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? (c) 2008 M. Jackson Nichols, Allen & Pinnix, P.A.

3. Where are we going today? • Examination of who is covered and who’s not under the SPA • Types of Claims covered • Where to Litigate the Claim • Tips for Litigating the Claim (c) 2008 Allen & Pinnix, P.A.

4. Where are we going, cont’d • Contents for Petitions for Judicial Review • A discussion of Ancillary Legal Claims (c) 2008 Allen & Pinnix, P.A.

5. Navigating the State Personnel Act: Who’s 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 (c) 2008 Allen & Pinnix, P.A.

6. Navigating the State Personnel Act: Who’s Not? • Exemptions to the Act, e.g, policymaking exempt positions; • Designated employees, e.g, const’l 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 (c) 2008 Allen & Pinnix, P.A.

7. Types of Claims Covered • Just Cause Dismissals; • Discrimination Claims; • Whistleblower Claims; • Denial of veteran’s 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 employee’s request for removal of allegedly inaccurate or misleading information from the employee’s personnel file. (c) 2008 Allen & Pinnix, P.A.

8. 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” (c) 2008 Allen & Pinnix, P.A.

9. Just Cause Discipline, cont’d 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. (c) 2008 Allen & Pinnix, P.A.

10. Just Cause Discipline, cont’d 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. (c) 2008 Allen & Pinnix, P.A.

11. 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 Just Cause, cont’d (c) 2008 Allen & Pinnix, P.A.

12. Unsatisfactory Job Performance Written Statement must be given BEFORE disciplinary action taken Unacceptable Personal Conduct Written Statement may be given AFTER suspension Just Cause, cont’d (c) 2008 Allen & Pinnix, P.A.

13. 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 Just Cause, cont’d (c) 2008 Allen & Pinnix, P.A.

14. Just Cause, cont’d 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 (c) 2008 Allen & Pinnix, P.A.

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. (c) 2008 Allen & Pinnix, P.A.

16. 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. (c) 2008 Allen & Pinnix, P.A.

17. 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 (c) 2008 Allen & Pinnix, P.A.

18. 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 employee’s opposition to alleged discrimination based on account of employee’s age, sex, race, color, national origin, religion, creed, political affiliation or handicapping condition (c) 2008 Allen & Pinnix, P.A.

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." (c) 2008 Allen & Pinnix, P.A.

20. 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 (c) 2008 Allen & Pinnix, P.A.

21. 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. (c) 2008 Allen & Pinnix, P.A.

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. (c) 2008 Allen & Pinnix, P.A.

23. 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 employee’s compensation, terms, conditions, location or privileges of employment (c) 2008 Allen & Pinnix, P.A.

24. 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. (c) 2008 Allen & Pinnix, P.A.

25. WARNING • Case law developments have shown this area to be changing and fraught with procedural dangers (c) 2008 Allen & Pinnix, P.A.

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. (c) 2008 Allen & Pinnix, P.A.

27. The History, cont’d: 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. (c) 2008 Allen & Pinnix, P.A.

28. The History, cont’d: 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. (c) 2008 Allen & Pinnix, P.A.

29. The History, cont’d: 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. (c) 2008 Allen & Pinnix, P.A.

30. The History, cont’d: 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 plaintiff’s complaint was fatally defective since he failed to allege that the exhaustion of his administrative remedy would be futile. (c) 2008 Allen & Pinnix, P.A.

31. 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). (c) 2008 Allen & Pinnix, P.A.

32. 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. (c) 2008 Allen & Pinnix, P.A.

33. Newberne, cont’d FACTS, cont’d: • suspect’s 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 Trooper’s statement about his hand (c) 2008 Allen & Pinnix, P.A.

34. Newberne, cont’d FACTS, cont’d: • Plaintiff worried about the omission and amended the report to include the Trooper’s admission that he had hurt his hand hitting the suspect • Captain filed complaint against Plaintiff for violating Personal Conduct Violation (c) 2008 Allen & Pinnix, P.A.

35. Newberne, cont’d Forum issues, cont’d: • 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 (c) 2008 Allen & Pinnix, P.A.

36. Newberne, cont’d Forum issues, cont’d: • 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” (c) 2008 Allen & Pinnix, P.A.

37. Newberne, cont’d 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.” (c) 2008 Allen & Pinnix, P.A.

38. Newberne, cont’d 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. (c) 2008 Allen & Pinnix, P.A.

39. Newberne, cont’d The Court established a new standard with shifting burden of proof; The "burden shifting" scheme set out in the McDonnell Douglas and _________ (c) 2008 Allen & Pinnix, P.A.

40. 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. (c) 2008 Allen & Pinnix, P.A.

41. 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. (c) 2008 Allen & Pinnix, P.A.

42. 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. (c) 2008 Allen & Pinnix, P.A.

43. Practical Tips in Litigating State Employee Claims at OAH • If the Employee requests a complete copy of their client’s 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.” (c) 2008 Allen & Pinnix, P.A.

44. 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. (c) 2008 Allen & Pinnix, P.A.

45. Practical Tips in Litigating State Employee Claims at OAH • After the hearing, do not waste your time and the ALJ’s 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. (c) 2008 Allen & Pinnix, P.A.

46. 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 (c) 2008 Allen & Pinnix, P.A.

47. 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? (c) 2008 Allen & Pinnix, P.A.

48. 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? (c) 2008 Allen & Pinnix, P.A.

49. 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? (c) 2008 Allen & Pinnix, P.A.

50. 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. (c) 2008 Allen & Pinnix, P.A.