Closing the Door on the Public Policy Exception to At-will Employment: How the Washington State Supreme Court Erroneously Foreclosed Wrongful Discharge Claims for Whistleblowers in Cudney v. Alsco, Inc

• Publication year: 2013

Washington Law ReviewVolume 36, No.4, SUMMER 2013

Closing the Door on the Public Policy Exception to At-Will Employment: How the Washington State Supreme Court Erroneously Foreclosed Wrongful Discharge Claims for Whistleblowers in Cudney v. ALSCO, Inc.

Laura A. Turczanski(fn*)

I. INTRODUCTION

In 2008, Matthew Cudney was terminated from his employment with ALSCO, Inc. a few weeks after reporting to his supervisor and human resources manager that he observed the branch general manager appearing intoxicated at work and driving away in a company vehicle.(fn1) Cudney brought an action for wrongful discharge in violation of public policy, claiming that he was terminated in retaliation for reporting the manager's drinking and driving.(fn2) Cudney asserted that the Washington Industrial Safety and Health Act (WISHA) establishes a public policy protecting workers who report safety violations.(fn3) He also asserted that Washington's DUI laws(fn4) clearly indicate a public policy protecting the public from drunk drivers.(fn5) In a 5-4 decision, the Washington Supreme Court held that the statutory remedies available under WISHA are adequate to protect the underlying public policy.(fn6) The court also held that Washington's criminal DUI laws are not an inadequate means of promoting the public policy, and that the public policy-rather than Cudney's own interests-must be promoted.(fn7) Based on these two conclusions, the court held that Cudney's tort claim of wrongful discharge in violation of public policy could not proceed.(fn8)

This Note contends that the Cudney court erred in determining that WISHA adequately promotes the public policy of insuring workplace safety; in deciding that public safety is adequately promoted by Washington's DUI laws; and in finding that the common law exception of wrongful discharge in violation of public policy does not apply in this case. The court's conclusion that WISHA was an adequate remedy was erroneous because of the unreasonably short time period available to file a claim under the statute, the lack of a robust administrative scheme, and the lack of full remedies available to a discharged employee. Furthermore, the court's determination that DUI laws adequately promote public policy, regardless of whether a remedy is available to the terminated employee, leaves an employee with no recourse for a wrongful termination and may discourage employees from reporting criminal activity.

This Note proceeds in seven parts. Part II discusses the history of employment at-will in Washington as well as the development of the public policy exception. This section also addresses the four-factor test adopted by the court to analyze a wrongful discharge claim. Part III introduces the Washington Industrial Safety and Health Act, including the public policy served by the Act, as well as the protections provided for workers. In addition, this Part highlights cases in which the court found the public policy exception applicable for claims premised on workplace protection laws. This Part also discusses the split in other jurisdictions regarding the adequacy of statutory remedies. Part IV introduces Washington's DUI laws and discusses what remedies are available under the criminal statutes. Part V analyzes the majority and dissenting opinions in Cudney and discusses the final resolution of the case. Part VI discusses possible future implications of the Cudney decision and proposes remedial legislation that the Washington State Legislature should adopt. Part VII concludes that the Washington Supreme Court incorrectly foreclosed a common law cause of action in the Cudney case, and that action by the court or the legislature is necessary to properly balance the interests of employers, employees, and society.

II. WASHINGTON EMPLOYMENT AT-WILL AND THE PUBLIC POLICY EXCEPTION

This Part discusses the development of Washington's employment at-will doctrine, including the public policy exception, and sets out the four-part test that a court will use in analyzing a tort claim of wrongful discharge in violation of public policy.

A. Doctrine of Employment At-Will

Under the doctrine of employment at-will, either the employer or employee may terminate an employment contract of indefinite period at-will without incurring liability.(fn9) Washington has recognized the doctrine since as early as 1928;(fn10) the doctrine's roots stem from a treatise written by Horace Gray Wood in 1877.(fn11) Although employment at-will remains the default rule, an employer's ability to terminate an employee has been constrained by both state and federal law. For example, statutes prohibit an employer from discharging an employee based on race, color, religion, sex, or national origin.(fn12) Further, statutes prohibit employers from discharging an employee who has filed a complaint with the government regarding workplace safety(fn13) or minimum wage violations.(fn14) Some statutes require that certain public employees are terminated only for cause.(fn15) In addition to statutory constraints, the doctrine of employment at-will may be limited by contract between the parties; moreover, collective bargaining agreements may prohibit an employer from terminating an employee except for cause.(fn16)

B. Wrongful Discharge in Violation of Public Policy

one judicial constraint on the doctrine of employment at-will is the common law tort of wrongful discharge in violation of public policy. The court will not allow the at-will doctrine to shield an employer's action "which otherwise frustrates a clear manifestation of public policy."(fn17) The majority of states have also recognized the public policy exception as a cause of action.(fn18)

The Washington Supreme Court first recognized the public policy exception in Thompson v. St. Regis Paper Co} (fn19) The Thompson court held that the "narrow public policy exception should be adopted because it properly balances the interest of both the employer and employee."(fn20) The court recognized that a "growing majority" of jurisdictions had adopted a public policy exception to the doctrine of employment at-will.(fn21) In a tort claim for wrongful discharge in violation of public policy, the employee has the burden to show that the discharge contravened a clear mandate of public policy.(fn22)

Since Thompson, the Washington Supreme Court has continued to hold that the public policy exception should be construed narrowly.(fn23) The court has identified four general areas that discharge may be in violation of a clear public policy: (1) where the employee was discharged for refusing to commit an illegal act; (2) where the employee was discharged due to performing a public duty or obligation; (3) where the employee was discharged for exercising a legal right; and (4) where the employee was discharged due to "whistleblowing" activity.(fn24)

1. The Four-Element Framework

The court in Gardner v. Loomis Armored, Inc. adopted a four-part test for analyzing wrongful discharge claims involving violations of public policy.(fn25) First, the plaintiff must prove the existence of a clear public policy: the clarity element. Second, the plaintiff must prove that the public policy would be jeopardized if the conduct the employee engaged in was discouraged: the jeopardy element. Third, the plaintiff must prove that the conduct related to public policy caused the discharge: the causation element. Finally, the defendant must not be able to justify the discharge on other grounds: the absence of justification element.(fn26)

In Cudney v. ALSCO, Inc.-the focus of this Note-the parties stipulated that WISHA and Washington's DUI laws established clear public policies and therefore the clarity element was not under considera-tion.(fn27) The causation and absence of justification elements are typically questions of fact, which are not usually decided on summary judgment, and the court was not asked to consider these elements.(fn28) The only element that the Cudney court was asked to decide was the jeopardy ele-ment.(fn29)

The court has recognized that the jeopardy element "strictly limits the scope of claims under the tort of wrongful discharge."(fn30) In order to successfully prove the jeopardy element, the plaintiff must show that his or her conduct directly relates to public policy, that other means of promoting public policy are inadequate, and that the actions the plaintiff took were the "only available adequate means" to promote public policy. (fn31)

When the statutory source of a clear public policy also includes administrative remedies, the jeopardy element is far more difficult for the plaintiff to establish.(fn32) However, in his treatise, Professor Perritt argues that the administrative remedies can only shield employee conduct, thereby precluding public policy tort claims, if the remedies "are available to the particular type of plaintiff involved."(fn33)

III. WASHINGTON INDUSTRIAL SAFETY AND HEALTH ACT

This Part discusses the history, purpose, and enforcement of the Washington Industrial Safety and Health Act. It also discusses cases where a plaintiff has brought a claim of wrongful discharge in violation of public policy premised on WISHA or other workplace safety laws.

A. History and Purpose of the WISHA Statute

The Washington Industrial Safety and Health Act of 1973(fn34) was enacted following extensive federal legislation in 1970, which resulted in the Occupational Safety and...