Ernst Home Center, Inc. v. United Food and Commercial Workers Intern. Union, AFL-CIO, Local 1001

Citation888 P.2d 1196,77 Wn.App. 33
Decision Date09 January 1995
Docket NumberLOCAL,No. 33420-4-I,AFL-CI,33420-4-I
CourtCourt of Appeals of Washington
PartiesERNST HOME CENTER, INC., a Washington corporation, Appellant, v. UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION,1001; and Webster, Mrak & Blumberg, a Washington general partnership, James Webster, Christine Mrak, Richard Blumberg, Mark Brennan, and John and Jane Does 1-5, Respondents.

John Mele, Ryan, Swanson & Cleveland, Seattle, for appellant.

James Webster, Webster, Mrak & Blumberg, Seattle, John P. Erlick, Janice Sue Wang and Cozen and O'Connor, Seattle, for respondents.

COLEMAN, Judge.

Ernst Home Center, Inc. appeals the trial court's order of summary judgment, dismissing its defamation and Consumer Protection Act (CPA) claims against the United Food and Commercial Workers International Union, AFL-CIO, Local 1001 ("Union"), and the law firm representing the Union, Webster, Mrak and Blumberg ("Webster defendants"). Ernst's complaints arise out of a mailer distributed by the Union and its attorneys to Ernst employees. Ernst contends that the mailer contained false statements that were damaging to its reputation and that the Webster defendants violated the CPA by soliciting potential clients through the mailer. We affirm.

I. FACTS

Since 1986 the Union has been the collective bargaining representative for a substantial number of Ernst employees. The most recent Union contract with Ernst expired October 31, 1992. In October 1992, the Union began negotiating with Ernst over the terms of a new collective bargaining agreement. During the Union's preparation for negotiations, a number of Ernst employees claimed that "off-the-clock work" was occurring. 1 According to Joe Peterson, President of the Union, some managers were telling employees to record the hours for which they were scheduled to work, but not to record additional hours spent on work-related activities like continuing education. 2 As a result of these reports, the Union proposed new contract language in the form of penalties against Ernst for permitting off-the-clock work. Ernst rejected this proposal at the bargaining table, insisting that company policy had always been to prohibit off-the-clock work. 3

During an October 8, 1992, bargaining session, Kathryn Norris, Ernst's Manager of Employee/Labor relations, spoke with employee representatives regarding off-the-clock work. She told them that it was Ernst's policy to pay employees for all time worked and that employees who had worked additional hours for which they had not been paid needed to make a claim. 4 The Union responded by distributing a mailer, on or around October 16, 1992, to Ernst employees. 5 5] The front cover of the mailer stated the following:

                Why has Ernst
                finally agreed to stop
                "off-the-clock" work
                Because the Union
                demanded it at the
                bargaining table
                

Inside, the mailer advised employees that they were entitled to back pay for off-the-clock work and that they could obtain a back pay calculation form either by sending a request to the Ernst Back Pay Task Force or by calling one of two telephone numbers. Peterson stated, by way of affidavit, that the mailer was intended to identify Ernst employees who had worked off the clock and to help those employees calculate how much money Ernst owed them.

On October 29, 1992, Ernst sent a letter to the Union and its attorneys, alleging that the mailer was defamatory and violated the CPA. After learning that neither the Union nor its attorneys would agree to a retraction, Ernst filed a complaint on November 3, 1992, for defamation and a CPA violation. The Union, in turn, filed an unfair labor practices charge with the National Labor Relations Board (NLRB) against Ernst and its attorneys. The NLRB issued a complaint against Ernst and filed a petition with the United States District Court, seeking to enjoin Ernst from litigating its claims.

By letter dated November 17, 1992, Norris responded to a Union request for information. Regarding off-the-clock work, Norris stated:

At various points throughout negotiations we have stated that a member of the Human Resource Services staff, Matt Boswell, interviewed a number of bargaining unit staff members [on] October 15, 1992, in store 217 regarding possible "off-the-clock" work.... Discussion with the staff member included informing him or her of their responsibility to properly account for all time worked on their paycard, including CEU training that may have taken place away from the workplace, and the necessity of each staff member to take all required rest and lunch breaks on a daily basis. No written record was kept of the conversations, nor were any staff member(s) threatened with discipline for failing to previously report such claims. 6

Norris also discussed the issue of CEU hours and stated:

Through discussion with store managers we found that a few staff members had not received compensation for all time worked during Holiday decorating parties, store clean-up and CEUs done during personal time. We are in the process of compensating the ... staff members for all known work time[.]

On April 12, 1993, Ernst served its interrogatories, requesting: (1) the identity of the persons who made the "demand" and "agreement" set forth in the mailer; (2) the identity of the authors and printers of the mailer; (3) the identity of all Ernst employees known by the Union to have worked off the clock, and (4) all documents related to the creation of the mailer. Ernst also noted several depositions that were set to take place shortly after the interrogatories were due.

In May 1993 the parties agreed to stay discovery pending the outcome of the NLRB's petition before the federal district court. Following the NLRB's withdrawal of the petition, Ernst mailed a letter to the Union's attorney on June 17, 1993, setting a response deadline of July 2, 1993. By letter dated July 2, 1993, the Union objected to Ernst's discovery request and refused to provide any discovery. The parties subsequently held a King County Local Rule 37(e) conference. The Union refused to participate in discovery until after a decision had been reached on its motion for summary judgment.

On July 6, 1993, the Union filed a motion for summary judgment, arguing that the court should dismiss Ernst's defamation claim because the statements in the mailer were substantially true. In support of the motion, the Union offered a declaration by Peterson. Regarding the Union's proposed penalties for permitting off-the-clock work, Peterson stated:

Ernst rejected this proposal, insisting that company policy has always been to pay for all time worked. Ernst's representatives then asked us to identify all employees who had an off-the-clock claim so that they could be compensated. I considered Ernst's statements during the negotiations that employees would be paid for off-the-clock work a commitment by Ernst to stop the off-the-clock work in the sense that the employees would receive compensation for such work.

Peterson also discussed a November 19, 1992, negotiating session in which Ernst was asked whether it paid for all time worked. He stated:

Several of the employee members of the negotiating committee stated that they or others in their stores had not received pay for time worked after the end of their scheduled shifts. Andrea Gee, an employee at Ernst's Redmond store, stated that she had called Norris and told her that employees at that store were not receiving pay for all time worked, particularly time spent counting their tills after the end of their shifts. Norris said she was aware of that, that it had occurred a long time ago and she had corrected it. Ms. Norris was asked how long ago it had occurred. She answered: in August, 1992. Other employees then spoke up saying similar things happened at their stores. Ms. Norris said that it was Ernst's policy to pay for all time worked, but she knew that some managers did not always get that message. She then said if employees had problems, they should call her and she would make certain if the time was worked they would get paid for it. She also said that if any employee went to their manager, the manager would pay them for time worked.

In response to the Union's motion for summary judgment, Ernst argued that it was entitled to a continuance pursuant to CR 56(f) in order to conduct the discovery refused by the Union. In the alternative, Ernst argued that summary judgment was inappropriate because there were disputed issues of material fact regarding the defamatory nature of the statement on the mailer and the Webster defendants' CPA liability. In support, Ernst submitted Norris's declaration. She stated that, prior to the mailer's distribution, the Union had never reported off-the-clock work violations or complained that Ernst was permitting off-the-clock work to occur. Norris then discussed the substance of the October bargaining session with the Union, stating:

On or about October 1, 1992, I met with representatives of Local 1001 to discuss the terms of a new contract. At that time, Local 1001 proposed a contract provision imposing a penalty on Ernst if off-the-clock work is permitted by Ernst. At that time, I informed the Local 1001 representatives Ernst did not and does not approve or permit off-the-clock work and that I had instructed all managers not to permit off-the-clock work.

I told the Local 1001 representatives their proposal was unnecessary. I also informed them Ernst had no knowledge off-the-clock work was occurring, and Ernst remained committed to pay employees for all time worked. Ernst did not "agree to stop 'off-the-clock' work" because Ernst had always prohibited off-the-clock work and had no knowledge off-the-clock work was occurring. I cannot agree to stop something that I already do not permit. I informed Local 1001's representatives I could not agree to a penalty for something when I have no indication it is happening.

....

9. I...

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