Gregoire, In re

• Decision Date: 13 December 1996
• Docket Number: No. 95-228,95-228
• Citation: 689 A.2d 431,166 Vt. 66
• Parties: , 154 L.R.R.M. (BNA) 2656 In re Cynthia GREGOIRE.
• Court: Vermont Supreme Court

Page 431

689 A.2d 431

166 Vt. 66, 154 L.R.R.M. (BNA) 2656

In re Cynthia GREGOIRE.

No. 95-228.

Supreme Court of Vermont.

Dec. 13, 1996.

Samuel C. Palmisano and Mark Heyman, VSEA Legal Counsel, Montpelier, for grievant-appellee.

Jeffrey L. Amestoy, Attorney General, David K. Herlihy, Assistant Attorney General, and F. Michael Seibert, General Counsel, Department of Personnel, Montpelier, for appellant State of Vermont.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

MORSE, Justice.

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 Employment 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 should 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 case, 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 possibility 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, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985), requires the employer to give explicit notice of contemplated dismissal, 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, 105 S.Ct. at 1495. In Loudermill, the Supreme Court held that due process requires a hearing in advance of termination. Id. at 542, 105 S.Ct. at 1493. 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, 105 S.Ct. at 1495. 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, 105 S.Ct. at 1495.

A strict reading of Loudermill thus does not require the employer to state that disciplinary action is contemplated, much...