Korslund v. Dyncorp Tri-Cities, 121 Wash. App. 295, 88 P.3d 966 (Div. 3, 2004)

In this case, Division Three reviewed the dismissal of claims brought by Steve n Korslund, Virginia Miller and John Acosta against Dyncorp Tri-Cities Services, Inc. and Fluor Daniel Hanford, Inc., arising from their allegations of safety violations, mismanagement and fraud at the Hanford Nuclear Reservation.  Korslund and Miller alleged they were constructively discharged in violation of public policy.  All three asserted that they had presented a valid claim for wrongful retaliation and of a claim for breach of promises for specific treatment in specific situations.  They further contended that if their claims are valid, the court should apply Virginia law and award punitive damages.   

The court’s lengthy opinion includes a discussion of several interesting issues.  

The court analyzed the circumstances under which it can be concluded that an employee has indeed left his employment for purposes of asserting a constructive discharge claim.  In this case, one of the plaintiffs was deemed to be still employed and thus not discharged, constructively or otherwise.   

The court discussed what constitutes a “clear mandate of public policy” and concluded that as to Korslund there was a genuine issue of material fact regarding whether he was constructively discharged in violation of a clear mandate of public policy.  

The court also addressed at some length circumstances by which an employer may be deemed, via personnel policies, manuals, handbooks, and related documents, to have promised specific treatment in specific situations so as to create a contract-based claim.  The court concluded that based on the language in an ethics booklet Dyncorp distributed each year, there was a triable issue regarding the parties’ intent to modify the at-will relationship. 

The court rejected the plaintiffs’ assertion that Virginia law (which allows for punitive damages) should apply.  As such, there could be no claim for punitive damages.  The court explained that Washington law bars such damages except where authorized by statute.  This was in conflict with Virginia law, which allows for punitive damages where the defendant’s conduct was “willful and wanton.”  Because there was an actual conflict of law, the court analyzed which state had the "most significant relationship" to the particular issue.  The court readily concluded it was Washington , because the alleged injuries and most of the alleged conduct occurred in Washington and the defendants are incorporated and have their principal place of business in Washington.  The fact that Dyncorp’s parent company was a Virginia corporation with headquarters in Virginia did not suffice, especially since the parent company was not a party to the litigation.  The court stated that, while a punitive award against a subsidiary could have a deterrent effect on the parent, Virginia’s alleged interest in such an indirect punishment is less compelling than Washington’s interest in limiting punitive damages and the significant contacts “overwhelmingly” favored applying Washington law.