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Ace Delivery & Moving, Inc. v. State

Supreme Court of Alaska

May 15, 2015

ACE DELIVERY & MOVING, INC., Appellant,
v.
STATE OF ALASKA, ALASKA STATE COMMISSION FOR HUMAN RIGHTS, PAULA M. HALEY, EXECUTIVE DIRECTOR, ex rel. Janet Wass, Appellees

Page 777

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Frank A. Pfiffner, Judge. Superior Court No. 3AN-14-04688 CI.

Appearances: LeRoy E. DeVeaux, DeVeaux and Associates, APC, Anchorage, for Appellant.

William E. Milks, Assistant Attorney General, and Michael C. Geraghty, Attorney General, Juneau, for Appellees.

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.

OPINION

Page 778

MAASSEN, Justice.

I. INTRODUCTION

The executive director of the Alaska State Commission for Human Rights brought an action on behalf of an employee who alleged that her employer's racist and insensitive remarks created a hostile work environment. The Commission ultimately found that the employee did not suffer a hostile work environment, but it denied the employer's request for attorney's fees. The employer now appeals on the single issue of attorney's fees, arguing that it was entitled to fees as the prevailing party and because it raised affirmative defenses under the Alaska and United States Constitutions. We affirm the Commission's denial of attorney's fees.

II. FACTS AND PROCEEDINGS

Ace Delivery & Moving, Inc. (Ace) hired Janet Wass on a temporary basis to perform data entry. Wass resigned on her third day and later filed a complaint with the Alaska State Commission for Human Rights, alleging that Ace's owner, Hank Schaub, made disparaging comments in her presence about various racial, ethnic, and religious groups. The executive director of the Commission issued a single-count accusation alleging that Ace " created a hostile working environment based on the owner's severe and pervasive derogatory comments and postings regarding race, national origin, and religion" -- directed at Jews, Arabs, Muslims, and Mexicans -- in violation of AS 18.80.220(a)(1).[1] The accusation sought various forms of injunctive relief, including that Ace be required to adopt a nondiscrimination policy and that its " owner, manager, and supervisors" receive training in Alaska human rights law.

Ace asserted affirmative defenses in response, including that Schaub's comments were protected by the free speech guarantees of article I, section 5 of the Alaska Constitution[2] and the First Amendment to the United States Constitution.[3] Ace also argued that because the accusation violated Schaub's constitutional right to free speech, Ace was entitled to attorney's fees under federal law.

The matter was assigned to an administrative law judge with the Office of Administrative Hearings. In an order denying summary judgment to Ace, the administrative law judge rejected Ace's argument that Schaub's speech was constitutionally protected. Citing federal cases, the administrative law judge observed that " [s]peech in the ...


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