Blog Post

Johannsen v. Nike Inc., No. 08-35040 (9th Cir. June 2, 2009)

Posted by: Paul Mollica
June 02, 2009
Topic: Daily Developments in EEO Law

A bit off-topic, but did you know that Montana has (by statute) reversed the presumption of pure at-will employment? Here's an unpublished Ninth Circuit case applying the law, affirming a bench verdict for the employee.

Johannsen v. Nike Inc., No. 08-35040 (9th Cir. June 2, 2009): Montana's Wrongful Discharge from Employment Act, MONT. CODE ANN. § 39-2-901 et seq., reverses the common American rule and directs (subject to statutory exceptions) that employers must have just cause to fire employees. Here, the employee, a sales representative, claimed that she was constructively discharged without just cause when the company expanded her territory so far that she could not reasonably cover it. She won at trial and Nike appealed the denial of judgment as a matter of law.

The Ninth Circuit affirms. The Act defines constructive discharge as:

"[T]he voluntary termination of employment by an employee because of a situation created by an act or omission of the employer which an objective, reasonable person would find so intolerable that voluntary termination is the only reasonable alternative. Constructive discharge does not mean voluntary termination because of an employer's refusal to promote the
employee or improve wages, responsibilities, or other terms and conditions of employment." [Emphasis supplied.]

The district court found that Nike "admitted that [Johannsen's] job as assigned . . . was not ‘doable' and that her territory had to be adjusted, but there was no indication at trial that [Nike] was making meaningful efforts to work with Johannsen to redesign a territory that was ‘doable' within a reasonable time frame." Although Nike argued on appeal that the plaintiff still managed to cover the expanded territory, and even rated herself "highly successful" on a self-evaluation form. But as the panel holds:

"There is no evidence that she received any feedback from her employer on her performance
with respect to the expanded territory, and the final self-evaluation form that she submitted was responsive, at least in large part, to the fiscal year preceding her expanded assignment, i.e., it is not at all clear that Johannsen was assessing her performance during the Fall 2005 sales season."

The panel also affirmed the finding that the employee had no reasonable alternative to resigining, when Nike refused to negotiate with her or respond to her complaints until after it had already accepted her resignation. Finally, the panel agrees that this case did not fall within the "terms and conditions" language, because -- in contrast to failing to improve conditions -- Nike positively worsened the plaintiff's working conditions: "The Act's 'terms and conditions' language bars claims predicated on an employer's failure to improve conditions above a status quo baseline; it does not exclude claims alleging that conditions deteriorated to a point that a reasonable person would find them intolerable."