Opinion ID: 1420265
Heading Depth: 4
Heading Rank: 4

Heading: The breach of the implied covenant of good faith and fair dealing claim

Text: Kotowski also claimed she was discharged in retaliation for investigating safety violations, specifically, violations of the zero tolerance, alcohol-free workplace policy in effect during the cleanup. She claims that this retaliatory discharge breached the covenant of good faith and fair dealing implied in all employment contracts. See Reed v. Municipality of Anchorage, 782 P.2d 1155, 1158 (Alaska 1989) ( Reed II ); Knight v. American Guard & Alert, Inc., 714 P.2d 788, 792 (Alaska 1986). The superior court agreed with Norcon that the implied covenant was a part of the contract, and that any claims alleging violations of the covenant were therefore claims brought under the CBA and pre-empted by the LMRA. Support for this view can be found in Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). In Allis-Chalmers, the Supreme Court reversed a decision of the Wisconsin Supreme Court which had held that a bad faith tort claim was not pre-empted by the LMRA, because it was based on an independent state law implied covenant of good faith and fair dealing. The Court observed that its pre-emption analysis must focus, then, on whether the Wisconsin tort action for breach of the duty of good faith as applied here confers nonnegotiable state-law rights on employers or employees independent of any right established by contract, or, instead, whether evaluation of the tort claim is inextricably intertwined with consideration of the terms of the labor contract. 471 U.S. at 213, 105 S.Ct. 1904. It found that [b]ecause the right asserted not only derives from the contract, but is defined by the contractual obligation of good faith, any attempt to assess liability here inevitably will involve contract interpretation. Id. at 218, 105 S.Ct. 1904. Thus the LMRA pre-empted Lueck's state law claim. See id. at 218-19, 105 S.Ct. 1904. The Supreme Court's analysis of the relationship between the bad faith tort claim, the implied covenant, and the contract in Allis-Chalmers is inapplicable to the present case, however. In Allis-Chalmers the issue was whether an employer who ordered periodic insurance cutoffs and medical reexaminations had acted in bad faith. The Court found that under Wisconsin law it appears that the parties to an insurance contract are free to bargain about what 'reasonable' performance of their contract obligation entails. Id. at 217, 105 S.Ct. 1904. Thus the employee's claim could not be resolved without referring to the terms of the contract, since the reasonableness of the cutoffs and reexaminations could only be determined by consulting such terms. In contrast, the implied covenant claim here requires no contractual interpretation. We have recognized that a retaliatory discharge gives rise to a cause of action for breach of the duty of good faith and fair dealing. See Reed II, 782 P.2d at 1158. [T]he public policy approach is largely encompassed within the implied covenant of good faith and fair dealing. Knight, 714 P.2d at 792. The fact that the whistle blower claim in this case involved the violation of a privately enforced safety policy, rather than violations of law, is irrelevant insofar as public policy favors safe workplaces. Kotowski still can bring an action for breach of the implied covenant of good faith and fair dealing if her termination was in retaliation for her reporting breaches of Exxon's zero tolerance, alcohol-free workplace policy. The CBA is irrelevant in adjudicating such an action; Kotowski and Norcon could not have contracted away Kotowski's right to report safety violations, even had they tried to do so. Nothing in the CBA could have altered, circumscribed, or defined this right. The implied covenant claim at issue can be distinguished from implied covenant claims of the sort found in Allis-Chalmers insofar as it rests on a non-negotiable right. Because the contours of this right are not defined through the bargaining process, they can be traced out without any reference to the CBA. The United States Court of Appeals for the Ninth Circuit explored the relationship between the LMRA and the Alaska implied covenant of good faith and fair dealing in Eldridge v. Felec Services, Inc., 920 F.2d 1434 (9th Cir.1990). In Eldridge, the court examined Alaska cases [7] and accurately concluded that we treat retaliatory discharge claims as violations of the implied covenant of good faith and fair dealing, that the state policy on such discharges is non-negotiable, and that Eldridge's state law implied covenant claim did not depend on any interpretation of the CBA. See id. at 1436-39. The court concluded that the implied covenant claim in that case was distinguishable from the one in Allis-Chalmers where the scope of the duty ... was defined by the express terms of the collective bargaining agreement itself. Id. at 1438. As the court observed: To defend the claim against it, Felec Services need only show that it was motivated to discharge Eldridge for reason other than to retaliate for the assertion of rights under the Alaska Workers' Compensation Act. It is irrelevant whether the company's reliance on the labor agreement was reasonable or whether its interpretation of the agreement was correct. Id. at 1439. The court's reasoning is both persuasive and applicable to Kotowski's claim. Furthermore, the Supreme Court has found other state law retaliatory discharge and public policy claims sufficiently independent under the LMRA pre-emption analysis. See Norris, 512 U.S. at 266, 114 S.Ct. 2239; Lingle, 486 U.S. at 407, 108 S.Ct. 1877. The fact that these cases involved causes of action based in tort, while breach of the implied covenant of good faith and fair dealing is an action based in contract, is irrelevant. Courts applying the LMRA pre-emption analysis should not elevate form over substance, but instead determine whether the adjudication of the right at issue requires interpretation of the CBA. See Allis-Chalmers, 471 U.S. at 211, 105 S.Ct. 1904; Eldridge, 920 F.2d at 1437. Kotowski's implied covenant of good faith and fair dealing claim was not pre-empted by the LMRA because it required no such interpretation.