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Mason v. USEC

August 26, 2008


The opinion of the court was delivered by: Thomas W. Phillips United States District Judge


This matter is before the court on defendant USEC, Inc.'s Motion for Summary Judgment [Doc. 56] and accompanying documents [Docs. 57, 58], filed under seal. Plaintiff responded in opposition [Docs. 80-82], and defendant replied [Doc. 88]. For the reasons that follow, defendant's motion is GRANTED.


Defendant USEC, Inc. ("USEC") is a private company, formerly part of the Department of Energy ("DOE"), engaged in uranium enrichment. It is one of four uranium enrichment organizations worldwide and the only such organization currently operating in the United States. USEC operates a nuclear centrifuge plant in Oak Ridge, Tennessee.

Plaintiff David L. Mason, Ph.D., began employment with USEC on June 30, 2000, as the Project Director for the classified American Centrifuge Project. Responsible for overseeing the project's daily operations, plaintiff had four major functions: maintaining costs, maintaining schedule, managing employees, and meeting the DOE's regulatory requirements.

Due to the nature of USEC's enterprise, DOE heavily regulates and monitors USEC's operations; DOE additionally owns the technology that USEC uses. DOE possesses the authority to initiate and conduct investigations regarding compliance with its regulations and to impose the appropriate disciplinary sanctions, including civil and criminal penalties, for infractions. See 10 C.F.R. §§ 820.1--820.81. Pursuant to this regulatory authority, information and materials at USEC are subject to DOE's classification requirements. Under DOE's classification rubric, Derivative Classifiers ("DCs") "mak[e] classification decisions based upon classification guidance" issued by the DOE. 48 C.F.R. § 952.204-70. All information and materials relating to the American Centrifuge Project were subject to the stricter "Born Classified" rule, under which information was to be presumed classified unless and until definitely proven otherwise. Where the classification applicable to a piece of information or material was unclear, the Born Classified rule required employees to treat the information or material as classified and seek DC review for guidance as to further treatment.

At the heart of this lawsuit are several security breaches that occurred at USEC's Oak Ridge facility, stemming from disregard of the Born Classified Rule. For example, on October 16, 2004, a document was transmitted via fax for which DC review had not been obtained. Subsequently, on December 1, 2004, a security incident occurred involving unsecured computers. It appears that these were among several continuing security violations at USEC's Oak Ridge plant. Accordingly, a "stand down," or temporary work stoppage, was ordered, and further training was conducted regarding the handling of classified information.

On May 17, 2005, representatives of USEC met with DOE officials to discuss the DOE's concerns about ongoing security breaches at USEC. At this meeting, the DOE appointed Richard Coriell, a Security Manager at USEC, as DOE's "Inquiry Official," charged with investigating these alleged breaches over the past year. In further response to this meeting, Senior Vice President Phil Sewell directed plaintiff to order an immediate stand down on the American Centrifuge Project.

Mr. Coriell began his investigation of the security breaches, which included interviews with USEC employees. Displeased with the conduct of the investigation and the overall atmosphere at USEC's Oak Ridge facility, on June 20, 2005, plaintiff and DC Tony Angelleli each filed a complaint against three management individuals whom they believed acted in an unethical manner. In his complaint, [Doc. 58, "SJ Exhibit 2," Attach. #63], plaintiff outlined his own "Chronology of Events," beginning in 2003 and continuing through the May 2005 stand down and Mr. Coriell's subsequent inquiry. Plaintiff asserted that three individuals in management were retaliating against him, apparently for a previously filed complaint, and complained that the interrogation launched by Security staff (apparently Mr. Coriell's DOE-sanctioned inquiry) had besmirched his reputation and damaged his and his team's morale. Plaintiff further asserts a "misrepresentation of the facts as to how USEC got into this current predicament."*fn1 [Id.]. USEC commenced an separate investigation of plaintiff's complaint.

In July 2005, Mr. Coriell presented his report of his investigation to DOE [Doc. 58, "SJ Exhibit 6," Attach. C], in which he found that security lapses had occurred and recommended security infractions be issued to plaintiff and others. Upon completion of the separate investigation of plaintiff's ethical complaints, Mr. Toelle and Mr. Anzelmo also recommended corrective actions be taken, likewise including the issuance of security infractions against plaintiff and others.

On September 30, 2005, plaintiff was advised that his services were no longer needed and that his employment would end. The parties signed a severance agreement, under which plaintiff's employment would effectively end on October 7, 2005. On that date, plaintiff signed a security termination statement, in which he acknowledged that his security clearance would be terminated. DOE effectuated this termination of plaintiff's security clearance on October 13, 2005. On October 24, 2005, USEC submitted a "Corrective Action Plan" and a list of security infractions to DOE.

On or about May 11, 2005, while in the process of seeking a security clearance for his new employment, plaintiff discovered defendant's report to the DOE that he committed security infractions. There had been no mention by USEC to plaintiff of any alleged security violations committed by plaintiff, and plaintiff vigorously disputes that he committed any. Plaintiff asserts that at the time the severance agreement was entered into, defendant wrongfully withheld the reporting of these infractions from him; had he known of the report, he would not have entered into the severance agreement. Further, although plaintiff apparently does not dispute the routine termination of his security clearance upon ending his employment at USEC, he contends that these allegedly false statements have precluded him from obtaining a security clearance at his new employment and will affect other future employment prospects.*fn2

On November 1, 2006, plaintiff filed suit against USEC in the Circuit Court for Anderson County, Tennessee. Defendant was served on December 14, 2006, and on January 1, 2007, defendant removed the action to this court, this court's jurisdiction being premised on diversity of citizenship.

Plaintiff's Third Amended Complaint [Doc. 44] alleges the following claims: (1) intentional/reckless interference with business relationships, (2) a deceptive act and/or trade practice, (3) inducement to breach a direct or implied contract between plaintiff and the DOE, (4) defamation by means of libel and slander, (5) breach of the implied duty and obligation of good faith of the employer with regard to the separation agreement between plaintiff and defendant, and (6) fraudulent inducement to contract. In a Memorandum and Order filed August 27, 2007 [Doc. 16], this court dismissed as time barred plaintiff's claim for slander, while allowing plaintiff's action to proceed on the remaining claims. Defendant now moves for summary judgment on these remaining claims.


Under Rule 56(c) of the Federal Rules of Civil Procedure, a court may grant summary judgment only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The court must construe the facts and draw all inferences therefrom in the light most favorable to the party opposing the motion-in this case, the plaintiff. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The sufficiency of the evidence at summary judgment is guided by the "substantive evidentiary standard of proof that would apply at the trial on the merits." Id. at 252. Because the instant case is governed by the preponderance of the evidence standard, this court must ask itself "whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict." Id. at 252. This does not mean that the evidence must dictate a verdict for plaintiff; rather, a genuine issue of material fact exists if there is sufficient evidence, beyond a "mere scintilla," that a jury could return a verdict for plaintiff. Id.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. With regard to issues where the moving party will not bear the ultimate burden of proof at trial,"the burden on the moving party may be discharged by 'showing' ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party to demonstrate the existence of genuine issues of material fact. Id. at 324. The nonmoving party demonstrates the existence of genuine issues of material fact by "going beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file ....' " Id. If the nonmoving party fails to meet this burden, the moving party is entitled to summary judgment.

"Where, as here, federal jurisdiction is based upon diversity of citizenship, [the court] applies the law of the forum state." Estate of Riddle v. S. Farm Bureau Life Ins. Co., 421 F.3d 400, 404 (6th Cir. 2005). The parties do not dispute that Tennessee law governs this case.


A. Validity of Severance Agreement

Defendant argues that the severance agreement bars all of plaintiff's claims, "as each one arises out of or relates to USEC's reports of Mason's actions taken while employed by USEC." [Doc. 56 at 20]. Plaintiff argues that the severance agreement does not bar suit, apparently disputing the validity of the agreement as a whole, based on claims ...

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