## Facts

- Insightful Corporation, a publicly traded software company, hired Wajih Alaiyan as an at-will employee to manage its consulting-services division.
- During his employment, Alaiyan believed Insightful was recognizing revenue prematurely in its financial statements, which he thought made the company appear more profitable than it was.
- Alaiyan raised his concerns internally with company management on multiple occasions.
- Revenue-recognition standards for software companies were shown in the record to be complex and to allow managerial judgment in application; the company’s SEC disclosures described revenue recognition as depending on multiple factors and business judgment, with revisions made as circumstances changed.
- Less than one year after he was hired, Insightful terminated Alaiyan, stating poor performance as the reason.
- Alaiyan sued in King County Superior Court for wrongful discharge in violation of public policy, alleging he was fired in retaliation for his internal complaints about the company’s revenue-recognition practices.
- The parties filed cross-motions for summary judgment. The trial court granted summary judgment to Insightful and dismissed Alaiyan’s claim.
- Alaiyan appealed to the Washington Court of Appeals, Division One.

## Issues

1. Whether Washington’s public-policy wrongful-discharge tort protects an at-will employee who internally complains about the timing of revenue recognition at a publicly traded software company.
2. Whether Alaiyan identified a clear mandate of public policy, grounded in authority addressing the specific accounting-timing conduct at issue, sufficient to defeat summary judgment.

## Decision

- The Washington Court of Appeals, Division One, affirmed the superior court’s summary judgment for Insightful.
- The court accepted the employer’s narrower framing of the dispute and resolved the case on whether a clear, well-defined public policy governed the specific revenue-recognition timing concerns raised by Alaiyan.
- The court held Alaiyan failed, as a matter of law, to identify a clear mandate of public policy that specifically applied to the timing decisions he challenged, particularly given the discretion recognized in the relevant accounting framework.
- Because the “clear mandate” element was not satisfied, Alaiyan’s wrongful-discharge claim could not proceed.

## Legal Principles

- Washington recognizes a limited tort claim for wrongful discharge in violation of public policy as an exception to at-will employment.
- To proceed, an employee must identify a clear mandate of public policy and connect the discharge to conduct that implicates that policy; broad statements favoring lawful or ethical conduct are not enough without a specific, well-defined policy source.
- Courts may evaluate the policy question at a level of specificity tied to the facts presented; where the challenged conduct involves accounting judgment rather than a bright-line prohibition, clarity is harder to establish.
- Internal complaints can support a public-policy claim only when the employee can tie the complaint to an articulated, specific public-policy mandate that would be threatened if employers could retaliate for the complaint.

## Conclusion

The Court of Appeals affirmed summary judgment for Insightful because Alaiyan’s internal objections to revenue-recognition timing did not rest on a clearly defined public-policy mandate addressing the specific conduct he challenged, and Washington’s public-policy wrongful-discharge tort requires that level of clarity to protect an at-will employee from termination for such complaints.


Alaiyan v. Insightful Corporation, 128 Wash. App. 1002 (2005)