Alaska Employment Law

In the “Sweetie” termination case against Fred Meyers discussed earlier, the Alaska Supreme Court, in Feburary, declined Judge Beistline’s certified question - whether any Alaska public policy prohibits an employer from discharging an at-will employee in order to replace her with someone else, even if the discharge is motivated by a hoped-for romantic interest.  Beistline had held that no express Alaska public policy barred such a discharge.

The case is now set for trial.  On August 7th, following the Pre-Trial Conference, Beistline issued an Order re Law of the Case in which observed that “there continues to be disagreement between the parties and understandable confusion regarding the law of case,” and then proceeded to ”restate[] the law as the Court understands it and as previously set forth in the Court’s prior orders.” 

In his most recent Order, Beistline addressed two issues:

1) Subjective element of the covenant of good faith/fair dealing:  Fred Meyers had argued that the ex-employee could have no such claim, but Beistline rejected that:

Defendant continues to argue – incorrectly in this Court’s opinion – that Plaintiff cannot proceed under the subjective element of the covenant because Plaintiff has not alleged the existence of an employment contract. The Alaska Supreme Court’s use of the phrase “such as” in the above quotation from Pitka indicates that deprivation of contractual benefits is an example of subjective violation of the covenant, but not necessarily the only way in which the subjective element of the covenant may be violated.

2)  Objective element of the covenant of good faith/fair dealing:  According to Beistline, Pitka v. IRHA, 54 P.3d 785 (Alaska 2002), identifies three categories of “objective” claims: disparate treatment; terminations on unconstitutional grounds; and public policy firings.  He then said: 

This Court has been of the opinion throughout this litigation that these were only examples and not intended to be an exhaustive statement of the only ways in which the covenant can be objectively breached.   Thus, the test under the objective element would not be whether Plaintiff’s case neatly fits into one of the three examples noted by the Alaska Supreme Court, but rather whether the employer acted in a manner which a reasonable person would regard as unfair. Although additional guidance on the objective element would be helpful, none appears to exist.

Beistline then refused to instruct on the objective element.

After further considering the matter, the Court concludes that it cannot ask the jury to decide whether an action is “unfair” without providing additional guidance. Such an instruction would be too broad and obliterate the distinction between “at-will” and “for cause” employees.  Conversely, eliminating the instruction regarding objective breach will do much to simply the instruction with little detriment to Plaintiff because any action qualifying as “unfair” would likely either be based on improper motives or taken in bad faith and thus be covered by the subjective breach instruction. Therefore, in order to avoid confusion the Court will not instruct jury as to the objective element of the covenant.

Comment: The upshot of Beistline’s Order seems to be that any “objective” claim that doesn’t fit into one of the three Pitka categories 1) should be treated as a “subjective” claim, and 2) may be brought regardless of whether there’s any express or implied contract of employment.  That, in turn, does seem to make Pitka’s three categories the exclusive kinds of objective claims. 

 Johnson v. Fred Meyers Stores, Inc., 1: 04-CV-0008-RRB (D.Alaska Order of Aug. 7, 2008)  

Mark Choate of Juneau represents the plaintiff.   Peter Gruenstein of Anchorage’s Gruenstein & Dickey, with James Dickens of Seattle’s Miller Nash, represents the employer defendant.