In Re Gregoire

Morse, J.

The State appeals from a decision of the Vermont Labor Relations Board granting reinstatement with back pay to grievant Cynthia Gregoire following her dismissal as a state employee. It claims the Board erred in concluding Gregoire’s dismissal violated her constitutional right to due process of law and a contract right under Article 14 of the Vermont State Employees Association (VSEA) collective bargaining agreement. The State further contends that the Board erred by reinstating grievant, and in awarding full back pay despite her failure to mitigate damages. We reverse.

At the time of her dismissal on March 14, 1994, Cynthia Gregoire was a Delinquent Tax Compliance Officer for the Department of *68Employment and Training (DET). Her primary duty was to collect delinquent unemployment tax contributions. As the most senior officer, Gregoire had responsibility for about 1,000 accounts.

Gregoire had read and signed a copy of Section 8 of DET’s Internal Security Policy, which provides:

In order to avoid any possible conflict of interest, cases involving a close friend or relative should be reassigned to another staff member. If this is not possible due to location, time, etc., then supervisory approval is to be granted before starting the assignment and reviewed by the supervisor after completion.

In the spring of 1993, Gregoire’s husband was preparing to open an auto body shop. A coworker of Gregoire’s had contributed startup money for the venture, which became the subject of discussions during work at DET. Gregoire’s supervisor, David Tucker, cautioned her in March 1993 about using work time for such discussions and advised her to be careful about her involvement with the business venture. He also provided Gregoire with DET’s Conflicts of Interest Policy which states, in part:

[A]n employee of the department shall not use his/her position to secure special privileges or exemptions for himself/herself or others.
This policy shall include but not be limited to the following:
3a: An employee shall not process or otherwise handle any transaction (e.g., claims processing, employer contributions, on the job training contracts, adjudication) between the Department and his/her relatives or business entities in which he/she and/or his/her relatives have a pecuniary interest. . . .
4. An employee shall not engage in any activity which might damage the effectiveness of the programs of the Department of Employment and Training or malign the public image of the Department and its programs.
If an employee is unsure as to whether or not a particular situation does indeed represent a conflict of interest, he/she *69should submit the facts, in writing, to the division Director who will render a written decision on the matter after consultation with legal staff.

In June of 1993, Gregoire and her husband formed a corporation called GFC, Inc., which operated as Downtown Auto. Her husband was company president, and she was named as secretary. By November 1, 1993, Downtown Auto owed about $150 in unemployment insurance contributions. Gregoire prepared and submitted to DET, on behalf of Downtown Auto, a form indicating that Downtown Auto’s tax payment was delinquent. No payment was forthcoming. Downtown Auto was subsequently designated a delinquent account. This account appeared on Gregoire’s delinquency list on November 18, 1993. By mid-December, Gregoire was aware that Downtown Auto had appeared on her delinquency list. The business appeared on Gregoire’s list in January and February, yet she never told her supervisors that her own business had been assigned to her for collection purposes. On January 31, 1994, Gregoire prepared and submitted, on behalf of Downtown Auto, a DET form for the fourth quarter of 1994 indicating that Downtown Auto owed about $135. Again, Gregoire noted on the form that no payment had been made.

In late December 1993, Tucker learned that the delinquent Downtown Auto account had been assigned to Gregoire. After making an investigation, Tucker sent Gregoire a memorandum in February 1994 entitled “Investigative Meeting,” stating that he was “contemplating disciplinary action” in accordance with Article 14. The memorandum stated the reasons for the contemplated disciplinary action and informed Gregoire that an investigative meeting would be held on the matter, that she would have the opportunity to speak on her behalf, and that she had the right to be represented by VSEA. The memorandum read:

As a result of your action described below, I am contemplating disciplinary action in accordance with Article 14. . . You have the right to be represented by VSEA during the proceedings connected with this action ....
If you do not participate in this investigation, a decision will be finalized based on the information available.
You are provided this opportunity to respond so that you can present points of disagreement with what appears as facts such as why and when did you plan to deal with the *70case, and why you didn’t turn this case over to your supervisor as Department policy and rules require. During this meeting, you may want to identify any circumstances the Department should consider or arguments you wish to offer. In other words, you may present your side of the issue. We want to take all of the facts into consideration before deciding what appropriate actions should be taken.

The letter tracked the language of Article 14(4) of the contract, which provides:

Whenever an appointing authority contemplates dismissing an employee, the employee will be notified in writing of the reason(s) for such action, and will be given an opportunity to respond either orally or in writing. The employee will normally be given 24 hrs. to notify the employer whether he or she wishes to respond in writing or meet in person to discuss the contemplated dismissal. The employee’s response, whether in writing or in a meeting, should be provided to the employer within four days of receipt of written notification of the contemplated dismissal. Deadlines may be extended at the request of either party, however if the extension is requested by the employee, the employee will not be carried on the payroll unless it is charged to appropriate accrued leave balances. At such meeting the employee will be given an opportunity to present points of disagreement with the facts, to identify supporting witnesses or mitigating circumstances, or to offer any other appropriate argument in his or her defense.

Section 1(d) of Article 14 lists “dismissal” as a form of discipline for misconduct.

In accordance with Tucker’s memorandum a meeting was held on February 28,1994. Gregoire was represented by VSEA Senior Field Representative Richard Lednicky. At the meeting Gregoire was given an opportunity to dispute the charges against her and submit evidence in her defense. Approximately two weeks later Gregoire received a dismissal notice from DET Commissioner Susan Auld.

Gregoire appealed her dismissal to the Board, claiming that her constitutional right to due process had been violated and that the February memorandum from Tucker failed to comply with the requirements of Article 14(4). Specifically, Gregoire claimed that, because the memorandum did not explicitly state that she faced the *71possibility of dismissal, the February 28 meeting was not a pretermination meeting, and thus that her subsequent dismissal was invalid. This challenge was not brought to the attention of DET and was made for the first time at the Board level. Nevertheless, in a divided opinion, the Board ruled that the dismissal was precluded based on the alleged procedural defect in the termination process. Accordingly, the Board reinstated Gregoire with back pay and imposed an alternative penalty of a thirty-day suspension without pay.

I.

We first address the constitutional issue. The State contends that the Board erred in concluding that due process, as construed in Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985), requires the employer to give explicit notice of contemplated dis^ missal, and that a mere statement that “disciplinary action” is contemplated is inadequate.

“The collective bargaining agreement vests state employees with a property interest in their employment, thereby raising due process considerations when they are faced with the prospect of discharge.” In re Towle, 164 Vt. 145, 153, 665 A.2d 55, 61 (1995). The essential requirements of due process are notice and an opportunity to be heard. Loudermill, 470 U.S. at 546. In Loudermill, the Supreme Court held that due process requires a hearing in advance of termination. Id. at 542. The hearing serves as an initial check against mistaken decisions, “essentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action.” Id. at 545-46. The hearing must be preceded by adequate notice and must afford the employee a meaningful opportunity to speak. In particular, Loudermill held: “The tenured public employee is entitled to oral or written notice of the charges against him, an explanation of the employer’s evidence, and an opportunity to present his side of the story.” Id. at 546.

A strict reading of Loudermill thus does not require the employer to state that disciplinary action is contemplated, much less dismissal. While it refers to the hearing as a chance to determine whether the “proposed action” has a factual basis, it does not render unconstitutional an employer’s failure to include in the notice of the charges an explicit statement of what that “proposed action” will be. “Notice,” under Loudermill, requires no more than notice of the charges, not, as the Board found, notice of potential dismissal. In its effort to *72balance the competing interests at stake in the termination process, the Court held that to require more than notice of the charges, an explanation of the evidence, and an opportunity for the employee to present evidence, “would intrude to an unwarranted extent on the government’s interest in quickly removing an unsatisfactory employee.” Id. at 546. A number of courts have since interpreted Loudermill to require that the notice be sufficient to alert employees that their job is in jeopardy. See Calhoun v. Gaines, 982 F.2d 1470, 1476 (10th Cir. 1992); Post v. Harper, 980 F.2d 491, 494 (8th Cir. 1992).

In this case, the memorandum of February 18 notified Gregoire that she was charged with failing to notify her supervisor of the apparent conflict of interest, and that, as a result of that failure, disciplinary action under Article 14 was contemplated. The memorandum further informed Gregoire that a meeting would be held to discuss the allegations, stating that she was entitled to assistance of VSEA counsel, and that she would be allowed to “present points of disagreement with what appears as facts .... In other words, you may present your side of the issue. We want to take all of the facts into consideration before deciding what appropriate actions should be taken.” In accordance with the memorandum a hearing was held, and Gregoire was given an opportunity to present her side of the story and offer evidence that would demonstrate a lack of just cause to dismiss her. The employer and, on appeal, the Board each found just cause. Furthermore, the Board found that Gregoire “had fair notice that her conduct could result in dismissal.” See Towle, 164 Vt. at 150, 665 A.2d at 60 (“Knowledge that certain behavior is prohibited and subject to discipline is notice of the possibility of dismissal.”). That knowledge, coupled with the notice of charges, opportunity to respond and subsequent hearing, was sufficient to satisfy the Loudermill requirements of due process of law.

II.

We turn now to the contract issue. The Board found that the plain language of Article 14(4) of the contract requires that when an appointing authority is contemplating dismissal it must “explicitly let the employee know of that potential.”

Substantial deference must be accorded the Board’s construction of collective bargaining agreements. In re Gorruso, 150 Vt. 139, 143, 549 A.2d 631, 634 (1988). We are obligated, however, to avoid constructions that are “unequal, unreasonable, and improbable, if this *73can be done consistently with the words of the contract.” Id. at 143-44, 549 A.2d at 634.

The plain language of § 4 of Article 14 says nothing about explicit notice of contemplated dismissal. Section 4 provides in part, “Whenever an appointing authority contemplates dismissing an employee, the employee will be notified in writing of the reason(s) for such action ...” The Board would have this read as, “the employee will be notified in writing [that dismissal is contemplated, and] of the reasons for such action . . . .” We find nothing in the contract as a whole, in the intent of the parties, or in the law, to warrant such an amendment of the plain language. See Vermont State Colleges Staff Fed’n, AFL Local 4023 v. Vermont State Colleges, 157 Vt. 645, 646, 596 A.2d 355, 357 (1991) (mem.) (where contract language is clear, parties are presumed to be bound by plain and ordinary meaning).

The Board’s construction emphasizes formalism at the expense of the evidentiary purpose of § 4 of Article 14. Section 4 ensures that the factual bases of the charges are laid out so the employee can respond, thus providing an “initial check” against dismissal without just cause. See Loudermill, 470 U.S. at 545. The agreement, to be sure, contemplates that employees will be made aware their job is in jeopardy so that they may “respond in writing or. . . meet in person to discuss the contemplated dismissal.” Again, however, nothing in the contract states how such notice must be conveyed. While it may be better practice to track the precise text of Article 14, we perceive no reason why such notice may not adequately be communicated by other means. That is precisely what occurred here.

Tucker’s memorandum of February 18 notified Gregoire that he was “contemplating disciplinary action in accordance with Article 14.” Article 14 lists dismissal as a form of discipline. Indeed, the notice procedure outlined in § 4 of Article 14 is required only when dismissal of the employee is contemplated. There was no mistaking the letter as anything other than a notice of contemplated dismissal. From its first sentence notifying Gregoire that disciplinary action was “contemplated],” to its subsequent recitation of the various due process rights to which she was entitled, including the right to be represented, to respond to the allegations in writing or in person, to “present points of disagreement” with the facts, and to “identify any circumstances the Department should consider or arguments you wish to offer,” the letter tracked point-by-point the contract language of § 4.

The unmistakable affinity between the memorandum and the pretermination contract language, coupled with Gregoire’s own *74knowledge that her conduct could result in dismissal, leave no room for doubt. Gregoire could not have failed to understand that her job was in jeopardy. The Board’s findings that neither Gregoire nor her counsel at the hearing was aware that dismissal was contemplated, based on their own self-serving testimony, are not credible in light of fact that they knew the consequences of the charges and the import of letters of the kind that Gregoire received. In re Muzzy, 141 Vt. 463, 470, 449 A.2d 970, 973 (1982) (findings will be upheld where credible evidence fairly and reasonably supports them). Moreover, the issue is not what the employee claims to have known, but what a reasonable employee in Gregoire’s circumstances would have known about her job security. The constitutional and the contractual prerequisites were satisfied.

III.

Having determined that Gregoire had adequate notice that she could be discharged, the only remaining question is whether to reinstate Gregoire’s dismissal. The Board clearly imposed a lesser discipline (thirty-day suspension) not because it concluded that dismissal was too severe, but rather because it believed the pretermination notice was defective and precluded dismissal as a legal option. That issue aside, the Board may impose a lesser discipline only where it finds “there was no just cause for the choice of discipline imposed by the State.” In re Gorruso, 150 Vt. at 145, 549 A.2d at 635. Here, the evidence and the Board’s findings amply support the State’s original disciplinary decision, and leave no doubt that “just cause for grievant’s dismissal existed as a matter of law.” Id. at 146, 549 A.2d at 636.

The Board found that the evidence sustained the charge that Gregoire had “intentionally violated the Employer’s Internal Security Policy and the Conflict of Interest Policy by shielding the delinquent account of Downtown Auto from the normal procedural collection path.” As the Board noted, Downtown Auto was a business primarily owned by Gregoire’s husband and also one in which she had some involvement, yet she handled the account for over two months without notifying her supervisors, and no payments were made by the business on the amounts owed during this period. The Board further found that Gregoire was aware of the policy prohibiting such conduct and “had fair notice that such conduct could result in dismissal.”. Indeed, she “had been specifically warned by [her] supervisor ... to review the Conflict of Interest policy due to the potential problems that could arise from the Downtown Auto business.”

*75The offense of shielding her family’s business from the normal collection process was, as the Board found, “serious,” and betrayed “a position with a high degree of trust given the large amounts of monies that she was responsible for collecting.” The offense, moreover, “had a substantial adverse effect on [her] supervisors’ confidence in [Gregoire’s] responsibly performing her duties.” Gregoire’s conduct, the Board concluded, was “in clear violation of conflict of interest policies which were known to her, compromised her integrity and the trust placed in her.” Although its hands were seemingly tied as far as affirming Gregoire’s dismissal was concerned, the Board nevertheless concluded that her conduct warranted the “most severe disciplinary penalty short of dismissal.” As the Board explained: “The seriousness of [Gregoire’s] offense, the breach of trust she committed given her position, and the clear notice she had that such conduct could result in discipline, weigh heavily towards the imposition of a severe disciplinary penalty.”

To warrant dismissal, an employee’s conduct must constitute ‘“some substantial shortcoming detrimental to the employer’s interests which the law and sound public opinion recognize as good cause for dismissal.’” Gorruso, 150 Vt. at 147, 549 A.2d at 636 (quoting In re Gage, 137 Vt. 16, 18, 398 A.2d 297, 298 (1979)). As summarized above, Gregoire’s conscious and prolonged violation of departmental policy and the public trust was sufficiently egregious to undermine both her employer’s and the public’s confidence in her continued ability to perform her duties. Although the Board noted that her years of service and potential for rehabilitation were mitigating factors, we are not persuaded that these significantly undermine the State’s disciplinary decision. “‘The ultimate criterion of just cause is whether the employer acted reasonably in discharging the employee because of misconduct.’ ” Id. at 145, 549 A.2d at 635 (quoting In re Brooks, 135 Vt. 563, 568, 382 A.2d 204, 207 (1977)). Judged in the light of this standard, we have no doubt that just cause for Gregoire’s dismissal existed as a matter of law.

Reversed.