Wal-Mart Stores, Inc. v. Smitherman

• Decision Date: 17 September 1999
• Citation: 743 So.2d 442
• Parties: WAL-MART STORES, INC. v. Gail SMITHERMAN.
• Court: Alabama Supreme Court

743 So.2d 442

WAL-MART STORES, INC. v. Gail SMITHERMAN.

1971085.

Supreme Court of Alabama.

September 17, 1999.

Glenn E. Ireland and Joseph H. Driver of Carr, Allison, Pugh, Oliver & Sisson, P.C., Birmingham, for appellant.

Howard B. Warren and Mary K. Simmons of Turnbach & Warren, P.C., Gadsden, for appellee.

SEE, Justice.

Wal-Mart Stores, Inc. ("Wal-Mart"), is the defendant in an action pending in the Etowah Circuit Court. Wal-Mart moved for a summary judgment on the plaintiff Gail Smitherman's retaliatory-discharge claim. The circuit court denied the motion. We have granted Wal-Mart permission, pursuant to Rule 5, Ala. R.App. P., to appeal from the interlocutory order denying Wal-Mart's motion for a summary judgment.

Wal-Mart argues that the trial court erred in denying its motion for a summary judgment because, it asserts, Smitherman's retaliatory-discharge claim is barred by the doctrine of collateral estoppel. We hold that Smitherman is collaterally estopped from relitigating the reason for her discharge, and, thus, is precluded from establishing a prima facie case of retaliatory discharge. Therefore, we reverse and remand.

I.

In November 1993, Smitherman was employed by Wal-Mart as an over-the-counter manager in the pharmacy department of one of its stores. As a manager, Smitherman was responsible for, among other things, supervising sales clerks and cashiers in the pharmacy department. Smitherman alleges that during the course of her employment she developed carpal tunnel syndrome in both of her hands. In December 1995, she had surgery on her left hand, and in June 1996, she had surgery on her right hand. In August 1996, Smitherman returned to work.

Smitherman alleges that on September 30, 1996, she injured her right shoulder. She says that the next day she notified Wal-Mart of her injury. On October 4, 1996, Wal-Mart terminated Smitherman's employment. Wal-Mart stated that it was terminating Smitherman's employment because, it said, she had made a profane and derogatory remark about the district manager of Wal-Mart's pharmacy departments. Wal-Mart said she had made the statement in the employee break room and in the presence of two other pharmacy employees who were under her supervision. Under Wal-Mart's employment policy, Smitherman's alleged action constituted "gross misconduct" and was grounds for immediate termination.

Smitherman does not dispute that on October 3, 1996, while in the break room and in the presence of two subordinate pharmacy employees, she said the words "son of a bitch." Wal-Mart contends that Smitherman directed the remark at the pharmacy department's district manager. Smitherman, on the other hand, testified that the statement was directed at no one, but rather was a general comment on a meeting of over-the-counter department managers that had been called by the district manager of the pharmacy departments and that Smitherman had attended.

Following her termination, Smitherman filed a claim for unemployment-compensation benefits. On October 24, 1996, the examiner determined that Smitherman was partially disqualified from receiving unemployment-compensation benefits, under Ala.Code 1975, § 25-4-78(3)c. That section provides for reduced benefits if the employee "was discharged from his most recent bona fide work for misconduct connected with his work." The examiner determined Smitherman was disqualified because she was "discharged from [her] most recent bona fide work with Wal-Mart Stores, Inc.[,] for using profanity and/or abusive language on the job," and that her action had "constitute[d] misconduct committed in connection with [her] work." Smitherman appealed the examiner's determination to the appeals tribunal, as provided by Ala.Code 1975, §§ 25-4-91 and 25-4-92. Following a hearing, the appeals referee, on January 8, 1997, affirmed the decision of the examiner. The appeals referee concluded:

"The evidence indicates [Smitherman] was discharged for making a derogatory and profane remark about a superior. Her actions constitute misconduct committed in connection with her work. The evidence further indicates [Smitherman] had not received a prior warning for a similar type of incident. Therefore, [Smitherman] is properly subject to a disqualification but under the less severe provisions of Section 25-4-78(3)(c)."

Smitherman then applied to the board of appeals for permission to appeal the appeals referee's decision. See Ala.Code 1975, §§ 25-4-92(c) and 25-4-94. The board denied Smitherman's application. Because her application was denied, she had the right to appeal the appeals referee's decision to the appropriate circuit court for a trial de novo. See Ala.Code 1975, § 25-4-94(b). However, Smitherman elected not to file such an appeal. As a result, the decision of the appeals referee finding Smitherman partially disqualified from receiving unemployment-compensation benefits became final.

On October 18, 1996, before any ruling on her unemployment-compensation claim had become final, Smitherman filed this action against Wal-Mart, seeking to recover workers' compensation benefits and seeking damages for a retaliatory discharge, under Ala.Code 1975, § 25-5-11.1. The trial court subsequently severed the workers' compensation claim from the retaliatory-discharge claim.¹ Thereafter, Wal-Mart moved for a summary judgment on Smitherman's retaliatory-discharge claim, on the ground that the claim was barred by the doctrine of collateral estoppel, given the appeals referee's decision that Smitherman had been discharged for making a derogatory and profane remark about a superior. The trial court denied Wal-Mart's motion. In its order denying Wal-Mart's motion, the trial judge stated that Wal-Mart's motion "involve[d] a controlling question of law as to which there is substantial ground for difference of opinion, that an immediate appeal from [that order] ... would materially advance the ultimate termination of the litigation, and that such an appeal would avoid protracted and expensive litigation." See Rule 5, Ala. R.App. P. Wal-Mart petitioned for permission to appeal from the trial court's interlocutory order denying the summary-judgment motion, and we granted Wal-Mart's petition. See id.

II.

This Court reviews de novo a trial court's denial of a summary judgment. See Young v. La Quinta Inns, Inc., 682 So.2d 402, 403 (Ala.1996) (citing Hightower & Co. v. United States Fid. & Guar. Co., 527 So.2d 698 (Ala.1988)). Where, as in this case, the defendant moves for a summary judgment based on an affirmative defense, this Court applies the following standard of review:

"When there is no genuine issue of material fact as to any element of an affirmative defense, ... and it is shown that the defendant is entitled to a judgment as a matter of law, summary judgment is proper. If there is a genuine issue of material fact as to any element of the affirmative defense, summary judgment is inappropriate. Rule 56(c), Ala. R. Civ. P. In determining whether there is a genuine issue of material fact as to each element of an affirmative defense, this Court must review the record in a light most favorable to the plaintiff (the nonmoving party) and must resolve all reasonable doubts against the defendant (the movant)."

Bechtel v. Crown Central Petroleum Corp., 495 So.2d 1052, 1053 (Ala.1986).

III.

In order for the doctrine of collateral estoppel to apply to an issue raised in an administrative proceeding, the following elements must be present:

"`"(1) there is identity of the parties or their privies; (2) there is identity of issues; (3) the parties had an adequate opportunity to litigate the issues in the administrative proceeding; (4) the issues to be estopped were actually litigated and determined in the administrative proceeding; and (5) the findings on the issues to be estopped were necessary to the administrative decision."'"

Ex parte Smith, 683 So.2d 431, 433 (Ala. 1996) (quoting Ex parte Shelby Med. Ctr., Inc., 564 So.2d 63, 68 (Ala.1990) (quoting Pantex Towing Corp. v. Glidewell, 763 F.2d 1241, 1245 (11th Cir.1985))). Wal-Mart asserts that all of the elements of collateral estoppel have been satisfied as to the issue of why Smitherman was discharged, and, thus, that Smitherman is barred from relitigating that issue in this retaliatory-discharge action. However, Smitherman asserts that only the first element—identity of the parties—has been satisfied as to the administrative proceeding, and, thus, that the doctrine of collateral estoppel does not apply to her retaliatory-discharge action. We must determine whether, under the particular facts of this case, the other four elements are satisfied.

A. Whether There is an Identity of Issues

Wal-Mart argues that Smitherman's claim for unemployment-compensation benefits and her retaliatory-discharge claim share one central issue: the reason for her termination. Under Alabama's Unemployment Compensation Act, a claimant has the burden of proving that he or she is eligible to receive benefits under Ala.Code 1975, § 25-4-77, and that he or she is not disqualified from receiving benefits by § 25-4-78. See Davenport v. State Dep't of Indus. Relations, 692 So.2d 851, 852 (Ala.Civ.App.1997). "`The claimant assumes the risk of nonpersuasion.'" State Dep't of Indus. Relations v. Downey, 380 So.2d 906, 908 (Ala.Civ.App.1980) (quoting Department of Indus. Relations v. Tomlinson, 251 Ala. 144, 145, 36 So.2d 496, 497 (1948)). To be eligible under § 25-4-77(a), a claimant must (1) file a claim for each week's benefits; (2) register for work at, and thereafter continue to report at, the state employment office; and (3) be able to work and be available for work. Under § 25-4-78(3)c., a claimant is partially disqualified from receiving unemployment-compensation benefits if he or she was discharged for misconduct committed in connection with work.

In this case, Wal-Mart maintains that its reason for discharging Smitherman was misconduct connected with...