EMPLOYER INVESTIGATIONS

Fired Red Dog supervisor gets his day in court

A case involving the Red Dog Mine emphasizes the importance of conducting thorough and fair internal investigations and carefully comparing an employee's misconduct to similarly situated employees before making a termination decision.

Facts

Teck Cominco Alaska, Inc., which operates the Red Dog Mine, fired Maurice Mitchell from his job as a warehouse supervisor because he allegedly sexually harassed a contractor's employee and lied during the investigation.

Mitchell had taken an interest in a female employee of a mine contractor and asked a friend of his to approach her to see if she might be interested in getting to know him. In an exchange of e-mails with his friend, Mitchell mentioned the possibility of summer work in the warehouse and that he might be able to get the woman a job. His friend talked to the woman and told her that Mitchell was interested in her, but got no response. The woman never applied for work at the mine.

Mitchell pressed his friend to make contact with the woman again, and the friend agreed, this time leaving a note in her dormitory. After seeing the note, the woman complained to her supervisor.

The interest Mitchell had expressed in the woman eventually came to the company's attention. One day, when he was about to fly home after his rotation, Teck Cominco's HR manager and a superintendent called him into a meeting and asked him about the series of events with the female employee. Mitchell denied asking his friend to approach the woman "about possibilities of a summer job and of hooking up."

At the conclusion of its investigation, Teck Cominco fired Mitchell. The company cited the following three reasons for its termination decision:

1. the allegations that Mitchell tied a job offer to a personal relationship had "merit";
2. he had been "considerably less than candid" when asked about the allegations; and
3. even if the allegations weren't true, his "willingness to misrepresent facts to the detriment of [his] employer" was cause for discipline.

Mitchell, who is African American, sued Teck Cominco, claiming he was terminated because of his race, in violation of the Alaska Human Rights Act. He also claimed breach of the implied covenant of good faith and fair dealing. Teck Cominco immediately asked the court to dismiss the discrimination claim. Several months later, the trial court dismissed the discrimination claim, ruling that Mitchell hadn't shown that he was treated "less favorably than other similarly-situated employees outside his protected class."

Soon after, Teck Cominco asked the court to dismiss Mitchell's good-faith and fair dealing claim, arguing that his termination was based on a good-faith investigation and the court had already ruled that he wasn't treated differently than similarly situated employees. The trial court granted the company's request and dismissed the remaining claims. Mitchell appealed to the Alaska Supreme Court.

Alaska Supreme Court's ruling

Comparator evidence in discrimination cases. The supreme court reversed the trial court's dismissal of Mitchell's discrimination claim. The superior court had ruled that "employees who are situated similarly to Mr. Mitchell are non-African- American supervisors or managers determined by Teck Cominco to have violated the company's sexual harassment policy." The supreme court said that was an unduly narrow standard that would allow an employer to "engage in blatant discrimination by never determining that a class of employees violate[d] company policy, but always escape a finding of discrimination on that basis."

The Alaska Supreme Court ruled that in a discrimination case, the employee need only "establish that he was treated differently from similarly-situated persons whose conduct was comparable in all [significant] respects." That means that the comparator need only have engaged in similar conduct ― regardless of the employer's findings about the nature of the conduct. In other words, the offenses don't have to be identical; they only have to be of "comparable seriousness."

Unfair investigation supports good-faith and fair dealing claim. The court then addressed Mitchell's good-faith and fair dealing claim. Mitchell argued that Teck Cominco breached the covenant by treating him unfairly during the sexual harassment investigation and disciplining him more harshly than other employees. In contrast, Teck Cominco argued that it conducted a reasonable investigation and reached a conclusion based on that investigation, which shouldn't be second-guessed by the court.

The supreme court didn't resolve the issue. Instead, it sent it back to the trial court because there was disputed evidence about the adequacy of the company's internal investigation. The court noted that there was evidence that Mitchell's interview lasted no more than five minutes and that he was never told he was accused of offering a woman a job in exchange for sex or that he was even being investigated for sexual harassment. Thus, according to the court, the handling of the investigation created an issue about whether it was conducted in a fair and reasonable manner.

The court also ruled that there was disputed evidence regarding whether Mitchell was treated more harshly than other employees. Mitchell pointed to the example of a white supervisor who had sexually harassed a contractor's employee and was only given a letter of warning. Teck Cominco said that evidence shouldn't be relevant because it occurred after Mitchell was fired. The supreme court ruled that the fact that the incident happened after Mitchell was fired doesn't make it irrelevant. In addition, the treatment of the white supervisor raised the possibility that Mitchell was treated differently than a similarly situated supervisor. Mitchell v. Teck Cominco Alaska, Inc. (Sept. 26, 2008).

Lessons learned

This case demonstrates the importance of carefully considering how other employees who committed similar offenses have been treated when disciplining or discharging employees. And that includes all employees, not just employees of a different race or sex, because under Alaska law the "disparate treatment" principle is part of the covenant of good faith and fair dealing.

This case also illustrates the importance of conducting thorough and fair internal investigations. In Holland v. Union Oil of California, the Alaska Supreme Court ruled that a discharged employee couldn't challenge his discharge when his employer based its decision on a good-faith investigation. In this case, however, the court seems to say that an unfair investigation is a stand-alone breach of the covenant of good faith and fair dealing.