The Washington State Supreme Court issued a decision in Karstetter v. King County Correction Guild on Friday July 18, 2019 protecting the right of in-house counsel to bring breach of contract claims and wrongful discharge claims. The decision also extends protected activity to those who assist in whistleblower investigations, and reinforces the limited application of the Peritt model.
The King County Department of Adult and Juvenile Detention (“the Guild”) and the Law Office of Jared Karstetter entered into an employment contract in 2011. The contract had a term of five years and required that the Guild have just cause to terminate Karstetter. Karstetter was an employee of the Guild. In March 2016, the King County Ombudsman’s Office contacted Karstetter and requested the production documents to investigate a whistleblower complaint filed by a Guild officer. Karstetter complied and was terminated from employment for revealing client confidences. He sued the Guild and claimed inter alia breach of contract and wrongful discharge in violation of public policy. The trial court granted partial summary judgment against Karstetter. The Court of Appeals dismissed the remaining claims relying upon Comment 4 to RPC 1.16(a), which provides that “[a] client has the right to discharge a lawyer at any time, with or without cause, . . . .” The Court of Appeals also ruled that Karstetter was not entitled to whistleblower protection because he was not the “whistleblower.” The Supreme Court granted review and reversed.
The Supreme Court held that within the limited context of attorneys who are also employees RPC 1.16(a) does not prevent an attorney from bringing a suit against an employer for either breach of contract or wrongful discharge. “Solely in the narrow context of in-house employee attorneys, contract and wrongful discharge suits are available, provided these suits can be brought without violence to the integrity of the attorney-client relationship.”
In reference to the whistleblower claim, the Court held ‘[p]rotecting only those who directly reveal information while sacrificing others who assist them would unjustly narrow the scope of whistle-blower statutes and caution future whistle-blowers to think twice before helping other whistle-blowers.” The Court reaffirmed the “commonsense notion that employers should abide by the law and the intrinsic importance of fairness and justice in protecting individuals trying to ‘do the right thing.’”