Korslund v. DYNCORP TRI-CITIES SERVICES

Citation121 Wn. App. 295,121 Wash. App. 295,88 P.3d 966
Decision Date22 April 2004
Docket NumberNo. 21603-9-III.,21603-9-III.
CourtWashington Court of Appeals
PartiesSteven M. KORSLUND, Virginia A. Miller, John Acosta, Appellants, v. DYNCORP TRI-CITIES SERVICES, INC., a Washington corporation, Fluor Daniel Hanford, Inc., a Washington corporation, Respondents.

Victoria L. Vreeland, Gordon, Thomas, Honeywell, Malanca, Peterson, Seattle, WA, for Appellants.

Larry E. Halvorson, Michael B. Saunders, Halvorson & Saunders PLLC, Seattle, WA, for Respondents.

Jeffrey L. Needle, Susan B. Mindenbergs, Seattle, WA, for Amicus Curiae.

KATO, C.J.

Steven M. Korslund, Virginia A. Miller, and John Acosta appeal the dismissal of their claims against DynCorp Tri-Cities Services, Inc., (DynCorp) and Fluor Daniel Hanford, Inc. (Fluor), arising from their allegations of safety violations, mismanagement, and fraud at the Hanford Nuclear Reservation. Mr. Korslund and Ms. Miller contend they were constructively discharged in violation of public policy. All three plaintiffs contend that, even if they were not constructively discharged, they have presented a valid claim for wrongful retaliation. They also contend they have presented facts to make out a claim for breach of promises of specific treatment in specific situations. Finally, if any of their claims are valid, they urge the court to apply Virginia law to permit punitive damages. We affirm in part, reverse in part, and remand.

In October 1996, Fluor became the prime Department of Energy contractor at Hanford, and DynCorp, its subcontractor, took over responsibility for the Fire Systems Maintenance (FSM) group. The plaintiffs were longtime workers in the FSM group. Ms. Miller and Mr. Acosta were journeyman electricians and longtime work partners. Mr. Korslund was the fire systems administrator and the lead engineer in the FSM group. Under DynCorp's management, Jon Finley was manager of the FSM group; his supervisor was Fire Chief Don Good, who in turn reported to Mike Dallas, DynCorp's director of operations.

Beginning in early 1997, Mr. Korslund participated in two investigations that were critical of DynCorp's safety practices. In his weekly reports to management beginning in March 1997, Mr. Korslund referred to safety violations and other work-related problems. He also reported to Mr. Good that some workers were abusing overtime. In August 1997, Mr. Korslund was asked to complete a revised conflict-of-interest questionnaire to reflect his personal relationship with Ms. Miller. DynCorp later rescinded the request.1

Also during the first half of 1997, Ms. Miller and Mr. Acosta became concerned about Mr. Finley's inexperience in the field, about what they believed were instances of mismanagement and fraud in the FSM group, and about abuse of work hours by FSM's pipefitters. On May 28, Mr. Acosta complained to Mr. Finley that a supervisor, Bill Blankingship, was supervising his own wife in the FSM group; he also told Mr. Finley about abuses of overtime.

On July 18, when Mr. Korslund and Ms. Miller arrived a few minutes late for work, Mr. Finley confronted them about it, and Ms. Miller responded that she would try to arrive on time if Mr. Finley would address work-time issues with others in the group. Within the next few days, Ms. Miller submitted a series of four anonymous memos or notices of employee concern, alleging Mr. Finley used government vehicles for personal business, Mr. Blankingship improperly gave tools to friends with Mr. Finley's approval, improper work for another company, and safety violations by Mr. Finley. A fifth anonymous notice, in which Ms. Miller misrepresented herself as an employee in another department who worked 12-hour shifts, complained that employees on 10-hour shifts were unfairly favored. Also on July 18, Mr. Acosta submitted an anonymous notice of employee concern complaining of favoritism and nepotism and alleging one employee was abusing prescription drugs.

On July 25, Mr. Finley appointed Mike Ferry as electrical team lead, replacing Mr. Blankingship. Apparently as part of the change, Mr. Korslund was removed as lead engineer. He viewed this as a demotion, although his work hours and pay grade did not change.

Also on July 25, Mr. Finley wrote in his journal that he had met with Fire Chief Good and DynCorp and Fluor employee relations representatives about his confrontation with Ms. Miller. He wrote that the group concluded he should (1) discipline Ms. Miller for insubordination and threats; (2) develop a list of Ms. Miller's issues and resolve them immediately; (3) obtain information on Ms. Miller's "past incidents by contacting previous HR's"; and (4) set up a meeting with Mr. Dallas, DynCorp President Robert S. Frix, "lawyers and even [C]ongress to appraise [sic] them of the situation." Clerk's Papers (CP) at 2461.

At a meeting with Mr. Good, Mr. Acosta, and a Fluor employee relations representative on August 1, Ms. Miller reported she was being harassed by other workers because she had raised concerns about work-hours abuses. Ms. Miller also reported Mr. Finley had taken a government vehicle home during work hours and, along with Mr. Blankingship, had failed to report an accident involving an FSM vehicle. Mr. Good followed up with Mr. Finley and Mr. Blankingship about these allegations. Apparently in response to one of Ms. Miller's anonymous notices of employee concern, Mr. Finley on August 4 issued a memo outlining his expectations about workers' starting times, breaks, and quitting times. Ms. Miller alleges other employees were upset at her for raising the issue, and she was ostracized, threatened, and harassed by the FSM group's pipefitters. Mr. Acosta witnessed some of this treatment, directed both at him and Ms. Miller. Ms. Miller alleges she told a supervisor, Mr. Blankingship, about the harassment, but nothing changed.

On August 6, Mr. Finley wrote in his journal that he had met with Mr. Dallas and Mr. Frix. He wrote:

Mike [Dallas] said he was not going to meet with Miller. Wanted to meet with entire FSM group and provide clear directions and expectations from him. Bob Frix supports the efforts and said he was aware of issues. Mike wants me to schedule a conference room, schedule the times and have all the people there. Wants me to schedule Don Good or Bill Hayes. He said after the meeting he was going to conduct interviews and meet with some known issue people and provide them with complete management expectations and warn them to change their behavior or get out. He specifically stated to me that after he does this, that I had better manage with authority and provide leadership or get out.

CP at 2305-06. Mr. Dallas met with the FSM group on August 11. He told the workers about the importance of trust, teamwork, and cooperation, and he said the company planned to engage in team-building. After the meeting, an employee relations representative interviewed Ms. Miller and Mr. Acosta.

On August 14, Ms. Miller and Mr. Acosta were told to move their equipment from a Suburban vehicle they had used for years and to begin using a van instead. The Suburban was considered a nicer vehicle, and Ms. Miller and Mr. Acosta believed Mr. Finley wanted it for his own use. In addition, the van had to be cleaned up before it could be used. Ms. Miller and Mr. Acosta viewed the change as harassment or retaliation, and they complained to the employee relations representative. She told them to transfer the tools as time permitted. Mr. Finley later had pictures taken of the Suburban, apparently to show that it had safety problems.

Ms. Miller and Mr. Acosta began working in their spare time to clean up the van so they could move their equipment from the Suburban. Mr. Ferry asked them on September 3 to move their equipment into the van if they had a chance, but they still did not complete the move, even though they had six free hours the next day. On September 5, Mr. Finley had a "very heated discussion" with Ms. Miller and Mr. Acosta about their failure to complete the transfer. CP at 1137. When Ms. Miller and Mr. Acosta told Mr. Finley they had not had time, Mr. Finley accused them of being insubordinate by refusing to do a job.

On September 10, Mr. Finley issued written warnings to Ms. Miller and Mr. Acosta for "extremely serious conduct" and insubordination for failing to move their equipment to and begin using the van. CP at 719, 1094. Both workers filed grievances over the warnings, claiming the incident had been blown out of proportion.

On September 28 or 29, Mr. Finley met with Ms. Miller, Mr. Ferry, and a union steward and informed Ms. Miller she would have to start her shift at 7:30 a.m. rather than 8 a.m. Ms. Miller contends the later starting time was necessary because she has a special-needs child, and Mr. Finley was aware of this. She did not object to the change at the time, she contends, because others were present during the meeting.

Meanwhile, on September 2, Mr. Finley presented to Mr. Korslund a draft of a performance evaluation. Mr. Korslund objected to several portions of the evaluation as inflammatory, and Mr. Finley made changes. Based on the revised evaluation, Mr. Korslund later received a 4.4 percent salary increase.

As part of the initiative announced on August 11, Mr. Dallas met with Mr. Korslund on September 17. Mr. Korslund told Mr. Dallas about overtime abuses and incidents of theft or bribery in the FSM group. After the meeting, Mr. Korslund sent to Mr. Dallas a 15-page memo, in which he raised dozens of concerns regarding safety or unethical practices. In response, Mr. Frix appointed Don Hay to investigate the allegations, under the direction of DynCorp's legal counsel. Mr. Korslund met extensively with and provided supporting documents to Mr. Hay, and he believed Mr. Hay took the allegations seriously and intended to conduct an accurate investigation. Mr. Hay also interviewed numerous DynCorp employees as part of his...

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