Chambers v. Travelers Cos.

• Decision Date: 09 February 2012
• Docket Number: No. 11–1473.,11–1473.
• Parties: Karen M. CHAMBERS, Plaintiff–Appellant, v. The TRAVELERS COMPANIES, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

114 Fair Empl.Prac.Cas. (BNA) 539

33 IER Cases 595

668 F.3d 559

Karen M. CHAMBERS, Plaintiff–Appellant,

v.The TRAVELERS COMPANIES, INC., Defendant–Appellee.

No. 11–1473.

United States Court of Appeals, Eighth Circuit.

Submitted: Oct. 18, 2011.Filed: Feb. 9, 2012.

Thomas Edward Glennon, argued, Minneapolis, MN, for appellant.

Charles Feeney Knapp, argued, Julie Marie Giddings, on the brief, Minneapolis, MN, for appellee.

Before RILEY, Chief Judge, LOKEN and BENTON, Circuit Judges.

LOKEN, Circuit Judge.

Following her termination in January 2008, Karen M. Chambers commenced this action against her former employer, The Travelers Companies, Inc., which removed the case to federal court. Chambers appeals the district court's ¹ grant of summary judgment dismissing her claims for defamation; breach of a unilateral contract to pay a performance bonus; failure to timely pay wages after discharge in violation of Minn.Stat. § 181.13(a); age discrimination; and interference with her rights to employee benefits in violation of § 510 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1140, and the court's denial of her motion to continue the summary judgment proceedings. Reviewing the grant of summary judgment de novo, and the procedural issue for abuse of discretion, we affirm.

I. The Defamation Claims

Chambers began work for Travelers' predecessor, The St. Paul Companies, in 1987 and stayed on after the two insurers merged in 2004. In 2006, she became a Travelers Managing Director, supervising six underwriters at the St. Paul offices. She reported to Second Vice–President Kurt Werner, located in Dallas, Texas. Werner reported to Homer Sandridge, Vice–President of the Professional Liability group. The Human Resources Manager for the group of underwriters supervised by Chambers was Michele Cady, located at Travelers headquarters in Hartford, Connecticut. Cady reported to the Second Vice–President in charge of human resources for bond and financial products, Gail DeAngelis, also located in Hartford.

On September 14, 2007, an underwriter supervised by Chambers called Michele Cady to complain that Chambers had a controlling management style, brought personal stress to the department, made inappropriate religious comments, and sold religious items in the office. Aware that the complaint might be suspect because this underwriter was on a performance improvement plan to correct work deficiencies, Cady discussed the complaint with DeAngelis, who advised Cady to speak to Jennifer Ames, the Director of Employee Relations. Ames advised Cady to conduct a “climate survey” or “environmental assessment” of the six underwriters supervised by Chambers to determine the merit of the complaint of poor management and low staff morale. Ames provided Cady with a template of neutral questions to ask employees in conducting the survey.

In early October, Cady using Ames's template surveyed the six underwriters about their work environment; the quality of supervision and management styles of Werner and Chambers; co-worker and management sensitivity to gender, race, age, religion, and employment positions; and in-office solicitations. Comments regarding Texas-based Werner were positive, but most of the six commented negatively regarding Chambers, describing the workplace as “dysfunctional,” team morale as low or non-existent, and Chambers' management style as “blame and shame” or “Dr. Jekyll, Mr. Hyde.” They also reported that Chambers spoke frequently about religion, and some said she sold items in the office to raise funds for missionary work, which they felt obligated to purchase to avoid getting on her “bad side.” Cady compiled her verbatim notes of the survey comments into a report dated October 8, 2007.

On October 10, Werner and Sandridge met with Chambers to obtain her response to the climate survey. Cady participated by telephone. Werner summarized the underwriters' negative comments and invited Chambers' response. She categorically denied the underwriters' characterizations of her performance as Managing Director. The following day, Chambers met with Werner and Sandridge and criticized the survey, angrily asserting that “perception is not reality” and that she “wouldn't tolerate being implicated in harboring fear,” and demanding that Werner and Sandridge “make sure this is taken care of.” On October 22, Werner delivered to Chambers a “Written Behavioral Warning” noting six areas where she needed to improve: (1) not communicating with staff in a demeaning, angry, or retaliatory manner; (2) not discussing religious or sexual preferences with staff; (3) not soliciting on company property; (4) communicating clearly, concisely, and respectfully; (5) not discussing private or confidential information about employees; and (6) permitting staff greater paid time off flexibility. Werner declined Chambers' request that he identify specific incidents of alleged wrongdoing and who had reported them.

On January 8, 2008, Cady, Sandridge, and Werner met with Chambers to discuss reports that she had taken family members on business trips and had unnecessarily delayed informing employees of a presentation assignment. Chambers acknowledged that her daughter had attended a business dinner or outing in Las Vegas but did not disclose that her five-year-old grandson also attended. The next day, Travelers learned that Chambers did not report family members' presence on the two expense forms she submitted for the dinner, which included the cost of their food and drinks. Questioned by Travelers, Chambers' staff reported that she had traveled with family members previously, which they considered inappropriate. On January 21, Werner and Cady told Chambers that she was being terminated, effective immediately, because of “continuing issues.”

Chambers alleges that Travelers agents defamed her at the October 10 meeting, in the October 22 Written Behavior Warning, and by telling her at the January 21 meeting that she was terminated for “continuing issues.” Defamation under Minnesota law requires proof that the alleged defamatory statement (1) was communicated to someone other than the plaintiff, (2) was false, and (3) tended to harm the plaintiff's reputation and lower her in the estimation of the community. Bahr v. Boise Cascade Corp., 766 N.W.2d 910, 919–20 (Minn.2009). Whether a communication is actionable because it contained a provably false statement of fact is a question of law. McClure v. Am. Family Mut. Ins. Co., 223 F.3d 845, 853 (8th Cir.2000), citing Geraci v. Eckankar, 526 N.W.2d 391, 397 (Minn.App.), review denied, (Minn. Mar. 14), cert. denied, 516 U.S. 818, 116 S.Ct. 75, 133 L.Ed.2d 34 (1995). If a plaintiff presents sufficient evidence of these three elements, the defendant may nonetheless be entitled to a qualified privilege that defeats the defamation claim if its statement was “made upon a proper occasion, from a proper motive, and [ ] based upon reasonable or probable cause.” Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 256–57 (Minn.1980). “The existence of the privilege is a matter of law for the court.” Bahr, 766 N.W.2d at 920.

The district court concluded that the statements made by Travelers agents at the October 10 meeting and in the October 22 Written Behavior Warning were entitled to a qualified privilege. We agree. An underwriter's telephone complaint to Cady gave Travelers reasonable ground to investigate staff morale in the unit managed by Chambers. Cady surveyed the entire staff and reported the concerns they expressed about Chambers' performance to supervisor Werner, who then summarized the negative comments to Chambers and sought her response. “Communications between an employer's agents made in the course of investigating or punishing employee misconduct are made upon a proper occasion and for a proper purpose, as the employer has an important interest in protecting itself and the public against dishonest or otherwise harmful employees.” McBride v. Sears, Roebuck & Co., 306 Minn. 93, 235 N.W.2d 371, 374 (1975).

“A qualified privilege is abused and therefore lost if the plaintiff demonstrates that the defendant acted with actual malice.” Lewis v. Equitable Life Assurance Soc., 389 N.W.2d 876, 890 (Minn.1986). “It is well-settled in Minnesota that to demonstrate malice in a defamation action the plaintiff must prove that the defendant made the statement from ill will and improper motives, or causelessly and wantonly for the purpose of injuring the plaintiff.” Stuempges, 297 N.W.2d at 257. Here, Chambers argues that Travelers lost any privilege through abuse because Cady and Werner did not adequately investigate the truth of the underwriters' defamatory comments before presenting those statements to Chambers as “results” at the October 10 meeting and then reflecting those comments in the October 22 Warning. Although abuse of the privilege is a jury issue, “pointing merely to instances in which [Travelers] might have better conducted the investigation does not provide a basis for a reasonable jury to [find actual malice].” Bahr, 766 N.W.2d at 925. Unlike the employer in Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 (Minn.1990), on which Chambers relies, Travelers investigated the initial complaint regarding Chambers' managerial deficiencies by surveying each member of her staff before asking Chambers to respond. Though the underwriters' survey responses were not uniformly negative, an employer may act on reports of employee misconduct, even if it receives conflicting reports during its investigation. See Elstrom v. Indep. Sch. Dist. No. 270, 533 N.W.2d 51, 55 (Minn.App.1995). On this summary judgment record, we agree with the district court that Chambers presented no evidence from which actual malice or ill will could reasonably be inferred and therefore Travelers was entitled to the qualified privilege as a matter of law.²

The district court granted summary judgment on the claim based on the ...