Two University employees and a former employee will face the University in court on Friday in a defamation lawsuit's preliminary stage -- a lawsuit which could cost the University more than $120,000.

The lawsuit, filed by L. Eric Cross, Russell Messier and Rustum Roy, centers around David Shirley's alleged criticism of the Materials Research Laboratory.

According to court documents, Shirley, senior vice president for research and dean of the Graduate School, said the lab was in a financial crisis and losing $750,000. He allegedly attributed the loss to Messier's leadership. But Cross, Messier and Roy claim in the court files that the lab was doing fine.

"The laboratory is not in any way over the hill," said Cross, Evan Pugh professor of electrical engineering.

The plaintiffs are suing the University for a total that exceeds $120,000 in compensatory and punitive damages. They also call for the reinstatement of Messier as acting director of the Materials Research Laboratory.

Roy, Evan Pugh professor of the solid state, founded the lab in the early '60s and served as its director from 1962 to 1985. Cross directed the lab from 1985 to 1988. During this period, it became internationally known and consistently maintained a balanced budget, according to court files.

According to court records, the lab lost money for the first time while Stewart Kurtz served as acting director and then director from 1988 to 1991. Messier became acting director in January 1992 and was eventually replaced by William Taylor.

"We have won more awards the last two years than before," Roy said. "Those are facts that cannot be challenged."

Truth or falsity of Shirley's alleged statements will not be an issue until it is determined whether the statements were defamatory, said Grant Fleming, attorney for the defendants.

"If the court determines that at least part of it is defamatory, then the suit proceeds," Fleming said. But he added that the lawsuit could be dismissed.

Shirley could not be reached for comment.

Shirley's statements allegedly occurred at a May 20, 1993, meeting of the lab faculty. The meeting was held with only 36 hours notice and with the knowledge that Cross and Roy were at a professional conference out of town, according to court documents.

"I think it's really time that the faculty were counted in on these things," Cross said.

He added that the plaintiffs' goal is for the University to look at the problem sensibly and to change the administrative structure.

Roy said the statements about the lab and its leadership were false and that the administration should apologize for them.

"We're not interested in any money," Roy said. "It's purely a reputation thing."