Sunday, January 25, 2015

Back to the Future "At-Will"

Nelson v. Town of St. Johnsbury, 2015 VT 5

By Andrew Delaney

Town manager gets fired and sues. His claims get tossed on summary judgment. The SCOV reverses on some claims and affirms on others. Almost the entire case comes down to a nearly-one-hundred-years-old statute.  You never know what's gonna happen at the SCOV.

Mr. Nelson served briefly as St. Johnsbury’s interim town manager. He was then formally hired by the selectboard, without any specific employment terms. Mr. Nelson claimed that the town’s attorney, on three separate occasions told him that he could only be removed for serious misconduct, which the town attorney opined was “an extremely high bar.”

As town manager, Mr. Nelson undertook a major building renovation project. The selectboard had concerns about Mr. Nelson’s performance and started an inquiry. Mr. Nelson got a letter from the chair, which basically said he had to cooperate or it could be considered misconduct. The letter didn’t specify the inquiry’s nature.

A selectboard member conducted the inquiry and drafted a list of concerns. Seems there were a whole bunch of them. The chair said “something” turned up in the investigation, but wouldn’t explain further. The chair then told Mr. Nelson to hand over his laptop and keys and go home, which Mr. Nelson did.

The selectboard had a meeting and told Mr. Nelson he didn’t need to be there, but he showed up anyway. The selectboard immediately went into executive session. They invited Mr. Nelson in after forty-five minutes and asked him if he wanted to resign. He declined. The selectboard then returned to public session and passed a “no confidence” vote. Mr. Nelson “did not understand until that time that the selectboard was terminating his employment.”

The town then issued a press release that more or less said Mr. Nelson misrepresented things to the board about the renovation project and other things. Them’s fightin’ words.

So, Mr. Nelson sued “the selectboard and its individual members, claiming: (1) wrongful termination; (2) deprivation of due process of law in violation of the Civil Rights Act, 42 U.S.C. § 1983; (3) violation of Chapter I, Article 4 of the Vermont Constitution; and (4) promissory estoppel.” He went for a preliminary injunction to get his job back (and compensatory and punitive damages and attorney’s fees, of course). The trial court denied the motion after a hearing, reasoning that Mr. Nelson had an “adequate remedy at law.” All that really means is that trial court figured Mr. Nelson could potentially get money for his claims and that’d be enough.

The town then moved for partial summary judgment on the claims for reinstatement and damages for the termination. The trial court granted the motion, holding that plaintiff had no legal interest in his “at-will” employment; that the selectboard members have qualified immunity from the civil-rights claim; there’s no private right of action under Chapter I, Article 4 of the Vermont Constitution; and plaintiff’s claims didn’t meet all the promissory estoppel requirements.

The standard for review of a summary judgment motion should be as familiar as an unwanted houseguest. Here it is in "abbreviated mumbling lawyer" form: no dispute of material fact, judgment matter of law, evidence light most favorable nonmoving party, ahem, bunch of lawyer words.

The majority stresses from the get-go “that the lynchpin of this appeal is whether plaintiff could be terminated for any reason or only for cause.” This turns on interpretation of a statute that governs terminating town managers when there’s no contract. Plaintiff reads it to say “only for cause”; town reads it to say “any reason.” The majority notes that the town raised additional grounds on which it should prevail. With the exception of qualified immunity, the record ain’t complete enough to dive into all that.

The majority first takes a gander at plaintiff’s wrongful-termination claim. Here’s the relevant statutory language:
shall be subject to the direction and supervision and shall hold office at the will of such selectmen, who, by majority vote, may remove him at any time for cause.  
That’s internally inconsistent—it does not make sense. The trial court resolved that by figuring that if a manager is hired at will, then he or she can be fired at will, but if there’s a specific term of employment, then cause is required.

The majority considers this proposition but doesn’t exactly agree. In interpreting statutes, the SCOV first looks to the plain language. If that’s clear and unambiguous, then that’s the deal. If it’s ambiguous (this one is), then legislative intent becomes a factor. The problem in this case is that the statute ain’t been tinkered with since 1918, so, um, yeah. This is gonna be a fun one, folks.

Nowadays, “at will” is commonly used in the employment law context and its meaning is clear, but in the early 1900s until at least the 1940s, the same concept was signified with “at the pleasure of” style language. I thought about telling my wife that she served “at the pleasure of” me the other day, but I’m fond of my various appendages so I kept my mouth shut—gotta love that old-timey language.

At any rate, the majority eventually concludes—after a bit of a history lesson—that the legislature’s use of “will” in this particular statute (and ONLY this statute) means a different thing, I guess.

The “for cause” bit is a different thing. That’s all through statutes and case law and it always signifies the you-need-a-good-reason concept. The majority briefly mentions the dissent’s at-will-ain’t-changed reasoning, but says its reasoning is better and stuff. Yeah, I might be paraphrasing a bit.

Anywho, the majority goes through the whole statutory-scheme analysis, concluding that the “for cause” bit puts it into reason-required territory. This is because there are other statutes that say things like “at any time for any reason” and “for cause” always means seems to mean “for cause.” There’s a does-this-mean-the-“at-will”-language-becomes-mere-surplusage concern, which is resolved by the it-probably-meant-something-different-back-then reasoning. Good times.

The majority gives a nod of approval to the trial court’s approach in resolving the contradictory terms, but reasons that the trial court ultimately got it wrong. It’s a “nice try” nod, I guess.

The majority spends a few paragraphs explaining why the dissent is off. The dissent reasons that giving the town manager a statement of grounds is sufficient, but there’re no due-process protections that attach. The majority says that the out-of-state cases cited by the dissent for support aren’t Vermont cases and that the dissent’s reasoning fails to give “for cause” its full due.

The majority then turns to the town’s but-cause-existed-anyway argument. On this point, the majority reasons that because the trial court went “at-will” there’s not enough of a record to make a whether-cause-existed determination. So the wrongful termination claim gets sent back to the trial court for further proceedings.

Next, the majority looks at the federal-civil-rights claim. The basic idea here is that one has a claim when a state actor interferes with one’s due process or other rights under color of state law. Here, like with the wrongful termination claim, the SCOV concludes that the record isn’t complete enough to make a determination on this claim, and so this one gets sent back as well.

Chapter I, Article 4 of the Vermont Constitution provides:
Every person within this state ought to find a certain remedy, by having recourse to the laws, for all injuries or wrongs which one may receive in person, property or character; every person ought to obtain right and justice, freely, and without being obliged to purchase it; completely and without any denial; promptly and without delay; conformably to the laws. 
Plaintiff’s argument is that this provision gives due-process rights just like the U.S. Constitution. The majority goes through a bunch of cases and considers whether Article 4 is self-executing (meaning that a constitutional provision provides a path to a remedy and a private cause of action). Here, the SCOV reasons that the trial court misread the case law, and holds that Article 4 does provide due-process rights. What the ultimate remedy may or may not be, the SCOV leaves to the trial court. This claim gets sent back too.

On the promissory-estoppel claim, the majority reasons that the town attorney’s opinion that plaintiff could only be fired for cause was not enough to create a situation where plaintiff could reasonably expect the selectboard to do or not do something. Promissory estoppel isn’t viable and the trial court got that one right.

Finally, the majority looks to the qualified immunity issue. The majority makes sure to note that qualified immunity is not necessarily a complete defense to all theories and all remedies in this case.

That said, the majority agrees with the town that the “selectboard members are entitled to qualified immunity because they did not violate a clearly established right.” While the majority holds that cause is required here, that right wasn’t clearly established until just now. So the town officials get qualified immunity. What that ultimately means remains to be determined by the trial court.

Chief Justice Reiber, in an Inigo Montoya-esque turn of phrase posits that the majority’s reasoning “is to conclude that ‘at the will of’ does not mean what we think it means.” Just because the legislature used “at the pleasure” of in other statutes doesn’t provide a basis for this kind of reasoning in the dissent’s view.

The dissent cites a number of cases from other jurisdictions to illustrate the “nearly universal understanding of the at-will concept,” and additionally points to legal commentaries enforcing that understanding.

If you’re looking for “at-will” authority, this dissent is a great place to start.

So there you have it. There’s a 1917 statute that the majority interprets to confer due-process rights for town managers without contracts, but the town attorney’s statements don’t give rise to promissory estoppel, and the selectboard gets qualified immunity (at least for some stuff).

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