Potkay v. Ament

• Decision Date: 24 July 2014
• Docket Number: Case No. 14–C–0181.
• Parties: Tamara H. POTKAY, Plaintiff, v. David AMENT, City of New Berlin, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

34 F.Supp.3d 937

Tamara H. POTKAY, Plaintiff

v.David AMENT, City of New Berlin, Defendants.

Case No. 14–C–0181.

United States District Court, E.D. Wisconsin.

Signed July 24, 2014.

Walter F. Kelly, Walter F. Kelly SC, Milwaukee, WI, for Plaintiff.

Gregg J. Gunta, John A. Wolfgang, Ann C. Wirth, Gunta Law Offices SC, Wauwatosa, WI, for Defendants.

DECISION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION (DOC. 4)

C.N. CLEVERT, JR., District Judge.

This case brings to mind the old adage: “If it looks like a duck and quacks like a duck, it's probably a duck.” Here, the defendants argue that Mayor David Ament's termination of Tamara Potkay's employment as Director of Human Resources for the City of New Berlin was a permissible layoff pursuant to a “mini reduction in force” (a “mini-RIF”), but the termination looks and sounds like a firing in violation of civil service rules—so much so that the court will grant Potkay's motion for temporary restraining order and preliminary injunction.

Potkay sues the City of New Berlin and its mayor, David Ament, regarding Ament's termination of Potkay's employment on January 24, 2014. Potkay brings the lawsuit pursuant to 42 U.S.C. § 1983, alleging a deprivation of property without due process. She seeks a temporary restraining order and preliminary injunction reinstating her as the City's Director of Human Resources. Pursuant to an agreement of the parties at court hearings, the City has been paying Potkay's salary and providing her with health benefits while the motion has been pending. However, Potkay wishes to return to work and to stop defendants from reorganizing her position out of existence.

FINDINGS OF FACT

For purposes of Potkay's motion the court finds the following based on the verified complaint,¹ defendants' answer, Potkay's affidavit, Ament's affidavit, Ronald Pezze's affidavit, Potkay's testimony at a court hearing, and the agreements of the parties.

In 1990 Potkay was hired by the City as a human resources employee. (Compl. ¶ 7; Answer ¶ 7.) She was promoted and appointed Director of Human Resources (“HR Director”) by Mayor James Gatzke in 1997, with confirmation by the City's Common Council. (Compl. ¶ 7; Potkay Aff. ¶ 3.) Potkay remained Director of Human Resources until January 24, 2014. (Potkay Aff. ¶ 3.)

In 2010, as part of the budget process, the City's Common Council directed the mayor to cut $1,000,000 from the budget before it would pass it. (Mar. 13 Hr'g Tr. at 7–8, 24.) Thereafter, the mayor and key department heads set up a layoff plan. (Id. at 8.) Potkay was given input regarding the layoffs. (Id. at 9.)

On October 27, 2010, then-Mayor Jack Chiovatero sent a memo to the City Council regarding his plan of cost-saving measures “[b]ased on economic conditions and the Council's desire.” (Ament Aff. Ex. B at 1.) Chiovatero stated that under the plan the City's workforce would shrink, and attached a list of twelve positions affected and a “New Gov” plan setting forth several cost-saving initiatives. (Ament Aff. Ex. B at 1–2.) As a result, between eleven and fourteen employees, including two in civil service positions, identified in § 11–5 of the City's municipal code, were laid off. (Ament Aff. ¶ 4; Mar. 13 Hr'g Tr. at 4–5.) On November 2, 2010, Potkay sent an email to the chair of the City's Civil Service Commission making him “aware that we laid off 2 civil service employees last week.” (Ament Aff. Ex. C; Mar. 13 Hr'g Tr. at 21–22.) “We” meant Potkay, the department head, and the mayor. (Mar. 13 Hr'g Tr. at 22.)

The Civil Service Commission had not taken action on and was not consulted about the layoffs prior to the layoffs occurring. (Mar. 13 Hr'g Tr. at 22–23.) Minutes from the Civil Service Commission's November 30, 2010, meeting indicate a report to the committee that two civil service employees were laid off on October 25, 2010, and a discussion that Chapter 11 of the municipal code did not need to be modified under the circumstances. (Ament Aff. Ex. D.)

The budget that ultimately passed for 2010 to 2011 included those layoffs. (Mar. 13 Hr'g Tr. at 8, 34.) By adopting the budget, the Common Council ended the funding for the positions in the next budgetary period. (Id. at 34–35.) But prior to the layoffs the Common Council did not take any action other than to issue the general directive to make cuts in the budget. (Id. at 35.)

The civil service employees who were laid off were not terminated because of performance problems or as a form of discipline. (Id. at 32–33.) Those employees were available for recall for one year and their position titles remained in the City's civil service code. (Id. at 8–9, 36.)

Around the time of the 2010 layoffs, Chiovatero advised the Council that he was creating a new Department of Community Relations and combining that department, responsible for all public relations tasks, with the City Clerk's department. (Ament Aff. ¶ 5.) The departments were reorganized and a new job description for the City Clerk combined the public relations duties with the clerk's position. (Ament Aff. ¶ 10, Ex. E.)

Telesfore Wysocki was mayor of the City from 2001 to 2005. (Potkay Aff. ¶ 7.) During his tenure as mayor, Wysocki attempted to suspend and discipline Potkay and to reduce her pay, but Potkay prevailed in contested legal proceedings following arbitration. (Compl. ¶ 9; Potkay Aff. ¶ 7.) Wysocki actively campaigned for Ament in the 2013 mayoral race. (Potkay Aff. ¶ 8.)

Ament was elected mayor of the City and took office in April 2013. (Compl. ¶ 9; Answer ¶ 9.) Ament had served as a City alderman starting April 2001. (Ament Aff. ¶ 1.) He says that as an elected official and taxpayer he is committed to providing needed services to the City's residents in the most cost-effective manner possible. (Ament Aff. ¶ 2.)

After he was elected mayor, Ament began reviewing the operations of City departments for opportunities to reduce costs while maintaining necessary services. (Ament Aff. ¶ 2.) He met with a Waukesha County supervisor and other County personnel to explore partnership opportunities, including the possibility of the County assuming oversight of the City's human resources functions, but the County staff indicated that the County was not in a position to take on anything additional. (Ament Aff. ¶ 8.) As a consequence, the option was not pursued further. (Id. ) Ament considered whether the finance department could be combined with another department; however, he was told by the Cities and Villages Mutual Insurance Company that few municipalities had successfully consolidated finance operations with another department. (Ament Aff. ¶ 9.) Because of that information and the fact that the finance director rescinded his resignation, Ament abandoned that option. (Ament Aff. ¶ 10.) Ament then explored the possibility of combining the human resources functions with the functions of the City Clerk.

Ament believed that the reduction in the number of employees represented by unions and reduction in the number of labor contracts as a result of the passage of Act 10 by the Wisconsin state government reduced the work of the HR Director. (Ament Aff. ¶ 11.) Further, he believed that the City Council's establishment of a negotiations committee with primary responsibility for negotiating labor contracts further reduced the HR Director's responsibilities. (Ament Aff. ¶ 11.) Additionally, the City had reduced the workforce through the 2010 layoffs and outsourced dispatch operations to the County in 2012, and had implemented a software program used to process applications for position vacancies. (Ament Aff. ¶ 11.) Therefore, Ament estimated that reorganization of the human resources department could save $119,000. (Ament Aff. ¶ 12.)

Ament looked at the qualifications of Potkay and Kari Morgan, the City Clerk, and determined that Morgan was better suited for a revised combined City Clerk/human resources position. (Ament Aff. ¶ 13.) According to Ament, Potkay had no experience as a City Clerk, whereas Morgan is a Wisconsin Certified Municipal Clerk with experience managing the human resources functions in a prior position. (Ament Aff. ¶ 13.) According to Potkay, Morgan's experience was in a very small community where she was the only full-time person in the town's office with three to six part-time employees. (Mar. 13 Hr'g Tr. at 10.) On the other hand, Potkay does not have and is not in the process of obtaining a Wisconsin Certified Municipal Clerk certificate. (Mar. 13 Hr'g Tr. at 29.) The City Clerk position requirements state that “WCMC, WCPC, IIMC certifications [are] preferred.” (Ament Aff. Ex. E at 2.)

In late December 2013 or early January 2014 Ament drafted a description for the proposed combined position. (Ament Aff. ¶ 15.) He met with outside counsel, Attorney Mary Hubacher, on January 15, 2014, to obtain legal advice on moving forward with a reduction in force laying off the HR Director. (Ament Aff. ¶¶ 16, 17.) Hubacher advised that instead of creating a new position, which would require the approval of the Civil Service Commission, Ament should maintain the position of City Clerk and combine the human resources responsibilities with the City Clerk's functions, similar to what had occurred in 2010.

(Ament Aff. ¶ 19.) Additionally, Hubacher advised that under his suggested approach Ament had authority as mayor to implement the reorganization without the prior approval of the City Council or Commission. (Ament Aff. ¶ 20.)

According to Potkay, Act 10 had the opposite effect than what Ament believed. Human resources professionals now perform daily personnel duties that previously were governed by collective bargaining agreements. (Potkay Aff. ¶ 12.) Act 10 increased Potkay's duties and responsibilities. (Mar. 13 Hr'g Tr. at 14.)

After he took office as mayor, Ament interfered with Potkay's duties concerning collective bargaining and excluded her without notice from important meetings with department heads and...