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Reviewed Date: May 12, 2017
Personnel--Employment--Laws and regulations
Personnel--Laws and regulations--Tennessee
At Will Employees
MTAS was asked whether city employees were at will employees or had a property right in their employment under the city's personnel policy.
Knowledgebase-At Will Employees August 20, 2009Dear Sir: You have what appears to be the following question: Are the city's charter and the city's personnel policies inconsistent on the question of whether city employees are employees at-will? The answer is no. Under the City Charter and the City Personnel Policies the city is an at- will employment city. However, that answer requires considerable elaboration. The City Charter is Private Acts 1941, Chapter 396, as amended. Article VII, Section 1 of that charter presently provides that: .... the Mayor shall be the chief executive officer of the city and as such ... shall employ, discharge, or suspend without compensation, all officers, agents, employees, workmen and servants with the exception of the recorder, chief of police, city field superintendent and treasurer who shall be employed and discharged by the Board of mayor and commissioners. Notwithstanding the foregoing, the actions of the mayor as to employment, discharge, and suspension of all officers, employees, workmen, servants shall be subject to being overridden by action of the Commission by three affirmative votes, the Mayor not voting. Article VII, Section 1 is inconsistent with Article VIII, Section 1 of the charter, which provides that:
" All officers, agents and employees shall be appointed by the City Mayor and Commissioners and removed by them at any time.
" Those two provisions are clearly irreconcilable, and under the rules of statutory construction, when two statutes on the same subject are irreconcilable, the later statute supercedes the earlier one. Article VII, Section 1 of the charter reflects an amendment by Private Acts 1983, Chapter 13; for that reason, it supercedes Article VIII, Section 1, which was last amended by Private Acts 1977, Chapter 11. Article VII, Section 1 does not expressly provide that city employees are employees at- will, or that they serve at the pleasure of the mayor. But the mayor's employment actions can be overridden by an affirmative vote of three commissioners, the mayor not voting. A property interest in public employment is a legitimate claim of entitlement to the employment, which stems from state law, and which cannot be taken away from the employee without notice and a hearing that conforms to the standards announced by the U.S. Supreme Court in Loudermill v. Cleveland Board of Education, 470 U.S. 532 (1985). Loudermill actually contemplates two hearings: a pretermination preceded by a notice of the charges against the employee, at which the employee has an opportunity to respond to the charges against him; and a full blown post-termination hearing (if the employee wants one.) The pretermination hearing need not be elaborate. As the U.S. Supreme Court said: The pretermination hearing need not definitely resolve the propriety of the discharge, but should be an initial check against mistaken decisions
: essentially a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action. The essential requirements of due process are notice and an opportunity to respond. [At 533] Article VII, Section 1 does not give officers and employees a right to a hearing upon discharge or other personnel disciplinary actions of the mayor; it provides only that the city commission has the right to override such employment decisions. But as a matter of policy, the city's personnel policies give such employees a
" to a hearing on those employment decisions. Do those personnel policies contradict Article VII, Section 1, and do they give employees a property right in their employment? The answer to the first question appears to be no. I can see no reason why the city commission, having been given the authority in Article VII, Section 1 of the City Charter to override employment decisions of the mayor, could not adopt policies that govern how it will override such decisions, including a policy adopting an appeals process. Arguably, without such a process, the city commission would not even be obligated to give such employees a hearing onthe mayor's decision. Article VII, Section 2 merely says that the board can override the decision of the mayor; it does not give such employees the right to a notice and a hearing on the decision of the mayor. The answer to the second question is also no, but requires more analysis. Tennessee is in the U.S. Sixth Circuit Court of Appeals. In the Sixth Circuit case of Brown v. City of Niota, 214 F.3d 718 (6th Cir. 2000), a police officer was terminated by the chief of police and subsequently by the board of commissioners, and a reserve police officer who was also a firefighter was terminated by the board of commissioners at the same meeting. Those two former employees argued that they had a property right and a liberty interest in their employment. With respect to their property right in employment argument they urged that the board of commissioners had adopted a rule that
" [a] city employees may be terminated for any just cause at the discretion of the board.
" [At 720], and that rule modified their at-will status and gave them a contractual right to be dismissed only for just cause, only after a hearing.
" Whether a property interest exists,
" said the court: is not determined by reference to the Constitution; rather property interests are 'created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law-rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.'[At 721] The plaintiffs were correct that
" at-will employment can be modified by language evidencing an intent on the part of the employer to modify the employment relationship....
" said the court. [At 721.] But the court did not agree that the City of Niota's regulation at issue had that effect: We accept the plaintiff's contention that these rules and regulations, like employee handbooks, could modify an employment relationship. Tennessee courts have
" recognized that an employee handbook can become a part of an employment contract.
" Rose v. Tipton County Pub. Works Dep't, 953 S.W.2d 690, 692 (Tenn. Ct. App. 1997).
" In order to constitute a contract, however, the handbook must contain specific language showing the employer's intent to be bound by the handbook's provisions.
" Id. [At 721]The court did not believe that the city's rules and regulations had done that. In Reed v. Alamo Rent-A-Car Inc., 4 S.W.3d 677, 688 (Tenn. Ct. App. 1999), said the court: the Tennessee Court of Appeals held that an employee handbook could modify an at-will employment agreement to require the employer to dismiss the employee only for just cause. Prior to this decision, Tennessee courts had held that terms of employment, like benefits, could become contractual, but they had never held that an employee handbook could convert an at-will employment agreement into a protectable property interest. See Gregory v. Hunt, 24 F.3d 781, 785-87 (6th Cir. 1994) (discussing this phenomenon). The Reed court, however, limited it holding to those cases where the handbook contains unequivocal language demonstrating [the employer's] intent to be bound by a handbook's provisions.In particular, the court stated,
" we can conceive of no clearer way for an employer to express its intent to be bound by a handbook's provisions than the employer's specific statement that the document represents the parties 'entire agreement of employment'and that the employer 'promises and agrees to abide by all its terms and conditions.'
" 4 S.W.3d at 688. We believe that the Reed court announced a high standard for establishing the existence of an employer's specific intent to be bound by the terms of an employee handbook and that the plaintiffs have not met this standard. [At 721] The reason the City of Niota's policy had not met that standard, continued the court, was that the rule providing that the board of commissioners
" fire an employee for just cause was permissive,
" and suggests that there are other permissible means for terminating a city employee.
" [At 721] In Tennessee cases where the court had found employment contracts to exist,
" the employee handbook contained the mandatory terms 'shall'and 'will.
'" [At 721] Even if the City of Niota's rule on termination had created an employment contract between the city and the plaintiffs, they could still not show they had a property interest in continued employment: ....because this contract does not provide a definite term of employment. Tennessee courts have held that [t]he law is well established in this state that a contract for employment for an indefinite term is a contract at will and can be terminated at will by party at any time without cause. [At 722] [Citations omitted by me] The Reed court, declared the Sixth Circuit, had found the employee handbook had created a contract
" that restricts the employer from terminating the employee without just cause, but it also created a contract for a definite period of time.
" (A one year term subject to annual renewal.) [At 721.] As to the plaintiff's claims that they had been denied a name-clearing hearing, the court pointed to five standards a plaintiff alleging deprivation of a liberty interest must meet to support that claim in the Sixth Circuit: 1.
" [T]he stigmatizing statements must be made in conjunction with the plaintiff's termination from employment
" ; 2.
" [A] plaintiff is not deprived of a liberty interest when the employer has alleged merely improper or inadequate performance, incompetence, neglect of duty or malfeasance.
" ; 3
" [T]he stigmatizing statements or charges must be made public;
" [T]he plaintiff must claim that the charges against them were false;
" [T]he public dissemination must have been voluntary.
" [At 722-23] Even assuming that what the Niota board of commissioners said about the plaintiff was stigmatizing and were entitled to a name-clearing hearing had one been denied, declared the court, they had not given notice of their desire for a name-clearing hearing prior to the time they initiated this lawsuit: Because plaintiffs must request a name-clearing hearing and be denied this hearing before they have suffered a deprivation of their liberty interest without due process of law we believe the district court was correct in granting the defendant's motion for summary judgment motion on the plaintiff's claim that they were deprived of a liberty without due process of law.[At 723] There appears to be a rule in the Sixth Circuit governing the question of whether municipal charters that expressly provide that the municipality's employees are at will employees can be overcome by a personnel policy that provides otherwise. That rule is that if the charter clearly makes those city employees at will, and authorizes no other options, a municipal ordinance, resolution or policy that gives employees a property right in their jobs gives way to the charter. In Chilingirian v. Boris, 882 F.2d 200 (6th Cir. 1989), a city attorney fired by the city argued that he had a property right in his employment, the basis of which was an implied contract with the city. The Court rejected his argument, reasoning that: This argument is devitalized by the fact that the city charter governs the terms of the city attorney's employment and provides for his termination at will. Moreover, the city was not authorized to enter into any contract in contravention of its charter. See Niles v. Michigan Gas and Elec. Co., 273 Mich., 255, 262 N.W. 900 (1935) (under Michigan law, a municipality cannot exceed its charter powers). Accordingly, notwithstanding Chilingirians'protestations to the contrary, no viable means exist for circumventing the termination-at-will language implicit in the charters section 4.6 provision that the city attorney serves at the pleasure of the council. [Citation omitted.] [My emphasis.] [At 205] In the unreported case of McLemore v. City of Adamsville, 1990 WL 30478 (6th cir. 1990) (Table of Cases, 914 F.2d 257 (6th Cir. 1990), the chief of police of the City of Adamsville, Tennessee, was fired. Under the city's charter department heads, including the chief of police,
" shall be appointed for indefinite terms and .... shall serve at the pleasure of the commissio
" [Court's emphasis.] [At 2] The former chief of police made several related arguments against his dismissal, among which were that he had a property right in his employment, and that his due process rights had been violated because the city had not given him the pretermination hearing required by Loudermill. The Court rejected those (and all his other) arguments. His claim that he was entitled to a Loudermill hearing failed, said the Court, citing Chilingirian, above, because he did not have a property right in his employment: In Tennessee, city charter provisions and ordinances may give rise to property rights for continued employment. Huddleston v. City of Murfreesboro, 635 S.W.2d 694 (Tenn. 1982). However, a review of the Adamsville's city charter reveals that, by its specific terms, the chief of police
" shall serve at the pleasure of the commission.
" Sixth Circuit precedent dictates that an employee does not have a protected property interest in his continued employment
" when his position is held at the will and pleasure of his superiors.
" [Citing Chilingirian, above.] [At 2] His claim of being a permanent member of the classified service failed, said the Court, because... [T]he city charter exclusively controls McLemore's employment relationship with Under Tennessee law, declared the court, : .... an individual is an at-will employee, as long as the city charter or other city regulations do not provide otherwise. Whittaker v. Care-More, Inc., 621 S.W.2d 395 (Tenn. App. 181) As previously stated, the Adamsville's city charter clearly provides that McLemore was an at-will employee. [At 3] Important here is that in Tennessee, as in Michigan, charter provisions are mandatory; where the charter creates at will employment,
" no viable means exist for circumventing the termination at will language [in the charter].
" That charter language is mandatory in Tennessee, with specific respect to at-will provisions in the city charter, is seen in Lewis v. Bowman, 814 S.W.2d 369 (Tenn. App. 1991). There the director of public works claimed he was terminated in violation of the city's personnel policies, which gave him certain procedural rights. However the procedural rights granted to him were in conflict with the city's charter, which made department heads employees at will. In holding the charter superseded the personnel policies, the Court said: It has long been the law in this state, as in many other states, that ordinances of the city are subordinate to charter provisions. This was pointed out in the case of Marshall & Bruce Co. v. City of Nashville, 109 Tenn. 495, 512, 71 S.W. 815, 819 (1903), wherein it was said,
" The provisions of the charter are mandatory and must be obeyed by the city and its agents; and if in conflict with an ordinance, the charter must prevail.
" A similar result was reached in Dingham v. Harvell, 814 S.W.2d 362 (Tenn. App. 1991), in which the police chief contested his firing by the Millington Board of Mayor and Aldermen. The Court rejected the chief's argument that he was an employee of the city for the purposes of the city's personnel policies which gave city employees certain job protection. Under the city's charter, the police chief served at the will and pleasure of the board of mayor and aldermen. In a contest between the city's charter and the city's personnel policies, the charter wins, said the Court. [In accord are Gay v. City of Somerville, 878 S.W.2d 124 (Tenn. App. 1994); Miller v. City of Murfreesboro, 122 S.W.3d 766 (Tenn. Ct. App. 2003); Trusant v. City of Memphis, 56 S.W.3d 10 (Tenn. Ct. App. 2001); Summers v. Thompson, 764 S.W.2d 182 (Tenn. 1988) (unreported)]. Those cases tell us that if a municipal employee claiming a property right in his employment makes that claim in the face of a statute that paints him at-will, his claim will fail. They also tell us that if the statute in question is silent on a municipal employee's employment status, the municipality has the discretion to adopt an ordinance or other written policy that gives him a property right in his employment. It seems clear that by the standards announced in Brown v. City of Niota governing the question of whether a city's personnel policy intercepts the employee at-will doctrine, the City's personnel policies do not intercept the city's charter. The City's charter does not expressly make the city an at-will employment city. Article VII, Section 1 of the charter does not give city employees a property right in their jobs, but it leaves open the doorway for the city commission to bestow such a property right on them through its right to overturn the mayor's personnel decisions. There appears to be no reason why the city commission could not adopt personnel policies that give those employees the right to a hearing on disciplinary actions taken against them by the mayor. However, those personnel policies adopted by the city commission avow that they reflect only
" governing the treatment of employees, and expressly and repeatedly declare that they do not intercept the at- will doctrine of employment. Section I. C. ADMINISTRATION, of the City Personnel Policies declares that,
" Nothing in the personnel rules and regulations document shall be deemed to give employees any more property rights in their jobs than may have already been given by the local government charter.
" Section IV. D. TYPES OF EMPLOYEES creates types of employees, including probationary employees, but Section IV. G. PROBATIONARY PERIOD, which prescribes a probationary period contains this notation at its end:
" NOTE: all employees including probationary employees are employees at will and may be terminated for cause or no cause.
" Section X. F. DISCIPLINARY ACTION, provides that: All local government employees are employees at-will of the local government. The local government reserves the right to discharge at-will employees for cause or for no reason, except that no employee shall be discharged for reasons that are prohibited by state or federal law. There may be occasions when local governments take disciplinary actions short of termination against employees. These actions in no way create a property right in employment for at-will employees. That language is followed by the provision that: It shall be the policy of the City to administer discipline fairly, reasonably, and impartially. Employees and the City are best served when discipline is administered to correct actions rather than to punish. All disciplinary actions involving suspensions without pay or termination require concurrence of the supervisor and approval of the Mayor prior to discipline being administered. Those two provisions appear to separate at-will employment from the policy of the city, and preserve the integrity of the former. They suggest that the city can, by other means, than contained in the personnel policy, terminate employees. Indeed, under Article VII, Section 1 of the charter, it is the mayor who holds the right to terminate and take other actions against city employees, subject to that action being overturned by the board of commissioners. In light of the mayor's personnel powers under the charter, he undoubtedly has the right to exercise those powers even if they were to conflict with some of the procedures prescribed by the city's personnel policies for the discipline of employees. Step 5. Discharge, under Section X. F. TYPES OF DISCIPLINARY ACTION, provides the reasons that an employee
" be discharged, but declares that,
" Probationary employees may be terminated at any time without cause and without the right of appeal.
" On this point it could be argued that where a city creates a class of probationary employees it must at least have impliedly intended to create a class of employees who have some job protection that rises to the level of a property right in employment after they complete their probationary period. Indeed, it would seem an accurate description of at-will employees as always being probationary employees. But Crumley v. Memorial Hospital, Inc., 509 F.Supp. 531 (E.D. Tenn. 1978), has a different take on probationary employment that does not square with a common understanding of that term. One of the questions in that case was whether the privileges of a doctor, who was a member of the hospital's medical staff, could be withdrawn before the expiration of his probationary period. The Court said this about employment contracts that have probationary periods:
" Probationary period
" as used in employment contract is, generally not construed to mean that the probationer's employment is at the will of the employer, Royce v. Delta Intern. Industries (1946 Supp.), 63 N.Y.S.2d 369, 370, rather that a status of experimental testing is implicated in which no commitment for continuance of employment is implied if, for any reason, the experimental relationship leads to a conclusion that a more extensive relationship might be unsatisfactory, Rhine v. Young Men's Christian Ass'n College (1959), 339 Mass. 610, 162 N.E.2d 56, 59. Nonetheless, the bylaws of the hospital provided that a member of its medical staff could be removed summarily if a continuation of his or her privileges constituted a threat to the welfare of a patient. [At 537] In Footnote 2 of that case, the court said: As the defendant performs essential services for members of the general public, this Court deems it appropriate under the circumstances to suggest that the hospital's by laws and probationary contracts might be adjusted in a manner to render the continuance of staff services subject to the will of the hospital during such probationary period. [At 537] Whatever the technical function of a probationary period pointed to in Crumley, relative to a doctor
' s staff
" relative to a hospital, the City Personnel policy makes it clear that probationary employees can be removed during their probationary period, and that they have no right of appeal. In short, the court's admonition to the hospital in Footnote 2 is already reflected in the City's personnel policies. But employees who have completed their probationary periods do have the
" to appeal disciplinary personnel actions against them by the mayor. In that respect they are distinguished from probationary employees. It must be repeated that the mayor has the personnel power under the city's charter to take disciplinary action against employees, including their removal. Their meaningful right of appeal lies in the city commission, which has given them the right to appeal their removal, but without affecting their at-will employment status. Indeed, there is nothing in the charter nor the city's personnel policies that prohibits the board from either upholding or overrturning the mayor's disciplinary decisions on whatever grounds it wishes; in short, for cause or no cause. However, even if it were conceded that the right to a hearing by the board of commissioners creates a whiff of a property right to employment, as Brown v. City of Niota, above, pointed out there is a two prong test to determine whether an employee has such a right. The second prong of the test is the determination of whether the employee is an indefinite or a definite term employee. There is no language in the city's personnel policies that suggests that the city's employees are definite term employees, and
" Tennessee courts have held that '[t]he law is well established n this state that a contract for employment for an indefinite term is a contract at will and can be terminated by either party at any time without cause.'
" [At 722] . Section X.F., DISCIPLINARY ACTION, also includes an Appeals segment, which provides that
" Warnings, reprimands and suspensions with pay may be appealed.
" The appeal is made to the supervision, but
" a final appeal can be made to the mayor's office.
" There is no indication in this section that a decision to terminate an employee can be appealed, although one of the personnel actions that can be taken under Section X.F., is
" Step 5: Discharge,.
" and that step appears to allow the supervisor to make a discharge. It may be that the absence of the right of appeal in this section of discharges is an erroneous omission. But at the end of the Appeals segment in Section X, is found this language:
" All employees shall be governed by the '
E mployment at Will'doctrine.
" There follows in Section X.G., GRIEVANCE PROCEDURES, but I will skip that provision for a moment because under Section X.H., employees who are reprimanded, suspended, or dismissed may submit a written request in writing to the City Commission asking it to review the action.That provision lends credence to the proposition that Step 5: Discharge, should have been appealable under the APPEALS, in Section X. F. In the GRIEVANCE PROCEDURES in Section X. G., a
" is defined as
" shall mean a claim or dispute by an employee with respect to the interpretation, meaning or application of the provisions of City's policies and procedures.
" I am not sure whether that definition includes the personnel action in Section X. F. The grievance is first made to the supervisors, and if the employee is not happy with the outcome, to the mayor, who is the
" final authority
" over grievances. There are no indications in that section that grievances can be appealed to the city commission It may be that those actions are not grievable actions. If that is so, Section X. H. probably ought to follow Section X. F. There is no intent reflected in the City's Personnel Policies to give its employees any rights greater than they have in the City Charter. Those personnel policies repeatedly make it clear that the city's employees are at will employees. Under the City Charter the mayor has the right to discipline city employees, including the right to terminate them. Under that charter the board of commissioners has the right to overturn the mayor's disciplinary decisions, but nothing in the charter gives the city's employees the right to a hearing for that purpose. However, under the city's personnel policies, employees who have completed their probationary periods have a right to a hearing on personnel actions the mayor has taken against them. But the personnel policies themselves make it clear that they do not represent an intent on the part of the board to create property rights in the city's employees. The board can uphold the mayor's disciplinary actions or overturn them on whatever grounds it wishes; as I said above, for cause or no cause (as long as the cause or no cause does not violate state or federal law). But even if it were to be found that the board's policy to grant employees a hearing on disciplinary actions taken by the mayor created an employment contract, that contract would still not rise to a property right in their employment because they are still indefinite term employees. If I recall correctly, a name-clearing hearing is not at issue with respect to your question. But Brown v. City of Niota, above, covers the rules that govern such hearings in the Sixth Circuit in the event my recollection is wrong. Sincerely, Sidney D. Hemsley Senior Law ConsultantSDH/