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In a rematch between Stratford, Conn.-based Mobil Chemical and ex-employee Victor Cweklinsky, the same facts will play out on new legal ground, remapped by the parties’ own litigation. In 2001, ex-machinist Cweklinski won an $837,000 jury verdict in U.S. District Court in Hartford, Conn., in part due to the ongoing difficulties he said he faced in getting a new job. Every time a prospective employer asked why he was fired, he’d have to tell them he was accused of fraudulently obtaining paid sick leave. This so-called “defamation by compelled self-publication” isn’t recognized in most states, and on appeal to the 2nd U.S. Circuit Court of Appeals, Mobil contended it didn’t exist in Connecticut. The 2nd Circuit asked the state Supreme Court to rule, and in January it rejected the tort. That settled, the three-judge federal appellate panel reviewed the rest of Mobil’s claims and vacated the entire verdict. In a ruling last month, it sent the case back for a new trial on a theory of defamation by intra-corporate publication, breach of implied contract, and promissory estoppel. In December 1998, Cweklinsky was recovering from carpal tunnel surgery, and went to his doctor to get an extension of his return-to-work date. A staff member in the doctor’s office changed the date from Friday, Dec. 11 to Monday, Dec. 14. Mobil contended Cweklinsky forged it and stole undeserved paid leave. Within an hour of his firing, Cweklinsky returned to the doctor’s office and got a note, signed by the doctor, that the change was authorized by the physician and made by an office employee — not Cweklinsky. The jury who heard Cweklinsky’s case determined that Mobil exceeded its qualified privilege when it charged Cweklinsky with fraud, finding the company’s human resources personnel acted with “actual malice,” said his lawyer, Victoria de Toledo, of Stamford, Conn.’s Casper & de Toledo. In an interview, de Toledo said that proving intra-corporate defamation isn’t easy. “You have to prove the employer acted maliciously, which is a very tough standard.” The first trial cleared that hurdle, she noted. “The jury found [Mobil] had acted maliciously, so they lost the privilege. They also found malicious, wanton behavior for punitive damages.” But the 2nd Circuit nullified the $837,000 verdict, sending the case back for a new trial before a “properly instructed jury.” Jeffrey Tinley, of Waterbury, Conn.’s Tinley, Nastri, Renehan & Dost, represents Mobil. “We’re back to square one,” he said. The next trial will cast the same facts against newly rewritten law. The 2nd Circuit panel of Joseph M. McLaughlin, Robert D. Sack and Dennis Jacobs clarified some confusion over the effectiveness of disclaimers in company employment manuals. Cweklinsky, a 30-year employee, claimed a breach of an implied employment contract, based on alleged oral assurances during pre-employment interviews, that he would have his job as long as he complied with company procedures. Mobil’s employment manual at the time Cweklinsky was hired guaranteed the employee would receive warning and instruction on how to correct his behavior “before disciplinary action needs to be taken.” That manual, however, was followed by another in the mid-1980s and one in 1990, which said specifically “this handbook is not intended to create a contract of employment.” At the close of the evidence in the 2001 trial, U.S. District Judge Dominic J. Squatrito instructed the jury to “completely disregard” any statements in the Mobil handbooks in which the company “attempts to disclaim that a contract existed.” Said de Toledo, “Judge Squatrito spent a while considering this issue — whether juries should have to pick through contracts, and decide whether there was consideration [to support the disclaimer], and made the decision that that analysis was something for the courts. The 2nd Circuit disagreed with that.” It concluded that the jury is entitled to decide, as a matter of fact, the complicated question of whether or not the employer has disclaimed any prior implied contract of employment. Tinley said that employers have been led to believe, in the wake of a key case acknowledging that employee manuals could create implied employment contract rights, that proper disclaimer language could place the employee on a clear employment-at-will footing. The 2nd Circuit decision will unavoidably create more jury trials, and leaves employers having to negotiate individually with employees to return to an at-will relationship, he added. “In the 1987 case of Finley v. Aetna,” said Tinley, “the [Connecticut Business & Industry Association] filed an amicus brief” predicting a flood of litigation if employers couldn’t contractually protect themselves. The Supreme Court ruled there could be an implied contract from an employee manuals, but that, if the right “disclaimer language was used, there would be no issue of fact and no jury trial. Now we’re finding that, unless the employer had disclaimer language in the book at the time the employee was hired, there’s got to be a jury trial, because it’s a matter of fact whether the disclaimer language became part of the deal or not.” The 2nd Circuit was clear, holding “we are persuaded by Mobil’s argument that whether the disclaimers in its 1990 employment manual altered the terms of its implied contract with Cweklinsky is a question of fact” for the jury.

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