444 P.3d 1185
Wash.2019Background
- Jared Karstetter was long-time counsel to the King County Corrections Officers Guild under successive employment agreements (including a 2012–2016 contract) that provided for just-cause termination and required him to limit outside clients.
- In 2016 Karstetter aided an ombudsman inquiry into member parking reimbursements after his vice-president directed him to cooperate; the Guild obtained outside counsel advice and terminated Karstetter immediately without contractually required remedial steps.
- Karstetter and his wife sued the Guild alleging breach of contract and wrongful discharge in violation of public policy (including whistleblower protection); the trial court allowed those claims to proceed in part.
- The Court of Appeals reversed and directed dismissal of the breach-of-contract and wrongful-discharge claims; the Washington Supreme Court granted review.
- The Supreme Court held that in-house employee attorneys may, in a narrow context, bring contract and wrongful-discharge suits against client-employers so long as the litigation can proceed without undermining the attorney-client relationship; it reversed the Court of Appeals and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RPC 1.16 bars an in-house attorney from suing a client-employer for breach of contract and wrongful discharge | Karstetter: RPC 1.16 (client may discharge attorney) does not preclude employee-attorneys from employment claims given their unique status | Guild: RPC 1.16 protects a client's absolute right to discharge and thus forecloses damages and wrongful-discharge remedies | Held: RPC 1.16 does not automatically bar in-house attorney employment suits; such suits are allowed narrowly if they do not violate the attorney-client relationship |
| Whether in-house attorneys should be treated differently than traditional private-practice lawyers under the RPCs | Karstetter: in-house attorneys face distinct economic dependence and role duties, so rigid application of RPC 1.16 is unfair | Guild: RPCs apply uniformly to all licensed attorneys and preserve client trust and public policy | Held: In-house attorneys have unique employment expectations; rules drafted for traditional practice do not foreclose employment claims here |
| Whether Karstetter pleaded a whistleblower-based wrongful discharge claim | Karstetter: he assisted an investigation into employer wrongdoing and was fired for cooperating, satisfying Diocomes whistleblower category | Guild: Karstetter did not act to further public good and therefore is not protected | Held: Pleading was sufficient; assisting an investigation can qualify for whistleblower protection under Diocomes at pleading stage |
| Whether attorney fees were properly awarded at this interlocutory stage | Karstetter: sought fees under RCW 49.48.030 after prevailing on appeal | Guild: no judgment for wages or salary yet, so fees are premature | Held: Request for attorney fees is premature and denied |
Key Cases Cited
- Kinney v. Cook, 159 Wash.2d 837 (standard for CR 12(b)(6) dismissal)
- Tenore v. AT&T Wireless Servs., 136 Wash.2d 322 (pleading standards referenced)
- LK Operating, LLC v. Collection Grp., LLC, 181 Wash.2d 48 (RPC violations may render contracts unenforceable; no per se insulation)
- Gen. Dynamics Corp. v. Superior Court, 7 Cal.4th 1164 (treating in-house counsel differently and recognizing wrongful discharge claims)
- Kimball v. Pub. Util. Dist. No. 1 of Douglas County, 64 Wash.2d 252 (traditional rule allowing client to discharge attorney without liability)
- Dicomes v. State, 113 Wash.2d 612 (four categories of protected conduct including whistleblowing)
- GTE Prods. Corp. v. Stewart, 421 Mass. 22 (permitting in-house counsel retaliatory discharge action)
- FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 180 Wash.2d 954 (reiterating CR 12(b)(6) standard)
- Nordling v. N. States Power Co., 478 N.W.2d 498 (permitting in-house counsel suits if they don't violate client confidentiality)