MacDonald v. Tandy Corporation

• Court: Court of Appeals for the First Circuit
• Decided: January 22, 1993
• Docket: 92-1802
• Status: Published

Opinion

USCA1 Opinion

January 22, 1993
                                [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 92-1802

                                  JOHN J. MACDONALD,

                                Plaintiff, Appellant,

                                          v.

                                  TANDY CORPORATION,

                                 Defendant, Appellee.
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Francis J. Boyle,* U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Selya, Circuit Judge,
                                        _____________
                        Higginbotham,** Senior Circuit Judge,
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                               and Cyr, Circuit Judge.
                                        _____________

                                 ____________________

            Andru  H.  Volinsky  with  whom  Mary   E.  Davis,  and   Shaheen,
            ___________________              ________________         ________
        Cappiello, Stein & Gordon, P.A. were on brief for appellant.
        _______________________________
            Russell  F. Hilliard with  whom Ernest  T. Smith,  III, and Upton,
            ____________________            ______________________      ______
        Sanders & Smith were on brief for appellee.
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                                 ____________________

____________________

        _____________________

        *  Of the District of Rhode Island, sitting by designation.
        ** Of the Third Circuit, sitting by designation.

HIGGINBOTHAM, Senior Circuit Judge.   This is an appeal
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          from a grant  of a judgment  n.o.v. in favor of  defendant, Tandy

          Corporation, and against plaintiff, John J. MacDonald.  MacDonald

          was fired from  his job as  a sales-trainee at  a store owned  by

          Tandy in  Manchester, New Hampshire because  Tandy suspected that

          MacDonald  had  stolen  money  from the  store's  cash  register.

          MacDonald  brought an  action  against Tandy,  alleging  wrongful

          discharge under New Hampshire law.  MacDonald  claimed that Tandy

          fired  him   because  he   had  cooperated  with   Tandy's  theft

          investigation.       Cooperation   with   an   employer's   theft

          investigation, according  to MacDonald,  is conduct  protected by

          New  Hampshire public  policy.   Therefore, MacDonald  argued his

          firing was unlawful under New Hampshire law.

                    The  action went to trial  before a jury  in the United

          States District Court  for the  District of New  Hampshire.   The

          jury returned a  verdict in  MacDonald's favor in  the amount  of

          $101,000 damages.  Tandy  moved for a judgment n.o.v. and, in the

          alternative,  a new  trial.   The district court  granted Tandy's

          first motion, and  entered a  judgment n.o.v..   The court  found

          that  MacDonald had failed to show that his conduct was protected

          by public policy.  The court also found that, even if MacDonald's

          conduct  was indeed  protected  by public  policy, MacDonald  had

          failed  to  show  that he  was  fired  because  of the  protected

          conduct.  

MacDonald now appeals.  Because we agree that MacDonald

          failed to show that he was fired because of conduct  protected by

          New Hampshire public policy, we  will affirm the district court's

          grant of judgment n.o.v. in favor of Tandy.

I.

                    John J. MacDonald (MacDonald), who had been employed by

          Tandy  Corporation (owner  of  the Radio  Shack  stores) for  six

          years, was working as a trainee at the Radio  Shack store located

          in a shopping mall in  Manchester, New Hampshire.  On  October 1,

          1986, the store was closed at 9:43 p.m. by three Tandy employees,

          David Jesperson  (Jesperson),  Al Aikens  (Aikens),  and  Shirley

          Cunningham (Cunningham).  Jesperson, Aikens, and Cunningham  left

          the store together.   As they left,  the three employees set  the

          store's electronically controlled motion detection alarms.

                    At 9:47 p.m., Eastern Alarm,  telephonically monitoring

          the alarms from its offices in Portland, Maine, received a motion

          alarm emanating from the Radio Shack store.  Eastern Alarm called

          the Manchester Radio Shack store by telephone but did not receive

          an  answer.   Eastern Alarm  received a  second motion  alarm two

          minutes later.   Eastern Alarm then called  the Manchester Police

          Department  which dispatched a police unit to the store.  Eastern

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Alarm also  called the  store manager, Brad  Ackerman (Ackerman),

          but  was unable  to reach  him.   Eastern Alarm  therefore called

          MacDonald, the second person on the Radio Shack list of employees

          to  be called.  In response to  the call, MacDonald left home and

          came to  the Radio Shack  store, arriving at  approximately 10:35

          p.m.    In  his  work  with  Tandy  Corporation,   MacDonald  had

          previously responded to over thirty such alarm calls.

                    When  MacDonald arrived,  he was  met by  mall security

          personnel  and informed that the  doors to the  store were secure

          and that it was safe  to enter.  MacDonald used a key supplied to

          him  by the  store  manager  and entered  the  store alone.    He

          remained alone in  the store for approximately  fifteen minutes. 

          MacDonald reset the alarm, put a few things in order for the next

          day, locked the front door, and left.

                    On the morning of October 2, 1986, MacDonald  also came

          in alone to open up the store for the day's  business.  MacDonald

          discovered $530.02,  including $200.00  petty cash,  missing from

          one  of two  cash  drawers.   He  immediately notified  Ackerman.

          MacDonald also  informed Bill Hanlon (Hanlon),  a loss prevention

          manager for Tandy Corporation, of the missing funds.

                    The police  arrived and questioned  MacDonald.   Later,

          both   Ackerman  and   Hanlon  arrived   and  began   a  separate

          interrogation.   They  questioned Jesperson,  Aikens, Cunningham,

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and MacDonald individually.   MacDonald  stated that  he did  not

          observe, either on the evening of October 1, 1986 or  the morning

          of October 2, 1986, when he opened the store, any signs of forced

          entry,  with  respect to  the  rear or  front doors  or  the cash

          drawers.  MacDonald also  stated that he  "did not notice if  the

          cash drawer was open  when he went to  the store on the night  of

          October 1, 1986."  

                    During MacDonald's questioning, the subject of taking a

          polygraph examination was raised.   At trial, MacDonald testified

          that  he understood that Tandy  wanted him to  take the polygraph

          and that  Tandy planned to set  up the polygraph  exam.  Further,

          MacDonald  understood that he would lose his career with Tandy if

          he  did not  accede  to  the  polygraph.   On  October  9,  1986,

          MacDonald  went  to  the  Manchester Police  Department  for  the

          purpose  of taking  a  polygraph examination  with regard  to the

          missing funds.  Officer  Anthony Fowler conducted the examination

          and scored it as  a three chart cumulative total of -17 deceptive

          and two chart cumulative  total of -10 deceptive.   In substance,

          the  conclusion  was that  MacDonald was  not telling  the truth.

          MacDonald  informed  Radio  Shack  personnel  of   the  polygraph

          results.

                    On October 21,  1986, the home  office of Tandy  issued

          orders that MacDonald  was to be discharged.  The  reason for his

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separation was stated  as follows:   "failed  to clear  integrity

          investigation.   See Loss  Prevention Report and  Manchester, New

          Hampshire Police  Report for  details."  Tandy's  Loss Prevention

          Report,  prepared  by  Hanlon,  noted the  circumstances  of  the

          disappearance of the money and that MacDonald had failed to clear

          the polygraph test.  

                    As  noted above, the action  went to a  jury trial, the

          jury returned a  verdict in  MacDonald's favor in  the amount  of

          $101,000 damages, and the  defendant moved for a judgment  n.o.v.

          The district court then  certified the following question  to the

          New Hampshire Supreme Court:  

                    Do the facts and circumstances of this action
                    support   a   finding   that  public   policy
                    encouraged  the action  of the  plaintiff, or
                    does public  policy condemn any  action which
                    the  plaintiff refused to  take in connection
                    with   the   termination   of   his   at-will
                    employment by the defendant?

          After the New Hampshire Supreme Court declined to respond to this

          certified  question, the  district court  granted the  motion for

          judgment n.o.v..

                    The district  court reasoned that the  record failed to

          show  that  Tandy  decided  to  terminate MacDonald's  employment

          because  he cooperated  in Tandy's  investigation of  the missing

          funds.  The court also reasoned that MacDonald's action in taking

          the polygraph was not in  cooperation with an investigation being

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conducted by his employer  but was rather in cooperation  with an

          investigation   being   conducted   by   the   Manchester  Police

          Department.

II.

                    The  district  court  had subject  matter  jurisdiction

          pursuant  to 28  U.S.C.  1332.   We  have  appellate jurisdiction

          prusuant  to 28 U.S.C.  1291.   In the  First Circuit, a judgment

          n.o.v. is reviewed under the same standard as a directed verdict:

                    [T]he evidence and all  reasonable inferences
                    extractable therefrom must be examined in the
                    light most  favorable to the nonmovant  and a
                    judgment  notwithstanding the  verdict should
                    be  granted only  when  the evidence,  viewed
                    from   this   perspective,   is   such   that
                    reasonable  persons  could   reach  but   one
                    conclusion.

          Veranda Beach Club Ltd. Partnership v. Western Sur. Co., 936 F.2d
          _______________________________________________________

          1364, 1383-84 (1st Cir. 1991).

                    New  Hampshire  law  recognizes  a  wrongful  discharge

          exception  to  the  common  law  rule  of  at-will  employment as

          follows:

                    [P]laintiffs must  meet [a two-part  test] to
                    establish  a  wrongful  discharge   cause  of
                    action.  First, the  plaintiff must show that
                    the  defendant was  motivated  by bad  faith,
                    malice,  or  retaliation  in terminating  the
                    plaintiff's  employment.  . .  .  Second, the
                    plaintiff  must  demonstrate   that  he   was
                    discharged  because he performed  an act that
                    public  policy would encourage, or refused to

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do   something   that  public   policy  would
                    condemn.

          Cloutier  v. Great  Atlantic &  Pacific Tea  Co., 436  A.2d 1140,
          ________________________________________________

          1143-44 (N.H. 1981); accord  Short v. School Admin. Unit  No. 16,
                               ______  ___________________________________

          612 A.2d  364, 370 (N.H.  1992) ("To support a  claim of wrongful

          termination  under  State law,  a  plaintiff  must establish  two

          elements:  one,  that the employer terminated the  employment out

          of  bad faith, malice, or retaliation; and two, that the employer

          terminated  the  employment because  the employee  performed acts

          which  public policy  would encourage  or because  he refused  to

          perform  acts  which  public  policy  would  condemn.") (citation

          omitted).

                    Resolution of  the second  prong of this  test, whether

          plaintiff's  conduct for  which  he or  she  was discharged  fell

          within the parameters of public policy, is usually a question for

          the jury:

                    [T]he  existence of  a  `public policy'  also
                    calls for the type of  multifaceted balancing
                    process that is properly  left to the jury in
                    most  instances. . . .  We believe it best to
                    allow the citizenry, through  the institution
                    of   the   American  jury,   to   strike  the
                    appropriate balance in these difficult cases.

Cloutier, 436 A.2d at 1145.  However, the jury's determination is
          ________

          not entirely  without bounds.  "Although ordinarily  the issue of

          whether a  public policy exists  is a  question for the  jury, at

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times the presence or absence of such a public policy is so clear

          that  a court may rule  on its existence  as a matter  of law and

          take the question away from the jury."  Short, 612 A.2d at 370.
                                                  _____

                    Even  if  the  alleged  conduct  is  determined  to  be

          protected  by  a  public  policy,  a  necessary  element  of  the

          plaintiff's  case is  to  prove  that  he  or  she  was  actually

          discharged  because of such conduct.  Thus, a causal link between

          the  conduct established to be protected by public policy and the

          reason  for  the allegedly  wrongful  discharge  is necessary  to

          satisfy  the second prong of the New  Hampshire test.  As the New

          Hampshire Supreme Court stated:  

                    [T]he plaintiff must  demonstrate that he was
                    discharged  because he performed  an act that
                                _______
                    public  policy would encourage, or refused to
                    do   something   that  public   policy  would
                    condemn.  

          Cloutier, 436 A.2d at  1144 (emphasis added).  Where  an employer
          ________

          essentially  penalized the  employee  for  taking  his  regularly

          scheduled  day off, the  court found "a  sufficient nexus between

          the public policy asserted  by the plaintiff and the  reasons for

          his  discharge."  Id. at  1141; see also  Cilley v. New Hampshire
                            __            ________  _______________________

          Ball Bearings,  Inc., 514  A.2d 818, 821  (N.H. 1986)  (causation
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          element  satisfied where  plaintiff  had alleged  his termination

          resulted  from refusing  to lie and  that public  policy supports

          such truthfulness).

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In this case,  we agree  with the  district court  that

          there  is  no evidence  on this  record  to demonstrate  that the

          plaintiff was discharged because of conduct protected by a public

          policy.   The specific public  policy asserted by  MacDonald as a

          justification  for  upholding  the  jury's  verdict  is  that  of

          "cooperation   with   an   employer's  theft   investigation."   

          Interpreted in the  light most favorable to MacDonald, the record

          shows  that MacDonald was  suspected of  stealing money  from his

          employer,  cooperated in  the employer's  investigation,  was not

          cleared by the investigation, and was  terminated.  MacDonald was

          suspected  of  stealing  the  cash  from  Tandy  because  of  the

          circumstances under  which the  money was  taken from  the store.

          MacDonald   then   cooperated    with   his   employer's    theft

          investigation,  the result  of which  did nothing  to dispel  his

          employer's suspicions.   We believe  the district court  drew the

          only possible  interpretation from these facts  when it concluded

          that MacDonald was dismissed because of the opportunity he had to

          steal the money and because he was not  cleared by the subsequent

          investigation and  not because he cooperated  with his employer's

          theft  investigation.   What is  missing from  the record  is any

          evidence  to  indicate  that   MacDonald  was  fired  because  he

          cooperated with the employer's theft investigation.

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Without such causal linkage, MacDonald cannot assert an

          exception to the  at-will employment doctrine.  We  cannot accept

          MacDonald's suggestion  that his cooperation with  his employer's

          investigation   immunizes   him   from  the   findings   of   the

          investigation.  It  would defy logic if an  employee by reason of

          cooperation  could be absolutely  protected from the consequences

          of the facts  the cooperation yields.   While it  may not be  the

          best of business practice,  a company is within its  legal rights

          to  fire  employees  on  such  slender  evidence  indicating  the

          possibility of  theft as is  offered in  the present  case.   See
                                                                        ___

          Beery v. Maryland Medical  Lab., Inc., 597 A.2d 516,  523-24 (Ct.
          _____________________________________

          Md. Ct.  Spec. App.  1991) (firing  an employee  on the  basis of

          unsubstantiated allegations can hardly  be said to contravene any

          clear mandate of public policy); Gillespie v. St. Joseph's Univ.,
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          513  A.2d 471, 472-73 (Pa. Super. 1986) (discharge of an employee

          allegedly  falsely accused of a crime of dishonesty not against a

          clear mandate of public policy).

                    For the foregoing reasons,  we will affirm the judgment

          of the district court.

Affirmed.
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