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The Washington State Supreme Court narrowly affirmed an employer’s right to terminate employees who disagree with management decisions.1 Several employees of a nonprofit objected to the decisions of their executive director. After several were fired and others quit in protest, the employees sued the nonprofit, claiming they should be statutorily protected from termination.

Employee-management relations break down

Nova Services is a Washington nonprofit corporation that provides services to disabled persons. In 2004, a hostile work environment developed between several employees and the organization’s executive director, Linda Brennan. Apparently in violation of company policy, the employees wrote to the organization’s board of directors, describing the employees’ concerns about Brennan’s leadership in several areas, including administration, finance, board development, corporate culture, and community relations. The employees asked for a meeting and threatened they would collectively leave the organization if Brennan terminated any of them for going to the board.

The board of directors hired an attorney to investigate the employee concerns. The attorney determined director Brennan had committed no illegal behavior and he recommended the board terminate either Brennan or some of the employees because of the “personal animosity” that had developed in the workplace.2 The board then turned to a mediator.

Eventually director Brennan fired two of the employees for insubordination, while a third employee quit after hearing the news. Later that week six other employees sent a letter to the board requesting reinstatement of the employees who had been fired and demanding that Brennan be terminated. The employees threatened to “walk out of Nova Services” if the board failed to contact them by close of business the next day, and indicated these requests were “non-negotiable.”3 The board did not contact the employees, who did not return to work as threatened. Brennan declared the action a group resignation and hired replacements for the workers who had walked off the job.

In September 2004, the employees filed a complaint against Nova Services alleging, among other things, wrongful discharge in violation of public policy and unlawful retaliation. The trial court granted Nova’s motion for summary judgment and the state court of appeals affirmed.4 The Washington Supreme Court granted review in 2007.

Washington Supreme Court’s plurality decision

On August 27, 2009, the Washington Supreme Court issued a ruling affirming the court of appeals with a 3-vote lead opinion by Justice James Johnson. Justice Johnson opened the plurality opinion by noting that Washington, like most other states, allows employers and employees to terminate their employment relationship at any time for any reason. One of the narrow exceptions to the terminable at-will doctrine is the tort of wrongful discharge in violation of public policy. In order to prevail, the employee must show: “(1) Washington has a clear public policy (the clarity element), (2) discouraging the conduct would jeopardize the public policy (the jeopardy element), and (3) that policy-protected conduct caused the dismissal (the causation element).”5 The public policy exception is often recognized when an employee is terminated as a result of a refusal to commit an illegal act, performance of a public duty or obligation, exercise of a legal right or privilege, or in retaliation for reporting employer misconduct. The terminated Nova Services employees argued that Washington state has a public policy protecting “concerted activities” by employees, citing a Depression-era statute which protects the “concerted activities” of nonunion workers. The law states, in relevant part:

[T]he individual unorganized... shall be free from interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protections.6

The court noted that to be protected, “concerted activities” must relate to terms and conditions of employment or other activities for the purpose of improving working conditions—for example, better wages, improved medical coverage, lunch breaks, and work rules.7 The court emphasized, however, that working conditions do not include “managerial decisions, which lie at the core of entrepreneurial control.”8

Turning to the Nova Services case, the court determined that the employees who were fired and those who quit were not engaged in protected activities related to working conditions. Rather, said the court, the employees merely objected to their executive director. For example, in their letter to the board of directors, the employees stated that there are “six widely accepted key areas of responsibility for CEOs of non-profit corporations” and the employees stated their belief that Brennan was deficient in each of these areas.9

The court noted the limits of the rights of employees in Washington to work collectively to improve working conditions:

[T]hese rights do not extend so far as to supersede the employer’s right to hire and retain the leadership of a company and surely do not block an employee’s ability to quit. Nova did not violate a clear public policy when it fired two employees based on an undeniable conflict of personalities and stated inability to work within the company. Nor did Nova violate a clear public policy when it accepted the resignation of the other six employees who would not work for Nova’s choice of an executive director.10

Concurring opinions

Two justices wrote separate concurring opinions, agreeing with the outcome of the plurality, but for differing reasons. 

Associate Chief Justice Charles Johnson criticized the plurality for confusing the “concerted activities” cause of action with the tort of discharge in violation of public policy. Justice Johnson pointed out that the Washington Supreme Court previously declined to analyze these issues together in a 1995 case.11 There the court observed that discharge that violates the concerted activities statute also gives rise to a tort of discharge in violation of public policy. Thus, a party must prove that RCW 49.32.020 was violated before he or she can argue a violation of public policy. Justice Johnson wrote the Nova employees were not acting to improve working conditions, but were merely attempting to remove a person they considered a bad boss. He concluded that because the employees’ activities “cannot be considered ‘concerted activities’ for purposes of RCW 49.32.020, their claims against Nova Services must fail....”12

Justice Barbara Madsen, also concurring, did not reach the issue of whether the employees of Nova Services were actually engaged in protected concerted activities.13 The tort of wrongful discharge in violation of public policy requires the plaintiff to identify the public policy that was violated by his or her discharge. While the former Nova Services employees argued wrongful discharge, Justice Madsen noted they failed to identify any public policy that had been off ended, only raising “concerted activities” on appeal. Instead, they focused on the executive director’s management of the organization, prompting Justice Madsen to wryly note: “[I]t appears the public policy urged in plaintiffs’ first claim is a broad public policy favoring efficient management of charitable organizations.”14 As the issue of whether there was a violation of the employees’ right to engage in concerted activities was not before the trial court, Justice Madsen agreed with the lower court’s finding of summary judgment in Nova’s favor.

Dissent argues for broader exception to terminable at-will doctrine

Justice Susan Owens, with three other members of the court, dissented. The dissent agreed with the lead opinion that RCW 49.32.020 creates a right protected under the public policy exception to the state’s rule of at-will employment, but took issue with the majority’s narrow characterization of what behavior constitutes concerted activity.15

Justice Owens wrote that concerted activity simply means that employees act together to improve working conditions, and that the statute created broad protections for actions of nonunion employees, including protection for “employee protests over management personnel decisions... when the decision relates to the employee’s working conditions.”16 She wrote that “working conditions” should be construed broadly to include objecting to a manager’s delegation, communication, hiring of staff , and financial management. Additionally, a director’s professional competence and management capacity are “proper employee concerns,”17 along with concerted employee activity seeking the reinstatement of a co-worker. The dissent argued that the case presented genuine questions of material fact and should be remanded to trial court for further proceedings.

The employees’ arguments prompted Louis Rukavina, attorney for Nova Services, to observe during oral argument: “If their position were adopted, this state would become the most hostile to business state in the country and private management would be reduced to judicially supervised employee referendum.”

The Washington Supreme Court’s decision was applauded by the Seattle Times: “The court reaffirmed an employer’s right to dismiss an employee—a right that is important to running a productive business and a highwage economy.”18

* Michael J. Reitz is general counsel of the Evergreen Freedom Foundation, a free-market policy organization in Olympia, Washington, where he blogs at wasupremecourtblog.com.

 

Endnotes

1 Briggs v. Nova Services, 213 P.3d 910 (Wash. 2009).

2 Id. at 913.

3 Id.

4 Briggs v. Nova Services, 135 Wash.App. 955, 147 P.3d 616 (2006).

5 Briggs, 213 P.3d at 914 (citing Gardner v. Loomis Armored, Inc., 128 Wn.2d 931, 913 P.2d 377 (1996)).

6 RCW 49.32.020. Th is statute is modeled on the Norris-LaGuardia Act, 29 U.S.C. § 102 (1932).

7 Briggs, 213 P.3d at 915.

8 Id.

9 Id.

10 Id. at 916.

11 Bravo v. Dolsen Cos., 125 Wash.2d 745, 888 P.2d 147 (1995).

12 Briggs, 213 P.3d at 917 (C. Johnson, J., concurring).

13 Id. at 918 (Madsen, J., concurring).

14 Id. at 920.

15 Id. at 922 (Owens, J., dissenting).

16 Id. at 926. 

17 Id. at 925.

18 Editorial, “Washington state Supreme Court upholds employer’s right to fire,” Seattle Times, August 28, 2009.

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