California Labor &
Employment Law Blog

Jan. 25 2013

Employer Wins Summary Judgment on Discrimination and Defamation Claims

Topics: Court Decisions, Discrimination, Harassment & Retaliation

Yesterday a California court affirmed a summary judgment win for the employer on an employee's claims of gender discrimination, retaliation, and defamation.  The case, McGrory v. Applied Signal Technology, Inc., contains a lot of favorable language for employers litigating these types of claims in California courts, particularly in the context of seeking summary judgment on the claims.

McGrory was a male department manager who issued performance discipline to a subordinate female employee who was gay.  The female employee refused to accept the discipline and instead lodged a complaint with HR that the discipline was motivated by McGrory's discriminatory bias against lesbians.  The complaint prompted the company to retain an outside investigator to conduct an investigation.  The investigator later issued a report finding that McGrory did not discriminate against the female employee and that the female employee did have performance issues that needed to be addressed.  However, the investigation revealed that McGrory had engaged in inappropriate conduct in the workplace, including regularly making inappropriate sexual and racial/ethnic remarks in violation of the employer's policies.  The investigator also concluded that McGrory (and one other male employee who was interviewed during the investigation) was not truthful in responding to all of her questions during the interview and was not fully cooperative in the interview process.  Based on the investigation report, the employer terminated McGrory's employment.

McGrory sued for wrongful termination in violation of public policy, arguing that his termination was because he was male and that it was also against public policy for an employee to be terminated based on his participation in an investigation.  Finally, the employee alleged that he was defamed as a result of HR telling one or more employees that he was terminated for not cooperating with the investigation (McGrory disputed he was uncooperative and claimed this conclusion was false).

The trial court granted the employer's motion for summary judgment, finding that McGrory's claims had no legal merit.  McGrory appealed, but the appellate court agreed with the trial court's decision.

First, the court held that there was no evidence to support McGrory's claim that his termination was somehow motivated by the fact that he was a man.  There was no direct evidence of any gender bias on the part of the decisionmakers, and the fact that McGrory0 disagreed with the conclusions of the investigation report was not sufficient to establish a discriminatory motive.  The court reiterated the principle that discrimination cannot be proven simply by establishing that the employer's actions were unwise, unsound, or even incorrect.  The actions must be more than wrong; there must also be evidence that the actions were motivated by discriminatory intent.  McGrory had no such evidence.

Second, the court rejected McGrory's claim that his participation in the investigation was "protected activity" and that he should not have been terminated based on that particpation.  The court rationally explained that while it is true that California's anti-discrimination law, FEHA, protects participation in investigatory interviews, it does not protect dishonesty during an investigation or failure to fully cooperate in an investigation.  McGrory's termination was based in part on the employer's belief that McGrory was not truthful during the investigation and refused to provide certain information requested by the investigator.  This is not protected activity.

Finally, the court rejected McGrory's defamation claim.  In this regard, McGrory claimed that after he was terminated, HR told a co-worker that McGrory was terminated for not cooperating with the investigation.  McGrory claimed this was a false statement (because he cooperated) and that it defamed him.  The employer argued that it could not be liable for defamation because its statements were protected by the "common interest privilege."  The common interest privilege protects statements made in the employment context by one interested party to another, as long as those statements are not made "maliciously."  Malice generally means that the allegedly defamatory statement must have been motivated by hatred or ill will or with no reasonable grounds for believing the statement to be true. McGrory argued that there was no reasonable ground for the employer to believe that he failed to cooperate with the investigation.  The court held that this argument was not supported by the evidence and that the investigator (and hence, the employer who relied on the investigator's report) had grounds for believing McGrory was less than cooperative. The court explained that it did not really matter whether this conclusion was correct or fair. Thus, McGrory's defamation claim could not succeed.

The full text of this decision is available here.

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About the Editor

Robin Largent represents employers, including major food and retail companies, in all types of employment litigation: wrongful termination, retaliation, breach of contract, wage and hour (California Labor Code) and unfair competition. She also regularly counsels and advises California employers on issues of compliance with California and federal employment laws.
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