Opinion ID: 1640643
Heading Depth: 1
Heading Rank: 1

Heading: facts and proceedings in the federal district court [1]

Text: ¶ 2. On January 10, 2003, Lewis DeCarlo filed a complaint in the United States District Court for the Southern District of Mississippi against various defendants, including Bonus Stores, Inc., d/b/a Bill's Dollar Stores, Inc., William Fields and Jimmy Schafer. Today's discussion, thankfully, does not require us to name all the corporate entities involved in this litigation, including corporations in the state of Delaware and the country of Iceland. DeCarlo was an employee of Bonus Stores, Inc. (Bonus), serving as its vice president of store operations from October 8, 2001, until he was terminated on May 31, 2002. During the period of time relevant to today's discussion, Jimmy Schafer was the president and chief executive officer of Bonus, which was headquartered in Columbia, Mississippi, having previously served as CEO of Bonus Stores of Florida, Inc. (Bonus Florida). Bonus was formed as a Delaware corporation in order to purchase Bill's Dollar Stores out of bankruptcy. While Schafer was serving as CEO of Bonus Florida, he started another company known as Retail Services, Inc. (Retail Services), in which he owned a fifty-percent interest, for the purpose of buying old fixtures from Wal-Mart and then refurbishing and selling them to Bonus Florida. Once Schafer moved to Mississippi to serve as CEO of Bonus, Retail Services continued the same business by selling the refurbished fixtures to Bonus. ¶ 3. In April 2002 after Schafer expressed concerns about Bonus's profitability, DeCarlo commenced an investigation in an effort to determine the reasons for the disappointing profit and loss statements; however, at the time he commenced this investigation, DeCarlo was unaware of the existence of the relationship between Retail Services and Bonus, as well as Schafer's involvement with Retail Services. Not surprisingly, during the course of his investigation, DeCarlo learned of the relationship between Bonus and Retail Services and Schafer's connection with Retail Services. Also, DeCarlo's investigation raised suspicions that Retail Services may have been billing Bonus for fixtures which were never delivered. DeCarlo reported his findings to Guy Heyl, Bonus's chief financial officer and secretary to the board of directors. According to DeCarlo, after he reported his findings, Heyl told him to lay low and that he (Heyl) would investigate the matter further. DeCarlo asserts that immediately after reporting to Heyl, he was subjected to repeated harassment and retaliation by Bonus, through the actions of Schafer. DeCarlo likewise claims that he reported Schafer's conduct to several board members in May 2002, and that on May 31, 2002, Schafer, at the direction of Bonus's board of directors, terminated DeCarlo's employment with Bonus. DeCarlo further asserts that after his termination, he was subjected to harassment by William Fields, a member of Bonus's Board of Directors, in that Fields tried through intimidation to force DeCarlo to settle his employment issues, failing which he (Fields) threatened to interfere with DeCarlo's future attempts to secure employment. [2] ¶ 4. In due course, the United States District Court for the Southern District of Mississippi, Judge Keith Starrett presiding, was confronted with separate motions for summary judgment filed by Bonus, Schafer, and Fields. DeCarlo v. Bonus Stores, Inc., 2006 WL 1328890 at , 2006 U.S. Dist. LEXIS 47132,  (S.D.Miss. May 12, 2006). After discussing Mississippi's employment-at-will doctrine, and this Court's decision in McArn v. Allied Bruce-Terminix Co., Inc., 626 So.2d 603, 607 (Miss.1993) (carving out exceptions to our employment-at-will law where an employee is terminated for refusing to participate in an illegal act or for reporting the employer's illegal acts to the employer or anyone else), the district court found that while Schafer's suspicious activities, as described by DeCarlo and if proven, amounted to illegal activity, the McArn exceptions applied only to reporting illegal acts of the employer as opposed to illegal acts of a co-employee, not attributable to the employer. ( DeCarlo v. Bonus Stores, Inc., 2006 WL 1328890 at , 2006 U.S. Dist. LEXIS 47132, -12, -16). ¶ 5. Thus, the district court granted the separate motions for summary judgment of Bonus, Schafer, and Fields and entered a final judgment dismissing DeCarlo's complaint with prejudice. Id. at , 2006 U.S. Dist. LEXIS 47132, . Aggrieved by the district court's judgment of dismissal, DeCarlo appealed to the United States Court of Appeals for the Fifth Circuit.