Alaska Employment Law

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Judge Beistline Certifies “Sweetie” Issue to the Alaska Supreme Court; A Comment

As earlier reported on this site, Judge Ralph Beistline on October 1st held that a dismissed employee need not identify “a clear mandate of public policy” as a predicate to a tort public policy claim or to an implied covenant contract claim based on a violation of public policy. 

Judge Beistline has now reversed himself, after the employer moved for reconsideration.  In an Order issued at the PreTrial Conference on Friday, October 5th, Judge Beistline dismissed the employee’s public policy tort claim, and barred the employee from relying on the public policy wing of the implied covenant theory.  The case is Johnson v. Fred Meyers Stores, Inc., Case No. 1:04-cv-0008-RRB (D.Alaska).

In his most recent order, Judge Beistline stated:

While Alaska does not appear to embrace the so-called ’sweetie rule’ proposed by Defendants, there also does not appear to be an explicit public policy in Alaska prohibiting an employer from discharging an at-will employee in order to replace her with someone else - even if motivated by a hoped-for romantic interest.  While the statutes and case law cited by Plaintiff stand for important public policies, these policies are not at issue here.  Because there is no explicit public policy prohibiting Defendants’ alleged actions, and because this Court declines to announce one in the absence of persuasive authority, Plaintiff may not use the phrase ‘public policy’ at trial.

Left with a narrowed implied covenant claim, plaintiff requested Judge Beistline to continue the trial and to certify his ruling to the Alaska Supreme Court.  Beistline granted the plaintiff’s requests.

Comment

Degree of clarity of policy.  The plaintiff had some basis for urging the court to reject the “explicit public policy” standard.  Luedtke v. Nabors Alaska Drilling, Inc., 768 P.2d 1123 (Alaska 1989), in particular, offers support to plaintiffs who rely on public policies that are less than “clear” or “explicit.”  But the Supreme Court has more recently used the phrase “explicit public policy” when describing the elements of the public policy tort.  E.g., Reust v. Alaska Petroleum Contractors, Inc., 127 P.3d 807, 812 (Alaska 2006); Kinzel v. Discovery Drilling, Inc., 93 P.3d 427, 437-38 (Alaska 2004).  See also ARCO Alaska v. Akers, 753 P.2d 1150,  1153 (Alaska 1988).  

But the ”explicit” standard does not necessarily require the plaintiff to identify a statute or other authority that proscribes the precise conduct that it alleges the defendant has engaged in, as the Johnson Court apparently held.  In Luedtke, the Court relied on the constitutional right of privacy (enforceable against only public bodies) to support a public policy of protecting the privacy of private sector employees.  And in Norcon, Inc. v. Kotowski, 971 P.2d 158 (Alaska 1999), the Court grounded a public policy protecting those who raise safety concerns by reference to a private employer’s safety policy that was broader than that required by OSHA. 

Alaska public policy at stake in Johnson.  The plaintiff in Johnson v. Fred Meyers rests her assertion of public policy on a) the Human Rights Act’s ban on employment discrimination based on sex and marital status; b) the “Inherent Right” of all persons to the “enjoyment of the rewards of their own industry” recognized in § 1.1 of the Alaska Constitution; and c) an asserted common law ban on sexual harassment and discrimination in the workplace (citing Kotowski and Rosebrock).  Fred Meyers relies on the managerial freedom implicit in an employer’s “at will” policy. 

Impact of Muller v. BP.  Another basis for Johnson’s public policy claim may be found in the Alaska Supreme Court’s opinion in Muller v. BP Exploration (Alaska) Inc., 923 P.2d 783 (Alaska 1996).   In that case, two employees  argued that BP’s anti-nepotism policy violated the “marital status” arm of the Human Rights Act by placing economic hurdles to marrying (or remaining married to) one’s co-worker.  BP, on the other hand, stressed the importance of anti-nepotism policies.  The Court, per Justice Eastaugh, rejected the employees’ argument and held that the Act prevents employers “from discriminating against an employee based on the status of being married, and does not prohibit an employer from discriminating against an employee based on the identity of his or her spouse or future spouse.”  Id. at 793.  Muller dooms any Title 18 claim by Johnson, but the methodology the Muller Court used to determine Alaska’s “public policy” (as part of its effort to construe the Human Rights Act) may lay out the way to resolve Johnson’s claim. 

The Muller Court found two competing interests expressed in state public policy:

The state has an interest in protecting a person’s right to choose the form that his or her relationships will take. . . . However, the state also has an interest in protecting the interests of its businesses and companies by allowing them to adopt reasonable employment policies.

Id. at 792.  Earlier in its opinion, the Court had stressed that anti-nepotism policies “are widespread and backed by valid reasons.”  Id. at 789.  The Court didn’t elaborate on what the “right to choose the form that his or her relationships will take,” but necessarily, though implicitly, held that the right encompassed the employee’s right to marry a fellow employee.  The Court held that the interests protected by anti-nepotism policies outweighed the employee’s interests in a marital relationship.

Application of Muller v. BP.  If Muller stands for the proposition that Alaska public policy “protect[s] a person’s right to choose the form that his or her relationships will take,” then Muller next requires to court to ask whether the employer has an overriding interest in permitting its supervisors to use their powers to further their romantic interests.   In the words of Muller, is the promotion of such supervisory powers a “reasonable employment polic[y]”?  Id. at 792. 

Employers often argue that a supervisor’s romantic pursuits are undertaken exclusively for his personal interest (and thus do not subject the employer to punitive damages liability).  One would be surprised to learn that an employer has a handbook or policy that expressly confers on its managers the authority to use their jobs to advance their romantic interests.  If Fred Meyers can’t or won’t argue that its supervisor had such express or implied powers, it can not defeat the employee’s interest explicitly recognized by the Supreme Court in Muller.   Under that view, Fred Meyers loses the Muller public policy balancing test, not because its interest is less important than Johnson’s, but because Fred Meyers has no interest at stake.  The employee’s interest “in the form that his or her relationship will take,” as recognized by Muller is as much explicit Alaska public policy as if the Legislature rather than the Supreme Court had expressed it.

Mark Choate of Juneau represents plaintiff Johnson.   James Dickens of Miller Nash (Seattle) and Peter Gruenstein (Gruenstein & Hickey) of Anchorage represent Fred Meyers.

 10/05/07 Order; 10/05/07 Minute Order; Johnson Opp. to Mtn for Reconsideration; Fred Meyers Motion for Reconsideration