Friday, June 26, 2015

Cutting Corners and Employees

Hallsmith v. City of Montpelier, 2015 VT 83

By Amy Davis

Once you get beyond the pass-the-buck, not-my-problem vibes in this case, the main issue is “whether a post-termination judicial remedy, in the form of a breach-of-contract action or a Vermont Rule of Civil Procedure 75 petition, is sufficient to satisfy the due-process rights of an employee whose employment is protected by a ‘for cause’ requirement and who is terminated by a municipal employer following pre-termination proceedings that do not by themselves satisfy due process.” That sounds like an issue to me.

The facts in this case make for a good story. Hence, a recitation of them: Hallsmith was the planning and community development director for the City of Montpelier. Even though I’ve watched every episode of Parks and Recreation, I do not know what that means. Montpelier’s personnel plan contained a “justifiable cause” provision—nobody knows what this means either.

In November 2013, defendant Fraser, the city manager, placed Hallsmith on paid administrative leave and sent her a letter saying he was thinking about firing her. He described her “acts of unprofessional behavior and insubordination” and generally accused her of not playing well with others, and using city resources inappropriately. Then he said he was willing to meet with Hallsmith to consider any sort of response she would want to make. I think that means she was allowed to grovel.

Hallsmith came with her attorney and argued her case to Fraser, at which time Fraser decided to fire her anyway. Hallsmith filed a grievance for a review of disciplinary action. Everyone agrees that Hallsmith was a public employee and had a right to continue employment absent “just cause” to dismiss. Furthermore, the City has the burden to show “just cause.”

Fraser designated the assistant city manager, Baker, to serve as the hearing officer. Hallsmith did not like that either given that Baker reported directly to Fraser and had been involved in the events leading up to her getting sacked. So, how could he possibly be an impartial adjudicator? Hallsmith did not like many of the procedural rules for the hearing, claiming many of them violated her due process rights. A couple of examples: weirdo rules of evidence and not being able to cross-examine witnesses.

The City lawyered-up with an attorney who was supposed to sit back and advise Baker in her adjudicative capacity. However, the attorney extensively questioned Hallsmith and her witnesses. But Hallsmith was not allowed to cross-examine Fraser, the City’s only witness. Not fair, bro. The end result (brace yourselves): the city manager’s decision was upheld.

Hallsmith filed a Rule 75 petition looking to have her position reinstated, some compensation for lost wages, and some other remedies. Hallsmith challenged the merits of her termination, her due process rights, and some evidentiary issues. The City responded by seeking to dismiss the due-process claim, “arguing that Hallsmith got all the due process that was due.” She wasn’t supposed to get a post-termination administrative hearing at all. So, if they screwed it up, that’s irrelevant. In other words, you take what you get and you like it. And, anyway, there’s evidence that supports her getting fired so naner-naner-poo-poo.

The trial court bought none of the City’s argument. Relying on Baird v. Board of Education out of the Seventh Circuit, trial court granted the Rule 75 petition and ordered the City “to provide Hallsmith a new grievance hearing that fully satisfies Hallsmith’s due process rights, including her rights to confront adverse witnesses to an impartial adjudicator.” Play nice, kids.

Montpelier appeals, and the SCOV, reviewing de novo, affirms. Citing the Fourteenth Amendment, the SCOV reasons that the uncontested due-process elements were that: (1) Hallsmith’s protected property right was in continued employment because of the “justifiable cause” provision of the personnel plan; and that (2) the firing constituted a deprivation of a property right. The only element at issue is whether the deprivation was effected without due process.

The big Supreme Court—you know, THE Supreme Court—said in Cleveland Board of Education v. Loudermill that certain tenured public employees are so unsatisfactory that due process may be satisfied with quickie pre-termination and then more extensive post-termination procedures. But in either event, the employee gets a chance to explain his or her side of the story. In the pre-termination stage, “something less” than a full-blown hearing is OK, but after termination, the employee gets the full enchilada.

Hallsmith does not challenge her pre-termination hearing, but challenges the adequacy of the half-baked post-termination hearing. The general rule is that what does not happen on the front-end needs to happen on the rebound—if you skimp on the pre-termination hearing, then you need to make up for it after termination. But, if an employee gets a full-blown pre-termination hearing, then a post-termination hearing may not be required at all.

The SCOV holds that because Hallsmith’s pre-termination hearing was “minimal,” she was entitled to a “more complete” post-termination process. The question then becomes whether the action under Rule 75 in the trial court satisfies Hallsmith’s due process rights.

The SCOTUS held in Lujan v. G & G Fire Sprinklers, Inc. that sometimes a judicial post-deprivation remedy is sufficient to satisfy due process. The City in this case argues that recourse in the Vermont courts alone provides post-termination due process protections. So, it’s not the City’s problem, but the judiciary’s problem. But, as the SCOV distinguishes, the employment rights in Hallsmith’s case are inherently different from the property rights at stake in Lujan. Thus, the SCOV concludes that a post-deprivation judicial remedy alone is insufficient to satisfy due process.

Some important reasons why the SCOV reaches this conclusion: first, the burden of proof on a Rule 75 petition is on the terminated employee, but the City and Hallsmith both agree that the burden of proving “justifiable cause” in this case falls on the City. Second, post-termination judicial review can take much longer than an administrative hearing, and due process requires an opportunity to be heard “at a meaningful time.” Third, under the City’s position, the trial court would sit as factfinders and essentially transform the courts into hearing officers for municipalities, and that’s a constitutional no-no. Finally, the City’s position is inconsistent with Loudermill’s logic, and what SCOTUS says goes.

The City also argues that the trial court should have followed Locurto v. Safir out of the Second Circuit. The trial court distinguished the case on the basis that the civil rule in Locurto provided a different scope of appeal from Rule 75. Indeed, the rule in Locurto provided a more-extensive presentation of evidence and more expansive due-process protections. Vermont’s Rule 75 does not provide these big, bad protections, and for that reason, Locurto is unpersuasive.

The SCOV concludes by saying that in the context of a tenured municipal employee protected by a “justifiable cause” provision, and where the pre-termination proceedings are minimal, the post-termination administration proceeding has to provide enough process to satisfy the Due Process Clause. If it does not, neither a Rule 75 appeal not a breach-of-contract action will make up for it.

So the trial court gets affirmed, and whether Hallsmith gets her job back is still up in the air, but in any event, she gets a real hearing with all the bells and whistles.

1 comment:

  1. Hi Amy,

    Thank you for your thoughtful analysis of my case. One factual correction (which you would have had no way of knowing) is that Fraser's first letter to me threatened to fire me if I didn't stop talking about public banking (as a private citizen, in my spare time). He wrote this letter one week after the mayor wrote to him saying that my advocacy work "can't continue." The mayor was and continues to be a lobbyist for Bank of America and Wells Fargo. The big banks are vehemently opposed to public banking. Meanwhile, the U.S. Conference of Mayors just passed a resolution supporting public banks. So whose interests was the mayor representing?

    You can read a good article about the whole mess here:

    Thanks again!

    Gwendolyn Hallsmith