              IN THE COURT OF APPEALS OF TENNESSEE
                         AT KNOXVILLE
                                                             FILED
                                                                May 4, 1998

                                                            Cecil Crowson, Jr.
JEFF HUBRIG,                            )                    Appellate C ourt Clerk
                                        )
      Plaintiff/Appellant                     )      ANDERSON CIRCUIT
                                        )
v.                                      )     NO. 03A01-9711-CV-00525
                                        )
LOCKHEED MARTIN ENERGY                  )     HON. JAMES B. SCOTT
SYSTEMS, INC.;                          )     JUDGE
LINC HALL, Individually;                )
LARRY PIERCE, Individually,             )
and JIM KOLLING, Individually,          )
                                        )     AFFIRMED
      Defendants/Appellees              )     and REMANDED



A. Philip Lomonaco, Knoxville, and Kathleen E. McGeechan, Kingston, for
Appellant.

G. Wilson Horde and Patricia L. McNutt, Oak Ridge; E. H. Rayson and John C.
Burgin, Jr., Knoxville, for the Appellees.

                                  OPINION

                                              INMAN, Senior Judge

      The plaintiff describes himself as a whistle blower, as that term has come

to be used, and seeks damages for his termination from employment because he

allegedly refused to participate in and keep silent about certain allegedly illegal

corporate activities. The allegations were denied by the defendants whose

motion for summary judgment was granted. The plaintiff appeals and presents

for review the issues of (1) whether he was terminated for time card abuse and

sexual harassment or whether these reasons were pretextual, (2) whether a

common law cause of action for retaliatory discharge remains viable in this

jurisdiction, and (3) whether his termination constituted outrageous conduct by

the defendants. Our review of the findings of fact made by the trial Court is de
novo upon the record of the trial Court, accompanied by a presumption of the

correctness of the finding, unless the preponderance of the evidence is

otherwise. TENN. R. APP. P., RULE 13(d). See, Byrd v. Hall, 847 S.W.2d 208

(Tenn. 1993). We will refer to the plaintiff as Hubrig, or as the appellant, or as

the plaintiff. This record is unusually prolix; prima facie, it appeared to reflect a

trial by affidavit, an impermissible use of RULE 56, see: Womack v. Blue Cross-

Blue Shield, 593 S.W.2d 294 (Tenn. 1980), but an in-depth analysis reveals that

the trial court correctly held that the totality of the evidence demonstrates the

absence of a genuine issue of fact or law. We therefore affirm the judgment.

                                          I

      Lockheed Martin Energy Systems, Inc. managed and operated three

government-owned facilities in Oak Ridge, Tennessee pursuant to a contract

with the United States Department of Energy [“DOE”], one of which is known

as the Oak Ridge National Laboratory [“ORNL”].

      The plaintiff was employed in the Applied Technology Division [“ATD”]

of ORNL from 1988 through 1991. In a memo dated April 18, 1991, he asked

ATD Director Dean Waters to be “relieved of my current assignment” pending

an investigation into allegations made against him, and expressed his regret that

he had been unable to win the “proactive support of your staff” because a

member of Waters’ staff had “actively campaigned” against him “without

consequence” resulting in “allegations of misconduct of office which are

completely false and without merit.” These allegations will be discussed later.

      After meetings with Waters, the plaintiff filed a formal complaint on

December 30, 1991 with ORNL Site Review Board alleging that Waters had

harassed him beginning April 19, 1991 and that there were “project

management problems, including cost overruns, incomplete or missing project
                                          2
plans, and disagreement with sponsors over deliverables and schedules of

performance.” These charges led to two investigations, one relating to the

treatment of the plaintiff and the other to the manner in which work had been

conducted by that division.

         A five-person Site Review Board investigated the plaintiff’s complaint

alleging mistreatment by Waters, while the Central Auditing Division examined

his allegations of mismanagement. The Site Review Board, after conducting 35

to 40 interviews, issued a response to the plaintiff on July 22, 1992, concerning

his complaint of ill-treatment by Waters, and found that Waters had engaged in

inappropriate management conduct but that Hubrig “could have directly

contributed to [his] situation . . . by [his] management style, interpersonal

interactions, and [his] blind loyalty to Waters . . ..” Remedial actions were

specified. A more detailed report was submitted to Energy Systems’

Management, which stated that the facts supported “Hubrig’s allegations . . . of

harassment,” and that “Waters exercised poor judgment when he allowed

Hubrig’s autocratic and control-oriented management style to lead to alienation

of managers and staff.” It recommended an “immediate study of management

practices.” 1

         The lengthy report of the Central Auditing Division reviewed Hubrig’s

allegations of mismanagement and found several of them to be valid.

         Before the Site Review Board issued its report, the plaintiff, then working

as a Quality Assurance Specialist, by letter dated July 15, 1992, requested a

meeting with Energy Systems President, Clyde Hopkins. He enclosed

         1
          Hubrig expressed dissatisfaction with the response in a letter dated August 31, 1992, but took no
further action. Among other things, he objected to the finding in the response, suggested by cou nsel, that Waters
had engaged in “inappropriate managerial conduct” rather than “harassment.” ORNL Director Trivelpiece sent
Hubrig a letter apologizing for the “unfair treatment to which you were subjected” and his performance appraisal
rating was increased to a “consistently exceeds” level. Trivelpiece later wrote Hubrig saying that he considered
the matter closed.

                                                        3
documents about “critical issues” and “career objectives,” and informed

Hopkins of his objective “to facilitate remediation of the dysfunctional

management practices within the Applied Technology Division” and to be

reassigned to a “job position consistent with my position history . . ..” Hopkins

directed Robert Merriman, the Vice President of Energy Systems’

Environmental Restoration and Waste Management Business Unit, to find a

suitable position for Hubrig. Merriman asked Linc Hall, then Plant Manager at

K-25, to consider Hubrig. Hall, after reviewing Hubrig’s qualifications,

appointed him Director of the newly-formed Institutional Planning and

Facilities Management Division. The appointment was announced on August

31, 1992, more than two years before Hubrig’s resignation.

      Plaintiff remained Director of the Institutional Planning and Facilities

Management Division from September 1, 1992 until February 1, 1994, at which

time, as part of a reorganization to reduce the cost of operations at K-25, three

organizations were eliminated. The work of Institutional Planning and

Facilities Management was consolidated with another program, and Marvin

Baer was appointed to head the newly consolidated division. Robert Eby was

then Plant Manager of K-25. Eby made the decision to appoint Baer on the

basis of Baer’s experience and his judgment that Baer was the better manager.

Eby believed that Hubrig had not performed well in the position for reasons

unrelated to Hubrig’s problems at the Applied Technology Division, of which

Eby had not been informed. This decision was approved by Linc Hall, Vice

President of Environmental Restoration and Waste Management. As a result of

this reorganization, Hubrig became a member of Linc Hall’s staff in the




                                         4
Environmental Restoration Waste Management Business Unit, a move which

did not affect his compensation or job level.

         Hubrig says that shortly after he began his new position, Hall directed

him to “coordinate appropriate changes to ensure ‘verbatim worker compliance’

with ‘flowdown’ requirements within the Environmental Restoration Program at

K-25.” Hubrig contends he engaged in protected activity by reporting corporate

failure to protect workers. He relies upon findings of the Defense Nuclear

Facilities Safety Board which were issued months after Hubrig was given his

assignment by Hall but which also refers to issues at the Y-12 plant and not the

K-25 plant where Hubrig worked. In this connection, the appellees argue that

assertions in Hubrig’s affidavit are either not based upon his own personal

knowledge or reflect his own inferences drawn from ambiguous facts or from

statements taken out of context.2 More about this later.

         It is not disputed that Linc Hall authorized the plaintiff to participate in

an “Improvement Team” program in which Hubrig acknowledged that he

enlisted the assistance of two subcontractor employees, Carol Hockett and Mary

Hutson, as well as other employees.

         In the summer of 1994, Hall learned that Hubrig was not regularly

reporting for work and was not remaining at work for the required hours and

was often seen in the company of Carol Hockett. He discussed these allegations

with Larry Pierce, the Director of Human Resources at K-25, and after a

preliminary examination of Hubrig’s time cards, requested Central Auditing,

headed by defendant Jim Kolling, to investigate the validity of the allegations.




         2
          The plaintiff asserts in his affidavit that his team inadvertently started to “discover and document
managerial negligence by Linc H all’s . . . direct employees” and mak es an ambiguous reference abo ut a “failure
to com ply with p rocedu re and reg ulation.”

                                                        5
         The audit was completed in November 1994. It disclosed many

irregularities in Hubrig’s time cards, together with inaccurate arrival, lunch and

departure times. Significantly, the audit documented ten unrecorded absences

in January, March, May, and June, 1994, and documented instances where

Hubrig’s explanations were inconsistent with his own previous statements and

directions to other employees, as, for instance, an occasion when he directed his

secretary to “forward my time card for each month to me as soon as it is

received” and that he would “complete the time card.” The auditors concluded

this statement contradicted Hubrig’s assertions that he did not understand the

time card system. Another example of an inconsistency concerned Hubrig’s

erratic time for reporting to work. His explanation was that he was unaware

that he had a shift schedule.

         The audit also examined whether Hubrig had a pattern of taking

excessive lunch breaks and whether he had a pattern of leaving work early. The

auditors found he often left work early and that his explanation - that he worked

about a third of his overtime at home - was unsupported by documentation

Hubrig said he could provide to them but did not.3 For these and a number of

other reasons, the audit concluded the foregoing constituted violations of

company policy and procedures on hours of work and was inappropriate

behavior for any Energy Systems employee. The plaintiff offered the off-setting

defense that he frequently reported for work earlier than required.

         The time card audit also involved the activities of Carol Hockett, then age

25, who was supervised by Hubrig and frequently seen in his company leaving

         3
           The au ditors also co ncluded that for Hu brig to ha ve wor ked the a moun t of overtim e he claim ed to
have w orked w ould ha ve requ ired that he leave the K -25 facility b etween 8:30 p.m . and 10 :30 p.m . And w hile
Hubrig told the auditors on average he left the facility at those times, he had also inconsistently informed the
auditors that he normally left work either between 4:00 to 4:30 p.m. or between 7:00 to 7:30 p.m. The earlier
departu re times w ere, mo reover, co nfirmed by Ms . Hocke tt, who told the audito rs that Hub rig usually left with
her at that time.

                                                          6
the plant and elsewhere. She was questioned during the audit, and it came to

light that she had more than a working relationship with Hubrig, who was

married. Complaints of sexual harassment made by Carol Hockett and Mary

Hutson to the Energy Systems’ Ethics Office on November 23, 1994 were the

critical developments in conjunction with the time card problems that led to

Hubrig’s resignation. The complaints by Hockett and Hutson against Hubrig

appear to represent the point that sometimes the best defense is a good offense.

      Ms. Hockett stated to Ethics Officer Barbara Ashdown that, during her

relationship with Hubrig, they would meet off site, at restaurants and elsewhere,

including the parking lot at K-25, for extended periods. They also met in her

condo and in a motel bedroom. Hubrig gave her a ring and sent her notes

expressing affection. Hockett explained that the relationship was “personal”

and that Hubrig wanted her to be an administrative assistant in a business he

had in mind but which never materialized. She had attempted to break off the

relationship several times prior to the audit, as far back as December 1993, but

on each occasion Hubrig “shunned” her and “would ignore” her, “provide no

work direction, and exclude her from meetings.” She said she resumed the

relationship “due to the uncomfortable work environment.”

      Ms. Hockett told Ms. Ashdown that, on September 26, 1994, after the

time card audit had commenced and because she was embarrassed at how others

saw her in her relationship with Hubrig, she told Hubrig she would have

nothing further to do with him “outside the fence,” i.e., outside of her normal

job duties. She also related to Ms. Ashdown that soon after this discussion with

Hubrig his reprisals started anew and that they continued to the point she

believed it necessary to make her complaint. She was excluded from team



                                        7
meetings and was told by Hubrig that he “would not continue to provide me

with opportunities for visibility or be able to support me much longer in my

current job.” In late October, Hubrig arranged to have a “team building

facilitation” conducted by Energy Systems’ employee Vivian Marshall with

himself, Ms. Hockett, and Mary Hutson in attendance. Ms. Hockett described

the meeting in this way:

      During this meeting, we were all asked what it would take to continue
      working as a team. I indicated that I needed to separate “inside” the
      fence activities from “outside” the fence activities. Hubrig responded
      that those activities were “seamless.” Vivian called a caucus with
      Hubrig. The meeting reconvened, and Hubrig agreed that the team
      would function dealing only with “inside” the fence activities.
      Hubrig stated in front of others, i.e., Mary Hutson and Vivian
      Marshall [CCE facilitator for Team Building], that I had betrayed the
      team. What he meant was that I had personally betrayed him by
      ending our personal relationship.

      Soon after this meeting, Ms. Hockett stated that she again was excluded

from normal team activities, and related the incident that caused her to seek help

and make her complaint:

             On November 17, 1994, Hubrig and I had a discussion about
      my work status. Hubrig said that he could not continue to work like
      we had been and indicated that he would not have a problem telling
      the Corporation that I was pursuing other employment. I told him
      that I wanted to continue working at Energy Systems. He said that we
      might need to clarify our understanding as to what had happened
      related to our relationship. Hubrig said for him to be able to feel that
      I had not betrayed his trust, it was necessary that we have a
      “seamless” relationship. He indicated that he did not want me to meet
      alone with Vivian Marshall and that if I wanted to keep my job, I
      needed to get the Corporation off his back.

      Ms. Hutson went with Ms. Hockett to the meeting with Ms. Ashdown.

She had observed Ms. Hockett’s exclusion from team activities and told Ms.

Ashdown the exclusion had been directed by Hubrig. Ms. Huston also said that

Hubrig began spending literally days with her in talking about Ms. Hockett and

that he started walking Ms. Hutson to her car several times a week, telling her


                                         8
that she was “the only one who was keeping him going and that he needed my

support and loyalty.” This continued until Ms. Hutson told him that she could

no longer speak with him about Ms. Hockett since it was causing her emotional

distress. Ms. Hutson said, however, that on November 17, Hubrig called her at

her home expressing concern over Ms. Hockett’s plan to meet alone with

Vivian Marshall. Ms. Hutson told Ms. Ashdown that, despite her entreaties to

Hubrig that he desist, “Hubrig has persisted to harass me by inappropriately

discussing personal issues with me, calling me at home, following me to my car,

and talking of personal matters even though I have requested him to stop doing

so. He has begun calling me names he used to call Hockett such as kiddo,

coach, counselor. He has used me and the corporation and even used team

facilitation to try to regain his personal relationship with Hockett. For the past

eight weeks very minimal work has been performed, with the majority of time

spent in discussions related to Hockett.”

      The investigation of these complaints, along with the time at work audit,

was reported to Hall and Pierce. On December 1, 1994, they and Kolling met

with Hubrig to discuss the results of the audit in which plaintiff’s time card and

work time irregularities were found. Hubrig was informed that the audit report

disclosed substantial variances in his time at work as recorded and his actual

time at work, and that the time card abuse was an extremely serious matter.

Plaintiff denied any intent to defraud the company and stated that he was

ignorant of the timekeeping method, an explanation that Hall found incredible.

The plaintiff was reminded that he was a senior manager and of all the training

that he had received relative to timekeeping and attendance at work.




                                         9
      Hubrig does not seriously disagree about this meeting, although he stated

that he “did not clearly understand what was being said,” and asked for “further

clarification” which was denied. According to his own affidavit, however, he

had already met with the auditors three times for a total of eight hours and had

discussed the matter with them over the telephone on at least six occasions.

      On December 2, 1994, Ms. Hockett and Ms. Hutson provided Ms.

Ashdown with signed statements about their harassment by Hubrig. This

information was provided to Linc Hall and Larry Pierce, who met with Energy

Systems’ President Gordon Fee, Vice President Mack Wilson, Robert Worrell

of Human Resources, General Counsel G. Wilson Horde, and Deputy General

Counsel Patricia L. McNutt to discuss Hubrig’s situation. Hall, Pierce and

Wilson recommended that if the allegations of sexual harassment were credible,

Hubrig should be terminated with instructions that Ms. Ashdown speak with

Ms. Hockett again and that Hubrig be given an opportunity to respond to the

allegations.

      Four days later, Hall and Pierce, along with Bruce Kimmel [for whom

Hubrig was working at the time], met with Hubrig, who was informed of the

charges by the two female employees and was given an opportunity to make any

explanation he wished. Larry Pierce’s notes of the meeting reflect the

following:

      A meeting was held in Linc’s office to confront Hubrig with the
      allegations made by the two women. Present were Linc [Hall], Larry
      [Pierce], Jeff [Hubrig], and Bruce Kimmel, for whom Hubrig has been
      working during the last several months. Linc explained the purpose
      of the meeting, and Larry proceeded to summarize the allegations of
      both parties. He worked from the two yellow sheets attached and
      Numbered 2 and 3. He characterized the allegations as extremely
      serious. Hubrig once again denied any wrongdoing whatsoever. He
      repeatedly used flowery descriptors like “leadership venture,”
      “leadership journey,” “lines of inquiry,” and “shared vision.” He


                                       10
      basically explained away Hockett’s allegations by stating that she
      could not decide whether she wanted to stay or leave. Hubrig
      portrayed himself as being concerned only with the welfare of the
      team and the work to be performed. With respect to Hutson, he flatly
      denied her allegations of wasting time and following her to the
      parking lot. Hubrig was never pressed on specifics except on two
      occasions. Larry asked if he had spent up to one hour in the parking
      lot talking to Mary during the time the audit was transpiring. He
      stated, “I don’t recall.” When asked if he had accompanied her to the
      parking lot prior to the beginning of the audit, he again stated, “I
      don’t recall.” He portrayed Hockett and Hutson as being devastated
      by the audit, wishing to distance themselves from Jeff Hubrig.
      During this meeting he alluded to the fact that Don White, an ER
      employee overseeing their work, could attest to Hockett’s unusual
      behavior of recent days. Linc told Jeff that these matters were serious
      and that the former could be terminated. Hubrig asked if he needed
      to get an attorney or take other action. Hubrig wanted more time to
      respond to the allegations. The meeting ended at approximately 3:15
      p.m. Hubrig asked for one minute alone with Linc at the end of the
      meeting.

      Hubrig’s version of this meeting is not materially different. He

acknowledges being told that he was not to see the two female employees again

either “inside or outside the fence.” He says that he asked for “specific details

and the opportunity to provide evidential proofs that the allegations of

harassment were unfounded” but was denied this request. He also stated that he

“could not clearly understand the allegations.” At the conclusion of the

meeting, plaintiff was informed that the facts would be carefully weighed and

that the company would make a decision within a few days and then get back

with him.

      In his affidavit, Hubrig says that he was not given details and thus was

not permitted to provide ‘evidential’ proof that the allegations were unfounded.

The affidavit (written after each of his accusers had been deposed) significantly

does not deny having a “personal relationship” or friendship with Ms. Hockett

nor her assertion that he treated her “differently” after she tried to break off

their affair. Hubrig says in his brief that he and Ms. Hockett enjoyed a


                                         11
“consensual and mutually beneficial relationship” and that after it ended in

September 1994 “he was distraught, continually requesting reconsideration, and

seeking help from others to understand Hockett’s actions.” He does not deny

Ms. Hockett’s assertion that he excluded her from team meetings or told her that

he would not continue to provide her with opportunities for “visibility” and

would be unable to support her in her current job. While Hubrig denies having

had sexual intercourse with Hockett (which is consistent with her testimony as

well) and denies having had a romantic relationship with her, he admits that on

at least one occasion, he and Ms. Hockett rented a motel bedroom together, in

Hockett’s name, for the purpose of deciding whether that room was fit for use

as a meeting place for his business, and further admits that he gave her a ring

for her 25th birthday.

      Continuing the saga, Ms. Ashdown and Sandy Davis of the Human

Resources Department met with Ms. Hockett on December 7 to review the facts

with her. Hockett reiterated that her relationship with Hubrig had not involved

sexual intercourse but was one of “heavy intimate personal contact” which

generally occurred off the work site usually in a park or a car after work.

Hockett told Ashdown that Hubrig’s exclusion of her from normal work

activities led her, in November, to conclude that she needed to seek other

employment and that if she was going to continue in her current position she

would have to have a personal relationship with Hubrig.

      Based on Ashdown’s report and the prior reports and audit, Energy

Systems’ senior management, including Hall, Pierce and President Fee,

concluded that it was necessary to terminate the plaintiff, who, in the meantime,

had been hospitalized with chest pains and was absent from work until early



                                        12
January 1995, when he returned. Hall and Pierce met with him on January 4,

1995, and informed him that management had reviewed the findings discussed

with him in previous meetings and had concluded it was necessary to terminate

his employment. Hubrig was informed that Energy Systems had decided to

terminate his employment because of the violations relating to the time cards

and his involvement with Hockett and the other subcontractor employee. Pierce

said, “I explained, when asked, that Jeff [Hubrig] had specifically tied Ms.

Hockett’s continued membership on the ‘team’ to continuing their outside

relationship.” Hubrig again denied any wrongdoing but Pierce “stated clearly

that, ‘the debate is over’.”

      Hall advised plaintiff that the termination was not reflective of his

“work,” but dealt with his conduct and actions that had been explained to him.

Plaintiff was given the opportunity to resign which he accepted. At the

conclusion of the meeting, Hall shook plaintiff’s hand and wished him well.

                                          II

       Byrd, supra, directs that the following determinations should be made in

ruling on a motion for summary judgment: (1) whether a factual dispute exists;

(2) whether the disputed fact is material to the outcome of the case; and (3)

whether the disputed fact creates a genuine issue for trial. “[T]he burden then

shifts to the nonmoving party to set forth specific facts . . . establishing that

there are indeed disputed, material facts creating a genuine issue.” Id. A

genuine issue exists only if a “reasonable jury could legitimately resolve that

fact in favor of one side or the other.” Id. At 215.

      Hubrig argues that he established a genuine issue of material fact as to

the honesty of the defendants’ belief that he engaged in time card abuse and



                                         13
harassment of two female employees. We disagree, because this contention

finds no support in the record, which clearly reveals that his own misconduct

was the sole cause for his termination.

      T.C.A. § 50-1-304 as pertinent provides:

      (a) No employee shall be discharged or terminated solely for refusing
      to participate in, or for refusing to remain silent about, illegal
      activities.

      (b) As used in this section, “Illegal activities” means activities which
      are in violation of the criminal or civil code of this state or the United
      States or any regulation intended to protect the public health, safety
      or welfare.

      (c) Any employee terminated in violation of subsection (a) shall have
      a cause of action against the employer for retaliatory discharge and
      any other damages to which the employee may be entitled.

      Under T.C.A. § 50-1-304, an employee claiming he was discharged

because he refused to remain silent about “illegal activity” must show that this

was the sole reason for his discharge. Griggs v. Coca-Cola Bottling Co., 909

F.Supp. 1059, 1065 (E.D. Tenn. 1995). An employee must show “an exclusive

causal relationship” between the discharge and protected activity, Id., citing

Merryman v. Central Parking System, Inc., 1992 WL 330404 (Tenn. Ct. App.

1992), and Leeman v. Edwards, 1994 WL 560889 (Tenn. Ct. App. 1994) (both

overruled on other grounds), Mason v. Seaton, 942 S.W.2d 470 (Tenn. 1997).

The elements are as follows:

      (1) the plaintiff’s status as an employee of the defendant;

      (2) the plaintiff’s refusal to participate in, or to remain silent about,
      illegal activities;

      (3) the employer’s discharge of the employee;

      (4) an exclusive causal relationship between the plaintiff’s refusal to
      participate in or remain silent about illegal activities and the
      employer’s termination of the employee.



                                          14
Merryman. According to Mason, the second element requires a showing that

the employee spoke out about illegal activities in the workplace. An instruction

to remain silent is not required.

      We agree with the appellee that this record reveals no genuine issue of

material fact as to the reason for Hubrig’s termination. In Mason, the Supreme

Court held that T.C.A. § 50-1-304 initially requires the employee to submit

evidence of a causal link between the protected act and the employee’s

discharge, which then imposes upon the employer the burden of showing the

reason for the discharge. Mason, 942 S.W.2d at 473. The record is clear that

Energy Systems proved a legitimate, non-pretextual reason for discharging

Hubrig: the audit findings with respect to his improper time card charges and

the charges of sexual harassment which were credited. The burden then became

Hubrig’s to show that the reason was pretextual, meaning “a phony reason for

some action.” Russell v. Acme-Evans Co., 51 F.3d 64, 68 (7th Cir. 1995). In

order to defeat summary judgment Hubrig must present specific admissible facts

which realistically challenge the defendants’ stated reasons. Wilkins v. Eaton

Corp., 790 F.2d 515, 521 (6th Cir. 1986); Silpacharin v. Metropolitan Gov’t.,

797 S.W.2d 625, 629 (Tenn. App. 1990).

      Conclusory statements of the employee do not constitute proof of pretext.

We recently held that the employee’s “subjective interpretation of [the

employer’s] actions does not create an issue of fact sufficient to defeat a

properly supported summary judgment motion. DeVore v. Deloitte & Touche,

01A01-9602-CH-00073 (Tenn. App. 1998); Accord, McCain v. Airport Honda,

1996 WL 557794 (Tenn. App. 1996).




                                        15
      The material issue here is not whether Hubrig actually sexually harassed

Hockett and Hutson; rather, “the inquiry . . . is limited to whether [the decision

makers] believed [the employee] was guilty of harassment.” Elrod v. Sears,

Roebuck & Co., 939 F.2d 1466, 1470 (11th Cir. 1991); Timm v. Mead Corp., 32

F.273, 275 (7th Cir. 1994) (“It is always the employer’s honestly held beliefs

that control.”)

      These principles clearly apply here. According to the Supreme Court in

Mason:

      “The cause of action for retaliatory discharge defines the balance
      point between the employment-at-will doctrine and rights granted
      employees under well-defined public policy.” Anderson v. Standard
      Register Co., 857 S.W.2d at 556; Reynolds v. Ozark Motor Lines,
      Inc., 887 S.W.2d 822, 824 (Tenn. 1994). Employment-at-will is the
      fundamental principle controlling the relationship between employers
      and employees. That principle was stated in Harney v. Meadowbrook
      Nursing Center, 784 S.W.2d 921, 922 (Tenn. 1990), as follows: “The
      long standing rule in this State is that an employee-at-will may be
      discharged without breach of contract for good cause, bad cause or no
      cause at all, without being thereby guilty of legal wrong.” This
      doctrine recognizes that employers need the freedom to make their
      own business judgments without interference from the courts. “[A]n
      employer’s ability to make and act upon independent assessments of
      an employee’s abilities and job performance as well as business needs
      is essential to the free-enterprise system.” Clifford v. Cactus Drilling
      Corp., 419 Mich. 356, 353 N.W.2d 469, 474 (1984). However, even
      under the common law, an employee is protected from discharge in
      retaliation for attempting to exercise a statutory or constitutional
      right, or in violation of a well-defined public policy. See e.g.,
      Conaster v. Clarksville Coca-Cola, 920 S.W.2d 646 (Tenn. 1995);
      Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822 (Tenn. 1994);
      Anderson v. Standard Register Co., 857 S.W.2d 555 (Tenn. 1993);
      Hodges v. S. C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992); Chism v.
      Mid-South Milling Co., 762 S.W.2d 552 (Tenn. 1988); Clanton v.
      Cain-Sloan Co., 677 S.W.2d 441 (Tenn. 1984).

Mason, 942 S.W.2d at 474; accord, Stein v. Davidson Hotel Co., 945 S.W.2d

714, 717 (Tenn. 1997).

      Hubrig’s asserted misconduct as a supervisor towards both female

employees subjected Energy Systems to potential civil liability to them had they


                                        16
chosen to pursue a “hostile work environment” theory. Campbell v. Florida

Steel Corp., 919 S.W. 2d 26, 33 (Tenn. 1996); Spicer v. Beaman Bottling Co.,

937 S.W.2d 884 (Tenn. 1996); see also Pierce v. Commonwealth Life Insurance

Co., 40 F.3d 796 (6th Cir. 1994). As heretofore stated, Ms. Hockett informed

the company that after she tried to break off her relationship with Hubrig, he

excluded her from team meetings and told her that he would not continue to

provide her with opportunities for “visibility” and would not support her in her

current job. The defendants cannot be faulted for taking “prompt and effective

remedial relief,” because Hubrig had been credibly accused by two female

employees. Given the current legal climate, this conduct could not be

condoned, particularly in light of the painstaking investigation of the charges.

      Moreover, Hubrig’s retaliation against Hockett for terminating their

relationship potentially subjected Energy Systems to a quid pro quo harassment

lawsuit. “The employer is strictly liable for a supervisor’s quid pro quo

harassment under the doctrine of respondeat superior.” Carr v. United Parcel

Service, 955 S.W.2d 832, 837 (Tenn. 1997); Sanders v. Lanier, _____S.W.2d

_____(Tenn. 1998).

      An employer’s obligation to eliminate unlawful harassment from the

workplace requires the employer to take action once it knows of the harassing

conduct even if the conduct does not rise to the level of being actionable by the

harassed employee. As observed in Chalmers v. Quaker Oats Co., 61 F.3d

1340, 1346 (7th Cir. 1995), if an employer’s harassment policy was not

consonant with federal law, the employer would be “hamstrung in its efforts to

take measures to stop such conduct before it became so abusive and offensive

that the company was vulnerable to a Title VII lawsuit.”



                                        17
       As we have seen, Energy Systems conducted an investigation and found

both women’s claims credible, as contrasted to Hubrig’s “non-denial denials”

and “flowery descriptors.” Having made these findings, Energy Systems was

clearly justified in taking action reasonably calculated to prevent any future

harassment.

       Whether the employer is liable for its supervisor’s actions in hostile
       work environment claims depends on: (1) whether the supervisor’s
       harassing actions were foreseeable or fell within the scope of
       employment; and (2) even if they were, whether the employer
       responded adequately and effectively to negate liability.” Pierce v.
       Commonwealth Life Ins. Co., 40 F.3d 796, 803 (6th Cir. 1994).
       Accordingly, the employer’s liability is predicated on its reaction to
       the discriminatory conduct.

Carr, 955 S.W.2d at 838. Energy Systems argues, and we agree, that it had the

right to act and the right to conclude that it should terminate an employee given

to such conduct, even if it believed the women were not going to file an action

against it.

       The record is clear that the decision to terminate Hubrig was influenced

also by the audit of his time cards and by his evasive and vague responses to

both the time card and sexual harassment charges. The time card audit was

headed by Linda Chappell, a CPA employed by the company, who reviewed the

relevant time records, and interviewed the plaintiff and other employees,

including Ms. Hockett, as part of the audit. She heard every contention the

plaintiff claims he was not permitted to make to Larry Pierce and Linc Hall.

Hubrig does not deny that he had not reported paid absences on his time cards,

as reported by the auditors:

       In conclusion, our review substantiated the allegation that Mr. Hubrig
       did not accurately report the hours he worked (eight days of
       unrecorded vacation and two days of unrecorded sick leave).
       Although Mr. Hubrig’s late arrivals, early departures, and excessive
       lunch breaks did not have to be recorded on his time card, they were


                                        18
       violations of company procedures and standards, including Energy
       Systems Procedure CP-153, Hours of Work; Energy Systems
       Standard ESS-AC-103, Internal Time Administration; Energy
       Systems Procedure ESP-LR-251, Personal Leave; and Energy
       Systems Procedure LR-201, Attendance and Absence Monitoring. In
       our opinion, the ten unrecorded absences and violations of basic
       procedures indicate a pattern of behavior that is inappropriate for any
       Energy System employee.

       The plaintiff’s suggestion that the defendants somehow manufactured

“trumped up charges” of “illusory time card abuse” and harassment at the

highest levels of the company is unsupported rhetoric, and does not create a

genuine issue of material fact.

       The plaintiff asserts that he did nothing which “merited termination,” a

wholly subjective declaration. He was an at will employee, and Energy Systems

was not required to have “just cause” to terminate him. Chalmers, 61 F.3d at

1346. As stated in Mason v. Seaton, “employers need the freedom to make their

own business judgments without interference from the courts.” 942 S.W.2d at

474.

       Hubrig did not establish that his claimed protected activities were the

“sole” reason for his termination/resignation, or that those activities played any

role in his termination/resignation.

                                        III

       Hubrig asserts that the trial court should have allowed him to amend his

complaint to assert a common law cause of action for damages for retaliatory

discharge, on the theory that the common law right survived the passage of

T.C.A. § 50-1-304.

       Tennessee courts have recognized two different actions for damages for

“retaliatory discharge.” The first action recognized in Tennessee was for

asserting a claim for workers’ compensation benefits. Clanton v. Cain-Sloan


                                         19
Co., 677 S.W.2d 441, 445 (Tenn. 1984); accord Conaster v. Clarksville Coca-

Cola, 920 S.W.2d 646 (Tenn. 1995). In Harney v. Meadowbrook Nursing Ctr.,

784 S.W.2d 921, 922 (Tenn. 1990), the court emphasized that its decision had

not created a new exception to the employment at will doctrine, but “merely

recognized that implicit within the provisions of T.C.A. § 50-6-114 a cause of

action existed . . ..”

       The Court considered another action for retaliatory discharge in Chism v.

Mid-South Milling Co., Inc., 762 S.W.2d 552, 555, 557 (Tenn. 1988), and

shortly thereafter in Watson v. Cleveland Chair Co., 789 S.W.2d 538, 544

(Tenn. 1989). Despite the fact that the Court upheld the dismissal of the claims

in both cases, in Watson, the Court stated that:

       We have expressed our accord with the opinion of the Court of
       Appeals, that a cause of action for retaliatory discharge arises when
       an at-will employee is terminated solely for refusing to participate,
       continue to participate, or remain silent about illegal activities.

In response to these two decisions, the General Assembly enacted T.C.A. § 50-

1-304.

       By its plain terms, the statute does not cover the first type of retaliatory

discharge claims - where the employee claims to have exercised a statutory right

to benefits. For those kind of claims, the common law cause of action continues

to exist, Anderson v. Standard Register Co., 857 S.W.2d 555 (Tenn. 1993), and

employees need only show that their exercise of the statutory right to workers’

compensation benefits was a “substantial factor” in their termination. Id.

       Prior to the passage of T.C.A. § 50-1-304, the appellate courts had not

clearly settled on whether a plaintiff was required to show that protected

activity was either a substantial factor or the sole cause of termination. But the

statute supplied the answer; it clearly requires the employee to show that the


                                         20
sole cause of his termination was his refusal to remain silent about illegal

activities in the workplace.

      The appellant argues that the “element of causal nexus” may have a lower

threshold of proof at common law than under the statute, thus justifying the

amendment. The issue of whether the statute displaced any common law claim,

or is merely cumulative, see: Reynolds v. Ozark Motor Lines, 887 S.W.2d 822

(Tenn. 1994), is not crucial. The burden of proof is the same and does not shift.

The issue is the same under either theory.

                                         IV

      In order to make a prima facie case under the statute, an employee must

show that he spoke out about or refused to participate in “illegal activities.”

Since the plaintiff does not contend he refused to participate in illegal activities,

he must show he spoke out about “activities which are in violation of the

criminal or civil code of this state or the United States or any regulation

intended to protect the public health, safety or welfare.” T.C.A. § 50-1-304(b).

We agree with the appellee that the activities he complains of in his affidavit do

not constitute illegal activity. See, Chism, supra.

      When the plaintiff became a member of Linc Hall’s staff in February

1994, he was assigned the task of developing certain work standards and

requirements to be used in implementing procedures. He asserts in his affidavit

that his “team” had discovered and begun to document “managerial negligence”

by Linc Hall and others. But “managerial negligence” is not an “illegal

activity.” Robins v. Flagship Airlines, Inc., 956 S.W.2d 4, 7(Tenn. App. 1997)

(employee’s insistence that his former “department is poorly run” did “not even

approach the subject of statutory or regulatory violations.”) What is more, the



                                         21
document relied upon by Hubrig to support this claim merely states that “It has

been determined that some upper-level tier requirements that have been brought

down have no clear guidelines defined. One concern appears to be regarding

the lack of attention devoted to this issue by the ERWM [Environmental

Restoration Waste Management] Quality Programs Office.”

                                       V

      We do not consider it necessary to discuss the claim of outrageous

conduct. The record is wholly devoid of any evidence which remotely suggests

that the defendants engaged in such conduct.

                                       VI

      Finally, in Carr v. United Parcel Service, 955 S.W.2d 832 (Tenn. 1997),

the Supreme Court made it clear that the definition of employer in T.C.A. § 50-

1-304 did not impose individual liability on supervisors. Thus, none of the

individual defendants can be liable on the theory that they terminated the

plaintiff’s employment.

      The judgment is affirmed at the costs of the appellant.




__________________________________
                              William H. Inman, Senior Judge

CONCUR:



________________________________
Houston M. Goddard, Presiding Judge



________________________________
Herschel P. Franks, Judge



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