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Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 

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UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

STEVEN WAYNE AGEE, 

Plaintiff-Appellant, 

AUG 3 _· 1992 

ROB3R.1' L. HOECv~-: Clerk .-• -

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No. 91-4066 

(D. Utah No. 89-156S) 

MORTON THIOKOL, INC., 

a Delaware corporation, 

Defendant-Appellee. 

ORDER AND JUDGMENT* 

Before EBEL, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and 

EISELE, Senior District Judge*. 

Steven Wayne Agee, the plaintiff-appellant, brought suit 

against his former employer, Thiokol Corporation ("Thiokol," 

formerly Morton Thiokol, Inc.), on the grounds that Thiokol 

defamed him and intentionally interfered with his prospective 

economic relations when his supervisor told a prospective employer 

that he had been terminated because his work was "unacceptable." 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

* The Honorable Garnett Thomas Eisele, Senior District Judge 

for the United States District Court for the Eastern District of 

Arkansas, sitting by designation. 

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The district court granted Thiokol's motion for summary judgment, 

and Agee appeals. 

I. BACKGROUND 

Thiokol is a major aerospace and defense contractor of the 

United States Government. Agee began working as an aerospace 

engineer in the systems safety unit at Thiokol's Wasatch plant on 

November 9, 1986. His job involved reviewing, reevaluating, and 

developing safety hazard analyses on the solid rocket motor for 

the space shuttle in the wake of the Challenger disaster. Agee 

was a temporary employee--also known as a "job shopper" or a 

"contract employee"--and was thus paid by ARC Technical Services, 

Inc., a "contract house," but supervised by Thiokol. 

On March 27, 1987, Agee's supervisor, Kerry Sanofsky, 

terminated him. Thiokol offers two reasons for Agee's 

termination. First, Thiokol contends, his work was "unacceptable" 

in that he refused to perform the type of analyses required, he 

did not understand what he was supposed to analyze, and he was not 

open to help and instruction. Second, Thiokol could not exceed 

its predetermined manpower level--i.e, when Thiokol hired a 

permanent employee, which it did at this time, one of the contract 

employees had to be let go. Thiokol claims that Agee's 

unacceptable work made him the first choice for termination under 

the manpower rule. 

Six months later, in September 1987, Boeing Aerospace 

("Boeing"), overseer of Thiokol under a contract with the National 

Aeronautics and Space Administration ("NASA"), decided to place a 

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contract employee in Thiokol's systems safety unit to report to 

Boeing and NASA on the quality of the work being done. Agee was 

considered for this position. 1 In conjunction with the hiring 

process, Joe Helmstetter, a representative of Boeing, spoke with 

Sanofsky. During a conversation that is at the crux of this 

dispute, Sanofsky informed Helmstetter that Agee probably would 

not be allowed back on the premises and that he had been fired for 

unacceptable work. 2 Helmstetter then relayed this information to 

Clint Rogers, his superior at Boeing. Rogers chose not to offer 

the position to Agee on this basis because he could not "interface 

effectively between Thiokol, NASA, and Boeing." Affidavit of J. 

Clint Rogers, Supp. App. to Opening Br. of Defendant/Appellee 

Thiokol Corp. [hereinafter Appellee's Supp. App.], Ex. B, at 3. 

Agee brought this action in the United States District Court 

for the District of Utah based upon diversity of citizenship, 

alleging that Thiokol defamed him and intentionally interfered 

with his prospective economic relations. The district court 

granted Thiokol's motion for summary judgment on the grounds that 

(1) the statements at issue were protected by a qualified 

1 Agee contends that Dawn Reynolds, the owner of a service that 

supplied contract employees to Boeing, hired him, but the record 

reveals that Clint Rogers was responsible for hiring and that he 

never offered a position to Agee. Appellee's Supp. App., Ex. B, 

at 3. 

2 The parties dispute whether the conversation included remarks 

about Agee's involvement with the FBI. Agee alleges that Sanofsky 

informed Helmstetter that Agee was involved with the FBI, but 

Sanofsky contends that he did not become aware of Agee's 

involvement with the FBI until Agee filed his complaint 

approximately one year after his termination. See Appellee's 

Supp. App. at 42-43. 

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privilege and Agee failed to show any malice on Thiokol's part to 

defeat this privilege; (2) the statements at issue were not 

defamatory because Agee did not show any injury to his 

professional reputation; and (3) Agee failed to establish a claim 

for intentional interference with prospective economic relations 

because he did not show any improper purpose or means on Thiokol's 

part. See Order, Appellant's App., Doc. 7 . Agee now appeals. 

We have jurisdiction pursuant to 28 U.S.C. § 1291 . We review 

a district court's grant or denial of summary judgment de nova. 

Applied Genetics Int'l, Inc. v . First Affiliated Sec .• Inc., 912 

F.2d 1238, 1241 (10th Cir. 1990). Similarly, "[w]e review the 

state law determinations of the district court de nova, according 

no deference." Mid-America Pipeline v. Lario Enterprises, 942 

F.2d 1519, 1524 (10th Cir. 1991) (citing Salve Regina College v. 

Russell, 111 S. Ct. 1217, 1221-25 (1991)). 

II. DISCUSSION 

A. Qualified Privilege 

Under Utah law, a statement is conditionally privileged if it 

is made to protect (1) a legitimate interest of the publisher of 

the communication; (2) a legitimate interest of the recipient of 

the communication or of a third person; or (3) a legitimate common 

interest between the publisher and the recipient of the 

communication. Brehany v. Nordstrom, Inc., 812 P.2d 49, 58 (Utah 

1991). Utah courts have recognized a conditional privilege, also 

known as a qualified privilege, in both defamation cases, see, 

~, id. at 58-59, and intentional interference with prospective 

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economic relations cases, see, e.g., Leigh Furniture and Carpet 

Co. v. Isom, 657 P.2d 293, 304 (Utah 1982). 

We agree with the district court that the communication at 

issue falls within the protection of a qualified privilege. 3 In 

fact, all three prongs of Brehany are satisfied. First, Thiokol, 

the publisher, had a legitimate interest in not wanting Agee back 

on the premises in light of its business relationship with Boeing. 

Regardless of whether that relationship was adversarial, allowing 

a hostile engineer to oversee his former employer might well be 

detrimental to employee morale and productivity. See Howcroft v. 

Mountain States Tel. & Tel. Co., 712 F. Supp. 1514 (D. Utah 

1989). 4 Second, Boeing, the recipient, had a legitimate interest 

in learning the employment background of an individual being 

considering for an important oversight position. See Brehany, 812 

P.2d at 58 ("qualified privilege protects an employer's 

3 In so doing, we reject Agee•s contention that public policy 

considerations militate against the existence of a qualified 

privilege in this case. 

4 In Howcroft, an employee terminated by Mountain Bell due to 

misconduct later applied to Wang, who had various accounts with 

Mountain Bell. Mountain Bell informed Wang that the employee had 

left on "unhappy terms" and would not be allowed to work on the 

Mountain Bell-Wang account. Accordingly, Wang did not hire the 

employee. Id. at 1517. The court stated that 

[i]n any event, Mountain Bell would be privileged in 

refusing to let [the former employee] return frequently 

to review records at its premises, where he would have 

convenient access to Mountain Bell's valuable equipment 

and would be in direct contact with his former 

supervisor and fellow employees. It would be reasonable 

to assume that after being fired, [the former employee] 

might be hostile towards Mountain Bell. 

Id. at 1521. 

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communication to employees and to other interested parties 

concerning the reasons for an employee's discharge"). Third, 

Thiokol and Boeing had a mutual common interest in a harmonious 

and cooperative working relationship. The reason for Agee's 

discharge and the fact that Thiokol did not want him back on the 

premises were highly relevant considerations with respect to 

whether Agee would be able to work as an effective liaison between 

Boeing and Thiokol. 

B. Lack of Malice 

In order to defeat a qualified privilege, the plaintiff must 

show "that the defendant acted with malice or that the publication 

of the defamatory material extended beyond those who had a legally 

justified reason for receiving it." Brehany, 812 P.2d at 58 

(citation omitted). To show malice, the plaintiff must show (1) 

"an improper motive such as a desire to do harm" or (2) "that the 

defendant did not honestly believe his statements to be true." 

Direct Import Buyers Ass'n v. KSL, Inc., 538 P.2d 1040, 1042 (Utah 

1975). 

We agree with the district court that Agee did not present 

concrete evidence in opposition to the motion for summary judgment 

that Thiokol acted maliciously--i.e., that Thiokol desired to harm 

Agee or acted on the basis of personal hostility or ill will. 

Thiokol explains that the communication at issue was motivated by 

a desire to keep the systems safety unit running smoothly, not by 

"spite, ill-will, or hatred toward Mr. Agee." Appellee's Supp. 

App. at 2. Agee has presented no specific evidence to the 

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contrary. Nor has Agee shown that the communication at issue 

exceeded the scope of the privilege. Rather, as discussed supra, 

the communication at issue was directly related to the common 

interests shared by Boeing and Thiokol. 

Accordingly, Agee may defeat the qualified privilege only if 

he can prove that Thiokol honestly did not believe its statement 

that Agee's work was unacceptable was true. Agee attempts to do 

so only by pointing to a memorandum that specifies that the reason 

for Agee's termination was Thiokol's need to meet its 

predetermined manpower level after the hiring of a permanent 

employee. This memorandum is consistent, however, with Thiokol's 

statement that Agee's unacceptable work made him the first choice 

for termination under the manpower rule and it therefore does not 

call Thiokol's belief in its statement into question. 

For the foregoing reasons, Agee has not satisfied his burden 

of proving malice. 

c. Intentional Interference With Prospective Economic Relations 

In order to recover damages for intentional interference with 

prospective economic relations, the plaintiff must show, inter 

alia, improper purpose or means. See Leigh Furniture, 657 P.2d at 

304 (to recover for intentional interference with prospective 

economic relations, plaintiff must prove "(1) that the defendant 

intentionally interfered with the plaintiff's existing or 

potential economic relations, (2) for an improper purpose or by 

improper means, (3) causing injury to the plaintiff."). We affirm 

the district court's decision that Thiokol was entitled to summary 

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judgment on plaintiff's claim for intentional interference with 

prospective economic relations. 

First, Agee has not established that Thiokol acted with an 

improper purpose or by improper means. The improper purpose 

requirement is satisfied only if the improper purpose is the 

"predominant purpose" behind the acts. Id. at 309 n.10. Malice 

and improper purpose are closely related. See id. at 305 (the 

terms "wrongful or malicious" are "functionally equivalent" to 

"improper means or improper purpose"). As discussed supra, Agee 

has not proven that Thiokol acted with malice. It therefore 

follows that he has not proven that Thiokol acted with an improper 

purpose. 

Nor has Agee presented evidence to satisfy the alternative 

requirement of improper means. This requirement "is satisfied 

where the means used to interfere with a party's economic 

relations are contrary to law, such as violations of statutes, 

regulations, or recognized common-law rules." Id. at 308. 

"[V]iolence, threats or other intimidation, deceit or 

misrepresentation, bribery, unfounded litigation, defamation, or 

disparaging falsehood" are common examples of improper means. Id. 

Agee has not presented evidence that Thiokol engaged in any of 

these types of conduct. 

Finally, as discussed in the following section, Agee has not 

shown that he suffered any injury. 

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D. Defamation 

The tort of defamation provides redress only if a publication 

injures the plaintiff's reputation. Cox v. Hatch, 761 P.2d 556, 

561 (Utah 1988). We agree with the district court that Agee did 

not show that he suffered any injury to his professional 

reputation. 5 

Agee argues that proof of injury to reputation is not 

required because Thiokol's statement that Agee was terminated due 

to "unacceptable work" was defamatory per se. In Utah, a 

statement is defamatory per se if it amounts to a "charge of 

conduct that is incompatible with the exercise of a lawful 

business, trade, profession, or office." Allred v. Cook, 590 P.2d 

318, 320 (Utah 1979). Agee's argument is foreclosed by Larson v. 

Sysco Corp., 767 P.2d 557 (Utah 1989), in which the Supreme Court 

of Utah held that a former employer's statement that the plaintiff 

had been fired for "poor performance" was not defamatory per se. 

The court stated: 

[T]he type of statement required for the purposes of 

defamation per se with respect to the practice of a 

trade or profession necessarily must, as its natural and 

proximate consequence, compel the conclusion that 

plaintiff will be damaged. Speculative injury as to 

some future difficulty does not give rise to a cause of 

action as defamatory per se. The employer's notation 

indicating "poor performance" as the reason for 

[plaintiff's] termination cannot be considered a 

statement which will necessarily injure his trade or 

profession. 

Id. at 560 (citations omitted). 

5 Accordingly, we need not address Thiokol's contention that 

summary judgment was also appropriate because the communication at 

issue was true and accurate, and truth is an absolute defense to 

defamation. 

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Furthermore, "if the statement made is capable of two 

interpretations, one interpretation which might refer to his 

professional reputation and one which might refer to his personal 

character, it cannot be slander per se." Allred, 590 P.2d at 321. 

Apparently, this communication is capable of two interpretations 

because Helmstetter stated that nothing Sanofsky said to him 

"imputed a lack of professional ability and/or criminal misconduct 

on Mr. Agee's part." Appellee's Supp. App., Ex. C, at 7. 

Thus, proof of injury to reputation is required. Agee's sole 

evidence of injury to reputation is Boeing's decision not to hire 

him. We agree with the district court that this is insufficient 

evidence of injury, particularly in light of the affirmative 

evidence to the contrary. For example, Agee admits that Boeing 

representatives have not altered their opinion of Agee's 

professional reputation; a vice-president of Boeing still holds 

him in "extraordinarily high esteem." See Appellee's Supp. App., 

Ex. F, at 43. In addition, Agee admits that Rogers told him that 

he would be happy to try to find Agee another job at Boeing. See 

id. at 38. Furthermore, Agee testified in his deposition that his 

colleagues in the aerospace industry continue to view him in high 

regard. Id. at 44-49. Accordingly, we affirm the district 

court's grant of summary judgment on this claim. 

E. Punitive Damages 

The district court granted Thiokol's motion to strike Agee's 

claim for punitive damages from his Third Amended Complaint. We 

affirm the court's action because a court can award punitive 

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damages only if the defendant acted with malice, see Lavicky v. 

Burnett, 758 F.2d 468, 477 (10th Cir. 1985) (defining malice for 

these purposes), cert. denied, 474 U.S. 1101 (1986), and Agee did 

not establish that Thiokol acted with malice. Furthermore, 

"punitive damages may not be recovered where no actual damages are 

found," see Aubertin v. Board of County Comm'rs, 588 F.2d 781, 786 

(10th Cir. 1978), and Agee did not establish any injury to his 

reputation. 

III. CONCLUSION 

For the reasons stated above, we AFFIRM the decision of 

the district court. 

Entered for the Court 

David M. Ebel 

Circuit Judge 

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