when you ready good morning please the court i'm aaron norgaard and i represent you that daily in this matter the plaintiff and appellate i'm going to try to preserve three minutes of my time today and i will go ahead and watch the clock  before this court are important questions of washington employment law the answers to which could have a broad and profound effect on the application of washington's common law tort of wrongful discharge and violation of public policy in this case the district court improperly narrowed application of the tort and committed reversible error when it found that ms bailey's twice reporting of conduct that she reasonably believed might violate tax law was not protected activity under washington law and then further held that even if it was such protected activity was not a substantial factor in the defendant's decision to terminate her employment after twenty six years the district court is wrong and should be reversed count wrong on both propositions correct and i want to st address this morning the question on the protected activity component now in this case the district court erroneous lee found that ms bailey did not engage in protected activity for two reasons the st was that she failed to prove that the excessive markups that she identified and reported to the defendants actually and in fact violated federal tax law and it was not enough for her to prove a reasonable belief in the potential violation of law the court also held that ms bailey did not engage in protected activity because she failed to prove a subjective intent to further the public good when she reported the excessive markup to the defendants even though the evidence shows that she reported for purposes of protecting her employer and preventing them from violating a potential law clear or not clear o believe that any court in washington has explicitly held that a plaintiff must prove that that is her a subjective intent so long is the conduct in which the plaintiff and gave engages is rooted in public policy and school probably close to correct that is one of the two questions that the plaintiff has proposed for certification in this case and we think that it is an important question that if this court finds any confusion or inconsistency in the language that is cited the many cases in the briefing that the court really should submit that question to the court in washington to decide i would submit to the court my analysis and my understanding of the case law is that that ruling just simply doesn't make any sense that so attacks i think we've got a problem here and you're trying to you're trying to avoid getting into trouble with the testimony that is her testimony but her testimony was also that she knew to report that information to her employers because they had told her over the years that margins in the range that she had detected could subject them to adverse tax consequences and she testified both after her initial report in or around february of two thousand and fifteen and then again in july of two thousand and fifteen that she reported the markups that she found to mr kaiser and mr mr sorry because she wanted to prevent them from getting in trouble with the law that is the kind of activity that is protected under washington law and i would and i would point the court there's several cases that are cited in the briefing where the court allowed a public policy discharge claims to proceed absent any evidence of an affirmative it meant by the plaintiffs that i did what i did in order to further some broader public policy that's the bennett versus hardy case which is cited by the plaintiff hired an attorney to protect herself from the employer's discriminatory practices better versus community health service says the plaintiff in that matter refused to falsify some financial reporting in order to protect himself from criminal liability in the rickman case which we rely on extensively for the other legal issue in this matter the plaintiff in that case reported what she believed to be a potential violation of hipaa in order to prevent her employer from violating the law violating the law which is protected activity recognized under a number of cases in washington is my problem with your understanding your argument is that this whistleblowing  comes up in the context of the wrongful discharge analysis and that is designed to make sure that employees are not chilled in their opportunity to report if the policy here is not we want to make sure that public policy is protected it's an employee statute so if the employee is only trying to advance private interests and by happenstance there may be some public policy aspect to it public policy in this particular state it's that this employee has an opportunity to when they think there is some public wrong to advance that if the employee doesn't have that frame of mind then to some extent i'm not sure why there is any policy issue in protecting that well i guess i would respond and hopefully answer the question if not i'll try better that i think him please motive in why he or she would come forward and report conduct to his or her employer i think that that certainly might be relevant to an inquiry of the reasonableness of that particular employee's belief in some potential law violation but so long as what the plaintiff is reporting further some public good then i believe that it is protected activity and that it is consistent with the protections that washington's torts affords its employees i hope i answered the rescue the public good aspect because there is the reporting that there's been some problem in terms of the company's own policies that doesn't have any implication for public policy that wouldn't be covered that's correct because in that six circumstance where the employee is reporting specifically and only to to advance some internal policy and i don't believe that that conduct would be rooted in public policy in this particular case we have complaints of conduct that are rooted in a clear mandate of public policy  tax law so it's a distinct situation let's try the following hypothetical i'm working in a company and my job is to supervise version charges and how they are allocated within company  my supervisor fixes it i think i've just done my job i kept the company from violating the tax laws while i think that that's the circumstance that was presented in the reckoning case where the employee in that particular circumstance reported for the purpose of preventing a potential violation now if an employee reports what he or she believes to be a potential violation of law which is clearly recognized in a statute or  opinion and then the employer takes action based upon that and takes corrective measures to prevent to prevent what could be a potential law violation and then takes retelling to tory action against the employee for speaking out i do think that that would be protected activity but why would something my boss like i fixed the problem well i think if there's no adverse employment action then there's going to be no claim for wrongful termination a violation of public policy i mean the claim presupposes a wrongful termination lease case although she testified that she had been asked by the defendants to to look at the pricing issues over the years i think it's important to know that her job duties were not to monitor those price lists her primary job  was to purchase components from contract manufacturers in china and she was ultimately doing the direct negotiations that the defense company in the bahamas was supposed to be doing and because of her unique position within that company she gained access over the years to this company pricing information and even mr kaiser testified that they never really asked her to monitor these prices she helped herself to this information and kind of worked herself into the into th outside of the agency i mean i don't have to you can simply be more the as it was a war thing i think there are some problems here and i bring this up to get them correct for the benefit of one million poor that's correct and i in addition i mean not only do the does the reporting benefit the employer it also advances public policy because by by taking action and bringing reports to an employer that can potentially prevent good morning your arse and may please a court for the record my name is kevin hamilton and i appeared today on behalf of the defendants napoli's the district court after a full five day trial and her judgment on plaintiffs claims for three independently sufficient resolves this appeal as a matter of law defendants submit that all three should be affirmed were correct the st the district court dismissed ms bailey's claim because she did not present evidence that her act of reporting excessive price margins was a violation of the letter or the policy of the federal tax law the district court noted that under washington law when financial misconduct this is subject of a whistle blowing claim courts have held that employees must demonstrate their employer committed an actual violation of the law or the policy behind the law and there are three cases that make this very clear the supreme court supreme court's decision in alice vs the city of seattle and there's two washington court of appeals  argument yet well the distinction in washington lot remember that this tort when it was created by the watch and supreme court about thirty years ago is a narrow exception to the employment will doctrine and as the tours of all the last thirty years they've made a distinction between cases of immediate threat to personal harm and that that's the case like alice where the conduct involved the disabling of a fire alarm system for key arena and or the gardner case which was a hostage situation in those cases a reasonable good faith belief is enough but the court is carefully distinguished in a whole series wasn't any actual hipaa violation but it's because it involves personal no that's not right your honor actually there was a violation in richmond it wasn't even an issue because the defendants admitted it if you read the opinion  absolutely not your honor in fact there was no evidence presented about the tax returns because ms bailey admitted that she never seen the tax returns she doesn't know how the specific charges were addressed between the two companies she just raised  to judge your honor judge fletcher point she was doing her job she was asked this was part of her job and indeed if if if this if simply monitoring the prices she negotiated with the chinese contract manufacturers and then looking at the resulting pricing list and saying golly i negotiated on these three dollars parts out of these one hundred dollars discount that's not reflect that we need to correct it if that says thank you that's that's great and as the record demonstrates here we love what you're doing here's a ten percent raise and we want you to take on additional responsibilities for monitoring not only all the contract manufacturers in china but the contract manufacturers in india as well because you're doing such a great job that's not whistleblowing that's her simply doing her job so the st point i would make is is watching law very carefully distinguishes financial misconduct cases and it is different your honor from the mine run of retaliation cases and washington as made that clear in the ellis case where they looked at bought and was way back they noted this distinction for financial misconduct cases and they said we're not go disturb it and in the fifteen years eighteen years since the ellis case decided those cases and that line that distinction has not been disturbed sense the most recent pronouncement is martin versus gun sagger that was in the washing supreme court just last year we provided to the court after the briefing was completed in a twenty eight day filing there the court directly rejects the suggestion that a good faith belief is enough quote even if martin truly believed that the un padded walls posed a danger to students this does not change the analysis as the focus on whistleblowing matters is on the employer's level of wrongdoing not to address martin's actions to address what he perceived to be wrongdoing none of these cases are unusual or outliers since the st recognition of the toward thirty years ago washington watch and supreme court has consistently insisted on an actual violation in cases the employer's conduct did not actually violate the law or policy and they were dismissed on that basis so so rickman i think we've addressed already is it's different this  the lower court correctly identified this flaw and ruled on that basis the one last point on this problem that i would i would point out is that rickman's companion case the rose case rose versus  if the court had intended at that time to overrule those cases and eliminate this distinction in financial misconduct cases that's a really odd statement for the court to have made instead the court would have said to extend our prior decisions are ms bailey failed to demonstrate she was acting in furtherance of the public good and not merely for private or proprietary interest and several questions earlier this morning to raise that issue this is a nd independent ground for affirming if you rule in this ground it doesn't matter what the rule is from any others the acting and the public good element is central to the claim and of course has been an essential element of the wrongful discharge tort since it was st embrace by the washington supreme court in pumps and the court  repeatedly emphasized that an employee asserting such a claim must have sought to further the public good not merely private report criteria interest in reporting the alleged wrongdoing and that requirement is reflected across all of the cases thompson  farnum and most recently in the martin case ms bailey made no effort to satisfy this requirement she reported the price errors as the questions from the panel of indicated because that's her job she admits that she never raised any issues of tax liability or tax evasion she never said the words tax she never certainly never said the words tax fraud to her employer much less anyone else she simply reported that certain prices she had negotiated were not reflected in the updated price list that's remarkable that's exactly what her job was as i said this is a carefully this tort is a carefully the lemonade exception of the employment at will doctrine and if this is whistle blowing then that exception is truly swell the rule at trial ms bailey admitted that she had no training in tax law or accounting she had no responsibilities for tax matters she never saw any of the tax returns she admitted that she was motivated not to protect the public good because this was part of her job so it's correct isn't it that in two thousand and four alpha the airplane you know t to falsifying tax returns and that's absolutely correct your honor it's not part of evidentiary record that was made before the court because it was excluded that that has made dealt with the track and the treatment of international sales commissions has nothing to do either with this the allegations here two thousand and fifteen that the events that happened in those tax returns were in the one thousand nine hundred and ninety s she aware of this they evidence in the record demonstrates she she had heard about it she wasn't challenge that on appeal the standard for review that decision is abuse of discretion and i believe the decision was clearly a correct decision given how limited the relevance even potentially could be for this case was grossly outweighed by the prejudice prejudicial value and whether you agree with that or not certainly wasn't an abuse of the trial court's discretion the last the last prong the last reason for the was that mr was it seems is ms bailey had failed to provide sufficient evidence to show that her reporting of the pricing lists was a substantial factor the undisputed evidence shows that after she reported these pricing errors bahamas trip and all of the sturm and drum that went along with that i mean there are some things from which a jury could infer that part of the reaction of the company is  the whistle blowing act not necessarily that they proved it but at least that the jury can make inference i think there are very few whistleblowing cases in which the retaliatory action against the employee involves an all expense paid trip on a private jet to record that this was not the ordinary trip this was sort of an unusual circumstance it was an unusual circumstance because of the miscommunication between the management company in the bahamas where mr keyser lives and were part of the company is located and and ms bailey and the idea was to sort it out and because ms bailey had these new responsibilities they were going to be an eye i think that's unusual the the unusual she says it was set up and i don't think  the bahamas about behavior that happened down there now that the suggestion your honor that it was a set up is is is interesting i mean i suppose i suppose you could you could try and make that argument but if mr if mr kaiser wanted t terminate her he could have done it easily it's an at will employment state he didn't need to engage you know the idea that he's going to send all these e mails they're going to give or raise they're going to offer responsibility for the union contract manufacturers take her down to the bahamas and then involve the deputy prime minister of the bahamas to write this scathing e mail which he then is going to respond to in real time which is before the court i don't think is of course and it simply has to be a substantial factor it doesn't have to the only reason she's terminated so the reason it could be still a viable claim even if healthy part of the terminations decision was based on this conduct email and the reaction to the e mail and the close timing of the terminations in response to the e mail and that explanation now the burden shifts under washington law to plaintiffs to demonstrate pretext and as the martin case and i and i urge the court to look at martin on this it holds speculation is not enough you've got to show that that e mail was pretext and that's where the judge i think concluded that's just not enough thank you encourage the court to read rickman carefully as well as the court of appeals decision upon which it was based because what the court held in rickman in a case where the plaintive had only a gut feeling that the conduct that was occurring might potentially violate the law the court in richmond stated that it was rejecting a narrow reading of di combs that the defendants had relied upon in that particular case and made a finding that they do not hold nor have they ever held that a plaintiff has to prove an actual violation of the law and i recognize that there are older cases predating rickman from which a pelleas can pull language and argue for this reasonable belief standard but it's hard for me to understand how the district court's opinion can be reconciled with language  reasonable belief standard to all wrongful termination claims predicated on with the blower activity the underlying issue in rickman was the disclosure of policyholder information there was no analysis as to whether or not that involved imminent harm or not the court