Smith v. Bates Technical College: Washington Extends the Availability of the Tort of Wrongful Discharge in Violation of Public Policy, but a Little Too Far: Employees Should Still Exhaust Other Remedies

• Publication year: 2001

SEATTLE UNIVERSITY LAW REVIEWVolume 25, No. 3WINTER 2002

Smith v. Bates Technical College: Washington Extends the Availability of the Tort of Wrongful Discharge in Violation of Public Policy, But a Little Too Far: Employees Should Still Exhaust Other Remedies

Richard A. Morris(fn*)

I. Introduction

Bates Technical College (Bates), a Washington State-operated vocational-technical institution, employed Kelly Smith as a television traffic programmer.(fn1) Washington law entitled her to civil service protection, and the collective bargaining agreement (CBA) of her state employees union also afforded her negotiated grievance procedure coverage.(fn2)

Bates fired Smith, an eight-year employee, for alleged disruptive and insubordinate behavior.(fn3) Smith filed a grievance under the CBA, protesting her termination.(fn4) She also filed charges with the State under civil service laws, claiming unfair labor practices.(fn5) Smith's grievance proceeded to arbitration, where the arbitrator issued an award in her favor.(fn6) Bates reinstated Smith to a comparable position and provided back pay and related benefits.(fn7) Smith then filed suit in Pierce County Superior Court, seeking damages for various tort and statutory claims.(fn8) The trial court granted Bates's summary judgment motion in part and dismissed Smith's wrongful discharge claim for failure to exhaust her remedies.(fn9) The Washington Supreme Court ultimately reversed the trial court's dismissal of Smith's wrongful discharge in violation of public policy claim.(fn10)

In its January 27, 2000 decision, the Washington Supreme Court held that the common law tort of wrongful discharge in violation of public policy is available to all employees, whether terminable-at-will or covered by a CBA or other administrative procedure.(fn11) The court also held that an employee need not exhaust contractual or administrative remedies before bringing an independent tort action of this kind.(fn12) Previously, the public policy tort was available only to at-will employees who had no other recourse. Smith v. Bates Technical College changes the common law in Washington by extending the availability of the public policy tort to employees already protected by CBA "for cause" provisions or, in the case of public employees, administrative appeal procedures. This expansion creates an additional avenue of appeal and additional remedies not previously available. Furthermore, it may lead to an increase in tort filings, the threat of lawsuits to leverage more favorable settlements, and to erosion of union influence and strength.

This Note will present and analyze two significant issues addressed by the Smith court. First, the court properly decided that state common law claims are not preempted by collective bargaining agreements or available administrative procedures. Second, the court incorrectly determined that exhaustion of administrative or contractual remedies is not a prerequisite to seeking tort relief in court.(fn13) The judiciary should give deference to administrative or contractual procedures specifically designed to resolve the matter in dispute.

This Note will analyze the preemption issue by first examining, in Part II, the general function of common law torts, the doctrine of employment-at-will, and the tort of wrongful discharge in violation of public policy. Part III reviews the policy underlying the public policy tort, a United States Supreme Court decision on preemption,(fn14) and the law of other states regarding the public policy tort.(fn15) Part IV analyzes the Smith court's reasoning and findings on the availability of the public policy tort in Washington. Finally, Part V addresses Washington case law on the issue of exhaustion of remedies and applies the law to the facts in Smith.

II. Background

A. Defining the Function of Common Law Torts

There is no all-encompassing definition of torts. Very broadly, a tort is a civil wrong carried out by one party against another party in breach of a duty and resulting in injury.(fn16) To give more content to this definition, it is perhaps best to start by identifying the purpose of tort law-in contrast, for example, to the purposes of contract and criminal law. Contract law protects a single, limited interest: having the promises of others performed.(fn17) Criminal law protects the interests of the public at large, as represented by the state. The purpose of criminal law is most often effectuated by extracting a penalty from the wrongdoer.(fn18) The purpose of tort law, on the other hand, is to adjust the losses arising from the civil wrongs of one party against another, as a result of the conduct of the other.(fn19) Historically, the law of torts has been concerned with the compensation of the losses to individuals, rather than to the public at large. A successful plaintiff in a tort action will therefore recover money damages for the injuries suffered at the hand of the tortfeasor.

However, the purpose of tort law has evolved. "Perhaps more than any other branch of the law, the law of torts is a battleground of social theory."(fn20) The last century has seen an increased recognition of the impact that private disputes have on society's interests in general.(fn21) This impact may occur in either of two ways: as punishment of the tortfeasor, so as to deter further tortious actions or unsafe behaviors, or as vindication of a recognized public interest.(fn22) When the decisions of the courts become known, there is a strong deterrent effect on those who may potentially act contrary to public interests. Further, the court decisions make normative statements about desirable or undesirable behavior. In this way, tort law encourages employees and employers, as well as citizens in general, to meet their societal and community obligations.

B. The Doctrine of Employment-at-Will

The common law doctrine of employment-at-will provides that, absent a contract of specific duration, either party may terminate an employment relationship at any time.(fn23) An employer can discharge an at-will employee for good cause, for no cause, or even for bad cause, without being guilty of an unlawful act.(fn24)

There have always been exceptions to the employment-at-will doctrine, including express and implied contracts, collective bargaining agreement provisions, and statutory protections.(fn25) As employment law has evolved, the number of exceptions to the doctrine has increased. These exceptions fall into three general categories: contracts,(fn26) statutes,(fn27) and torts.(fn28) Recently, tort claims-including the tort of wrongful discharge-have increasingly been used in employment disputes.(fn29) Because of growing societal and judicial reaction to incidents of egregious employer conduct, wrongful discharge in violation of public policy is one of the most rapidly growing torts in this area of the law.

C. The Tort of Wrongful Discharge in Violation of Public Policy

The tort of wrongful discharge in violation of public policy is an exception to the employment-at-will doctrine. This tort provides a way to identify certain reasons for discharge that will support an action for wrongful discharge.(fn30) Those reasons are ones that contravene public policy.(fn31) One of the earliest recognitions of this tort was by a California appeals court in the 1959 decision, Petermann v. International Brotherhood of Teamsters Local 396.(fn32)

Petermann was a union business agent, who refused to commit perjury in testimony concerning union corruption.(fn33) Petermann contested his discharge by the union, and the court recognized this new tort claim, stating that "the right to discharge an employee . . . may be limited by . . . public policy."(fn34) However, the wrongful discharge tort did not gain wider acceptance until after Professor Lawrence E. Blade's 1967 article(fn35) advocating the adoption of this new cause of action.(fn36) By the end of the 1980's, the majority of states recognized the doctrine,(fn37) although there were significant differences in what the source of public policy should be.(fn38)

Washington first recognized the public policy tort in 1984, in Thompson v. St. Regis Paper Co.(fn39) Thompson involved an employee who claimed that he was fired for instituting accounting procedures that ensured compliance with a federal antibribery statute.(fn40) In Thompson, the Washington Supreme Court stated: "We join the growing majority of jurisdictions and recognize a cause of action in tort for wrongful discharge if the discharge of the employee contravenes a clear mandate of public policy."(fn41) The court regarded this tort as an exception to the employment-at-will doctrine.(fn42) The court noted that the exception has been used where the employment-at-will doctrine would have "led to a result clearly inconsistent with a stated public policy and the community interest it advances."(fn43) As an example, the Thompson court noted a case where the employer would be liable for discharge because the discharge "would otherwise frustrate a clear manifestation of public policy . . . ."(fn44)

III. Availability of the Public Policy Tort to Employees Who May Only Be Terminated for Cause

A. The Policy Issues Behind the Public Policy Tort

Tort law has evolved to include, as one of its purposes, the vindication of a recognized public interest. The need to encourage the...