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Cassel v. State; Dept of Administration (12/15/00) sp-5344
Cassel v. State; Dept of Administration (12/15/00) sp-5344
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
JAMES R. CASSEL, )
) Supreme Court Nos. S-9063/9073
Appellant and )
Cross-Appellee, ) Superior Court Nos.
) 3AN-97-7295/95-3048 CI
v. )
) O P I N I O N
STATE OF ALASKA, DEPARTMENT )
OF ADMINISTRATION, ) [No. 5344 - December 15, 2000]
)
Appellee and )
Cross-Appellant. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Sigurd E. Murphy, Judge pro tem and
Milton M. Souter, Judge.
Appearances: Terry A. Venneberg, Law Offices
of Terry A. Venneberg, Anchorage, for Appellant and Cross-Appellee.
Jan Hart DeYoung, Assistant Attorney General, Anchorage, and Bruce
M. Botelho, Attorney General, Juneau, for Appellee and Cross-
Appellant.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
FABE, Justice.
I. INTRODUCTION
James Cassel, a probationary employee, was dismissed from
his position as the Department of Public Safety's Identification
Bureau Chief. Cassel appeals his termination, claiming that
objective grounds did not support his termination. He further
claims entitlement to back pay based on a violation of his right to
due process. Because Cassel's termination conformed to the
objective standards and procedural safeguards required by the
collective bargaining agreement, we affirm.
II. FACTS AND PROCEEDINGS
In January 1994 James Cassel began work as the Department
of Public Safety's Identification Bureau Chief, a position charged
with the responsibility of managing the State's criminal records
and fingerprint identification system.
Under the collective bargaining agreement between the
State of Alaska and the Alaska Public Employees Association (APEA),
Cassel's position was subject to a twelve-month probationary
period. Midway through this probationary period, Cassel received
a performance evaluation from his immediate supervisor, Director of
Administrative Services Ken Bischoff. Bischoff expressed
dissatisfaction with Cassel's job performance, giving him an
"unacceptable" rating on his performance and a "low acceptable"
overall rating. Cassel did not appeal this evaluation and
eventually signed the report.
In September 1994 Bischoff notified Cassel that Cassel
would not complete his probationary period and that his employment
would be terminated within sixty days. Cassel, through his union,
challenged his termination pursuant to the complaint procedures
available to probationary employees. At the first two steps of the
complaint review process, Cassel's complaint was denied by Bischoff
and Commissioner of Public Safety Richard Burton. The third and
final step of the complaint process entailed review by the
Commissioner of Administration.
In conjunction with this step III complaint review by the
Department of Administration, labor relations analyst Mila Doyle
met with Cassel and his APEA representative. Following this
meeting, Doyle recommended the denial of Cassel's complaint.
Ultimately, then-Commissioner of Administration Mark Boyer denied
Cassel's complaint and upheld his termination.
Cassel appealed this final decision to the superior
court. In a September 1996 order, Superior Court Judge Milton M.
Souter determined that under the applicable labor contracts and
University of Alaska v. Tovsen, [Fn. 1] Cassel could be terminated
"only for good cause." Because no good cause determination had
been made, Judge Souter reversed Commissioner Boyer's decision and
remanded to the Department of Administration for further
proceedings.
Cassel thereafter filed a Motion for Clarification of
Remedy, seeking back pay for the State's failure to provide him
with an adequate hearing. Judge Souter determined that Cassel's
meeting with Doyle conformed to the collective bargaining agreement
and provided due process, and therefore denied Cassel's request for
back pay.
In May and June of 1997 Hearing Officer Phyllis V.
Schmidt held a hearing pursuant to Judge Souter's remand order to
determine whether there was good cause to terminate Cassel. In her
September 1997 decision, Schmidt concluded that "there was just
cause to terminate Mr. Cassel for unsatisfactory performance of his
duties."
Cassel appealed Hearing Officer Schmidt's decision to the
superior court. Superior Court Judge pro tem Sigurd E. Murphy
affirmed, holding that just cause supported Cassel's termination.
Judge Murphy also affirmed Judge Souter's ruling that Cassel
received due process in the Doyle meeting and was therefore not
entitled to back pay.
On appeal, Cassel claims that (1) Hearing Officer Schmidt
improperly applied a subjective standard in violation of Judge
Souter's order, and (2) he did not receive due process in the Doyle
meeting and is therefore entitled to back pay.
On cross-appeal, the State claims that good faith,
subjective dissatisfaction with employee performance is sufficient
to terminate probationary employees under the collective bargaining
agreement.
III. DISCUSSION
A. Standard of Review
"When the superior court acts as an intermediate court of
appeal, we review the merits of the underlying administrative
decision independently, giving no deference to the superior court's
decision." [Fn. 2] In reviewing administrative decisions, we apply
four principal standards:
the "substantial evidence" test for questions
of fact; the "reasonable basis" test for questions of law involving
agency expertise; the "substitution of judgment" test for
questions of law where no agency expertise is involved; and the
"reasonable and not arbitrary" test for review of administrative
regulations.[ [Fn. 3]]
Because the interpretation of a contract is a question of law, we
substitute our own judgment. [Fn. 4] Whether an employee was
terminated for just cause or for an illegitimate reason is a
question of fact which we review for substantial evidence. [Fn. 5]
Substantial evidence exists when, in light of the whole record,
reasonable minds might accept the administrative agency's decision.
[Fn. 6] We do "not independently reweigh the evidence" nor "choose
between competing inferences" but "only determine whether such
evidence exists." [Fn. 7] It is a legal question whether the
quantum of evidence is substantial. [Fn. 8]
B. The State-APEA Collective Bargaining Agreement Required
Objective Grounds to Terminate Cassel as a Probationary Employee.
In furtherance of the constitutionally mandated merit
principle in public employment, [Fn. 9] the legislature has
required a probationary period for state employees prior to
attaining permanent status. [Fn. 10] This probationary period "is
an integral part of the examination process which is to be used to
evaluate the employee's work and to reject any employee whose
performance is not acceptable." [Fn. 11]
This court has previously addressed the question of
whether language in an employment contract required objective
grounds for terminating a probationary employee. In University of
Alaska v. Tovsen, we addressed whether the University of Alaska's
personnel regulations required an objective basis for the dismissal
of a probationary employee. [Fn. 12] The University argued that
the regulation at issue [Fn. 13] was analogous to a satisfaction
contract that permits the dismissal of the probationary employee
upon the employer's subjective, good faith dissatisfaction with the
employee's performance. [Fn. 14] We rejected this argument,
determining that "the regulation more clearly resembles an
agreement permitting termination only when objective standards of
performance are not satisfied." [Fn. 15] We defined "objective
standards" broadly in this context as "standards that exist by
reference to external sources such as employee rules and
regulations or standards that a reasonable person would use in
evaluating an employee's performance." [Fn. 16] The University
regulation referred to objective standards and thus did not
resemble a satisfaction contract, under which the employer may
terminate an employee as long as the employer, in good faith, is
actually dissatisfied with the employee's performance. [Fn. 17] We
concluded that the wording of the University regulation
"suggest[ed] a process involving objective standards rather than
mere personal beliefs." [Fn. 18]
In the instant case, Judge Souter determined that the
State-APEA collective bargaining agreement and the "Rater's Guide
to Performance Appraisals" set forth "uniform standards . . . [for
the] rating of a probationary employee." [Fn. 19] Because of these
uniform standards, Judge Souter reasoned that Tovsen applied and
that Cassel "was subject to termination only for good cause." In
its cross-appeal, the State argues that probationary employees,
like at-will employees, may properly be dismissed under the State-
APEA agreement upon a supervisor's good faith, personal
dissatisfaction with employee performance.
As a matter of contract interpretation, we reject the
State's argument and conclude that the State-APEA agreement, like
the regulations discussed in Tovsen, permits termination only when
a probationary employee has failed to satisfy objective standards
of performance. First, the State-APEA agreement explicitly
requires written performance evaluations of probationary employees.
[Fn. 20] Section 18.17(A) provides that probationary employees
"shall receive written performance evaluations." Furthermore,
negative performance evaluations are explicitly linked to
nonretention; raters may recommend personnel actions on the
performance evaluations.
More importantly, the State-APEA agreement creates an
objective standard for dismissing probationary employees: the
unsatisfactory completion of the probationary period with reference
to the uniform Rater's Guide standards. [Fn. 21] Under Section
18.17(D), the State has the responsibility "to provide the
uniformity of the application of standards by different rating
officers by providing training and a 'Rater's Guide' to supervisors
who have the responsibility of evaluating" employees. These
factors indicate that the State may not terminate probationary
employees on a whim under the State-APEA collective bargaining
agreement; termination must be based on a failure to meet objective
standards either set forth in employee regulations or "that a
reasonable person would use in evaluating an employee's
performance." [Fn. 22]
In sum, after analyzing the State-APEA agreement in light
of Tovsen, we conclude that, as a matter of contract
interpretation, the superior court did not err in rejecting the
State's argument on cross-appeal that it could terminate Cassel, as
a probationary employee, merely because of a supervisor's personal
dissatisfaction with his performance without regard to objective
standards. [Fn. 23]
C. Objective Grounds Support Cassel's Termination.
In his appeal, Cassel argues that the Department of
Administration failed to comply with Judge Souter's remand order
and to apply an objective standard as required by Tovsen. [Fn. 24]
In Braun v. Alaska Commercial Fishing & Agriculture Bank,
[Fn. 25] we enunciated the court's proper role in assessing
terminations for cause. [Fn. 26] A court reviews such a
termination to ensure that it "is not for any arbitrary,
capricious, or illegal reason and . . . is . . . based on facts (1)
supported by substantial evidence and (2) reasonably believed by
the employer to be true." [Fn. 27] This approach thus "checks the
subjective good faith of the employer with an objective reasonable
belief standard." [Fn. 28] As in Tovsen, this court will uphold a
good faith termination upon substantial evidence of "an objective
failure to meet acceptable standards," in other words, "when
objective standards of performance are not satisfied." [Fn. 29]
Hearing Officer Schmidt correctly set forth and applied
the objective standard requirements of Tovsen and Braun. First,
Schmidt properly concluded that unsatisfactory performance of
duties constituted just cause for termination. This conclusion
clearly comports with the State-APEA agreement, which defines "just
cause" as "incompetence, unsatisfactory performance of duties,
unexcused absenteeism, intoxication, substance abuse, dishonesty
and gross disobedience." (Emphasis added.)
Second, Hearing Officer Schmidt properly applied an
objective standard. Cassel claims that Schmidt erred by relying on
the subjective evaluations of Cassel's supervisor rather than
substituting her own evaluation of Cassel's performance in light of
objective standards. But a supervisor's performance evaluation
invariably involves that supervisor's personal assessment of the
employee's performance. The hearing officer's duty under Braun and
Tovsen is to ensure that the supervisor's evaluations were made in
good faith and in reference to objective performance standards.
Therefore, Schmidt did not err in concluding that satisfactory
performance was to be judged by the supervisor or in relying
heavily on Bischoff's evaluation of Cassel.
Bischoff described a number of shortcomings that were
cited by Schmidt: (1) Cassel's draft capital budget "needed major
work" and had to be completed by a different employee; (2) Cassel
did not interact on a routine basis with other key team members;
(3) Cassel required direction and did not adequately act in an
independent and proactive manner; (4) Cassel did not focus on his
primary mission of fingerprint processing but rather emphasized the
cultivation of alliances with coordinate law enforcement divisions;
(5) Cassel would have missed a deadline for submitting a document
had another employee not completed the written product; (6) Cassel
mishandled an alleged sexual harassment incident and an equipment
fire; (7) Cassel did not pay enough personal attention and
inappropriately delegated responsibility with respect to the
automation of work flow processes; (8) Cassel's management resulted
in a large backlog of requests and numerous complaints; and (9)
Cassel's monthly reports failed to provide the expected management
analysis.
Co-worker Kathy Mather corroborated Bischoff's
assessments regarding Cassel's contribution to the backlog and his
poor management abilities. Another co-worker, John McGhee,
testified that Cassel had improperly conducted employment
interviews, gave out incorrect information to the public,
contributed to the work backlog, and improperly accessed a law
enforcement information system (ASPIN) for personal use.
In light of this evidence, we concur with Judge Murphy
that substantial evidence supported the hearing officer's decision.
The cited criticisms of Cassel touch on several aspects of
managerial performance: supervision, delegation, communication,
execution, analysis, judgment, and prioritization. These are
precisely the areas that a reasonable person would examine in
evaluating a supervisory employee's performance.
Because Hearing Officer Schmidt relied on evidence of
Cassel's failure to meet objective managerial performance
standards, we conclude that the superior court was correct in
affirming her decision.
D. The Superior Court Did Not Err in Denying Cassel Back
Pay.
Following Judge Souter's order remanding the case for an
objective good cause determination, Cassel moved to clarify the
remedy. In particular, Cassel sought back pay for the State's
failure to provide an adequate due process hearing. After hearing
arguments, Judge Souter denied Cassel's motion, concluding that
Cassel had received due process through the post-termination
meeting convened under the complaint procedures of the collective
bargaining agreement. Cassel claims that this decision was
erroneous because the Doyle meeting was not an adequate adversarial
hearing. [Fn. 30]
In Storrs v. Municipality of Anchorage, [Fn. 31] we
determined that public employees terminable only for cause under a
collective bargaining agreement "have a sufficient property
interest in continued employment to warrant due process protection
prior to termination." [Fn. 32] This due process protection arises
from both the federal and Alaska constitutions. [Fn. 33]
Furthermore, "[w]hen a constitutionally unlawful dismissal is cured
by a post-termination hearing, the employee is entitled to be paid
for the period between dismissal and the curative hearing." [Fn.
34]
Ordinarily, the public employee is entitled to an
adversarial hearing before termination. [Fn. 35] However, in
limited circumstances, a post-termination adversarial hearing may
satisfy the due process requirements "when a collective bargaining
agreement waives the constitutionally mandated pretermination
adversarial hearing . . . [and] provides fair, reasonable, and
efficacious procedures by which employer-employee disputes may be
resolved." [Fn. 36] Although a full evidentiary hearing is not
required, the procedures must provide an opportunity for the
employee "to present a defense by testimonial and other evidence."
[Fn. 37] When the collective bargaining agreement provides such
procedures, the employee suffers no due process violation through
the use of a post-termination hearing and thus is not entitled to
back pay. [Fn. 38]
Because Cassel received no pretermination hearing, the
central dispute is whether the State-APEA agreement provides for a
post-termination adversarial hearing that is fair, reasonable, and
efficacious. In contrast to the heightened grievance procedures
available to permanent employees under Section 10.2, probationary
employees may appeal their dismissals solely through the complaint
procedure provided in Section 10.1. Under the complaint procedure
of Section 10.1(5)(c), APEA may present the appeal of a
probationary employee's dismissal to the Commissioner of
Administration. Upon request, "a meeting between the [APEA]
Representative and the Commissioner or a designee will be convened
to discuss the complaint." The Commissioner is then required to
issue a decision within twenty days of that meeting.
Here, after Cassel appealed to the Commissioner of
Administration, he met with State labor analyst Mila Doyle to
discuss his complaint. APEA official Dennis Geary represented
Cassel at the meeting and provided documentary evidence to Doyle.
Although the participants did not take oaths or engage in cross-
examination, Cassel had the opportunity to present his position to
Doyle and call a witness, Lieutenant Jay Yakopatz, to provide
further information. One month later, Doyle submitted a short
memorandum entitled "Complaint Synopsis" to Commissioner Boyer,
analyzing the parties' positions and offering recommendations.
Commissioner Boyer then denied Cassel's complaint.
We conclude that these procedures represent a "fair,
reasonable, and efficacious" means of dispute resolution. The
post-termination procedures accepted by APEA and provided to Cassel
by the State do not constitute a due process violation. Because
Cassel received "fair, reasonable, and efficacious" post-
termination procedures in accordance with the collective bargaining
agreement, Cassel received due process and is therefore not
entitled to back pay.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM Cassel's termination
and the denial of back pay.
FOOTNOTES
Footnote 1:
835 P.2d 445 (Alaska 1992).
Footnote 2:
Bartlett v. State, Commercial Fisheries Entry Comm'n, 948 P.2d
987, 990 (Alaska 1997).
Footnote 3:
Rollins v. State, Dep't of Revenue, Alcoholic Beverage Control
Bd., 991 P.2d 202, 206 (Alaska 1999).
Footnote 4:
See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d 1116, 1119
(Alaska 1997).
Footnote 5:
See Jones v. Central Peninsula Gen. Hosp., 779 P.2d 783, 789
(Alaska 1989).
Footnote 6:
See Municipality of Anchorage, Police & Fire Retirement Bd. v.
Coffey, 893 P.2d 722, 726 (Alaska 1995) (internal quotation
omitted).
Footnote 7:
Id.
Footnote 8:
See Fireman's Fund Am. Ins. Cos. v. Gomes, 544 P.2d 1013, 1015
(Alaska 1976).
Footnote 9:
See Alaska Const. art. XII, sec. 6.
Footnote 10:
See AS 39.25.150(7); 2 Alaska Administrative Code (AAC) 07.240
(1999).
Footnote 11:
2 AAC 07.240.
Footnote 12:
835 P.2d 445, 446-48 (Alaska 1992).
Footnote 13:
University Regulation 04.01.06 provided in part:
All non-exempt and exempt (non-faculty)
employees shall be in probationary status for the first six months
of employment. The performance of these employees shall be
evaluated prior to the end of the probationary period.
. . . .
B. If the employee's performance is found to
be unsatisfactory, the employee will be terminated.
Tovsen, 835 P.2d at 446 n.1.
Footnote 14:
See Tovsen, 835 P.2d at 446.
Footnote 15:
Id. at 447.
Footnote 16:
Id. at 447 n.2.
Footnote 17:
See id. at 446 (citing 53 Am. Jur. 2d, Master and Servant sec.
37, at 113 (1970)). Satisfaction contracts typically contain the
phrase "as long as his services are satisfactory to the employer."
Id. (quoting John C. McCarthy, Recovery of Damages for Wrongful
Discharge 2d sec. 3.53, at 286 (1990)).
Footnote 18:
Id. at 447.
Footnote 19:
The State claims the superior court's reference to the Rater's
Guide constituted error on the ground that the Rater's Guide was
not part of the employment contract. But the Rater's Guide
constitutes an "external source" of employee performance standards
and was referenced by name in sec. 18.17(D) of the State-APEA
agreement. See Tovsen, 835 P.2d at 447 n.2. We accordingly
conclude that the superior court did not err in citing the Rater's
Guide.
Footnote 20:
See Tovsen, 835 P.2d at 447 ("the regulation itself directs
that the performance of probationary employees be evaluated; a
probationary employee may be terminated if his or her performance
is found to be unsatisfactory.") (internal punctuation omitted).
Footnote 21:
See Tovsen, 835 P.2d at 447, 447 n.2 (discussing agreement
that permits termination only for failure to satisfy objective
standards of performance, i.e., standards with reference to
"external sources such as employee rules and regulations or
standards that a reasonable person would use in evaluating an
employee's performance"); see also Stanfill v. City of Fairbanks,
659 P.2d 579, 583 (Alaska 1983) (requiring just cause for
termination of probationary employee where city personnel
ordinance provided performance-related grounds for dismissal,
namely "inability or unwillingness to perform the job or
unsuitability for the position").
Footnote 22:
Tovsen, 835 P.2d at 447 n.2. Given the agreement's framework
of performance evaluations based on objective standards, the fact
that sec. 18.12 explicitly ties the retention of probationary
employees to "the judgment of the Employer" does not by itself
create a satisfaction contract.
Footnote 23:
We note that, while this particular contract requires a
failure of objective standards to warrant termination of
probationary employees, just cause is not per se required for the
termination of probationary employees. We do not hold that the
State is precluded from negotiating a satisfaction contract with
APEA or other labor unions in order to establish an at-will
employment relationship with probationary employees.
Footnote 24:
See 835 P.2d at 446-47.
Footnote 25:
816 P.2d 140 (Alaska 1991).
Footnote 26:
See Manning v. Alaska R.R. Corp., 853 P.2d 1120, 1125 n.2
(Alaska 1993) (citing Braun, 816 P.2d at 142).
Footnote 27:
Braun, 816 P.2d at 142 (quoting Baldwin v. Sisters of
Providence in Wash., Inc., 769 P.2d 298, 304 (Wash. 1989)).
Footnote 28:
Baldwin, 769 P.2d at 304.
Footnote 29:
835 P.2d at 447.
Footnote 30:
Cassell further claims that his due process rights were
violated because the Doyle meeting did not apply the "just cause"
standard. But Cassel has cited no legal authority for this
proposition. We therefore reject this argument. See Adamson v.
University of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991) ("where
a point is given only a cursory statement in the argument portion
of a brief, the point will not be considered on appeal").
Footnote 31:
721 P.2d 1146 (Alaska 1986).
Footnote 32:
Id. at 1148. Cf. Chijide v. Maniilaq Ass'n of Kotzebue,
Alaska, 972 P.2d 167, 171-72 (Alaska 1999) (finding no property
interest in continued employment where employee could be fired at
any time without cause and worked under year-to-year contract that
could be renewed or not renewed for any reason); Breeden v. City of
Nome, 628 P.2d 924, 926 (Alaska 1981) ("A person who is employed
'at the pleasure' of his employer has no 'property' interest in
continued employment that is protected by due process.").
Footnote 33:
See Storrs, 721 P.2d at 1148, 1150.
Footnote 34:
Id. at 1151.
Footnote 35:
See id. at 1150.
Footnote 36:
Id. (citations and quotations omitted); see also Chaney v.
Suburban Bus Div. of Regional Transp. Auth., 52 F.3d 623, 628-630
(7th Cir. 1995); Wallace v. Tilley, 41 F.3d 296, 301-02 (7th Cir.
1994); Buttitta v. City of Chicago, 9 F.3d 1198, 1206 (7th Cir.
1993).
Footnote 37:
Storrs, 721 P.2d at 1150; see also City of North Pole v.
Zabek, 934 P.2d 1292, 1298 (Alaska 1997) (concluding that
terminated employee received due process because of adversarial
proceeding and representation by counsel, and her ability to frame
issues and submit witness affidavits); North Slope Borough v.
Barraza, 906 P.2d 1377, 1383-84 (Alaska 1995) (Matthews, J.,
concurring) (stating that Storrs properly articulated requirements
for pre-termination hearing); Nichols v. Eckert, 504 P.2d 1359,
1365 (Alaska 1973) ("A full judicial hearing is not necessary, but
a hearing that allows the administrative authority to examine both
sides of the controversy will protect the interests and rights of
all who are involved.").
Footnote 38:
See Storrs, 721 P.2d at 1151 (noting that back pay is only
available for "constitutionally unlawful" dismissal).
