IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
May 22, 2007 Session
WILLIAM L. THOMPSON v. MEMPHIS LIGHT, GAS AND WATER
DIVISION
Direct Appeal from the Chancery Court for Shelby County
No. CH-05-1303 D.J. Alissandratos, Chancellor
No. W2006-01972-COA-R3-CV - Filed July 12, 2007
The trial court awarded summary judgment to Plaintiff, former employee of Defendant Memphis
Light Gas and Water Division (“MLGW”), upon determining that Plaintiff was entitled to severance
benefits under “personnel policy 22-25" because revocation of the policy by MLGW’s Board was
negated due to violations of the Open Meetings Act. We reverse the award of summary judgment
to Mr. Thompson and award summary judgment to MLGW on other grounds.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed; and
Remanded
DAVID R. FARMER , J., delivered the opinion of the court, in which ALAN E. HIGHERS, J. and HOLLY
M. KIRBY , J., joined.
Allen Jerome Wade, Brandy S. Parrish, Lori Hackleman Patterson, and Stephen Harold Biller,
Memphis, Tennessee, for the appellant, Memphis Light, Gas and Water Division.
Ronald D. Krelstein, Memphis, Tennessee, for the appellee, William L. Thompson.
OPINION
The primary issue presented by this lawsuit is whether Plaintiff William L. Thompson (Mr.
Thompson) is entitled to enhanced severance benefits under Memphis Light Gas and Water Division
(“MLGW”) personnel policy 22-25 (“policy 22-25" or “the policy”), which was adopted by the
Board of Defendant MLGW (“the Board”) in 2000 and subsequently rescinded by the Board in
August 2004. This dispute arises in the midst of the on-going storm at MLGW. In 2000, when the
city of Memphis was considering the sale of MLGW, the MLGW Board adopted personnel policy
22-25, which provides for severance and “enhanced severance” benefits. According to MLGW’s
brief to this Court, the policy was adopted “in order to provide lucrative benefits to MLGW senior
employees in the event of a sale of MLGW by the City.” The policy allowed MLGW to offer
enhanced severance benefits to employees and appointed officers whose full-time positions were
terminated under certain conditions in exchange for “separation and release” agreements. It is
undisputed that the policy was never approved by the City Council, was not included in MLGW
budgets, and apparently went largely unnoticed until 2004 when Memphis Mayor Willie Herenton
(“Mayor Herenton” or “the Mayor”) chose not to reappoint then MLGW President Herman Morris
and Mr. Thompson, then Senior Vice President and Chief Operating Officer, applied for the position
of President. In July 2004, however, Joseph Lee (Mr. Lee) was hired as President, and on September
13, 2004, Mr. Thompson’s position at MLGW was eliminated and Mr. Thompson was advised that
there was no other job opening available at MLGW.
In the meantime, in January 2004, the City Council passed a resolution limiting the Board’s
ability to enter into contracts providing enhanced severance benefits. Additionally, in January and
August 2004, Mayor Herenton requested that the Board rescind policy 22-25. On August 19, 2004,
the Board voted at its regularly scheduled meeting to rescind the policy by vote of three to zero. The
matter apparently was also discussed at an 11:00 AM meeting between the Board and the President
of MLGW. Accordingly, because the Board rescinded policy 22-25 prior to the elimination of Mr.
Thompson’s position, Mr. Thompson was not entitled to enhanced severance benefits under the
policy.
On July 13, 2005, however, Mr. Thompson filed suit in the Shelby County Chancery Court
alleging he was entitled to severance benefits under policy 22-25 because the August 19 vote to
rescind the policy was null and void due to violations of the Open Meetings Act by the Board. He
accordingly sought all termination benefits to which he was entitled under policy 22-25. Mr.
Thompson also sought damages against Mr. Lee, alleging Mr. Lee had conspired with Mayor
Herenton to terminate his employment in violation of the Whistleblower Act. He also alleged Mr.
Lee had engaged in tortious interference with his job and had wrongfully failed to allow him to
return to his position with MLGW.
In March 2006, Mr. Thompson nonsuited all claims except the Open Meetings Act claim and
his allegation that the severance policy had been rescinded illegally. In May 2006, he filed an
amended motion for summary judgment, seeking a declaration that the MLGW Board members had
violated the Act. In his motion, Mr. Thompson stated that benefits under the policy had been
determined by MLGW to be $275,955.70. He further sought prejudgment interest, the imposition
of a penalty in either the form of punitive damages or attorney’s fees, and an injunction prohibiting
the Board from holding meetings in violation of the Open Meetings Act.
In its response to Mr. Thompson’s motion for summary judgment, MLGW asserted that a
genuine issue of material fact existed with respect to the alleged violations of the Open Meetings Act
and further asserted that the adoption of policy 22-25 was ultra vires. MLGW asserted the policy
was null and void ab initio because it had not been approved by the Memphis City Council as
required by the City Charter. Mr. Thompson, in turn, challenged the defense on procedural grounds
and asserted that, as a matter of law, the policy was not ultra vires because MLGW had not adopted
it in the entire absence of authority.
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The trial court denied Mr. Thompson’s procedural defense. It further held that MLGW’s
ultra vires defense was not applicable to bar Mr. Thompson’s claims. The trial court determined that
the Board violated the Open Meetings Act (“the Act”) as codified at Tennessee Code Annotated §
8-44-101, et. seq., during the course of revoking the policy, rendering the Board’s revocation of the
policy null under Tennessee Code Annotated 8-44-105. 1 It accordingly
1
The Open Meeting Act provides, in pertinent part:
Policy -- Construction. -- (a) The general assembly hereby declares it to be the policy of this state
that the formation of public policy and decisions is public business and shall not be conducted in
secret.
(b) This part shall not be construed to limit any of the rights and privileges contained in
article I, § 19 of the Constitution of Tennessee.
Tenn. Code Ann. § 8-44-101.
Open meetings – “Governing body” defined – “M eeting” defined. – (a) All meetings of any
governing body are declared to be public meetings open to the public at all times, except as provided
by the Constitution of Tennessee.
(b)(1) "Governing body" means:
(A) The members of any public body which consists of two (2) or more members, with the
authority to make decisions for or recommendations to a public body on policy or administration and
also means a community action agency which administers community action programs under the
provisions of 42 U.S.C. § 2790. Any governing body so defined by this section shall remain so
defined, notwithstanding the fact that such governing body may have designated itself as a negotiation
committee for collective bargaining purposes, and strategy sessions of a governing body under such
circumstances shall be open to the public at all times;
(B) The board of directors of any nonprofit corporation which contracts with a state agency
to receive community grant funds in consideration for rendering specified services to the public;
provided, that community grant funds comprise at least thirty percent (30%) of the total annual income
of such corporation. Except such meetings of the board of directors of such nonprofit corporation that
are called solely to discuss matters involving confidential doctor-patient relationships, personnel
matters or matters required to be kept confidential by federal or state law or by federal or state
regulation shall not be covered under the provisions of this chapter, and no other matter shall be
discussed at such meetings;
(C) T he board of directors of any not-for-profit corporation authorized by the laws of
Tennessee to act for the benefit or on behalf of any one (1) or more counties, cities, towns and local
governments pursuant to the provisions of title 7, chapter 54 or 58. The provisions of this subdivision
(b)(1)(C) shall not apply to any county with a metropolitan form of government and having a
population of four hundred thousand (400,000) or more according to the 1980 federal census or any
subsequent federal census;
(D) The board of directors of any nonprofit corporation which through contract or otherwise
provides a metropolitan form of government having a population in excess of five hundred thousand
(500,000) according to the 1990 federal census or any subsequent federal census with heat, steam or
incineration of refuse;
(E)(i) The board of directors of any association or nonprofit corporation authorized by the
laws of Tennessee that:
(a) Was established for the benefit of local government officials or counties, cities, towns
or other local governments or as a municipal bond financing pool;
(continued...)
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1
(...continued)
(b) Receives dues, service fees or any other income from local government officials or such
local governments that constitute at least thirty percent (30%) of its total annual income; and
(c) W as authorized as of January 1, 1998, under state law to obtain coverage for its
employees in the Tennessee consolidated retirement system.
(ii) The provisions of this subdivision (b)(1)(E) shall not be construed to require the
disclosure of a trade secret or proprietary information held or used by an association or nonprofit
corporation to which this chapter applies. In the event a trade secret or proprietary information is
required to be discussed in an open meeting, the association or nonprofit corporation may conduct an
executive session to discuss such trade secret or proprietary information; provided, that a notice of the
executive session is included in the agenda for such meeting.
(iii) As used in this subdivision (b)(1)(E):
(a) "Proprietary information" means rating information, plans, or proposals; actuarial
information; specifications for specific services provided; and any other similar commercial or
financial information used in making or deliberating toward a decision by employees, agents or the
board of directors of such association or corporation; and which if known to a person or entity outside
the association or corporation would give such person or entity an advantage or an opportunity to gain
an advantage over the association or corporation when providing or bidding to provide the same or
similar services to local governments; and
(b) "Trade secret" means the whole or any portion or phrase of any scientific or technical
information, design, process, procedure, formula or improvement which is secret and of value. The
trier of fact may infer a trade secret to be secret when the owner thereof takes measures to prevent it
from becoming available to persons other than those selected by the owner to have access thereto for
limited purposes;
(2) "M eeting" means the convening of a governing body of a public body for which a quorum
is required in order to make a decision or to deliberate toward a decision on any matter. "M eeting"
does not include any on-site inspection of any project or program.
(c) Nothing in this section shall be construed as to require a chance meeting of two (2) or
more members of a public body to be considered a public meeting. No such chance meetings, informal
assemblages, or electronic communication shall be used to decide or deliberate public business in
circumvention of the spirit or requirements of this part.
Tenn. Code Ann. § 8-44-102(2002).
(a) N O TICE O F R EGULAR M EETINGS . – Any such governmental body which holds a meeting previously
scheduled by statute, ordinance, or resolution shall give adequate public notice of such meeting.
(b) Notice of Special Meetings. Any such governmental body which holds a meeting not
previously scheduled by statute, ordinance, or resolution, or for which notice is not already provided
by law, shall give adequate public notice of such meeting.
(c) The notice requirements of this part are in addition to, and not in substitution of, any other
notice required by law.
Tenn. Code Ann. § 8-44-103 (2002.
M inutes recorded and open to public – Secret votes prohibited. – (a) The minutes of a meeting
of any such governmental body shall be promptly and fully recorded, shall be open to public
inspection, and shall include, but not be limited to, a record of persons present, all motions, proposals
and resolutions offered, the results of any votes taken, and a record of individual votes in the event of
roll call.
(b) All votes of any such governmental body shall be by public vote or public ballot or public
(continued...)
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awarded summary judgment to Mr. Thompson upon determining that, as an employee of MLGW
whose position was eliminated in September 2004, Mr. Thompson was entitled to seek benefits
under policy 22-25 in the amount of $275,955.70. The trial court awarded summary judgment to Mr.
Thompson and entered judgment in his favor in the amount of $275,955.70. Mr. Thompson moved
to alter or amend, seeking prejudgment interest, penalties for violation of the Open Meetings Act,
a recalculation of benefits, an injunction against further violation of the Act, and a finding that
MLGW was not authorized to take action regarding its severance policy following a January 2004
City Council resolution. The trial court denied prejudgment interest, penalties, and the request for
additional findings with respect to the 2004 resolution. It also denied the claim for additional
damages, holding that the issue was not properly before it. The trial court granted the injunctive
relief based upon agreement of the parties. This appeal ensued. We reverse the award of summary
judgment to Mr. Thompson and award summary judgment to MLGW on the grounds that, pursuant
to the resolution adopted by the City Council in January 2004, enhanced severance benefits under
policy 22-25 are not authorized or available absent approval by the Memphis City Council.
Issues Presented
MLGW presents the following issues for our review:
(1) Whether the chancery court erred in holding that MLGW’s severance policy
was lawfully adopted and/or valid despite the fact that it was never approved
by the Memphis City Council.
(2) Whether the chancery court erred by awarding Plaintiff a judgment for
severance benefits in light of the Memphis City Council’s January 20, 2004
resolution prohibiting MLGW from entering into any contracts for severance
payments pursuant to MLGW’s severance policy from and after January 20,
2004, and the enactment of substitute ordinance 5046.
1
(...continued)
roll call. No secret votes, or secret ballots, or secret roll calls shall be allowed. As used in this chapter,
"public vote" means a vote in which the "aye" faction vocally expresses its will in unison and in which
the "nay" faction, subsequently, vocally expresses its will in unison.
Tenn. Code Ann. § 8-44-104 (2002).
Action nullified – Exception. – Any action taken at a meeting in violation of this part shall be void
and of no effect; provided, that this nullification of actions taken at such meetings shall not apply to
any commitment, otherwise legal, affecting the public debt of the entity concerned.
Tenn. Code Ann. § 8-44-105 (2002).
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(3) Whether the chancery court erred by holding that MLGW’s August 19, 2004
action to rescind its severance policy violated Tennessee’s Open Meetings
Act as a matter of law.
(4) Whether the chancery court erred in holding that Plaintiff was entitled to any
enhanced severance benefits under MLGW’s severance policy in light of
Plaintiff’s election to receive and acceptance of a partial lump sum
distribution of his pension benefits.
Mr. Thompson raises the following additional issues, as we slightly reword them:
(1) Whether the trial court erred by allowing the Defendant to raise the defense
of ultra vires even though it found the defense did not apply.
(2) Whether the trial court erred by not awarding prejudgment interest.
(3) Whether the trial court erred by not assessing a penalty.
(4) Whether the trial court erred by not awarding damages for the alleged
underpayment of the Plaintiff’s pension benefits.
(5) Whether the trial court erred by finding that the Defendant is subject to the
provisions of Tennessee Code Annotated § 6-54-115.
Standard of Review
Our standard of review of a trial court sitting without a jury is de novo upon the record.
Wright v. City of Knoxville, 898 S.W.2d 177, 181 (Tenn. 1995). There is a presumption of
correctness as to the trial court’s findings of fact, unless the preponderance of evidence is otherwise.
Tenn. R. App. P. 13(d). We review the trial court’s conclusions on matters of law and on mixed
questions of law and fact de novo, with no presumption of correctness. Tenn. R. App. P. 13(d);
Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000).
Summary judgment is appropriate only when the moving party can demonstrate that there
are no disputed issues of material fact, and that it is entitled to judgment as a matter of law. Tenn.
R. Civ. P. 56.04; Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn. 1993). The party moving for summary
judgment must affirmatively negate an essential element of the nonmoving party’s claim, or
conclusively establish an affirmative defense. McCarley v. West Quality Food Serv., 960 S.W.2d
585, 588 (Tenn. 1998). In determining whether to award summary judgment, the trial court must
view the evidence in the light most favorable to the nonmoving party and draw all reasonable
inferences in that party’s favor. Staples v. CBL & Assocs., 15 S.W.3d 83, 89 (Tenn. 2000). The
court should award summary judgment only when a reasonable person could reach only one
conclusion based on the facts and the inferences drawn from those facts. Id. Summary judgment is
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not appropriate if there is any doubt about whether a genuine issue of material fact exists. McCarley,
960 S.W.2d at 588. We review an award of summary judgment de novo, with no presumption of
correctness afforded to the trial court. Guy v. Mut. of Omaha Ins. Co., 79 S.W.3d 528, 534 (Tenn.
2002).
Analysis
On appeal, MLGW asserts that the award of summary judgment to Mr. Thompson must be
vacated because there is a genuine issue of material fact regarding the existence and extent of any
alleged discussion between Board members concerning the revocation of policy 22-25 other than
discussions held at the two Board meetings on August 19, 2004. It also argues that the policy was
ultra vires and void; that any authority the Board may have had to make payments under the policy
was revoked by the City Council prior to Mr. Thompson’s termination; that Mr. Thompson failed
to exhaust his administrative remedies; and that Mr. Thompson’s decision to receive benefits other
than those provided by policy 22-25 results in an election of remedies.
The Ultra Vires Defense
The first issue which must be determined in this case, as we perceive it, is whether enhanced
benefits under policy 22-25 were available to Mr. Thompson in September 2004. MLGW contends
that policy 22-25 was ultra vires and, accordingly, void ab initio or, in the alternative, revoked by
the Memphis City Council prior to August 2004. Mr. Thompson, on the other hand, asserts the
policy was in effect until rescinded by the Board in August 2004; that the Board’s vote is null and
void due to violations of the Open Meetings Act; and that, notwithstanding the trial court’s rejection
of MLGW’s ultra vires defense, the trial court should not have considered the defense because it was
first raised by MLGW in its response to Mr. Thompson’s motion for summary judgment. We begin
our analysis of this issue with Mr. Thompson’s objection to the defense on procedural grounds.
Mr. Thompson’s argument in his brief to this Court, as we understand it, is that the trial court
abused its discretion by implicitly permitting MLGW to amend its answer to assert the ultra vires
defense after discovery had been conducted and Mr. Thompson’s motion for summary judgment was
pending. Although we agree with Mr. Thompson that MLGW asserted the ultra vires defense rather
late in the process, we note that, in its answer filed on August 19, 2005, MLGW moved to dismiss
on the grounds that “Board approval of the rescission of the severance policy was not a condition
precedent.” Additionally, we observe that this lawsuit is primarily grounded on the question of
whether the enhanced severance policy was, in fact, effective in September 2004. Thus, we find no
abuse of discretion in the trial court’s decision to address the defense and turn to the substance of
this issue.
Policy 22-25 is a comprehensive severance benefits policy available
(1) to employees and officers appointed to their full time employment position with
MLGW who are terminated due to a reduction-in-force (elimination of job(s)), (2)
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to employees and officers appointed to their full-time employment position with
MLGW who are terminated due to a change in control or ownership of MLGW, and
(3)withrespecttoofficersappointedtotheirfull-timeemploy positionwithML theexpirationorearlierterminationwithoutcauseoftheterm
ment GW,
of appointment.
The policy references a number of additional personnel policies and includes two categories of
severance benefits. The first category, category “A,” provides for two weeks of severance pay
calculated on the employee’s base pay at the time of separation. The second category, “B,” provides
for “enhanced benefits” for “eligible employees and appointed officers who voluntarily enter into
‘separation and release’ agreements.” In addition to the benefits included in category A, category
B benefits include substantial additional scheduled benefits not available under category A.
Category B benefits are available only to “eligible employees and appointed officers,” however, and
also are contingent upon the execution of a separation and release agreement by the
employee/officer.
The parties argue at length regarding the extent to which the Memphis City Charter and
Memphis Ordinances enable or authorize the MLGW Board to enact a severance policy, and,
assuming the Board has such authority, the mechanisms by which such a policy may be
implemented. However, it is undisputed that the authority of the MLGW Board is prescribed and
circumscribed by the Charter and City Council, and that the Board may not act in excess of the
authority granted to it by the City Council and the City Charter. See Faust v. Metro. Gov’t of
Nashville, 206 S.W.3d 475, 485 (Tenn. Ct. App. 2006). It also is undisputed that the Memphis City
Council neither expressly authorized nor approved policy 22-25. Rather, MLGW’s brief to this
Court indicates that the policy was adopted by the Board to provide a type of security net to senior
employees whose positions may have been threatened by the Mayor’s proposed sale of MLGW. We
make no comment regarding this tactic, but note that the Board apparently made no budgetary
provision to fund enhanced severance benefits under the policy. Additionally, MLGW asserts that
it has not entered into “separation and release” agreements with former employees as provided for
under category B. Mr. Thompson does not dispute this assertion.
We agree with MLGW that a genuine issue of material fact exists regarding whether the
MLGW Board exceeded its authority when it included the provision for enhanced severance benefits
in personnel policy 22-25. However, we find it unnecessary to reach this issue where, on January
20, 2004, the City Council clearly limited the Board’s authority to enter into contracts required for
implementation of the enhanced severance benefits.
As noted above, policy 22-25 apparently went largely unnoticed until 2004. In January 2004,
however, Mayor Herenton sought rescission of the policy and, on January 20, 2004, the Memphis
City Council passed a resolution suspending the Board’s ability to enter into the contracts required
for the provision of category B benefits. The 2004 resolution states:
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WHEREAS, pursuant to the City’s Charter, Council approval is required of
any salary or contract of MLGW in excess of $5,000, unless the Council by
ordinance raises the amount of contracts or salaries that will require Council
approval; and
WHEREAS, the Council by Ordinance 3509 increased the amount of
contracts and salaries that may be made by the MLG&W Board of Commissioners
without Council approval, provided any such expenditure is in an annual budget
approved by Council; and
WHEREAS, the Council desires to determine the propriety and necessity for
a severance policy adopted by the MLG&W Board of Commissioners, and in the
interim prohibit the board from altering or amending the policy pending further study
and approval by the Council.
NOW, THEREFORE, BE IT RESOLVED That 2004 MLG&W Budget is
hereby amended
(i) To prevent the MLG&W Board of Commissioners from entering into any
contracts providing for severance payments pursuant to the severance policy from
and after the effective date of this resolution without Council approval; and
(ii) To prohibit the MLG&W Board from making any amendments or changes
to the severance policy pending further study and approval by the Council.
This resolution prevented the MLGW Board from making any changes to the severance
policy and from entering into the separation and release contracts required for the provision of
category B benefits without Council approval. We disagree with Mr. Thompson, moreover, that this
resolution is “illegal” because it was passed in excess of the authority granted by the City Charter.
Section 681 of the City Charter states, in pertinent part:
The light, gas and water commissioners shall have no authority to make any
contracts entailing an obligation of or involving an expenditure in excess of five
thousand dollars, without the consent and approval of the board of commissioners of
the City of Memphis or the duly authorized agent or representative of said board of
commissioners of the City of Memphis.
Section 1 of Ordinance 3054, adopted in 1980, provides, in pertinent part:
The City Council by ordinance may raise the amount of contracts and salaries
or compensation for employees or others requiring City Council approval to such
amount as it may deem appropriate . . . .
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Ordinance 3054 was amended by Ordinance 3509 in 1985. Ordinance 3509 provides, in pertinent
part:
WHEREAS, the Council has determined that an ordinance should be passed
concerning the approval of salaries and contracts entailing obligations or involving
expenditures and that the Council, in lieu of approval of individual contracts and
salaries, should approve the budget established by the Board of Commissioner of the
Memphis Light, Gas & Water Division.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE
CITY OF MEMPHIS:
Section 1. . . . Any increase in the salaries or compensation of the President
of the Memphis Light, Gas & Water Division shall be submitted to the City Council
for approval. All other increases in the amounts of salaries or compensation for other
employees may be approved by the Board of Commissioners of the Memphis Light,
Gas & Water Division provided that no such increase shall result in annual
compensation to such employee in excess of the President.
Section 2. The Board of Light, Gas & Water Commissioners shall have
authority to make contracts entailing any obligations or involving any expenditure for
any amount without the consent and approval of the City Council of the City of
Memphis so long as said amount is within the budget established by the Board of
Commissioners of the Memphis Light, Gas & Water Division and approved by the
City Council.
However, in light of the requirements of Sections 681 and 675 of the City Charter and
Tennessee Code Annotated § 7-34-102, Substitute Ordinance 5046 was passed in April 2004.
Section 2 of the Substitute Ordinance provides:
Notwithstanding Ordinance 3509 to the contrary, any salaries or other compensation
of any officers, executive management employees or other employees for MLG&W
in excess of Ninety Thousand Dollars ($90,000) shall require Council approval in
advance of employment.
Read together, these provisions now authorize the Board to offer limited compensation in an
amount not to exceed $90,000 without Council approval providing the expenditure is within the
budget approved by the City Council. Under Ordinance 3509, the Board was without authority to
enter into contracts to provide the enhanced benefit unless the benefit was approved as part of the
budgetary process. We note that MLGW asserts severance benefits are not “compensation” but
“‘extra money’ paid to former employees.” Regardless of whether such benefits constitute
“compensation” under the Charter or Ordinances, enhanced benefits under category B
unambiguously derive from the execution of a contract that is not a contract for employment and
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which requires a budgetary allocation approved by the City Council. It is undisputed, moreover, that
the enhanced severance benefit amounts were not approved by the City Council as a part of the
MLGW budget.
Further, we do not agree that the above Ordinances permit the Board to execute “separation
and release” contracts with MLGW employees in exchange for enhanced benefits packages as
envisioned in part B of policy 22-25. The Ordinances are silent with respect to severance benefits
and with respect to the extent of the Board’s authority to execute agreements which contemplate a
waiver of recourse to the courts in exchange for enhanced benefits. Thus, the January 2004
Resolution does not illegally circumvent the City Charter or Ordinances. Rather, it suspends the
Board’s authority to enter into a particular type of contract, that envisioned by category B of policy
22-25, absent Council approval pending a review of the severance benefit policy.
Although policy 22-25 is not ultra vires per se merely as a result of the Board’s failure to
submit a budget to fund the policy as required by the Ordinances, the City Council clearly
circumscribed the Board’s authority to enter into contracts under part B absent Council approval.
The Ordinances, moreover, do not expressly grant the Board the authority to enter into contracts that
not only provide severance benefits as part of a personnel policy, but require the employee to release
the Board from further claims. Accordingly, although the City Council did not revoke policy 22-25
altogether, it prohibited the Board from entering contracts as provided by category B without Council
approval. It further prevented the Board from altering or amending the severance policy pending
further review by the Council. This, we believe, suggests future action by the City Council to review
the severance policy and procedure. In September 2004, however, MLGW was without authority
to execute an agreement with Mr. Thompson pursuant to which Mr. Thompson could receive
enhanced severance benefits under policy 22-25 absent approval by the City Council.
Holding
In light of the foregoing, the trial court’s award of summary judgment to Mr. Thompson is
reversed. Summary judgment is awarded to MLGW. The remaining issues are rendered moot by
our disposition of this matter. Costs of this appeal are taxed to the Appellee, William L. Thompson,
for which execution may issue if necessary.
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DAVID R. FARMER, JUDGE
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