Lynn v. Wal-Mart Stores, Inc.

• Court: Arkansas Court of Appeals
• Writing for the Court: Larry D. Vaught
• Citation: Lynn v. Wal-Mart Stores, Inc., 280 S.W.3d 574, 102 Ark. App. 65 (Ark. App. 2008)
• Decision Date: 19 March 2008
• Docket Number: No. CA 07-384.,CA 07-384.
• Parties: James W. LYNN, Appellant, v. WAL-MART STORES, INC., Appellee.

280 S.W.3d 574

102 Ark. App. 65

James W. LYNN, Appellant, v. WAL-MART STORES, INC., Appellee.

No. CA 07-384.

Court of Appeals of Arkansas.

March 19, 2008.

Youtz & Valdez, P.C., by: Shane Youtz; and McHenry, McHenry & Taylor, by: Robert McHenry and Greg Taylor, for appellant.

Friday, Eldredge & Clark, LLP, by: Elizabeth Robben Murray and H. Wayne Young, Jr., Little Rock, AR, for appellee.

LARRY D. VAUGHT, Judge.

James Lynn has appealed from a summary judgment for his former employer appellee Wal-Mart Stores, Inc. On appeal, Lynn argues that he was fired for reporting inhumane workplace conditions in some foreign manufacturing facilities from which Wal-Mart buys goods, violating the public policy of this state, and that his termination breached a written employment contract for a specific term of three years. We find no error in the circuit court's entry of summary judgment to Wal-Mart, and we affirm.

Lynn began working for Wal-Mart in 1993. In January 2002, he signed the following "Global Assignment Letter" in contemplation of his transfer to Costa Rica as a Global Services manager:

This Global Assignment Letter confirms our mutual understanding of the terms and conditions applying to your global assignment with Wal-Mart Stores Inc. or one of its affiliates.

The intent of this letter is to provide a statement of salary and benefits effected by your acceptance of this Global Assignment. Please refer to the Global Assignment Policy Manual for a detailed description of each of these terms as well as other important information related to your assignment. The content of this letter represents your compensation at the beginning of your assignment; the terms of this letter may change throughout the assignment based on salary increases, adjustments to the allowance tables, change of family status, overall policy changes or other individual circumstances as described in the Global Assignment Policy Manual.

....

Date of letter:                 12/20/2001
                Position:                       Global Services Manager
                Home Country:                   US
                Host Country:                   Costa Rica
                International Effective Date:   January 12, 2001
                Type of assignment:             Expatriate
                Anticipated duration of
                  assignment:                   3 years
                Tax origin/relocated from:      Arkansas
                

....

It is understood that this letter is not to be construed as an employment agreement nor a contract for employment and that each of these terms is described in detail in the Wal-Mart Global Assignment Policy Manual.

Lynn moved to Costa Rica in February 2002. By early March, other Wal-Mart employees and his immediate supervisor, Odair Violim, began complaining about his work performance. Lynn was counseled about these problems in mid-March. By April 2, 2002, however, his superiors decided that he should be terminated "right away."

While based in Costa Rica, Lynn accompanied an inspector in mid to late April 2002 as he evaluated working conditions at some manufacturing facilities that did business with Wal-Mart. According to Lynn, he observed, and then reported to Wal-Mart executives, inhumane working conditions at the factories.

Also in April 2002, Wal-Mart opened an investigation of whether Lynn had an inappropriate relationship with a subordinate. On April 21, 2002, Lynn and this woman traveled to Guatemala on business. A "Wal-Mart Loss Prevention Associate," Juan Valverde, also traveled to Guatemala to watch them and checked into the same hotel. Valverde reported that, late on the night of April 24, he saw Lynn enter the woman's room, heard sounds that he believed were indicative of sexual contact, and saw Lynn leave her room with messy hair and with his shirt out of his pants. In his report to Wal-Mart, Valverde described what he observed in detail.

On May 6, Violim separately interviewed Lynn and the woman. She admitted that she and Lynn had an inappropriate relationship, which she described as going "further ... than a friendship" and "a big mistake." Although Lynn at first denied an inappropriate relationship, after he was informed that Wal-Mart had evidence of one, he admitted kissing her. Lynn and the woman then signed written statements acknowledging a romantic relationship. On May 7, 2002, Wal-Mart terminated Lynn for violating the company's fraternization policy, which provided that it was against company policy for a supervisor to become romantically involved with an employee he supervised and that employees who did so would be subject to immediate termination.

Lynn filed his complaint in the Benton County Circuit Court on June 17, 2005, alleging several causes of action that included wrongful discharge and breach of contract. He alleged that his termination for violating the company's fraternization policy was a pretext and that he had actually been fired because he had reported the factory-certification program's failure to Wal-Mart. He asserted that he had reported inhumane working conditions in the factories and that Wal-Mart employees were being pressured by Wal-Mart executives to alter factory-certification results. Lynn alleged that he had discovered that Wal-Mart's factory-certification process was designed only to create the impression that Wal-Mart bought goods produced under humane working conditions which, in fact, were terrible and which violated Wal-Mart's internal rules and regulations.

Lynn contended that, in October 2003, Wal-Mart made the following misrepresentation in its 2002 annual report on supplier standards:

Wal-Mart strives to do business only with factories run legally and ethically. We continue to commit extensive resources to making the Wal-Mart system one of the very best. We require suppliers to ensure that every factory conforms to local workplace laws and there is no illegal child or forced labor. Wal-Mart also works with several different outside monitoring firms to randomly inspect thousands of these factories each year to ensure compliance. In fact, we conduct more than 300 factory inspections each week as part of our commitment. In short, we have no desire to do business with any factory being run illegally or unethically, and we feel that our program is helping to improve working conditions and create economic opportunity for workers around the world.

Lynn stated that he was terminated in violation of Arkansas's public policy against falsifying business records and protecting the consumer from the deceptive trade practice of making a false representation concerning the source or certification of goods. He also alleged that his Global Assignment Letter was an enforceable contract, which his termination breached.

Wal-Mart moved for summary judgment on the grounds that Lynn's allegations did not constitute a violation of Arkansas's public policy and that he did not have an enforceable employment contract. Along with the motion, Wal-Mart attached excerpts from the depositions of Lynn and several Wal-Mart executives, an executive's affidavit, and the statements of Lynn, his subordinate, and Valverde. In his deposition, Lynn admitted that he had violated Wal-Mart's fraternization policy. As exhibits to his response, Lynn filed copies of some factory-monitoring reports; emails among Wal-Mart executives prior to his termination; excerpts from several depositions; and Wal-Mart's 2002 annual report on supplier standards.

The circuit court entered summary judgment for Wal-Mart, holding that, as a matter of law, even if Lynn's allegations were true, he was not terminated in violation of the public policy of Arkansas:

6. Lynn alleges his termination violated the public policy articulated in the Arkansas Deceptive Trade Practices Act. Ark.Code Ann. § 4-88-107. The Arkansas Deceptive Trade Practices Act, however, is not implicated by Lynn's allegations. There is no evidence of a misrepresentation of the quality of Wal-Mart's goods or a misrepresentation in the advertisement of the goods Wal-Mart sells. There is no evidence of any damage or injury to a consumer who has purchased Wal-Mart goods. The Annual Report on Wal-Mart's Factory Certification...