Falls v. Sporting News Publishing Co.
2 I.E.R. Cas. (BNA) 1239, 834 F.2d 611, 1987 U.S. App. LEXIS 15770 (1987)
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Rule of Law:
Under Michigan law, the determination of whether a worker qualifies as a protected 'employee' under the Elliott-Larsen Civil Rights Act is governed by the multi-factor 'economic reality' test. Additionally, an expression of opinion can be defamatory if it implies the existence of undisclosed defamatory facts that harm a person's reputation.
Facts:
- Joseph F. Falls, a 57-year-old sports writer, contributed a weekly column to The Sporting News (TSN) from 1963 to June 1985 for $90 per column.
- TSN classified Falls as an independent contractor, reporting his income on an IRS Form 1099, and did not provide traditional employee benefits, office space, or expense reimbursement.
- Despite this classification, TSN set deadlines for Falls' columns, edited his work, required him to cover specific sporting events, and provided him with sports research materials.
- In June 1985, TSN's editor, Tom Barnidge, discharged Falls.
- Following the discharge, Barnidge wrote to a reader that TSN replaced Falls with 'more energetic columnists who attend more events and are closer to today’s sports scene.'
- TSN's president, Richard Waters, was later quoted in USA Today stating that writers who have 'reached maturity and are on the downswing are giving way to some of the up-and-coming young writers.'
Procedural Posture:
- Joseph F. Falls filed a complaint in the United States District Court for the Eastern District of Michigan against The Sporting News Publishing Company and two of its executives.
- The complaint alleged age discrimination under Michigan's Elliott-Larsen Civil Rights Act, defamation, and injurious falsehood.
- Prior to discovery being completed, the defendants filed a motion for summary judgment.
- The district court granted the defendants' motion for summary judgment, dismissing all of Falls' claims.
- Falls (appellant) appealed the district court's judgment to the United States Court of Appeals for the Sixth Circuit.
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Issue:
Under Michigan law, does the determination of whether a worker is a protected 'employee' for purposes of an age discrimination claim depend on the 'economic reality' of the relationship, and can an opinion about a professional's performance be defamatory if it implies the existence of undisclosed, harmful facts?
Opinions:
Majority - Judge Alan E. Norris
Yes. Under Michigan law, the 'economic reality' test governs whether an individual is an employee for purposes of the state's civil rights act, and an opinion can be defamatory if it implies undisclosed defamatory facts. The district court erred by granting summary judgment because it appeared to apply the narrower common law 'control' test instead of the 'economic reality' test to determine Falls' employment status. This broader test requires a holistic analysis of factors including control, payment, hiring/firing authority, and whether the work is integral to the business; given the conflicting evidence on these factors, summary judgment was premature. Furthermore, the statements that Falls was 'on the downswing' and less 'energetic' are not protected opinions as a matter of law. They are 'mixed' opinions that could reasonably be understood to imply the existence of undisclosed defamatory facts, such as a decline in his writing ability or a failure to attend events. Therefore, these statements are capable of a defamatory meaning, and the issue should be decided by a jury.
Analysis:
This decision solidifies the application of the broad 'economic reality' test for determining employee status under Michigan's civil rights statutes, potentially extending protections to individuals in non-traditional work relationships. By expanding the scope of who qualifies as an 'employee,' the ruling makes it more difficult for employers to avoid liability under anti-discrimination laws by classifying workers as independent contractors. Additionally, the court's analysis of defamation clarifies that labeling a statement as an 'opinion' does not automatically shield it from liability. This reinforces that courts must scrutinize opinions that imply undisclosed factual bases, thereby lowering the barrier for plaintiffs to survive summary judgment in defamation cases concerning professional competence.
