NEW CASE – Cautions Washington Employers About Their Progressive Discipline Policies

Attention Washington employers, in a recent case (Mikkelsen v. Public Utility District No. 1 of Kittitas County), the Washington State Supreme Court found that an employer’s progressive discipline policy altered the “at-will” employment relationship and created a situation where the employee could only be discharged “for cause.”

The Case

In this case, the plaintiff (a woman) was the Finance Manager for Public Utility District No. 1 of Kittitas County. After the relationship between the plaintiff and the General Manager (a man) deteriorated, the plaintiff began to complain that she was being treated differently than the other (male) managers in the office. Ultimately, the plaintiff was asked by the president of the Board of Directors to create an anonymous survey about the General Manager. When the General Manager found about out the survey, the plaintiff was terminated.

She later filed a lawsuit for gender discrimination and wrongful termination in violation of the employer’s progressive discipline policy. This case was dismissed at summary judgment by both the trial court and the appellate court. The plaintiff then appealed her case to the Washington State Supreme Court, who overturned the dismissal of both claims.

The Ruling

With respect to the plaintiff’s gender discrimination claim, the Court found that plaintiffs need not prove they were replaced by someone outside of the protected group in order to establish gender discrimination. Instead, plaintiffs only need prove that they were in a protected class, terminated from a job they were qualified for, and the employer continued to seek candidates. This is a reversal of the previous standard where a plaintiff was required to prove “that they were replaced by someone outside of their protected group – the replacement element.” This is significant to employers because they can no longer use just the replacement element to avoid potential liability for discrimination

More significant (and impactful to employers) was the Court’s ruling with respect to the plaintiff’s wrongful termination claim. The plaintiff claimed that the employer’s progressive discipline policy voided the at-will nature of employment and the Court agreed – despite the fact that the policy contained a disclaimer which stated “the rules set out here are intended only as guidelines, and do not give any employee a right to continued employment or any particular level of corrective action”

The Court found that this disclaimer was ambiguous (with respect to preserving the at will employment relationship) and did not “sufficiently emphasize to employees that employment would remain at will. Instead, the Court found that the progressive discipline policy, on whole, indicated that termination could only occur “with due consideration for employee rights and expectations”, which the Court held eliminated the at will employment relationship and required discharge for good cause only.

Take Home For Employers

While we recommend against employers implementing a progressive discipline policy (mainly because of the risks of destroying the at will nature of employment), there are employers who elect to include this type of policy in their handbooks. This case reminds employers that a progressive discipline policy needs to be drafted extremely carefully and clearly state that the at will nature of employment is preserved.

Employers who have this type of policy in their handbooks should review the policy to verify that the language in the policy makes it very clear to the employee that he/she is still “at-will” and there is no promise of specific treatment in disciplinary or other matters. In addition, language that indicates/promises that employees will be treated fairly, or even non-arbitrarily, in the disciplinary process and therefore terminated only “for cause” should be eliminated.