The Utah Supreme Court has overturned a lower-court judgment of $285,000 to three former Nordstrom employees, who claimed they were wrongfully terminated by the department store.
A unanimous opinion released Friday reversed a 3rd District Court decision in favor of Dennis Knapp, who had been the general manager of the Crossroads Plaza Nordstrom, and Barbara Knapp, who had worked as a women's clothing buyer for the same store and is Knapp's wife.The case of a third former employee at the downtown Nordstrom, Cathy Brehany, was remanded back to 3rd District Court. Dennis Knapp had been awarded $150,000; Barbara Knapp, $80,000; and Brehany, who also worked as a buyer, $55,000.
Nordstrom had appealed the judgment, which was awarded for wrongful termination of employment based on breach of an implied covenant of good faith and fair dealing.
The Knapps and Brehany had cross-appealed the lower court's dismissal of their claims for breach of contract and defamation, filed after a company official indicated that the dismissals were for drug-related activities.
In Utah, the opinion stated, truth is an absolute defense to an action for defamation, and both Knapps "admitted at trial that they had used illegal drugs while employed by Nordstrom and while engaged in their employment duties."
Brehany, however, had made no such admission, according to the opinion, "and the evidence relating to whether she had been involved with illicit drugs was, at best, conflicting."
But the issue has been waived, the Supreme Court justices found, because Brehany failed to allege the statement was made with malice in her amended complaint.
Brehany's case was sent back to the lower court to determine whether she committed an act that would have subjected her to immediate discharge without warning.
The Nordstrom employee manual, which employees are required to sign, provides that an employee may be immediately discharged for using drugs or alcohol in the store or for violating any criminal law.
The high court found that the Knapps "admitted use of narcotics justified summary dismissal under the terms . . . Their use of drugs was directly prohibited and it also constituted a crime."