(CN) - Wal-Mart must face a defamation claim from an ex-cashier the company had arrested over leniency with an extreme couponer, an Arkansas appeals court ruled.
Mai Sawada was just 22 in July 2012 when her manager at the Wal-Mart in Russelville interrogated her over price matching and other discounts that Sawada gave a friend, Lily Xayadeth, who shopped at the store.
After Sawada admitted in a written statement that she deferred out of "peer pressure" to Xayadeth's description of the too-good-to-be-true coupons she used, Wal-Mart had Sawada arrested for felony theft.
Though the charges against Sawada were dismissed, she claimed that the arrest caused her to lose her second job at Arkansas Tech University, and she spent three days in jail.
The Russellville Courier published Sawada's mug shot in an article on the arrest, which reported that "Walmart management told police she allegedly stole approximately $8,000 over a period of time from the store's cash registers."
Sawada sued Walmart for defamation and malicious prosecution, among other claims, noting that article also said "that 'store employees "observed [her] removing money from the registers,"' and that she had 'allegedly confessed to the theft.'"
Though Sawada said that one of her supervisors had approved "each and every transaction underlying the criminal accusations," the trial court in Pope County granted Wal-Mart summary judgment.
The Arkansas Court of Appeals mostly affirmed this month but revived Sawada's defamation claim, citing questions on what Karen Bryant, Wal-Mart's asset-protection manager, told police about Sawada's conduct.
"Was she fired for stealing $8,000 from the cash register," the judge asked. "Or was she fired because she gave a friend $8,000 worth of drastic and unreasonable discounts in a manner that Wal-Mart deemed unethical?"
The 16-page ruling otherwise sides with Wal-Mart on Sawada's other claims.
"The information that Wal-Mart possessed from its internal investigation and subsequent interview of Sawada was enough to cause a person of ordinary caution to believe, from a probable-cause standpoint, that Sawada committed a theft," Judge Brandon Harrison wrote on behalf of a three-judge panel.
Wal-Mart also need not face claims of false light, abuse of process and outrage, also known as intentional infliction of emotional distress, the court found.
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