Alaska Employment Law

A 9th Circuit panel has affirmed U. S. District Judge Ralph Beistline’s dismissal of a claim that several Anchorage officials, and the municipality itself, violated 42 USC § 1983 when they allegedly caused the Panhandle Bar to dismiss an at-will employee. 

The unpublished opinion states:

Milstead brought suit under 42 U.S.C.
§ 1983 alleging Defendants deprived her of due process by making defamatory statements that (1) damaged her reputation, (2) caused the owners of the Panhandle bar in Anchorage, Alaska, to terminate her employment, and (3) caused her peers in the hospitality industry to “ostracize” her. We affirm.

First, applying Paul v. Davis, 424 U.S. 693 (1976), we have held that “reputation, without more, is not a protected constitutional interest.” WMX Techs., Inc. v. Miller, 197 F.3d 367, 374 (9th Cir. 1999) (en banc) (citation omitted).  Therefore, Milstead’s allegation that Defendants’ statements resulted in damage to her reputation in the Anchorage hospitality industry does not provide a federal cause of action, as her reputation alone is not a constitutionally protected liberty or property interest.

Second, we have noted that “where the actions of private individuals operate to deprive an individual of his employment, a suit for interference with private contractual relationships would lie, but where government officials are involved, the nature of the interest at stake in private employment is a property interest.”  Merritt v. Mackey, 827 F.2d 1368, 1371 (9th Cir. 1987). Nevertheless, “[f]or the purpose of due process, [a plaintiff] must show that [s]he had more than a ‘unilateral expectation’ of continued employment; [s]he must demonstrate a
‘legitimate claim of entitlement.’” Id. (quoting Board of Regents v. Roth, 408 U.S. 564, 577 (1972)).  The Supreme Court has repeatedly held there is no Fourteenth Amendment property interest in an at-will employment contract. []  Milstead does not allege anything more than an at-will employment. Her complaint contains no representation that she even had a contract. As a result, she has not alleged that she had “more than a ‘unilateral expectation’ of continued employment.” Merritt, 827 F.2d at 1371.

Third, even if liberally construed, Milstead’s allegation that she has been “ostracized by her peers and nearly all others in the bar industry” does not sufficiently articulate a claim that she has been foreclosed from future employment. Milstead has not alleged that an employer refused to hire her as a result of Defendants’ statements. Her allegations therefore have not raised “a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, her federal claims fail.

Milstead v. Begich, et al., 2010 WL _____ (9th Cir. Jan. 25, 2010)(unpub.)

William Large of Anchorage represented Milstead.  Joyce Weaver Johnson of the city’s law office represented the multiple defendants.