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Southwest Gas v. Vargas8/24/1995
urisdictions have adopted the standard that is implicit in our prior holdings. In Braun v. Alaska Com. Fishing & Agr. Bank, 816 P.2d 140 (Alaska 1991), a bank's chief lender and the state government, concerned with the bank's financial stability, placed pressure on the bank to become more frugal. The bank's approach included increasing the loan volume handled by each loan officer, and Braun, a loan officer, was terminated as a consequence of the reorganization. Braun sued the bank for breach of employment contract, and the superior court granted summary judgment in favor of the bank, concluding that economic necessity constituted good cause for Braun's termination. On appeal, Alaska's high court held that "`a discharge for "just cause" is one which is
[111 Nev. 1064, Page 1077]
not for any arbitrary, capricious, or illegal reason and which is one based on facts (1) supported by substantial evidence and (2) reasonably believed by the employer to be true.'" Id. at 142 (quoting Baldwin v. Sisters of Providence in Washington, Inc., 769 P.2d 298, 304 (Wash. 1989)). The court concluded that, assuming the existence of an employment contract terminable only for cause, " he record shows that no genuine issue of material fact existed as to the Bank's economic motivation for Braun's termination, or its belief that such economic need existed." Id. Good cause was therefore present on the record as a matter of law. Baldwin (quoted in Braun) is even more apropos, because it dealt with employee misconduct, the occurrence of which was in dispute. In Baldwin, a respiratory therapist at a hospital was terminated following alleged sexual abuse of a patient and an investigation into the charges. The therapist prevailed at trial on a breach of employment contract claim, but on appeal to the Supreme Court of Washington, the judgment was reversed:
In this case, the parties agree sexual abuse of a patient is just cause for termination. An instruction was given to this effect. Therefore, the only issue is who makes the requisite factual determination of just cause. This question has not been decided by this court. . . . . . . . n employer's agreement to restrict discharges to those supported by just cause should not be followed by a further judicial implication which takes the determination of just cause away from the employer. . . . . . . . The reasoning of the Oregon Supreme Court [in Simpson] is persuasive. The employer unilaterally decided to place the restriction of just cause upon its termination decisions. This just cause provision, by its terms, had no restrictions. . . . As defendants argue, a standard which checks the subjective good faith of the employer with an objective reasonable belief standard strikes a balance between the employer's interest in making needed personnel decisions and the employee's interest in continued employment. See [Thompson v. St. Regis Paper Co., 685 P.2d 1081 (1984) 3]. A contrary result could encourage employers to remove such provisions from their handbooks and render the inroads made by Thompson ineffectual.
[111 Nev. 1064, Page 1078]
Baldwin, 769 P.2d at 303-04 (emphasis supplied).
In agreement with the standard as set forth in Baldwin and Braun, we hold that a discharge for "just" or "good" cause is one which is not for any arbitrary, capricious, or illegal reason and which is one based on facts (1) supported by substantial evidence, and (2) reasonably believed by the employer to be true. 4 Of course, unsubstantiated and clearly baseless allegations of fact against the employer may not be sufficient to overcome summary judgment; however, in the face of adequate averments of fact tending to show a lack of good faith, a c
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