Thompson v. St. Regis Paper Company
1 I.E.R. Cas. (BNA) 392, 685 P.2d 1081, 102 Wash. 2d 219 (1984)
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Rule of Law:
An employer can be liable for the wrongful discharge of an at-will employee if the termination violates promises of specific treatment made in an employee handbook or if the discharge contravenes a clear mandate of public policy.
Facts:
- Kenneth L. Thompson began working for St. Regis Paper Company in 1963 without a written employment agreement.
- Over 17 years, Thompson was promoted to a management position, received positive performance reviews, and was awarded regular bonuses.
- In December 1979, Thompson received a merit pay raise.
- On January 17, 1980, St. Regis asked Thompson to resign, stating only that he had "stepped on somebody's toes."
- The day after being asked to resign, Thompson was awarded a $10,000 bonus for his prior year's performance.
- St. Regis's Policy and Procedural Guide stated that terminations would be processed in a manner that was "fair, reasonable and just."
- Thompson alleged he was actually fired because he instituted accurate accounting procedures in compliance with the Foreign Corrupt Practices Act of 1977.
Procedural Posture:
- Kenneth L. Thompson sued St. Regis Paper Company in a state trial court for wrongful discharge.
- During discovery, the trial court denied Thompson's motion to compel St. Regis to answer interrogatories about the reason for his termination.
- The trial court granted St. Regis's motion for summary judgment, finding no implied contract existed and dismissing Thompson's case.
- Thompson appealed the summary judgment directly to the Supreme Court of Washington.
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Issue:
Does the termination of an at-will employee give rise to a cause of action for wrongful discharge where the employee alleges the termination either violated promises of specific treatment in an employee manual or contravened a clear mandate of public policy?
Opinions:
Majority - Justice Brachtenbach
Yes, the termination of an at-will employee can give rise to a cause of action for wrongful discharge under certain circumstances. While rejecting a broad 'bad faith' exception, this court recognizes two exceptions to the terminable-at-will doctrine. First, promises of specific treatment in specific situations found in an employee manual may be enforceable if an employee justifiably relies on them. Second, an employer can be liable in tort for discharging an employee for a reason that contravenes a clear mandate of public policy. The court reasoned that the traditional at-will doctrine, a 19th-century judicial creation, must be modified to reflect modern realities and public interest. For the first exception, the court held that when an employer creates an atmosphere of job security and fair treatment through policies in a handbook, it cannot treat those promises as illusory. For the second, the court joined a growing number of jurisdictions in holding that the at-will doctrine cannot be used to shield an employer's action that frustrates a clear public policy, such as compliance with federal law.
Analysis:
This landmark decision significantly modified Washington's employment-at-will doctrine by creating two major exceptions. The ruling empowers at-will employees by giving them potential causes of action based on contract and tort theories that did not previously exist. By recognizing claims based on employee handbooks, the court incentivized employers to be precise in their policy manuals or risk them being interpreted as binding promises. The public policy tort exception provides a crucial check on employer power, preventing discharges that would undermine legislative or judicially recognized public interests, thereby protecting employees who act as whistleblowers or refuse to break the law.
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