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BECKER ET AL. v. PHILCO CORP.

decided: December 4, 1967.

BECKER ET AL
v.
PHILCO CORP.



C. A. 4th Cir. Reported below: 372 F.2d 771.

[ 389 U.S. Page 979]

Certiorari denied.

MR. CHIEF JUSTICE WARREN, dissenting.

 This is an important case affecting the rights of millions of workers to vindicate their reputations and to make a living in the military-private industrial complex. See Greene v. McElroy, 360 U.S. 474, 507, n. 31 (1959).

According to petitioners, this case presents the following question:

"Is a government contractor endowed with the attributes of a Federal Agency and is it and are its employees clothed with unqualified or absolute privilege to falsely and maliciously defame other employees in reporting a loss, compromise, or suspected compromise of classified information, solely by reason of (1) having contracted with the United States Government to furnish it with supplies or services which are required and necessary to the National Defense, and (2) in connection therewith having entered into a security agreement with the United States Government under the terms of which it has agreed to report the loss, compromise, or suspected compromise of classified information." Petition for Cert., p. 2.

Petitioners brought this action against respondent Philco Corporation, their employer, for an alleged defamation made in a report to the Department of Defense under the terms of a contract for the manufacture of defense items. The complaint alleged that the report contained both false and malicious statements concerning petitioners and resulted in the withdrawal of their security clearances and thus the loss of their jobs. On respondent's

[ 389 U.S. Page 980]

     motion for summary judgment, the District Court dismissed the complaint, holding the communication absolutely privileged. 234 F.Supp. 10 (D.C. E. D. Va. 1964). Placing unjustified reliance on the authority of the principal opinion in Barr v. Matteo, 360 U.S. 564 (1959), the Court of Appeals for the Fourth Circuit affirmed. 372 F.2d 771 (1967). In granting an absolute privilege to government employees at the expense of the individual's right to be free from defamation, Barr v. Matteo extended the earlier decisions of this Court to what I and others considered to be the breaking point. That opinion did not command a majority of this Court then, and only one of those who joined it is on this Court today. The conclusion there was reached by balancing

"on the one hand, the protection of the individual citizen against pecuniary damage caused by oppressive or malicious action on the part of officials of the Federal Government; and on the other, the protection of the public interest by shielding responsible governmental officers against the harassment and inevitable hazards of vindictive or ill-founded damages suits brought on account of action taken in the exercise of their official responsibilities." Barr v. Matteo, supra, at 565.

The deprivation of the employees' rights in the present case is justified in the following manner: By Executive Order, the Secretary of Defense is empowered through regulations to safeguard classified information.*fn1 Pursuant to that power, the Secretary has issued an Industrial Security Manual which requires contractors to protect all classified information by maintaining a system of

[ 389 U.S. Page 981]

     security controls and to report any loss, compromise, or suspected compromise of that information to the Department of Defense.*fn2 The Secretary enters into a Security Agreement with his contractors to implement the provisions of the Manual. The Secretary does not attempt to clothe the contractor with any immunity from a civil action for damages caused by defamatory reports.

From this scheme to protect classified information, the court below took the additional and unwarranted step of conferring an ...


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