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Jyll M. Newell v. Jds Holdings

April 24, 2013


Appeal from the Iowa District Court for Black Hawk County, Kellyann M. Lekar, Judge.

The opinion of the court was delivered by: Tabor, J.

Jyll Newell appeals from the grant of summary judgment on various claims arising from the termination of her employment with JDS Holdings, LLC. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.

Heard by Eisenhauer, C.J., and Potterfield and Tabor, JJ.

After being fired from her position as a massage therapist, Jyll Newell sued her employer, JDS Holdings, and her supervisor, Jacquelyn Preston. Newell alleged she was wrongfully discharged in violation of public policy because she declined to sign a form acknowledging receipt of an employee handbook without first consulting an attorney. She also alleged Preston defamed her and intentionally interfered with her prospective business advantage because Preston lied to the company's owner about Newell's conduct. The district court granted summary judgment in favor of the defendants on all three claims, and Newell appealed.

We affirm the grant of summary judgment on the wrongful discharge claim because Newell did not show she was fired for engaging in protected activity. We also find summary judgment was proper on Newell's claim that Preston intentionally interfered with her prospective business advantage because the record contains no evidence Preston aimed to financially injure Newell. But we reverse the grant of summary judgment on Newell's defamation claim because the record reveals a genuine issue of material fact as to whether Preston abused her qualified privilege.

I. Background Facts and Proceedings

Dr. John Schofield owns JDS Holdings, LLC, which operates Elements Therapeutic Massage (Elements) studio in Cedar Falls. Jyll Newell is a massage therapist. She began working at Elements in January 2008. Her employer presented Newell with an employee handbook and an acknowledgment form, which she signed and dated on March 24, 2008. The acknowledgment form stated that the policies and benefits described in the handbook were subject to revision. It also explained Newell was an at-will employee of Elements.

On May 5, 2008, Newell received her first performance evaluation from studio manager Kathy Mundfrom. One a scale of one to five, Newell received a rating of five (excellent) in each of the seven categories on the three-month review. In her first annual performance review, Newell again scored five out of five in each of the seven categories on the evaluation form. Newell earned a raise effective January 1, 2009. On December 17, 2009, Newell received her second annual performance evaluation. Her supervisor rated her at the top of the scale in each of the eight categories listed. Again, she received a raise.

Elements hired Jacquelyn Preston as studio manager in March 2010. That month, Preston jotted a favorable note in Newell's file: "Thanks for taking later hours on Monday night. Clients are very glad to have that scheduling option. I appreciate your assistance in interviewing and mentoring. MARVELOUS." But Newell's file also revealed a number of absences in 2010.

On January 7, 2011, Preston completed Newell's three-year performance evaluation. Newell received scores of four (above average) or five (excellent) in nine of the ten categories. In the category of "Accurate and timely SOAP*fn1 notes on all clients and follows other company procedures," Preston rated Newell at four with the following explanation: "Getting better. SOAP notes commonly missed as noted in comm. log but significant efforts to improve." In the category of "Arrives to work on time," Newell received a score of between three (Average) and four (Above Average) with the following note: "Arrives on time but attendance has been an issue." The evaluation stated that Preston and Schofield advised Newell that her attendance was problematic, but she was "working on the concern." Newell's total performance score was forty-three out of a possible fifty, or eighty-six percent. Newell again received a raise, which moved her to the top of Element's pay scale.

On February 24, 2011, the employer presented a revised employee handbook to Newell and asked her to sign a form acknowledging its receipt. The form stated:

By signing below, I certify that I have received and understand that I should read and must abide by this handbook. Without limiting the foregoing, I understand that my employment with elements therapeutic massage is at-will and that either I or the elements therapeutic massage may terminate the employment relationship at any time, with or without reason.

Newell told Preston she wanted to read the handbook before signing the acknowledgment. Preston told her to sign the acknowledgment and read the handbook later. Newell did not sign the form that day.

On February 25, 2011, Newell signed and dated the receipt and acknowledgment form. Below her signature, she wrote: "I have concerns with 3.16, 5.1 (suspension for not receiving a massage), and 6.2 communication devices. I have spoken with Jackie Preston regarding these concerns." Later that day, Preston showed Newell an email from Schofield which read: "Jackie-Tell Jyll to sign the agreement as written, without ambiguous comments or face termination for cause." Newell also saw an email from JDS Holdings' attorney Bradley Strouse, which stated:

The employee handbook is a condition of employment. We have the right to change it whenever we want without notice. That is part of employment at will. Employees can either sign and return the receipt of handbook page or face termination for cause. You could point out that while he/she might not like everything in there, it is take it or leave it. We should insist that she sign the receipt and acknowledgment without ambiguous comments.

If he/she or a lawyer thinks one of the policies in the handbook is contrary to law, he or she can write me, with citations, explaining exactly how they believe the handbook violates the law.

When Newell balked at signing the acknowledgment without first consulting her attorney, Preston told her if she did not sign it immediately she was fired. Preston then left the room and Newell called her attorney. Newell did not sign the form that day. Schofield called Newell that Friday night and told her that she was not fired after all. He asked her to report for her regularly scheduled shift that Sunday. Schofield told Newell she could review the handbook and they would meet later to discuss it.

Newell continued to work her regular schedule. On February 28, 2011, Newell provided massage therapy to Amy Tomlyanovich. Preston claimed she overheard Newell tell client ...

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