Thomas R. Frazier, Appellant, vs. Michael Lindbloom, et al., Respondents.

STATE OF MINNESOTA
 IN COURT OF APPEALS
 C1-98-1824

Thomas R. Frazier,
Appellant,

vs.

Michael Lindbloom, et al.,
Respondents.

 Filed April 6, 1999
 Affirmed
 Shumaker, Judge

Hennepin County District Court
File No. 978738

Charles A. Cox, Cox, Goudy, McNulty & Wallace P.L.L.P., 676A Butler Square, 100 Sixth Street North, Minneapolis, MN 55403; and

Gerald P. Boyle, Boyle, Boyle & Smith, S.C., 1124 Wells Street, Milwaukee, WI 53233 (for appellant)

Mary E. Stumo, Jacqueline R. Rolfs, Faegre & Benson L.L.P., 2200 Norwest Center, Minneapolis, MN 55402-3901 (for respondent)

Considered and decided by Harten, Presiding Judge, Davies, Judge, and Shumaker, Judge.

 U N P U B L I S H E D   O P I N I O N

 SHUMAKER, Judge

Appellant Thomas R. Frazier challenges summary judgment in favor of respondent[1] Bachman's, Inc., his former employer, on his claims of disability discrimination and defamation. We affirm.

 FACTS

  Appellant began working for respondent in October of 1968. In 1996, he was the manager of commercial sales.

Respondent's employee handbook contained prohibitions against "harassment" and "sexual harassment." The former prohibition provided:

Bachman's does not tolerate harassment of its employees, customers or others in the workplace by any person in any form.

Harassment of another employee, customer, or others which interferes with an employee's work performance or which creates an intimidating, hostile, or offensive work environment, is a violation of Company policy.

In July 1996, respondent's human resources director received a complaint from an employee that appellant had sexually harassed a female employee under his supervision and had physically threatened a receptionist. The director and others investigated.

The conduct of which appellant was accused allegedly consisted of sexual comments, innuendoes, and touching, and a threat of physical violence. During an interview by the human resources director on July 19, 1996, appellant denied touching any employee, admitted that he had engaged in sexual comments and conversations that he characterized as "joking," admitted that he "could have" made other sexual comments, and admitted that he had told a receptionist that he would break her fingers if she revealed certain information he had given her. Appellant indicated that the "threat" also was just a joke, but he acknowledged that the receptionist apparently did not perceive it as such. After the interview, respondent temporarily suspended appellant.

Respondent retained a lawyer to conduct further investigation. Appellant acknowledged to the lawyer that he had made some of the sexual comments attributed to him but said that they were made in the context of mutual joking. During his deposition he also admitted touching the employee. Other employees corroborated some of the accusations.

Respondent terminated appellant's employment on August 16, 1996. In a termination memorandum dated August 15, 1996, respondent stated:

You admitted to making a threatening comment to an employee if she shared information about another employee. While you indicated during the investigation that you intended this as a joking comment, your remark was totally unacceptable for a manager in our workplace, regardless of its intent. You admitted to a number of instances in which you engaged in sexual language, sexual banter, and sexual innuendo with an employee under your supervision. You attempted to justify these comments on the basis that they were joking and that the other employee also engaged in sexual talk with you and otherwise conducted herself in an inappropriate manner. Regardless of the other employee's conduct, and regardless of your intentions, your conduct in the workplace is unacceptable. As a manager, you are held to a high standard of behavior. At best, even under your version of the facts, you demonstrated extremely poor judgment which put both you and the company at risk.

At some point during his interview on July 19, 1996, appellant asked the human resources director to provide him with a disability claim form. Throughout his employment with respondent, appellant suffered from various psychological and physical ailments. He was agoraphobic, had anxiety attacks, was hospitalized for depression, and had heart surgery in 1993. Despite these problems, by 1996 he was fully performing his job without any special accommodations. After his termination, he claimed to have been disabled since his heart surgery.

Appellant sought employment elsewhere in his area of expertise. He alleges that when he told prospective employers that he had been fired for sexual harassment and threatening an employee, no one would hire him.

Appellant sued respondent and three individual employees. He then voluntarily dismissed the individuals. The trial court granted summary judgment to respondent. On appeal, appellant challenges the trial court's rulings only as to his claims of disability discrimination and defamation.

 D E C I S I O N

 When reviewing a summary judgment, the appellate court must determine whether there are any genuine issues of material fact and whether the district court erred as a matter of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). The appellate court must review the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). If a party has the burden of proof but fails to establish an essential element of the claim, summary judgment is mandatory because with that failure, all other facts are rendered immaterial. Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn. App. 1994).

 I.

 Appellant first argues that the district court erred in granting summary judgment on his disability discrimination claim. It is an unfair discriminatory employment practice for an employer to discharge an employee based on disability. Minn. Stat. § 363.03, subd. 1(2)(b) (1998). Disability discrimination claims are subjected to the three-part McDonnell Douglas test. Sigurdson v. Carl Bolander & Sons, Co., 532 N.W.2d 225, 228 (Minn. 1995) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817 (1973)).

Under this test, appellant first must make a prima facie showing of discrimination. Sigurdson v. Isanti County, 386 N.W.2d 715, 720 (Minn. 1986). If appellant satisfies that test, the burden shifts to respondent to show a legitimate, nondiscriminatory reason for the termination. Id. The reason must be one that would permit the conclusion that the termination was based on something other than illegal discrimination. Ward v. Employee Dev. Corp., 516 N.W.2d 198, 202 (Minn. App. 1994) (holding employee's social meeting with client showed legitimate reason for terminating employee), review denied (Minn. July 8, 1994). Because this case had reached only the summary judgment stage, the issue was not whether the respective parties actually have met their respective burdens but whether there are genuine issues of material fact as to the elements they must prove. The district court ruled there were no such fact issues for trial. We agree.

Appellant admitted that he engaged in sexual talk and innuendo with a female employee. He admitted that he made an ostensibly threatening statement to another female employee. It is undisputed that respondent's employee handbook prohibited "harassment * * * which interferes with an employee's work performance or which creates an intimidating, hostile, or offensive work environment." Appellant's admittedly inappropriate workplace conduct provided a legitimate, nondiscriminatory reason for his termination. As the district court aptly noted in its summary judgment memorandum:

Stated succinctly, Bachman's was under no obligation to retain a management-level employee who admitted to such patently inappropriate conduct * * *.

Appellant also argues that there is a genuine fact issue as to whether or not the reason for his termination was pretextual. Sigurdson, 386 N.W.2d at 720. He contends that respondent fired him to avoid the possibility that he would file a disability claim. He notes that the closeness in time of his request for a disability application and his suspension and termination raises a question of fact as to respondent's motive for the termination. See Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 445 (Minn. 1983) (inference of unlawful motive may arise where protected activity and adverse employment action are closely linked in time). Unlike Hubbard, in which the employee's activity was proper, this case involves improper activity that was admitted by the discharged employee. The district court did not err in ruling that there was no showing of a genuine fact issue as to pretext under these circumstances.

Appellant further agues that he was treated more harshly than nondisabled employees who engaged in similar conduct. See Schockency v. Jefferson Lines, 439 N.W.2d 715, 719-20 (Minn. 1989) (addressing unsuccessful claim that disparate treatment showed pretext). The district court rejected this argument, ruling that the circumstances of other employees were either not similar or were not supported by facts. The existence of a genuine fact issue must be established by "substantial evidence," in terms of legal sufficiency, in order to preclude summary judgment. Murphy v. Country House, Inc., 307 Minn. 344, 351, 240 N.W.2d 507, 512 (1976). The nonmoving party cannot rely on general statements but rather must identify factual particulars that show "genuine" issues for trial. Moundsview Indep. Sch. Dist. No. 621 v. Buetow & Assocs., Inc., 253 N.W.2d 836, 838 (Minn. 1977). The district court did not err in this ruling.

 II.

  The next issue is whether the district court erred in granting summary judgment on appellant's defamation claim. To be considered defamatory, a statement

must be communicated to someone other than the plaintiff, it must be false, and it must tend to harm the plaintiff's reputation and to lower him in the estimation of the community.

 Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). The alleged defamatory statements were that appellant "violated Bachman's anti-harassment policy" and that he "threatened a fellow employee." Appellant contends there is a genuine issue of material fact as to whether the statements were false, whether a qualified privilege applied, and whether he was forced to self-publish the statements.

Even if an untrue defamatory statement has been published, there is no liability if it is conditionally privileged and the privilege is not abused. Lewis v. Equitable Life Assurance Soc'y, 389 N.W.2d 876, 889 (Minn. 1986). For an employer to use the qualified privilege, it must be based upon reasonable or probable grounds, even if hindsight might show the statement to be false. Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 (Minn. 1990). The court will examine the steps the employer took to investigate and ascertain the accuracy of the statements, including whether the employer personally questioned the employee. Id.

Appellant contends that respondent had no probable cause because his statement to the receptionist was a joke, not a threat, and his sexual banter was not harassment because the supervised employee welcomed it. But the crucial question for determining whether a qualified privilege applies is whether the respondent performed an investigation before making the statement. Id. Appellant does not dispute that respondent's human resources director interviewed eight people, including appellant, after hearing the report of his conduct, and that respondent hired an outside attorney, who investigated and conducted interviews. Some of the employees corroborated the allegations. Thus, even if hindsight showed the statements to be false, there is no genuine issue of material fact as to whether the company investigated before making the statements and had probable cause as a matter of law.

A qualified privilege may be lost if there is proof of actual malice in making the statement. Stuempges, 297 N.W.2d at 257. "Actual malice means what it says: ill-will and improper motive or wishing wantonly and without cause to injure the plaintiff." Bauer v. State, 511 N.W.2d 447, 449 (Minn. 1994). If "extrinsic evidence of personal ill feeling" or "intrinsic evidence such as exaggerated language, the character of the language used, or the extent of publication" give rise to an inference the defendants knew the statements were false, the malice requirement can be met. Brooks v. Doherty, Rumble & Butler, 481 N.W.2d 120, 126 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992).

Appellant contends that here, as is usually the case, the issue of whether actual malice is present is a jury question. Lewis, 389 N.W.2d at 890. Nonetheless, when warranted, a malice issue may be subject to summary judgment. Michaelson v. Minnesota Mining & Mfg. Co., 474 N.W.2d 174, 182 (Minn. App. 1991), aff'd mem., 479 N.W.2d 58 (1992).

Appellant argues that respondent engaged in actual malice because it manufactured false reasons for terminating him to avoid a potential disability claim. But, as discussed above, when there is a qualified privilege, even defamatory statements are protected if, as here, they were based on reasonable and probable grounds. Appellant cites no other evidence of ill feeling, exaggerated language, or external publication that would create a genuine issue of material fact as to malice. Likewise, the qualified privilege applies to appellant's claim of defamation by compelled self-publication. Lewis, 389 N.W.2d at 890.

Affirmed.

[1] Although the title of this action names Michael Lindbloom as a respondent, he is not. He was a defendant at the trial court level. Only Bachman's, Inc. is a respondent on appeal.