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February 2015 - Municipal Grievance Policy
Municipal Grievance Policy under Acts 10 and 32
By Attorney Steve Zach, Boardman & Clark
Steve Zach is a partner in Boardman & Clark LLP which provides a wide range of legal services, including serving as general counsel to local governments and providing specialized services to municipally owned electric, water and wastewater utilities. He can be contacted at szach@boardmanclark.com.
Along with the elimination of almost all municipal collective bargaining, 2011 Wisconsin Acts 10 and 32 (Act 10) also require municipalities to adopt a grievance policy if they do not have a civil service system in place. Codified at Wis. Stat. sec. 66.0509(1m), this legislative mandate requires municipalities to implement an impartial hearing procedure as 1 step of the grievance policy with respect to “terminations,” “discipline,” and “workplace safety.”
The statute provides little guidance as to what should be included in the grievance policy and there is scant legislative history to aid in its interpretation. For example, the statute does not define “employee,” “termination,” “discipline,” or “workplace safety.” Given this lack of clarity as to the scope of employment actions subject to sec. 66.0509(1m), municipalities have adopted policies which limit the application of the grievance process by excluding through definition certain employment actions from its coverage.
What are Discipline & Termination?
This is particularly true with respect to the definition of “discipline” and “termination.” Most sec. 66.0509(1m) policies exclude from their coverage employment actions caused by economic factors, including layoffs, furloughs, reductions-in-force, and wage and benefit adjustments. They also exclude “non-disciplinary” employment actions such as resignations, retirements, voluntary quits, and administrative leaves with pay. Some policies go further and exclude verbal and written warnings on the basis they are remedial rather than disciplinary in nature.
The extent to which municipalities can self-define the scope of their statutory grievance process by narrowly defining the terms has been the subject of recent litigation. For example, in Dodge County Professional Employees Local 1323-A, AFSCME, AFL-CIO and Heidi Burden v. Dodge County, 2014 WI APP 8, the County adopted a grievance procedure which excluded from its provisions “termination of employment due to . . . lack of qualification. . . .” The employee was convicted of operating a motor vehicle while under the influence of alcohol. The employee worked as an Elderly Benefit Specialist II and County policy required as a qualification for employment that she not have any convictions for operating under the influence within the past 12 months. The County terminated her employment upon her conviction. The employee grieved the discharge under the County’s statutory grievance policy. The County refused to process the grievance contending that the employee was terminated for lack of qualifications, which was excluded from the definition of “termination.”
The employee filed a lawsuit alleging that sec. 66.0509(1m) required her discharge be considered a “termination” and, thus, subject to the County’s grievance procedure. The Wisconsin Court of Appeals agreed with the employee, holding that the County’s exclusion of her discharge from the grievance process violated sec. 66.0509(1m). In interpreting this statute, the court used the dictionary definition of “termination” and found it to mean “to terminate” or to “discontinue the employment of; dismiss.” The court held that not all employment separations are “terminations” within the meaning of the statute and emphasized that its ruling was meant to convey that only the action taken against this specific employee was a termination within the plain meaning of the statute. The court also pointed out that the exclusion itself defined the employment action as a “termination.”
In Schneider v. Howard Suamico School District, Case No. 2013-CV-397 (Brown County Circuit Court), the school district adopted a grievance procedure which excluded teacher non-renewals under sec. 118.22, Stats., from the definition of “termination” and “discipline.” A non-renewed teacher argued that this exclusion violated sec. 66.0509(1m). The circuit court also interpreted the statute by reference to the dictionary definition of “discipline” and concluded that “discipline” encompasses “punishment.” The court concluded that because some non-renewals may constitute “punishment,” non-renewals could not categorically be excluded from the grievance procedure. The court did not consider whether non-renewals are also “terminations.” The circuit court opinion suggests that an Act 10 grievance procedure may exclude from its scope non-renewals based upon non-disciplinary reasons. The decision suggests that other non-disciplinary actions may also be excluded from a statutory grievance policy.
These cases also hold that municipalities cannot unilaterally define the scope of the grievance process, and that the definition of “termination” and “discipline” will be subject to judicial review and interpretation. Beyond that, clarity is still elusive, although both courts based their holdings on what they perceived as a common sense lay interpretation of “termination” and “discipline.”
Due Process
Another question that has been the subject of legal proceedings is whether a §66.0509(1m) grievance procedure creates a property interest in municipal employment. A municipal employee who has a property interest in employment is almost always entitled to a pre-termination hearing, although individual circumstances will affect how elaborate such a hearing must be. Cleveland Bd. of Educ. v. Loudermill, 105 S.Ct. 1487 (1985).
As a general rule, municipal employment is at-will. Vorwald v. School District of River Falls, 167 Wis. 2d 549, 482 N.W.2d 93 (1992). A protected property interest generally only arises if an employee has an expectation of continued employment arising from a policy, statute, handbook, collective bargaining agreement or individual contract that provides job security (such as a “cause” standard) akin to tenure. Sanguigni v. Pittsburgh Bd. of Public Educ., 968 F.2d 393 (3d Cir. 1992).
Whether a sec. 66.0509(1m) policy creates a property right and requires that a municipal employee receive procedural due process was addressed in Nesvold v. Roland, 2014 U.S. Dist. LEXIS 105268 (W.D. Wis. Aug. 1, 2014). The county employee filed a federal lawsuit alleging that his separation from county employment violated his due process rights. To prevail, the employee had to prove that the terms of his employment provided for termination only for “cause” or otherwise evinced mutually explicit understandings of continued employment. The county adopted a sec. 66.0509(1m) policy which articulated that the impartial hearing officer could only overturn the county’s employment action upon a finding that such action was “arbitrary and capricious.” This standard has been the primary standard adopted by municipalities, although some have adopted a higher “cause” standard.
The court held that the adoption of a grievance process pursuant to sec. 66.0509(1m) does not create a federally-protected property right. Significantly, the court also concluded that the adoption of an “arbitrary and capricious” standard does not create a property right, holding that while such a standard moves the employment setting out of an “at-will” status, it does not establish a “cause” standard sufficient to create a property right to the position. The court further recognized that the statutory grievance process in-and-of-itself satisfies federal due process rights, even if that process does not provide all the relief that an employee seeks, such as front pay or future loss of earnings.
A similar result was reached in Marks v. City of Hayward, et al No. 13-CV-366 (W.D. Wis. April 16, 2014), in which the plaintiff alleged the City violated her right to constitutional due process by terminating her employment through layoff without giving her a pre-termination hearing. The City contended that the plaintiff did not have a property right in her employment because its statutory grievance policy gave the City complete discretion in determining employment terminations and discipline. The plaintiff argued, however, that this right arose from a City employment policy that established a “just cause” standard for discipline and termination. The court held that “no 1 reading the internally inconsistent provisions of the City’s agreement for 2012-13 and the City’s new Grievance Policy could reasonably believe that it established a binding employment relationship that gave plaintiff a property interest in her job in 2012.”
These cases suggest that the adoption of a sec. 66.0509(1m) grievance process which includes a standard of review short of “cause” does not give rise to a property right which would impose due process obligations on a municipality.
Impact of Alternative Processes
The Act 10 grievance provisions were not part of initial legislation and were presumably added in recognition of the fact that Act 10 made “just cause” and grievance arbitration provisions prohibited subjects of bargaining. This suggests that at least part of the legislative intent in adopting sec. 66.0509(1m) was to provide municipal employees with some procedural employment protections if they were not already covered by a civil service process.
This raises the question of whether a municipality can exclude from the scope of its grievance process those employment actions in which a municipal employee has procedural recourse through other sources. Examples of those situations include:
Police officers and firefighters can only be terminated, suspended or reduced-in-rank in conformance with the process and cause standards set forth in sec. 62.13(5)(em), Stats.
Police officers and firefighters are able to bargain for a grievance arbitration process for discipline and termination.
Municipal officers who are appointed to their positions are subject to removal pursuant to various statutory provisions and processes.
“Workplace safety” is not defined in the statute, but typically has been defined by policy to include conditions that substantially endanger an employee’s health or safety. These conditions can be subject to state and federal standards and enforcement mechanisms (e.g., OSHA).
There are a variety of state and federal discrimination statutes which provide municipal employees with protection from discriminatory employment actions and the administrative and legal venues to enforce those protections.
The statute and its legislative history do not provide an answer to this question, but some municipalities have taken an aggressive approach and excluded from their sec. 66.0509(1m) process those employment actions or safety conditions which provide an employee a procedural review process by means of other statutory sources.
Conclusion
The Wisconsin legislature gave municipalities significant discretion in the drafting of grievance policies under sec. 66.0509(1m). Recent case law interpreting that statute has confirmed that discipline and terminations which occur under such policies do not create due process rights, unless the policies adopt a substantive cause standard. They also suggest that any attempt to limit the application of the grievance procedure by means of definitional exclusions must comport with common sense definitional standards. To the extent that a municipality can define an employment action as “non-disciplinary” and support that argument, the courts have shown an inclination to permit the municipality to exclude that action from the grievance process. Given the dearth of statutory guidance, however, many questions remain as to the ability of municipalities to shape the application of the grievance process.
Employees 346
By Attorney Steve Zach, Boardman & Clark
Steve Zach is a partner in Boardman & Clark LLP which provides a wide range of legal services, including serving as general counsel to local governments and providing specialized services to municipally owned electric, water and wastewater utilities. He can be contacted at szach@boardmanclark.com.
Along with the elimination of almost all municipal collective bargaining, 2011 Wisconsin Acts 10 and 32 (Act 10) also require municipalities to adopt a grievance policy if they do not have a civil service system in place. Codified at Wis. Stat. sec. 66.0509(1m), this legislative mandate requires municipalities to implement an impartial hearing procedure as 1 step of the grievance policy with respect to “terminations,” “discipline,” and “workplace safety.”
The statute provides little guidance as to what should be included in the grievance policy and there is scant legislative history to aid in its interpretation. For example, the statute does not define “employee,” “termination,” “discipline,” or “workplace safety.” Given this lack of clarity as to the scope of employment actions subject to sec. 66.0509(1m), municipalities have adopted policies which limit the application of the grievance process by excluding through definition certain employment actions from its coverage.
What are Discipline & Termination?
This is particularly true with respect to the definition of “discipline” and “termination.” Most sec. 66.0509(1m) policies exclude from their coverage employment actions caused by economic factors, including layoffs, furloughs, reductions-in-force, and wage and benefit adjustments. They also exclude “non-disciplinary” employment actions such as resignations, retirements, voluntary quits, and administrative leaves with pay. Some policies go further and exclude verbal and written warnings on the basis they are remedial rather than disciplinary in nature.
The extent to which municipalities can self-define the scope of their statutory grievance process by narrowly defining the terms has been the subject of recent litigation. For example, in Dodge County Professional Employees Local 1323-A, AFSCME, AFL-CIO and Heidi Burden v. Dodge County, 2014 WI APP 8, the County adopted a grievance procedure which excluded from its provisions “termination of employment due to . . . lack of qualification. . . .” The employee was convicted of operating a motor vehicle while under the influence of alcohol. The employee worked as an Elderly Benefit Specialist II and County policy required as a qualification for employment that she not have any convictions for operating under the influence within the past 12 months. The County terminated her employment upon her conviction. The employee grieved the discharge under the County’s statutory grievance policy. The County refused to process the grievance contending that the employee was terminated for lack of qualifications, which was excluded from the definition of “termination.”
The employee filed a lawsuit alleging that sec. 66.0509(1m) required her discharge be considered a “termination” and, thus, subject to the County’s grievance procedure. The Wisconsin Court of Appeals agreed with the employee, holding that the County’s exclusion of her discharge from the grievance process violated sec. 66.0509(1m). In interpreting this statute, the court used the dictionary definition of “termination” and found it to mean “to terminate” or to “discontinue the employment of; dismiss.” The court held that not all employment separations are “terminations” within the meaning of the statute and emphasized that its ruling was meant to convey that only the action taken against this specific employee was a termination within the plain meaning of the statute. The court also pointed out that the exclusion itself defined the employment action as a “termination.”
In Schneider v. Howard Suamico School District, Case No. 2013-CV-397 (Brown County Circuit Court), the school district adopted a grievance procedure which excluded teacher non-renewals under sec. 118.22, Stats., from the definition of “termination” and “discipline.” A non-renewed teacher argued that this exclusion violated sec. 66.0509(1m). The circuit court also interpreted the statute by reference to the dictionary definition of “discipline” and concluded that “discipline” encompasses “punishment.” The court concluded that because some non-renewals may constitute “punishment,” non-renewals could not categorically be excluded from the grievance procedure. The court did not consider whether non-renewals are also “terminations.” The circuit court opinion suggests that an Act 10 grievance procedure may exclude from its scope non-renewals based upon non-disciplinary reasons. The decision suggests that other non-disciplinary actions may also be excluded from a statutory grievance policy.
These cases also hold that municipalities cannot unilaterally define the scope of the grievance process, and that the definition of “termination” and “discipline” will be subject to judicial review and interpretation. Beyond that, clarity is still elusive, although both courts based their holdings on what they perceived as a common sense lay interpretation of “termination” and “discipline.”
Due Process
Another question that has been the subject of legal proceedings is whether a §66.0509(1m) grievance procedure creates a property interest in municipal employment. A municipal employee who has a property interest in employment is almost always entitled to a pre-termination hearing, although individual circumstances will affect how elaborate such a hearing must be. Cleveland Bd. of Educ. v. Loudermill, 105 S.Ct. 1487 (1985).
As a general rule, municipal employment is at-will. Vorwald v. School District of River Falls, 167 Wis. 2d 549, 482 N.W.2d 93 (1992). A protected property interest generally only arises if an employee has an expectation of continued employment arising from a policy, statute, handbook, collective bargaining agreement or individual contract that provides job security (such as a “cause” standard) akin to tenure. Sanguigni v. Pittsburgh Bd. of Public Educ., 968 F.2d 393 (3d Cir. 1992).
Whether a sec. 66.0509(1m) policy creates a property right and requires that a municipal employee receive procedural due process was addressed in Nesvold v. Roland, 2014 U.S. Dist. LEXIS 105268 (W.D. Wis. Aug. 1, 2014). The county employee filed a federal lawsuit alleging that his separation from county employment violated his due process rights. To prevail, the employee had to prove that the terms of his employment provided for termination only for “cause” or otherwise evinced mutually explicit understandings of continued employment. The county adopted a sec. 66.0509(1m) policy which articulated that the impartial hearing officer could only overturn the county’s employment action upon a finding that such action was “arbitrary and capricious.” This standard has been the primary standard adopted by municipalities, although some have adopted a higher “cause” standard.
The court held that the adoption of a grievance process pursuant to sec. 66.0509(1m) does not create a federally-protected property right. Significantly, the court also concluded that the adoption of an “arbitrary and capricious” standard does not create a property right, holding that while such a standard moves the employment setting out of an “at-will” status, it does not establish a “cause” standard sufficient to create a property right to the position. The court further recognized that the statutory grievance process in-and-of-itself satisfies federal due process rights, even if that process does not provide all the relief that an employee seeks, such as front pay or future loss of earnings.
A similar result was reached in Marks v. City of Hayward, et al No. 13-CV-366 (W.D. Wis. April 16, 2014), in which the plaintiff alleged the City violated her right to constitutional due process by terminating her employment through layoff without giving her a pre-termination hearing. The City contended that the plaintiff did not have a property right in her employment because its statutory grievance policy gave the City complete discretion in determining employment terminations and discipline. The plaintiff argued, however, that this right arose from a City employment policy that established a “just cause” standard for discipline and termination. The court held that “no 1 reading the internally inconsistent provisions of the City’s agreement for 2012-13 and the City’s new Grievance Policy could reasonably believe that it established a binding employment relationship that gave plaintiff a property interest in her job in 2012.”
These cases suggest that the adoption of a sec. 66.0509(1m) grievance process which includes a standard of review short of “cause” does not give rise to a property right which would impose due process obligations on a municipality.
Impact of Alternative Processes
The Act 10 grievance provisions were not part of initial legislation and were presumably added in recognition of the fact that Act 10 made “just cause” and grievance arbitration provisions prohibited subjects of bargaining. This suggests that at least part of the legislative intent in adopting sec. 66.0509(1m) was to provide municipal employees with some procedural employment protections if they were not already covered by a civil service process.
This raises the question of whether a municipality can exclude from the scope of its grievance process those employment actions in which a municipal employee has procedural recourse through other sources. Examples of those situations include:
Police officers and firefighters can only be terminated, suspended or reduced-in-rank in conformance with the process and cause standards set forth in sec. 62.13(5)(em), Stats.
Police officers and firefighters are able to bargain for a grievance arbitration process for discipline and termination.
Municipal officers who are appointed to their positions are subject to removal pursuant to various statutory provisions and processes.
“Workplace safety” is not defined in the statute, but typically has been defined by policy to include conditions that substantially endanger an employee’s health or safety. These conditions can be subject to state and federal standards and enforcement mechanisms (e.g., OSHA).
There are a variety of state and federal discrimination statutes which provide municipal employees with protection from discriminatory employment actions and the administrative and legal venues to enforce those protections.
The statute and its legislative history do not provide an answer to this question, but some municipalities have taken an aggressive approach and excluded from their sec. 66.0509(1m) process those employment actions or safety conditions which provide an employee a procedural review process by means of other statutory sources.
Conclusion
The Wisconsin legislature gave municipalities significant discretion in the drafting of grievance policies under sec. 66.0509(1m). Recent case law interpreting that statute has confirmed that discipline and terminations which occur under such policies do not create due process rights, unless the policies adopt a substantive cause standard. They also suggest that any attempt to limit the application of the grievance procedure by means of definitional exclusions must comport with common sense definitional standards. To the extent that a municipality can define an employment action as “non-disciplinary” and support that argument, the courts have shown an inclination to permit the municipality to exclude that action from the grievance process. Given the dearth of statutory guidance, however, many questions remain as to the ability of municipalities to shape the application of the grievance process.
Employees 346