FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRUCE P. PAOLINI, 

Plaintiff-Appellant,

No. 03-35724 v.

D.C. No. ALBERTSON’S INC.; PLAN 

ADMINISTRATOR, of Albertson’s CV-02-00041-BLW

amended and restated stock-based ORDER

incentive plan,

Defendants-Appellees. 

Appeal from the United States District Court

for the District of Idaho

B. Lynn Winmill, District Judge, Presiding

Argued February 17, 2005

Submitted March 16, 2005

Seattle, Washington

Filed August 10, 2005

Before: Betty B. Fletcher and Ronald M. Gould,

Circuit Judges, and Samuel P. King,* District Judge.

COUNSEL

Bruce P. Paolini, Virginia Beach, Virginia, Pro se plaintiffcounterdefendant-appellant. 

*The Honorable Samuel P. King, Senior United States District Judge

for the District of Hawaii, sitting by designation. 

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J. Walter Sinclair, Harry S. Chandler, & Wade L. Woodard,

Stoel Rives LLP, Boise, Idaho, for defendantcounterclaimant-appellee Albertson’s, Inc., and defendantappellee the Plan Administrator of Albertson’s Amended and

Restated Stock-Based Incentive Plan.

ORDER CERTIFYING QUESTIONS OF LAW TO

THE IDAHO SUPREME COURT

Bruce P. Paolini, the plaintiff, appeals the district court’s

summary judgment decision. The district court granted summary judgment to the defendants, Paolini’s former employer

Albertson’s, Inc. and the Administrator of Albertson’s, Inc.’s

Stock-Based Incentive Plan (the “Plan Administrator”), (collectively “Albertson’s”). 

On appeal Paolini argues, among other things, that he was

fired for petitioning to exercise stock options granted to him

by Albertson’s. He argues that firing him for this reason violated Idaho’s wage laws and public policy. We vacate submission and certify two legal questions that are dispositive of

these issues on appeal. 

I.

Resolution of Paolini’s wrongful discharge claims as

related to Idaho’s wage laws and Idaho’s public policy are

matters of first impression under Idaho law. Because we find

no controlling precedent in the decisions of the Idaho courts,

pursuant to Rule 12.2 of the Idaho Appellate Rules, we

respectfully request the Idaho Supreme Court to exercise its

discretion to accept certification of the following legal questions:

1. Can stock options be wages under Idaho Code

sections 45-601(7) and 45-613? If so, is it a factual

10268 PAOLINI v. ALBERTSON’S
issue as to whether the stock options were issued as

wages, to be resolved by a factfinder? 

2. If an employer fires an employee for trying to

exercise his right to the receipt of wages, has the

employer violated the public policy exception to atwill employment? 

A determination of Idaho law with regard to these certified

questions would resolve the wrongful discharge issues on

appeal as they relate to Idaho’s wage laws and Idaho’s public

policy and would determine whether these matters should be

remanded to the district court for further proceedings. 

II.

Paolini was an employee at Albertson’s for seventeen

years. He advanced to the position of Senior Vice President

of Labor Relations and Employment Law. During Paolini’s

time at Albertson’s he received several thousand stock

options. The options were issued pursuant to the Albertson’s

Amended and Restated 1995 Stock-Based Incentive Plan (the

“Plan”). According to the Plan, a change in control at the

company accelerated vesting of the stock options. 

In the summer of 2001, Paolini believed a change in control

occurred at Albertson’s.1 He attempted to exercise his stock

options based on accelerated vesting. The Plan Administrator

denied his request. 

Then, for reasons that are disputed, Paolini left his employment at Albertson’s. Paolini claims Albertson’s discharged

him for acting to exercise his stock options, thus raising the

possibility that several million dollars of stock options,

1Whether a change in control occurred at Albertson’s is disputed by the

parties but this issue is not material to the questions as certified to the

Idaho Supreme Court. 

PAOLINI v. ALBERTSON’S 10269
including his own, were subject to accelerated vesting. This,

Paolini claims, was a retaliatory discharge in violation of

Idaho’s wage laws, public policy, and the covenant of good

faith and fair dealing. Albertson’s response to Paolini’s

wrongful discharge claims is two-fold: first, they argue

Paolini quit and second, they argue that if Paolini was fired,

then his firing did not violate Idaho state law.2

Paolini filed a complaint in Idaho federal district court. The

complaint challenged the Plan Administrator’s interpretation

of the stock option Plan and alleged wrongful discharge.

Albertson’s counterclaimed for the amount owed on a disputed promissory note. 

Both parties filed for summary judgment. The district court

granted all of Albertson’s substantive motions for summary

judgment and denied all of Paolini’s motions for summary

judgment. Paolini appealed to the Ninth Circuit. 

III.

A. Violation of Idaho’s wage laws. 

Under Idaho law an employer may not fire or retaliate

against an employee for making a complaint under the Idaho

wage laws. Idaho Code § 45-613. The statute reads: 

No employer shall discharge or in any other manner

retaliate against any employee because that

employee has made a complaint to the employer, or

to the department, or filed suit alleging that the

employee has not been paid in accordance with the

provisions of this chapter, or because the employee

has testified or may be about to testify in an investigation or hearing undertaken by the department. The

2The parties agreed at oral argument that a material factual dispute

exists over whether Paolini quit or was discharged. 

10270 PAOLINI v. ALBERTSON’S
provisions of this section shall not be construed to

otherwise restrict the discipline or termination of an

employee. 

Id. Paolini argues he was fired for petitioning to exercise his

stock options and raising concerns in management over the

potential for accelerated vesting of the company’s stock

options. Stock options, he argues, were part of Albertson’s

compensation, i.e. wages, to himself and other executives.

Therefore, he argues, he was terminated for pursuing a complaint under Idaho’s wage law. 

Idaho law defines wages as “compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece or commission basis.” Idaho

Code § 45-601(7). The Idaho Supreme Court has never said

whether stock options can be wages and it is not clear from

Idaho’s existing case law how the court would decide this

question. The Idaho Supreme Court has addressed the definition of wages in other contexts,3

 but none are comparable to

grants of stock options. 

While the law is unclear, the facts suggest a triable issue of

fact on whether Albertson’s stock options are wages. Paolini

and the Plan Administrator both said the stock options were

compensation. Paolini’s affidavit says he was told “dozens of

times” that his pay included salary, bonuses, and stock

options. The chair of the Compensation Committee/Plan

Administrator4 testified to the same. The Plan Administrator’s

3For example, the Idaho Supreme Court said year end commissions are

wages, Goff v. H.J.H. Co., 521 P.2d 661, 664; 95 Idaho 837, 840 (1974);

bonuses and severance pay are wages, Johnson v. Allied Stores Corp., 679

P.2d 640, 644; 106 Idaho 363, 367 (1984); and deferred incentive compensation packages are wages, Bilow v. Preco, Inc., 966 P.2d 23, 28-30; 132

Idaho 23, 28-30 (1998). The Idaho Court of Appeals said a life insurance

contract is not a wage, Whitlock v. Haney Seed Co., 759 P.2d 919, 925-26;

114 Idaho 628, 634-35 (Idaho Ct. App. 1988). 

4The Compensation Committee and the Plan Administrator were one

and the same. 

PAOLINI v. ALBERTSON’S 10271
written decision in this case calls the stock option Plan compensation, saying: “[M]anagement has discretion to design

and create compensation programs such as the Plan.” 

This court has said stock options under California’s wage

laws are not wages5 but not all states have excluded stock

options from the definition of wages. For example, the Third

Circuit has said stock options are wages under the Pennsylvania Wage Payment and Collection Law “if the employer specifically agreed to deliver the option as employment

compensation.” Scully v. US WATS, 238 F.3d 497, 517-18 (3d

Cir. 2001). 

In this case, if stock options are not wages then no triable

issue of fact exists for the wrongful discharge claims under

Idaho’s wage law. The claims therefore would have to be dismissed. If stock options are wages as a matter of law, then

these claims must return to the district court for a determination of whether Paolini was fired and, if so, for what reason.

If stock options may be wages and determining so is an issue

of fact, then these issues must return to the district court for

such a determination. Whether stock options can be wages is

a “controlling question of law” without “controlling precedent

in the decisions of the Idaho Supreme Court.” Idaho Appellate

Rule 12.2(a). Resolving this question will “materially advance

the orderly resolution” of this litigation. Id. 

B. Public policy exception to employment at-will. 

Idaho has long recognized a public policy exception to the

employment at-will relationship. Under this exception “an

employer may be liable for wrongful discharge when the

motivation for discharge contravenes public policy.” Edmondson v. Shearer Lumber Prods., 75 P.3d 733, 737; 139 Idaho

5

See Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th Cir. 2002)

(saying stock options are not wages under California law); Int’l Bus.

Machs. Corp. v. Bajorek, 191 F.3d 1033, 1039 (9th Cir. 1999) (same). 

10272 PAOLINI v. ALBERTSON’S
172, 176 (2003). Whether a particular action falls within the

public policy exception is a question of law. Id. The Idaho

Supreme Court has explained the exception by saying: 

The purpose of the exception is to balance the competing interests of society, the employer, and the

employee in light of modern business experience.

The public policy exception has been held to protect

employees who refuse to commit unlawful acts, who

perform important public obligations, or who exercise certain legal rights or privileges. 

Crea v. FMC Corp., 16 P.3d 272, 275; 135 Idaho 175, 178

(2000) (internal quotation marks omitted). The exception has

been extended to specifically protect: participation in union

activities, Roberts v. Bd. of Trustees, 11 P.3d 1108, 1111; 134

Idaho 890, 893 (2000); Watson v. Idaho Falls Consol. Hosp.,

720 P.2d 632, 637; 111 Idaho 44, 49 (1986); reporting safety

violations, Ray v. Nampa School Dist., 814 P.2d 17, 120

Idaho 117 (1991); and reporting false medical records and the

performance of unnecessary operations, Thomas v. Med. Ctr.

Physicians, 61 P.3d 557, 138 Idaho 200 (2002). The Idaho

Supreme Court has indicated that the exception would also

protect against termination for refusing to date a supervisor,

filing a worker’s compensation claim, or serving on a jury,

Sorensen v. Comm. Tek, Inc., 799 P.2d 70, 75; 118 Idaho 664,

669 (1990). However, the Idaho Supreme Court has said the

exception does not protect private-sector employees who

exercise their constitutional rights of free speech and association, Edmondson, 75 P.3d at 738-39; 139 Idaho at 177-78, and

Idaho Court of Appeals has declined to extend the exception

to cover running for public office, McKay v. Ireland Bank, 59

P.3d 990, 994-95; 138 Idaho 185, 189-90 (Idaho Ct. App.

2002). 

The question of whether Paolini was fired in violation of

public policy is dependent, in part, on the answer to the earlier

question of whether stock options can be wages. If stock

PAOLINI v. ALBERTSON’S 10273
options are wages then a legal question exists over whether

firing a person for acting to prevent the withholding of wages

is a violation of public policy. A factual question also remains

as to whether Paolini was terminated for taking such an

action. The legal question has never been addressed by the

Idaho Supreme Court. 

Paolini argues that as the head of labor and employment at

Albertson’s he was refusing to commit an unlawful act, i.e.

withholding wages from Albertson’s employees. He also

argues he was exercising his own legal right to pursue wages

owed to him by Albertson’s. Existing case law is not sufficiently analogous to the legal questions presented by Paolini

to allow us to resolve these issues. Whether Paolini’s arguments are correct under Idaho law is a matter best determined

by the Idaho Supreme Court. We respectfully request the

Idaho Supreme Court to exercise its discretion and accept certification of the legal questions presented. 

IV. 

The clerk of this court shall forward a copy of this order,

under official seal, to the Idaho Supreme Court. The clerk

shall also forward copies of all briefs and excerpts of record

to the Idaho Supreme Court. The parties shall notify the clerk

of this court within 14 days of any decision by the Idaho

Supreme Court to accept or decline certification. If the Idaho

Supreme Court accepts certification, the parties shall then

notify the clerk of this court within 14 days of the issuance of

that court’s opinion. We withdraw submission of this appeal

until further order of this court.

SUBMISSION VACATED AND QUESTIONS CERTIFIED 

10274 PAOLINI v. ALBERTSON’S



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