta then spoke to Mr. Molnaa. Mr. Molnaa was primarily a truck driver
at Hanford and has known Mr. Stiles since the latter was a truck driver for Battelle. Mr.
Molnaa is currently the president of the Hanford Atomic Metal Trades Council
(HAMTC). HAMTC is an umbrella organization of 14 unions, including Local 839, and
represents over 3,000 Hanford employees who are spread across 9 separate employers.
Because of this union work, Mr. Molnaa has also known his codefendant, Mr. Hawks, for
over 20 years, and has worked closely with him on the HAMTC executive board.
Mr. Molnaa told Mr. Sansotta that he would rather not deal with Mr. Stiles and
would prefer someone else from WRPS to meet with him if Mr. Stiles was hired. Mr.
Sansotta inquired further and Mr. Molnaa told him, "I couldn't trust him, based on those
events that happened in the past." CP at 103. Mr. Sansotta inquired further, and Mr.
Molnaa relayed two incidents from his past with Mr. Stiles.
The first incident occurred at a semi-annual union meeting where Mr. Stiles told
Mr. Molnaa that he wanted to move up in the union organization and "didn't care who he
had to step on to get there." CP at 93. The second incident occurred at another semi­
annual union dinner where Mr. Molnaa said that Mr. Stiles got drunk and started hitting
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on and kissing other women in front of his wife, who then left the dinner in an angry
hurry.
Mr. Molnaa also testified regarding two other incidents that caused him to not trust
Mr. Stiles, but about which he did not tell Mr. Sansotta. The first happened at another
semi-annual union meeting/golf tournament where Mr. Molnaa felt belittled when Mr.
Stiles introduced him to John Rabine, a high level union executive, as "just a steward at
Hanford." CP at 98. The second incident happened at yet another semi-annual
meeting/dinner where Mr. Stiles invited nonunion people to a gathering intended only for
union people and encouraged them to order expensive items. Mr. Molnaa testified
however that the union's executive board did not discipline Mr. Stiles for the expenses
and affirmatively ratified the expenses at a later meeting. Mr. Molnaa also testified that
he could not remember when any of these incidents occurred.
After hearing from Mr. Hawks and Mr. Molnaa, WRPS formally rescinded its
contingent offer of employment.
Mr. Stiles denied each and every one of these incidents in his deposition. He
admitted that he had some friction with Mr. Hawks's assistant, but denied ever seeking
her termination. He denied that he ever had excessive charges at Kinko's and denied
anyone ever confronting him about such charges. He admitted that he had a trophy
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business for a while, but denied ever working on that on union time. He also denied
being part of a T-shirt business or writing a novel, which also included denials of working
on both during union time. He further denied ever being disciplined or talked to for
working on nonunion activities during union time.
He testified that he almost never saw Mr. Molnaa, even at the semi-annual
functions, because they socialized with different crowds. He testified that the "stepping
on" conversation never occurred. He testified that no one ever mentioned him charging
excessive meals to the union. He denied being a womanizer. Finally, he testified that he
left Local 839 on good terms and never had any strife with Mr. Hawks or Mr. Molnaa.
In a later declaration, Mr. Stiles made a blanket denial of all allegations made by
Mr. Hawks and Mr. Molnaa. He stated that his Kinko's charges were always expressly
approved by Mr. Hawks and that when he worked for the union they did not prepare their
copies in-house because they did not have the facilities to do that. He again denied
working on nonunion activities on union time. He denied cheating on his wife, denied
picking up women while away on business, and denied bragging about such things. He
denied hitting on Mr. Hawks's sister and denied hitting on other women at union
functions in front of his wife. He denied belittling Mr. Molnaa to Mr. Rabine, and denied
having ever met or known Mr. Rabine. Finally, he denied running up excessive bills at
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union dinners and denied being disciplined for such things.
PROCEDURAL HISTORY
On May 25,2011, Mr. Stiles brought a complaint against Mr. Molnaa, Mr. Hawks,
and their respective organizations. The complaint alleged defamation and tortious
interference with a business relationship against both defendants, and alleged vicarious
liability against their employing organizations. Mr. Stiles alleged both economic and
noneconomic damages.
The defendants brought a motion for summary judgment on October 12,2012.
The defendants sought summary judgment on several grounds. First, they argued that Mr.
Stiles's claims were preempted by the NLRA because Mr. Stiles could not meet the
elements of intentional defamation (defamation + actual malice), an exception to
preemption. Next, the defendants argued that the blanket release that Mr. Stiles signed
applies to his intentional tort claims. The defendants also argued for immunity under
RCW 4.24.730-a statute enacted in 2005, which protects current and former employers
who provide job-related references.
Mr. Stiles responded to each of the arguments raised in the defendants' motion.
The defendants then filed a reply. Mr. Stiles then filed a motion to strike portions of the
reply, and argued that those portions raised new arguments. The defendants offered to
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continue the summary judgment motion to allow Mr. Stiles time to respond. He refused
the offer.
On November 16,2012, the superior court heard argument on the summary
judgment motion. The court orally denied Mr. Stiles's motion to strike. The court then
signed the order granting the defendants' motion for summary judgment on each of the
grounds they argued. Mr. Stiles thereafter appealed to this court.
ANALYSIS
I. Plaintiff's Motion to Strike
New issues in support of summary judgment cannot be raised in reply materials
unless accompanied by a motion and memorandum in support of the motion. R.D.
Merrill Co. v. Pollution Control Hearings Ed., 137 Wn.2d 118, 147,969 P.2d 458 (1999).
An aggrieved party may move to strike the offending pleading or offending portions
thereof. A court's decision on a motion to strike is reviewed for an abuse of discretion.
King County Fire Prot. Dist. No. 16 v. Hous. Auth., 123 Wn.2d 819,826,872 P.2d 516(1994).
Here, Mr. Stiles objected to the reply discussion of "actual malice" and "proof of
damages." However, these issues were fairly raised in the defendants' opening
memorandum in support of summary judgment in its discussion ofNLRA preemption.
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The defendants laid out the heightened elements that needed to be met to avoid NLRA
preemption, the case law requiring those elements, and alleged that Mr. Stiles could not
meet those elements. Moreover, the defendants offered to continue the summary
judgment hearing to allow Mr. Stiles greater time to respond, and Mr. Stiles refused the
offer. Accordingly, the trial court did not abuse its discretion by denying the motion to
strike.
II. Summary Judgment Standards
"When reviewing an order for summary judgment, the appellate court engages in
the same inquiry as the trial court." Mountain Park Homeowners Ass 'n v. Tydings, 125
Wn.2d 337,341,883 P.2d 1383 (1994). "This court will affirm summary judgment ifno
genuine issue of any material fact exists and the moving party is entitled to judgment as a
matter of law." Id. "All facts and reasonable inferences are considered in the light most
favorable to the nonmoving party, and all questions of law are reviewed de novo." Id.(citations omitted).
III. NLRA Preemption
"This court reviews questions of law, including preemption, de novo." McCurry v.
Chevy Chase Bank, FSB, 169 Wn.2d 96, 100,233 P.3d 861 (2010). Preemption is an
issue in this case because the defendants are two labor organizations and their agents.
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Section 8(b)(l)(B) of the NLRA prohibits labor organizations and their agents from
coercing "an employer in the selection of his representatives for the purposes of collective
bargaining or the adjustment of grievances." 29 U.S.c. § 158(b)(1)(B). Because Mr.
Stiles sought to become the employer's labor representative and because the union
interfered in this process § 8(b)(I)(B) applies. This court must therefore decide whether
Mr. Stiles's lawsuit is preempted by the NLRA.
In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 237, 79 S. Ct.
773, 3 L. Ed. 2d 775 (1959), a retail lumber business sued a union that was using coercive
tactics intended to force the employer to unionize its employees for an injunction and
damages. The United States Supreme Court held that the injunction order was preempted
by the NLRA, despite the NLRA' s refusal to exercise jurisdiction, but remanded to the
state court for determination of whether it had different grounds for sustaining its
damages award. Id. at 238·39. When the state court affirmed the damages, the Supreme
Court again accepted review to determine whether the damages award was also
preempted. Id. at 239. The Supreme Court found that the damages claim was also
preempted by the NLRA because the subject actions of the lawsuit arguably overlapped
with § 8 of the NLRA. Id. at 244-45.
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Next, we examine whether any recognized exception to the Garmon preemption
applies to this situation. As identified by the parties, the only applicable exception is the
one described in Linn v. United Plant Guard Workers ofAmerica, Local 114, 383 U.S.
53,86 S. Ct. 657,15 L. Ed. 2d 582 (1966). In Linn, an employer's official sued the union
for defamatory remarks made by the union in the course of its organizing campaign. Id.
at 55. Noting that the NLRA is powerless to redress damages suffered by individuals
through the use of unfair labor practices, the Supreme Court found that the NLRA should
not be read to preempt all state tort actions. Id. at 63-64. The Supreme Court also
recognized that such lawsuits carry the potential to chill the free debate envisioned by the
NLRA and thus frustrate the federal policy. Id. at 64-65. The Supreme Court thus struck
a middle ground, holding that defamation suits are preempted except in cases of
defamation with actual damages and actual malice as defined by Sullivan.) Id. at 65.
Therefore, Mr. Stiles's defamation claim is not preempted by the NLRA ifhe can satisfy
the requirements of actual malice and damages.
) New York Times Co. v. Sullivan, 376 U.S. 254,84 S. Ct. 710,11 L. Ed. 2d 68612
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A. Actual Malice
Since Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997,41 L. Ed. 2d 789(1974), the United States Supreme Court has admonished courts not to take the phrase
"actual malice" literally because the First Amendment does not require any actual ill will.
In Masson, the Court explained:
Actual malice under the New York Times standard should not be
confused with the concept of malice as an evil intent or a motive arising
from spite or ill will. We have used the term actual malice as a shorthand to
describe the First Amendment protections for speech injurious to reputation,
and we continue to do so here. But the term can confuse as well as
enlighten. In this respect, the phrase may be an unfortunate one. In place
of the term actual malice, it is better practice that jury instructions refer to
publication of a statement with knowledge of falsity or reckless disregard as
to truth or falsity.
Masson v. New Yorker Magazine, Inc., 501 U.S. 496,510-11, 111 S. Ct. 2419, 115 L. Ed.
2d 447 (1991) (citations omitted).
Here, Mr. Stiles argues that the defendants acted with actual malice because they
knew that the events they had used to form their opinions did not in fact occur. Mr. Stiles
does not argue that the defendants trust him; rather, he argues that the defendants lied
about not trusting him. But whether the defendants do or do not trust Mr. Stiles is
irrelevant; rather, what is relevant is whether the defendants have true facts that support
(1964).
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their opinions. Due Tan v. Le, 177 Wn.2d 649, 663,300 P.3d 356 (2013). InDue Tan,
there is no question that Le actually believed that Duc Tan was a communist spy who
could not be trusted. However, Le was held liable because the facts to support that
opinion were-as determined by the trier of fact-false.
Mr. Stiles does not provide declarations, other than his own, to refute his alleged
misconduct. Nevertheless, at summary judgment, the plaintiffs evidence is treated as
true, and he is entitled to all reasonable inferences. If the underlying reasons why Mr.
Hawks and Mr. Molnaa do not trust Mr. Stiles are false, a rational finder of fact could
conclude that Mr. Hawks and Mr. Molnaa knowingly lied, and therefore had actual
malice. See id. at 671 (The jury is entitled to determine actual malice, even when the
truth or falsity of the allegations are largely dependent upon the testimony of the parties
themselves.). While corroborating nonparty eyewitnesses are desirable, their absence
does not mandate summary judgment for the defendants.
B. Damages
Normally, proof of damages would flow from Mr. Stiles's ability to demonstrate
actual malice. In defamation cases, damages may be presumed if the trier of fact finds
actual malice. Milkovich v. Lorain Journal Co., 497 U.S. 1, 16, 110 S. ct. 2695, III L.
Ed. 2d 1 (1990) (explaining that presumed damages are constitutionally permissible only
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in cases where actual malice is proved) (citing Gertz, 418 U.S. at 350). Defamation, like
trespass, is one of the few areas of tort law where the plaintiff does not need to'prove any
damages.
However, the Supreme Court made an exception to this rule in Linn. When the
defamation stems from a labor dispute that would otherwise be preempted by the NLRA
under Garmon, the claimant must prove actual damages. Linn, 383 U.S. at 65. Actual
damages does not necessarily mean economic damages. The actual damages may be in
the form of "general injury to reputation, consequent mental suffering, alienation of
associates, specific items of pecuniary loss, or whatever form of harm would be
recognized by state tort law." Jd.; see also Farmer v. United Bhd. a/Carpenters &
Joiners 0/Am., Local 25,430 U.S. 290, 97 S. Ct. 1056, 51 L. Ed. 2d 338 (1977) (holding
that Garmon does not preempt claims of intentional infliction of emotional distress).
Here, Mr. Stiles has failed to make any argument to this court or below with
respect to proof of damages. His argument with respect to damages hinges solely on his
unsuccessful motion to strike the defendants' discussion of damages at summary
judgment. Mr. Stiles has not carried his burden of production with regard to stating a
prima facie case on the element of damages.
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Nevertheless, we will review the record on this issue. Mr. Stiles's base salary for
his new/current job is lower than the salary he would have received at WRPS. Adding his
bonuses, however, put him over the salary that he would have received at WRPS. There
is no evidence whatsoever what his bonuses would have been at WRPS. Mr. Stiles's
failure to argue the point leads to the conclusion that he has failed to meet his burden of
production.
Concerning noneconomic damages, Mr. Stiles's deposition and affidavit testimony
merely reiterate the claims made in his complaint-that he has suffered mental anguish,
emotional distress, humiliation, embarrassment, and loss of reputation. Absent any
additional facts, it is not sufficient at the summary judgment stage to simply reiterate the
allegations in the complaint. See Atherton Condo. Apartment-Owners Ass 'n v. Blume
Dev. Co., 115 Wn.2d 506, 535-36, 799 P.2d 250 (1990). To the contrary, Mr. Stiles
admitted in his deposition that he has not been distressed enough that he has sought help
from a mental health professional. Notably, Mr. Stiles stated that his new/current position
is his dream job. Regardless, Mr. Stiles's failure to argue the point causes us to reach the
conclusion that Mr. Stiles cannot meet his burden of production on this prima facie
element. Mr. Stiles's defamation claim therefore is preempted under Linn, for lack of
argument and evidence to support a prima facie element, actual damages. We therefore
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affirm the lower court summary judgment dismissal, and do not reach the remaining
issues.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to
RCW 2.06.040.
~()
Lawrence-Berrey, J.
WE CONCUR:
Korsmo, J. 7'
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