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Bailey v. Alpha Technologies Inc.

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

November 14, 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 judgment as a matter of law (Dkt. No. 97). Having thoroughly considered the evidence and testimony presented at trial and the parties' arguments, the Court GRANTS the motion for the reasons explained herein.

         I. DISCUSSION

         A. Judgment as a Matter of Law Standard

         During trial, if the Court determines a party has not presented sufficient evidence to allow a reasonable jury to find for it on an issue, the Court may: “(A) resolve the issue against the party; and (B) grant a motion for judgment as a matter of law against the party on a claim or a defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.” Fed.R.Civ.P. 50(a). Judgment as a matter of law is proper when the evidence, viewed in the light most favorable to the nonmoving party, permits only one reasonable conclusion. See Berry v. Bunnell, 39 F.3d 1056, 1057 (9th Cir. 1994).

         B. Wrongful Termination in Violation of Public Policy

         As a general rule, employees in Washington work at-will, meaning they can be terminated for any reason that is not unlawful. See Rose v. Anderson Hay & Grain Co., 358 P.3d 1139, 1141 (Wash. 2015). The tort of wrongful termination in violation of public policy is a narrow exception to the at-will doctrine. See, e.g., Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1063 (9th Cir. 2002); White v. State, 929 P.2d 396, 408 (Wash. 1997). Washington courts have recognized that the tort applies to situations where an employee is fired in retaliation for reporting employer misconduct, i.e. whistleblowing. See, e.g., Gardner v. Loomis Armored Inc., 913 P.2d 377, 384 (Wash. 1996).

         When financial misconduct is the subject of a whistleblowing claim, courts have held that employees must demonstrate their employer committed an actual violation of law or violated the purpose of the law. Ellis v. City of Seattle, 13 P.3d 1065, 1070 (2000), as amended (Jan. 8, 2001) (citing cases). In addition, an employee must show that she acted “to further the public good, and not merely private or proprietary interests.” Farnam v. CRISTA Ministries, 807 P.2d 830, 835 (Wash. 1991) (citation omitted). Finally, the employee must show that her whistleblowing was a “substantial factor” in the employer's termination decision. Rickman v. Premera Blue Cross, 358 P.3d 1153, 1160 (2015), as amended (Nov. 23, 2015) (citation omitted).

         C. Bailey's Evidence of Whistleblowing

         Bailey has not provided sufficient evidence to allow a reasonable jury to find that the Defendants terminated her in violation of public policy. First, Bailey did not present evidence that her act of reporting excessive price margins was a violation of the letter or policy of federal tax laws. Second, the evidence does not support a finding that Bailey sought to further the public good by reporting the price information to the Defendants. Third, Bailey did not provide sufficient evidence that her conduct was a substantial factor in the Defendants' decision to terminate her.

         Bailey testified that she was instructed by Defendant Frederic Kaiser to monitor the price margins that Telecomponents and Supply (TCS) was charging Defendant Altair Advanced Industries (Altair) for component parts purchased from foreign contract manufacturers. Both Bailey and Kaiser testified that Kaiser told Bailey to let him know if the price margins for those components climbed above 10-20%.

         Bailey testified that in January 2015 she noticed for the first time that the margin on some components had climbed above Kaiser's designated range. Bailey testified that she reported these excessive margins to Defendant Grace Borsari and Kaiser because that is what Kaiser had instructed her to do-in other words, she was doing her job by reporting the information. Bailey testified that after she made her report, Kaiser said the excessive margins could get the company in trouble with the IRS. Kaiser testified that one concern he had about the excessive margins was that they could create a bad image if the company was ever audited by the IRS. There was no evidence that Bailey knew about any tax implications related to the excessive margins prior to reporting the information to Kaiser in January 2015.

         After Bailey reported the excessive margins to Kaiser she was given a raise and praised for her good work. Both Bailey and Kaiser testified that Bailey was instructed to continue monitoring the TCS price list and to report any excessive price margins. Bailey testified that in July 2015, she again noticed component prices with margins in excess of 20% and, as instructed, reported the information to Kaiser.

         Bailey did not present evidence that the excessive margins she reported were a violation of the letter or purpose of federal tax laws. Bailey did not present any evidence that the excessive margins were illegal. Nor did Bailey present any evidence that her reporting caused the Defendants to comply with tax laws. Bailey testified that she had no special training or experience regarding tax issues. Bailey testified that the only reason she thought the price margins ...


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