Newsom v. Textron Aerostructures, a div. of Avco, Inc.

• Decision Date: 20 October 1995
• Citation: 924 S.W.2d 87
• Parties: Charles K. NEWSOM, Plaintiff-Appellant, v. TEXTRON AEROSTRUCTURES, A DIVISION OF AVCO, INC.; and Gary L. Smith, Individually, Defendants-Appellees.
• Court: Tennessee Court of Appeals

Page 87

924 S.W.2d 87

Charles K. NEWSOM, Plaintiff-Appellant, v. TEXTRON AEROSTRUCTURES, A DIVISION OF AVCO, INC.; and Gary L. Smith, Individually, Defendants-Appellees.

Court of Appeals of Tennessee,

Western Section, at Nashville.

Oct. 20, 1995.

Application for Permission to Appeal

Denied by Supreme Court

Feb. 26, 1996.

H. Rowan Leathers, III, Manier, Herold, Hallabaugh & Smith, Nashville, for Appellant.

Robert E. Boston and Stephen W. Grace, Nashville, for Appellees.

CRAWFORD, Presiding Judge.

This appeal involves a suit brought by an employee against his employer asserting that the employer's actions, in connection with the employee's demotion and subsequent termination, violated The Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634, and the Tennessee Human Rights Act (THRA), T.C.A. § 4-21-101 (1991), et seq. The employee also alleges that the employer's actions in connection with the demotion and termination were slanderous and constituted outrageous conduct. Plaintiff employee, Charles K. Newsom, appeals from the order of the trial court granting summary judgment to defendant, Textron Aerostructures, Inc., and Gary Smith, ¹ and the only issue on appeal is whether the trial court erred in so doing. The pertinent facts are as follows.

The plaintiff, Charles K. Newsom, was born February 14, 1933. Defendant Textron Aerostructures is in the business of manufacturing aircraft parts and other large machinery for both private buyers and the defense industry. Newsom was employed by defendant Textron on September 23, 1957, as an at-will employee, and he worked at Textron for thirty-four years until he was discharged on March 27, 1992.

During the course of Newsom's employment at Textron he received regular promotions, satisfactory performance evaluations, work commendations, and pay increases. Newsom eventually obtained a management position and in April of 1988 he was promoted to the position of Senior Compliance Analyst (SCA). As SCA Newsom was responsible for reviewing the "procurement packages" of Textron "buyers" and insuring that Textron's procurement of tools and other parts to be used in contracts with the federal government complied with federal regulations controlling government contracts. Textron created the SCA position in order to ensure that Textron successfully passed government contract "procurement audits" which were performed by agencies of the federal government. ² One of the major audits Textron was required to undergo was a Contractor Procurement System Review (CPSR).

To ensure that Textron would successfully pass its scheduled CPSR in November of 1989, Textron performed a "pre-CPSR" in April of 1989. A "pre-CPSR" is Textron's own internal audit of its buyers procurement packages. ³ The results of the April, 1989 "pre-CPSR" showed deficiencies in seventy percent of the buyer packages, and in Newsom's words the results were "not good." Following the CPSR, Newsom was suspended without pay for a period of one week. Subsequently, on August 10, 1989, Newsom was notified that he was being demoted from SCA into the position of Buyer II. Newsom's successor as Senior Compliance Analyst was Sherry Ritchie, a female under the age of forty.

On August 30, 1989, Newsom was evaluated pursuant to Textron's annual employment evaluation policy, and he was informed at that time that he was demoted because his performance in the position of SCA was unsatisfactory. In the August 30, 1989 performance review, Textron stated that it demoted Newsom, because he did not "meet the position requirements for a Senior Compliance Analyst." The basis asserted by Textron for Newsom's deficient performance was his performance in the pre-CPSR in April, 1989. Newsom contends that he was demoted because of his age.

Newsom appealed his unsatisfactory performance appraisal and demotion pursuant to Textron's internal appeal process. The appeal was heard by a supervisor of the Senior Compliance Analyst position and another manager at Textron. In January of 1990 the Textron managers determined the demotion was proper and fair, and the managers refused to reinstate Newsom to the position of SCA.

On June 21, 1990, Newsom filed an age discrimination charge with the Equal Employment Opportunity Commission (EEOC) complaining of his demotion to Buyer II and other allegedly discriminatory actions on the part of Textron. In the charge, Newsom listed August 10, 1989, as the date on which the most recent discrimination against him had occurred. On September 14, 1990, Newsom amended his charge by inserting the word "continuing" after the August 10, 1989, date in order to signify that the discrimination against him was continuing. On July 18, 1991, the EEOC determined that Newsom's age discrimination claim was without merit. Thereafter, on August 9, 1991, Newsom filed the present action against Textron alleging, inter alia, that his demotion violated his rights under the ADEA.

Following Newsom's demotion and during the pendency of Newsom's age discrimination action, he continued his employment at Textron in the position of Buyer II. Two of Newsom's duties as a Buyer II were procuring materials and supplies from tool vendors through competitive price bidding and ensuring that Textron complied with the defense industry's initiatives regarding fraud, waste, and abuse in government contracts. In August of 1990, Newsom was evaluated by his supervisors as "meeting the standards" of the Buyer II position. In August of 1991, Newsom was again evaluated as "meeting the standards" required of a Buyer II.

In late 1991 and early 1992, Textron decided to open a competitive bidding process to select a company to provide all of Textron's cutting tools. During the bidding process, Textron managers became aware that one company, Tool Group Network, had obtained $600,000 of Textron's business in a short period of time. Dick Kottler, Textron's Director of Materials, allegedly became concerned over Tool Group's rapid acquisition of Textron business, and he initiated an internal audit of Textron's contracts with Tool Group. Textron's legal department, which supervised the internal investigation, was required by the Anti-Kickback Enforcement Act of 1986, 41 U.S.C. §§ 55-58 (1986), to report the existence of the investigation to the federal government. ⁴ Subsequent to Textron's report, Newsom and other Textron employees were interviewed by agents of the federal government regarding Newsom's award of the Tool Group contracts.

During the course of the Textron investigation, an employee of Textron who was reviewing the Tool Group contracts discovered that a number of Textron contracts had been awarded to Tool Group without competition and at higher prices than previous tool contracts, and that some of the Tool Group contract documentation had apparently been altered. The Textron investigation also disclosed instances in which Tool Group had been underbid by a competitor, but Tool Group reduced its bid to slightly under that of a competitor, and was thereafter awarded the contract.

The Textron investigation showed that the two buyers who had been awarding the Tool Group contracts were Martha Martin and Newsom, and both buyers were questioned regarding the contract awards. Following the investigation, Textron allegedly believed that Newsom had been favoring Tool Group during the competitive bidding process, that Newsom had engaged in outside meetings with Tool Group during the bidding competition, and that Newsom had awarded Tool Group some Textron contracts when Tool Group was not the lowest bidder on those contracts. Textron investigators also believed that Newsom had accepted outside entertainment from Tool Group and had entered into a long term contract with Tool Group without his supervisor's approval of the contract. Textron concluded that Newsom had engaged in improper and potentially illegal favoritism toward Tool Group Network, and Textron fired Newsom on March 27, 1992. Textron's stated reason for Newsom's discharge was that he "violated ... company policies and fail[ed] to perform job duties."

Following his employment termination, Newsom amended the complaint in this case on July 21, 1992, alleging that his rights under the THRA were violated, because he was discharged in retaliation for filing his age discrimination suit against Textron in connection with his demotion. The amended complaint also alleges that Textron's actions in connection with Newsom's demotion and termination were slanderous and constituted outrageous conduct. ⁵

A trial court should grant a motion for summary judgment only if the movant demonstrates that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Tenn.R.Civ.P. 56.03; Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn.1993); Dunn v. Hackett, 833 S.W.2d 78, 80 (Tenn.App.1992). The party moving for summary judgment bears the burden of demonstrating that no genuine issue of material fact exists. Byrd, 847 S.W.2d at 210. When a motion for summary judgment is made, the court must consider the motion in the same manner as a motion for directed verdict made at the close of the plaintiff's proof; that is, "the court must take the strongest legitimate view of the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that party, and discard all countervailing evidence." Id. at 210-11. In Byrd, the Tennessee Supreme Court stated:

Once it is shown by the moving party that there is no genuine issue of material fact, the nonmoving party must then demonstrate, by affidavits or discovery materials, that there is a genuine, material fact dispute to warrant a trial. [citations omitted]. In this regard, Rule 56.05 provides that the nonmoving party cannot simply rely upon his pleadings but must set forth specific facts showing that there is a genuine issue of material fact for trial.

Id. at 211 (emphasis in original).

The summary...