The Honorable Rodney S. Webb, Chief Judge, Un ited States District Court for 1 the District of North Dakota, sitting by designation. The Ho norable Ann D. Montgomery, United States District Judge for th e 2 District of Minnesota. United States Court of Appeals FOR THE EIGHTH CIRCUIT

__________ No. 97-1009

___________ Mark Ewald, * * Appellant, * * App eal from the United States Distric t v. * Court for the District of Minnesota. * Wal-Mart Stores, Inc. * * Appellee. *

___________ Submitted: October 24, 1997 Filed: March 20, 1998

___________ Bef ore McMILLIAN, BEAM, Circuit Judges, and WEBB, United States Distric t 1 Judge.

___________ BEAM, Circuit Judge. Mark Ewald appeals the district court's grant of summary judgment t o Wal-Mart 2 on various claims stemming from the termination of his employment. We affirm.

I. BACKGROUND-2-

Mark Ewald was employed by Wal-Mart as a management trainee in it s Brooklyn Park, Minnesota, store. On May 17, 1995, the s tore suffered a cash shortage of $5,000. Kim Walters, Wal-Mart's district loss-prevention manager, investigated the following day. She concluded that there had been a theft and, based on statements of co-workers that put Ewald in or near the cash office when the theft had occurred , identified him as the primary suspect. Walters informed t he police and other Wal-Mart managers of her suspicions.
Ewald was next scheduled to work on May 21. About halfway through his shift, Ewaldwas informed that Walters and another district loss-prevention manager , Jonathon Harris, wanted to see him. Walters and Harris interrogated Ewald for over
an hou r and, although they never directly accused him, strongly implied that the y thoug ht Ewald had taken the money. Ewald's account of this interrogation is no t pleasant. Walters and Harr is falsely told Ewald they had found his fingerprints on the containers from which the money was taken and on security equ ipment which had been disabled during the theft; they told him that t hey had his credit report and knew he was in financi al trouble, which was also false. When Ewald did not confess to the theft , they became more forceful; raising their voices, leaning forward and speaking int o Ewald's face. When Ewald c omplained that he was uncomfortable, Harris told Ewald he was free to leave. Ewald told his inquisi tors that he had nothing further to say, and left the store for his dinner brea k. When he returned, Harris asked Ewald if he would cooperate further in the investigation. Ewald replied that he woul d, but only if he could have another member of management or an attorney present. Walters and Harri s
announc ed that they didn't deal with attorneys. They then told Ewald that he wa s suspended.
On May 24, Ewald returned to the store to meet with members of management. Although Ewal d had passed a polygraph examination and brought with him a copy of the results, management informed Ewald that he was being dism issed. They gave him an exit interview form that listed "failure to cooperate with an investigation" as the-3-

reason for his termination. Ewald was then informed that he could never enter a WalMart again, and was escorted out of the store by two members of management

. Although Wa lters informed the police of the incident, no charges were ever brough t against Ewald or anyone else in relation to the theft.

Ewaldfiled suit against Wal-Mart claiming 1) breach of contract; 2) wrongfu l dischar ge; 3) promissory estoppel; 4) retaliation under Minnesota's whistleblowe r statute, Minn. Stat. § 181.932; 5) civil conspiracy; 6) defamation; 7) failure to timely pay his wa ges; and 8) failure to give him timely written notice of the reasons for hi s termination. Wal-Mart moved for, and the district court granted, summary judgment against Ewald on all claims.

II. DISCUSSION

A grant of summary judgment is reviewed de novo. See Lang v. Star Herald , 107 F.3d 1308 , 1311 (8th Cir.), cert. denied , 118 S. Ct. 114 (1997). Summar y judgment is proper if, taking all facts and reasonable inferences from those facts in the light most favorable to the non-moving party, ther e is no genuine issue of material fact, and the movant is entitled to judgment as a matter of law. Id. ; see also Fed. R. Civ. P. 56(c). Because jurisdiction in this ca se is based on diversity of citizenship, Minnesota substantive law applies. See, e.g. , Mudlitz v. Mu tual Serv. Ins. Co. , 75 F. 3d 391, 393 (8th Cir. 1996).

A. Breach of Contract

In Minnesot a, employment for an indefinite term is terminable at will. Se e Cederstrand v. Lutheran Bhd. , 117 N.W.2 d 213, 221 (Minn. 1962). However, written employment policie s can create unilateral contracts, requiring discharge to be in good faith or for just cause. Pine River State Bank v. Mettille , 333 N.W.2d 622, 626-2 7 (Mi nn. 1983). Ewald contends that his employment contract with Wal-Mart was notDuring Ewald's tenure with Wal-Mart, the company pro duced and disseminated 3 two different

employee handbooks; one in 1991 and another in 1994. The provisions of the two are substantially similar and any differences between the two have no impact on our analysis. -4- at-will, but a contract allowing his termination only for just cause. He has two bases for this contention.
First, Ewald argues that Wal-Mart 's "Associate Handbook" created a unilateral 3 employment contract entitling him to termination only for good cause. Whether a handb ook constitutes all or part of a contract is determined by the outwar d manifestations of the parties. Id. at 626. Thus, an employer's disclaimer of intent to form a contract in a handbook will prevent it from being construed as an offer. Se e Michaelson v. Minnesota

Mining & Mfg. Co. , 474 N.W.2d 174, 180 (Minn. Ct. App. 1991). In this case, both handboo ks contained clear disclaimers. The 1991 handbook admonishes associates to "Please Note . . . the stated policies and benefits are no t intende d to create nor be interpreted in any way as a contract between Wal-Mart and you. Your employment with W al-Mart is on an 'at-will' basis." Likewise, in the 1994 Wal -Mart handbook, the company writes that "[t]his handbook is not a contract. " Thus, we find that neither handbook created a contract requiring ju st-cause termination.

Secon dly, Ewald argues that even if the handbook did not create a just-caus e employm ent contract, Wal-Mart's "Coaching for Improvement" program did. During the course of his management training, Ewald took a computer tutorial progra m instruct ing him on how to discipline employees under this progressive five-ste p program. He contends he w as told by management that no Wal-Mart employee could be dismissed unless Wal-Mart first followed this process.Although we are not called upon in this case to assess attorney conduct, ou r 4 review of the record has required us to sift through deposition transcripts containin g frequent interruptions, unjustified instructions to witnesses not to answer questions, and argumentative and suggestive objections by Ewald's counsel. We remind counsel that merely because depositions do not take place in the presence of judges does not mean lawyers can forget their responsibilities as officers of the court. -5- We have painstakingly reviewed the record, and can find no sup port for Ewald's 4 assertio n that he was told that Wal-Mart employees could not be fired outside th e Coachin g for Improvement program. Moreover, whatever members of managemen t may or may not have stated, the company expressly disclaimed any contractua l guarantee of

specific discipline. The 1991 handbook acknowledgment (which Ewald signed) explains that "nothing stated in this handbook or by any member o f management

is intended to create any guarantees of any certain disciplinar y procedures."

We find no just-cause employment contract; the relationship was at-will. This
means that Wal-Mart could fire Ewald for any reason or no reason at all. We do not cond one the company's heavy-handed tactics, but find nevertheless, that there is n o legal basis for contract liability in this case.

B. Defamation

Ewald as serts that three sets of communications defamed him: 1) Walters' s id entification of Ewald to the police as her main suspect and various statements sh e made to Wal-Mart management and empl oyees regarding her suspicions about Ewald; 2) ma nagement's statement to Ewald that he was being discharged for "failure t o cooperate with an investigation," which he was compelled to disclose during his search for other employment; and 3) statements Ewald postulates must have been made t o other Wal -Mart employees by management about the circumstances of his discharge.-6-

In order to be ac tionable as defamation under Minnesota law, a statement must be false and tend to harm the plaintiff's reputation in the estimation of the community. See Stuempges v. Parke, Davis & Co. , 297 N.W.2d 252, 255 (Minn. 1980). However,
even i f a defamatory statement has been made, the originators of the statement ma y escape liabi lity if they are entitled to a qualified privilege. Lewis v. Equitable Lif e Assur. Soc'y , 389 N.W.2d 876, 889 (Minn. 1986). Under Minnesota law, an employer is enti tled to qualified privilege if the communication was made on a proper occasion andfor a proper purpose, and if the statements were based on reasonable and proper gro unds. Id. Communications between an employer's agents made in the course o f investigating or punishingan employee for misconduct are qualifiedly privileged. See McBride v. Sears, Roebuck & Co. , 235 N.W.2d 371, 374 (Minn. 1975) (privileg e applies b ecause an "employer has an important interest in protecting itself and th e public against dishonest or otherwise harmful employees") . Likewise, communications made to an e mployee concerning the reasons for his or her discharge are qualifiedl y privileged. See Harvet v. Unity Medical Ctr. , 428 N.W.2d 574, 579 (Minn. Ct. App. 1988). Finally, communication to employees about the reasons for another employee's disch arge are also qualifiedly privileged. See Wirig v. Kinney Shoe Corp. , 46 1 N.W.2d 374, 380 (Minn. 1990).

We find that all of Wal-Mart's statements are entitled to qualified privilege

. Walters' s disclosures were made in the course of investigating employee misconduct. The statement to Ewald that he was being terminated for failure to cooperate in a n inve stigation was made only to explain the reason for his discharge. Finally, even i f Ew ald's suspicions about what management told other Wal-Mart employees wer e eventually confirmed (and this is not supported b y the record), these disclosures would be qualifiedly privileged as communications to em ployees as to the reasons for another employee's discharge.

A qualif ied privilege may be lost, however, if abused. Lewis , 389 N.W.2d a t 890. Abuse is established if the plaintiff demonstrates that the defendant acted with-7-

actual malice, w hich exists where the defendant's statements were made from "ill will and impr oper motives, or causelessly and wantonly for the purpose of injuring th e plaintiff." Stumpges , 297 N.W.2d at 257 (quotation omitted). Ewald argues tha t Walters's investigation was deficient, and that her failure to fully investigate the facts before making the alleged defamatory statements establishes actual malice.

We find no evidence of such actual malice. Th e uncontradicted evidence shows first , that Walters had established that a theft had actually occurred and interviews of other employees did not contradict th at conclusion. Furthermore, no one involved had any grudge against Ewald, and Walters double-checked the details of the employe e st atements, confirming them where possible. Walters conducted an independen t investigation, relying on information from known sources. In sum, the evidenc e indica tes that Wal-Mart's managers acted on a reasonable belief that Ewald had been involved in the theft and t

heir statements were based on that belief. Compare Karnes v. Milo Beau ty and Barber Supply Co. , 441 N.W.2d 565, 569 (Minn. Ct. App. 1989) (no act ual malice when sole motivation behind allegedly defamatory statements wa s proper concern about possible theft) wi th Smits v. Wal-Mart Stores, Inc. , 525 N.W.2d 554, 557 (Minn. Ct. App. 1994) (malice established where store manager told police he had witnessed shoplifting, even though he had not actually seen the crime, and even thoug h other employees told him they were not sure a theft had even occurred) ; Thom pson v. Campbell , 845 F. Supp. 665, 681 (D. Minn. 1994) (malice establishe d because accusation came from an employee with a motive to retaliate against th e plaintiff, and the company failed to confirm the details of the charge before dismissing her); and Wirig , 461 N.W.2d at 380 (malice established because employer conducted no investigation of the charges against t he employee, and instead relied on accusations made by an employee wh ose credibility was questionable and on secondhand hearsay from unidentified sources). Summary judgment in Wal-Mart's favor on the defamation claim was proper.-8-

We have carefully con sidered each of the remainder of Ewald's claims and find them to be without merit.

III. CONCLUSION
For the foregoing reasons, the opinion of the district court is affirmed.
WEBB, Chief District Judge, concurring specially.
I concur in the result of this case be cause the law is clearly in Wal-Mart's favor. I wri te separately, however, to express my concern with the present state of th e Minnesota "at will" employment doctrine as it pertains to employee handbooks. In my view, courts are placing too much emphasis on disclaimers rather t han searching for the true intent of employee handbooks as a whole. Savvy employers such as Wal-Mar t should not be allowed to hid e behind relatively inconspicuous disclaimers when in the
same b reath they outline detailed procedures for discipline or termination. Thes e illusory promises have no purpose other than to provide employees a false sense o f security and stability in their employment, a purpose which should not be so readil y condoned by the courts.
A true copy.

ATTEST:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.