COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Annunziata and Senior Judge Coleman Argued at Richmond, Virginia
THOMAS EDDIE TATUM OPINION BY v. Record No. 2436-02-2 JUDGE SAM W. COLEMAN III JUNE 24, 2003 VIRGINIA DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Melvin R. Hughes, Jr., Judge
James A. Eichner (William G. Shields & Associates, on brief), for appellant.
Guy W. Horsley, Jr., Senior Assistant Attorney General (Jerry W. Kilgore, Attorney General; Elizabeth A. McClanahan, Chief Deputy Attorney General; Judith Williams Jagdmann, Deputy Attorney General; Martha M. Parrish, Assistant Attorney General, on brief), for appellee.
Thomas Eddie Tatum was employed by the Virginia Department
of Agriculture and Consumer Services (the "Department") of the
Commonwealth as an inspector, primarily inspecting gasoline
pumps for proper calibration. The Department issued a Group III
written notice of disciplinary action against Tatum for
misconduct and removed Tatum from his job.
Pursuant to the State Grievance Procedure, Code § 2.2-3004,
Tatum requested and received a grievance hearing before an
administrative hearing officer. The hearing officer made
findings of fact and reduced the Department's disciplinary action to a Group III written notice without removal, ordering
reinstatement but not back pay. The Department requested the
hearing officer to reconsider his decision and also requested
administrative review of the hearing officer's decision. The
hearing officer denied the request for reconsideration. On
administrative review, the Director of the Department of
Employment Dispute Resolution and the Director of the Department
of Human Resources Management upheld the hearing officer's
decision.
Pursuant to Code § 2.2-3006(B), the Department sought
judicial review of the hearing officer's decision in the Circuit
Court of the City of Richmond. The circuit court reversed the
hearing officer's decision which had reinstated Tatum and upheld
the Department's Group III written notice and removal of Tatum
from his job.
Tatum appealed that decision to this Court, contending that
the circuit court erred in reversing and vacating the hearing
officer's decision reinstating him to his job. For the
following reasons, we reverse the circuit court's decision and
reinstate the hearing officer's decision.
BACKGROUND
The Department employed Tatum for nine years as an
inspector, primarily inspecting gasoline pumps to ensure they
were accurately calibrated. He worked independently, with
little supervision. According to the Department's program - 2 - manager, all inspectors are "vested with police powers in the
weights and measures law. [Therefore,], [i]t's important that
we're able to rely on their judgment, rely on their honesty,
[and] credibility, . . . from the standpoint of there's not
someone looking over their shoulder each hour of the day."
During the fall of 2000, Tatum accepted outside employment
during his off-hours for F.W. Baird, a company regulated by the
Department, and he performed work similar to that which he
performed for the Department. When the Department learned of
Tatum's outside employment, it investigated the situation and
determined that Tatum's activity constituted a prohibited
conflict of interest. It issued a Group II written notice to
Tatum for that misconduct. Tatum did not grieve that
disciplinary action.
As part of Tatum's job, he was required to complete three
written documents to account for his time: a Leave Activity
Reporting Form, a Timesheet, and an internal work report. On
November 22, 2000, Tatum submitted those documents and claimed
that his absences from work on November 20 and 21, 2000 were due
to personal sick leave. In fact, Tatum was not sick on those
dates, rather, he was working in another state in his outside
employment for F.W. Baird.
As a result of Tatum's falsifying his leave report and
timesheet records, the Department issued Tatum a Group III
written notice with removal from his job on September 10, 2001. - 3 - State personnel policy describes Group III offenses as of such a
serious nature that the normal disciplinary action for a Group
III offense is termination of employment. See Department of
Personnel and Training Policies and Procedures Manual, Standards
of Conduct, Policy No. 1.60, § VII, D.3.a. In the Group III
written notice, the Department stated that prior to issuing this
decision it had taken into consideration Tatum's nine year
tenure and his job performance. The Department explained that
"due to the regulatory responsibilities of [Tatum's] position,
the Department and the public must be able to rely on the
accuracy and truthfulness of documents produced by individuals
occupying a position of public trust." As a result of Tatum's
falsification of his employment records and leave reports, the
Department concluded that Tatum was no longer a trusted employee
and that removal was the appropriate sanction.
Tatum requested a grievance hearing before an
administrative hearing officer pursuant to Code § 2.2-3004. At
the grievance hearing, Tatum asserted that he had "mistakenly"
entered personal sick leave on the documents because the
document contained no code for "family and personal leave." At
the time Tatum completed the documents, he had accrued
sufficient family and personal leave to cover the absence.
The hearing officer rejected Tatum's contention that he had
"mistakenly" reported his November 20 and 21 absences as sick
leave because he had previously completed leave documents using
- 4 - the correct code for family and personal leave. The hearing
officer also considered mitigating circumstances in deciding
whether to reduce the Department's disciplinary action against
Tatum to a sanction less severe than termination. 1 The hearing
officer found that Tatum's "favorable work performance and
approximately nine years of employment with the Commonwealth
form[ed] a sufficient basis to reduce [Tatum's] discipline from
a Group III written notice with removal to a Group III written
notice without removal." The hearing officer declined to award
Tatum back pay because he upheld the Group III written notice
and because Tatum had also received a Group II written notice.
The hearing officer ordered the Department to reinstate Tatum to
his job. The hearing officer rejected the Department's argument
that because Tatum had failed to fully cooperate with its
investigation he had aggravated the situation and prohibited
mitigation of the discipline against him. The hearing officer
1 In the Personnel Manual, Group III offenses include "[f]alsifying any records, including, but not limited to, vouchers, reports, insurance claims, time records, leave records, or other official state documents." Policy No. 1.60, § V, B.3.b. P&PM, the Personnel Manual, provides that the normal disciplinary action for a Group III offense is the issuance of a Written Notice and discharge, Policy No. 1.60, § VII, D.3.a. but also provides that agencies may reduce disciplinary action based on mitigating circumstances such as: "conditions that would compel a reduction in the disciplinary action to promote the interests of fairness and objectivity; or . . . an employee's long service or otherwise satisfactory work performance." Policy No. 1.60, § VII, C.1. It further provides that as alternatives to discharge, "[m]itigating circumstances may result in an employee's demotion, transfer and/or suspension . . . ." P&PM, Policy No. 1.60, VII, C.2.a. - 5 - ruled that he was required to consider the aggravating
circumstances existing at the time of the events giving rise to
the disciplinary action and that Tatum's behavior subsequent to
those events could not serve as aggravating circumstances.
The hearing officer denied the Department's request for
reconsideration. The hearing officer ruled that because a
grievance hearing is de novo the hearing officer decides the
dispute on an independent review of the evidence as if the
Department had made no disciplinary determination. The hearing
officer rejected the Department's argument that because the
Personnel Manual states that "agencies may reduce the
disciplinary action if there are mitigating circumstances,"
Policy No. 1.60, § VII, C., a hearing officer has no authority
to mitigate discipline. In so ruling, the hearing officer held
that the Department's authority to consider mitigating
circumstances is not exclusive and a de novo hearing necessarily
requires an independent review of the facts and application of
legal principles. The hearing officer noted that he was
required to determine whether the Department presented
sufficient evidence to support the level of disciplinary action
taken, and if so, whether sufficient mitigating circumstances
existed to justify a reduction in the disciplinary action.
The hearing officer also ruled that "aggravating
circumstances would normally be considered when determining
whether fairness requires a reduction of discipline." However, - 6 - he further ruled that determining whether "[a]ggravating
circumstances [exist] must be construed narrowly because their
consideration arises only in the context of mitigation." The
hearing officer specifically rejected the Department's argument
that Tatum's failure to cooperate with its investigation of his
conduct was an aggravating circumstance. The hearing officer
found that "[n]o evidence was presented suggesting [Tatum] had a
duty to cooperate with the [Department's] investigation." The
hearing officer found that, to the extent that Tatum had any
such duty, his refusal to cooperate was reasonable under the
circumstances. The hearing officer also found that Tatum's
separate Group II written notice relating to a conflict of
interest concerning his outside employment could not serve as an
aggravating circumstance in considering Tatum's Group III
written notice. The hearing officer ruled that the Group II
written notice was only relevant with respect to the
accumulation of discipline. Thus, "the [h]earing [o]fficer
[gave] less weight to the Group II Written Notice that [Tatum]
failed to appeal than the [h]earing [o]fficer would otherwise
have given had [Tatum] had a pattern of disciplinary action."
The hearing officer concluded as follows:
The [Department] argues that it can no longer trust [Tatum] to do his job because he falsified leave. No evidence was presented suggesting [Tatum] ever falsified any of his inspection duties or records. Indeed, the evidence showed that [Tatum] was very good at his job and took it seriously. - 7 - While it may be factually true that the [Department's] Party Designee no longer trusts [Tatum's] work product, no evidence was presented suggesting that his conclusion was reasonable or appropriate. The [Department's] assumption that one act of falsification forever condemns [Tatum's] entire work product is inappropriate.
After giving due consideration to the [Department's] judgment, the Hearing Officer finds that its judgment was in error. The [Department] based its decision to terminate . . . on its false conclusion that it could no longer trust [Tatum] to perform his inspection duties. Consequently, the [Department's] decision to terminate was inappropriate.
The Department requested administrative review of the
hearing officer's decision by the Director of the Department of
Employment Dispute Resolution and by the Director of the
Department of Human Resources Management. The Director of the
Department of Employment Dispute Resolution found that the
hearing officer did not abuse his discretion or exceed his
authority under either the State Grievance Procedure or the
Hearing Officer Rules. He ruled that the hearing officer was entirely within his authority to give the Group II written notice
less weight than the Department may have given it in determining
whether to uphold or reverse Tatum's termination. The Director
of the Department of Human Resources Management found the hearing
officer did not violate the Personnel Policy No. 1.60 in his
application of the provisions of that policy and, therefore, she
had no basis upon which to interfere with the hearing officer's
decision. These decisions, which were rendered on administrative
review to determine whether the hearing officer's decision is
- 8 - consistent with state or agency policy and whether it complies
with the grievance procedure, are final and not appealable. See
Department of Employment Dispute Resolution, Grievance Procedure
Manual, § 7.2(c); see also Code §§ 2.2-1001(5) and 2.2-3003(G).
Code § 2.2-3003(A) requires the DEDR to develop a three-tiered
grievance procedure for state employees, which includes a formal
hearing.
Pursuant to Code § 2.2-3006(B), the Department appealed the
hearing officer's decision to the circuit court. Code
§ 2.2-3006(B) provides in pertinent part that "[w]ithin thirty
days of a final decision, a party may appeal on the grounds that
the determination is contradictory to law . . . ." (Emphasis added). The circuit court hears the appeal "on the record," and
may reverse, affirm, or modify the hearing officer's decision.
Code § 2.2-3006(B).
The Department argued before the circuit court that the
hearing officer's decision to mitigate the disciplinary action
and order Tatum's reinstatement was without authority and
contrary to the law, because it "ignor[ed] the express legal
directive of Code § 2.2-3004(B) that [the Department], not the
Hearing Officer, has the exclusive right to manage its
employees." The Department also argued that the hearing officer
ignored aggravating circumstances based on the fact that Tatum
failed to cooperate with the Department's investigation of his
misconduct regarding the outside employment. The Department
contended that "[h]ad the Hearing Officer found that the evidence
did not support falsification of the time sheets, then he would
have had the authority to reinstate." The Department further - 9 - argued that the hearing officer failed to recognize that it had
considered mitigating circumstances, including Tatum's tenure and
past work performance when it determined what sanction to impose,
but had determined that such mitigating factors were outweighed
by aggravating circumstances, including Tatum's failure to
cooperate with the investigation, and his outside employment
which resulted in a Group II written notice. In addition, the
Department argued that the hearing officer erred in refusing to
consider the Group II written notice as an aggravating
circumstance because it arose out of the same general facts as
the Group III written notice. The Department asserted that
"[t]he Hearing Officer has substituted his judgment for that of
the [Department], by reinstating an employee who has breached his
trust with his superiors to a position with – quasi-law
enforcement and regulatory powers." The circuit court reversed the hearing officer's decision
which ordered Tatum's reinstatement, finding that the decision
was contrary to law. In so deciding, the circuit court ruled as
follows:
[I]n his written decision, the hearing officer, while finding that Tatum intentionally falsified the leave forms, observed that there was no evidence of falsifying inspection records and found that "one act of falsification" in light of an otherwise uneventful, discipline free course of employment for nine years was not justification for the agency to no longer trust Tatum to carry out his inspection duties. I do not believe that the hearing officer is charged with overriding a management decision with respect to discipline upon a finding of misconduct unless the discipline meted out is arbitrary
- 10 - or contrary to law as in Siewert[v. VCU, Case No. HS-21-4 (Richmond Cir. Ct., 2/14/02)]. On examination of the record there is nothing to suggest that the agency came to its decision to terminate blindly or without a reasoned basis based on what went on during the course of its investigation, the nature of the infractions and Tatum's admissions. Here, we have an instance of the hearing officer substituting judgment regarding discipline, although reasonable, against that of the agency's which is also reasonable. Compared against the applicable legal standard namely, the agency's "exclusive right to manage [its] affairs and operations" See Va. Code § 2.2-3004(B), this difference of view must bend in favor of the agency determination of the proper sanction to be imposed for the infraction involved because the agency determination was reasonable and not arbitrary or contrary to law.
Pursuant to Code § 17.1-405(1)(ii), Tatum appealed to this
Court from the circuit court's decision. On appeal, Tatum
contends the circuit court erred in reversing the hearing
officer's decision reinstating Tatum to his job. Tatum argues
that the circuit court erroneously relied upon Code § 2.2-3004(B)
for providing the applicable legal standard for its review.
Tatum argues that under the "Rules for Conducting Grievance
Hearings," VI, B.1. "the hearing officer may consider mitigating
or aggravating circumstances to determine whether the level of
discipline was too severe or disproportionate . . ." and under
the "Grievance Procedure Manual" the hearing officer "may order
appropriate remedies, including . . . [r]einstatement . . . ."
Tatum argues that the circuit court erred in finding that the
Department must prevail because "its [administrative]
determination was reasonable and not arbitrary or contrary to
- 11 - law." Tatum contends the circuit court erred in relying upon
Code § 2.2-3004(B) for providing the applicable standard for
review, which statute provides that "[m]anagement reserves the
exclusive right to manage the affairs and operations of state
government." Rather, Tatum argues Code § 2.2-3005(D)(iii)
controls, which statute states that "[t]he decision of the
hearing officer . . . shall . . . be final and binding if
consistent with law and policy." Tatum contends that by applying
that controlling statute, the circuit court was required to
uphold the hearing officer's decision. Tatum asks this Court to
reverse the circuit court's decision and reinstate the hearing
officer's decision of a Group III written notice without removal.
STANDARD OF REVIEW
Tatum did not appeal the hearing officer's finding that he
committed a Group III offense. Therefore, that finding is final
and binding upon us. With respect to the applicable standard of
review for appeals from a grievance proceeding, the State
Grievance Procedure, Code §§ 2.2-3000 et seq., defines the powers
and duties of a hearing officer. The hearing officer is charged
with conducting a hearing upon a formal written grievance filed
by a covered non-probationary state employee. See Code
§§ 2.2-3003 and 2.2-3005. The hearing officer shall receive
probative relevant, material, non-privileged evidence, rebuttals
and cross-examinations, rule upon offers of proof, and oversee a
verbatim recording of the evidence. See Code § 2.2-3005(C)(5).
The hearing officer orders appropriate remedies, which may
include "reinstatement, back pay, full reinstatement of fringe
benefits and seniority rights, or any combination of these - 12 - remedies" and shall "[t]ake other actions as necessary or
specified in the grievance procedure." Code § 2.2-3005(6) and
(7). The hearing officer's decision "shall (i) be in writing,
(ii) contain findings of fact as to the material issues in the
case and the basis for those findings, and (iii) be final and
binding if consistent with law and policy." Code § 2.2-3005(D).
In Virginia Dep't of State Police v. Barton, 39 Va. App.
439, 573 S.E.2d 319 (2002), this Court recognized that:
[t]hese statutes clearly provide the hearing officer is to act as fact finder and the Director of the Department of Human Resources Management is to determine whether the hearing officer's decision is consistent with policy. In the grievance process, neither of these determinations is subject to judicial review, but only that part of the grievance determination "contradictory to law."
Id. at 445, 573 S.E.2d at 322.
Upon judicial review from the administrative grievance
hearing, the circuit court, based on the record and sitting
without a jury, may affirm, reverse or modify the hearing
officer's decision. Code § 2.2-3006(A). "[T]he only grounds of
appeal of the hearing officer's decision [to the circuit court]
is 'that the determination is contradictory to law.'" Barton, 39
Va. App. at 445, 573 S.E.2d at 322 (citation omitted).
Thus, the Department, the party that appealed the hearing
officer's decision to the circuit court, was required to "specify
how that decision [was] 'contradictory' to law and what 'law'
[was] thereby being contradicted." Id. at 445-46, 573 S.E.2d at
322. In the circuit court, the Department was required to
"identify [a] constitutional provision, statute, regulation or - 13 - judicial decision which the [hearing officer's] decision
contradict[ed]." Id. at 446, 573 S.E.2d at 323. Thus, the
circuit court's only ground for reversing the hearing officer's
decision was that the hearing officer's decision was
contradictory to law. Accordingly, we must determine whether the
circuit court followed the correct standard of review and whether
it reached the correct legal conclusion.
- 14 - ANALYSIS
The circuit court ruled that the hearing officer's decision
was contrary to law because the hearing officer overrode the
Department's "management decision" with respect to the
appropriate discipline to impose upon a finding of Group III
misconduct, where the Department's decision was not arbitrary or
contrary to law. In so ruling, however, the circuit court did
not apply the correct standard for reviewing the decision of the
hearing officer. Where an agency removes or dismisses an employee for
misconduct, such as in this case, and a grievance hearing is
requested, the agency is required to prove "by a preponderance of
the evidence that the action was warranted and appropriate under
the circumstances." See Grievance Procedure Manual § 5.8(2).
While the hearing officer is not a "super-personnel officer" and
should give appropriate deference to actions in agency management
that are consistent with law and policy, as to issues involving
the appropriate discipline, "the hearing officer reviews the
facts de novo . . . as if no determinations had been made yet, to determine whether the cited actions occurred, whether they
constituted misconduct, and whether there were mitigating
circumstances to justify reduction or removal of the disciplinary
action or aggravating circumstances to justify the disciplinary
action." See Rules for Conducting Grievance Hearings, VI(B)
(effective July 1, 2001). The hearing officer is expressly
authorized to reduce the discipline if the officer finds that the
level or severity of discipline for the misconduct was too
severe. Id. The hearing officer is charged with the duty of - 15 - taking evidence and ordering appropriate remedies, which may
include reinstatement. See Code § 2.2-3005.
Here, the circuit court's reliance upon the general language
of Code § 2.2-3004(B) unduly limited the hearing officer's
express authority as set forth by statute and the rules and
procedures promulgated pursuant to the directive of Code
§ 2.2-3003(A). No statute or rule provides that the hearing
officer may order reinstatement only where the agency's decision
was arbitrary or contrary to the law. To the contrary, Code
§ 2.2-3005 provides that the hearing officer may make a decision
as to the appropriate sanction, independent of the agency's
decision. "[T]he only grounds of appeal of the hearing officer's
decision is 'that the determination is contradictory to law.'
. . . Code § 2.1-116.07:1(B) ([now] § 2.2-3006(B)) represents
the first and only appearance of the phrase 'contradictory to
law' in the Code of Virginia as a standard of appellate review."
Barton, 39 Va. App. at 445, 573 S.E.2d at 322 (citation omitted).
"By its plain reading, Code § 2.1-116.07:1 [now Code § 2.2-3006]
makes it incumbent upon the party appealing the hearing officer's
decision to specify how that decision is 'contradictory' to the
law and what 'law' is thereby being contradicted." Id. at
445-46, 573 S.E.2d at 322. "'Law' is the 'aggregate of
legislation, judicial precedents and accepted legal principles.'"
Id. at 446, 573 S.E.2d at 323 (citation omitted). Thus, the
circuit court erred in ruling that its judicial review of the
Department's decision and the hearing officer's decision
ultimately turned upon the overriding principle that the agency - 16 - has the "exclusive right to manage its affairs and operations,
and that the hearing officer substituted his judgment for that of
the agency." The appropriate inquiry for the circuit court was
whether the hearing officer's decision was contradictory to law.
Id. at 447, 573 S.E.2d at 323.
On appeal to the circuit court, the Department failed to
establish that the hearing officer's decision was contradictory
to any law. Contrary to the Department's contentions, our review
of the hearing officer's January 2 and 16, 2002 decisions
discloses that the hearing officer reviewed de novo the aggravating circumstances relied upon by the Department to
support disciplinary action, together with the mitigating
circumstances, and ordered that Tatum be reinstated to his
employment position. The adjudicative acts of the hearing
officer were grounded in and consistent with the provisions of
Code §§ 2.2-3003 and 2.2-3005, as well as the Rules for Conducting Grievance Hearings, VI(B). In short, they were not
contradictory to law. Moreover, the assertion by the Department
that the hearing officer did not follow state policy and
procedures in considering or weighing aggravating or mitigating
circumstances was rejected by the Director of the Department of
Employee Dispute Resolution and by the Director of the Department
of Human Resources Management. The circuit court was bound by
those decisions because they are final and not subject to
judicial review as a matter of law. See Department of Employment
Dispute Resolution, Grievance Procedure Manual, § 7.2(c); see
also Code §§ 2.2-1001(5) and 2.2-3003(G). "The General Assembly
has clearly vested review of policy issues involved in employee - 17 - grievances in the Department of Human Resource Management, and
not in the courts." Barton, 39 Va. App. at 445, 573 S.E.2d
at 323.
The circuit court's finding in this case that a hearing
officer's decision to mitigate discipline should be reversed on
the ground that it conflicted with the general principle set
forth in Code § 2.2-3004(B) would nullify the express power
granted to a hearing officer to decide de novo whether to
mitigate a disciplinary action and to order reinstatement. Accordingly, because the Department failed to establish that
the hearing officer's decision contradicted any "law," we reverse
the circuit court's decision overturning the hearing officer's
decision, and reinstate the hearing officer's decision.
Reversed and final judgment.
- 18 -