Two recent opinions from the Alaska Supreme Court offer helpful guidance to employers regarding termination processes.
In Barickman v. State, an employer suspected an employee of theft. When confronted, the employee signed a letter of termination and then wrote a letter stating that he was resigning to avoid a “black mark on his record.” The employee later sued, alleging wrongful termination based on breach of good faith and fair dealing.
To win a claim of wrongful discharge in Alaska, the employee must show that (1) he was discharged by his employer and (2) that the employer breached a contract or committed a tort in connection with the termination. Here, the employee argued that his employer terminated him in bad faith, treated him differently than similarly situated employees, and failed to conduct a reasonable investigation before deciding to fire him.
Alaska law provides that when an employer makes a good faith determination that misconduct has occurred, there is no breach of the implied covenant of good faith and fair dealing, even if the employee can subsequently prove that the factual finding of misconduct was a mistake. Here, the Supreme Court found that the employee did not raise any facts alleging that the employer’s determination was made in bad faith, particularly since the employer provided a spreadsheet showing instances where other employees accused of similar charges were dismissed or asked to resign. The Court ultimately held that the employer did not breach its duty of good faith and fair dealing. The Court likewise found that the employee failed to present enough evidence on the issues of whether the employer had treated him differently than other similarly situated employees or whether the employer’s investigation was unreasonable.
Boyko v. Anchorage School District involved a teacher who sued the Anchorage School District, one of Alaska’s largest employers. The parties had entered into a verbal resignation agreement wherein the employer promised not to release any negative information about the teacher to prospective employers. The teacher claimed that the District had provided information that was not positive to another school district, and that these actions breached the termination agreement, violated the covenant of good faith and fair dealing, and interfered with her prospective contractual relations. She also claimed disability discrimination, because the termination stemmed from incidents associated with the teacher’s drinking problem. The employer won on summary judgment all counts in the lower court, where the court found that the employer was immune under an Alaska statute (see AS 09.65.160) immunizing employers who disclose job performance information in good faith.
The Supreme Court largely disagreed, finding that evidence the teacher produced in the trial court raised sufficient factual issues as to whether the District had breached the resignation agreement, and therefore whether the District had violated the covenant of good faith and fair dealing and interfered with the teacher’s prospective contractual relations. The Court also noted that statutorily-created rights can be waived where there is “direct, unequivocal conduct indicating a purpose to abandon or waive the legal right.” Ultimately, the Court found that whether such a waiver occurred through the District’s verbal negotiation of a resignation agreement was in itself a material issue of fact, and remanded the claim to the lower court.
It was not all bad for the employer. On the disability claim the court found that District had provided a legitimate, nondiscriminatory reason for the dismissal and that the teacher had not raised sufficient doubts as to whether the reason was a pretext. Therefore, the Court affirmed the lower court’s entry of summary judgment on the claim.
Four Practical Tips For Terminations:
- Always act in good faith and deal fairly with employees.
- Consider whether termination of employment is consistent with applicable policies and past practices.
- Good documentation demonstrates process (and calm reflection).
- Be careful what you say at termination – it can become an oral contract.
Melanie Osborne contributed to this post.