STATE AND LOCAL GOVERNMENT EMPLOYEES: RIGHTS AND REMEDIES UNDER THE STATE PERSONNEL ACT

1
STATE AND LOCAL GOVERNMENT EMPLOYEES RIGHTS AND
REMEDIES UNDER THE STATE PERSONNEL ACT

• M. Jackson Nichols
• Allen Pinnix, P.A.

2
Navigating the StatePersonnel Act

• Questions to determine
• Is this person covered by the SPA?
• Is the complained of behavior actionable?
• What provisions apply?

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Where are we going today?

• Examination of who is covered and whos not under
  the SPA
• Types of Claims covered
• Where to Litigate the Claim
• Tips for Litigating the Claim

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Where are we going, contd

• Contents for Petitions for Judicial Review
• A discussion of Ancillary Legal Claims

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Navigating the State Personnel Act Whos
Covered?

• Career State Employees
• Some Local Government Employees
• Area mental health, developmental disabilities,
  and substance abuse authorities.
• Local social services departments.
• County health departments and district health
  departments.
• Local emergency management agencies that receive
  federal grant-in-aid funds.
• Some County Employees deemed so by Commissioners

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Navigating the State Personnel Act Whos Not?

• Exemptions to the Act, e.g, policymaking exempt
  positions
• Designated employees, e.g, constl officers,
  judicial employees, members of Boards,
  officers/employees of the G.A., employees of the
  governor/lt. gov.
• UNC employees, community college employees and
  local school employees

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Types of Claims Covered

• Just Cause Dismissals
• Discrimination Claims
• Whistleblower Claims
• Denial of veterans preference.
• Denial of promotion for failure to post or
  failure to give priority consideration for
  promotion or reemployment to a career state
  employee.
• Denial of an employees request for removal of
  allegedly inaccurate or misleading information
  from the employees personnel file.

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Just Cause Discipline

• N.C.G.S. ? 126-35 provides
• No career employee subject to the State
  Personnel Act shall be discharged, suspended or
  demoted for disciplinary reasons, except for just
  cause.
• The State Personnel Commission may adopt,
  subject to the approval of the Governor, rules
  that define just cause

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Just Cause Discipline, contd

• State Personnel Commission Defines Just Cause at
  25 N.C.Admin.Code 1J.0604
• (a) When just cause exists the only disciplinary
  actions provided for under this Section are
• (1) Written warning
• (2) Disciplinary suspension without pay
• (3) Demotion and
• (4) Dismissal.

10
Just Cause Discipline, contd

• Two bases for discipline or dismissal under
  126-35
• Discipline or dismissal imposed on the basis of
  unsatisfactory job performance, including grossly
  inefficient job performance.
• Discipline or dismissal imposed on the basis of
  unacceptable personal conduct.

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Just Cause, contd

• Unsatisfactory Job Performance
• Employee shall be furnished written statement
  setting forth acts/omissions that are basis for
  disciplinary action

• Unacceptable Personal Conduct
• Employee may be suspended without warning for
  personal conduct detrimental to State service

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Just Cause, contd

• Unsatisfactory Job Performance
• Written Statement must be given BEFORE
  disciplinary action taken

• Unacceptable Personal Conduct
• Written Statement may be given AFTER suspension

13
Just Cause, contd

• Unsatisfactory Job Performance
• Includes things such as careless errors, poor
  quality work, and untimeliness
• SP Manual indicates used to address
  performance-related inadequacies for which a
  reasonable person would expect to be notified of
  and allowed an opportunity to improve.

• Unacceptable Personal Conduct
• Includes insubordination, reporting to work under
  the influence of drugs or alcohol, and stealing
  or misusing State property.
• SP Manual indicates imposed for those actions for
  which no reasonable person could, or should,
  expect to receive prior warnings

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Just Cause, contd

• In both circumstances
• Employee given 15 days from delivery to of
  Written Statement to appeal to head of department
• If disagrees with result of internal grievance,
  may appeal to OAH

15
Caselaw involving Just Cause

• Ritter v. N.C. DHR,
• Held alcoholism is not a defense to a just cause
  dismissal.
• Eury v. N.C.ESC,
• Off-duty criminal conduct can be a just cause
  basis for dismissal.

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Caselaw involving Just Cause

• Walker v. N.C.DHR,
• For Just Cause an agency is bound to make a
  showing that the employee has not performed with
  reasonable care, diligence and attention.
  Failure to fulfill certain quotas and complete
  certain tasks to the complete satisfaction of a
  supervisor is not enough. The agency must show
  that these quotas and job requirements were
  reasonable, and if so, that the employee made no
  reasonable effort to meet them.

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Discrimination Claims by Employees

• N.C.G.S. 126-34.1(a)(2) provides for claims
  arising under
• Denial of Promotion, Transfer or Training
  because of age, sex, race, color, national
  origin, religion, creed, political affiliation or
  handicapping condition

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Discrimination Claims by Employees

• N.C.G.S. 126-34.1(a)(2) provides for claims
  arising under
• Demotion, reduction in force or termination in
  retaliation for employees opposition to alleged
  discrimination based on account of employees
  age, sex, race, color, national origin, religion,
  creed, political affiliation or handicapping
  condition

19
Cases Arising under Discrimination Provisions of
the SPA

• Dept. of Correction v. Gibson, 308 N.C. 131, 301
  S.E.2d 78 (1983)
• NC Supreme Court adopts the "burden shifting"
  scheme set out in the McDonnell Douglas
• The Gibson Court states that the ultimate purpose
  of N.C. Gen. Stat. 126-36 and Title VII is the
  same. Pursuant thereto, "we look to federal
  decisions for guidance in establishing
  evidentiary standards and principles of law to be
  applied in discrimination cases."

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Cases Arising under Discrimination Provisions of
the SPA

• Enoch v. Alamance County Dep't of Soc. Servs.,
  164 N.C. App. 233 595 S.E.2d 744 2004 N.C. App.
  LEXIS 810 (2004)
• Female, African-American social services employee
  with 20 years experience alleges discrimination
  in the promotion of a white male with 8 years
  experience.
• Employer testifies that she was looking for a
  visionary who was progressive and flexible.
• Employer argued that the employee lacked
  initiative

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Cases Arising under Discrimination Provisions of
the SPA

• Enoch RESULT
• Court found there was substantial evidence in the
  record that the employee lacked initiative, that
  her communications skills and ability to work
  effectively within the agency were limited, and
  that she did not extend herself beyond the agency
  into the community.
• There was no due process violation by the fact
  that the person who made the hiring decision also
  gave final approval to the decision that she had
  not discriminated.

22
Whistleblower Claims under the State Personnel Act

• 126-34.1(a)(3) addresses
• Basis for a contested case hearing at OAH
• Based on Retaliation against an employee for
  protesting a violation of Equal Opportunity laws.

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Whistleblower Claims under the State Personnel Act

• NCGS 126-86 provides
• a civil cause of action in Superior Court
• remedy for injunctive relief
• For discharging, threatening or otherwise
  discriminating against a State employee regarding
  the employees compensation, terms, conditions,
  location or privileges of employment

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Whistleblower Claims under the State Personnel Act

• Because the employee
• reports or is about to report a violation of
  State/federal law, fraud, misappropriation of
  state resources, substantial and specific danger
  of public health and safety or gross
  mismanagement
• refuses to carry out a directive which
  constitutes a violation of State or federal law,
  rule or regulation, or poses a specific danger to
  the public health and safety.

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WARNING

• Case law developments have shown this area to be
  changing and fraught with procedural dangers

26
Swain v. Efland, 145 N.C. App. 383 (2001). The
History

• Court of Appeals holds that an aggrieved state
  employee (or former state employee) may choose to
  pursue a whistleblower claim pursuant to N.C.
  Gen. Stat. 126-85 in either superior court or
  the Office of Administrative Hearings, but not
  both.

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The History, contd

• Pertinent Facts of Swain
• The plaintiff first filed an action in Superior
  Court claiming retaliation under the
  Whistleblower Act and wrongful discharge in
  violation of public policy and racial
  discrimination in violation of N.C. Gen. Stat.
  143-422.2.
• About three weeks after filing his action in
  Superior Court, the plaintiff filed a separate
  petition for contested case in the Office of
  Administrative Hearings alleging that his
  suspension was without cause and was the result
  of racial discrimination and retaliation.

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The History, contd

• Pertinent Facts of Swain
• Trial for the contested case in the Office of
  Administrative Hearings preceded the summary
  judgment hearing in the civil action filed in
  Superior Court
• The ALJ issued a Recommended Decision concluding
  that the defendant had just cause to discipline
  plaintiff for unacceptable personal conduct and
  the termination was NOT the result of illegal
  discrimination or retaliation.

29
The History, contd

• Pertinent Facts of Swain
• Defendant argued in Superior Court that the
  plaintiff was precluded from bringing his
  Whistleblower action because the plaintiff had
  already brought such action in the OAH
• The Court of Appeals found that plaintiff chose
  to pursue an administrative action under the
  Whistleblower Act, the administrative law judge
  ruled against the plaintiff and the plaintiff did
  not seek judicial review.

30
The History, contd

• The Court reasoned
• to allow plaintiff two bites of the apple
  could lead to the possibility that different
  forums would reach opposite decisions as well as
  engender needless litigation.
• Court held that plaintiff may choose to pursue
  his Whistleblower claim in either forum but not
  both.
• Court further noted that plaintiffs complaint
  was fatally defective since he failed to allege
  that the exhaustion of his administrative remedy
  would be futile.

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Prima Facie Case under 126-85 from 2002 - 2005

• the plaintiff's engagement in a protected
  activity,
• an adverse employment action occurring subsequent
  to the protected activity, and
• the plaintiff's engagement in the protected
  activity was a substantial or motivating factor
  in the adverse employment action.
• Wells v. State DOC, 152 N.C. App. 307, 567 S.E.2d
  803 (2002).

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Recent Developments

• Newberne v. Crime Control Pub. Safety, 359 N.C.
  782, 618 S.E.2d 201, reversing 168 N.C. App. 87,
  606 S.E.2d 742 (2005)
• FACTS
• State Trooper with the SHP arrived at an incident
  scene after the arrest had been completed.
• When he arrived a fellow trooper approached the
  Plaintiff and was rubbing one of his hands.
• The trooper explained that he had jammed his hand
  after hitting suspect.
• Plaintiff suggested that the trooper go to the
  hospital for treatment, but the trooper responded
  that he would not know how to explain his injury
  to the sergeant.
• Plaintiff then left the scene of the arrest.

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Newberne, contd

• FACTS, contd
• suspects father filed a complaint alleging
  excessive force
• Plaintiff asked to write statement about what he
  had seen
• Plaintiff limited statement to what he had
  literally seen, omitting the Troopers statement
  about his hand

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Newberne, contd

• FACTS, contd
• Plaintiff worried about the omission and amended
  the report to include the Troopers admission
  that he had hurt his hand hitting the suspect
• Captain filed complaint against Plaintiff for
  violating Personal Conduct Violation

35
Newberne, contd

• Forum issues, contd
• Plaintiff filed an action with OAH alleging
  wrongful termination and lack of just cause in
  his dismissal
• Later Plaintiff filed a Whistleblower action in
  Superior Court

36
Newberne, contd

• Forum issues, contd
• Case was dismissed and on appeal the Court cited
  Swain noting that
• "the only reasonable interpretation of these
  statutes 126-34.1 and 126-85 is that a state
  employee may choose to pursue a Whistleblower
  claim in either forum, but not both

37
Newberne, contd

• Court of Appeals went on to state
• Plaintiff admits in his complaint that he did
  not exhaust his potential administrative remedies
  for his claim of retaliation"'premature
  intervention by the courts would completely
  destroy the efficiency, effectiveness, and
  purpose of the administrative agencies.
• Plaintiff in the case before us failed to
  exhaust his administrative remedies and the trial
  court did not err in dismissing his claim filed
  in Superior Court.

38
Newberne, contd

• On appeal, Supreme Court reversed and remanded
  with directions
• The Court established a new standard with
  shifting burden of proof and
• Held definitively that an employee may elect
  between an OAH hearing or a Superior Court
  action.

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Newberne, contd

• The Court established a new standard with
  shifting burden of proof
• The "burden shifting" scheme set out in the
  McDonnell Douglas and _________

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Where Did the Employee Choose to Litigate the
Claim?

• If the employee claim is a just cause dismissal
  claim, they must pursue the administrative route
  in OAH.
• If the employee has a discrimination claim, they
  have several choices.
• If the employee has both a just cause and
  discrimination claim, then the issue is very
  complicated.

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Where Can You Litigate an EEOC Claim?

• Discrimination Claims
• If the employee has a discrimination claim
  subject to EEOC review, there are 3 options
• File a Petition for Hearing and litigate the case
  before OAH and the State Personnel Commission
• File a discrimination charge with OAH and have it
  investigated by the 706 Division which
  investigates charges under a deferral agreement
  with EEOC.
• File directly with EEOC. Many of these charges
  are deferred to OAH for investigation by the 706
  Division.

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Practical Tips in Litigating State Employee
Claims at OAH

• Review the Petition for Hearing. If the employee
  simply relied on the OAH form, there may be
  mistakes.
• Make that proper service of process is made.
• Follow the instructions in the initial Scheduling
  Order
• Serve your discovery with your Pre-Hearing
  Statement.

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Practical Tips in Litigating State Employee
Claims at OAH

• If the Employee requests a complete copy of their
  clients personnel file
• Request an Authorization signed by the
  client/former employee.
• NOTE Under the definition of personnel file in
  N.C.G.S. ? 126-22, you MUST provide a copy of all
  personnel files wherever located and in whatever
  form.

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Practical Tips in Litigating State Employee
Claims at OAH

• When personnel documents of someone other than
  the grieving employee
• Do not waste time with motions to prevent access
  to personnel files. The ALJ will not support
  you.
• Be prepared to enter into a Protective Order.

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Practical Tips in Litigating State Employee
Claims at OAH

• After the hearing, do not waste your time and the
  ALJs time with a jury type argument.
• Order a Transcript.
• ALJs prefer to have a draft Proposed Decision and
  a Memorandum of Law arguing points of evidence
  with page numbers from a transcript and citing
  applicable cases.

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Tips in Drafting Reviewing Civil Pleadings

• Conduct a thorough analysis re suing someone in
  his/her individual vs. official capacity.
• What is the relief being sought?
• Unless properly alleged, it is presumed that the
  public employee or official has been sued in an
  official capacity. CITE

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Tips in Drafting Reviewing Civil Pleadings

• Have they alleged sufficient facts to establish
  waiver sovereign immunity?
• Purchase of insurance policy?
• Acting outside scope of employment?
• Malice or corruption?

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Tips in Drafting Reviewing Civil Pleadings

• If a 1983 claim, has Plaintiff
• Sought relief that precludes individual
  liability?
• Alleged facts to establish qualified immunity
  claims?
• Filed in state court? If so, remove to federal
  court?

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Tips in Defending Employee Claims

• Focus on Due Process
• Has the employee been given a pre-dismissal
  conference?
• Was the employee given oral or written notice of
  the charges against him/her?
• Were the appeal rights set forth in writing?

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Contents for Petition for Judicial Review

• Exceptions to Findings of Fact
• Petitions shall explicitly state the exceptions
  taken to the decision or procedure of the agency
  if not, grounds for dismissal.

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Petitions for Judicial Review

• Identify the Legal Issues to be considered under
  G.S. 150B-51??
• Agency acted in violation of Constl provisions
• Agency exceeded its authority or jurisdiction
• Agency decision was made upon unlawful procedure

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Petitions for Judicial Review- Legal Issues to be
considered under G.S. 150B-51??

• Agency Decision was affected by error of law
• Agency decision is unsupported by substantial
  evidence in view of the whole record test
• Agency acted arbitrarily or capriciously

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Petitions for Judicial Review

• ALJ decisions are no longer recommended
  decisions. See G.S. 150B-___.
• Focus exceptions and claims on Findings of Fact
  when the SPC has made findings different than
  those of the ALJ.
• Focus legal claims on Conclusions of Law.

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Petitions for Judicial Review, other housekeeping
matters

• Responses to Petitions are not required but you
  may want to do so to set the tone. Also, there
  is a 30 day appeal deadline, so you will want to
  track and file a Motion to Dismiss for
  jurisdiction if fails to comply
• Briefs are often dictated by Local Rules of court
• If you cite Admin Rules, its a good idea to
  index them with your brief

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Ancillary Claims Which Can Be Filed with Civil
Action

• Title VII may join a discrimination claim with
  judicial review of state personnel claim. See
  Davenport v. NCDOT, 3 F.3rd 89 (4th Cir. 198_)
• Whistleblowing claims
• Intentional Torts
• Negligent Torts not covered by Tort Claims
  Actions.