Walmart truck driver, fired for workers' comp fraud, claims defamation. $34.7M. San Bernardino County.

Facts and Background

• Facts and Background:

  Plaintiff was a 14-year Walmart truck driver based out of Walmart’s Apple Valley Distribution Center. In June 2017, while on the job driving his truck on the freeway, plaintiff's truck was rear-ended by another semi-truck. It was a significant crash. The other semi became engulfed in flames. Plaintiff sustained injuries to his neck, back, knee and shoulder. Initially, plaintiff didn’t hire a workers' compensation lawyer but instead saw Walmart’s approved workers' comp doctors.

  Plaintiff was put on “modified duty” with “restrictions” of “no lifting, pushing, pulling over 5 lbs; no bending, no stooping; no driving.” It was undisputed that Walmart did not have any form of “modified duty” for truck drivers. So, having restrictions as a truck driver meant that plaintiff needed to go out on a workers' compensation medical leave.

  In August 2017, while on his leave and receiving medical treatment, plaintiff told the workers' comp nurse case manager that he was going on two family trips that were planned before his injury: an annual family RV camping trip to Malibu and a cruise with his wife for their wedding anniversary. Walmart was self-insured for workers' compensation but had Sedgwick act as a third-party administrator for workers' comp purposes. Nobody from Walmart or Sedgwick told plaintiff that he shouldn’t take these trips, or that he was required to follow his “work restrictions” while at home every moment of the day or, if not, Walmart would consider it an act of “intentional dishonesty” and an “integrity” violation under Walmart’s statement of ethics, or anything like that. However, Sedgwick’s adjuster ordered sub rosa surveillance of plaintiff. The surveillance was 16 hours over two days initially. It captured video of Jesse driving the RV (at most, for about two hours) and bending/stooping for a matter of minutes while setting up the RV. When the Sedgwick claims adjuster received the surveillance video, she sent the video to one of plaintiff’s treating workers' comp doctors to comment. The doctor revised the work restriction to “no commercial driving.” Walmart and the Sedgwick claims adjuster did not contact the doctor for any clarification…such as whether the intent of the initial “no driving” restriction was to preclude commercial driving versus any driving. Instead, the claims adjuster requested that Walmart’s internal fraud department refer plaintiff to the State of California for consideration of criminal prosecution for workers' comp fraud.

  Walmart has an internal department of fraud investigators, called Global Investigations. The Global Investigations department conducted an investigation, which consisted of: (1) reviewing medical records; (2) reviewing the work restriction notes; (3) reviewing the surveillance video; and (4) interviewing plaintiff. When interviewed by Global Investigations, plaintiff acknowledged taking these two trips, and even some others, but he also protested that he did nothing wrong. He explained that he was not aware of the “no bending/stooping” restrictions (he didn’t pay attention because once he was told of continued “modified duty” he knew that just meant he’d be on leave) and he thought he was allowed to drive his personal vehicles. In fact, according to plaintiff, he had been driving to doctors’ appointments within weeks after the injury. The Global Investigations investigator (Kristi Yarnall) testified that: (1) she had no reason to doubt Jesse’s credibility; (2) he did not appear to be untruthful; and (3) she did not find him to be intentionally dishonesty. The Global Investigator (Yarnall) reviewed her findings with her boss (Eric VanDyke). The Global Investigations department determined that, while they said it was “gray”, plaintiff didn’t commit fraud and they did not turn him over to the State for possible criminal prosecution.

  After the Global Investigations Department decided not to turn plaintiff over to the State for potential insurance fraud prosecution, Walmart’s process was that the report from the Global Investigations Department was to be sent to Walmart’s internal Ethics Department to evaluate whether plaintiff should be disciplined because he was a current employee. But the written report that Global Investigations sent to the Ethics Department did not contain any of investigator Yarnall’s conclusions that: (1) she had no reason to doubt plaintiff’s credibility; (2) he did not appear to be untruthful; (3) she did not find him to be intentionally dishonest; or (4) Global Investigations essentially cleared him of fraud by declining to turn the case over to the State for potential fraud prosecution.

  Global Investigator Yarnall also had a three-plus page summary of her interview of plaintiff, but this too was not sent to Ethics. Instead, Ethics reviewed only Yarnall’s written report, which contained a select and small number of still shots from the surveillance video but not even the video itself. Based on nothing more than Yarnall’s report, Faisha Cizerle from Walmart’s Ethics Department substantiated that plaintiff had acted with “intentional dishonesty” because Walmart effectively has a policy or practice that any activity that was deemed to be “outside of restrictions” would be treated as an act of “intentional dishonesty” prohibited by the “integrity” policy of Walmart’s Statement of Ethics. An act of “integrity” was grounds for immediate termination, skipping Walmart’s normal progressive discipline. Cizerle from the Ethics Department then published to Divisional HR person Roxanna Wigger the defamatory conclusion that plaintiff had committed an “integrity” violation by acting with “intentional dishonesty”. Wigger then republished the same defamatory conclusions to others in order to effectuate plaintiff’s termination. Plaintiff was terminated in March 2018.

• Plaintiff's Contentions:

  Plaintiff alleged that he was terminated based on malicious defamation. He did not commit an integrity violation or any act of dishonesty. Walmart acted with malice under Civil Code section 47, subdivision (c) to overcome the conditional privilege for statements made to interested parties, among other reasons, because: (1) the investigation was a reckless investigation in conscious disregard for the truth; (2) Wigger, who republished the defamation, admitted she did not have reasonable grounds for believing that plaintiff acted with intentional dishonesty; (3) Walmart's termination of plaintiff was part and parcel of Walmart’s attempt to push injured drivers back to work prematurely or, if not, fire them, which was shown by evidence that: (a) Sedgwick pushed to have plaintiff return to work prematurely when still under active treatment as evidenced by statements in its claims file; (b) Sedgwick rated its claims adjusters based in part on “closure goals” – i.e., how fast the file was closed; (c) Walmart tracked and scrutinized the leaves and injuries of truck drivers; and (d) Walmart implemented a new policy cutting down leave rights of injured truck drivers.

• Defendant's Contentions:

  Walmart contended that plaintiff acted dishonestly, so this was not defamation as it was true. Walmart also contended that it did not act with malice. This was a normal investigation of suspected misuse of leave time and the surveillance video showed that plaintiff was acting contrary to his work restrictions. Walmart also alleged that plaintiff was not being honest when he told Yarnall that he did not realize he was violating work restrictions.