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Robert Bratt v. International Business MacHines Corporation

Citations: 785 F.2d 352; 1986 U.S. App. LEXIS 22744; 54 U.S.L.W. 2477Docket: 85-1545

Court: Court of Appeals for the First Circuit; March 5, 1986; Federal Appellate Court

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Robert Bratt, an IBM employee, appeals the district court's decision granting summary judgment for IBM, its Vice-President Wesley Liebtag, and physician Martha Nugent on his breach of privacy claims. This case marks the third review by the First Circuit, stemming from prior rulings where the court sought clarification on privacy and libel law from the Massachusetts Supreme Judicial Court. After receiving guidance, the court initially affirmed the dismissal of libel claims but reversed the summary judgment on privacy claims, remanding for further findings.

Bratt's claims arise from alleged unauthorized disclosures regarding his use of IBM's confidential "open door" grievance procedure and personal medical information. The "open door" policy allows employees to escalate unresolved issues to higher management levels, with assurances against retaliation and confidentiality during investigations. The current appeal challenges the district court's summary judgment on the privacy claims and the denial of oral argument for Bratt regarding this motion.

In 1971, Bratt agreed to transfer from the Waltham office to the Cambridge office based on a promise of a promotion and salary increase, which he did not receive. After utilizing the open door policy, he eventually obtained the promised promotion and raise. However, in 1975, Bratt was denied a promotion at the Burlington office, leading him to again use the grievance process, which was unsuccessful. He was later transferred back to Waltham without a promotion or pay increase, and in 1980, discovered he had been demoted at that time.

While at Waltham, Bratt suggested improvements for cash-fund account controls that were initially ignored but later implemented after a poor audit, leading to improved results. He felt his contributions were undervalued. In July 1977, he received a lower performance rating than expected, which his manager, Ed Simpson, refused to discuss. During this time, Bratt's wife was hospitalized, and although he requested time off, Simpson denied his request; he was eventually granted time off by higher management.

In 1978, Bratt found that suggestions he had made to address embezzlement issues were missing from his files, leading him to suspect that Simpson resented his previous use of the open door process. Concerned about discrimination and lack of recognition, he approached a higher-level manager, David Blackburn, in May or June of that year. After receiving no response from Blackburn by September, Bratt escalated his concerns to Dr. Cary, the Chairman of the Board of IBM. Blackburn eventually informed Bratt that his suggestions had been rejected and the negative performance appraisal from 1977 would be destroyed.

Dr. Cary appointed Wesley Liebtag to address Bratt's complaints and investigate the handling of his suggestions. Following a meeting with Liebtag, Bratt felt disheartened by the situation and expressed his frustrations to his immediate supervisor, Rita Lynch. He indicated that his mental health was suffering due to the stress from management issues. Subsequently, Bratt requested a transfer for health reasons, citing unfair treatment and management issues. Lynch arranged for him to see Dr. Martha Nugent, a general practitioner, for further evaluation.

IBM operates its own medical department with in-house physicians, but Dr. Nugent, who consulted with employee Bratt, was an independent contractor labeled as a 'local examining physician.' At the time of this consultation, IBM enforced a policy requiring employee consent via a Medical Information Release form prior to disclosing or seeking access to confidential medical information, except in emergencies or as mandated by law. Managers and personnel could receive recommendations regarding medical limitations relevant to job duties, but no confidential medical details could be shared without employee consent. Additionally, managers were prohibited from direct interaction with local examining physicians and were instructed to seek guidance through the regional medical director, who coordinated with local physicians.

The records do not show that Dr. Nugent was briefed on IBM's medical-records policy. Bratt did not give consent for Dr. Nugent to release any medical information to IBM's management. After Bratt’s routine physical examination, Dr. Nugent informed Lynch that Bratt exhibited paranoia and recommended he see a psychiatrist, which Lynch relayed to her supervisor, Crawford. Crawford later communicated this information to Liebtag, who documented the recommendation against transferring Bratt until further assessment.

On October 19, 1978, Bratt was notified that his grievance had been denied, leading him to express distress in Crawford's office. She advised him to return to work, but he became visibly upset. Following this, Crawford arranged for Bratt to see a psychiatrist that afternoon and again the next morning, noting that the psychiatrist's initial assessment suggested a mental health issue extending beyond IBM’s concerns.

Crawford was advised to contact Dr. Duffy, the corporate medical director, to facilitate physician-to-physician communication regarding Bratt's case. On October 19, 1978, Rita Lynch summarized recent incidents involving Bratt in a memo to manager Blackburn, noting Dr. Nugent's assessment of Bratt as paranoid. In the following days, Lynch and Crawford communicated with IBM medical staff, including Dr. Duffy, Dr. McLean, and Dr. Silverberg, about Bratt's condition. Dr. Nugent expressed her concerns about Bratt's paranoia in conversations with Dr. Silverberg on October 25 and November 9, 1978. Lynch reported Bratt's underperformance and early departures on November 15, 1978. By December 11-12, discussions occurred regarding Bratt's medical leave, which was subsequently decided for three months, confirmed by a letter to Dr. Silverberg on December 19, 1978.

Toward the end of Bratt's leave, Dr. Silverberg learned from Lynch's secretary that Bratt appeared well and optimistic. After returning, Bratt was given a temporary position in Cambridge under Tom Wolfe. A call from Bratt's psychiatrist indicated he was thriving in his role, prompting Silverberg to inquire about Wolfe's management approach. In September 1979, Dr. Silverberg informed IBM manager P. Strohm that Bratt had no medical restrictions for returning to work. 

Bratt was under consideration for a permanent job at the Cambridge Center, but a memo from Wolfe to manager Dick MacKinnon revealed MacKinnon's reluctance to hire someone with Bratt's open door history. This memo upset Bratt, who initiated another open door process in September 1979, expressing concerns to Liebtag about the lack of a permanent job assignment and the retention of a 1977 performance appraisal. Following Bratt's complaints, Liebtag communicated with W.W.K. Rich, advising sensitivity to any potential medical or mental health issues related to Bratt. 

Four counts from Bratt's original seven claims were remanded for district court consideration, including Count III, which alleged that IBM, through Liebtag, violated Bratt's right to privacy by disclosing his open door rights to other management employees.

Count V alleges Wesley Liebtag infringed on Bratt's privacy by distributing memos from October 1978 and September 1979, which labeled Bratt as paranoid and indicated a serious mental issue. Count VI claims IBM breached Bratt's privacy by allowing discussions of his medical issues between Dr. Nugent and IBM management without his consent. Count VII contends Dr. Nugent violated Bratt's confidentiality by discussing his medical information with IBM staff without authorization.

The Massachusetts Supreme Judicial Court's test for determining privacy violations by employers involves balancing the employer's legitimate business interests against the extent of privacy intrusion. This applies to medical information and other personal data. The Court stated that if medical information is essential for a significant employer interest, its disclosure by a physician does not constitute an invasion of privacy.

The district court found that the reasonableness of the disclosure is typically a factual issue. It ruled in favor of the defendants, stating that no evidence warranted a finding of unreasonable action. The court concluded that Bratt's claims regarding excessive disclosure lacked evidence of widespread dissemination beyond a few managerial employees, who had a legitimate need for the information concerning Bratt's work. Even if more individuals had received the information, such disclosure would not be considered unreasonable based on internal IBM regulations and Bratt's own discussions about his medical issues.

Bratt contends that the district court erred in granting summary judgment, emphasizing that many disclosures violated IBM policy and questioning the legitimacy of IBM's business interest in accessing restricted information.

Bratt contends that the district court improperly assumed that all individuals who received his information had a legitimate business interest in it. Summary judgment is only appropriate if there are no genuine issues of material fact, and all inferences must favor the non-moving party. When assessing reasonableness of a defendant's actions, summary judgment is warranted only if no reasonable fact-finder could deem the conduct unreasonable.

The court reviews the district court's summary judgment favoring defendants IBM, Liebtag, and Dr. Nugent concerning Bratt's four privacy claims. Specifically, Count III claims IBM disclosed Bratt's use of the open door process to managerial employees uninvolved in that process. Although not explicitly stated in the complaint, it's assumed Bratt's claim includes that the Cambridge center manager was aware of his open door history, impacting his employment opportunities. 

Bratt asserts that three copies of Liebtag's memos were found in the Waltham file, accessible to many employees, including MacKinnon, the Cambridge manager. An affidavit from an IBM attorney counters Bratt's assertions, stating the file was created in response to litigation and maintained at IBM's New York headquarters. The court agrees with the district court that no reasonable fact-finder could view the limited dissemination of Bratt's open door usage as an unreasonable privacy intrusion. This information, while potentially negative for some managers, is not considered intimate or highly personal, especially as the open door process requires informing Bratt's immediate manager for a thorough investigation. Most individuals aware of Bratt's open door usage were involved in its process and had legitimate business needs for the information. Bratt's voluntary participation essentially waived any privacy claims against these individuals.

The only remaining issue is Bratt's assertion that MacKinnon was improperly informed of his open door history through the distribution of Liebtag's October memos. Bratt argues this distribution constitutes a disputed fact warranting jury consideration. The court disagrees, stating that Bratt cannot construct a case based on mere speculation. The memos explicitly show they were sent to IBM personnel with supervisory roles over Liebtag.

Three copies of a memo made by Liebtag regarding Bratt's mental state were confirmed to be in the file, with one copy retained by Liebtag and two sent to supervisors. Bratt's assertion that the 'Waltham file' was improperly compiled is deemed speculative. The district court granted summary judgment for IBM on Count III due to the minimal privacy intrusion and lack of evidence for improper disclosure.

Count V alleges Liebtag violated Bratt's privacy by distributing memos that labeled Bratt as paranoid and by informing others of his mental issues. The test for privacy violation examines whether the intrusion outweighs the employer's legitimate business interest. The nature of Bratt's mental state is considered more personal than the information addressed in Count III, suggesting a greater privacy intrusion. However, the actual degree of disclosure was limited, with only four individuals informed about Bratt's mental state: his supervisors and those involved in his employment. Bratt did not provide evidence of any IBM regulations restricting managerial disclosure of medical information. Given the context of Bratt's grievances, the information shared was deemed relevant for evaluating his complaints. The court concluded that the limited disclosure was reasonable, affirming summary judgment for the defendants on Count V.

Count VI charges IBM with breaching Bratt's privacy by allowing Dr. Nugent to discuss Bratt's medical issues with management without his consent. This count may also imply that the IBM medical staff breached privacy through its discussions with management, though the specifics in Bratt's pleadings are unclear.

The balancing of Bratt's privacy intrusion against the legitimate business interests of the information recipients is central to this case. Bratt's claim hinges on the violation of IBM's internal medical information disclosure regulations, which enhance the expectation of privacy. The violation of these regulations intensifies the assessment of privacy invasion, imposing a significant burden on IBM to justify its business interest in obtaining the information. The district court concluded that no reasonable fact finder could determine that the disclosure to management was an unreasonable privacy violation due to their legitimate business interest. However, this conclusion is disputed, as a rational fact finder could find that IBM's disclosures constituted a substantial privacy intrusion and that IBM's managerial employees lacked a legitimate interest in obtaining the information via such a violation of internal rules. Evidence presented by Bratt raises genuine issues of material fact regarding the extent of the disclosures, indicating the district court's error in granting summary judgment for IBM on Count VI. 

Count VII alleges Dr. Nugent breached Bratt's privacy by discussing his examination results with IBM management without consent. The Massachusetts Supreme Judicial Court clarified that a physician's disclosure of medical information to an employer must balance the privacy intrusion against the employer's need for that information. The court recognized an employer's valid interest in employee performance, concluding that disclosure is permissible when it serves a substantial business interest without constituting a privacy violation under the Massachusetts privacy statute. Additionally, the court addressed the parameters of a physician's confidentiality duty in a subsequent decision.

In this Commonwealth, physicians have a legal duty to maintain patient confidentiality, disclosing medical information only with patient consent or to prevent serious harm. This duty is rooted in the physician-patient relationship. The Alberts decision emphasizes that confidentiality may take precedence over employer interests when a physician-patient relationship exists. In Bratt's case, the determination of whether Dr. Nugent owed him a duty of confidentiality is critical to his breach of privacy claim. Bratt contends that despite Dr. Nugent's connection to IBM, he reasonably believed she was acting as his private physician, which was supported by a pamphlet on IBM's Employee Assistance Program (EAP) assuring confidentiality. Evidence includes Bratt's payment to Dr. Nugent and her failure to inform him of any reporting obligations to IBM. The Massachusetts Court has not clarified the circumstances under which a physician-patient relationship is established, but it is suggested that if a patient reasonably believes such a relationship exists, especially when the physician is aware of this belief, then a duty of confidentiality may be recognized. Bratt's allegations suggest a genuine issue regarding the existence of this duty, which would be relevant in assessing whether his privacy rights were violated, though it does not constitute a separate claim for breach of confidentiality.

Dr. Nugent's potential duty of confidentiality to Bratt is under scrutiny, particularly regarding whether her actions violated internal regulations of the IBM medical staff. These regulations may amplify the seriousness of the privacy intrusion caused by her unauthorized disclosures and lessen the justification for the business necessity of that information. Favorably assessing the facts for Bratt concerning confidentiality and privacy invasion, it is concluded that a reasonable fact finder could determine that Dr. Nugent breached Bratt's privacy rights, necessitating a reversal of the district court's summary judgment in favor of Dr. Nugent on Count VII.

Bratt also argues that the district court erred by denying a request for oral argument on the defendants' summary judgment motion. According to the Rules of the United States District Court for the District of Massachusetts, any party may request oral argument, stating the time needed and reasons for the request. While the court has discretion regarding whether to permit oral arguments, Bratt contends that the district court abused this discretion by denying the request. However, past rulings indicate that district courts have broad leeway in deciding the necessity of oral arguments, and denial of such requests is not inherently an abuse of discretion unless it results in serious prejudice.

Prejudice resulting from the denial of oral argument is deemed necessary for a reversal, but the burden on district courts is significant, and forgoing oral argument can conserve judicial time. District court judges have the discretion to determine the necessity of oral argument without fear of creating an appealable issue. In this case, the opposing party, Bratt, had ample time since the filing of the complaint in 1980 to present evidence and legal arguments to the district court. The case had previously been evaluated on summary judgment, and the issues were largely defined. Despite finding that the district court erred in granting summary judgment on some counts, the denial of oral argument did not prejudice Bratt's ability to present his case. 

Count II, regarding loss of consortium, is not revived as it was dependent on Count I, which was dismissed. The court affirmed the summary judgment for Counts III and V, reversed it for Counts VI and VII, and remanded for further proceedings. No costs were awarded to either party. Additionally, Bratt's claim of breach of confidentiality was not pursued separately from his breach of privacy claim and is therefore considered lost. While the reversal does not preclude the district court from directing a verdict if evidence shows no issues for a jury, it clarifies the treatment of the confidentiality issue as part of the privacy claim.