Pharmacy Law: Dismissed Diverting Pharmacist Goes on the Offensive

DECEMBER 01, 2008
Joseph L. Fink III, BSPharm, JD

Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.

Issue of the Case

May a pharmacist who was discharged after being covertly filmed diverting controlled substances maintain a legal action against the employer for defamation, defamation of business reputation, battery, and wanton and willful misconduct?

Facts of the Case

A pharmacist was employed at a chain pharmacy in a southeastern state when in late 2001 a variance was noted between the amount of controlled substances ordered and the quantity dispensed. The corporate loss prevention department opened an investigation into the matter, questioning everyone who had access to the pharmacy area. Shortly thereafter the losses ceased, and the investigation was closed.

One year later this location again attracted the attention of the loss prevention specialists when a bottle of C II medication was determined to be missing. The investigation proceeded and corporate officials approved installing a hidden camera in the pharmacy. Also, during the investigative period, the pharmacy supervisor and an investigator conducted covert drug counts over 6 weeks.

The results of the investigation found that nearly 3500 dosage units were missing, representing a wholesale value of nearly $3000, and the majority of the missing tablets were of one item. Furthermore, one of the pharmacists was working 92% of the time on the dates when the medications were ordered and received; in addition, she was observed in the parking lot of the pharmacy after hours on 2 occasions with no apparent purpose for being there. Finally, one of the videotapes revealed the pharmacist removing a container from a shelf bearing the tablets in question, pouring them into her hand, and making a motion toward her mouth.

The investigator interviewed the pharmacist. She admitted she had taken and consumed some medications without a prescription or payment "just a few times," according to the interviewer. Later the pharmacist denied that admission and refused repeated requests to provide a written statement to the investigator. She also allegedly made an admission to the intervention coordinator for the state board of pharmacy, but she denied that allegation.

Upon concluding the interview with the investigator and again refusing to sign a written statement, the pharmacist rose to leave. She claimed the investigator grabbed her arm and she had to pull away from him to leave the location. The investigator denied the accusation.

The investigator then contacted the local police and filed a report regarding the losses at the pharmacy, including details of the investigation and what was missing. The videotape also was provided to the local officials. The pharmacist was arrested and charged with unauthorized distribution of narcotics. She entered a pretrial diversion program and agreed to submit to drug testing, so the criminal charge was dismissed.

The pharmacist filed one lawsuit against her former employer alleging illegal bases for termination, but the court ruled in favor of the employer. In the second lawsuit, the pharmacist advanced 4 new legal arguments not included in the first litigation. The trial court judge granted the employer's motion for summary judgment, without a trial. The pharmacist thought the trial court judge had erred with that ruling and appealed to the US Court of Appeals.

The Court's Ruling

The higher court agreed with the lower trial court that summary judgment in favor of the employer was the appropriate disposition of the matter.

The Court's Reasoning

The appellate court ruled that the employer was insulated from the defamation charges by a state statute that created a legal privilege for someone acting in good faith when filing a loss report with the police. This is a rule encountered in many jurisdictions to remove any hindrance to aiding law enforcement officials. The court reviewed all the evidence from the internal investigation compiled by the corporate loss prevention specialists and concluded that all of it was directly relevant to the loss being reported to law enforcement authorities. Also, the information had been submitted directly to the police officers, so there was no opportunity for those outside law enforcement to have access.

Moreover, the battery claim in her lawsuit was based on the allegation that the investigator had restrained her from leaving the interview by an offensive touching. The lower court had ruled that the plaintiff had abandoned that claim. The employer had advanced arguments regarding why that element of the case should be the subject of summary judgment in its favor by the judge, and the plaintiff did not address that issue, thereby abandoning it.