New Washington State Supreme Court Case: Updated Standard for Discrimination Claims and A Warning That Policies Can Modify At-Will Employment


From Helsell Fetterman

On October 19, 2017, the Washington State Supreme Court entered its opinion in the matter of Mikkelsen v. Public Utility District No. 1 of Kittias County, et al.  In Mikkelsen, the female plaintiff sued her former employer (a utility district) for wrongful discharge based on gender and age discrimination, and failure to follow the progressive discipline policy.  The plaintiff in Mikkelsen was a long-standing and exemplary employee who did not have any documented performance issues.  The plaintiff, however, did have some interpersonal issues with her new manager that she alleged arose out of his gender bias.  Plaintiff was encouraged by a utility board member to circulate a survey to determine whether other employees also felt the manager had gender biases.  When the manager learned about the survey, he immediately fired plaintiff.  Subsequently, the utility stated it terminated plaintiff ‘without cause’ (which it was purportedly entitled to do because plaintiff was an at-will employee).  Plaintiff sued alleging she was fired because of her age and her gender, and that the termination was in violation of an adopted progressive discipline policy that required terminations be for-cause.  The trial court granted summary judgment in favor of the employer on all claims; in its opinion, the Court overrules the trial court on the gender discrimination claim and the for-cause claim and remands to the trial court for further proceedings.  The opinion is significant on a few points:

On review of the discrimination claims, the Court considered the McDonnell Douglas burden-shifting analysis and held that, contrary to how it was being applied in other jurisdictions, it does not require a plaintiff show they were replaced by a person not in their protected class.  The Court also reiterated that “where there are reasonable but competing inferences of both discrimination and nondiscrimination, it is the jury’s task to choose between such inferences—not the court’s.”  This would seem to affirm prior jurisprudential guidance that summary judgment is seldom appropriate in employment discrimination cases due to the difficulty of proving discriminatory motivation.

With respect to the for-cause claim, the progressive discipline policy relied on by the plaintiff granted the employer broad discretion to implement any disciplinary action in any situation.  However the policy also emphasized that employees should be treated fairly and implied that dismissal could not occur arbitrarily.  The Court said this conflict rendered the policy “ambiguous” and that the policy “could plausibly be read as modifying [the plaintiff’s] at-will status” and establishing an expectation that employees may not be fired without cause.  The Court concluded that an ambiguous discipline policy can create an issue of fact that defeats summary judgment, despite that the policy expressly stated that it did not “not give any employee a right to continued employment or any particular level of corrective action.”   The Mikkelsen case is a timely reminder that employee handbooks and policies may create a legally binding contract.

Employers considering discharging an employee should work with an experienced employment lawyer to mitigate potential discrimination claims; we also recommend having a lawyer draft and/or review and update employment policies to be sure they accurately reflect the employer’s promises, practices, and intentions.