Baggs v. Eagle-Picher Industries, Inc., EAGLE-PICHER

• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)
• Writing for the Court: Before GUY, NORRIS and BATCHELDER; RALPH B. GUY, Jr.
• Citation: 957 F.2d 268
• Parties: 121 Lab.Cas. P 56,821, 7 IER Cases 318 Ralph BAGGS; Vern Baggs, Jr.; Gary A. Delecki; Lori J. Glick; Merrill J. Hansen; Tracy Helsel; Robert Kanaziz; Anthony F. Krol; Penny J. Pahl; Gary Parker; Gary Roessler; Mark Russell; David Wilson; Mary Ann Fender; Walter Montney; Patricia Russell; Daniel Schelske; Nadine Wells; James D. Wilson, II; James MacDonald, Plaintiffs-Appellants, Thomas A. Brown; Bill Elya, III; Garry Moore; Timothy Morrison; Deane W. Pahl, Plaintiffs, v.INDUSTRIES, INC., an Ohio corporation, Defendant-Appellee.
• Docket Number: EAGLE-PICHER,No. 90-1949
• Decision Date: 27 February 1992

Page 268

957 F.2d 268 121 Lab.Cas. P 56,821, 7 IER Cases 318 Ralph BAGGS; Vern Baggs, Jr.; Gary A. Delecki; Lori J.
Glick; Merrill J. Hansen; Tracy Helsel; Robert Kanaziz;
Anthony F. Krol; Penny J. Pahl; Gary Parker; Gary
Roessler; Mark Russell; David Wilson; Mary Ann Fender;
Walter Montney; Patricia Russell; Daniel Schelske; Nadine
Wells; James D. Wilson, II; James MacDonald, Plaintiffs-Appellants,
Thomas A. Brown; Bill Elya, III; Garry Moore; Timothy
Morrison; Deane W. Pahl, Plaintiffs,
v.
EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation,
Defendant-Appellee. No. 90-1949. United States Court of Appeals,
Sixth Circuit. Argued Jan. 21, 1992.
Decided Feb. 27, 1992.

Page 269

Craig W. Elhart (argued and briefed), Elhart & Power, Traverse City, Mich., for plaintiffs-appellants.

Jon G. March (argued and briefed), Jennifer DeLessio (briefed), Miller, Johnson, Snell & Cumminskey, Grand Rapids, Mich., for defendant-appellee.

Before GUY, NORRIS and BATCHELDER, Circuit Judges.

RALPH B. GUY, Jr., Circuit Judge.

The plaintiffs in this private-sector employee drug testing case appeal the district court's grant of summary judgment dismissing their breach of contract, defamation, and invasion of privacy claims against their former employer. We affirm.

I.

Until August 1989, the plaintiffs worked for the defendant, Eagle-Picher Industries, Inc., at Eagle-Picher's Trim Division plant in Kalkaska, Michigan. The Trim Division manufactures interior trim for use in automobiles. Some of the plant's 230 employees work with potentially hazardous materials, including hot adhesives.

Each applicant for employment at the plant was required to sign a form acknowledging that Eagle-Picher could terminate the employment at any time, with or without notice. ¹ Upon hiring, each new worker received an employee handbook. The version of the handbook given to the plaintiffs had been prepared when the plant was known as Fabricon Automotive Division. The Fabricon handbook contained a pledge by Eagle-Picher to treat employees fairly, followed by a list of ten rules of employee conduct. The first rule prohibited intoxication while on duty and use or possession

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of drugs on company premises. The handbook also spelled out a four-step system of progressive discipline but noted that severe infractions could result in immediate discharge.

In late 1988, Trim Division President Michael Aslanian became concerned about drug use among employees. According to Aslanian, several employees complained to him about drug use by fellow workers. Aslanian also stated that truck drivers making deliveries to the plant had commented to management about employee drug use. The plant's management responded in April 1989 by promulgating a drug-free workplace policy. That policy prohibited employees from possessing, using, or being under the influence of drugs while at work. The policy also provided for drug testing of employees under certain circumstances. The new policy was posted on employee bulletin boards.

Aslanian also communicated his concerns to the Kalkaska County Sheriff and the Grand Traverse Narcotics Team. With Aslanian's encouragement, an undercover agent worked in the plant to observe employees. As a result of the agent's surveillance, two employees were arrested in June 1989 for selling drugs. In order to dramatize the situation, Aslanian allowed the police to arrest the employees at work. According to Aslanian, the undercover agent told him that 60 percent of the workforce used illegal drugs.

The Trim Division strengthened its drug policy in July 1989. Among other changes, the new policy provided that "reporting to work with alcohol, illegal or illicit drugs in the employee's system is a violation of Company rules and will result in disciplinary action, up to and including discharge." This revision strengthened the earlier provision that only prohibited an employee from working under the influence of drugs. The new policy also provided that submission to a drug test at management's request was a "condition of employment." The previous policy had provided for drug testing only in certain circumstances. The new policy was posted on employee bulletin boards on July 17, 1989. On August 7, 1989, Eagle-Picher distributed a new employee handbook containing the revised drug policy.

Eagle-Picher carried out a surprise drug screening on August 10 and 11, 1989. At a meeting of employees, Aslanian announced that each employee would be required to submit a urine sample as a condition of continued employment. Nine employees, including seven of the plaintiffs, refused the test and left the plant. Eagle-Picher treated the refusals as voluntary resignations. One of the plaintiffs refused the test but declined to leave the plant. Eagle-Picher terminated his employment.

The remaining employees, over 200 in number, submitted to the urine test. The employees filled specimen jars in the employee lavatories. Male employees used a urinal in the presence of a male nurse. Female employees used a stall while a female nurse stood outside. Employees absent on August 10 were tested at a local health clinic.

Eagle-Picher received the test results six days later. Eagle-Picher immediately terminated the employees who tested positive for drugs, including twelve of the plaintiffs. On each terminated employee's record, Eagle-Picher listed violation of an unspecified company policy as the reason for termination.

One of the plaintiffs who tested positive denied drug use and contended that his positive result stemmed from passive inhalation of marijuana smoke. The other plaintiffs who tested positive have admitted that they have used illegal drugs. Eight of the ten plaintiffs who refused to submit to the test also have admitted illegal drug use. The other two plaintiffs who declined to be tested have denied any illegal drug use.

In response to requests from the media, Aslanian commented on the testing program. In published remarks, Aslanian stated that some employees had refused to take the tests and that others had tested positive. Aslanian also made statements about the severity of the drug problem at the plant. Aslanian did not refer to any employee by name.

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The plaintiffs filed this action in Kalkaska County Circuit Court shortly after their terminations. The complaint contained six counts: (1) breach of employment contract; (2) defamation; (3) invasion of privacy; (4) misrepresentation; (5) negligence; and (6) violation of Michigan Handicappers' Civil Rights Act, Mich.Comp. Laws Ann. § 37.1101 et seq. Eagle-Picher, an Ohio corporation, removed the case to federal district court.

After discovery, the district court granted Eagle-Picher's motion for summary judgment. Baggs v. Eagle-Picher Indus., Inc., 750 F.Supp. 264 (W.D.Mich.1990). The court first held that the plaintiffs were employees at will and had no contractual right to progressive discipline. The court next held that Aslanian's comments to the media were protected by a qualified privilege. Third, the court dismissed the invasion of privacy claim, holding that the plaintiffs lacked an expectation of privacy and that Eagle-Picher had not disclosed any private facts to the public. The court dismissed the misrepresentation count, holding that the plaintiffs' claim involved only future promises, not false statements of fact. Fifth, the court dismissed the negligence count on the ground that Eagle-Picher's duties were contained in the contract. Finally, the court dismissed the Handicappers' Act claim, holding that the plaintiffs failed to allege the nature of their handicap.

This appeal followed. On appeal, the plaintiffs challenge the district court's grant of summary judgment against the breach of contract, defamation, and invasion of privacy claims. They apparently have abandoned the remaining counts.

II.

We review grants of summary judgment de novo. EEOC v. University of Detroit, 904 F.2d 331, 334 (6th Cir.1990). Summary judgment is appropriately granted when the pleadings, affidavits, and other submissions demonstrate "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).

A.

The plaintiffs first argue that there is a genuine issue of material fact as to whether Eagle-Picher breached the plaintiffs' employment contracts. Specifically, the plaintiffs contend that there is an issue of fact as to whether the employee handbook created a contract right to progressive discipline and fair treatment. We disagree.

The plaintiffs concede that the language on their employment applications created at will employment. However, the plaintiffs maintain that the handbook, by expressly providing for fair treatment and a progressive discipline system, altered the employment relationship. The plaintiffs' argument relies heavily on language from the landmark case of Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980). In Toussaint, the Michigan Supreme Court held that an employer's statements, including those contained in employee handbooks, could convert a presumptive at will employment relationship into a contract terminable only for cause. Id., 292 N.W.2d at 891-92.

The contours of the rights established in Toussaint have been heavily litigated, and the Michigan Supreme Court has revisited the issue repeatedly. In Renny v. Port Huron Hospital, 427 Mich. 415, 398 N.W.2d 327 (1986), the...