IN THE SUPREME COURT OF IOWA No. 15–1131
Filed June 9, 2017
Amended August 25, 2017
LARRY SHAWN WHITWER,
Appellee,
vs.
CIVIL SERVICE COMMISSION OF THE CITY OF SIOUX CITY, IOWA,
Appellant.
Appeal from the Iowa District Court for Woodbury County,
Jeffrey A. Neary, Judge.
A civil service commission appeals a district court’s reinstatement
of a civil service employee after he was terminated pursuant to a last-
chance agreement. REVERSED.
Justin Vondrak, Assistant City Attorney, Sioux City, for appellant.
Jay E. Denne of Munger, Reinschmidt & Denne, LLP, Sioux City,
for appellee. 2
MANSFIELD, Justice.
This case requires us to determine the enforceability of a so-called
“last-chance agreement” entered into by a civil service employee. After a
municipal firefighter pled guilty to domestic abuse assault, the
municipality offered to discipline him with a short suspension instead of
terminating his employment. However, in exchange, the municipality
insisted that the firefighter agree to give the municipality discretion to
terminate him immediately and without appeal if he violated the law
again or violated the related no-contact order. The firefighter accepted
the municipality’s proposal and signed the written last-chance
agreement.
Just over a year later, the firefighter violated the no-contact order
related to the domestic abuse assault. When the city terminated his
employment in reliance on the agreement, the firefighter attempted to
appeal his termination to the civil service commission. The commission
declined to hear his appeal. On judicial review, however, the district
court reinstated the firefighter. The district court ruled that the last-
chance agreement was not valid because the commission had not
approved or reviewed it before the parties entered into it.
On appeal, we now reverse the district court. Consistent with the
authority in other jurisdictions, we conclude that a civil service employee
may enter into a valid last-chance agreement. Such an agreement,
however, remains subject to principles of contract law, such as the duty
of good faith and fair dealing. Accordingly, we do not decide whether a
last-chance agreement can be used to terminate a civil service employee
when there has been a significant lapse of time or the breach is de
minimis or unrelated to the reason for the agreement. 3
I. Background Facts and Proceedings.
For over twenty years, Larry Whitwer served as a firefighter with
the Sioux City Fire Department. In July 2012, Whitwer was arrested for
an assault. He later pled guilty to domestic abuse assault in violation of
Iowa Code section 708.2A(2)(a) (2013). At sentencing, the court granted
Whitwer a deferred judgment. The court also extended a previously
entered no-contact order for five years. See id. § 664A.5. On September
26, the day after Whitwer pled guilty, he was placed on administrative
leave from the fire department, with pay, and a predisciplinary hearing
was scheduled for October 5.
Before that hearing, Fire Chief Tom Everett spoke with Dan
Cougill, a representative from the firefighters’ union, about the
appropriate discipline for Whitwer’s actions. Although Whitwer could
have been terminated, Everett and Cougill discussed the possibility of
Whitwer signing a last-chance agreement. Under the agreement,
Whitwer would not be terminated because of the domestic abuse assault
guilty plea and he would instead serve a short suspension. Whitwer
would agree, among other things, to abide by the no-contact order and
consent to immediate termination if he violated that order. Whitwer
would also be required to waive the right to appeal if he were later
terminated under the last-chance agreement. In an email sent
September 27, Chief Everett noted that he “spoke for some time [with
Cougill] about . . . what exactly the last chance means.” Chief Everett
and Cougill then separately discussed the proposed discipline and last-
chance agreement with Whitwer’s personal attorney.
Meanwhile, Connie Anstey, an attorney for the City of Sioux City
(City), drafted the two-page document titled “Disciplinary Agreement” in
anticipation of the hearing. The agreement provided that it would be a 4
“complete resolution to the disciplinary action relating to incidents which
took place on or about July 21, 2012.” The agreement then included
several provisions that “Whitwer, the Sioux City Professional Fire
Fighter’s Association, and the City of Sioux City agree to . . . in lieu of
Mr. Whitwer’s immediate termination:”
1. The City agrees that the only disciplinary action which will be taken regarding the alleged misconduct . . . is contained in this agreement unless this agreement is breached by Mr. Whitwer. In the event of breach of this agreement by Mr. Whitwer, the City reserves the right to impose further disciplinary action up to and including immediate termination.
2. That Mr. Whitwer shall be subject to transfer at the sole discretion of the Fire Chief and shall receive a five (5) shift suspension from work without pay for violation of Sioux City Fire Rescue Rules and Regulations . . . .
....
5. That Mr. Whitwer shall strictly abide by all court issued no contact orders in Woodbury County Case No. . . . , and shall not, either while on duty or off duty violate the court imposed no contact order in person, by telephone or through the use of third parties.
7. That this agreement is a last chance agreement and as such, it is agreed that Mr. Whitwer may be terminated from his employment with the City without cause and without appeal rights under the labor agreement between the City and Union or under the provisions of the Iowa Civil Service laws at any time following the execution of this agreement. It is understood that Mr. Whitwer may be immediately terminated under this provision for any violation of the law (excluding simple misdemeanor traffic or parking tickets), violation of the no contact order, violation of Fire Department Rules and Regulations or the City Administrative Policies which may occur during this agreement.
8. The Union and Mr. Whitwer specifically waive all claims, disputes, appeals and grievances which have arisen or which may arise from the discipline given Mr. Whitwer pursuant to this Agreement. 5
Due to scheduling conflicts, the hearing was moved forward to
October 1. 1 On that day, Chief Everett, Anstey, and Bridey Hayes,
director of human resources for the City, were in attendance on behalf of
the City. Cougill and a second representative from the firefighters’ union
were present, as was Whitwer. Whitwer’s personal attorney was not at
the meeting, although neither Whitwer nor the union asked that the
meeting be continued for that reason.
All parties understood that the purpose of the hearing was to
review the last-chance agreement. After that review, Whitwer could
either sign the agreement or be terminated for the domestic abuse
assault guilty plea. Chief Everett read aloud the entire agreement and
asked Whitwer if he had any questions. Whitwer was given time to study
the document. The union representatives asked to discuss the
agreement in private with Whitwer. City officials honored the request
and left the room. When they returned, Whitwer and the union
representatives had several questions relating to the proposed shift
suspensions. Chief Everett asked Whitwer if he had any other questions
about the agreement, and Whitwer replied that he did not. At that point,
Whitwer, Chief Everett, and Cougill each signed five copies of the
agreement. Whitwer then became emotional and apologized. Chief
Everett responded to Whitwer, “[W]e really want you to be successful.”
For the next thirteen months, Whitwer continued to work as a
firefighter without incident. However, in November 2013, police were
dispatched on reports that Whitwer was texting and attempting to meet
with and otherwise reach the victim in violation of the no-contact order.
1The October 1 hearing was audio recorded and is a part of the record in this case. 6
Officers reviewed an actual text message, confirmed the no-contact order
was still active, and arrested Whitwer. On November 18, Whitwer
appeared before the district court and admitted to violating the no-
contact order. The court found him in contempt and sentenced him to
two days in jail with credit for time served. A separate job-related
hearing was held on November 22 and Whitwer was terminated from the
Sioux City Fire Department for violating the last-chance agreement.
Whitwer appealed his termination to the Sioux City Civil Service
Commission pursuant to chapter 400, which governs the rights of civil
service employees. See id. § 400.18(1). However, the Commission
declined to determine whether Whitwer was properly terminated because
of the waiver-of-appeal provision in the last-chance agreement. Although
Whitwer claimed that he was under duress and suffering from depression
when he signed the agreement, the Commission determined it had no
authority to hear the appeal.
Whitwer appealed the Commission’s decision to district court. See
id. § 400.27. At the district court hearing, several City employees
testified regarding the City’s use of last-chance agreements. Bridey
Hayes explained that the agreements are not prescribed in the City code
or administrative regulations. Instead, the decision of whether to offer a
last-chance agreement is at the discretion of human resources, the City
attorney’s office, and the relevant department head. Connie Anstey
testified that when a last-chance agreement is appropriate, the City uses
a form agreement which is then tailored to the circumstances involved.
For instance, Anstey elaborated that if the last-chance agreement is
based on criminal conduct, the agreement will require no further
violations of the law. Anstey stated that the waiver-of-appeal provision is
a “standard provision” in the form agreement. Anstey emphasized that 7
the decision to offer a last-chance agreement depends on the
circumstances of the misconduct, the disciplinary options available, and
the employee’s work history. Finally, Anstey acknowledged that there
was no end-date for the last-chance agreement in this case.
Chief Everett confirmed that if Whitwer had declined to sign the
last-chance agreement on October 1, 2012, he would have been
terminated at that meeting. Everett explained that public trust was
extremely important to the fire department, and a violation of law “begins
to chip away or erode that public trust and certainly speaks to integrity
and decision-making.” Chief Everett also observed that last-chance
agreements, when appropriate, are generally beneficial to the fire
department because the department “put[s] a lot into these individuals,”
and a last-chance agreement allows the employee to “see what they’ve
done and make corrections moving forward so that they can continue to
serve in a manner that’s . . . highly ethical.”
Following trial, the district court filed a written ruling reinstating
Whitwer to his position with the Sioux City Fire Department. The court
emphasized that offering a last-chance agreement is “entirely in the
discretion of the city.” In the court’s view, using the agreement to
terminate Whitwer “essentially circumvented the public policy which
forms the basis for the establishment of a Civil Service Commission,”
specifically, protection of civil service employees from arbitrary
termination. The court continued,
The decision to offer a last chance agreement is just as central in this process as the decision to terminate the employee, and can be just as easily abused or manipulated. It is precisely this discretion that should be subject to review by the Defendant Commission and approval or denial based upon their role as a neutral evaluator of the facts in each case. 8
Therefore, the court found,
[The] Commission must be permitted to make such a determination prior to the offering of a last chance agreement or it must be permitted to approve a last chance agreement in order to perform one of its essential purposes. If Defendant Commission is not allowed to do so, the intent of the legislature in passing the civil service commission legislation would be defeated. Civil service legislation was designed to assure that municipal employees were being employed and retained based on their skills and qualifications, and not due to any prohibited ground for consideration, such as favoritism or nepotism. As applied to the facts here, the Commission must be allowed to verify that no employee is subjected to arbitrary termination, regardless of the device used to terminate or continue employment.
(Citation omitted.)
The Commission appealed, and we retained the appeal.
II. Standard of Review.
Our review of the district court’s decision is de novo. Lewis v. Civil
Serv. Comm’n, 776 N.W.2d 859, 861 (Iowa 2010). “Although we give
weight to the findings of the district court, we are not bound by them.”
Dolan v. Civil Serv. Comm’n, 634 N.W.2d 657, 662 (Iowa 2001). Further,
“[w]e confine our review to the record made in the district court.” Id.
Thus, “we do not receive new evidence” and “we limit our review to the
same issues that were raised in the district court.” Id.
III. Analysis.
A. Validity of Last-Chance Agreements. Civil service employees
are entitled to a variety of rights arising under Iowa Code chapter 400,
including the right not to be arbitrarily discharged and the right to seek
review of a discharge. See City of Des Moines v. Civil Serv. Comm’n, 540
N.W.2d 52, 56 (Iowa 1995). In this case, we are asked whether a civil
service employee may prospectively waive those rights through a last-
chance agreement that avoids termination proceedings. 9
We begin with a review of the relevant statutes. 2 Iowa Code section
400.18 establishes that a civil service employee
shall not be removed, demoted, or suspended arbitrarily, except as otherwise provided in this chapter, but may be removed, demoted, or suspended after a hearing by a majority vote of the civil service commission, for neglect of duty, disobedience, misconduct, or failure to properly perform the person’s duties.
Iowa Code § 400.18(1); cf. id. § 400.19 (allowing the “chief of the fire
department [to] peremptorily suspend, demote, or discharge a
subordinate” for the same grounds). Section 400.20 specifies that any
such discipline “may be appealed to the civil service commission within
fourteen calendar days after the suspension, demotion, or discharge.” Id.
§ 400.20. At the hearing before the commission, the employee has the
right to be represented by counsel or a union representative, id.
§ 400.18(3), and proper notice must be given, id. § 400.23. A civil service
commission has jurisdiction “to hear and determine matters involving
the rights of civil service employees under [chapter 400], and may affirm,
modify, or reverse any case on its merits.” Id. § 400.27.
We have long recognized these statutes protect a civil service
employee such as Whitwer from being arbitrarily discharged. City of Des
Moines, 540 N.W.2d at 56; accord Anderson v. Bd. of Civil Serv. Comm’rs,
227 Iowa 1164, 1168, 290 N.W. 493, 494 (1940); see also Lewis, 776
N.W.2d at 862 (“It is improper for a civil service employee to be removed,
demoted, or suspended for reasons other than those found in sections
400.18 and 400.19 . . . .”). The commission review process, therefore,
serves to protect employees “as long as they are not guilty of misconduct
2The general assembly recently amended several provisions of chapter 400. See H.F. 291, 87th G.A., 1st Sess. §§ 55–63 (Iowa 2017). We are deciding this case based on the version of chapter 400 in effect when Whitwer’s employment was terminated. 10
or failure to perform their duties.” Misbach v. Civil Serv. Comm’n, 230
Iowa 323, 327, 297 N.W. 284, 286 (1941). Review by a commission “does
not exist to change the issues or scope of the original termination
decision.” Dolan, 634 N.W.2d at 665. Instead, the main thrust of
commission review is to determine whether the decision to terminate a
civil service employee, for either a disciplinary or nondisciplinary reason,
was arbitrary. City of Des Moines, 540 N.W.2d at 59; Misbach, 230 Iowa
at 327, 297 N.W. at 286 (“The commission is protection and a shield to
the civil service employee against an arbitrary or capricious removal.”).
Chapter 400 further provides for judicial review of an employee’s
termination:
The city or any civil service employee shall have a right to appeal to the district court from the final ruling or decision of the civil service commission. The appeal shall be taken within thirty days from the filing of the formal decision of the commission. The district court of the county in which the city is located shall have full jurisdiction of the appeal and the said appeal shall be a trial de novo as an equitable action in the district court. .... In the event the ruling or decision appealed from is reversed by the district court, the appellant, if it be an employee, shall then be reinstated as of the date of the said suspension, demotion, or discharge and shall be entitled to compensation from the date of such suspension, demotion, or discharge.
Iowa Code § 400.27. We have distinguished the phrase “trial de novo,”
which appears in this statute, from mere review de novo. See Sieg v. Civil
Serv. Comm’n, 342 N.W.2d 824, 828 (Iowa 1983). In a trial de novo, the
district court “hear[s] the case anew” and may receive evidence not
presented to the commission. Dolan, 634 N.W.2d at 662. Ultimately,
“the objective of a trial de novo is to permit the district court to
independently determine whether the sanction imposed by the 11
commission was warranted.” Id. at 663. Consequently, a district court—
and by extension, this court on review—may modify any disciplinary
decision of the Commission. Id.; see also Lewis, 776 N.W.2d at 862
(“[T]his court ‘independently construe[s] the factual record as a whole to
determine if the [employee’s] discipline was warranted.’ ” (second and
third alterations in original) (quoting City of Des Moines v. Civil Serv.
Comm’n, 513 N.W.2d 746, 748 (Iowa 1994))).
In this case, it is undisputed that Whitwer was entitled to the
rights of a civil service employee—the Commission only points out that
nothing in chapter 400 prevents Whitwer from waiving those rights, as
the last-chance agreement clearly reflects. According to the Commission,
Whitwer could have elected not to sign the agreement in October 2012,
faced termination for the domestic abuse assault guilty plea, and then
contested that termination. Instead, Whitwer signed the agreement and
kept his job for thirteen additional months subject only to the conditions
outlined in the agreement. So long as he entered into the agreement
voluntarily, the Commission maintains that the agreement is valid and
enforceable.
At the outset, we note that nothing in chapter 400 expressly bars
agreements waiving civil service appeal rights. In certain other contexts,
the legislature has declared that any purported waiver of statutory rights
is void against public policy. See, e.g., Iowa Code § 96.15(1) (“Any
agreement by an individual to waive, release, or commute the individual’s
rights to [unemployment] benefits or any other rights under this chapter
shall be void.”); id. § 216E.6(2) (“Any waiver of rights by a consumer
under this chapter is void.”); id. § 322G.13 (declaring that a waiver of
rights related to defective motor vehicles “is void as contrary to public
policy”); id. § 579B.6 (providing that a waiver of the right to file a lien 12
under chapter 579B “is void and unenforceable”). However, no similar
provision exists in chapter 400. Further, the relevant statutes indicate
that the right to appeal the discharge is an individual right, to be
exercised at the discretion of the employee. Section 400.20 provides that
any suspension, demotion, or discharge “may be appealed to the civil
service commission,” id. § 400.20 (emphasis added), and notice is
required “[i]f the appeal be taken,” id. § 400.21 (emphasis added).
In the federal system, employees covered by the Civil Service
Reform Act may be removed “only for such cause as will promote the
efficiency of the service.” 5 U.S.C. § 7513(a) (2012). Federal law provides
that “[a]n employee against whom an action is taken under [section
7513] is entitled to appeal to the Merit Systems Protection Board.” Id.
§ 7513(d); see id. § 7701 (providing the procedures for appellate review);
see also Dep’t of Navy v. Egan, 484 U.S. 518, 526, 108 S. Ct. 818, 823
(1988) (“A removal for ‘cause’ embraces a right of appeal to the Board
and a hearing of the type prescribed in detail in § 7701.”). However, the
United States Court of Appeals for the Federal Circuit—the circuit where
many federal employment cases arise—regularly upholds and enforces
last-chance agreements related to removals. See, e.g., Buchanan v. Dep’t
of Energy, 247 F.3d 1333, 1338, 1340 (Fed. Cir. 2001). So long as the
agreement is validly executed, an employee’s removal is predicated on a
breach of the agreement, not whether the employee was removed for
cause. See Stewart v. U.S. Postal Serv., 926 F.2d 1146, 1148 (Fed. Cir.
1991); see also Buchanan, 247 F.3d at 1337, 1340 (affirming the removal
of an employee for “failing to be on duty for a significant portion of the
day”). Further, “[i]t is settled that an employee can waive the right to
appeal in a last-chance agreement.” Buchanan, 247 F.3d at 1338
(quoting Gibson v. Dep’t of Veterans Affairs, 160 F.3d 722, 725 (Fed. Cir. 13
1998)); see Annotation, Enforceability of Waiver of Right to Appeal in
Federal Employees’ Last Chance Agreement, 16 A.L.R. Fed. 2d 593, 593
(originally published in 2007) (“It is well established that a federal
employee can waive future appeal rights in a last chance agreement.”).
A valid waiver-of-appeal provision in a federal last-chance
agreement divests the Merit Systems Protection Board of jurisdiction,
Gilbert v. Dep’t of Justice, 334 F.3d 1065, 1070 (Fed. Cir. 2003), and the
Federal Circuit applies basic contract principles in determining whether
the agreement should be enforced, Link v. Dep’t of Treasury, 51 F.3d
1577, 1582 (Fed. Cir. 1995) (“A last-chance agreement is a settlement
agreement, and a settlement agreement is a contract.”). Accordingly, in
order to overcome the waiver-of-appeal provision, the federal employee
must either prove compliance with the agreement, that he or she did not
knowingly or voluntarily enter into the agreement, or that the agency
breached the agreement. Id.; see also Gilbert, 334 F.3d at 1070
(recognizing that the employee has the burden of proof to establish
jurisdiction). The employee may also demonstrate a last-chance
agreement is invalid if the agency acted in bad faith. Link, 51 F.3d at
1582.
Significantly, federal courts recognize the validity of last-chance
agreements despite several policy arguments similar to those raised by
Whitwer in this case. See McCall v. U.S. Postal Serv., 839 F.2d 664, 667–
68 (Fed. Cir. 1988). In McCall, the Federal Circuit rejected the idea that
last-chance agreements are inherently coercive due to unequal
bargaining power between the employer and employee. Id. at 667; see
also Williams v. U.S. Postal Serv., 58 Fed. App’x 469, 471 (“The choice
between removal and signing the agreement is inherent in any last
chance agreement.”). The court acknowledged that individuals “are often 14
forced to make difficult choices which effectively waive statutory or even
constitutional rights.” McCall, 839 F.2d at 667. Nevertheless, the court
recognized that an employee obtains a substantial benefit from entering
into a last-chance agreement: retaining employment and being given an
opportunity to improve his or her conduct. See id. So long as the waiver
is knowing and voluntary, the agreement simply “reflects a rational
judgment on the part of [the employee].” Id.
In McCall, the Federal Circuit also addressed the argument that
enforcement of last-chance agreements may incentivize agencies to bring
disciplinary actions that “might otherwise not be sustainable before the
board.” Id. The court recognized the public interest at stake in allowing
a full and fair consideration of all disciplinary actions; however, the court
pointed out that a federal employee’s right to appeal is a private decision
of the employee. Id. Consequently, the court concluded, “We cannot say
that the comparatively remote public interest in the effectiveness of the
Civil Service Reform Act should displace [the employee’s] knowing and
voluntary decision that he would benefit personally from the agreement.”
Id.
Finally, the Federal Circuit rejected the idea that last-chance
agreements are “contrary to the goals of the Civil Service Reform Act” and
“open[ ] the door to completely subjective evaluation by the agency.” Id.
Specifically, the agreement in McCall required the employee to conduct
himself in a manner “acceptable to management” or face removal. Id. at
665. As the court explained,
We agree that the term “acceptable to management” does introduce an element of subjectivity into the agreement, but this does not mean that agencies would have a free hand to take arbitrary action against employees. We think it is implicit in the agreement here that the agency must abide by it in good faith. Thus, the agreement itself serves as a check 15 on arbitrary agency action. If an agency acts in bad faith or takes other arbitrary and capricious action, as a breaching party it would not be able to enforce the agreement.
Id. at 667 (emphasis added). The court also distinguished cases
involving the waiver of substantive guarantees for individual employees,
noting that the removal statutes at issue were directed only “to the
procedures by which civil servants are hired and fired.” Id. at 668; cf.
Callicotte v. Carlucci, 698 F. Supp. 944, 946–47 (D.D.C. 1988)
(concluding that a waiver of an employee’s right to file a claim of
workplace discrimination was invalid as contrary to public policy).
Likewise, several state courts have enforced last-chance
agreements as a valid waiver of a civil service employee’s rights related to
the termination of employment. See, e.g., Muth v. City of Leominster, No.
12–P–1498, 2013 WL 3939948, at *1 (Mass. App. Ct. Aug. 1, 2013);
Chilefone v. Metro. Council, No. C0-02-2260, 2003 WL 21694564, at *3
(Minn. Ct. App. July 22, 2003); Watson v. City of East Orange, 815 A.2d
956, 957–58 (N.J. 2003) (per curiam) (enforcing the terms of an
agreement in part because “[a] contrary conclusion likely would chill
employers from entering into last chance agreements to the detriment of
future employees”); Abramovich v. Bd. of Ed., 386 N.E.2d 1077, 1079–80
(N.Y. 1979) (“[W]hen a waiver is freely, knowingly and openly arrived at,
without taint of coercion or duress, the sturdy public policy
underpinnings of section 3020-a are not undermined.”); Monahan v. Girouard, 911 A.2d 666, 672–73 (R.I. 2006); City of Yakima v. Yakima
Police Patrolmans Ass’n, 199 P.3d 484, 490 (Wash. Ct. App. 2009). At
least two other states expressly authorize waiver by statute. See
McCollins v. Cuyahoga County, 20 N.E.3d 1221, 1225 n.3 (Ohio Ct. App.
2014) (“The statute and case law treat Last Chance Agreements like any
other contract . . . .”); City of Austin Firefighters’ and Police Officers’ Civil 16
Serv. Comm’n v. Stewart, No. 03–15–00591–CV, 2016 WL 1566772, at *3
(Tex. App. Apr. 14, 2016) (recognizing that when an agreement
authorized by statute addresses disciplinary actions, it “supersedes any
contrary statute, ordinance, or rule, including provisions under the [Civil
Service] Act”); see also Ohio Rev. Code Ann. § 124.34(B) (West, Westlaw
current through 2017 File 5 of the 132d Gen. Assemb.); Texas Loc. Gov’t
Code Ann. §§ 143.306–.307 (West, Westlaw current through chapters
effective immediately through Chapter 34 of the 2017 Reg. Sess.).
Whitwer cites only one example of a state court that declined to
enforce an employee’s waiver of termination rights in a last-chance
agreement. See Farahani v. San Diego Comm. Coll. Dist., 96 Cal. Rptr. 3d
900, 905–06 (Ct. App. 2009). However, Farahani is easily distinguishable
because such waivers in California are expressly prohibited by statute, a
circumstance which does not exist in Iowa under chapter 400. Id. at 905
(“By its terms, section 87485 renders null and void any agreement to
waive the benefits of Chapter 3, ‘Employment.’ ”).
We find the reasoning from McCall persuasive and conclude that a
last-chance agreement waiving civil service appeal rights afforded to a
civil service employee under chapter 400 can be valid and enforceable.
Here, the district court concluded that while a municipal
government may enter into a last-chance agreement with an employee,
such an agreement is not effective until the Commission has had an
advance opportunity to review and approve the agreement. However, this
notion bends the duties and responsibilities of the Commission too far.
No provision in chapter 400 authorizes the Commission to review and
approve such agreements or provides it with standards for doing so.
Rather, the Commission acts in an adjudicatory capacity when it reviews
the removal, demotion, or suspension of a civil service employee. Sieg, 17
342 N.W.2d at 828. This review process is predicated on a sanction
having already occurred. Cf. Bevel v. Civil Serv. Comm’n, 426 N.W.2d
380, 383 (Iowa 1988) (concluding that the appeal time in section 400.20
begins once the employee receives notice of the sanction).
We also do not accept that a last-chance agreement becomes
arbitrary simply because the municipality retains discretion whether to
offer the agreement. Primarily, this ignores the fact that the employee
has comparable discretion to reject the agreement, if and when offered.
Further, any disciplinary decision begins with an exercise of discretion
by the municipality in any event. The City should retain discretion to
determine whether to offer an employee an opportunity to remain on the
job through a last-chance agreement despite otherwise “removable”
misconduct. For example, in this case, Whitwer was described as having
an exemplary record of nearly two decades before committing assault in
2012. See id. at 382 (construing chapter 400 liberally to “assist the
parties in obtaining justice”).
Of course, a civil service employee does not waive any rights
protected by chapter 400 if the agreement itself is invalid. Because a
last-chance agreement is essentially a settlement agreement, general
principles of contract law should apply to their creation and
interpretation. See Estate of Cox v. Dunakey & Klatt, P.C., 893 N.W.2d
295, 302 (Iowa 2017); see also Rick v. Sprague, 706 N.W.2d 717, 723
(Iowa 2005) (“[W]e also look to contract principles when we interpret
offers to confess judgment.”).
B. The October 2012 Agreement. The district court determined
the last-chance agreement was invalid as a matter of law since it lacked
the Commission’s prior imprimatur. Thus, the court did not reach the
issue of whether the agreement was otherwise enforceable and valid. 18
Whitwer does not dispute that he violated the no-contact order, which
resulted in a direct violation of the last-chance agreement.
Whitwer instead characterizes the circumstances surrounding his
signing the agreement as “incredibly problematic.” Whitwer points out
that the meeting was rescheduled at the last minute from October 5 to
October 1, and that his personal attorney was not present. He also
claims that he was under stress when the document was signed and
faced a “Hobson’s choice”: either sign the agreement “as is,” or be
terminated.
Upon our de novo review, we are satisfied that Whitwer entered
into the agreement voluntarily, knowingly, and intelligently. The
agreement provided a significant benefit—continued employment with a
five-shift suspension in lieu of termination proceedings. The fact that
Whitwer’s attorney was not present when he signed the agreement is not
controlling. Whitwer’s attorney was informed of the terms of the last-
chance agreement before the hearing, and no objection was raised to his
absence. Whitwer’s interests were represented by two union officials at
the hearing. Whitwer was given ample time, outside the presence of any
City personnel, to review the agreement with the union officials. Except
for the scheduling of his shift suspensions, Whitwer raised no questions
or concerns about the agreement despite several opportunities to do so.
On these facts, we conclude that Whitwer agreed to the last-chance
agreement and was fully aware of both its benefits and its consequences.
It is also notable that in this case, the violation of the last-chance
agreement occurred a little over a year after the agreement was signed
and was connected to the misconduct underlying the original disciplinary
proceeding. Additionally, first responders often have to deal with volatile
in-home situations, including incidents of domestic violence. Thus, full 19
public confidence in the ability of first responders to perform these
functions is particularly important.
We do not foreclose the possibility that in a different case in the
future, such as a case involving a significant lapse of time or a de
minimis or unrelated breach, attempted enforcement of the last-chance
agreement might be contrary to public policy or might violate the duty of
good faith and fair dealing. See McCall, 839 F.2d at 667 (“[I]t is implicit
in the agreement here that the agency must abide by it in good faith.
Thus, the agreement itself serves as a check on arbitrary agency
action.”). Such a case is not before us today and we do not address it in
today’s opinion.
IV. Conclusion.
For the above reasons, we conclude the last-chance agreement
signed by Whitwer was valid and enforceable. Accordingly, we reverse
the judgment of the district court and uphold the City’s termination of
Whitwer’s employment under the circumstances of this case. See Lewis,
776 N.W.2d at 865.
REVERSED.
All justices concur except Appel and Hecht, JJ., who dissent. 20
#15–1131, Whitwer v. CSC of Sioux City
APPEL, Justice (dissenting).
Iowa Code section 400.30 (2013) states, “The provisions of this
chapter shall be strictly carried out by each person or body having
powers or duties thereunder.” If the provisions of the Code are to be
strictly carried out, it seems to me a person
shall not be removed, demoted, or suspended arbitrarily, except as otherwise provided in this chapter, but may be removed, demoted, or suspended after a hearing by a majority vote of the civil service commission, for neglect of duty, disobedience, misconduct, or failure to properly perform the person’s duties.
Id. § 400.18(1).
The Iowa legislature has clearly provided, except for certain
exceptions not applicable here, termination may occur only “after a
hearing by a majority vote of the civil service commission for neglect of
duty, disobedience, misconduct, or failure to properly perform the
person’s duties.” Id. That did not happen here.
I do not think the parties can agree to opt out of the system
because they think their agreement is more beneficial than the statutory
framework. The majority suggests last-chance agreements are at least
sometimes good for the employee and good for the public employer.
Perhaps so. But that is not the question. The question here is a simple
one: Does the statute authorize dismissal of an employee without a
majority vote of the civil service commission after a hearing for the
enumerated causes? There is nothing in the statute allowing the parties
to finesse this language.
The majority opinion declares there is nothing in the statute
prohibiting last-chance agreements. There is no such specific language
dealing with last-chance agreements. But the fact the language of Iowa 21
Code section 400.18(1) is broad and not narrow does not defeat its
application to last-chance agreements that do not provide for a hearing
and vote by a majority of the civil service commission.
The majority correctly points out the civil service statute does not
expressly declare waivers are void as do many other statutes. That is a
fair point. But it also does not expressly authorize last-chance
agreements, as do some civil service statutes. In any event, the failure to
provide such a declaration does not eviscerate the mandatory provisions
of Iowa Code section 400.18(1), which the legislature has instructed the
participants to strictly enforce. I do not think it can be fairly said this
provision has been strictly enforced in this case.
For these reasons, I would affirm the judgment of the district
court. Tinkering with the statute should be left to the legislature.
Hecht, J., joins this dissent.