Loew’s, Inc. v. Cole

In 1947 the House Un-American Committee (HUAC) was on a mission to rid America of the influence of Communist operatives, particularly in the movie industry. HUAC held hearings in an effort to identify secret members of the Communist Party. Before the hearings, one of the executives of Loew’s, Inc. (plaintiff) indicated that he did not care whether his employee, Lester Cole (defendant), was a Communist, and another leader indicated that he would not fire a writer who was assumed to be a Communist if the writer’s political affiliation had not been proved. At the hearing, however, industry leaders tried to assure the HUAC and the public that their movies and staff were free of Communist influences, and that they welcomed HUAC’s investigation. Officials of Loew’s testified that they would not hire writers who were proved to be Communists. HUAC then questioned 11 screenwriters, including Cole, regarding whether they were Communists. Though Cole had told his employer he was not a Communist, the screenwriters decided before the hearing they would not answer HUAC’s questions, and they each declined to answer. This gave the public the impression that Cole and the others were in fact Communists. During this period, Cole had signed an extension of his contract with Loew’s. The contract contained a morals clause providing that Cole could not do anything that would “degrade him in society or bring him into public hatred, contempt, or scorn or ridicule, or that would shock, insult or offend the community.” After Cole’s testimony, there was a public outcry. Fearing a movie boycott or legislation, Loew’s suspended Cole. Cole could return to work on the condition that he be acquitted or be purged of contempt by testifying under oath that he was not a Communist. Cole refused, arguing that he had no control over acquittal, purging was impossible, and the studio had no right to demand he take the oath because, in his view, Loew’s executives were fine with Cole’s conduct until the public outcry. Loew’s terminated Cole’s contract. Cole sued the studio for wrongful dismissal in federal court. The trial court ruled in Cole’s favor, and Loew’s appealed.