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Bailey v. Alpha Technologies Inc.

United States District Court, W.D. Washington, Seattle

September 19, 2017

YVETTE BAILEY, Plaintiff,
v.
ALPHA TECHNOLOGIES INCORPORATED, et al., Defendants.

          ORDER

          JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendants' motion for summary judgment (Dkt. No. 48) and motion to strike evidence (Dkt. No. 57 at 12-13). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary, and, for the reasons explained herein, GRANTS in part and DENIES in part Defendants' motion.

         I. BACKGROUND[1]

         Yvette Bailey (“Bailey”) filed this suit against Defendants, her former employers, alleging wrongful discharge, failure to pay overtime wages as required by state and federal law, willful withholding of wages, defamation, and emotional distress claims. (Dkt. No. 1 at 10-12.) Upon Defendants' prior motion, the Court dismissed Bailey's emotional distress claims. (Dkt. No. 10; Dkt. No. 16 at 11-15.) Defendant Grace Borsari (“Borsari”) subsequently counterclaimed for breach of contract. (Dkt. No. 23.) Bailey has voluntarily dismissed her defamation claim. (Dkt. No. 53 at 3.) Defendants now seek summary judgment on all remaining claims. (Dkt. No. 48.)

         Altair Advanced Industries, Inc. (“Altair”) and Alpha Technologies, Inc. (“Alpha”) are privately held companies owned and headed by Borsari and Defendant Fredrick Kaiser (“Kaiser”) respectively. (Dkt. No. 50 at 1-2.) Telecomponents & Supply, Ltd. (“TCS”) is a purchasing agent for Altair, and is wholly owned by Kaiser. (Dkt. No. 50 at 1.) Bailey worked for Defendants Altair and Alpha for more than 25 years before her employment was terminated in August 2015. (Dkt. No. 54 at 2.) Bailey was a senior international buyer, whose duties included “negotiating the purchase price of components, sub-assemblies, and finished products with the contract manufacturers in Asia (mostly China).” (Id. at 3.)

         Bailey's primary responsibility as a purchaser was to negotiate the price of parts from contract manufacturers. (Id. at 6.) She would then relay the negotiated price to TCS and TCS would purchase the parts at that price. (Id. at 3.) The prices that TCS was willing to pay for goods were set by TCS, and Bailey had no discretion or authority over what TCS was willing to pay. (Id. at 4.) Once TCS purchased the parts, they were sold to Altair at a markup. (Id.)

         Bailey was aware of the higher prices that Altair would pay for the same goods she had negotiated to buy for less. (Id.) Kaiser told Bailey that the markup between the negotiated price that TCS paid and the price Altair paid should not exceed 20-25% because there would be adverse tax consequences that could get the company in trouble with the IRS. (Id. at 5.) As one of the only people with access to both price lists, Bailey reviewed the lists to make sure the markups did not exceed the designated percentages. (Id.)

         In January 2015, Bailey discovered that some of the markups recorded on the TCS price list were 50-60% higher than the price she had negotiated. (Id.) Bailey reported the discrepancy to Borsari who in-turn notified Kaiser. (Id.) Borsari insisted Bailey delete any email correspondence about the high markup and ensure other recipients did also. (Id.) In a later in- person meeting, Kaiser and Borsari reminded Bailey not to disclose the markup concerns, and told Bailey that it was “unfortunate” she knew the information. (Id.) In that meeting, Kaiser and Borsari told Bailey she would be transferred from Altair to Alpha. (Id. at 10.) She moved offices and received a raise, but, her job duties did not change. (Id.)

         Bailey did not understand the move because she had been doing the same work for Altair for years, and found it odd she was moved immediately after reporting the high markups. (Id.) In July 2015, TCS released a new price list which again showed markups of 50-60%. (Id.) Bailey again reported the markups, but this time Kaiser insisted that Bailey travel with him to the Bahamas to meet with Peter Turnquest, a TCS employee, to fix the price list. (Id.) Kaiser also asked Bailey to bring her husband. (Id. at 12.) Bailey found both requests odd because she had met Turnquest before and thought the issue could be sorted out over the phone. (Id. at 11-12.)

         In the Bahamas, during a brief meeting, Kaiser instructed Bailey and Turnquest to review the price list. (Dkt. No. 54 at 12.) Turnquest instead had an associate work with Bailey on the price list. (Id.) This was the only meeting Bailey attended in the Bahamas, and she was otherwise free to do what she pleased. (Id.) Days after returning, Kaiser received an email from Turnquest alleging Bailey and her husband had solicited drugs at their hotel while making “outlandish” claims about Turnquest and TCS. (Dkt. No. 50 at 16.) Days later, Kaiser fired Bailey. (Id.) Bailey was not given an opportunity to explain herself. (Dt. No. 54 at 14.) Kaiser claims he terminated Bailey's employment because of the content of the email, and Turnquest's insistence that he no longer wanted to work with Bailey. (Dkt. No. 50 at 16.) Bailey denies Turnquest's allegations and believes they were fabricated to allow Kaiser to fire her. (Dkt. No. 54 at 14-15.)

         Separate from Bailey's termination, in 2013 and 2014, Borsari loaned Bailey $6, 400 using several promissory notes. (Dkt. No. 52 at 223-226.) Each promissory note contained an acceleration clause that allowed Borsari the option to collect the outstanding loan balance in full if Bailey became delinquent. (Id. at 223-226.) When Bailey was unable to pay the loans when they became due, Borsari told her to pay when she could. (Dkt. No. 54 at 17.) After Bailey filed this lawsuit, Borsari sent her a letter requesting payment in full. (Dkt. No 56-3 at 70.) Bailey has still made no payments on any of the loans. (See Dkt. No. 54 at 17.)

         II. DISCUSSION

         A. Summary Judgment Standard

         The Court shall grant summary judgment if the moving party shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). In making such a determination, the Court must view the facts and justifiable inferences to be drawn therefrom in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Once a motion for summary judgment is properly made and supported, the opposing party must present specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Material facts are those that may affect the outcome of the case, and a dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Anderson, 477 U.S. at 248-49. Ultimately, summary judgment is appropriate against a party who “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).

         B. Motion to Strike Evidence

         As an initial matter, the Court addresses Defendants' motion to strike all evidence mentioned in Plaintiff's response brief regarding the Defendants' 2004 criminal tax case.[2] (Dkt. No. 57 at 12-13.) Defendants ask this Court to strike the evidence as irrelevant and improper “other acts” evidence in violation of Federal Rules of Evidence 402 and 404(b), or in the alternative, as unfairly prejudicial under Rule 403. (Id.)

         The Court has not considered that evidence in making its decision on Defendants' summary judgment motion. Even without considering that evidence, the Court finds that the Plaintiff has presented evidence that creates a genuine dispute of material fact as it relates to her wrongful termination claim. The Defendants' motion to strike is therefore DENIED without prejudice. Defendants can bring their motion again prior to trial.

         C. Bailey's Wrongful Termination Claim

         “The tort for wrongful discharge in violation of public policy is a narrow exception to the at-will doctrine.” Thompson v. St. Regis Paper Co., 685 P.2d 1081 (Wash. 1984). “To state a cause of action, the plaintiff must plead and prove that his or her termination was motivated by reasons that contravene an important mandate of public policy.” Id. In Washington, it is generally accepted that wrongful discharge claims are limited to four public policy concerns:

(1) where employees are fired for refusing to commit an illegal act; (2) where employees are fired for performing a public duty or obligation, such as serving jury duty; (3) where employees are fired for exercising a legal right or privilege, such as filing workers' compensation claims; and (4) where employees are ...

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