At-Will Former Chief Obtains Job Rights On Demotion

Written on 04/16/2022
Will Aitchison

Samuel Joseph was the police chief for the City of Atwater, California. Jo­seph’s employment agreement stated he was an at-will employee who could be removed as police chief for any reason but, if the removal was not for willful misconduct, he had the option of con­tinuing his employment by returning to the position of police lieutenant.

On September 28, 2018, City Manager Lori Waterman sent Joseph a notice of intended discipline along with a final copy of the investigation report and supporting exhibits relating to the allegations against Joseph. The notice informed Joseph of the city manager’s “intention to terminate Joseph’s employment as Police Chief with the City for willful and other misconduct.” The notice listed viola­tions of five policies and three Penal Code sections, described four types of willful misconduct, and set forth four other mismanagement issues.

On October 4, 2018, Joseph’s attorney sent the City a letter stating Joseph was appealing the proposed termination and was objecting to the appeal procedure offered by the City. The letter asserted Joseph was “entitled to a hearing before a ‘truly neutral arbi­trator’ (not one selected by the City at the City’s expense), at which the City would be required to bear the burden of proving the charges, be required to call witnesses in support of the charges, and Joseph will be afforded the oppor­tunity to cross-examine those witnesses, and present witnesses to testify on his behalf.”

The City ignored the letter from Joseph’s attorney and began trying to schedule a hearing before an arbitrator it had unilaterally chosen. Eventually, the city manager issued a “Final No­tice of Termination” stating Joseph’s employment was being terminated, effective immediately, for willful and other misconduct.

The California Court of Appeals reversed Joseph’s termination. The core question for the Court was “whether the employment agreement is reasonably susceptible to the interpretation that Joseph is an at-will employee in all ca­pacities. The first sentence of Section 2.2 of the employment agreement stating Joseph shall be designated an ‘at-will’ employee. Reading this sentence in iso­lation, one might conclude that Joseph is an at-will employee in all capacities.

“However, the remainder of Section 2.2 places a limitation on the City’s right to terminate Joseph’s employment for any reason. It provides that if Joseph’s employment as police chief is termi­nated for reasons other than ‘willful misconduct in office or conviction of a crime of moral turpitude,’ Joseph has a right to continued employment as a lieutenant or a payment of four months’ salary, at his option. Thus, Section 2.2 necessarily implies that City’s right to terminate Joseph’s employment as a lieutenant is limited to the specified reasons – that is, willful misconduct or conviction of a crime of moral turpitude, which necessitate certain procedural protections. This contractual limitation on the City’s right to terminate Joseph’s overall employment is more specific than the sentence stating Joseph is an at-will employee and, therefore, must be given effect.

“Consequently, we conclude that when Section 2.2 is read as a whole, it is not reasonably susceptible to the interpretation that all of Joseph’s rights to employment were at-will. Instead, the employment agreement unambig­uously created a hybrid employment relationship between the City and Joseph. First, Joseph’s employment as chief of police was at-will. Second, Joseph’s employment as a lieutenant was not at-will because it could be terminated only on the grounds speci­fied in the agreement. Interpreting the agreement otherwise would deprive Joseph of the job security for which he bargained.

“Many courts addressing the pro­cedural requirements for an adminis­trative appeal have stated that public safety officers are entitled to an evi­dentiary hearing before a neutral fact finder. Under California’s Peace Offi­cer’s Bill of Rights, an appeal requires: (1) an independent reexamination of the decision; (2) the reexamination be conducted by someone who was not involved in the initial determination; (3) the independent administrative decision maker to set forth findings to bridge the analytical gap between the raw evidence and the ultimate decision; (4) the hearing to be treated as a de novo proceeding at which no facts are taken as established; and (5) the proponent of a particular fact to bear the burden of establishing it.

“The hearing offered by the City did not satisfy these requirements. For example, the retention of final authority by the city manager did not provide Joseph with a hearing by an independent decision maker because the city manager was involved in the initial decision to terminate Joseph’s employment. Also, the City’s proposed hearing did not provide Joseph with a full evidentiary hearing where he had the right to cross-examine witnesses and the burden of proving a particular fact was placed on its proponent.”

Joseph v. City of Atwater, 2022 WL 391821 (Cal. Ct. App. 2022).

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