Case Name: Bowen SANDERS, Barbara Sanders; George Howard; Rhodney Cantu; Joline Cantu, Plaintiffs-Appellees, v. PARKER DRILLING COMPANY, an Alaskan Corporation, Defendant-Appellant
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1990-08-07
Citations: 911 F.2d 191
Docket Number: Nos. 87-4352, 88-3748
Parties: Bowen SANDERS, Barbara Sanders; George Howard; Rhodney Cantu; Joline Cantu, Plaintiffs-Appellees, v. PARKER DRILLING COMPANY, an Alaskan Corporation, Defendant-Appellant.
Judges: Before REINHARDT, KOZINSKI and TROTT, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 911
Pages: 191–218

Head Matter:
Bowen SANDERS, Barbara Sanders; George Howard; Rhodney Cantu; Joline Cantu, Plaintiffs-Appellees, v. PARKER DRILLING COMPANY, an Alaskan Corporation, Defendant-Appellant.
Nos. 87-4352, 88-3748.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Feb. 7, 1989.
Decided Aug. 7, 1990.
As Amended Sept. 26, 1990.
Thomas M. Daniel, David T. Jones, Perkins Coie, Anchorage, Alaska, for defendant-appellant.
Lee Holen, Elizabeth Johnson, Johnson & Holen, Anchorage, Alaska, for plaintiffs-appellees.
Before REINHARDT, KOZINSKI and TROTT, Circuit Judges.

Opinion:
TROTT, Circuit Judge:
SUMMARY
This case arises out of a wrongful termination dispute between Parker Drilling Company ("Parker") and Bowen Sanders, Rhodney Cantu, and George Howard ("plaintiffs"). Parker terminated plaintiffs upon concluding they smoked marijuana while working on Parker's oil rigs in violation of Parker's drug policy. After a vigor ously contested trial in federal district court, the jury found on a contractual claim that Parker did not have "just cause" to terminate plaintiffs. Parker sought a judgment notwithstanding the verdict or, in the alternative, a new trial. Both motions were denied by the district court, and this appeal followed.
Parker argues that the district court erred in calling on the jury to decide whether plaintiffs actually smoked marijuana on the rigs. Parker's theory is that the jury should only have been asked to determine whether Parker's decision to terminate was based on a good faith belief that plaintiffs smoked marijuana on the oil rigs, not whether the allegation was actually true. Parker asserts that if it was acting in good faith, it is insulated from liability.
We hold that under the law of Alaska, the jury in deciding the contractual issue of just cause was entitled to review the evidence underlying the termination in order to determine whether plaintiffs actually smoked marijuana on Parker's oil rigs. So holding, we find sufficient evidence in the record to support the jury's conclusion that Parker did not have just cause to terminate plaintiffs, and we affirm the district court.
FACTS
Plaintiffs worked as floor hands on Rig 191, one of several oil drilling rigs owned by Parker on Alaska's North Slope. As floor hands, plaintiffs' job was to connect ninety-foot segments of steel pipe, each weighing 1500 pounds, and place them in the drilling hole in the floor of the rig. This is demanding work. The drilling hole is often overflowing with mud, making the rig floor slick and treacherous. The work is performed at temperatures of thirty degrees below zero, using heavy tools, the lightest of which weighs 400 pounds. It is hazardous. Injuries are frequent, ranging from severed fingers and arms to death.
Parker, in the interests of safety, enforces strict discipline aboard the rigs. This includes a laudable ban on the use or possession of drugs on the rigs. The drug ban extends to the company-provided sleeping areas, but it does not address employees' drug use during their off-time, so long as they are off of the drilling site. The plaintiffs testified that they were aware of Parker's drug policy.
During a routine safety inspection of the North Slope rigs on February 22, 1983, Parker's Safety Director, John Haynes, was told by two Parker employees, Billy Reynolds and Joe Watkins, that plaintiffs were routinely smoking marijuana on the rig and during their break periods.
Haynes, immediately upon returning to Anchorage, reported these accusations to Gary McCarrell, Parker's Division Manager. Hesitant to act on what might prove to be an unfounded rumor, McCarrell asked Reynolds and Watkins to put their allegations in writing. The handwritten statements were faxed to McCarrell that evening.
Based on these statements, McCarrell suspended plaintiffs pending investigation. At the time of their suspension, plaintiffs were off the rig on their normal two-week rotation.
After confronting plaintiffs, who denied using drugs, and based on the information above, McCarrell fired the plaintiffs. The plaintiffs brought this wrongful termination action in Alaska state court, and the suit was removed to the United States District Court for the District of Alaska. At the conclusion of the trial, the jury found that Parker did not have just cause for terminating the plaintiffs. This appeal followed.
STANDARD OF REVIEW
The standard for reviewing jury verdicts is whether they are supported by "substantial evidence," that is, such rele vant evidence as reasonable minds might accept as adequate to support a conclusion. Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1013-14 (9th Cir.1985), cert. denied, 474 U.S. 1059, 106 S.Ct. 802, 88 L.Ed.2d 778 (1986)). When there is sufficient evidence before the jury on a particular issue, and if the instructions of law on the issue were correct, the jury's verdict must stand. Transgo, 768 F.2d at 1014. The credibility of the witnesses and the weight of the evidence are issues for the jury and are generally not subject to appellate review. Id. at 1024; see also Nicholson v. Rushen, 767 F.2d 1426, 1427 (9th Cir.1985). Where just cause for termination is required, the employer has the burden of proving that just cause existed. Skagway City School Board v. Davis, 543 P.2d 218, 222 (Alaska 1975), disapproved on other grounds, Native Alaska Reclamation and Pest Control v. United Bank of Alaska, 685 P.2d 1211 (Alaska 1984).
ANALYSIS
Courts addressing whether good cause for dismissal existed generally must answer two separate questions: (1) whether the employee engaged in the conduct the employer alleges; and (2) whether that conduct constitutes just cause for termination of employment. H. Perritt, Employment Dismissal Laws and Practice 226 (1984). We believe that Alaska's courts have adopted this analysis.
The second question is not at issue in this case. The parties do not dispute that drug use on the oil rigs presents a legitimate business reason to terminate employment.
As to the first question, the jury found in its special verdict that Parker did not have just cause to dismiss the plaintiffs. The jury apparently found that Parker did not establish that plaintiffs smoked marijuana on the oil rig as claimed.
Therefore, the question this court must address is whether, under Alaska law, Parker must prove that plaintiffs actually smoked marijuana on the oil rigs, or if Parker need only show that it acted in good faith based on the information available. Alaska's common law is clear in wrongful termination cases; the jury is entitled to decide whether the alleged conduct that led to the termination actually took place unless the facts are so one-sided the issue can be decided as a matter of law.
Rutledge v. Alyeska Pipeline Services Co., 727 P.2d 1050 (Alaska 1986), involved a wrongful termination suit brought by a former employee against Alyeska. Alyes-ka had dismissed the employee for fighting on company property. While the judge in Rutledge took the question of whether the employee was actually involved in the fight away from the jury, he clearly indicated that the determination was one of fact, generally to be decided by a jury. The court simply exercised its discretion to decide the question of fact as a matter of law, holding "reasonable jurors must conclude that Rutledge fought on company property...." 727 P.2d at 1056.
The Rutledge court cited approvingly, albeit on other grounds, Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980), which held that a just cause requirement for termination would be meaningless if the employer were permitted to be the sole judge of whether just cause existed. 292 N.W.2d at 895. In deciding that the question of just cause presented a jury question, the court in Toussaint held, "Where the employer claims that the employee was discharged for specific misconduct — intoxication, dishonesty, insubordination — and the employee claims he did not commit the misconduct alleged, the question is one of fact: did the employee do what the employer said he did?" 292 N.W.2d at 896. Moreover, there is no indication in Rutledge that the employer's mere erroneous belief, whether reasonable or not, is sufficient to satisfy the "for cause" requirement. We conclude that under the law of Alaska, to carry its alleged burden of just cause for termination, an employer must satisfy its burden of showing the discharged employee engaged in the alleged prohibited conduct. See also Wilkerson v. Wells Fargo Bank, 212 Cal.App.3d 1217, 261 Cal.Rptr. 185, 192 (App.1989) ("[A]n employer's subjective be lief it possessed good cause does not dispose of a wrongfully discharged employee's claim for breach of contract. Such employee is entitled to recover for breach of contract notwithstanding the employer's state of mind . If an employer claims that the employee was discharged for specific misconduct, and the employee denies the charge, the question of whether the misconduct occurred is one of fact for the jury."); McLain v. Great American Insurance, 208 Cal.App.3d 1476, 256 Cal.Rptr. 863, 870 (1989) (Although employer claimed that employee distributed confidential memorandum in violation of company policy, jury found that there was an implied contract that employee could only be terminated for cause, and that employee had established that he did not distribute the memo or act in an insubordinate manner. Since the employee did not violate the company rules as alleged, "there was substantial evidence to support the jury's verdict that [the employer] did not have cause to discharge [the employee] and therefore breached the implied contract.")
The dissent sympathizes with Parker's obligation to provide a safe working environment for its employees. It cites strong policy arguments against the use of drugs as authority to alter Alaska's law. Judge Kozinski does not believe that the jury should have the prerogative to second-guess Parker's determination that plaintiffs smoked marijuana on the oil rigs. Although we share Judge Kozinski's concern for safety in the workplace, we respectfully do not believe that concern provides us a mandate to water down centuries of respect for the place of juries in our civil justice system. At this level of our system of jurisprudence — the appellate level — the issue we confront as judges is not whether the use of certain drugs and narcotics is a serious threat to our nation, which it is, or whether the use of marijuana is dangerous to workers on oil rigs, which it is, but whether the verdict of the jury is supported by the evidence presented. The war on drugs can be waged without turning our back on the rightful function of juries in resolving factual disputes.
The jury's verdict finds support in the evidence presented at trial. The plaintiffs denied the use of marijuana as charged. They also claimed they had been threatened with "blackballing" from future work on the North Slope if they did not agree to termination. Tom Manix and Gerald Borthwick, both Parker employees who worked on the rigs with plaintiffs, testified they had never seen plaintiffs smoke marijuana on the rigs. Manix testified that he had been instructed to keep an eye on plaintiffs, adding that if they had engaged in prohibited conduct, he would have known it. Another Parker employee, Malcolm Calhoun, testified that it would have been impossible for plaintiffs to have smoked marijuana on the rigs without being detected by other workers.
As we review this evidence, we are guided by the principle that "[c]ourts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable." Tennant v. Peoria & Pekin Union Railway Co., 321 U.S. 29, 35, 64 S.Ct. 409, 412, 88 L.Ed. 520 (1944) (emphasis added).
The district court's judgment is
AFFIRMED.
. The jury concluded Parker violated an implied covenant of good faith and fair dealing in terminating the plaintiffs. We need not discuss this issue because of our conclusions as to the matter of just cause.
. The district court found there existed an implied contract between Parker and plaintiffs whereby plaintiffs could be terminated only for just cause.
. Judge Kozinski in his dissent frets about the intrusiveness of drug testing as a means of protecting safety in the workplace. In Luedtke v. Nabors Alaska Drilling, Inc., 768 P.2d 1123, 1136 (Alaska 1989), however, the Supreme Court of Alaska has explicitly grappled with this issue, holding that even though the right of privacy found in article I, section 22 of the Alaska Constitution prohibits the state from criminalizing the use of marijuana in one's home, that private right must yield to the public policy of providing safe places for employees to work. Thus, Judge Kozinski's concerns are of little moment as they relate to Alaska. Moreover, Judge Kozinski's idea that drug testing is somehow more intrusive and oppressive vis-a-vis privacy rights than standard investigations of peoples' conduct betrays a misunderstanding of routine police work. These may be his own views, but they may not be those of employees subjected to surveillances, suspensions, and the questioning over extended periods of time of employees' co-workers, friends, and neighbors. It is regrettable that going into the twenty-first century we need magnetometers to protect our airports and drug testing to keep our armed forces and workplaces safe from peril. But it is the genius of our Constitution that it permits us to adapt to the changing world around us. But, let the debate continue. It is in the discussion of these issues that we fine-tune our laws and constantly strive for the balance that preserves our freedom and well being, from excessive intrusion from the government on one hand, and intolerable private behavior on the other.