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Mikkelsen v. Public Utility District No. 1 of Kittitas County

Supreme Court of Washington, En Banc

October 19, 2017

KIM MIKKELSEN, Petitioner,

          FAIRHURST, C. J.

         The Public Utility District No. 1 of Kittitas County (district) fired Kim Mikkelsen after 27 years of service. Mikkelsen sued the district, alleging that, among other things, her dismissal violated the Washington Law Against Discrimination (WLAD), RCW 49.60.180. Specifically, Mikkelsen claims that Charles Ward, the general manager, exhibited a bias against women and older employees and that gender and age discrimination were substantial factors in his decision to fire her. She also argues that her dismissal violates the progressive correction action policy the district distributed to its employees.

         First, we wish to clarify that under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), a plaintiff need not prove that she was replaced by a member outside her protected class in order to establish a prima facie case of discrimination. We affirm summary judgment dismissal of Mikkelsen's age discrimination claim because Mikkelsen presented almost no evidence of age discrimination. But we reverse summary judgment dismissal of Mikkelsen's gender discrimination claim because the facts taken in the light most favorable to her create a material issue of fact about whether gender discrimination was a substantial factor in Ward's decision to fire her. The corrective action policy is ambiguous and could plausibly be read as establishing a for-cause standard for dismissal; we therefore reverse and remand that issue.


         Mikkelsen began working for the district in 1984, when she was 30 years old. Mikkelsen entered into an employment contract assigning her duties as manager of accounting and finance for the district. She worked for the district part time to accommodate her consulting business, which involved advising other utility businesses on financing, administration, and accounting issues. The district has a three member board of commissioners (Board) that directs operations. The Board hires a general manager to oversee day-to-day operations. The general manager works with a three member management team.

         From 1984 to 2009, Mikkelsen and the district thrived under three different general managers. In 2009, however, Mikkelsen and three other employees became concerned with the actions of then general manager Mark Kjelland. The employees sent a letter to the Board expressing their concerns in compliance with the district's whistleblower policy. Kjelland resigned from his position, and the Board did not investigate the complaints. Following Kjelland's resignation, the Board asked Mikkelsen to serve as an interim general manager. Mikkelsen accepted the position. The Board later asked Mikkelsen to serve permanently as the general manager, but she declined. The Board hired Ward as general manager in July 2010.

         During her time as interim general manager, Mikkelsen spearheaded the adoption of a "Corrective Action Policy" for the district. Clerk's Papers (CP) at 317. At the time, the district had no such policy, which led to confusion and uncertainty when employees required discipline. Mikkelsen adapted a corrective action policy from Chelan County Public Utility District. The district management team and the Board held meetings discussing the proposed policy. The Board ultimately adopted the policy. Mikkelsen used the policy while interim general manager, issuing a verbal warning to a line worker and documenting the warning in the employee's personnel file. Ward also used the policy as general manager, issuing a verbal warning to a different employee while Mikkelsen assisted as a witness.

         Once Ward began as general manager, Mikkelsen resumed her former position as finance manager. Mikkelsen served on the management team under Ward along with Matt Boast and Brian Vosburgh. Mikkelsen was the only female member of the management team.

         Mikkelsen and Ward worked well together at first, but their relationship eventually deteriorated. According to Mikkelsen, Ward exhibited a unilateral, '"my way or the highway'" management style. CP at 334. Mikkelsen alleged that Ward would make impulsive decisions without gathering information and considering the various consequences to the district. Mikkelsen also claimed that Ward was sometimes belligerent with her and would undermine her authority by calling her '"untrustworthy"' during meetings with other employees. Id.

         Mikkelsen believed that Ward's conduct was due in part to gender bias. She testified that Ward "had a difficult time with women in upper management." CP at 86. For example, Ward often talked over Mikkelsen in meetings. Ward would also regularly disregard Mikkelsen's input. The male members of the management team did not experience this same treatment.[1]

         In December 2010, Ward began excluding Mikkelsen from communications in which she typically participated. Ward discussed management issues over e-mail with the male members of the management team, but he would not include Mikkelsen. Ward also held some meetings without including Mikkelsen. When Ward first began as general manager, he would have Mikkelsen act as acting manager when he was away from the office. But eventually, he stopped asking Mikkelsen to serve as acting manager and asked only the male members of the management team, Boast and Vosburgh.

         Mikkelsen testified that Ward would frequently refer to the women at the office as the '"girls, "' '"gals, "' or '"ladies, "' but he never referred to the men as '"guys, "' '"men, "' or '"boys."' CP at 318. During union negotiations regarding uniforms, Ward mentioned he would wear any uniform paid for by the district as long as it was not pink. Mikkelsen also claims that Ward would regularly rearrange his genitals when he was around her or sitting in front of her. Mikkelsen did not witness Ward engage in this same behavior around male employees. Mikkelsen claims that when she asked Vosburgh about Ward's behavior, Vosburgh told her that Ward has "got a guy/girl thing with you." CP at 87.[2]

         In March 2011, Mikkelsen arranged a meeting with Ward to address their communication breakdown and Ward's alleged gender bias. Ward told Mikkelsen that he trusted her and that he would improve his behavior. Mikkelsen took notes during the meeting, and shortly afterward she noted that she "did not feel that [Ward] took ownership of any gender bias or going around me to avoid ideas that may not be in agreement with his." CP at 335. According to Mikkelsen, Ward's behavior did not improve after this meeting.

         In July 2011, communication between Mikkelsen and Ward had largely ceased. John Hanson, the president of the Board, was apparently aware of the issue and called Mikkelsen to see how things were going. After Mikkelsen told Hanson about Ward's behavior, Hanson asked her what the Board could do. Mikkelsen suggested conducting an anonymous survey to see if other employees shared her concerns. Hanson asked Mikkelsen to create the survey. Although the survey does not mention Ward by name, it contains many questions about the "General Manager, " including a question that asked whether "[t]he General Manager is biased on the basis of gender." CP at 265.

         Mikkelsen e-mailed the survey to the Board, but she did not send the survey to Ward. Mikkelsen admitted that Ward might interpret this decision as "going behind his back." CP at 96. Roger Sparks, a member of the Board, suggested no action regarding the survey until Ward returned from vacation. When Ward returned, Sparks notified him about the survey, and Ward promptly fired Mikkelsen. Ward testified the survey proved Mikkelsen was "out to get [him] and make the [district] look bad." CP at 152. In August 2011, Ward invited Mikkelsen into his office and informed her she was fired because '"it's not working out.'" CP at 319. Ward read from a script and did not provide Mikkelsen with any other reason for her termination. Mikkelsen asked for a copy of her personnel file, which Ward provided. Mikkelsen's personnel file contained no adverse history of being reprimanded, admonished, or disciplined while employed at the district.

         Ward wrote a memo to the Board explaining the termination. In the memo, Ward accuses Mikkelsen of disrupting the workplace and undermining his authority. He describes the early months as positive, but claims that Mikkelsen became combative and insubordinate as time went on. He claims that Mikkelsen disrespected him regularly, disagreed with his management choices, made unreasonable requests, and kept information about billing from him.

         In response to the Employment Security Department's inquiry after Mikkelsen applied for unemployment benefits, the district explained Mikkelsen's termination by writing that "Mikkelsen was an 'at will' employee and was terminated without cause." CP at 402. The same form provides a series of boxes indicating the reasons for the discharge, including insubordination, dishonesty, and the violation of company rules. The district checked none of these boxes.

         Mikkelsen was 57 years old when Ward fired her. The district replaced Mikkelsen with Genine Pratt, then 51 years old. In December 2011, the Board fired Ward for reasons not in the record.

         On November 8, 2011, Mikkelsen sued the district, the Board, and Ward for wrongful discharge. She alleged that she was terminated in violation of the district's corrective action policy and in violation of WLAD. Specifically, she claimed that age and gender discrimination were substantial factors in her dismissal. She also alleged that the district had negligently hired Ward and that her discharge amounted to intentionally inflected emotional distress. The trial court granted the defendants' motion for summary judgment and dismissed all of Mikkelsen's claims with prejudice. The Court of Appeals, Division Three, affirmed in a partially published opinion. See Mikkelsen v. Pub. Util. Dist. No. 1 of Kittitas County, 195 Wn.App. 922, 380 P.3d 1260 (2016). Mikkelsen sought this court's review regarding the discrimination issue and the corrective action policy issue. We granted her petition for review. Mikkelsen v. Pub. Util. Dist. No. 1 of Kittitas County, 187 Wn.2d 1009, 388 P.3d 495 (2017).

         II. ISSUES

         A. Is the replacement element required to establish a prima facie case of discrimination under the McDonnell Douglas framework?

         B. Can Mikkelsen show a genuine issue of material fact as to whether the discrimination was a substantial factor in her dismissal?

         C. Can Mikkelsen show a genuine issue of material fact as to whether the corrective action policy modified her at-will employment status?

         III. ANALYSIS

         A. Standard of review

         We review a trial court's grant of summary judgment de novo. Camicia v. Howards. Wright Constr. Co., 179 Wn.2d 684, 693, 317 P.3d 987 (2014). Summary judgment is proper only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). We consider all facts and reasonable inferences in the light most favorable to the nonmoving party- here, Mikkelsen. Young v. Key Pharm., Inc., 112 Wn.2d 216, 226, 770 P.2d 182 (1989).

         B. The McDonnell Douglas framework

         WLAD prohibits employers from discharging any employee on the basis of a protected characteristic, including age and gender. RCW 49.60.180(2). But "[d]irect, 'smoking gun' evidence of discriminatory animus is rare, since '[t]here will seldom be "eyewitness" testimony as to the employer's mental processes.'" Hill v. BCTI Income Fund-I,144 Wn.2d 172, 179, 23 P.3d 440 (2001) (second alteration in original) (quoting U.S. Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 716, 103 S.Ct. 1478, 75 L.Ed.2d 403 (1983)). Accordingly, we have repeatedly emphasized that plaintiffs may rely on circumstantial, indirect, and inferential evidence to establish discriminatory action. Id. at ...

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