Lewis v. Equitable Life Assurance Society Of The United States

389 N.W.2d 876 (1986)

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Nature of the Case

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Facts

D hired Ps (Carole Lewis, Mary Smith, Michelle Rafferty, and Suzanne Loizeaux) as dental claim approvers. D assured Ps that if hired, their employment would continue as long as their production remained at a satisfactory level. Ps did not execute written contracts of employment. They were employed for an indefinite time pursuant to oral agreements, and each received a copy of the company's employee handbook. Among other topics, the handbook discussed policies regarding job security, dismissals, and severance pay. D's Pittsburgh office requested assistance and extra claim approvers were sent to Pittsburgh beginning in September. Ps, who had never traveled on company business before, were among two groups of employees sent to assist the Pittsburgh office for 2-week periods. D had written policies concerning travel expenses. An office manager at D was responsible for instructing prospective travelers regarding the company's policies. The office manager delegated the responsibility to his secretary for the first group. A supervisor was given responsibility for advising the second group. Neither the secretary nor the supervisor had performed such duties prior to instructing Ps. D did not give Ps any written instructions, and they did not tell Ps that expense reports would have to be filed. Ps were orally given information on the company's daily allowances for meals and maid tips and they were told to keep receipts for hotel bills and airfare. Each P received a $1,400 travel advance which, having no instruction to the contrary, they spent in full. On return to the office, each P received a personal letter from management commending them on their job performance while in Pittsburgh. Ps were informed that they would have to submit expense reports detailing their daily expenditures while in Pittsburgh. Ps attempted to reconstruct their expenses. Ps were asked to change the reports with respect to maid tips because the initial instructions had been erroneous. P complied. Ps were yet again told to change their reports to reflect lower overall totals. D sought to recoup from each P approximately $200. In late November 1980 Ps received written guidelines for completing the expense reports. The guidelines differed from the instructions given prior to their departures. D again asked Ps to make additional changes in their expense reports. Ps refused and stated that the expenses shown on their original reports had been honestly and reasonably incurred and were submitted based upon the instructions they had received prior to leaving for Pittsburgh. In January 1981, Ps received a letter from the office manager requesting again that they revise their expense reports. The letter set out still another, different set of guidelines to be followed. Three plaintiffs met individually with a manager from the company's Chicago office and were once again asked to change their expense reports to conform to company policies. Ps refused and were put on probation. D got money back from some of the Ps and then fired all of them that same day for gross insubordination for refusing to change their reports. Ps received no severance pay. In looking for new work Ps gave the reasons for their termination. D neither published nor stated to any prospective employer that Ps had been terminated for gross insubordination. D gave only the dates of employment and the final job title of a former employee unless specifically authorized in writing to release additional information. Three of the four found work with two of the three lying on their applications. All Ps testified to suffering emotional and financial hardship as a result of being discharged. Ps sued D for breach of contract and defamation. Ps were awarded compensatory and punitive damages. The court of appeals affirmed. The Minnesota Supreme Court granted certiorari. D argues that for defamation the only publications of the allegedly defamatory statements were made by Ps, the statement in question was true and D had a qualified privileged to make the statement.