This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-96-1156

Melodie Paulsen, et al.,

Appellants,

vs.

Guidant Corporation, et al.,

Respondents.

Filed December 31, 1996

Affirmed in part, reversed in part, and remanded

Klaphake, Judge

Ramsey County District Court

File No. C5-95-5453

Judith L. Oakes, J. Oakes & Associates, 780 Galtier Plaza, Box 15, 175 East Fifth Street, St. Paul, MN 55101-1609 (for Appellants)

Robert R. Reinhart, Dorsey & Whitney L.L.P., Pillsbury Center, 220 South Sixth Street, Minneapolis, MN 55402-1498; Marsh J. Halberg, Richard W. Pins, Thomsen & Nybeck, P.A., Edinborough Corporate Center East, Suite 600, 3300 Edinborough Way, Edina, MN 55435-5962 (for Respondents)

Considered and decided by Schumacher, Presiding Judge, Klaphake, Judge, and Amundson, Judge.

U N P U B L I S H E D O P I N I O N

KLAPHAKE, Judge

Appellants, Melodie Paulsen and Paulette Olson, challenge the district court's grant of summary judgment to respondents, Guidant Corporation f/k/a Cardiac Pacemakers, Inc. (Guidant) and Dacon Engineering and Service Company, Inc. (Dacon) on their claims of gender and religious discrimination, religious harassment, reprisal, and defamation. Because we conclude appellants raised material questions as to the gender discrimination and reprisal claims against Guidant, we reverse and remand on those issues. Because we conclude appellants failed to raise a material question as to the gender discrimination and reprisal claims against respondent Dacon and the religious discrimination, harassment, and defamation claims against both respondents, we affirm on those issues.

D E C I S I O N

On appeal from summary judgment, the appellate court determines whether the district court erred in its application of the law and whether any genuine issues of material fact exist. See State v. French, 460 N.W.2d 2, 4 (Minn.1990). We review legal questions de novo, Frost-Benco Elec. Ass'n v. Minnesota Pub. Util. Comm'n, 358 N.W.2d 639, 642 (Minn.1984), but give the nonmovant the benefit of any doubt regarding the existence of a genuine issue of material fact. Rathbun v. W.T. Grant Co., 300 Minn. 223, 230, 219 N.W.2d 641, 646 (1974). Summary judgment must be granted against a party who fails to establish elements of a claim, if that party has the burden of proof. Lloyd v. In Home Health, Inc., 523 N.W.2d 2 (Minn. App. 1994).

Dacon, a temporary employment agency, pursuant to its agreement to supply workers to Guidant, placed both appellants as contract workers with Guidant's Quality Assurance/Document Control Department.[1] In late 1993, Guidant employee Gary Wereley became appellants' supervisor. Shortly thereafter, appellants allege that Wereley began making sexist and religious comments and began treating them negatively. Within months, Guidant decided to end appellants' employment contracts. Olson's contract was cancelled in April 1994, and Paulsen's was not renewed in June 1994. Appellants based their claims against respondents for discrimination, reprisal, harassment, and defamation primarily on Wereley's actions.

I. Gender Discrimination and Reprisal

The district court determined that both appellants established prima facie cases of gender discrimination and reprisal. See Minn. Stat. § 363.03, subds. 1(2), 7 (1994); see also Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 442-44 (Minn. 1988) (setting out elements of prima facie case for discrimination and reprisal). Because neither respondent filed a notice of review, respondents may not now contest whether appellants established a prima facie case for these claims.[2] See Kolby v. Northwest Produce Co., 505 N.W.2d 648, 653 (Minn. App. 1993) (refusing review of issue on which district court ruled against respondent because respondent failed to file notice of review).

Once a claimant establishes a prima facie case and the employer articulates a nondiscriminatory reason for its actions, the claimant must prove those reasons pretextual and bears the ultimate burden of persuasion to prevail. See Hubbard, 330 N.W.2d at 442, 444 (setting out generalized formulation of McDonnell-Douglas three-step analysis); Sigurdson v. Isanti County, 386 N.W.2d 715, 720-21 (Minn. 1986) (requiring district court to rely on McDonnell-Douglas analysis). The facts support the district court's finding that respondents articulated legitimate nondiscriminatory reasons for their actions toward appellants. Respondents established that they acted pursuant to a company reorganization and cost-saving plan. Therefore, we examine whether appellants provided sufficient facts to show that respondents' justifications were pretextual and whether they could ultimately prove that respondents acted with discriminatory or retaliatory intent.

A. Gender Discrimination

Appellants offered several facts suggesting that Guidant's decisions to end their contracts were not related to the proffered justifications of cost-saving or restructuring: (1) Guidant had expressed a desire to renew Olson's contract, but retracted it one month after appellants' complaints about Wereley's behavior; and (2) after appellants left Guidant, experienced male workers, rather than the new, lower-paid workers, performed many, if not all, of appellants' prior duties. Further, appellants provided other facts suggesting that Guidant acted with discriminatory intent: Wereley moved appellants' cubicles to less desirable locations; adversely changed their work assignments; provided specialized training for two male workers and not appellants; refused Olson's requested overtime; increased scrutiny of appellants' work and time cards; and failed to give appellants performance reviews while male office workers received reviews.[3]

Because we conclude appellants raised sufficient facts to create a material issue as to Guidant's motivations, we reverse the district court's grant of summary judgment to Guidant and remand this issue for trial. However, because appellants offered no facts showing that Dacon acted with discriminatory motives when it ended its employment relationships with them, we affirm the district court's summary judgment for Dacon on the claim of gender discrimination.

B. Reprisal

The district court determined that respondent Guidant's proffered non-discriminatory reasons for its actions, restructuring and cost saving, also negated appellants' reprisal claims. In addition to the facts showing that the decisions to end appellants' contracts were not related to the company's restructuring plan, appellants provided other facts suggesting that Guidant acted with retaliatory intent. After appellants complained about Wereley, he allegedly began checking on them often, going into their offices when empty to wait for their return, and scrutinizing their time cards. Respondents' proffered reasons do not justify these actions. Moreover, after Guidant informed Dacon it would not renew Paulsen's contract and cancelled Olson's contract, a Dacon representative called each appellant and asked if she was a "troublemaker." These facts suggest Guidant complained to Dacon about appellants' discrimination complaints when it decided to terminate the employment relationships. Because these facts create an issue as to Guidant's basis for terminating the contracts, we reverse the district court's grant of summary judgment for Guidant on this issue.

Appellants fail to offer sufficient facts, however, to prove a reprisal claim against Dacon. Even after Guidant had terminated its relationship with appellants, appellants admit that Dacon sent them both on interviews for new positions. Therefore, we affirm the district court's summary judgment for Dacon on this issue.

II. Religious Discrimination and Harassment

The district court dismissed appellants' claims of religious discrimination and harassment because neither established a prima facie case. Appellants alleged that Wereley made adverse religious comments about their beliefs and treated them adversely because of their religious beliefs. Even if Wereley took such action, however, the discrimination claims against both respondents must fail because neither appellant provided sufficient facts showing disparate treatment based on their particular religious beliefs. See Hubbard, 330 N.W.2d at 442; Adams v. West Pub. Co., 812 F.Supp. 925, 932 (D. Minn. 1993) (setting out requirements for sex discrimination claim), aff'd, 25 F.3d 635 (8th Cir. 1994).

Furthermore, appellants have failed to provide sufficient facts to support their claims for religious harassment against either respondent. To prove their claims, appellants must show that the alleged harassment created a hostile or abusive work environment. Cf. Thompson v. Campbell, 845 F.Supp 665, 672-74 (D. Minn. 1994) (granting summary judgment to defendants on sexual harassment because alleged offensive conduct did not create pervasive hostile environment). Because Wereley's alleged comments were, at most, isolated, they do not constitute a hostile work environment. Therefore, we affirm the district court on these issues for both respondents.

III. Defamation Claims

To establish a defamation claim against respondents, each appellant must show that respondent made false communications to someone other than herself, and that the communication tended to harm her reputation and lower her in the estimation of the community. See Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). Respondents must have intentionally conveyed defamatory words to persons other than appellants. See Frankson v. Design Space Int'l, 394 N.W.2d 140, 144 (Minn. 1986) (to publish is "to intentionally exhibit defamatory words to one other than the libelee."). Here, neither appellant presented sufficient facts to show they could sustain their burden of proving Wereley published any defamatory statements. Appellants' speculative allegations as to what Wereley said to third parties, and whether a co-worker overheard him, are inadequate to defeat summary judgment. See Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845 (Minn. 1995) (speculation, general assertion, promises to produce evidence at trial not sufficient to create genuine issue of material fact for trial). Therefore, we affirm the district court's summary judgment for respondents on the defamation claims.

Affirmed in part, reversed in part, and remanded.

[ ]1The trial court found that both respondents were appellants' "employer" for purposes of the claims. Neither respondent appealed that finding.

[ ]2In a Special Term order granting appellants' motion to strike, this court decided respondents' challenge to appellants' prima facie case was precluded by their failure to file a notice of review.

[ ]3Wereley reviewed only one woman in appellants' department and gave her the only negative review.