Opinion ID: 1344791
Heading Depth: 1
Heading Rank: 4

Heading: Are damages for emotional distress caused by sexual harassment barred by the exclusive remedy provision of the Alaska Workers' Compensation Act? [22]

Text: VECO argues that Rosebrock should not have been able to obtain emotional distress damages. It contends that these were barred by the exclusive remedy provision of the Workers' Compensation Act. [23] Alaska Statute 22.10.020(i) authorizes a court finding a violation of any of the provisions of AS 18.80 to award any other relief including the payment of money, that is appropriate. We have held that this includes an award of compensatory damages. See Loomis Elec. Protection, Inc. v. Schaefer, 549 P.2d 1341, 1343 (Alaska 1976). In Loomis we observed that the objective of the anti-discrimination law was to afford complete relief to parties injured by discrimination. The language of the statute is clearly intended to provide a litigant complete relief in an appropriate case. In view of the strong statement of purpose in enacting AS 18.80, and its avowed determination to protect the civil rights of all Alaska citizens, we believe that the legislature intended to put as many teeth into this law as possible. We fail to see how, consistent with that purpose and intent, the legislature could have contemplated a statutory scheme that would not have included the right to recover damages. Otherwise, there would be many cases in which no meaningful relief would be available to the injured party, the one whose civil rights have been violated and whom the law seeks to protect. Id. at 1343 (footnotes omitted). The Alaska Workers' Compensation Act does not provide compensation for emotional distress which does not result in permanent or partial disability. It would be inconsistent with the legislative purpose of affording complete relief to those injured by discrimination to hold that nonduplicative damages are barred by the exclusive remedy provision of the Workers' Compensation Act. In declining to so hold we join the courts of many other states which have held that the exclusive remedy provisions of their workers' compensation laws do not bar intangible injury claims resulting from sexual harassment. See Hart v. National Mortgage & Land Co., 189 Cal.App.3d 1420, 235 Cal.Rptr. 68, 75 (Cal.App.1987); Cox v. Brazo, 165 Ga.App. 888, 303 S.E.2d 71, 73 (Ga.App.1983); O'Connell v. Chasdi, 400 Mass. 686, 511 N.E.2d 349, 351-52 (Mass.1987); Hogan v. Forsyth Country Club Co., 79 N.C.App. 483, 340 S.E.2d 116, 120-21 (N.C.App.1986); Palmer v. Bi-Mart Co., 92 Or.App. 470, 758 P.2d 888, 891 (Or.App.1988).

Rosebrock's pleadings did not explicitly allege that her wrongful termination claim was brought pursuant to AS 18.80.220(a)(4). [25] Rather, the complaint stated: 20. Plaintiff's termination was wrongful in that she was discharged for asserting her right as an employee to be free from sexual assault and harassment, a right that is of important public interest as reflected in both federal and state statutes and case law. .... 22. Defendant VECO's action in discharging plaintiff for this reason was willful, wanton and malicious and beyond the bounds of socially tolerable conduct, warranting the assessment of punitive damages against defendant VECO. In response to VECO's summary judgment motion, the superior court ruled that Rosebrock's wrongful termination claim could proceed to trial. It stated that if she prevailed, Rosebrock would be entitled to damages for emotional distress and punitive damages, since wrongful termination in violation of public policy constitutes a tort. Thus, the superior court permitted the wrongful termination claim to proceed as a public policy tort. At trial, however, the claim was presented to the jury as a retaliation claim in conformance with the elements that would be necessary for a wrongful termination claim under AS 18.80.220. Then, after the trial concluded, the superior court permitted a retroactive amendment of Rosebrock's complaint to include a wrongful termination claim under AS 18.80.220. VECO argues that it was unfairly prejudiced by the retroactive amendment of Rosebrock's complaint. We believe that Rosebrock's pleadings sufficiently placed VECO on notice that it was being sued for wrongful termination, and that punitive damages would be sought. [26] While the superior court did state, in ruling on a summary judgment motion, that the wrongful termination claim would proceed as a public policy tort, the trial, in fact, conformed to a retaliation claim under AS 18.80.220. Additionally, VECO has not established that it was prejudiced by the retroactive amended pleadingthat is, it did not suggest how it might have tried the case differently if it had known throughout the lawsuit that Rosebrock would prosecute her wrongful termination claim under AS 18.80.220. [27] Therefore, we hold that the superior court did not abuse its discretion by allowing the post-trial amendment of Rosebrock's complaint. [28]
Quoting only a portion of Jury Instruction Number 21, VECO claims that it is erroneous because it allowed the jury to rule in favor of Rosebrock on her wrongful termination claim by finding only that Rosebrock demonstrated that VECO's stated reason for her termination was pretextual. VECO argues that the jury was not required to find that its reason for terminating Rosebrock was retaliatory. In determining whether an employer has violated AS 18.80.220 when there is no direct evidence of discriminatory intent, we have adopted the three-part framework used in Title VII cases. See Haroldsen v. Omni Enterprises, Inc., 901 P.2d 426, 430 (Alaska 1995) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)). This test also governs actions for retaliatory discharge. See Miller v. Fairchild Industries, Inc., 797 F.2d 727, 730-31 (9th Cir.1986). The Miller court stated: To establish a prima facie case of discriminatory retaliation, a plaintiff must show that: (1) she engaged in an activity protected under Title VII; (2) her employer subjected her to adverse employment action; (3) there was a causal link between the protected activity and the employer's action. Causation sufficient to establish a prima facie case of unlawful retaliation may be inferred from the proximity in time between the protected action and the allegedly retaliatory discharge.... Once a plaintiff establishes a prima facie case, the burden of production shifts to the employer to articulate a legitimate, non-retaliatory explanation for the action.... To satisfy this burden, the employer need only produce admissible evidence which would allow the trier of fact rationally to conclude that the employment decision had not been motivated by discriminatory animus. If the employer successfully rebuts the inference of retaliation that arises from establishment of a prima facie case, then the burden shifts once again to the plaintiff to show that the defendant's proffered explanation is merely a pretext for discrimination. Id. at 731 (citations and footnote omitted) (quoting Texas, Dep't of Community Affairs v. Burdine, 450 U.S. 248, 257, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981)). Instruction Number 21, read in its entirety, properly instructed the jury on Rosebrock's wrongful termination claim. [29] The jury was instructed that Rosebrock first had to prove facts that gave rise to an inference of wrongful terminationthat she complained to VECO supervisory or management employees about sexual harassment and/or sexual assault, and that after she complained of sexual harassment and/or assault, she was terminated. Next, the instruction informed the jury that VECO had alleged a legitimate, non-discriminatory reason for terminating Rosebrock. Finally, the instruction placed the burden of persuasion on Rosebrock to prove that it is more likely than not that VECO's real reason for terminating her was the fact that she complained of sexual harassment and/or sexual assault. Contrary to Veco's claim, the instruction did not allow the jury to impose liability based solely on its disbelief of VECO's stated reason for terminating Rosebrock. We therefore hold that when the text of Instruction Number 21 is considered in its entirety, the instruction is not erroneous.
VECO claims that Jury Instruction Number 21, as it relates to mixed-motive sexual harassment, is incorrect. Specifically, VECO claims that mixed-motive causation does not apply to cases of retaliation, and also claims that Rosebrock had to choose either a pretext claim or a mixed-motive claim, but could not pursue both simultaneously. VECO cites no authority for the proposition that consideration of mixed motives is impermissible in wrongful termination retaliation cases. Authority does support the opposite proposition, however. See, e.g., Ostrowski v. Atlantic Mut. Ins. Cos., 968 F.2d 171, 185 (2d Cir.1992) (We reject the district court's view that a claim of retaliation necessarily presents only a pretext case and cannot be a mixed-motives case.); see also Haroldsen, 901 P.2d at 432 n. 12 (noting that our anti-discrimination laws condemn employment decisions based on a mixture of legitimate and illegitimate considerations). The question of whether a mixed-motive theory applies to wrongful termination depends on the interpretation of the term because in AS 18.80.220. [30] In interpreting Title VII, the United States Supreme Court, in Price Waterhouse v. Hopkins, 490 U.S. 228, 240, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), held that the words because of... sex mean that gender must be irrelevant to employment decisions. It emphasized that the words because of do not mean  solely because of, and held that Title VII prohibited decisions based on a mixture of legitimate and illegitimate considerations. Id. at 241, 109 S.Ct. 1775. The Court then held that if the plaintiff shows that gender was a motivating part in an employment decision, the defendant may avoid a finding of liability only by proving that it would have made the same decision even if it had not allowed gender to play such a role. Id. at 244-45, 109 S.Ct. 1775 (footnote omitted). The analysis that the Supreme Court applied to Title VII sexual discrimination is equally applicable to a wrongful termination claim pursuant to AS 18.80.220(a)(4). In both situations, the employer is prohibited from making an employment decision where an illegitimate consideration is a motivating factor in the decision. Requiring plaintiffs in wrongful termination cases to prove that their termination was caused solely by their protected actions would unnecessarily restrict the term because, and would hinder achieving the purpose of AS 18.80.220, eradicating discrimination. We therefore hold that a wrongful termination claim pursuant to AS 18.80.220(a)(4) can be based on mixed-motive causation. We also reject VECO's argument that the plaintiff must choose between pursuing a mixed-motive theory and a pretext theory. The Supreme Court in Price Waterhouse held that a plaintiff can assert a mixed-motive claim when the employer considered both legitimate and illegitimate reasons in making its employment decision. See 490 U.S. at 241, 109 S.Ct. 1775. However, [i]f the plaintiff fails to satisfy the factfinder that it is more likely than not that a forbidden characteristic played a part in the employment decision, then she may prevail only if she proves ... that the employer's stated reason for its decision is pretextual. Id. at 247 n. 12, 109 S.Ct. 1775. Thus, Price Waterhouse does explicitly contemplate that a plaintiff can pursue a mixed-motive claim and a pretext claim simultaneously. There is no reason to make the plaintiff elect which theory to present to the jury. If the jury finds that there is direct evidence that the employer considered a forbidden characteristic in terminating the plaintiff, it will apply the mixed-motive framework. However, if the jury does not find direct evidence, the plaintiff can still prevail by using the pretextual framework. We thus hold that a plaintiff can present both mixed-motive and pretext claims to the jury, and reject VECO's argument that Rosebrock had a forbidden second bite at the apple.
VECO claims that Rosebrock failed to offer evidence which would prove the elements of her wrongful termination claim. Specifically, VECO argues that Rosebrock failed to establish a prima facie case of retaliation because she failed to show: (1) that she engaged in a protected activity; (2) that an adverse employment decision was made; and (3) that there was a causal connection between the two. First, Rosebrock testified that she complained to a supervisor, Bobby Clark, that she was sexually assaulted by another VECO employee. [31] VECO offers no support for the proposition that VECO would have been justified for terminating her for complaining about such an assault. Nor does VECO claim or offer any support for the proposition that such a report was not a protected activity. Therefore, Rosebrock offered sufficient evidence to demonstrate that she engaged in a protected activity. Second, VECO claims that it did not take adverse employment action against Rosebrock. However, Rosebrock was laid off. Therefore, there is no real dispute that VECO made an adverse employment decision against Rosebrock. Finally, VECO claims that there was no causal connection between Rosebrock's complaint and her termination, and that Rosebrock was laid off as part of a general reduction in force because she was a junior office worker. However, Rosebrock testified that, following her termination, she spoke to a VECO employee who told her that VECO had taken care of the problem because you're gone. Also, Rosebrock was laid off about six days after she complained, which in context of Rosebrock's you're gone testimony, is inferential evidence of a causal connection. See Miller, 797 F.2d at 731 (stating that causation can be proved by inference from a close proximity in time between the protected activity and the allegedly retaliatory discharge); see also Mack A. Player, Employment Discrimination Law § 5.48, at 404 n. 284 (1988). Reviewing this evidence in the light most favorable to Rosebrock, we find that the jury could reasonably have found that Rosebrock's complaint about the sexual assault was a cause of her termination. We thus affirm the superior court's denial of VECO's motions for JNOV and a new trial as to Rosebrock's wrongful termination claim.

VECO claims that Rosebrock cannot recover punitive damages under Alaska's anti-discrimination statute, AS 18.80.220. However, in Loomis Electronic Protection, Inc. v. Schaefer, 549 P.2d 1341, 1343 (Alaska 1976), this court stated that plaintiffs may recover punitive damages under AS 18.80. We stated that the broad language of AS 22.10.020(c) indicates a legislative intent to authorize an award of compensatory and punitive damages for violations of AS 18.80, in addition to the equitable remedies such as enjoining illegal employment activities and ordering back pay as a form of restitution.[ [33] ] Id.; see also Johnson v. Alaska State Dept. of Fish & Game, 836 P.2d 896, 906 (Alaska 1991) (citing Loomis for the proposition that AS 22.10.020(c) authorizes punitive damages for violations of AS 18.80, but holding that the statute did not specifically allow punitive damages against the state). Nevertheless, VECO claims that this court's statements in Loomis and Johnson were merely dicta, and that we should reconsider the question of punitive damages. Specifically, VECO claims that the issue in Loomis concerned whether a prospective employee was entitled to a jury trial, and that the language regarding punitive damages is therefore superfluous. It also argues that in Johnson, we simply assumed that punitive damages were recoverable, but never decided the propriety of such damages. While VECO accurately summarizes the question presented in Loomis, we think that VECO is incorrect in claiming that the punitive damage reference is mere dicta. Dicta is defined as [o]pinions of a judge which do not embody the resolution or determination of the specific case before the court. Expressions in court's opinion which go beyond the facts before court and therefore are individual views of author of opinion and not binding in subsequent cases as legal precedent. Black's Law Dictionary 454 (6th ed.1990). In Loomis, this court's discussion of the relief afforded by Alaska's civil rights statute was necessary for our holding that the prospective employee was entitled to a jury trial. See 549 P.2d at 1343. The language was not superfluous to the specific case before the court, and did not go beyond the facts. Similarly, in Johnson, we necessarily accepted the holding in Loomis that punitive damages were recoverable pursuant to AS 18.80 before reaching the issue of whether punitive damages could be assessed against the state. See 836 P.2d at 906. The plain language of AS 22.10.020(i) authorizes the superior court to award any other relief, including the payment of money. Further, in a consistent line of decisions, this court has held that punitive damages are recoverable in discrimination cases. See Loomis, 549 P.2d at 1343; Johnson, 836 P.2d at 906; cf. McDaniel v. Cory, 631 P.2d 82, 87 (Alaska 1981) (affirming holding in Loomis that punitive damages are available in civil action, but distinguishing administrative action where punitive damages are not available). Moreover, under the common law, Alaska's superior courts possess the authority to award punitive damages for outrageous conduct. See Bridges v. Alaska Hous. Auth., 375 P.2d 696, 702 (Alaska 1962). Allowing punitive damages under AS 18.80.220 does not reach beyond settled expectations. We therefore follow our prior holdings that punitive damages are authorized under AS 18.80.220 and AS 22.10.020(i).
VECO claims that the superior court's instruction on punitive damages was erroneous because it allowed the jury to award punitive damages based on vicarious liability. Citing Restatement (Second) of Agency § 217C (1958), it argues that this court should apply agency principles to limit the award of punitive damages to instances where the employer has committed a wrong. The jury instructions allowed the jury to award punitive damages against VECO based on four different theories of employer liability: (1) wrongfully terminating Rosebrock; (2) sexual harassment by an employee acting within the scope of his employment if VECO knew about the harassment and failed to take corrective action; (3) sexual harassment by a co-worker or supervisor who did not have authority over Rosebrock, if Rosebrock's supervisor knew about the harassment and failed to take corrective action; and (4) vicarious liability for sexual harassment by Rosebrock's supervisor, unlimited by the scope of the supervisor's employment. The jury found that VECO was liable for both wrongful termination and sexual harassment and awarded punitive damages. No special verdict answer specified whether punitive damages were awarded for the wrongful termination or the sexual harassment claims, or for both. Thus, it is possible that the jury's award of punitive damages could have been based solely on VECO's vicarious liability for actions of Rorick outside the scope of his employment. We must now determine whether an employer can be liable for punitive damages based solely on vicarious liability for its employees' actions outside the scope of their employment. [34] Restatement (Second) of Agency § 217C provides: Punitive damages can properly be awarded against a master or other principal because of an act by an agent if, but only if: (a) the principal authorized the doing and the manner of the act, or (b) the agent was unfit and the principal was reckless in employing him, or (c) the agent was employed in a managerial capacity and was acting in the scope of employment, or (d) the principal or a managerial agent of the principal ratified or approved the act. The comments to section 909 of the Restatement (Second) of Torts, which is identical to section 217C of the Restatement (Second) of Agency, provide: The rule stated in this Section results from the reasons for awarding punitive damages, which make it improper ordinarily to award punitive damages against one who himself is personally innocent and therefore liable only vicariously. It is, however, within the general spirit of the rule to make liable an employer who has recklessly employed or retained a servant or employee.... Nor is it unjust that a person on whose account another has acted should be responsible for an outrageous act for which he otherwise would not be if, with full knowledge of the act and the way in which it was done, he ratifies it, or, in cases in which he would be liable for the act but not subject to punitive damages, he expresses approval of it. In these cases, punitive damages are granted primarily because of the principal's own wrongful conduct. Although there has been no fault on the part of a corporation or other employer, if a person acting in a managerial capacity either does an outrageous act or approves of the act by a subordinate, the imposition of punitive damages upon the employer serves as a deterrent to the employment of unfit persons for important positions. Restatement (Second) of Torts § 909 cmt. b (1979) (emphasis added) (illustrations omitted). We generally agree with VECO that the Restatement properly balances the interests in imposing vicarious liability while precluding punitive damages when the employer has not acted wrongfully. Other courts which have used agency principles to impose vicarious liability on an employer for its supervisor's hostile environment sexual harassment have also limited the employer's punitive damage liability based on the agency principles enunciated in § 217C of the Restatement (Second) of Agency. See, e.g., Kelly-Zurian v. Wohl Shoe Co., 22 Cal.App.4th 397, 27 Cal.Rptr.2d 457, 468-69 (Cal.App.1994) (holding that employer is not liable for punitive damages based on supervisor's sexual harassment unless the employer acted wrongfully, as defined by Restatement (Second) of Torts § 909); Lehmann v. Toys `R' Us, Inc., 132 N.J. 587, 626 A.2d 445, 464 (N.J.1993) (applying agency principles to hold employer vicariously liable for supervisor's hostile environment sexual harassment, but limiting liability for punitive damages to situations of actual participation by upper management or willful indifference). We have indicated that liability for punitive damages might be imposed in one situation where the Restatement would not impose themwhere an employee who is not necessarily employed in a managerial capacity acts within the scope of his employment. See Alaskan Village, Inc. v. Smalley, 720 P.2d 945, 948-49 (Alaska 1986); cf. Murray v. Feight, 741 P.2d 1148, 1158-59 (Alaska 1987). We decline, however, to extend this exception and allow vicarious liability for punitive damages when the employee is acting outside the scope of his employment. [35] If an employee is acting outside the scope of his employment, he is not acting in any way to further the goals of the employer. See Restatement (Second) of Agency § 228(1)(c) (providing that employee is not acting within the scope of his employment unless his actions are actuated, at least in part, by a purpose to serve the master). [36] The interest of preventing sexual harassment is served by holding an employer vicariously liable for its supervisors' sexual harassment, regardless of whether they are acting within the scope of their employment, because the employer may be deterred from delegating authority to untrained or incompetent supervisors. However, this does not mean that an innocent employer should be punished by an award of punitive damages when its supervisors are acting outside the scope of their employment. Punitive damages are disfavored and are allowed only within narrow limits. See Chizmar v. Mackie, 896 P.2d 196, 210 (Alaska 1995). The instructions given in this case went beyond those limits in permitting punitive damages to be awarded based on vicarious liability for acts of employees outside the scope of their employment. When a jury award may be based on any one of several theories, one of which has been erroneously submitted to the jury, a new trial is required. See Matomco Oil Co. v. Arctic Mechanical, Inc., 796 P.2d 1336, 1343-44 (Alaska 1990). This rule applies here, for there is no means for determining whether the punitive damage award was based on the direct liability theories which would support the award or on the vicarious liability theory which would not support the award.
Civil Rule 51(a) provides that [n]o party may assign as error the giving or the failure to give an instruction unless the party objects thereto ... stating distinctly the matter to which the party objects and the grounds of the objection. We now address whether VECO satisfied this rule with respect to punitive damages for vicarious liability. The superior court gave a substantially similar instruction on punitive damages as that submitted by VECO. [37] This instruction did not inform the jury that it could not impose punitive damages based on vicarious liability for acts of supervisors beyond the scope of their employment. However, VECO objected to the instruction which stated that it could be held vicariously liable for the acts of its supervisors. VECO's counsel referred to its running objection, referring to its prior arguments on this point. VECO clearly asserted its position that it could not be vicariously liable for sexual harassment. But it did not state that this objection applied to punitive damages. In our view, such a statement was not necessary in order to preserve its appellate rights. VECO's objection to vicarious liability was inclusive of all forms of damages. Liability for punitive damages was subsumed within its objection.
The judgment of the superior court is AFFIRMED as to compensatory damages, REVERSED as to punitive damages, and REMANDED for a new trial where the issues will be whether punitive damages should be assessed against VECO and, if so, the amount of such damages. [38]