Ted Stiles v. Dave Molnaa

FILED
MAY 1,2014
In the Office of the Clerk of Court
W A State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE

TED STILES, a married man, ) No. 31306-9-111
)
Appellant, )
)
v. )
)
DAVB MOLNAA, a married man; ) UNPUBLISHED OPINION
HANFORD ATOMIC METAL TRADES )
COUNCIL, a labor organization; )
ROBERT HAWKS, a married man; and )
TEAMSTERS LOCAL UNION NO. 839 )
BUILDING ASSOCIATION, a labor )
organization, )
)
Respondents. )

LAWRENCE-BERREY, J. Theodore Stiles sought a position with Washington

River Protection Solutions (WRPS). WRPS contacted one of Mr. Stiles's former

employers, Robert Hawks of Teamsters Loca1839, and Dave Molnaa, who is president of

the union's umbrella organization. Both gentlemen provided unfavorable reviews, which

caused WRPS to rescind its tentative offer of employment. Mr. Stiles thereafter sued Mr.

Molnaa, Mr. Hawks, and their employing organizations for defamation and tortious

interference with a business relationship. The defendants moved for summary judgment
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Stiles v. Molnaa

on both causes of action, and the trial court granted the motion. Mr. Stiles raises only the

defamation claim on appeal. The defendants assert three bases for affirming the trial

court: (1) that the National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169, preempts

plaintiffs cause of action; (2) that a blanket release exonerates them from liability; and

(3) that RCW 4.24.730, which provides qualified immunity to a former employer

responding to a job reference, insulates them from liability. We affirm only upon the

NLRA preemption argument, and do not reach the other two arguments.

FACTS

The people and employers at issue in this case are primarily Hanford contractors or

unions representing employees ofthose Hanford contractors. Mr. Stiles started at

Hanford as a truck driver for Battelle where he was also his union's shop steward. From

there, he moved onto an internal union position with Teamsters Local Union No. 839

Building Association. He worked for Local 839 from 1998 to 2002, representing union

workers in contract negotiations and in grievance hearings.

In 2002, Mr. Stiles left Local 839 to take a position on the opposite side of the

bargaining table, representing Sysco in their labor dealings. After a few years, Mr. Stiles

moved on to employer-side labor relations at Conoco Phillips.

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Then in 2011, Mr. Stiles learned of an opening at WRPS for an industrial relations

manager who would represent WRPS in union contract negotiations and grievance

adjudications. Mr. Stiles applied for the position. After interviewing Mr. Stiles, WRPS

sent Mr. Stiles a letter confirming a contingent offer of employment, including a

$140,000 annual salary, bonus, and benefits.

Mr. Stiles also agreed in his employment application to permit WRPS to conduct a

background investigation and to hold harmless anyone who provided information during

this investigation:

I hereby voluntarily give the company the right to conduct a background
investigation and agree to cooperate in such investigation, and release from
aU liability or responsibility all persons, companies or organizations
supplying such information.

Clerk's Papers (CP) at 133. In the course of its investigation into Mr. Stiles's

background, Dominic Sansotta of WRPS spoke with Robert Hawks and Dave Molnaa.

This was a logical decision considering Mr. Stiles's history with these two men, but also

because Mr. Stiles would have to sit on the opposite side of the bargaining table from

these two men if hired.

Mr. Hawks is the secretary-treasurer of Local 839, and was also Mr. Stiles's boss

throughout his four years at Local 839. During his deposition, Mr. Hawks testified that

he told Mr. Sansotta that he was "going to have a real trust issue with Ted ifhe's

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employed at WRPS." CP at 80. Mr. Sansotta inquired further, but Mr. Hawks refused to

elaborate, telling Mr. Sansotta that it was confidential and that he did not feel comfortable

getting into specifics.

In his deposition, Mr. Hawks elaborated on the specifics that he refused to disclose

to Mr. Sansotta. Mr. Hawks explained that Mr. Stiles was a womanizer, had an incident

just after being hired in 1998 where he got drunk at a semi-annual union dinner and hit on

Mr. Hawks's sister, and also used to tell stories about how he would cheat on his wife

whenever he was out of town on union business. Mr. Hawks also relayed an incident

where Mr. Stiles racked up a large bill at a Kinko's doing copies for an out-of-state

grievance hearing with UPS when he should have done those copies at the union office

prior to leaving. Mr. Hawks, however. could not remember the date of this incident. He

also testified that Mr. Stiles sought to have Mr. Hawks's executive assistant fired when

she confronted him about the Kinko's charges. Mr. Hawks next testified that he

disciplined Mr. Stiles a couple times for doing outside work on union time. Mr. Hawks

again could not remember the dates of any of these incidents, but noted that Mr. Stiles

took the discipline/criticism appropriately. Finally, Mr. Hawks testified to an event after

Mr. Stiles left Local 839, when he sought a favor from Mr. Stiles to get Local 839 to

negotiate with Sysco, but Mr. Stiles refused to help. TestifYing in summation, Mr. Hawks

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said that his opinion was based on the fact that he could not trust a person who cheats on

his wife and does not use union money efficiently.

Mr. Sansotta then spoke to Mr. Molnaa. Mr. Molnaa was primarily a truck driver

at Hanford and has known Mr. Stiles since the latter was a truck driver for Battelle. Mr.

Molnaa is currently the president of the Hanford Atomic Metal Trades Council

(HAMTC). HAMTC is an umbrella organization of 14 unions, including Local 839, and

represents over 3,000 Hanford employees who are spread across 9 separate employers.

Because of this union work, Mr. Molnaa has also known his codefendant, Mr. Hawks, for

over 20 years, and has worked closely with him on the HAMTC executive board.

Mr. Molnaa told Mr. Sansotta that he would rather not deal with Mr. Stiles and

would prefer someone else from WRPS to meet with him if Mr. Stiles was hired. Mr.

Sansotta inquired further and Mr. Molnaa told him, "I couldn't trust him, based on those

events that happened in the past." CP at 103. Mr. Sansotta inquired further, and Mr.

Molnaa relayed two incidents from his past with Mr. Stiles.

The first incident occurred at a semi-annual union meeting where Mr. Stiles told

Mr. Molnaa that he wanted to move up in the union organization and "didn't care who he

had to step on to get there." CP at 93. The second incident occurred at another semi­

annual union dinner where Mr. Molnaa said that Mr. Stiles got drunk and started hitting

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on and kissing other women in front of his wife, who then left the dinner in an angry

hurry.

Mr. Molnaa also testified regarding two other incidents that caused him to not trust

Mr. Stiles, but about which he did not tell Mr. Sansotta. The first happened at another

semi-annual union meeting/golf tournament where Mr. Molnaa felt belittled when Mr.

Stiles introduced him to John Rabine, a high level union executive, as "just a steward at

Hanford." CP at 98. The second incident happened at yet another semi-annual

meeting/dinner where Mr. Stiles invited nonunion people to a gathering intended only for

union people and encouraged them to order expensive items. Mr. Molnaa testified

however that the union's executive board did not discipline Mr. Stiles for the expenses

and affirmatively ratified the expenses at a later meeting. Mr. Molnaa also testified that

he could not remember when any of these incidents occurred.

After hearing from Mr. Hawks and Mr. Molnaa, WRPS formally rescinded its

contingent offer of employment.

Mr. Stiles denied each and every one of these incidents in his deposition. He

admitted that he had some friction with Mr. Hawks's assistant, but denied ever seeking

her termination. He denied that he ever had excessive charges at Kinko's and denied

anyone ever confronting him about such charges. He admitted that he had a trophy

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Stiles v. Molnaa

business for a while, but denied ever working on that on union time. He also denied

being part of a T-shirt business or writing a novel, which also included denials of working

on both during union time. He further denied ever being disciplined or talked to for

working on nonunion activities during union time.

He testified that he almost never saw Mr. Molnaa, even at the semi-annual

functions, because they socialized with different crowds. He testified that the "stepping

on" conversation never occurred. He testified that no one ever mentioned him charging

excessive meals to the union. He denied being a womanizer. Finally, he testified that he

left Local 839 on good terms and never had any strife with Mr. Hawks or Mr. Molnaa.

In a later declaration, Mr. Stiles made a blanket denial of all allegations made by

Mr. Hawks and Mr. Molnaa. He stated that his Kinko's charges were always expressly

approved by Mr. Hawks and that when he worked for the union they did not prepare their

copies in-house because they did not have the facilities to do that. He again denied

working on nonunion activities on union time. He denied cheating on his wife, denied

picking up women while away on business, and denied bragging about such things. He

denied hitting on Mr. Hawks's sister and denied hitting on other women at union

functions in front of his wife. He denied belittling Mr. Molnaa to Mr. Rabine, and denied

having ever met or known Mr. Rabine. Finally, he denied running up excessive bills at

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union dinners and denied being disciplined for such things.

PROCEDURAL HISTORY

On May 25,2011, Mr. Stiles brought a complaint against Mr. Molnaa, Mr. Hawks,

and their respective organizations. The complaint alleged defamation and tortious

interference with a business relationship against both defendants, and alleged vicarious

liability against their employing organizations. Mr. Stiles alleged both economic and

noneconomic damages.

The defendants brought a motion for summary judgment on October 12,2012.

The defendants sought summary judgment on several grounds. First, they argued that Mr.

Stiles's claims were preempted by the NLRA because Mr. Stiles could not meet the

elements of intentional defamation (defamation + actual malice), an exception to

preemption. Next, the defendants argued that the blanket release that Mr. Stiles signed

applies to his intentional tort claims. The defendants also argued for immunity under

RCW 4.24.730-a statute enacted in 2005, which protects current and former employers

who provide job-related references.

Mr. Stiles responded to each of the arguments raised in the defendants' motion.

The defendants then filed a reply. Mr. Stiles then filed a motion to strike portions of the

reply, and argued that those portions raised new arguments. The defendants offered to

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continue the summary judgment motion to allow Mr. Stiles time to respond. He refused

the offer.

On November 16,2012, the superior court heard argument on the summary

judgment motion. The court orally denied Mr. Stiles's motion to strike. The court then

signed the order granting the defendants' motion for summary judgment on each of the

grounds they argued. Mr. Stiles thereafter appealed to this court.

ANALYSIS

I. Plaintiff's Motion to Strike

New issues in support of summary judgment cannot be raised in reply materials

unless accompanied by a motion and memorandum in support of the motion. R.D.

Merrill Co. v. Pollution Control Hearings Ed., 137 Wn.2d 118, 147,969 P.2d 458 (1999).

An aggrieved party may move to strike the offending pleading or offending portions

thereof. A court's decision on a motion to strike is reviewed for an abuse of discretion.

King County Fire Prot. Dist. No. 16 v. Hous. Auth., 123 Wn.2d 819,826,872 P.2d 516

(1994).

Here, Mr. Stiles objected to the reply discussion of "actual malice" and "proof of

damages." However, these issues were fairly raised in the defendants' opening

memorandum in support of summary judgment in its discussion ofNLRA preemption.

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The defendants laid out the heightened elements that needed to be met to avoid NLRA

preemption, the case law requiring those elements, and alleged that Mr. Stiles could not

meet those elements. Moreover, the defendants offered to continue the summary

judgment hearing to allow Mr. Stiles greater time to respond, and Mr. Stiles refused the

offer. Accordingly, the trial court did not abuse its discretion by denying the motion to

strike.

II. Summary Judgment Standards

"When reviewing an order for summary judgment, the appellate court engages in

the same inquiry as the trial court." Mountain Park Homeowners Ass 'n v. Tydings, 125

Wn.2d 337,341,883 P.2d 1383 (1994). "This court will affirm summary judgment ifno

genuine issue of any material fact exists and the moving party is entitled to judgment as a

matter of law." Id. "All facts and reasonable inferences are considered in the light most

favorable to the nonmoving party, and all questions of law are reviewed de novo." Id.

(citations omitted).

III. NLRA Preemption

"This court reviews questions of law, including preemption, de novo." McCurry v.

Chevy Chase Bank, FSB, 169 Wn.2d 96, 100,233 P.3d 861 (2010). Preemption is an

issue in this case because the defendants are two labor organizations and their agents.

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Section 8(b)(l)(B) of the NLRA prohibits labor organizations and their agents from

coercing "an employer in the selection of his representatives for the purposes of collective

bargaining or the adjustment of grievances." 29 U.S.c. § 158(b)(1)(B). Because Mr.

Stiles sought to become the employer's labor representative and because the union

interfered in this process § 8(b)(I)(B) applies. This court must therefore decide whether

Mr. Stiles's lawsuit is preempted by the NLRA.

In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 237, 79 S. Ct.

773, 3 L. Ed. 2d 775 (1959), a retail lumber business sued a union that was using coercive

tactics intended to force the employer to unionize its employees for an injunction and

damages. The United States Supreme Court held that the injunction order was preempted

by the NLRA, despite the NLRA' s refusal to exercise jurisdiction, but remanded to the

state court for determination of whether it had different grounds for sustaining its

damages award. Id. at 238·39. When the state court affirmed the damages, the Supreme

Court again accepted review to determine whether the damages award was also

preempted. Id. at 239. The Supreme Court found that the damages claim was also

preempted by the NLRA because the subject actions of the lawsuit arguably overlapped

with § 8 of the NLRA. Id. at 244-45.

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Next, we examine whether any recognized exception to the Garmon preemption

applies to this situation. As identified by the parties, the only applicable exception is the

one described in Linn v. United Plant Guard Workers ofAmerica, Local 114, 383 U.S.

53,86 S. Ct. 657,15 L. Ed. 2d 582 (1966). In Linn, an employer's official sued the union

for defamatory remarks made by the union in the course of its organizing campaign. Id.

at 55. Noting that the NLRA is powerless to redress damages suffered by individuals

through the use of unfair labor practices, the Supreme Court found that the NLRA should

not be read to preempt all state tort actions. Id. at 63-64. The Supreme Court also

recognized that such lawsuits carry the potential to chill the free debate envisioned by the

NLRA and thus frustrate the federal policy. Id. at 64-65. The Supreme Court thus struck

a middle ground, holding that defamation suits are preempted except in cases of

defamation with actual damages and actual malice as defined by Sullivan.) Id. at 65.

Therefore, Mr. Stiles's defamation claim is not preempted by the NLRA ifhe can satisfy

the requirements of actual malice and damages.

) New York Times Co. v. Sullivan, 376 U.S. 254,84 S. Ct. 710,11 L. Ed. 2d 686

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A. Actual Malice

Since Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997,41 L. Ed. 2d 789

(1974), the United States Supreme Court has admonished courts not to take the phrase

"actual malice" literally because the First Amendment does not require any actual ill will.

In Masson, the Court explained:

Actual malice under the New York Times standard should not be
confused with the concept of malice as an evil intent or a motive arising
from spite or ill will. We have used the term actual malice as a shorthand to
describe the First Amendment protections for speech injurious to reputation,
and we continue to do so here. But the term can confuse as well as
enlighten. In this respect, the phrase may be an unfortunate one. In place
of the term actual malice, it is better practice that jury instructions refer to
publication of a statement with knowledge of falsity or reckless disregard as
to truth or falsity.

Masson v. New Yorker Magazine, Inc., 501 U.S. 496,510-11, 111 S. Ct. 2419, 115 L. Ed.

2d 447 (1991) (citations omitted).

Here, Mr. Stiles argues that the defendants acted with actual malice because they

knew that the events they had used to form their opinions did not in fact occur. Mr. Stiles

does not argue that the defendants trust him; rather, he argues that the defendants lied

about not trusting him. But whether the defendants do or do not trust Mr. Stiles is

irrelevant; rather, what is relevant is whether the defendants have true facts that support

(1964).

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their opinions. Due Tan v. Le, 177 Wn.2d 649, 663,300 P.3d 356 (2013). InDue Tan,

there is no question that Le actually believed that Duc Tan was a communist spy who

could not be trusted. However, Le was held liable because the facts to support that

opinion were-as determined by the trier of fact-false.

Mr. Stiles does not provide declarations, other than his own, to refute his alleged

misconduct. Nevertheless, at summary judgment, the plaintiffs evidence is treated as

true, and he is entitled to all reasonable inferences. If the underlying reasons why Mr.

Hawks and Mr. Molnaa do not trust Mr. Stiles are false, a rational finder of fact could

conclude that Mr. Hawks and Mr. Molnaa knowingly lied, and therefore had actual

malice. See id. at 671 (The jury is entitled to determine actual malice, even when the

truth or falsity of the allegations are largely dependent upon the testimony of the parties

themselves.). While corroborating nonparty eyewitnesses are desirable, their absence

does not mandate summary judgment for the defendants.

B. Damages

Normally, proof of damages would flow from Mr. Stiles's ability to demonstrate

actual malice. In defamation cases, damages may be presumed if the trier of fact finds

actual malice. Milkovich v. Lorain Journal Co., 497 U.S. 1, 16, 110 S. ct. 2695, III L.

Ed. 2d 1 (1990) (explaining that presumed damages are constitutionally permissible only

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in cases where actual malice is proved) (citing Gertz, 418 U.S. at 350). Defamation, like

trespass, is one of the few areas of tort law where the plaintiff does not need to'prove any

damages.

However, the Supreme Court made an exception to this rule in Linn. When the

defamation stems from a labor dispute that would otherwise be preempted by the NLRA

under Garmon, the claimant must prove actual damages. Linn, 383 U.S. at 65. Actual

damages does not necessarily mean economic damages. The actual damages may be in

the form of "general injury to reputation, consequent mental suffering, alienation of

associates, specific items of pecuniary loss, or whatever form of harm would be

recognized by state tort law." Jd.; see also Farmer v. United Bhd. a/Carpenters &

Joiners 0/Am., Local 25,430 U.S. 290, 97 S. Ct. 1056, 51 L. Ed. 2d 338 (1977) (holding

that Garmon does not preempt claims of intentional infliction of emotional distress).

Here, Mr. Stiles has failed to make any argument to this court or below with

respect to proof of damages. His argument with respect to damages hinges solely on his

unsuccessful motion to strike the defendants' discussion of damages at summary

judgment. Mr. Stiles has not carried his burden of production with regard to stating a

prima facie case on the element of damages.

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Nevertheless, we will review the record on this issue. Mr. Stiles's base salary for

his new/current job is lower than the salary he would have received at WRPS. Adding his

bonuses, however, put him over the salary that he would have received at WRPS. There

is no evidence whatsoever what his bonuses would have been at WRPS. Mr. Stiles's

failure to argue the point leads to the conclusion that he has failed to meet his burden of

production.

Concerning noneconomic damages, Mr. Stiles's deposition and affidavit testimony

merely reiterate the claims made in his complaint-that he has suffered mental anguish,

emotional distress, humiliation, embarrassment, and loss of reputation. Absent any

additional facts, it is not sufficient at the summary judgment stage to simply reiterate the

allegations in the complaint. See Atherton Condo. Apartment-Owners Ass 'n v. Blume

Dev. Co., 115 Wn.2d 506, 535-36, 799 P.2d 250 (1990). To the contrary, Mr. Stiles

admitted in his deposition that he has not been distressed enough that he has sought help

from a mental health professional. Notably, Mr. Stiles stated that his new/current position

is his dream job. Regardless, Mr. Stiles's failure to argue the point causes us to reach the

conclusion that Mr. Stiles cannot meet his burden of production on this prima facie

element. Mr. Stiles's defamation claim therefore is preempted under Linn, for lack of

argument and evidence to support a prima facie element, actual damages. We therefore

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affirm the lower court summary judgment dismissal, and do not reach the remaining

issues.

A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to

RCW 2.06.040.
~()

Lawrence-Berrey, J.

WE CONCUR:

Korsmo, J. 7'

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