Employee Suit Against UPS Upheld : Court Refuses Summary Judgment for Firm in Firing

Michael Kelley, an ex-employee of United Parcel Service who is suing the company for extortion and entrapment, has won the right to pursue his court fight in a decision handed down by the 4th District Court of Appeal.

Kelley, 40, was fired from his job as a package sorter in the San Marcos UPS plant in August, 1983, because company officials said he violated a company policy against possession of drugs on company property.

The Escondido man did not deny that he gave two marijuana cigarettes to a fellow employee in the UPS parking lot. But he charged in his lawsuit that the company had hired a federal drug informant to entrap UPS employees so that they would be forced to give information about two missing UPS shipments of guitars and gold jewelry.

In a ruling handed down by the state appellate court Friday, three justices reversed a Superior Court ruling and denied a UPS attorney’s petition for a summary judgment in the firm’s favor. The justices set aside the lower court’s ruling that Kelley could not pursue claims on charges of extortion or entrapment in his suit against the company for wrongful discharge.

Michael Lennie, Kelley’s attorney, said the appellate court’s decision “makes me very pleased” because the charges ruled out by the lower court contained the heart of Kelley’s case--that company officials had knowingly hired a drug informant to entrap Kelley into an illegal act in an attempt to extort information from him about the thefts. He said Kelley is seeking a “seven-figure amount” from his ex-employer and has filed a $1-million claim against the federal Drug Enforcement Administration for its alleged participation in the scheme.

The appellate court ruling called UPS’s petition for a summary judgment “premature” and noted that “UPS does not . . . discuss the propriety of inducing an employee to violate the law and then using this fact and the implied threat of termination to try to coerce him into confessing or snitching on co-workers.”

According to Kelley, after he was arrested, a drug enforcement agent offered to go easy on him if he cooperated with UPS security officials by giving them information about the shipment thefts. Then, Kelley contends, he was turned over to a UPS security agent who alleged that Kelley was implicated in the thefts, then offered to have the drug charge against him dropped if he would inform on those involved.

Kelley does not deny giving the two cigarettes to Dan Whetstone, an informant for federal and local drug enforcement agencies, but he said that he thought he was doing a favor for a fellow Vietnam veteran who had told Kelley that he was in constant pain from wounds he had suffered in the war.

Kelley’s suit charges that UPS hired Whetstone to force UPS employees into illegal acts so company security officials could “blackmail” the employees into giving information about the missing UPS shipments.

UPS denies hiring Whetstone as a company informant, claiming he was an employee of the DEA. Company officials also testified at a preliminary hearing that Kelley was fired solely because he broke a long-standing company rule against having drugs on company property.

UPS attorney William Claster could not be reached Monday for comment on the ruling or on whether the firm would appeal.