JOE E. ARMSTRONG, )
)
Petitioner/Appellee, )
) Appeal No.
) 01-A-01-9610-CH-00476
VS. )
) Davidson Chancery
) No. 95-1996-III
TENNESSEE DEPARTMENT OF )
VETERANS AFFAIRS, COMMISSIONER )
FRED TUCKER in his official capacity as )
Commissioner of the Tennessee Department )
of Veteran Affairs, TENNESSEE CIVIL )
FILED
SERVICE COMMISSION and ELEANOR )
July 2, 1997
E. YOAKUM, in her official capacity as )
Secretary of the Tennessee Civil Service )
Cecil W. Crowson
Commissioner, )
Appellate Court Clerk
)
Respondents/Appellants. )
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEALED FROM THE CHANCERY COURT OF DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE ROBERT S. BRANDT, CHANCELLOR
PETER M. OLSON
OLSON & OLSON, PLC
114 Franklin Street
Clarksville, TN 37040
Attorney for Petitioner/Appellee
JOHN KNOX WALKUP
Attorney General and Reporter
JAMES C. FLOYD
Assistant Attorney General
450 James Robertson Parkway
Nashville, TN 37243-0490
Attorney for Respondents/Appellants
AFFIRMED AND REMANDED
BEN H. CANTRELL, JUDGE
CONCUR:
TODD, P.J., M.S.
WELLES, J.
OPINION
The question in this case is whether a state employee protected by civil
service has a right to be heard before being reclassified to the unprotected executive
service. The Chancery Court of Davidson County held that the employee had a right
to grieve the reclassification. We affirm.
I.
The appellee, Joe E. Armstrong, was initially hired at the Tennessee
Department of Veteran Affairs ("TDVA") in May of 1989 in the position of
Administrative Service Assistant 1, an executive position. In the Spring of 1994, by
which time Mr. Armstrong had been promoted to the position of Administrative
Assistant 4, he was informed that his employment status would be transferred from
executive to career service. W. D. Manning, the Commissioner of the TDVA at the
time, made a written request for such a change "due to a change in the reporting
relationship." He wrote that "[p]rior to September 20, 1993 [Mr. Armstrong's position
along with one other] reported directly to me" but that they currently were "reporting
to Administrative Services Assistant 5." The State Department of Personnel
approved Mr. Manning's request by a letter dated March 10, 1994 which stated that
the approval was "based upon the information [TDVA] staff provided that these
positions, which had previously reported to an [sic] Commissioner, now report to the
Director of Administrative Services (Administrative [S]ervices Assistant 5)."
With a change of administration, Fred Tucker became the Commissioner
of the TDVA on January 21, 1995. On February 9, 1995, Mr. Tucker wrote a letter
requesting that the classification of three positions including Mr. Armstrong's be
changed to executive status as "the reporting relationship of these three positions has
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been changed to report directly to me." On February 22, 1995, Tennessee
Department of Personnel Commissioner, Susan Williams, reclassified Mr. Armstrong's
position from career service to executive service status. Only two days following the
reclassification of Mr. Armstrong's position, on February 24, 1995, Mr. Tucker
terminated Mr. Armstrong from this position.
In a letter dated March 15, 1995, Mr. Tucker denied Mr. Armstrong's
request for a grievance hearing stating that the procedures granting employees the
right to grieve apply only to employees in career services. Mr. Armstrong then
obtained counsel and requested a Level V hearing before the Commission in a letter
dated April 11, 1995. On April 27, 1995, Ms. Williams, as secretary of the
Commission sent Mr. Armstrong a letter stating that because he "was an employee
occupying an executive service position [under Tenn. Code Ann. § 8-30-208(b)(5)],
the [Commission] lack[ed] statutory authority to hear his grievance concerning his
dismissal." Mr. Armstrong then filed this petition in Chancery Court claiming that the
reclassification of his job and subsequent termination from this job divested him of a
constitutionally protected property right and thereby deprived him of due process.
II.
The facts of this case must be viewed with an understanding of the
Tennessee Civil Service Code which divides all positions in the state service between
career service and executive service. Tenn. Code Ann § 8-30-208 (1993); see also
§ 8-30-101(a)(23) (Supp. 1996) (defining "[s]tate service" as "all officers and positions
of trust or employment in the service of state government in the executive branch and
all boards, commissions and agencies in state government" with certain exceptions).
Generally speaking, executive service employees are those in higher level
management and administrative positions. Id. § 8-30-208(b); see also Op. Att'y Gen.
95-088 (Tenn. 1995). Among those positions designated for executive service are
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specific positions fully defined by the titles of the positions such as "[m]embers of
boards, commissions, agencies and authorities and the chief executive officer of each
board, commission, agency and authority and the commissioner of each department."
Tenn. Code Ann. § 8-30-208(b)(1). The executive service also includes positions
which are not defined by the particular job's title but by the job's description. An
example is the category of executive service into which the appellee's position was
classified which includes "[a]ny position serving in a confidential administrative or
program management capacity to a commissioner, deputy commissioner, assistant
commissioner or equivalent authority." Id. § 8-30-208(b)(5). All regular full-time
positions in state service which are not designated as executive service in Section
8-30-208(b) are in the career service. Id. § 8-30-208(c).
Career service employees who have completed their initial working test
periods are called "regular employees" and they are given certain protections under
the Civil Service Code. See id. § 8-30-101(a)(20) (Supp. 1996) (defining "regular
employee"). Section 8-30-328 sets up a grievance procedure for regular employees.
Moreover, while executive service employees serve at the pleasure of their employer,
Tenn. Dep't of Personnel R. § 1120-10-.02, a regular employee in the career service
acquires a property right in that position. Tenn. Code Ann. § 8-30-331(a) (1993).
With such a right, "no suspension, demotion, dismissal or any other action which
deprives a regular employee of such employee's property right will become effective
until minimum due process is provided." Id. § 8-30-331(a). The statute provides that
minimum due process includes written notice of the charges and the opportunity to
respond to these charges before any action is taken. Id. § 8-30-331(b)(1)-(2). The
statute states that the employee's opportunity to respond "shall be for the purpose of
allowing the employee to present information to the manager regarding the
disciplinary action under consideration." Id. § 8-30-331(b)(4).
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In this case the trial court based its decision on the Tennessee
Department of Personnel Rules on Disciplinary Actions which contain similar language
to the code with respect to minimum due process. Rule 1120-10-.03(1) states that
"[c]areer employees have a 'property right' to a position in the classification in which
they currently hold career status. Therefore, no suspension, demotion, dismissal or
any other action which deprives a regular (career) employee of his property right will
become effective until minimum due process is provided as outlined below." Like
Section 8-30-331(b) of the Tennessee Code, the Department rules provide that
minimum due process mandates written notification to the employee of the charges
against him as well as the opportunity for the employee to answer these charges and
present information which might influence the decision. Tenn. Dep't of Personnel R.
1120-10-.03(2). See Tenn. Code Ann. § 8-30-205 (1993) (providing that the rules
adopted by the commissioner to carry out the provisions of the civil service code "shall
have the force and effect of law").
III.
The Fourteenth Amendment to the United States Constitution protects
individuals against government deprivations of "life, liberty or property without due
process of law." U.S. Const. amend. XIV, § 1. In a due process case, the court
follows an established two-step analyses determining whether the plaintiff was
deprived of a protected interest and, if so, what process is due. Rowe v. Board of
Educ. of Chattanooga, 938 S.W.2d 351, 354 (Tenn. 1996), cert. denied, 117 S. Ct.
1271 (1997) (citing Board of Regents of State Colleges v. Roth, 408 U.S. 564, 569-70,
92 S. Ct. 2701, 2705, 33 L. Ed. 2d 548 (1972)). The case before us focusses on the
first question, specifically whether Mr. Armstrong had a constitutionally protected
property interest in his job giving rise to due process protection.
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"Property interests are not created by the federal constitution. Instead,
they are created and defined 'by existing rules or understandings that stem from an
independent source such as state law.'" Rowe, 938 S.W.2d at 354 (citing Roth, 408
U.S. at 577, 92 S. Ct. at 2709). The United States Supreme Court has stated that
"[t]he hallmark of property . . . is an individual entitlement grounded in state law, which
cannot be removed except 'for cause.'" Logan v. Zimmerman Brush Co., 455 U.S.
422, 430, 102 S. Ct. 1148, 1155, 71 L. Ed. 2d 265 (1982). As stated above,
Tennessee law gives certain civil service employees a constitutionally protected
property interest in continued employment which cannot be extinguished unless the
employees are afforded procedural due process. See Tenn. Code Ann. § 8-30-331
(1993); Tenn. Dep't of Personnel R.1120-10-.03(1).
It is not disputed that once Mr. Armstrong became a career employee in March
of 1994, he satisfactorily completed his initial probationary period under the
administration of the former Commissioner of TDVA, and thus became a regular
employee with a property interest in his employment. See Tenn. Code Ann. § 8-30-
331; § 8-30-312 (provides for probationary period of at least 3 months). As a regular
employee, the law clearly provides that Mr. Armstrong could not be deprived of his
property right by "suspension, demotion, dismissal or any other action" without
minimum due process. Id. § 8-30-331(emphasis added). The question becomes
whether the reclassification from career to executive service constitutes "any other
action" thereby triggering the minimum due process protections of Section 8-30-331.
The lower court answered this question in the affirmative observing that the language
"any other action" is exceedingly broad. We agree. Reclassification of an employee
from the career service to the executive service is just as much a deprivation of
property as suspension, demotion, or dismissal. Indeed, as Mr. Armstrong's case
illustrates, reclassification might immediately precede termination and thereby provide
the state with a means of effecting suspension, demotion, or dismissal without the
burden of providing due process.
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Moreover, with no means to review the reclassification of executive
service employees, the state can arbitrarily determine which employees will lose their
protected civil service status. As the trial court noted, it "requires the exercise of
some discretion to decide whether a state employee falls within" the category of
executive service (Tenn. Code Ann. § 8-30-29(5)) into which Mr. Armstrong was
classified. "To hold [that reclassification does not trigger minimum due process] would
completely eliminate real civil service protection for many, if not most, career service
employees. The appointing authority, for whatever reason, political or otherwise,
could simply reclassify a position and terminate the employee." This court has
recognized that the due process clause was "intended to secure the individual from
the arbitrary exercise of the powers of government." Lee v. Ladd, 834 S.W.2d 323,
325 (Tenn. App. 1992) (quoting Daniels v. Williams, 474 U.S. 327, 331, 106 S. Ct.
662, 665, 88 L. Ed. 2d 662, 668 (1986)).
We recognize that in both the statute and the Department rule, the
process that is due is articulated in the context of disciplinary procedures against an
employee. Though "suspension, demotion, dismissal or any other action which
deprives a regular employee of such employee's 'property right'" might occur most
often as a consequence of disciplinary procedures, the statute does not require that
the employee's loss be the result of discipline. Tenn. Code Ann. § 8-30-331(a).
Rather, the statute clearly creates a property right without qualification to all
"'[e]mployees who have successfully completed their probationary period" and
ensures due process for "any . . . action" which deprives them of their property
interest. Id.
In holding that the reclassification of an employee's position from career
service to executive service requires that the employee receive notice and the
opportunity to respond, we acknowledge that the legislature has given the
Commissioner of the Tennessee Department of Personnel the duty to assign the
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positions in the state service which are not specifically identified as career or
executive service. Tenn. Code Ann. § 8-30-208(d). The statute provides that "[s]uch
determination shall be based solely on duties, responsibilities and reporting
relationships and shall not be subject to review through any procedure." Id.
(emphasis added). To the extent that this statute cannot be reconciled with the state-
created property interest in employment possessed by a Tennessee career service
employee, we find that it is inadequate as a matter of constitutional law. In addressing
the nature of constitutional due process, the United States Supreme Court stated that
because "'minimum [procedural] requirements [are] a matter of federal law, they are
not diminished by the fact that the State may have specified its own procedures that
it may deem adequate for determining the preconditions to adverse official action'. .
. . Indeed, any other conclusion would allow the State to destroy at will virtually any
state-created property interest." Logan v. Zimmerman Brush Co., 455 U.S. 422, 102
S. Ct. 1148, 71 L. Ed. 2d 265 (1982) (quoting Vitek v. Jones, 445 U.S. 480, 491, 100
S. Ct. 1254, 1263, 63 L. Ed. 2d 552 (1980)).
The holding in Logan is instructive. There, the state of Illinois had
established a comprehensive scheme for adjudicating allegations of employment
discrimination. Logan, 455 U.S. at 422. After being discharged from the defendant
employer, the plaintiff filed a charge with the Illinois Fair Employment Practices
Commission which triggered the Commission's statutory obligation to convene a fact-
finding conference within 120 days. Id. at 426. However, by no fault of the plaintiff's,
the Commission's representative scheduled the conference for a date five days after
the expiration of the statutory period. Id. Finding the legislative language with regard
to scheduling a conference within 120 days to be mandatory, the state supreme court
held that the failure to comply with this language deprived the Commission of
jurisdiction to hear the plaintiff's charge. Id. at 427. In a decision which reversed the
state court, the Supreme Court asserted that "'[w]hile the legislature may elect not to
confer a property interest, . . . it may not constitutionally authorize the deprivation of
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such an interest, once conferred, without appropriate procedural safeguards.'" Id. at
432 (quoting Vitek, 445 U.S. at 490-91, n.6, 100 S. Ct. at 1262-62, n.6) (quoting Arnett
v. Kennedy, 416 U.S. 134, 167, 94 S. Ct. 1633, 1650, 40 L. Ed. 2d 15 (1974)). Thus,
while the General Assembly of Tennessee can completely do away with the
constitutionally-protected interest in continued employment for the state's civil service
regular employees, it cannot establish a system where these employees can be
arbitrarily deprived of their interest by reclassification without due process protection.
We hold that Mr. Armstrong, as a regular employee with a property
interest in his position, had a right to procedural due process upon the reclassification
of his position to executive service. In addition, he was entitled to use the grievance
procedures established by the legislature for regular employees. Tenn. Code Ann.
§ 8-30-328 (1993) (grievance procedures); § 8-30-331(c) (stating that "[t]he
commission shall determine as a preliminary matter to the merits of a grievance, a
grievant's allegation of denial of minimum due process"). We stress that it is the
reclassification of a career service employee to executive service that requires due
process and not the termination of an executive service employee, for the law
explicitly provides that executive service employees serve at the pleasure of their
employers. The nature of Mr. Armstrong's grievance or complaint must be that his
position has been wrongly assigned to the executive service. If it is ultimately
determined that Mr. Armstrong's duties correspond to those of an executive employee
as outlined in Section 8-30-29 and that his reassignment was proper, then he will
loose his property right in his position. If, on the other hand, it is determined that his
duties do not place him within the scope of executive service, he is entitled "to be
reinstated or made whole or both" pursuant to Section 8-30-328(e).
Lastly, we address appellant's contention that there is no legal
foundation for this appeal. Appellant claims that this was not a "contested case"
within the chancery court's review authority under the Uniform Administrative
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Procedures Act ("UAPA") which provides that "[a] person who is aggrieved by a final
decision in a contested case is entitled to judicial review under this chapter." Tenn.
Code Ann. § 4-5-322(a) (Supp. 1996). As stated, with regard to the UAPA, the trial
court concluded "that the decision not to hold a contested case hearing is subject to
judicial review just as if a contested case hearing were held." The court reasoned that
"[j]udicial review would be meaningless if it could be avoided by simply refusing to
hold a contested case hearing. More importantly, if a party has a right to a contested
case hearing and is denied one, precluding judicial review of the denial would leave
the party with no judicial redress of an obvious violation of the party's right to a
hearing."
In support of its contention that the UAPA is inapplicable, appellant relies
upon Mid-South Indoor Horse Racing, Inc. v. Tennessee State Racing Comm'n, 798
S.W.2d 531 (Tenn. App. 1990), which involved the issue of the UAPA's applicability
to the review of licensing proceedings in which the plaintiff was denied a license to
conduct horse racing. In Mid-South, this court stated that such proceedings "will be
treated as 'contested cases' only if they contain three essential elements. They must
be a 'proceeding' conducted by an 'agency' after the opportunity for a 'hearing.' . . .
Proceedings lacking any of these ingredients are not contested cases." Id. at 537.
In the case before us, the appellant asserts that since the Commission did not
conduct a proceeding after the opportunity for a hearing, there was no "contested
case" as is required by the statute for judicial review.
The problem with appellant's argument is that the Mid-South case did
not turn on the fact that there was no proceeding after the opportunity for a hearing
but rather on the fact that no such proceeding was required. The court stated "the
licensing proceeding involved in this case was not a contested case because the
commission was not required to afford Mid-South a hearing before acting on its
application." Id. at 537 (emphasis added). Significantly, the UAPA defines "contested
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case" as "a proceeding, including a declaratory proceeding, in which the legal rights,
duties or privileges of a party are required by any statute or constitutional
provision to be determined by an agency after an opportunity for a hearing." Tenn.
Code Ann. § 4-5-102(3) (1991) (emphasis added). In Mid-South, the court found that
state law did not contain a contested case hearing requirement nor was there one
arising from a constitutionally protected property interest in a racing license.
Mid-South, 798 S.W.2d at 539-40. On the other hand, in the case at bar, we have
concluded that due process requires that a regular employee with a property interest
in his position receive the hearing and proceedings upon the reclassification of his
position to executive service. Since there is a contested case hearing requirement,
we affirm the chancery court in its determination that this was a proper matter for
review under the UAPA.
For the foregoing reasons, the decision of the chancery court is affirmed
in all respects. As a regular employee with a property interest in his position under
Tennessee's Civil Service Code, Mr. Armstrong had a right to procedural due process
when his position was reclassified to executive service. We direct that he be allowed
to use the grievance procedures established by the legislature to raise his complaint
regarding the reassignment of his position. Finally, we affirm the chancery court's
decision to review Mr. Armstrong's petition under the UAPA. The costs on appeal
should be taxed to the state.
________________________________
BEN H. CANTRELL, JUDGE
CONCUR:
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_______________________________
HENRY F. TODD, PRESIDING JUDGE
MIDDLE SECTION
_______________________________
DAVID H. WELLES, JUDGE
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