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Schultz v. Tribune Co.

October 7, 2009


The opinion of the court was delivered by: Block, Senior District Judge


Plaintiff Gerard Schultz ("Schultz") was fired in 2004 by the New York area daily newspaper Newsday. Schultz believes that his termination was in retaliation for his role as a "whistleblower" on a scheme whereby the newspaper reported inflated circulation figures in order to charge higher rates to advertisers ("the circulation scandal"). Defendant Newsday and its publisher, Timothy P. Knight (collectively, "Newsday"), now move for summary judgment on all of Schultz's claims.

Schultz's complaint is not a model of clarity. The complaint makes repeated references to Schultz's status as a "whistleblower," see, e.g., Am. Compl. at ¶¶ 184, 189, 194, 198, but critically fails to allege a discrete "whistleblowing" claim under either federal or state law.*fn1

Instead, Schultz's complaint alleges claims under: (1) the Family Medical Leave Act ("FMLA"); (2) the Americans with Disabilities Act ("ADA"); (3) the Employee Retirement Income Security Act ("ERISA"); and (4) the New York State Human Rights Law ("NYSHRL").*fn2 See Am. Compl., Docket Entry No. 2-3 (Jan. 2, 2007).

Schultz must connect his termination to his rights under the aforementioned statutes in order to survive summary judgment. This he fails to do, since he consistently and ardently maintains that his termination was in retaliation for his role as a "whistleblower," and not on account of his taking medical leave (FMLA), his disability (ADA), or his entitlement to disability benefits (ERISA). Therefore, and as more fully set forth below, Newsday's motion is granted in its entirety.*fn3


Unless otherwise noted, the following facts are undisputed, and are drawn chiefly from Schultz's deposition testimony. Schultz worked for Newsday from 1980-2004. Beginning in about 1999, he became aware (or at least suspected) that personnel at the newspaper were inflating circulation figures. In 2003, he became suspicious of one account in particular ("the Faella Account").*fn4 Schultz reported his concerns about the Faella Account (and other practices) to various superiors at the newspaper several times throughout the period 1999-2003. These concerns were either ignored or received coolly. At some point, two of Schultz's superiors, defendant Robert Brennan ("Brennan") and non-party Edward Smith, pressured Schultz to create a handwritten list related to the Faella Account ("the Handwritten List"). The Handwritten List was supposed to represent "where Faella was selling papers." Schultz Dep. Tr. at 91:13-16. Schultz made up dates of sales and the numbers of newspapers sold, and inserted these into the Handwritten List. Id. at 100:18-101:02. Schultz testified that he was afraid of creating the Handwritten List because he knew it was for a fraudulent purpose, namely, to present to Newsday's auditors as evidence of sales. Id. at 95:12-22, 97:02-20. Ultimately the Handwritten List was "never completed." Id. at 97:21-98:15. Schultz now refers to the Handwritten List as "thankfully aborted" and protests that it "was not [his] idea to cover-up the Faella overpayments." Schultz Aff. at ¶ 39.

In 2004, a civil complaint based on Newsday's circulation practices was filed against the newspaper on behalf of several advertisers. See Complaint, Crabhouse of Douglaston, Inc. v. Tribune Co., No. 04-CV-558 (E.D.N.Y. Feb. 10, 2004). Around the same time, Newsday conducted an internal investigation into the circulation scandal, presumably in response to the complaint. In May 2004, in connection with that investigation, Schultz was asked to meet with Tribune's general counsel, Crane Kenney. Schultz spoke with Brennan prior to that meeting; Brennan told him: "[D]on't tell them anything, just tell them Richie Faella died . . ." Schultz Dep. Tr. at 58:17-23. Schultz construed the conversation as an instruction by Brennan not to tell Kenney anything. Id. at 62:12-17.

Schultz followed Brennan's instructions. He did tell Kenney that the Faella Account was "under investigation." Id. at 62:18-22. He did not, however, tell Kenney of his specific suspicions of fraud in the Faella Account, or of the brief existence of the Handwritten List. In June 2004, Schultz met with Tribune's in-house counsel Roger Goodspeed and outside counsel Thomas Souther. In this second interview, Schultz admitted that he knew that the "numbers being reported on the Faella [A]ccount were false." Id. at 74:13-20. Schultz had a third meeting in connection with Newsday's investigation later in June 2004, with Kenney, Souther, and possibly Thomas Caputo, a member of Tribune's internal audit group. Schultz admitted at this meeting that he had not been "honest" with Kenney during the May 2004 meeting. Schultz Dep. Tr. at 80:10-15.

Schultz was terminated on September 2, 2004. Katie Lawler, Vice President of Newsday's Human Resources and Labor Relations department, confirmed Schultz's termination in a letter the next day:

I am writing to confirm the termination of your employment with Newsday effective September 2, 2004. As you were advised yesterday, the reasons for your termination are based on your participation in fraudulent circulation practices, your failure to be forthright with company attorneys during the investigation, and your violations of the company's Code of Conduct.

Letter from K. Lawler to G. Schultz (Sep. 3, 2004), Schultz Aff. Ex. C.

Schultz's termination occurred during a medical leave he took as of August 9, 2004. Significant back injuries caused him to miss work on numerous occasions; he is now disabled on account of ...

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