Summary
relying on Decker in holding that a writ of review was the exclusive remedy for purported violations of the Oregon Constitution arising out of the termination of a municipal employee
Summary of this case from Doe v. Univ. of Or.Opinion
CV-00-480-ST.
May 10, 2002
FINDINGS AND RECOMMENDATION
INTRODUCTION
Plaintiffs, Ralph DeFrancesco and Tristin DeFrancesco, filed this action on April 10, 2000. Ralph DeFrancesco ("DeFrancesco") alleges that his former employer, defendant City of Mt. Angel ("City"), his former supervisor and Chief of Police, defendant Michael Conrad ("Conrad"), and the City Administrator, defendant Roberta Huddleston ("Huddleston"), terminated him in retaliation for engaging in protected speech in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq ("Title VII") and Article I § 8 of the Oregon Constitution. Accordingly, DeFrancesco is seeking reinstatement or front pay, non-economic damages of not less than $100,000, a declaration that defendants violated his rights, an order requiring defendants to correct this deficiency, punitive damages of not less than $300,000 from each defendant, and reasonable attorney fees and costs pursuant to 42 U.S.C. § 1988.
On July 12, 2001, defendants filed an Accepted Offer of Judgment to Plaintiff Tristin DeFrancesco Only (docket #23). Thus, it appears that plaintiff Tristin DeFrancesco should be dismissed, as well as the Second Cause of Action ("Liberty Interest — Freedom of Association") alleged only against Tristin DeFrancesco. However, the parties have not requested such a dismissal.
This court has federal question jurisdiction under 28 U.S.C. § 1331 and 1343; 42 U.S.C. § 1983; and 42 U.S.C. § 2000e(b), (g) and (h). DeFrancesco has filed a Motion for Summary Judgment — Declaratory Judgment (docket #31) seeking to declare that the City's November 1997 Employment Handbook is void and unenforceable. For the reasons that follow, the motion should be denied.
LEGAL STANDARDS
FRCP 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show an absence of an issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party does so, the non-moving party must go beyond the pleadings and designate specific facts showing a genuine issue for trial. Id at 324. The court must "not weigh the evidence or determine the truth of the matter, but only determines whether there is a genuine issue for trial." Balint v. Carson City, 180 F.3d 1047, 1054 (9th Cir 1999). A "`scintilla of evidence,' or evidence that is `merely colorable' or `not significantly probative,'" does not present a genuine issue of material fact. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir), cert denied, 493 U.S. 809 (1989).
The substantive law governing a claim or defense determines whether a fact is material. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir 1987). The court must view the inferences drawn from the facts in the light most favorable to the non-moving party. Thus, reasonable doubts about the existence of a factual issue should be resolved against the moving party. Id at 630-31. However, when the non-moving party's claims are factually implausible, that party must come forward with more persuasive evidence than would otherwise be required. California Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir 1987), cert denied, 484 U.S. 1006 (1988). The Ninth Circuit has found, "No longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment." Id.
FACTS
Because all material facts must be viewed in the light most favorable to the non-movant, this court will view the evidence in the light most favorable to defendants. A review of the parties' materials, including affidavits, declarations, and deposition excerpts, reveal the following facts:
DeFrancesco submitted no concise statement of material facts, but his motion (docket #31) includes various exhibits ("Pltf's Ex"). Defendants incorporate by reference its Affidavit of Robert E. Franz, Jr. in Support of Reply in Support of Motion to Compel by Defendants ("Defs' Ex") (docket #36). Citations to affidavits, declarations, and depositions are identified by the last name of the affiant, declarant, or deponent, and citations are to the paragraph(s) of the affidavit, declaration or page(s) of the deposition transcript. All other citations are to the exhibit number of the parties' submissions.
I. Personnel Policies
On September 8, 1975, the City passed Ordinance No. 432, a Personnel Ordinance for the City of Mount Angel ("Ordinance 432"). Pltf's Ex 4. The declared purpose of Ordinance 432 is "to establish an equitable and uniform procedure for dealing with personnel matters . . . and to provide a reasonable degree of job security for qualified employees." Id, Section 2. It also provides that "[p]ersonnel rules shall be adopted and amended by resolution to the Common Council." Id, Section 3.
On July 19, 1993, pursuant to Ordinance 432, the City passed Resolution No. 626, which repealed prior personnel policies and procedures of the City, and adopted the "City of Mt. Angel Employee Handbook, June 1993" ("1993 Handbook"), as the official personnel policies and procedures for City employees. Pltf's Ex 2, p. 2. The 1993 Handbook defined a "permanent employee" as "[a]n employee who had been appointed or hired to a position established in the annual budget following satisfactory completion of the probationary period." Id at 9. The 1993 Handbook also provided for due process and progressive disciplinary procedures. Id at 9-10, 18-20.
DeFrancesco was hired in August 1990, after adoption of Ordinance 432 but before adoption of the 1993 Handbook. Complaint, ¶ 12.
In 1997, the City decided to revise the 1993 handbook and provided its employees with a new draft version for suggestions. Affidavit of Sandra T. Ryan ("Ryan Aff"), p. 1. City employees, including DeFrancesco, suggested changes to the proposed revisions. Id at 2. A final handbook, entitled "City of Mt. Angel, Employee Handbook, effective November 1997" ("1997 Handbook") was then given to the employees. Id.
City employees were asked to sign and acknowledge the 1997 Handbook, and nine employees actually did so. Pltf's Ex 1, p. 50; Affidavit of Roberta Huddleston, Ex A. DeFrancesco received the 1997 Handbook but did not sign the acknowledgment form. Ryan Aff, pp. 1-2.
In March 1998, City Council Members passed Resolution No. 737, which formally repealed the 1993 Handbook and adopted the 1997 Handbook. Pltf's Ex 5. The authority to pass this resolution was vested in Ordinance 432 and was based on the City's "desire to adopt new personnel policies and procedures to reflect current operation, personnel laws and administration." Id. Changes in the 1997 Handbook include: (1) new sections, including safety and appropriate dress and grooming; (2) an increase in an employee's vacation benefits; and (3) revisions in sick pay, leave of absence, and the harassment policy. Pltf's Ex 1, pp. 6, 11, 24-27, 32-39, 40-41 In addition, the 1997 Handbook changed the status of all employees to "at-will," subject to immediate termination for any reason. Id at 5, 45, 48. No one explained the effect of the new 1997 Handbook and DeFrancesco thought that he was a permanent employee who could not be disciplined or terminated without warning or progressive discipline. Affidavit of Ralph DeFrancesco, ¶¶ 2-3.
II. DeFrancesco's Termination
On March 20, 1999, DeFrancesco lost his temper while at the police department and used expletives. Defs' Ex 115, p. 1. He was overheard by Huddleston, who reported the incident to Conrad. Id. Conrad was aware of prior incidents when DeFrancesco lost his temper. Defs' Ex 134, p. 1; Deposition of Michael Conrad ("Conrad Depo"), Defs' Ex 143, pp. 53-55.
Concerned with potential liability to the City, on March 30, 1999, Conrad ordered that DeFrancesco make an appointment to see Dr. Robert H. Jones, a police psychologist, regarding his temper. Defs' Exs 111, p. 1; 115, p. 4; 134, pp. 1-2; Conrad Depo, p. 49. DeFrancesco set the appointment for April 6, 1999; however, he later cancelled this appointment and a second appointment was scheduled for April 15, 1999. Defs' Ex 134, p. 2.
On April 7, 1999, DeFrancesco lost his temper at a staff meeting and was ordered to go home. Id at 2. Conrad was out of the office until April 19, 1999, and learned upon his return that DeFrancesco again cancelled his appointment with Dr. Jones. Id at 3. After discussing the situation with City Attorney Paul Elsner, DeFrancesco was disciplined for this misconduct. Id; Defs' Ex 115. DeFrancesco was again ordered to see Dr. Jones and an appointment was scheduled for April 30, 1999. Defs' Ex 134, p. 3. After this meeting, Dr. Jones reported to Conrad that DeFrancesco had an anger management problem and recommended a minimum of nine months of anger management counseling with a trained psychologist. Id at 3-4. Dr. Jones also recommended a written examination. Id at 4.
Conrad contacted DeFrancesco by telephone and informed him of Dr. Jones' results. Id. DeFrancesco became angry with Conrad when he learned of the recommended written evaluation. Id. Conrad also informed DeFrancesco that he would be receiving further discipline for violating the chain of command (for speaking to Huddleston when he was instructed not to) and for failing to obey a superior officer (relating to his outburst at the staff meeting). Id. DeFrancesco became irate and began talking in an insubordinate manner. Id. DeFrancesco threatened Conrad several times and hung up on him. Id.
On May 3, 1999, Conrad met with DeFrancesco in his office and presented him with two letters. The first letter advised DeFrancesco of a three-day suspension without pay. Defs' Ex 121. The second letter advised him of Conrad's intent to recommend to the City Administrator that he be terminated as an officer with the Mt. Angel Police Department, effective May 6, 1999, for what Conrad perceived to be threats against him during the course of their April 30, 1999, telephone conversation. Defs' Ex 122A, p. 2. Both letters stated that DeFrancesco had a right to appeal to the City Administrator in writing and, if dissatisfied with the resolution offered by the City Administrator, to appeal to the City Council. Defs' Exs 121, p. 2; 122A, pp. 2-3. He was also informed that the specific terms of his rights were contained in the 1997 Handbook at page 45. Id.
III. Appeal
DeFrancesco followed the procedures outlined in the 1997 Handbook with respect to his appeal rights. See Defs' Exs 117, 119, 122B, 130, 132-33. On May 3, 1999, after meeting with Conrad, DeFrancesco met with Huddleston and confirmed a second meeting for DeFrancesco to appeal Conrad's recommendation. Defs' Ex 123. On May 5, 1999, DeFrancesco met with Huddleston and gave her a letter attempting to convince her not to accept Conrad's recommendation that he be terminated. Defs' Exs 122B and 123. DeFrancesco advised Huddleston that Conrad's recommendation was groundless. Defs' Ex 122B. He also gave a copy of the letter to Conrad that day. Defs' Ex 123.
On May 6, 1999, DeFrancesco met with Huddleston again and picked up his paycheck. Defs' Ex 122B. On May 10, 1999, Huddleston informed DeFrancesco by letter that "[t]he allegations brought against you by the Chief of Police will stand. The allegations you brought forth regarding the Chief will be investigated further." Defs' Ex 124, p. 4. Moreover, Huddleston advised DeFrancesco of his right to appeal his disciplinary action to the City Council. Id. On May 13, 1999, Huddleston again wrote to DeFrancesco and advised him that the suspension for failing to obey a superior officer (relating to cancelling his second appointment with Dr. Jones) was dropped. Defs' Ex 125. She again advised DeFrancesco of his right to appeal. Id.
Despite his administrative appeal, the City Council approved DeFrancesco's termination on June 22, 1999. Defs' Ex 137. The City Council's correspondence does not advise DeFrancesco of a right to appeal that decision and states it is "a final decision." Defs' Ex 136. DeFrancesco did not take any further steps to have the final decision of the City reviewed by a circuit court by way of writ of review.
After a hearing held on September 28, 1999, Administrative Law Judge W. Lewis found that "[f]or purposes of unemployment insurance benefits, [DeFrancesco] is only disqualified if the employer shows misconduct" and held that he was "not acting in clear derogation of his understanding of the employer's reasonable standards." Pltf's Ex 6, p. 7. Thus, DeFrancesco was not subject to disqualification from unemployment benefits. Id.
ANALYSIS
The narrow issue before this court is whether the 1997 Handbook, which establishes "at-will" employment, is void or unenforceable. DeFrancesco argues that the 1997 Handbook conflicts with Ordinance 432 and was enacted without notice or consideration. He believes that this court's decision on whether the 1997 Handbook is enforceable will "clean up" the issue on whether defendants can claim that DeFrancesco was an at-will employee and thus "put the focus where it belongs — whether there was a [c]onstitutionally adequate pre-termination process and if it was reasonable and just (`cause') to terminate a 13 year police veteran for the alleged and obviously insubstantial reasons that the defendants assert." Plaintiff's Motion for Summary Judgment — Declaratory Judgment, p. 5.
The City counters that whether DeFrancesco was an at-will employee is irrelevant because he is protected by the First Amendment in either employment scenario. Additionally, the City argues that Ordinance 432 does not create a property interest for employees; that DeFrancesco is barred by claim preclusion; and that DeFrancesco was afforded due process. For the reasons that follow, this court finds that the 1997 Handbook is valid and enforceable.
I. Relevance
The City argues that whether DeFrancesco was an at-will employee is irrelevant, given that even an at-will employee cannot be terminated for exercising his First Amendment rights. DeFrancesco responds that his procedural rights were violated in retaliation for protected speech and that those rights are dependent on whether he was a permanent employee with a constitutionally protected property right.
The Complaint appears to allege just the opposite, namely that his discrimination "was in retaliation for his free speech and exercise of his procedural rights." Complaint, ¶ 30. However, for purposes of this motion, this court accepts DeFrancesco's characterization of his claim.
Resolution on this issue is significant because violations of an employer's own policies may be relevant to the issue of why an employee was terminated. Gonzales v. San Jose Police Dep't, 901 F.2d 758, 760-61 (9th Cir 1990); see also Domingo v. Copeland Lumber Yards, 81 Or. App. 52, 56, 724 P.2d 841, 844 (1986). If the 1997 Handbook establishing "at-will" employment is invalid, then the City might have violated its own ordinance by terminating DeFrancesco. Accordingly, this court will consider the merits of the parties' arguments.
II. Validity of the 1997 Handbook
A. Conflict with Ordinance 432
DeFrancesco first argues that the 1997 Handbook is void and unenforceable because it conflicts with Ordinance 432. Ordinance 432 was "adopted to establish an equitable and uniform procedure for dealing with personnel matters . . . and to provide a reasonable degree of job security for qualified employees." Pltf's Ex 4, Section 2 (emphasis added). Because the 1997 Handbook established at-will employment, DeFrancesco claims that it eliminated a "reasonable degree of job security" and therefore conflicts with Ordinance 432.
Ordinance 432 does not define "a reasonable degree of job security." Instead, it specifically defers to the City Council to adopt and amend personnel rules by resolution. This broad right to amend personnel rules grants to the City Council the ability to make reasonable policy changes regarding employment.
Nonetheless, DeFrancesco claims that Ordinance 432 granted him a property right that could not be terminated by the City adopting the 1997 Handbook. Interests in property are created 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." Board of Regents of State Coll. v. Roth, 408 U.S. 564, 577 (1972). Whether an expectation of entitlement to some benefit amounts to a property interest hinges on the language of the law or rule giving rise to that expectation. Wedges/Ledges of California, Inc. v. City of Phoenix, 24 F.3d 56, 62 (9th Cir 1994); Emerald Outdoor Adver., LLC v. City of Portland, 1999 WL 1441942, *6 (D Or 1999) (applying standard to a procedural due process claim).
Ordinance 432 is quite vague. It does not place any restriction on the grounds on which the City may discharge an employee, does not explicitly grant an employee a property right to due process prior to termination, and does not expressly prohibit "at-will" employment. Given the broad and deferential guidelines granted in Ordinance 432, it is difficult to conclude that the 1997 Handbook fails to comply with Ordinance 432. For example, the 1997 Handbook uniformly explains "at-will" employment times and establishes a Complaint Procedure which outlines three uniform steps for an employee to bring complaints to the City's attention.. See Pltf's Ex 1, pp. 5, 45, 48-49. Accordingly, this court finds that the 1997 Handbook does not contravene the basic employment policies originally reflected in Ordinance 432.
But even if Ordinance 432 does create an entitlement to employment that is not "at-will," it is of little consequence to this court's conclusion. As discussed below, an employer is entitled to eliminate job security based on new consideration and notice.
B. Consideration and Notice
DeFrancesco next argues that the 1997 Handbook is void because he did not: (1) receive any consideration for it; (2) agree or sign its acknowledgment form; or (3) receive any notice regarding the material change to "at-will" employment. Defendants respond that all City employees were given the opportunity to make suggested changes and received a copy of the 1997 Handbook.
1. Consideration
In Oregon, a written agreement stating employment is "at-will" does not eliminate a permanent employment agreement established by oral promises and conduct of the parties. McPhail v. Milwaukie Lumber, 165 Or. App. 596, 600-01, 999 P.2d 1144, 1148 (2000). Instead, new consideration is required to support new and inconsistent terms in a subsequent employment agreement. See Perthous v. Stewart, 243 F. Supp. 655 (D Or 1965); McCombs v. McClelland, 223 Or. 475, 483, 354 P.2d 311, 315 (1960) (holding that "where one already employed is induced to enter into a subsequent agreement containing a restrictive covenant as to other employment, such agreement to be enforceable must be supported by a promise of continued employment . . . or some other good consideration."). Moreover,
modification of an existing contract requires additional consideration in order for the modification to be binding. . . . Consideration is "the accrual to one party of some right, interest, profit or benefit or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other." . . . Under that definition, "benefit" means that the promisor has, in return for the promise, acquired a legal right to which the promisor would not otherwise be entitled; "detriment" means that the promisee has forborne some legal right that the promisee would otherwise have been entitled to exercise.
Id at 600-01, 999 P.2d at 1148, citing Jole v. Bredbenner, 95 OrApp 193, 196, 768 P.2d 433, 435 (1989); quoting Shelley v. Portland Tug Barge Co., 158 Or. 377, 387-88, 76 P.2d 477, 481 (1938).
In McPhail, a plaintiff employee accepted an employment handbook which altered his employment to "at-will." The Oregon Court of Appeals held that the employer defendants failed to "identify any specific benefit or improvement in plaintiff's employment status that occurred when plaintiff received the handbook." McPhail, 165 Or App. at 601, 999 P.2d at 1148. The court explained that continued employment and "benefits of an efficient, streamlined work environment that maximized sales and profits and supported his paycheck" did not rise to adequate consideration because "he did not gain anything new." Id.
Unlike McPhail, revisions in the 1997 Handbook clearly include increases in benefits, particularly with respect to the significant increase in vacation benefits for those employees, such as DeFrancesco, who had been employed for more than six years. See Pltf's Ex 1, p. 24. The increase in benefits constitute a legal right to which DeFrancesco would not otherwise be entitled. Thus, DeFrancesco did receive new consideration sufficient to support the change in terms to "at-will" employment.
2. Assent
Generally, "[a]n offeree's power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract." Copper River Sch. Dist. v. Traw, 9 P.3d 280, 286 (2000). The absence of express words of revocation is not necessarily controlling." Id at 287. Additionally, a revision in employment status cannot terminate an employee's "protectable job security interest by changing the status of her employment without her knowledge and consent." Gabe v. Clark County, 701 F.2d 102, 103 (9th Cir 1983) (per curiam).
In this case, DeFrancesco argues that he never accepted the "at-will" employment terms in the 1997 Handbook because he never signed the acknowledgment form. This argument fails because "assent by an employee to the modification of an agreement of employment by a change in duties by his employer may be shown by his continuing to serve after notice of such a change." Mail-Well Envelope Co., 262 Or at 152, 497 P.2d at 369 (citation omitted). DeFrancesco assented to the at-will term by continuing his employment.
3. Notice
DeFrancesco next argues that City employees were never provided with notice of the implications of changing their employment to "at-will." In Gabe, the Ninth Circuit held that "at the time of the promulgation of [a new employment rule], the plaintiff was entitled to notice thereof and a reasonable time within which to make her decision whether to continue in her current position . . . despite the removal of the job security safeguards, or seek to return to [her former position], accept a lateral transfer . . . or look for a position elsewhere." Gabe, 701 F.2d at 103.
Unlike Gabe, City employees, including DeFrancesco, had the opportunity to comment on the proposed 1997 Handbook months before the City Council formally adopted it. DeFrancesco's submitted suggestions to the revision, demonstrating that he received adequate notice.
Moreover, "at-will" employment terms are disclosed several times throughout the 1997 Handbook. See Pltf's Ex 1, pp. 5, 45, 48. For example, the introduction section states: "Nothing in this Handbook should be construed as a guarantee of continued employment, but rather, employment with the City is on an at-will basis. This means that the employment relationship may be terminated by you or the City for any reason not prohibited by law." Id at 5. Accordingly, DeFrancesco did receive adequate notice.
III. Claim Preclusion
Even if the 1997 Handbook is void and unenforceable, defendants assert that DeFrancesco's exclusive remedy to contest the quasi-judicial decisions of the City was to file a writ of review in state court pursuant to ORS §§ 34.010 — 34.100. DeFrancesco counters that his claim is based on federal constitutional and statutory grounds, including a challenge to the constitutional property interest in the adequacy of his pre-termination process. This court agrees, but only with respect to DeFrancesco's federal claim.
In a case involving terminated police officers, Decker v. Clark, 95 Or. App. 320, 769 P.2d 228, review denied, 308 Or. 405, 781 P.2d 885 (1989), the court found that the exclusive writ of review procedures applies in all civil actions. The court held:
The firings were quasi-judicial decisions of an inferior tribunal and were reviewable by a writ of review. . . . ORS 34.020 provides that a party to a proceeding before such a tribunal "may have the decision or determination thereof reviewed for errors, as provided in ORS 34.010 to 34.100, and not otherwise." (Emphasis supplied.) Although plaintiffs brought this action with the time limits for a writ of review, and although at least some of the relief that they seek would be available under that writ, they did not bring the case as a writ of review but as a civil action within the circuit court's general jurisdiction. Because the writ of review is the exclusive method for seeking judicial review of the Chief's actions, the trial court did not err in granting summary judgment to defendants on the state claims.
Id at 323, 769 P.2d at 229 (internal citations omitted and emphasis added).
However, a state writ of review process is not necessary when a case involves federal rights or constitutional claims. Patsy v. Florida Board of Regents, 457 U.S. 496, 516 (1982) (concluding that "exhaustion of state administrative remedies should not be required as a prerequisite to bringing an action pursuant to § 1983"); Pangle v. Bend-LaPine Sch. Dist., 169 Or. App. 376, 385-86, 10 P.3d 275, 280 (2000) (finding that even though plaintiff's exclusive remedy was a writ of review as to some state law claims, this "does not prevent us from reaching the merits of plaintiff's § 1983 claim.").
While it is true that a writ of review is required for state claims, DeFrancesco alleges both federal and state due process constitutional claims. See Amended Complaint, ¶¶ 30, 33, 35. Thus, while DeFrancesco was required to file a writ of review with respect to his state claims, this court can still reach the merits on his federal due process challenge.
IV. Due Process
Additionally, defendants argue that even assuming DeFrancesco has a property interest in continued employment prior to the adoption of the 1997 Handbook, he had adequate due process to contest the revisions or find a new employer, but elected to stay. He: (1) met with Conrad and was presented in writing with recommended charges against him; (2) appealed these to Huddleston, a final decisionmaker; (3) appealed to the City Council; and (4) could have appealed to the circuit court by filing a writ of review.
However, DeFrancesco did not raise this issue in his motion and this issue has no bearing on this court's assessment on whether the 1997 Handbook is valid. Accordingly, this court will reserve this issue for another day.
RECOMMENDATION
For the reasons stated above, plaintiff Ralph DeFrancesco's Motion for Summary Judgment — Declaratory Judgment (docket #31) to declare the 1997 Handbook void and unenforceable should be DENIED.
SCHEDULING ORDER
Objections to the Findings and Recommendation, if any, are due May 31, 2002. If no objections are filed, then the Findings and Recommendation will be referred to a district court judge and go under advisement on that date.
If objections are filed, the response is due no later than June 18, 2002. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will be referred to a district court judge and go under advisement.