Alaska Employment Law

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Anchorage Superior Court Judge John Suddock has granted retailer Home Depot summary judgment on multiple claims filed by former managers in its Tudor Road (Anchorage) and Fairbanks stores.  The employees claimed breach of the implied covenant, contract breach, age and disability discrimination, retaliation, IIED, NIED, and negligent supervision.  The employees conceded that they were validly “at-will.”  At least one of the employees conceded (during deposition) that the employer had not violated its own policies. 

Suddock also denied the employees’ reconsideration motion.

In the two citation-studded and lengthy (34 and 19 pages) opinions, Suddock nicely summarizes current Alaska law on all claims.  He pays most attention to the implied covenant claim, and, in both orders, rejects any notion that the covenant guarantees a generalized regime of fair employment practices.  

Suddock on implied covenant claims:

Rahlfs’ bad faith claim suffers from a fatal analytic deficiency. He assumes he is entitled to litigate the factual correctness of Home Depot’s grounds for termination. He contends that a showing of flawed decision-making suffices to take an employment case to the jury.

This is an overbroad interpretation of the Supreme Court’s formulation that “(a)n objective breach occurs when the employer fails to act in a manner that a reasonable person would consider fair.” The formulation must be understood in the light of the applicable case law.  After all, a reasonable person might not consider it objectively fair to fire a longstanding employee based on wholly erroneous conclusions of fact.  Yet our Supreme Court ratifies that outcome, because to do otherwise would be to eviscerate for all practical purposes the core nature of employment-at-will. Since an employee can virtually always claim that an employer erred, linking the validity of a termination to its factual correctness would put every termination in the hands of jurors. Our case law has not developed in that fashion.

Rahlfs raises no material issues of disputed fact implicating a recognized variant of an objective good faith claim, such as disparate employee treatment, violation of statutory or constitutional rights, or infringements upon public policy. His recitation of facts and allegations tend to establish mere general unfairness. A mere showing of exercise of discretion based on incorrect data fails to raise justiciable issues of fact to defeat summary judgment on his good faith claim.

Rahlfs Order at pp. 14-15 (citations omitted).  On the other employee’s implied covenant claim, Suddock said:

Kendall’s proposed common-decency standard is inapt in the rough and tumble world of employment law. Put bluntly, an Alaskan employer may fire with impunity for quite mean-spirited, personalitydriven, and even factually erroneous reasons, so long as explicitly forbidden taboos of employment law are not transgressed. To ignore these realities exposes clients to very substantial prevailing party attorney fees if an employer has seeded the litigation with timely offers of judgment.

Mr. Kendall complains that Mr. Parker was an uncouth man who had it in for him, demanded too much, aided too little, bad-mouthed him to others, was mistaken on the facts, and fired without giving a fair chance to show improvement. But none of this conduct, even if accurately depicted, amounts to bad faith as that term of art is defined by the common law.

Kendall Order at p. 21 (citation omitted).

Suddock on similarly-situated employees:

Home Depot also argues that Rahlfs fails to satisfy the prima facie element that a similarly situated younger employee was treated more favorably. Rahlfs identifies no such employee. He does not address the point in his memorandum, apparently on the assumption that the primafacie case is somehow self-evident. It is not.

Employees are similarly situated when they have similar jobs and display conduct or a disciplinary record of comparable gravity. It is Rahlfs’ burden to identify such a specific person and present his or her circumstances with specificity. Clearly, this represents an arduous investigative task for an attorney screening or filing an age discrimination case. But without such evidence, there is no case.  Because Mr. Rahlfs presents no evidence, much less argument, regarding this element of his prima facie case, his age discrimination claim fails.

Rahlfs Order at pp. 15-16 (citations omitted).

Suddock’s Order on Motion for Reconsideration is equally blunt:

In its order, this court reframed the implications of Era Aviation, stating that a firing for even mean-spirited reasons might survive scrutiny unless it fit neatly into a bad-faith pigeonhole.  The court’s blunt summary of “acceptable” rationales was intended to caution litigants from relying on discredited Queensberry rules.  Employment law, like politics, “ain’t beanbag.”  The price of misjudgment includes prevailing party attorney fees, a doubly unfortunate blow for a plaintiff-employee who may already have been in some sense victimized by the circumstances of his termiation.

Reconsideration Order at pp. 2-3. 

Philip Kendall and Terry Rahlfs v. The Home Depot, Inc., Case No. 3AN-06-13817 Civ. (3rd Jud. Dist., State of Alaska)

Joe Josephson represented the plaintiff-employees.  Peter Partnow represented Home Depot.  Both counsel practice in Anchorage.

Order Dismissing Kendall Claims; Order Dismissing Rahlfs Claims; Order on Reconsideration