JOHN SHROUT v. THE TFE GROUP; AND EDDIE KENDRICK
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RENDERED:
April 1, 2005; 10:00 a.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-000834-MR
JOHN SHROUT
v.
APPELLANT
APPEAL FROM GRANT CIRCUIT COURT
HONORABLE STEPHEN L. BATES, JUDGE
ACTION NO. 02-CI-00545
THE TFE GROUP; AND EDDIE
KENDRICK
APPELLEES
OPINION
AFFIRMING IN PART AND REVERSING IN PART
** ** ** ** **
BEFORE:
SCHRODER, TAYLOR, AND VANMETER, JUDGES.
VANMETER, JUDGE:
John Shrout, a truck driver, was terminated
from his employment after a positive drug test. However, the
testing was not conducted as required by federal regulations,
and the test results were inaccurate due to the improper
handling of the tested sample and Shrout’s use of legal,
over-the-counter (OTC) medications.
The issues we must decide
on appeal are whether the employer’s failure to comply with
federal testing regulations creates an exception to Kentucky’s
employment at-will doctrine, and whether Shrout has stated a
viable claim for defamation.
We hold that the failure to comply
with the federal drug testing regulations does not create an
exception to the employment at-will doctrine, but that the
employer may be liable for defamation for failing to accurately
report the test results.
Therefore, we affirm in part and
reverse in part.
I.
Facts.
According to Shrout’s complaint and first amended
complaint,1 he was employed by The TFE Group, Inc. as a
long-distance, over-the-road truck driver.
As a condition of
this employment, Shrout was subject to random drug and alcohol
testing.
On February 15, 2002, Shrout submitted to such a test,
which was administered by an outside testing facility.
Approximately 10 days later, TFE’s physician and medical review
officer informed Shrout that he had tested positive for
amphetamines.
Shrout disputed the results and informed his
supervisor, Eddie Kendrick, that the positive results must have
been caused by his use of Contact and Vicks Sinex, which are
legal OTC drugs.
1
The circuit court dismissed Shrout’s claim under CR 12.02(f) for “failure to
state a claim upon which relief can be granted.” Under such a motion, the
pleadings are liberally construed in a light most favorable to the plaintiff,
and the material allegations in the complaint are regarded to be true. Pike
v. George, 434 S.W.2d 626, 627 (Ky. 1968); Gall v. Scroggy, 725 S.W.2d 867,
869 (Ky.App. 1987).
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At the time Shrout took the initial test, he requested
that the sample be treated as a split sample so that a second
test would be possible.
However, for reasons which are unclear,
the split sample did not occur and the testing laboratory did
not retain any portion of the initial urine sample.
After being
notified of the positive test, Shrout requested a second test,
including a blood or hair sample test.
On March 11, 2002, TFE
sent Shrout an evaluation form and a referral to a substance
abuse evaluation firm in Florence, Kentucky.
Shrout underwent
an evaluation on March 13, and on March 18 the evaluation firm
issued a clearance to “return to work in a safety-sensitive
position.”
TFE nevertheless fired Shrout on March 14 based on the
February 26 positive test result.
to a body hair drug test.
On April 18 Shrout submitted
The results of that test were
negative for amphetamine, demonstrating that the February test
had indicated a false positive.
Since the time of his termination by TFE, Shrout has
been unable to find work as an over-the-road truck driver.
The
record shows that whenever Shrout applies for a truck driving
position, federal regulations require him to sign a consent and
release form authorizing TFE to disclose any prior drug testing
results.
The disclosures provided by TFE have indicated that
the February 2002 drug test result was positive.
-3-
On December 5, 2002, Shrout filed a complaint against
TFE and Kendrick claiming wrongful termination (count I);
defamation (counts II and III); and “fraud, oppression, malice
and a wanton disregard for truth and reputation” (count IV).
After TFE filed its initial motion to dismiss for failure to
state a claim, Shrout filed an amended complaint which added a
number of the factual allegations included within the factual
recitation above, and claimed wrongful termination based on the
failure to comply with federal drug-testing regulations (Count
V), as well as defamation in reporting the results of a flawed
test (Count VI).
After Shrout amended his complaint, TFE renewed its
motion to dismiss.
motion.
The Grant Circuit Court sustained the
This appeal follows.
II.
Wrongful Discharge.
The parties agree that Kentucky adheres to the
“terminable at will” doctrine, in that “[o]rdinarily an employer
may discharge [an] at-will employee for good cause, for no
cause, or for a cause that some might view as morally
indefensible.”2
In Firestone Textile Co. Div. v. Meadows, the
Kentucky Supreme Court recognized a narrow exception to the
terminable at will doctrine and acknowledged a cause of action
2
Grzyb v. Evans, 700 S.W.2d 399, 400 (Ky. 1985). See also Firestone Textile
Co. Div. v. Meadows, 666 S.W.2d 730, 731 (Ky. 1983).
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for wrongful discharge, but only in those limited circumstances
in which (1) the discharge is contrary to a fundamental and
well-defined public policy as evidenced by existing law; and (2)
the policy is evidenced by a constitutional or statutory
provision.3
“The decision of whether the public policy asserted
meets these criteria is a question of law for the court to
decide[.]”4
In Grzyb v. Evans, the Kentucky Supreme Court
further clarified Firestone by stating:
We adopt, as an appropriate caveat to our
decision in Firestone Textile Co. Div. v.
Meadows, supra, the position of the Michigan
Supreme Court in Suchodolski v. Michigan
Consolidated Gas Co., 412 Mich. 692, 316
N.W.2d 710 (1982). The Michigan court held
that only two situations exist where
"grounds for discharging an employee are so
contrary to public policy as to be
actionable" absent "explicit legislative
statements prohibiting the discharge." 316
N.W.2d at 711. First, "where the alleged
reason for the discharge of the employee was
the failure or refusal to violate a law in
the course of employment." Second, "when
the reason for a discharge was the
employee's exercise of a right conferred by
well-established legislative enactment." 316
N.W.2d at 711-12.5
Underpinning any cause of action for wrongful
discharge is KRS 446.070, pursuant to which
3
Firestone, 666 S.W.2d at 731 (citing Brockmeyer v. Dun & Bradstreet, 335
N.W.2d 834, 835 (Wis. 1983)).
4
Grzyb, 700 S.W.2d at 401.
5
700 S.W.2d at 402.
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a person injured by the violation of any
statute may recover from the offender such
damages as he sustained by reason of the
violation. But this is limited to where the
statute is penal in nature, or where by its
terms the statute does not prescribe the
remedy for its violation. . . . Where the
statute both declares the unlawful act and
specifies the civil remedy available to the
aggrieved party, the aggrieved party is
limited to the remedy provided by the
statute.6
Thus, important to a finding of wrongful discharge is
the requirement that the public policy must be defined by
statute and directed at providing statutory protection to the
worker in his employment situation.7
In the instant case, Shrout argues that the public
policy violation underpinning his cause of action for wrongful
discharge is that the drug test which ultimately led to his
termination did not comply with federal drug testing
regulations,8 that the federal regulations exist for the
protection of workers who might otherwise be subject to
disciplinary action as a result of flawed test results, and that
employers cannot take disciplinary actions except based on test
results which comply with the regulations.
6
Id. at 401. (citation omitted).
7
Id. at 400.
8
49 C.F.R., Part 40.
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Shrout’s argument fails for two reasons.
The first is
that KRS 446.070, the underpinning of a wrongful discharge,
extends a right of action only for the violation of a Kentucky
statute or a constitutional provision.
The protection does not
extend to the violation of a federal regulation.9
Since Shrout’s
wrongful discharge claim hinges on the violation of a federal
regulation, he cannot benefit from KRS 446.070.
The second reason Shrout’s argument fails is that, as
noted above, the public policy must be defined by statute and
must be directed at providing statutory protection to the worker
in his employment situation.
Shrout’s analysis relies on
federal drug testing regulations promulgated under the authority
of the Omnibus Transportation Employee Testing Act of 1991.10
The federal courts which have looked at Congress’s purpose in
enacting this legislation have acknowledged employee rights as
one of the purposes of the legislation, but have concluded that
Congress “intended to provide a general benefit to the public by
increasing the level of passenger safety[.]”11
Thus, protection
of employees is not the primary purpose of this statute and the
regulations governing drug testing.
9
10
Alderman v. Bradley, 957 S.W.2d 264, 266 (Ky.App. 1997).
Pub. L. No. 102-143, Title V (1991).
11
Drake v. Delta Airlines, Inc., 923 F. Supp. 387, 392 (E.D.N.Y. 1996), aff’d
in part, rev’d in part, 147 F.3d 169 (2nd Cir. 1998); see Parry v. Mohawk
Motors of Michigan, Inc., 236 F.3d 299, 309 (6th Cir. 2000).
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Shrout claims that the failure to follow the federal
regulations constitutes negligence per se, quoting at length
from Alderman v. Bradley.12
In Alderman, this court recognized
the elements of negligence per se as being that (1) the
plaintiff must be a member of the class of persons intended to
be protected by the regulation, and (2) the injury suffered must
be an event which the regulation was designed to prevent.13
However, as noted, the regulation is primarily designed to
protect the public.
Shrout’s claim is not that he was fired for failing or
refusing to violate a law in the course of his employment, and
he cannot make any reasonable claim that he was discharged for
exercising a right conferred by well-established legislative
enactment.
This is in contrast to the holdings in Pari-Mutuel
Clerks’ Union v. Kentucky Jockey Club,14 which recognized
wrongful discharge because a worker had authorized a labor union
to represent him as permitted by statute, and in Firestone, in
which the worker had been fired for filing a workers’
compensation claim.
III. Defamation
12
957 S.W.2d 264 (Ky.App. 1997).
13
Id. at 267.
14
551 S.W.2d 801 (Ky. 1977).
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Shrout’s claim of defamation is based on TFE’s
disclosure of the positive results of the drug test he took in
February 2002.
Shrout argues that since the test was flawed,
TFE may not publicize the results in disclosures to Shrout’s
prospective employers.
In order to understand Shrout’s argument, a review of
the Department of Transportation’s (DOT’s) regulatory scheme is
necessary.
Under DOT regulations,15 the employer is responsible
for meeting all applicable procedures and requirements of
workplace drug testing,16 and is “responsible for all actions of
[its] officials, representatives, and agents (including service
agents) in carrying out the requirements of the DOT agency
regulations.”17
One of those service agents18 is the medical review
officer (“MRO”),19 who has a number of important functions as the
“independent and impartial ‘gatekeeper’ and advocate for the
accuracy and integrity of the drug testing process.”20
Among
15
Procedures for Transportation Workplace Drug and Alcohol Testing Programs,
49 C.F.R. pt. 40.
16
49 C.F.R. § 40.11(a).
17
49 C.F.R. § 40.11(b).
18
49 C.F.R. § 40.3.
19
49 C.F.R. § 40.3. This section defines a Medical Review Officer as “[a]
person who is a licensed physician and who is responsible for receiving and
reviewing laboratory results generated by an employer’s drug testing program
and evaluating medical explanations for certain drug test results.”
20
49 C.F.R. § 40.123(a).
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these functions are ensuring review of chain of custody of
samples; providing feedback to employers and laboratories;
determining whether legitimate medical reasons exist for
confirmed positive, adulterated, substituted, and invalid drug
tests; providing review of employees’ drug tests; investigating
and correcting problems where possible and notifying appropriate
parties when necessary (e.g., cancelled or problematic tests, or
incorrect results); and ensuring the timely flow of test results
and other information to employers.21
Specifically with regard to an employee’s positive
drug test result, the MRO is to contact the employee, discuss
the test result with the employee, and attempt to verify the
test result or to ascertain whether any legitimate medical
reason exists for the test result.22
If a legitimate medical
reason exists, the MRO “must verify the test result as negative.
Otherwise, [he or she] must verify the test result as
positive.”23
If the test is verified as positive, the MRO must
notify the employee of his or her right to a test of the split
specimen.24
If the employee so requests, but the split sample is
no longer available for testing, the entire test must be
21
49 C.F.R. § 40.123(b).
22
49 C.F.R. §§ 40.129, 40.131, 40.137.
23
49 C.F.R. § 40.137(d).
24
49 C.F.R. § 40.153.
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cancelled, including the original positive from the primary
specimen, and the employer, through its designated employer
representative, must obtain another sample under direct
observation.25
“A cancelled drug test is neither positive nor
negative.”26
In the instant case, Shrout alleges that he gave a
medically legitimate reason which should have caused the MRO to
verify the February 16, 2002 test as negative.
Failing that,
the MRO should have verified that Shrout’s request for a split
sample test was not able to be completed due to the
unavailability of the split sample for testing, with the result
that the test was cancelled, i.e., there was neither a positive
nor a negative result.
Notwithstanding these problems with the
primary test sample, Shrout alleges that the MRO erroneously
verified the primary sample as positive, and TFE improperly
continued to report the test results as positive to subsequent,
prospective employers.
TFE argues “[Shrout] signed detailed
consent forms authorizing TFE to release the results of his
prior positive drug test.”
Shrout’s counterargument is that
since the test was properly either a verified negative test or a
cancelled test, it should not have been disclosed as a positive
test.
25
49 C.F.R. §§ 40.187(d), 40.201(e).
26
49 C.F.R. § 40.207.
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In Stewart v. Pantry, Inc., the court summarized the
elements of defamation as “(1) defamatory language, (2) about
the plaintiff (3) which is published and (4) which causes injury
to reputation.”27
The court further defined "defamatory
language” as “language which ‘tends to (1) bring a person into
public hatred, contempt or ridicule; (2) cause him to be shunned
or avoided; or, (3) injure him in his business or occupation.’”28
On its face, Shrout’s complaint made such a case.
Having reviewed TFE’s arguments that Shrout consented
to the disclosure and that disclosure to prospective employers
was privileged, we conclude that both those arguments presuppose
that the test involved was verified positive.
As noted, for
purposes of a motion to dismiss under CR 12.02, the material
allegations of Shrout’s complaint are to be taken as true.
Assuming that the facts as alleged by Shrout are true, i.e.,
that the test was not verified positive but was actually
negative or cancelled, our view is that he has stated a cause of
action for defamation sufficient to survive a motion to dismiss.
The judgment of the Grant Circuit Court is reversed,
and this matter is remanded to that court for further
proceedings consistent herewith.
27
715 F.Supp. 1361, 1366 (W.D. Ky. 1988) (citing Columbia Sussex Corp., Inc.
v. Hay, 627 S.W.2d 270 (Ky.App. 1982)).
28
715 F.Supp. at 1366 (quoting McCall v. Courier-Journal & Louisville Times,
623 S.W.2d 882, 884 (Ky. 1981)).
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ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEES:
Charles W. Arnold
Lexington, Kentucky
H. Lawson Walker II
Andrew R. Kaake
Cincinnati, Ohio
Edward J. Lorenz
Williamstown, Kentucky
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