Joshua Keller v. Janice Casteel

Tennessee Supreme Court·Decided June 12, 2020·No. E2017-01020-SC-R11-CV·Published

Opinion

06/12/2020 IN THE SUPREME COURT OF TENNESSEE AT KNOXVILLE November 19, 2019 Session Heard at Kingsport1

JOSHUA KELLER v. JANICE CASTEEL ET AL.

Appeal by Permission from the Court of Appeals Chancery Court for Bradley County No. 2012-CV-117 Jerri Bryant, Chancellor ___________________________________

No. E2017-01020-SC-R11-CV ___________________________________

We granted permission to appeal in this case to address when an employee handbook may create a property interest entitled to due process protection. After the petitioner municipal firefighter pled guilty to a criminal charge, his employment was terminated. The firefighter filed a complaint for judicial review of the termination, asserting a due process claim based on the municipality’s personnel manual. The trial court and the Court of Appeals both held that the personnel manual gave the firefighter a property interest entitled to due process protection. We reverse that holding. In Tennessee, employment is presumed to be at-will. Employers, including governmental employers, may adopt policies and procedures to promote efficiencies and fair, consistent treatment of employees, and may put those policies and procedures in employee manuals or handbooks. In the absence of specific language showing the employer’s intent to be contractually bound, such policies and procedures do not change employees’ at-will status and do not create a constitutionally protectable property interest. In this case, the municipality’s personnel manual included an explicit statement that the municipality did not intend the procedures to be binding or constitute any type of contract. Such disclaimers preclude any finding that the employer intended to be bound by the terms of the employee handbook. Accordingly, we decline to hold that the employee handbook converted the employee’s at-will employment into a property interest entitled to due process protection.

Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals Is Reversed and Judgment of the Chancery Court Is Affirmed for Different Reasons

1 We heard oral argument at Kingsport, Tennessee, as part of the Court’s S.C.A.L.E.S. (Supreme Court Advancing Legal Education for Students) project. HOLLY KIRBY, J., delivered the opinion of the court, in which JEFFREY S. BIVINS, C.J., and CORNELIA A. CLARK, SHARON G. LEE, and ROGER A. PAGE, JJ., joined.

Ronald D. Wells, Stacy Lynn Archer, and Philip Aaron Wells, Chattanooga, Tennessee, for the appellants, Janice Casteel, City of Cleveland, Tennessee, and Steve Haun.

James R. McKoon, Chattanooga, Tennessee, and Sarah M. Block, Washington, D.C., for the appellee, Joshua Keller.

John T. Batson, Jr., Emily C. Taylor, and Brian R. Bibb, Knoxville, Tennessee, for amicus curiae Public Entity Partners, and Melanie E. Davis, Maryville, Tennessee, for amicus curiae Tennessee Municipal Attorneys Association.

OPINION

FACTUAL AND PROCEDURAL BACKGROUND

Petitioner-Appellee Joshua Keller was hired by Respondent-Appellant City of Cleveland (“City”) as a firefighter in December 2008.2 In April 2009, while Mr. Keller was still under his 6-month probationary period, he was arrested and convicted of driving under the influence while off duty. The City Fire Department allowed Mr. Keller to remain employed but extended his probation for twelve months. It also asked him to undergo counseling for alcohol abuse.

No further incidents occurred until a little over two years later. On January 22, 2012, Mr. Keller had some friends at his home. Everyone, including Mr. Keller, was drinking alcohol. At some point, a fight broke out. Mr. Keller retrieved a firearm from his bedroom and shot it more than once; no one was injured by the shots. The report by the police officer who investigated the episode described Mr. Keller as “highly intoxicated.”

2 We recite the facts pertinent to this appeal. For a more complete recitation of the facts and testimony, please see the Court of Appeals’ thorough recitation. See Keller v. Casteel, No. E2017-01020- COA-R3-CV, 2019 WL 354867, at *1–7 (Tenn. Ct. App. Jan. 28, 2019), perm. app. granted (June 19, 2019).

-2- As a result of this incident, Mr. Keller was charged with reckless endangerment and two counts of aggravated assault. Two days later, City Fire Chief Steve Haun sent Mr. Keller a memo informing him that he was suspended without pay until the charges were resolved, at which time the City would make a decision about his employment.

On January 31, 2012, to resolve the charges against him, Mr. Keller pled guilty to simple assault. Mr. Keller informed Chief Haun of the resolution of the charges. Chief Haun told Mr. Keller he would let him know about his employment status.

Ultimately, Chief Haun decided to recommend termination of Mr. Keller’s employment. On February 10, 2012, Chief Haun gave Mr. Keller a copy of Chief Haun’s memo to the City Manager documenting his decision. The memo recounted Mr. Keller’s work history, including the arrests and convictions, and stated:

I have to make the decision that is best for our Department as a whole.

I cannot, as Fire Chief, condone this behavior from a firefighter of the department. I have to think of the precedent that will set if I allow [Mr. Keller] to return. I would have to allow this type of behavior from the rest of the department as well as future employees and I am not prepared to lower our standards as a department to do what is easy. I feel [Mr. Keller] was shown compassion in 2009 and was allowed to continue to work for the City of Cleveland.

I still have compassion for [Mr. Keller] and what dismissal will mean for his life. But I keep coming back to the realization that [Mr. Keller] made every decision, as poor as they were, to put himself in this position. Therefore, it is my recommendation of dismissal.

The City terminated Mr. Keller’s employment effective February 17, 2012.

Mr. Keller sought an appeal pursuant to policies set forth in the City’s personnel manual. The policies allowed employees to request an initial appeal to the City Manager, with judicial review by the local chancery court.3

3 As discussed in more detail below, the City’s personnel manual outlined the following appeal process:

-3- The City Manager conducted a hearing as provided in the manual. Afterward, she sent Mr. Keller a letter notifying him of her decision to uphold the termination.

In May 2012, Mr. Keller filed a petition for a writ of certiorari with the Bradley County Chancery Court. It named the City and the City Manager as defendants.4 The petition asserted the City violated Mr. Keller’s right to due process under both the federal and Tennessee Constitutions by, among other things, having the administrative appeal of the decision to terminate Mr. Keller’s employment heard by the City Manager. It claimed policies and procedures applied to the termination of his employment were arbitrary and capricious and the City did not have substantial and material evidence to support the termination. The petition asserted a violation of the Uniform Administrative Procedures Act, Tenn. Code Ann. §§ 4-5-101 (2015) et seq., and of his due process rights under Tennessee Code Annotated §§ 27-8-101 et seq.5 and Tennessee Code Annotated §§ 27-9-101 et seq.6

Mr. Keller later amended his petition to add federal claims. As a result, the City removed the case to the United States District Court for the Eastern District of Tennessee.

Any City employee reprimanded, suspended, demoted, or dismissed has the right to submit a request in writing to the City Manager to have the action reviewed.

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