Understanding Alaska's Implied Covenant of Good Faith and Fair Dealing in Employment

Alaska is unique when it comes to workers' rights. While it is true that the state generally follows the rule of "at-will" employment, there is a powerful legal shield protecting workers in Anchorage, Fairbanks, and Juneau. This shield is known as the implied covenant of good faith and fair dealing. Essentially, this legal doctrine requires employers to treat their employees fairly and honestly.

If you suspect you were fired for unfair, malicious, or deceptive reasons, you may have a valid wrongful termination claim. Navigating employment law can be complicated, but you do not have to do it alone. We highly recommend browsing our US Attorney Directory to find an experienced Alaska employment lawyer. A local attorney can review the details of your firing and help you fight for the compensation you deserve.

How the Covenant Overrides At-Will Status

Most workers in the United States are "at-will," meaning an employer can fire them at any time, for almost any reason, without notice. However, Alaska courts have established that the implied covenant of good faith and fair dealing applies to all employment contracts, including at-will agreements. This covenant acts as a crucial exception to the at-will rule.

Under Alaska common law, your employer is legally forbidden from acting in a way that destroys your right to receive the benefits of your employment. This means they cannot fire you simply to cheat you out of something you earned, or fire you in a way that is outrageously unfair. The courts look at this covenant in two distinct ways: subjective bad faith and objective bad faith.

Subjective Bad Faith (Malicious Intent)

Subjective bad faith occurs when an employer fires an employee with actual malice or a bad motive. This is the "personal grudge" or "ulterior motive" category of wrongful termination. For example, if a manager in Wasilla fires you solely out of personal spite, or to cover up their own illegal activities, that is subjective bad faith.

Objective Bad Faith (Procedural Unfairness)

Objective bad faith does not require malice. Instead, it happens when an employer acts unfairly by failing to follow standard procedures or treating an employee differently than everyone else. For instance, if your company in Ketchikan has a strict policy that requires three written warnings before a worker is fired, but they fire you on the spot for a minor mistake, they have acted in objective bad faith.

This also applies to disparate treatment. If five employees are routinely late to work, but you are the only one who gets fired for it, the employer's actions are objectively unfair. You did not receive the same procedural fairness as your coworkers, which is a direct violation of the implied covenant.

Notable Alaska Supreme Court Precedents

The Alaska Supreme Court, Anchorage has established a comprehensive framework defining how the implied covenant protects workers. Key rulings that govern this doctrine include:

• Mitford v. de Lasala, 666 P.2d 1000 (AK Supreme Court 1983): The foundational ruling establishing that an implied covenant of good faith and fair dealing exists in at-will employment contracts, barring employers from firing workers to deprive them of earned compensation or bonuses.
• ARCO Alaska, Inc. v. Akers, 753 P.2d 1150 (AK Supreme Court 1988): Clarified that breach of the implied covenant is strictly a contract claim rather than an independent tort, limiting recovery to contract damages like back pay and benefits while precluding tort damages such as emotional distress or punitive damages absent an independent tort.
• Jones v. Central Peninsula General Hospital, 779 P.2d 783 (AK Supreme Court 1989): Confirmed that an employer's failure to follow its own written policies, manuals, or standard operating procedures constitutes a breach of the objective prong of the covenant.
• Luedtke v. Nabors Alaska Drilling, Inc., 834 P.2d 1220 (AK Supreme Court 1992): Formally cemented both the subjective standard (prohibiting malice or personal ill-will) and the objective standard (requiring basic procedural fairness and adherence to public policy) in Alaska wrongful termination disputes.

Step-by-Step: What to Do If You Were Fired in Bad Faith

If you believe your employer breached the implied covenant of good faith and fair dealing, you must take immediate action to protect your legal rights.

• Step 1: Request Your Personnel File. Under Alaska law, you have the right to view or copy your personnel file. Submit a written request to human resources to get your performance reviews and disciplinary history.
• Step 2: Save All Communications. Preserve emails, text messages, and voicemails that show your employer's true motives. If they praised your work on Monday and fired you on Tuesday, that is vital evidence.
• Step 3: Document the Financial Motive. If you were fired right before a bonus or commission, gather your compensation plan and sales records to prove what you were owed.
• Step 4: Consult an Employment Lawyer. Wrongful termination cases require proving intent or procedural failures. An attorney from our directory can guide you through the process of filing a lawsuit.

Frequently Asked Questions (FAQ)