Gray v. Allison Division, General Motors Corp.

• Decision Date: 14 April 1977
• Citation: 52 Ohio App.2d 348,370 N.E.2d 747,6 O.O.3d 396
• Parties: , 6 O.O.3d 396 GRAY, Appellee, v. ALLISON DIVISION, GENERAL MOTORS CORPORATION, Appellant. *
• Court: Ohio Court of Appeals

Page 348

52 Ohio App.2d 348

370 N.E.2d 747, 6 O.O.3d 396

GRAY, Appellee, v. ALLISON DIVISION, GENERAL MOTORS CORPORATION, Appellant. ^*

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

April 14, 1977.

Syllabus by the Court

1. In an action for defamation, communications made in good faith between an employer and an employee or between two employees concerning the conduct of a third or former employee concerning a matter of common interest are within the doctrine of qualified privilege.

2. Statements protected by the doctrine of qualified privilege will impose liability only if it is established either that the defamation was published to someone not within the scope of the privilege, or that the publication was made with actual malice.

3. Punitive damages may not be recovered against a corporation for the malicious acts of its agents in the absence of evidence that the corporation authorized, participated in, consented to, acquiesced in or ratified the malicious or outrageous conduct or that the corporation was negligent in the selection of its employees.

4. The discretion of the jury to award punitive damages is not arbitrary and unlimited.

5. Awards of punitive damages must not be so disproportionate to actual damages sustained as to be excessive or result from passion and prejudice rather than reason on the part of the jury and must bear some reasonable relation or proportion to actual damages.

Davis & Young, Martin J. Murphy and Sharratt & Willmann, Cleveland, for appellee.

Weston, Hurd, Fallon, Paisley & Howley and Jerome S. Kalur, Cleveland, for appellant.

JACKSON, Chief Judge.

This action arises from the circumstances surrounding the termination of employment of the appellee, Jerome R. Gray, by the appellant, General Motors Corporation. In 1970, the appellee was employed as a Detroit Tracer Lathe operator by the Allison Division of General Motors. This division was engaged in the manufacture of 81 millimeter mortar shells under contract for the United States Government.

Detroit Tracer Lathes were used in the first phase of production. The raw shell casings were ground down to roughly the proper outside diameter by the Detroit Tracer Lathe operator. The semi-machine shells were then placed on a conveyor which transported them to the next station where the inside diameter was bored out.

Prior to beginning work on the morning of January 16, 1970, the appellee was notified that he would be placed on layoff as part of a general layoff. During that day the appellee's foreman, Joseph Miller, observed raw shell casings moving down the conveyor and notified Donald Drake, the shop's general foreman. Drake subsequently observed the appellee placing raw shell casings on the conveyor and ordered him suspended. The appellee admitted that he placed the raw shell casings on the line. Evidence was submitted by both parties to the action that raw shell casings had appeared on the conveyor on many occasions, but it was disputed whether and to what extent the presence of the raw casings caused the disruption of production.

After appellee's suspension he was taken to the labor relations office and questioned about prior line breakdowns. On January 21, 1970, the appellee was discharged for a violation of Shop Rule 33, which states:

"Committing any of the following violations will be sufficient grounds for disciplinary action ranging from reprimand to immediate discharge, depending upon the seriousness of the offense in the judgment of management. * * *

"33. Sabotage * * * ."

The appellee brought this action in the Court of Common Pleas of Cuyahoga County for libel and slander, alleging that he was "maliciously and falsely accused of committing sabotage while working on a job for the United States Government." The case was tried to a jury, which returned a verdict in favor of the appellee, awarding $100 in compensatory damages and $40,000 in punitive damages. It is from that verdict that this appeal is taken. Appellant assigns four errors:

"1. The trial court erred in failing to direct a verdict for defendant.

"A. The plaintiff failed to prove by any substantial evidence that there had been a publication of the alleged libel and/or slander.

"B. Plaintiff failed to present evidence of actual malice governing the alleged act of defamation.

"2. The trial court erred by charging the jury that it could award punitive or exemplary damages.

"3. The jury verdict involving the issue of truth as a defense is contrary to the weight of the evidence.

"4. Allowance of punitive damages in a defamation action, without proof of knowledge of falsity or reckless disregard for truth, violates the First Amendment to the United States Constitution."

By his first assignment of error the appellant maintains that the appellee failed to establish a prima facie case of libel and/or slander and therefore the court should have directed a verdict in favor of the appellant. We do not agree.

It is clear beyond question that not every act of defamation is actionable. The concept of privilege holds that conduct which involves a specific interest of social importance merits protection and should be immune from liability. An absolute privilege is limited to very few situations, where there is a policy of complete freedom of expression regardless of motive. A qualified privilege has been applied to situations of intermediate importance with immunity conditioned upon publication in a reasonable manner and for a proper purpose. Specifically, a qualified privilege has been applied to statements concerning a matter of common interest to the publisher and recipient which is furthered by the communication.

It is well established in Ohio that communications between an employer and an employee or between two employees concerning the conduct of a third or former employee made in good faith concerning a matter of common interest are within the doctrine of qualified privilege. McKenna v. Mansfield Leland Hotel Co. (1936), 55 Ohio App. 163, 9 N.E.2d 166; DeAngelo v. W. T. Grant Co. (1952), Ohio App., 111 N.E.2d 773, 64 Ohio Law Abs. 366.

While protected by a qualified privilege, defamatory statements will impose liability only be establishing either that the defamation was published to someone not within the scope of the privilege, or if the defamation was only published to individuals within the scope of the privilege, that the act was done with actual malice.

First, as to the question of publication, we find no evidence in the record of a publication of the alleged defamation to individuals not within the scope of the qualified privilege. The trial judge properly determined as a matter of law that statements made in the course of the grievance procedure were qualifiedly privileged. By virtue of appellee's union membership and his voluntary participation in the grievance procedure, qualified privilege is properly invoked. See Joftes v. Kaufman (D.C.1971), 324 F.Supp. 660. If these communications were not privileged that is, if representatives of employers and employees were subject to an action for damages as a result of statements made as to the pertinent facts of a controversy made in negotiations or collective bargaining sessions the likelihood of achieving peaceful resolutions or settlements would be extremely remote. While some evidence was presented that tended to demonstrate that individuals outside the privilege had discovered the alleged defamation, there was absolutely no evidence from which it could be concluded that General Motors was responsible for the publication. Moreover, the appellee testified that he told his fellow employees himself that he was being charged with "sabotage." With the record in this posture, the mere fact that individuals outside the scope of the privilege discovered the information is insufficient in and of itself to permit the inference that General Motors was responsible.

Second, as to the question of whether or not the evidence was such that reasonable minds could differ as to the presence of actual malice, we find that there was sufficient evidence adduced; consequently, the question was properly presented to the jury.

A review of the record reveals that it was undisputed that the custom of the appellant was to give verbal warnings for initial infractions of a shop rule and not to impose a suspension immediately. The record also reveals a considerable dispute as to the seriousness of the offense in question and whether or not the presence of raw shell casings would cause any disruption of production. The shop rules specify that disciplinary action will vary from reprimand to immediate discharge depending on the seriousness of the offense in the judgment of management.

Paul Papes, a fellow employee of the appellee, testified that raw shell casings did not cause the line to break down, but they were simply returned to the beginning of the line. Raymond George Wiggins, the union shop committeeman at Allison, testified that after the dismissal of the appellee he ran a test placing raw casings on the line and no problems developed. On the other hand, Donald Drake testified that not every raw casing will shut down the line. He stated that there was a great deal of variation in the size, shape and weight of raw casings, and that certain raw casings would cause the conveyor to snap because of their greater size and weight, as the conveyor was only designed to carry machined casings. He further stated that a breakdown had previously occurred due to the presence of raw casings on the conveyor.

John Penniman, the plant personnel manager at Allison, testified that even though no breakdown occurred, if enough raw casings were placed on the line there would be insufficient room for finished stock. Consequently, someone would have to pull the raw casings off the line and either leave them next to the conveyor or return them to the Detroit Tracer Lathe operator.

At trial the appellee, Mr. Gray,...