James v. Department of Transp. of State of Idaho

• Decision Date: 21 June 1994
• Docket Number: No. 20735,20735
• Citation: 125 Idaho 892,876 P.2d 590
• Court: Idaho Supreme Court
• Parties: , 128 Lab.Cas. P 57,711 William G. JAMES, Plaintiff-Appellant, v. DEPARTMENT OF TRANSPORTATION OF the STATE of IDAHO, Defendant-Respondent. Boise, March 1994 Term

Page 590

876 P.2d 590

125 Idaho 892, 128 Lab.Cas. P 57,711

William G. JAMES, Plaintiff-Appellant, v. DEPARTMENT OF TRANSPORTATION OF the STATE of IDAHO, Defendant-Respondent.

No. 20735.

Supreme Court of Idaho,

Boise, March 1994 Term.

June 21, 1994.

Jim Jones & Associates, Boise, for appellant. John C. McCreedy, argued.

Larry EchoHawk, Atty. Gen., and Mallea & Scrivner, Sp. Deputy Attys. Gen., Boise, for respondent. Kenneth L. Mallea, argued.

JOHNSON, Justice.

This is a state employee termination case. The primary issues presented concern: (1) exhaustion of administrative remedies, and (2) the protection afforded by the provisions of I.C. § 65-503, relating to veterans' preference, for classified employees during an entrance probationary period.

We conclude that the state employee did not fail to exhaust administrative remedies, except concerning the claim that the state employer failed to evaluate the employee's performance and advise the employee of any improvements needed in order to complete the entrance probationary period successfully. We also conclude that there is a genuine issue of material fact concerning whether the employer terminated the employee for reasons that are permissible under I.C. § 65-503, which is part of the veterans' preference act, I.C. §§ 65-502 through 65-508 (the veterans' preference act).

I.

THE BACKGROUND AND PRIOR PROCEEDINGS.

William G. James is a disabled war veteran, as defined in I.C. § 65-507. James applied for employment with the Idaho department of transportation (the department), receiving preference points regarding his employment by virtue of his prior service in the armed forces of the United States. On April 27, 1992, James began working for the department as a port of entry inspector trainee.

Prior to commencing his employment with the department, James received and signed a copy of a hiring notice indicating that he had a probationary appointment with the department. On April 27, 1992, James received and signed a notice of training which included the statement: "I further understand that no advancement can take place until I have satisfactorily completed the required probationary period for my job class." James received and signed a similar notice of training on July 31, 1992.

On August 24, 1992, James attended a meeting with one of the department's district engineers (the district engineer) and other employees of the port of entry where James was assigned. Among the topics discussed at this meeting was the overall job performance of James's immediate supervisor (the immediate supervisor), who was not present. There is a dispute about the content of the remainder of the discussion that took place at this meeting.

On September 14, 1992, the district engineer advised the immediate supervisor and the department's area supervisor to meet with James and to tell James the district engineer had decided James should not become a permanent employee of the department and that James could resign "without prejudice." Following this meeting, James submitted his resignation, effective September 25, 1992. On September 16, 1992, James withdrew his resignation.

By a letter dated September 16, 1992, the director of the department (the director) advised James:

In accordance with Idaho Personnel Commission Rule 15.C you are hereby notified that you will be terminated for failing to satisfactorily complete your entrance probationary period.

You are hereby given the opportunity to resign without prejudice. If you fail to resign you will be terminated effective at the end of your shift Wednesday, September 30, 1992.

Your last day of work will be at the end of your shift on September 16, 1992. You will be placed on Administrative Leave with pay effective September 17, 1992 through September 30, 1992.

Also on September 16, 1992, the department prepared a notice of severance, indicating that James was terminated because of his failure to meet probation requirements, and that his ability to meet standards and his human relations were unsatisfactory.

On September 18, 1992, James's attorney wrote to the director stating: (1) James had been denied his right to a formal evaluation and opportunity to meet expectations and remedy criticisms; (2) James had been denied his rights as a disabled veteran; and (3) James had been terminated for improper reasons. The director responded on September 30, 1992, stating that a formal performance evaluation of James "will be issued denoting unsatisfactory performance during the probationary period." The director also stated that James's veterans' preference under I.C. § 65-503 "has been preempted or overridden by the later enactment of Title 67, Chapter 53, of the Idaho Code [the personnel system act] and through the terms of the employment contract."

On September 30, 1992, the immediate supervisor signed an overall performance rating for James stating that James needed to improve his working relationship with his fellow employees and the quality of his written work. The immediate supervisor also commented in the rating that James had to be cautioned on the use of vulgar and obscene language in front of the public and his fellow employees, and that the immediate supervisor had received a complaint about James's "know it all" attitude when he was instructed in various aspects of his job requirements. On October 1, 1992, the district engineer concurred with the immediate supervisor's evaluation of James and recommended that James not be allowed to achieve "permanent status."

James sued the department for damages, reinstatement, and attorney fees, alleging: (1) breach of contract, (2) violation of veterans' preference rights, (3) breach of the covenant of good faith and fair dealing, (4) deprivation of due process, and (5) breach of public policy. The department responded denying liability and alleging: (1) failure to state a claim upon which relief may be granted, (2) failure to exhaust administrative remedies, (3) estoppel, (4) lack of a property right, (5) compliance with all due process protection to which James was entitled as a probationary employee, and (6) resignation.

The department requested summary judgment dismissing all of James's claims. James requested partial summary judgment on the issue of the department's violation of his veterans' preference rights. The trial court denied James's motion, and granted the department's motion. The trial court also denied James's motion to alter or amend the judgment.

James appealed, raising only two issues: (1) whether the trial court was incorrect in dismissing his claims on the ground that James failed to exhaust administrative remedies, and (2) whether the department violated James's veterans' preference rights.

II.

THE TRIAL COURT SHOULD HAVE DISMISSED ONLY ONE OF JAMES'S CLAIMS ON THE GROUNDS THAT JAMES FAILED TO EXHAUST ADMINISTRATIVE REMEDIES.

James asserts that the trial court was incorrect in dismissing his claims on the ground James failed to exhaust administrative remedies. We agree, except concerning James's allegation that the department breached his contract of employment by failing to evaluate his performance and advise him of any improvements needed in order for him to complete his probationary period successfully.

The personnel system act requires the department to establish and adopt a grievance procedure, and provides:

A classified employee may grieve any matter, except that compensation shall not be deemed a proper subject for consideration under the grievance procedure except as it applies to alleged inequities within a particular agency or department, and except for termination during the entrance probationary period.

I.C. § 67-5315(1).

The department's grievance procedure states:

Any matter is grievable except:

Salary, in and of itself, is not a grievable item except as it applies to alleged inequities within the department nor is dismissal for failure to complete satisfactorily the entrance probationary period.

All of James's claims are directed to the reasons for his termination or the procedures used in terminating him, except the portion of his breach of contract claim alleging that the department failed to evaluate his performance and advise him of any improvements needed in order to complete his probationary period successfully. We conclude that the only failure of James to exhaust administrative remedies concerns this alleged breach of contract.

James was terminated during his entrance probationary period. Pursuant to I.C. § 67-5315(1) and the department's grievance procedure, James was not entitled to grieve his termination. This conclusion is not in conflict with Brigham v. Department of Health and Welfare, 106 Idaho 347, 679 P.2d 147 (1984).

In Brigham, a probationary employee filed grievances contending, among other things, that the department of health and welfare had failed to provide him with a job description and an evaluation based on the job description. The Court ruled that a job description and an evaluation based on the job description are rights accorded to all classified employees, including probationary employees, under the personnel system act. The Court also said that the only right contained in the personnel system act that probationary employees do not have is "the right to appeal a dismissal based on unsatisfactory performance." Id. at 350, 679 P.2d at 150. (Citing I.C. § 67-5309(j), which at that time included the following: "Employees who during the probationary period are performing in an unsatisfactory manner may be asked to resign and, upon failure to submit such resignation, may be discharged without the right of appeal." 1981 Idaho Sess.Laws, ch. 133, § 3, pp. 221, 229.)

When the Court decided Brigham in 1984, the current provision in I.C. § 67-5315(1) preventing a classified employee from grieving termination during the entrance probationary period had not been added to the statute. This provision was added in 1987. ...