Huntsville City Bd. of Educ. v. Frasier

• Decision Date: 22 February 2013
• Docket Number: 2110427.
• Citation: 122 So.3d 193
• Parties: HUNTSVILLE CITY BOARD OF EDUCATION v. Ann FRASIER et al.
• Court: Alabama Court of Civil Appeals

122 So.3d 193

HUNTSVILLE CITY BOARD OF EDUCATION

v.Ann FRASIER et al.

2110427.

Court of Civil Appeals of Alabama.

Feb. 22, 2013.

William W. Sanderson of Lanier Ford Shaver & Payne, P.C., Huntsville, for appellant.

Jake Watson of Watson Graffeo, Huntsville; Brian Austin Oakes of White & Oakes, LLC, Decatur; and Quicha Riche, Huntsville, for appellees.

On Application for Rehearing

MOORE, Judge.

This court's opinion of November 30, 2012, is withdrawn, and the following is substituted therefor.

The Huntsville City Board of Education (“the HCBOE”) appeals from a hearing officer's decision reversing the HCBOE's action terminating the employment of Ann Frasier, Jodie Lindstrom, Johnna Lamelle, Rene Robinson, Deborah Hatton, Bryant Benson, Anthony McCurdy, Freeman Milton, Tracy Powell, Anthony Crutcher, Garrison Friend, Patty Smith, David Yarborough, Carl Ford, Harvey Fisher, Jimmy Cobble, and Steve Berryhill (hereinafter referred to collectively as “the appellees”).

Procedural Background

On April 25, 2011, Dr. Ann Moore, who was at that time the superintendent of the HCBOE, gave notice to each of the appellees and to the HCBOE of her intent to recommend the termination of their services due to a “justifiable decrease in jobs in the system or other good and just causes.” The notices further stated, in pertinent part:

“Due to financial circumstances, the [HCBOE] must reduce the number of its employees. To accomplish this, the [HCBOE] has adopted a Reduction in Force Plan. The selection of the employees to be terminated is based upon the job classifications affected by the Reduction in Force Plan and years of service within the Huntsville School System (those with fewer years of service in each specifically identified area to be terminated before those with greater seniority).”

In response to Dr. Moore's notices, the appellees contested their proposed terminations, as was their right under former § 36–26–102, Ala.Code 1975, a part of the former Fair Dismissal Act (“the FDA”), former § 36–26–100 et seq., Ala.Code 1975.¹ Pursuant to conferences held by the HCBOE on May 17 and 18, 2011, the HCBOE voted to approve the recommended terminations. Each of the appellees contested the HCBOE's decision in a consolidated hearing on October 24 and 25, 2011. On January 26, 2012, the hearing officer entered a decision reversing the HCBOE's decision, concluding that no action should be taken against the appellees.

On February 3, 2012, the HCBOE filed a notice of appeal from the hearing officer's decision. After concluding that the HCBOE presented “special and important reasons” for the appeal, see former § 36–26–104(b), Ala.Code 1975, this court accepted the appeal on June 19, 2012.

Evidentiary and Statutory Background

In 2006, the Alabama Legislature passed the School Fiscal Accountability Act (“the SFAA”). See§ 16–13A–1 et seq., Ala.Code 1975. The SFAA mandates that all local boards of education adopt, and operate under, sound fiscal-management policies, § 16–13A–1, including establishing and maintaining a reserve fund equal to one month's operating expenses. § 16–13A–9, Ala.Code 1975. To assure compliance, the SFAA provides for the appointment of local financial officers to verify and report on the financial transactions of each board of education. § 16–13A–4, Ala.Code 1975. The various financial reports are collected and analyzed by the Chief Financial Officer (“CFO”) of the State Board of Education. § 16–13A–2, Ala.Code 1975. If, upon analysis of the financial reports, it is determined that a local board of education is operating in a fiscally unsound manner, the CFO must provide assistance to restore the financial integrity of that local board of education. Id. In some cases, the CFO can recommend to the Superintendent of the State Board of Education (“the State Superintendent”) that he or she appoint a person to provide on-site continuous advice on day-to-day financial operations. Rule 290–4–1–.01, Ala. Admin. Code (State Bd. of Educ.). In extreme cases, when such continuous assistance does not remedy the situation, the State Board of Education, upon the recommendation of the CFO and the State Superintendent, may authorize the State Superintendent to assume direct control of the finances of a local board. Rule 290–4–1–.01(d), Ala. Admin. Code (State Bd. of Educ.).

After the enactment of the SFAA, Dr. Warren Craig Pouncey assumed the duties of the CFO. Dr. Pouncey testified that the HCBOE was almost immediately placed under watch for its financial practices. On November 30, 2007, Dr. Pouncey wrote Dr. Moore a letter advising her that the HCBOE should take corrective measures in order to avoid further deteriorating finances. Despite that warning, by 2010, the HCBOE's financial records showed that it had incurred financial obligations exceeding its ability to pay by approximately $20 million and that the HCBOE had not maintained a reserve fund of approximately $16 million as required by § 16–13A–9. Dr. Pouncey issued a report to the HCBOE in December 2010 indicating that the HCBOE had experienced a shortfall of $35,803,051 for the fiscal year 2009. In his deposition, Dr. Pouncey attributed that shortfall to a decrease in funding due to several years of state proration of budget funds and diminishing local tax revenue, as well as to the failure of the HCBOE to make equivalent and anticipatory cuts in expenditures, particularly in regard to staffing, which, according to Dr. Pouncey, composed 86% to 87% of the HCBOE's budget. Dr. Pouncey recommended that the HCBOE take various actions to cure its financial problems, including reducing its support staff from 1,100 positions to 850.² Dr. Pouncey testified that, if the HCBOE had not acted as requested, “the State Board would have officially intervened and taken over control of the district” and made the necessary personnel cuts.

The HCBOE adopted an initial reduction-in-force (“RIF”) plan in February 2011, terminating the employment of, among others, 137 probationary support staff, i.e., support workers who had not yet been employed for 3 continuous years. After that RIF plan was adopted, the HCBOE retained Dr. Ed Richardson, a former Superintendent of the State Board of Education, as a consultant. Dr. Richardson, who also testified by deposition, agreed with Dr. Pouncey that the HCBOE had had “no other choice” but to reduce personnel. Dr. Pouncey and his office worked with Dr. Richardson to develop a plan to further reduce the support personnel and other personnel expenses of the HCBOE in a manner that was least likely to impact classroom instruction. Dr. Pouncey developed a list of positions that Dr. Richardson should investigate for possible employment action. Dr. Richardson then met with many of the heads of the various departments within the school system regarding how many, and which, of their support personnel would lose their jobs.

Three of the supervisors with whom Dr. Richardson had conferred testified before the hearing officer. Belinda Williams, the director of the HCBOE's human-resources department, testified that she had not agreed with Dr. Richardson on the number of positions that could be eliminated in her department, but, she said, Dr. Richardson “would not budge” on his proposal to terminate the employment of two support employees in addition to the two support employees who had already lost their jobs under the initial RIF plan.

Marc Seldon, the materials coordinator for the HCBOE, testified that he managed several areas for the HCBOE, including its warehouse and, at one time, its landscaping department. Seldon testified that he had provided Dr. Richardson with an outline of the potential savings the HCBOE could expect from contracting landscaping services to outside contractors and that he had also discussed the impact of any reduction in the workforce employed in the warehouse area. Dr. Richardson had thereafter recommended eliminating the positions of all the landscape workers ³ and inventory clerks,⁴ as well as some of the warehousemen.⁵ Seldon testified that he was not happy with Dr. Richardson's decision and that he felt like the decision had been made without a clear understanding of what those positions accomplished for the HCBOE. Seldon stated that the plan had targeted more positions for elimination from his departments “than [he] would have liked.”

John Brown, the director of construction, maintenance, facilities, transportation, and safety for the HCBOE, testified that Dr. Richardson had informed him that his departments would be heavily affected by job cuts. According to Brown, Dr. Richardson had asked him to look at all the positions he supervised and determine which positions Brown considered to be nonessential. Brown testified that he had identified only one nonessential position—building-equipment operator—because, he said, it had become “archaic.” ⁶ Dr. Richardson ultimately recommended terminating from Brown's departments three of the four painter positions,⁷ all of the mechanics,⁸ three of four data-entry technicians,⁹ the lone welder,¹⁰ and at least two carpentry apprentices.¹¹ Brown testified that he felt like the recommendations had been made hastily and without complete information and that, in some cases, they would not produce an efficient outcome.

Dr. Richardson did not personally meet with any of the appellees or review firsthand the appellees' performance of their positions. Each appellee who testified stated that his or her job was essential to the proper functioning of the school system and that his or her job responsibilities would still have to be performed by someone. In most instances, no specific person had been identified to assume the duties of the appellees. In other cases, Dr. Richardson had recommended hiring independent contractors to perform the duties of the eliminated positions. The appellees presented some evidence, particularly in regard to automobile-mechanic work, indicating that it could cost the...