Terminating the Employment Relationship

A LL A BOUT THE A UTHORS With offices in Los Angeles, San Francisco, Fresno, San Diego and Sacramento, the law firm of Liebert Cassidy Whitmore represents public agency management in all aspects of labor and employment law, labor relations, and education law. The Firm's representation of cities, counties, special districts, transit authorities, school districts, and colleges throughout California, encompasses all phases of counseling and representational services in negotiations, arbitrations, fact findings, and administrative proceedings before local, state and federal boards and commissions, including the Public Employment Relations Board, Fair Employment and Housing Commission, Equal Employment Opportunity Commission, Department of Labor and the Office for Civil Rights. The Firm regularly handles a wide variety of labor and employment litigation, from the inception of complaints through trial and appeal, in state and federal courts. The Firm places a unique emphasis on preventive measures to ensure compliance with the law and to avoid costly litigation. For more than thirty years, the Firm has successfully developed and presented training workshops and speeches on all aspects of employment relations for numerous public agencies and state and federal public sector coalitions, including the National League of Cities, National Association of Counties, International Personnel Management Association, United States Government Finance Officers Association, National Employment Law Institute, National Public Employer Labor Relations Association, California Public Employer Labor Relations Association, County Counsels’ Association of California, League of California Cities, California State Association of Counties, Public Agency Risk Management Authority, the Association of California School Administrators, the California School Boards Association, and the California Association of Independent Schools.

This workbook contains generalized legal information as it existed at the time the workbook was prepared. Changes in the law occur on an on going basis. For these reasons, the legal information cited in this workbook should not be acted upon in any particular situation without professional advice.

Copyright © 201 9 Liebert Cassidy Whitmore. All rights reserved. No part of this publication may be reproduced, stored, transmitted, or disseminated in any form or by any means without prior written permission from Liebert Cassidy Whitmore.

T ABLE OF C ONTENTS

7-19 S

S ECTION 1 Introduction ...................................................................................................................................................................8

S ECTION 2 Terminating an Employee..............................................................................................................................................8 A. Follow Rules and Procedures for Termination ................................................................................................9 B. Consider the Nature of the Employment Relationship ....................................................................................9 1. At-Will Employees ..................................................................................................................................10 2. Probationary Employees ..........................................................................................................................14 C. Permanent, or “For Cause,” Employees ........................................................................................................17 1. Pre-Deprivation Due Process – “Skelly” .................................................................................................17 2. Post-Deprivation Due Process – The Evidentiary Hearing ......................................................................22 3. Remedies for Violating a Permanent Employee’s Due Process Rights ...................................................24 D. Part-Time Employees ....................................................................................................................................24 1. Designating Part-Time Employees as At-Will.........................................................................................24 2. Avoid Destroying the At-Will Designation .............................................................................................24 E. Contract Employees ......................................................................................................................................26 1. Employment Contracts.............................................................................................................................26 2. Implied Contracts.....................................................................................................................................26 S ECTION 3 Legal Ramifications to Consider Prior to Ending the Employment Relationship .......................................................28 A. Discrimination Claims...................................................................................................................................29 B. Retaliation Claims .........................................................................................................................................29 1. Activities Protected by FEHA/Title VII ..................................................................................................29 2. Retaliation for Taking Protected Leave ...................................................................................................30 3. Free Speech Retaliation ...........................................................................................................................30 4. Workers’ Compensation Retaliation ........................................................................................................31 5. Retaliation for Union Activity .................................................................................................................32 6. Whistleblower Retaliation........................................................................................................................33 C. Termination for Private Conduct...................................................................................................................35 1. Off-Duty Conduct ....................................................................................................................................35 2. Drugs and Alcohol ...................................................................................................................................36 3. Workplace Surveillance ...........................................................................................................................36 4. Employees’ Electronic Communications .................................................................................................37 S ECTION 4 Termination for a Disability that Cannot be Accommodated ......................................................................................39 A. Interactive Process and Reasonable Accommodation ...................................................................................39 1. Interactive Process ...................................................................................................................................40 2. Reasonable Accommodation....................................................................................................................42 B. Defenses to Accommodation: Health and Safety, and Undue Hardship ......................................................49 1. Direct Threat to Health and Safety – ADA/FEHA ..................................................................................49 2. Health and Safety Issues Under FEHA....................................................................................................51 3. Undue Hardship Defense – ADA/FEHA .................................................................................................52 C. Inability to Accommodate .............................................................................................................................55 1. Separating Disabled At-Will Employees .................................................................................................55 2. Employees With Property Rights: Due Process ......................................................................................55

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S ECTION 5 Retirement and Retirement Incentives.........................................................................................................................56 A. Disability Retirement ....................................................................................................................................56 1. Retirement System Overview ..................................................................................................................56 2. Eligibility .................................................................................................................................................57 3. Does the Member Qualify? ......................................................................................................................57 4. Applying for Disability ............................................................................................................................63 5. Labor Code Section 4850 and Industrial Disability Retirement of Safety Members ...............................64 6. After the Application is Accepted or Denied ...........................................................................................66 7. Procedures for Handling Local Safety Disability Retirement Applications: A Primer for PERS Agencies.......................................................................................................................73 8. Involuntary Disability Retirement ...........................................................................................................77 9. Involuntary Discontinuance of Disability Retirement Benefits ...............................................................79 B. Service Retirement ........................................................................................................................................80 1. CalPERS Retirements ..............................................................................................................................80 2. ’37 Act Retirements .................................................................................................................................80 C. Early Retirement Incentives ..........................................................................................................................81 1. General Incentives ...................................................................................................................................82 2. “Golden Handshake” For PERS Agencies...............................................................................................88 3. “Golden Handshake” for ’37 Act Employers...........................................................................................91 S ECTION 6 Layoffs ........................................................................................................................................................................92 A. Layoff Rules..................................................................................................................................................92 B. Duty to Meet and Confer Over Impact of Layoffs ........................................................................................92 C. Potential Legal Ramifications: Discrimination/Wrongful Termination/Retaliation......................................93 D. Layoffs In Lieu of Termination: Due Process Concerns ..............................................................................93 S ECTION 7 Legally Enforceable Settlement and Separation Agreements ......................................................................................94 A. Preliminary Issues .........................................................................................................................................94 1. Preamble ..................................................................................................................................................94 2. Recitals.....................................................................................................................................................94 B. Common General Provisions.........................................................................................................................95 1. No Admission ..........................................................................................................................................95 2. Payment/Consideration ............................................................................................................................96 3. Waiver & Release ....................................................................................................................................97 4. Integration..............................................................................................................................................102 5. Supersession Clause...............................................................................................................................102 6. No Representations ................................................................................................................................102 7. Modification...........................................................................................................................................102 8. Interpretation..........................................................................................................................................103 9. Severability ............................................................................................................................................103 10.Further Documents and Actions ............................................................................................................103 11.Voluntariness/Representation by Counsel .............................................................................................104 12.Choice of Forum and Law .....................................................................................................................104 13.Execution in Counterparts......................................................................................................................105 C. Variable Provisions .....................................................................................................................................105 1. No Reemployment .................................................................................................................................105 2. References for Future Employment .......................................................................................................105 3. Dismissal of Action(s) ...........................................................................................................................106 4. Attorneys’ Fees ......................................................................................................................................107 5. Confidentiality and Disclosure...............................................................................................................107 6. Non-disparagement ................................................................................................................................109

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7. Unemployment Benefits ........................................................................................................................110 D. Sealing Personnel Documents .....................................................................................................................110 1. Disclosure ..............................................................................................................................................111 E. Taxation of Money Paid Pursuant to an Agreement....................................................................................117 F. Discussion of Agreements at Public Meetings ............................................................................................118 1. Agenda ...................................................................................................................................................120 2. Reporting Out ........................................................................................................................................121 3. Disclosure of Executed Agreement........................................................................................................122 S ECTION 8 Post-Separation Obligations ......................................................................................................................................123 A. Final Payment of Wages..............................................................................................................................123 1. Accrued Vacation...................................................................................................................................123 2. Accrued Sick Leave ...............................................................................................................................123 3. Overtime and Compensatory Time Off..................................................................................................124 4. Potential Penalties for Withholding Wages ...........................................................................................124 B. Unemployment Insurance Benefits Requirements ......................................................................................124 1. Voluntarily Leaving Work Without Good Cause ..................................................................................125 2. Other Forms of Good Cause For Leaving Work....................................................................................125 3. Discharge For Misconduct .....................................................................................................................126 C. Cobra Notification.......................................................................................................................................128 1. Cal-COBRA...........................................................................................................................................128 2. Qualifying Events ..................................................................................................................................128 3. COBRA Coverage Period ......................................................................................................................129 4. COBRA Payment Obligations ...............................................................................................................129 5. Denial of Benefits Based on Gross Misconduct.....................................................................................129

E NDNOTES .................................................................................................................................................................131

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I NTRODUCTION

Section 1

Employment relationships are similar to personal relationships. Sometimes, they do not end to the satisfaction of both parties. One party may want for the relationship to continue, while the other party has a beneficial interest in severing the relationship and moving on to greener pastures. Where there is a “good break-up,” both parties may move forward with no or relatively few feelings of resentment. Conversely, a “bad break-up” may leave one party harboring resentment and looking for retribution. In the case of employment relationships, a “bad break- up” may lead to a lawsuit and potentially liability, and certainly spending money litigating, settling or both. There are two ways an employment relationship ends: involuntarily and voluntarily. For purposes of this workbook, an involuntary separation occurs when the employer severs the employment relationship with an employee who otherwise desires to continue working for the employer. Voluntary separations occur when an employee elects to end the employment relationship. While liability most often arises out of involuntary separations, it can also arise out of voluntary separations if an employer does not adequately take protective measures. The purpose of this workbook is to provide public employers with guidance regarding the best practices and procedures to use when involuntarily or voluntarily ending the employment relationship with an employee or group of employees. Although the majority of the workbook focuses on involuntary separations, parts of the workbook touch on best practices for avoiding liability in voluntary separations, such as when an employee elects to retire. When using this workbook, it is important to consider that it is only a guide and cannot be relied upon for definitive legal advice regarding a specific situation. Ending the employment relationship with an employee often requires a unique, fact-intensive analysis. The analysis can change with the absence or addition of a single fact. Therefore, we advise that you consult an attorney when dealing with a situation that could lead to future liability.

T ERMINATING AN E MPLOYEE

Section 2

When making the decision to terminate an employee, an employer must consider several key factors if it wants to avoid liability. These factors include:

The agency’s rules, procedures, and past-practice;

The nature of the employment relationship (e.g., “at-will” versus “for cause”);

The potential legal ramifications (e.g., has the employee recently filed a sexual harassment complaint?); and

Whether the reason can be explained and supported by evidence.

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A. F OLLOW R ULES AND P ROCEDURES FOR T ERMINATION Regardless of the nature of the employment relationship or the reason for termination, it is crucial that an agency follow its rules, procedures and in most cases past practices, when terminating an employment relationship. This principle cannot be emphasized enough because failure to follow rules, procedures and practices can result in having an otherwise valid termination overturned, or in some cases, lead to liability.

Sources of rules and procedures include:

Charter;

Municipal Code;

Personnel or civil service rules;

Department Rules;

Applicable MOUs;

Administrative policies; and

Any other legislative act (i.e. creation of new job specification with designation of status).

An agency should also adhere to any unwritten practices it has established because a failure to follow that practice with an individual could lead to a discrimination lawsuit, where an employee would claim the agency treated him/her differently than others based on a protected category (e.g., race, sex, disability). B. C ONSIDER THE N ATURE OF THE E MPLOYMENT R ELATIONSHIP An individual’s employment relationship with an employer plays a crucial role in determining what due process he or she is entitled to, if any, and what reasons, if any, an employer must provide when ending the employment relationship. For instance, it may save an agency thousands of dollars to allow a contract employee’s contract to expire, rather than terminate him or her for cause two months prior to expiration of the contract term, and potentially face a lawsuit.

The sections that follow examine various employment relationships and how ending them differs depending upon the relationship.

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1. A T -W ILL E MPLOYEES At-will employment is essentially the opposite of “for cause” employment, which is discussed in detail below. If an employee is at-will, then an employer may dismiss the employee without notice, without a reason and without affording any right of appeal. In contrast, a “for cause” employee can only be dismissed with advance notice, with reasons sufficient to constitute “cause” (aka, “just cause” or “good cause”), with certain pre-disciplinary procedural rights, and with a right to a post-disciplinary appeal hearing. a. The At-Will Presumption At-will employment is frequently associated with private sector employment relationships. However, California law is structured so that most employment relationships, private and public, are presumed at-will. The at-will presumption arises from Labor Code section 2922, which states that employment having no specified term may be terminated “at the will of either party.” The statutory “presumption of at-will employment” can, however, be overcome by an employment contract, statute (e.g., civil service or merit system statutes), or agency rules. Although most local government employers in California utilize some form of personnel system that creates certain employee rights, there is no legal requirement to have such a system. Legally, it is possible for all agency employees to be at-will. A local agency’s rules can and often do rebut the at-will presumption by granting employees a different status. Typically, an agency charter, ordinance, municipal code, resolution, personnel rule, civil service rule, or other local enactment will establish a system for hiring, evaluation, promotion and discipline of employees. 1 These local sources of legal authority typically identify which employees are for cause and which are at-will. For example, a common provision in civil service systems delineates between classified and unclassified members of the service. This distinction typically identifies the classified employees as for cause. Unclassified employees are identified as “serving at the pleasure of the agency.” 2 Serving at the pleasure of the agency is tantamount to at-will status. 3 Typically, at-will employees are high-level managers, department heads, executives, probationary employees, seasonal employees, and part-time/temporary employees. In most public agencies, the largest group of employees who qualify as at-will are those in probationary status. Exactly which groups of employees are at-will in any given agency often depends on the local definitions and rules of that agency.

Rules or provisions in a memorandum of understanding (MOU) sometimes create a conflict regarding an employee’s at-will status. For example, many management rights clauses include a provision identifying the agency’s authority to discipline all employees for cause. Although this is a generally accepted management right, such a broad pronouncement presents potential problems because it does not exclude at-will employees (for example,

LCW Practice Advisor

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probationary employees). Applied literally, this management rights clause has been interpreted as conferring the right to discipline all employees for cause, including at-will employees. The “right” to discipline at-will employees for cause is no right at all. In fact, it may have the practical effect of eliminating the status of at-will employment, since the only distinguishing feature of such employment is the ability to dismiss without cause.

It is essential for a public employer to ensure that its rules and practices are consistent with the formal legal definitions regarding which employees are at-will and which are for cause. For cause rights can be created unintentionally for an otherwise at-will employee when an agency’s rules significantly constrain management’s right to discharge or discipline the employee. If classification titles are changed or new classifications are created, the rules should be altered to reflect the intent of the legislative body regarding the status. Failure to do so may result in the agency losing its discretion to dismiss at-will employees without advanced notice.  Review charter, ordinance, and personnel rules to determine whether a position is classified as civil service or at-will.  Revise or modify charters, ordinances, personnel rules and/or regulations to prohibit oral or implied contracts of employment.  Revise job announcements, employment applications and employee evaluation forms to reflect an at-will relationship.  Delete language in department manuals, employee handbooks and/or employee evaluation forms that could be construed to require continued employment absent cause for discharge. b. Checklist for Preserving At-Will Employment

 Make sure there are explicit exceptions for at-will employees in any “for cause” language.

 Avoid making written or oral representations to the effect that cause is required for discharge.  Eliminate any reference to a probationary period in hiring documents for an at-will employee.

 Have at-will employees sign at-will acknowledgment forms or contracts at the time of hire.

 Confirm the employee’s at-will status in all correspondence regarding employment.



Emphasize employee’s at-will status in orientation.

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c. Terminating At-Will Relationships At-will employees do not have a property interest in their employment, and therefore there is no “for cause” standard applicable to their possible discipline. In other words, they do not have the right to pre-disciplinary due process under Skelly , or to a post-disciplinary appeal hearing. Therefore, local rules should not provide any post-disciplinary appeal procedure for at-will employees. Doing so may change their status from at-will to for cause.

Certain employees have statutory appeal rights regardless of whether they are at-will or for cause. For instance, non-probationary, at-will public safety officers do not have due process rights under the constitution because they are at-will. However, they are entitled to post-disciplinary appeals under the Public Safety Officers Procedural Bill of Rights Act and Firefighters Procedural Bill of Rights Act, which establish appeal rights for employees covered by the Acts (e.g., police officers and firefighters).

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Occasionally, local ordinances or personnel rules set forth procedures for terminating at-will employees. An agency should ensure that it reviews local rules and ordinances to confirm that local rules do not inadvertently create disciplinary rights for at-will employees (e.g. mistakenly converting at-will employees into for cause employees). If such rules exist, an agency must follow them.

Note that utilizing progressive discipline will not convert at-will employees to for cause employees. Agencies should always apply discipline fairly and consistently.

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While it is true that at-will employees can be terminated for no reason at all, at-will employees cannot be terminated for “illegal” reasons. For example, at-will employees are protected by discrimination, retaliation, free speech, “whistleblower,” privacy and other similar laws. Also, they typically have the right to representation and the right to organize and bargain. Even though a public agency is not required to provide an at-will employee reasons for termination, the agency should always have a sound reason for terminating an at-will employee that it can articulate in case the employee challenges his or her termination. Sometimes public agencies do not thoroughly evaluate the termination of an at-will employee (e.g. the agency does not adequately warn the employee prior to termination, the agency does not use progressive discipline, or it fails to scrutinize whether there is a legitimate reason for termination). This may enable at-will employees to challenge a termination, for example, as discriminatory. It is important to remember that although an employee may be at-will or serve at the pleasure of the agency, that status is not an absolute protection against liability. If a separated at-will employee alleges he/she was dismissed for illegal or discriminatory reasons, the employer will need to articulate the actual legitimate reasons as a defense to the allegations of discrimination.

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Therefore, in some circumstances, it is wise to disclose reasons for termination. An agency should consult with its legal counsel to determine the best strategy in this situation. The employer should internally document its reasons for terminating an at will employee regardless of whether it communicates those reasons to the at will employee. Finally, while for cause employees have procedural due process protections, at-will employees may have similar, but lesser rights, when the a termination is based on reasons that stigmatize an employee’s reputation, seriously impair his/her opportunity to earn a living, or might seriously damage his/her standing or associations in the community. 4 This pre-disciplinary process is described as a liberty interest hearing. d. Liberty Interest Hearing There are situations where even an “at will” employee is entitled to limited due process rights. Courts have consistently held that where a dismissal involves charges that stigmatize the employee’s reputation (e.g., an at-will employee is terminated for theft, dishonesty or immoral conduct), the constitutional right to liberty may be implicated. In such cases, the employee is entitled to a “liberty interest hearing”, which is also commonly referred to as a “name clearing” or “ Lubey Conference.” 5

Kreutzer v. City and County of San Francisco In this case, the City released a physician and did not publicly disclose the reason(s) for his release. The physician then sued the City to challenge his discharge and alleged that his liberty interest in his reputation had been infringed due to the stigma created by his discharge. During litigation, the City disclosed its rationale for releasing the physician. The appellate court noted that an inference drawn from dismissal alone is insufficient to implicate a liberty interest. The Court held that where a government employee is released from employment for non-disciplinary reasons and the employer does not publicly disclose those reasons at the time of release, the employee’s liberty interest in his or her reputation has not been infringed and the employee is not entitled relief. 6 Further, a deprivation of an employee’s liberty interest in reputation entitles the employee only to a name-clearing hearing and does not give rise to any right to sue for monetary damages or equitable relief. 7

To be entitled to a liberty interest hearing, the stigmatizing reasons must be publicly known and the employee must deny them. An employee who admits the charges for which he was discharged cannot later claim that the resulting stigmatization violated his liberty interest. 8 If these prerequisites are met, the employer must afford the employee a “hearing” to allow the employee the opportunity to clear his/her name. 9 Unless otherwise required by an agency’s rules or a memorandum of understanding, the “hearing” is not a full evidentiary type hearing akin to a post-discipline appeal by a for cause employee. Rather, a liberty interest hearing is an opportunity for the employee to make a formal record of his/her explanation of the stigmatizing events that led to the dismissal. The hearing

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need not involve witnesses, cross examination, exhibits or any other features of a typical due process hearing. It is more in the nature of a response provided by the employee to an agency manager who has authority to assure that a record of the response is available. Although the manager conducting the hearing has discretion to modify the discipline, there is no duty to do so. An employer’s failure to provide a required liberty interest hearing does not entitle the employee to back pay unless the agency’s own rules call for back pay. Curiously, the officers who were denied a liberty interest hearing in the actual Lubey case were ordered reinstated. Presumably, thereafter they could be immediately dismissed if the agency takes the required procedural steps. 2. P ROBATIONARY E MPLOYEES Probationary employees are essentially a sub-category of at-will employees. In most agencies, probationary employees make up the largest group of at-will employees. The probationary period is considered an integral part of the recruiting, testing and hiring process. The period is designed to allow employers to evaluate both objective and subjective factors in assessing whether the employee is a good fit for the job, the organization and its employees. If not, the employer should be able to reject the employee prior to the end of the probationary period without cause and without the right of appeal. a. Defining the Probationary Period Local rules typically establish the legal requirements attached to probationary employment, including the length of the probationary period. There is no independent legal requirement setting a maximum length for the probationary period, but normally, entry level probation ranges from six to 18 months. The longer period is typically reserved for safety employees who spend the first part of their employment attending a training academy. Many agencies have recently changed the description of the length of the probationary period from months to hours. For example, instead of a 12 month probationary period, probation is described as lasting for 2080 work hours. Although this is the hourly equivalent of 12 months, using work hours to measure the length of the probationary period focuses on the time spent actually working. If the probationer is off work for any reason, then those hours do not count toward satisfying the probationary period. In these instances, it may take more than 12 months for the employee to work the required 2080 hours. Any agency desiring to change the description of the probationary period (e.g. from months to hours) would likely have to meet and confer with recognized employee organization(s). If the agency has part-time employees who serve a probationary period, the agency should carefully specify what the period is. For example, the agency should specify the prorated portion of 2080 hours (if the full-time employee probationary period is one year) for part-time employees.

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The most important thing an agency must remember about probationary periods is that the agency must follow its rules. For example, the failure to follow the agency’s rules for separation of an employee during the probationary period means the employee becomes a “for cause” employee and is entitled to all the protections afforded such employees. Probation of indefinite duration is also subject to challenge. For example, a provision that provides for probation to continue until the employing department notifies human resources that the employee has successfully completed probation creates the risk that the term of probation is so vague as to make it unenforceable. b. Extending Probation Courts are frequently critical of attempts to extend probation, finding that rules setting the length of the probationary period are to be strictly construed in favor of the employee. In Winter v. City of Los Angeles 10 , the City completed all but one of the necessary steps to separate a probationary employee prior to the end of his probationary period. The one uncompleted step was to send a copy of the separation form to the Board of Civil Service Commissioners (a requirement contained in the City’s local rules). The City argued that the probationary period should be extended by the length of time the employee had been on administrative leave. The Court, however, ruled that administrative leave did not operate to extend probation. Courts have been willing to uphold extensions of probation if the extension is expressly permitted by local rules in effect at the time the probationary employee is hired. For instance, a rule that allows probation to be extended by the length of time an employee is absent is valid and enforceable over the later objection of the employee. Such an extension will only be upheld if there is strict compliance with the applicable rules. Any such rule should state clearly that if the probationary period is to be extended, the probationer shall be informed in writing. It should also specifically identify the procedures for extending probation. An agency must then follow those procedures or subject itself to legal action. c. Releasing a Probationary Employee Many public employers struggle with what to record as the reason for releasing a probationary employee. The better practice may be to state nothing more than “failure to meet probationary standards” or some other similar general description. Identifying the specific reasons for separation creates a risk of stigmatizing the employee, and may result in the entitlement of a name-clearing hearing. (See discussion above regarding liberty interest hearing.) Probationary employees often believe that any rejection during the probationary period is stigmatizing because it adversely affects their chances of obtaining another job. However, if the reasons for rejection are related solely to inadequate performance, courts have found that the employee does not have a right to a name-clearing hearing. It is also important to remember that there is no legal requirement to keep a probationary employee for the entire length of the probationary period if the employee is “not working out.” Probationary employees can be released at any time during their probationary period. An agency that has realized that a probationer is “not working out” should release the employee sooner

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rather than later. A delay will look suspicious to a trier of fact if the employee later sues. A probationer who believes s/he is doing a good job and is then released at the very end of probation may feel more “wronged” and disgruntled, and thus more likely to try and find a legal basis upon which to claim wrongful termination.

EXAMPLE In a case before the Public Employment Relations Board (PERB), a probationary employee claimed he had been released from probation in retaliation for engaging in protected activity. The employer provided substantial evidence that it placed the employee on administrative leave and ultimately released him from probation because of performance issues. Specifically, the agency showed that it explained and documented its expectations and concerns regarding the employee’s performance prior to placing him on administrative leave. PERB held that the employee’s protected activity did not insulate him from adverse action, and that the agency met its burden of establishing that its decision to place him on administrative leave and release him from probation was based on legitimate business reasons.

Remember employees should be on their best behavior and give their best efforts when on probation. Don’t let probationary employees who exhibit subpar performance become “for cause” employees thinking performance will improve.

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d. Promotional Probation Typically, an agency’s rules provide for a probationary period when an employee is promoted into a higher classification. The length of that promotional probationary period is usually shorter than entry level probation since the agency is already familiar with the newly promoted employee. Disputes often arise if the promoted employee fails probation and the agency seeks to dismiss the employee. Both California and federal courts have held that promoted employees who fail probation cannot be dismissed from agency employment unless there is cause. 11 The judicial reasoning is that the employee acquires a property interest in employment by completing probation in the original position and does not lose that property interest by being promoted but failing to successfully complete the promotional probation. 12 The practical effect of these decisions is that an employer has discretion to reject a promoted probationer, but must reinstate that employee to the position from which s/he was promoted unless there is cause to terminate. Of course, if the employee engages in misconduct that would justify termination, the agency could terminate the employee “for cause” regardless of the position the employee is in at the time of the wrongdoing.

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e. POBR/FBOR California’s Public Safety Officers Procedural Bill of Rights Act (“POBR”) and Firefighters Procedural Bill of Rights Act (“FBOR”) create certain protections for firefighters, police officers, deputy sheriffs and other sworn personnel. 13 The FBOR does not apply to firefighters who have not successfully completed the probationary period established by their employer. 14 Under the POBR, peace officer employees have a right to an administrative appeal from disciplinary action once they have “successfully completed the probationary period.” 15 This statutory entitlement to appeal does not apply to an officer rejected during his/her entry-level hiring probationary period, so long as the reasons for the rejection are performance based. With regard to promoted peace officer employees rejected while serving a promotional probation, there has been no definitive judicial determination. But the statute appears to deny the right to appeal a rejection if it is performance based. Under both the POBR and FBOR, employees released for stigmatizing reasons are entitled to a liberty interest hearing and possibly additional legal protections (see liberty interest hearing discussion above). C. P ERMANENT , OR “F OR C AUSE ,” E MPLOYEES Most California public employees have what is known as a constitutionally protected “property” interest in continued employment. Terminating an employee with a property interest in his or her position requires an agency to provide pre-discipline and post-discipline “due process.” 16 Failure to provide due process can result in the termination being reversed or a civil rights lawsuit. 1. P RE -D EPRIVATION D UE P ROCESS – “S KELLY ” Anyone who has been employed in the public sector for any significant period of time has undoubtedly heard of the term “Skelly” used in the workplace. The term “Skelly” comes from the California Supreme Court case Skelly v. State Personnel Board . 17 The petitioner in that case, John Skelly, was a medical consultant working for the California Department of Health Care Services. As an employee of the State for seven years, Skelly was a “permanent” employee under the State’s civil service rules. Over approximately an 18-month period, Skelly had been repeatedly counseled, reprimanded and even suspended (for one day) for excessive absenteeism, tardiness, and drinking alcohol on the job. While these problems did not directly affect the quality of Skelly’s work, he was eventually terminated for violating the State’s rules regarding “intemperance,” “inexcusable absence without leave,” and “other failure of good behavior during duty hours that caused discredit to the Department.”

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After being terminated, Skelly timely appealed in accordance with the State’s disciplinary rules (as they existed at the time). A post-termination evidentiary hearing was held before an authorized representative of the Department’s Board. During the appeal hearing, both Skelly and the Department presented witness testimony and documentary evidence supporting their respective positions. The hearing officer sustained the termination, finding that Skelly’s failure to change his behavior after being counseled outweighed the fact that the quality of his work never suffered. Skelly challenged the hearing officer’s decision by filing a petition for writ of mandate in the local superior court. Skelly challenged his dismissal on several grounds, including the arguments that: (1) the State’s procedure of terminating a public employee without first giving him a hearing violated his “due process” rights; and (2) the discipline was unduly harsh and disproportionate to his allegedly wrongful conduct. With respect to Skelly’s “due process” argument, the California Supreme Court agreed with him and held that a permanent public employee’s property rights (i.e., the vested right to continued employment) cannot be taken away by his employer without first being afforded certain procedural safeguards. While a pre-discipline evidentiary hearing is not required before significant punitive action is imposed, there are minimum procedural safeguards that must be provided to employees before discipline is imposed. The minimum “due process” protections an employer must provide to an employee are: (1) notice of the proposed disciplinary action; (2) a statement of the reasons for the proposed disciplinary action; (3) a copy of the charges and materials on which the proposed discipline is based; and (4) the right to respond, either orally or in writing, to the authority initially proposing discipline. These procedural safeguards are now commonly referred to as “Skelly rights.” With respect to Skelly’s challenge to the degree of penalty imposed, the Supreme Court agreed with him that termination was too severe under the circumstances because there was no evidence that his job performance was actually affected by his tardiness and drinking. While noting that a public employer has discretion with respect to the degree of discipline to impose, the Skelly Court held that such discretion is not unfettered. The test the Supreme Court developed to determine whether an employer has abused its discretion in selecting too harsh a penalty is:

In considering whether such abuse occurred in the context of public employee discipline, we note that the overriding consideration in these cases is the extent to which the employee’s conduct resulted in, or if repeated is likely to result in, “[h]arm to the public service.”…Other relevant factors include the circumstances surrounding the misconduct and the likelihood of its recurrence.

The Skelly case stands for several different legal principles that directly impact the manner in which a public employer terminates a tenured or permanent employee. These legal principles and strategies include the following.

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