LEON KEA,
Petitioner
v
.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, O'BERRY CENTER,
Respondent
Appeal by respondent from order entered 2 April 2001 by
Judge Narley C. Cashwell in Wake County Superior Court. Heard in
the Court of Appeals 21 February 2002.
Pueschel & Associates, by Janet I. Pueschel, for petitioner-
appellee.
Attorney General Roy Cooper, by Assistant Attorney General
Lisa Granberry Corbett, for respondent-appellant.
CAMPBELL, Judge.
The North Carolina Department of Health and Human Services
(respondent) appeals from the trial court's order reversing the
State Personnel Commission's (Commission) Decision and Order
upholding the dismissal of Leon Kea (petitioner) from his
employment at O'Berry Center, a State facility for the mentally
retarded. After careful consideration of the record and briefs,
we reverse the trial court's order and remand for reinstatement
of the Decision and Order of the Commission.
Petitioner was dismissed from his position as Cluster
Administrator at O'Berry Center on 13 August 1998. The reason
given for his dismissal was unacceptable personal conduct. The
misconduct arose out of his relationship with a subordinate
employee, Veronica Ham ("Ham"), and respondent's subsequent
investigation of that relationship. Specifically, petitioner wasdismissed for: (1) treating Ham in a special and preferential
way; (2) sexually harassing Ham; (3) retaliating against Ham; (4)
disobeying a direct order by reporting to work and discussing the
investigation with staff while on investigative status; (5)
failing to follow educational leave procedures regarding Ham's
educational leave in the Spring of 1998; and (6) failing to
follow procedures by allowing Ham to enter requisitions without
prior authorization. Petitioner was informed of his dismissal
by letter dated 12 August 1998. Petitioner followed respondent's
internal grievance procedure. Petitioner's dismissal was
subsequently upheld by the Secretary of the Department of Health
and Human Services by letter dated 19 November 1998. On 11
December 1998, pursuant to N.C. Gen. Stat. §§ 126-34.1 and 150B-
23, petitioner filed a contested case petition with the Office of
Administrative Hearings. Petitioner alleged he was terminated
without just cause in violation of N.C. Gen. Stat. § 126-35, his
due process rights were violated in that he was not provided with
an unbiased pre-termination hearing, and respondent violated the
specificity requirements of N.C. Gen. Stat. § 126-35. Petitioner
sought reinstatement with back pay and benefits.
Following a hearing, an administrative law judge ("ALJ")
issued a Recommended Decision on 22 December 1999. The ALJ made
the following findings of fact: Petitioner began working as a
Cluster Administrator at O'Berry Center on 1 February 1993. As
Cluster Administrator, petitioner was responsible for overseeing
the staff that provided care for the residents in his cluster,which consisted of four units referred to as group homes. In
1996, Veronica Ham was hired as a DT/Escort for Cluster 1, the
cluster administered by petitioner. Each cluster had a DT/Escort
staff position. As a DT/Escort, Ham's job duties included
"normal Developmental Technician [DT] daily client care duties
and additional duties of providing transportation and escort to
clients needing services off of the home unit." Ham's work hours
were 7:00 a.m.-3:30 p.m. She was supervised by Deborah Martin
("Martin"), Group Home Director for Group Home 1. Martin
supervised Ham until Ham took maternity leave.
While Ham was home on leave, petitioner called and asked if
she would like an office when she returned to work and told her
that her work hours would be 8:00 a.m-5:00 p.m. with holidays and
weekends off. Ham returned to work in October 1996 and was given
office space in Cluster 1. While her job position remained
DT/Escort, she was now assigned to Group Home 2, whose Director
was Greg Anderson ("Anderson"). However, Ham was not supervised
by Anderson. Instead, she reported directly to petitioner.
Petitioner instructed Ham to perform various office clerical
duties, including requisitions, work schedules, and answering
phones. These duties were different from the job duties of a
DT/Escort. Petitioner also instructed Ham to use the budget code
number of another employee in order to make requisition requests
to the central budget office. The ALJ found that petitioner knew
allowing Ham to use another employee's budget code violated State
Budget Office procedures requiring only the person assigned abudget code be given access to the code and requisition system in
order to avoid fraud.
In the Spring of 1998, petitioner allowed Ham to take time
off from work to pursue a degree at Wayne Community College. Ham
never filled out a request for educational leave and was informed
by petitioner that she did not have to account for the time.
Petitioner never talked to Ham about using compensatory time for
her classes and her time sheets reflect she listed her time in
class as time worked. The ALJ found that petitioner was familiar
with O'Berry Center's policy on educational leave, and his
failure to properly approve and supervise Ham's educational leave
was a violation of O'Berry Center's policy.
Following Ham's return to work in October 1996, petitioner
frequently asked her to lunch and frequently complimented her on
her appearance. Ham never accepted petitioner's lunch
invitations. Petitioner commented to Ham that large penises ran
in his family, asked her if she was on birth control so that when
the two of them had sex he would know she was protected, and
invited her to go to Raleigh to stay with him and have sex. He
also had other conversations with Ham about his sexual attraction
to her.
Ham was subsequently accepted to Nursing School at Wayne
Community College. She informed petitioner and was told to fill
out the educational leave form and that it would be no problem
for her to attend the classes. On 8 June 1998, the day petitioner completed Ham's
performance review, he resumed talking about the possibility of
the two of them having a relationship. Ham responded, "We can't
do this . . . [y]ou've got a wife. You're a minister. This is
wrong. I've already told you 'no'." The next day, petitioner
apologized to Ham for his conduct and told her he could no longer
supervise her. Ham was informed that she was being transferred
back to Group Home 1, where she would be supervised by Deborah
Martin. Martin would now be responsible for approving Ham's
educational leave. Ham would no longer have office space, her
work hours would revert back to normal DT/Escort hours, and she
would be assigned normal DT/Escort duties. At the time of the
transfer, petitioner knew of past problems between Ham and
Martin. However, following the transfer, petitioner refused to
consider options for Ham to continue her education and told her
the decision was up to Martin.
Ham spoke with Greg Anderson, Group Home Director for Group
Home 2, about petitioner's sexual interest in her and told
Anderson she believed her transfer was retaliation for her
refusal to have sex with petitioner. Anderson suggested Ham
report petitioner's conduct to Eugene Hightower, respondent's
Employee Relations Specialist. On 15 July 1998, Ham filed a
sexual harassment complaint against petitioner. Specifically,
the complaint alleged that petitioner, in retaliation for Ham's
refusal to have sex with him, disapproved her educational leave
that he had previously verbally supported and threatened totransfer her to a work site where she had previously experienced
problems.
On 17 July 1998, Eugene Hightower and Frank Farrell
("Farrell"), respondent's Deputy Director of Client Services, met
with petitioner to discuss the sexual harassment complaint.
Petitioner admitted he had asked Ham to meet him for dinner on
his way back from Raleigh. Petitioner also admitted that and he
and Ham once had a conversation about the possibility of having
sex. However, petitioner denied ever asking Ham for sex or
harassing her in any way. Petitioner told Farrell he had elected
to transfer Ham because there was an attraction between the two
of them and he felt it was inappropriate for him to continue
supervising her.
On 17 July 1998, petitioner was placed on investigative
status with pay and advised not to return to O'Berry Center or
speak to anyone about the investigation. Petitioner was only
given permission to attend Public Manager's training in Raleigh
on 20 July and 21 July. Nevertheless, after being placed on
investigative status on 17 July, petitioner spoke with three
employees and informed them of his suspension. In addition,
petitioner came to O'Berry Center on 21 July and spoke with
Deborah Martin about Ham's sexual harassment complaint. Finally,
on 22 July, petitioner returned to work at the normal time and
was told to leave campus immediately. Petitioner met with Farrell again on 27 July 1998, at which
time petitioner changed his story and denied having asked Ham to
dinner and having had a conversation with Ham about the
possibility of the two of them having sex.
On 30 July 1998, Farrell sent petitioner a letter setting
out the specific allegations against him and the conclusions that
had been reached up to that point in the investigation.
Petitioner was informed that a predisciplinary conference was
scheduled for 4 August 1998. Petitioner submitted a written
statement to Farrell and the two men discussed the allegations at
the predisciplinary conference. Following the conference,
petitioner was notified by letter dated 12 August 1998 that he
was dismissed for unacceptable personal conduct and informed of
the reasons.
The ALJ found as fact that petitioner's credibility was
questionable because he had changed his story during the course
of the investigation.
Based on his findings of fact, the ALJ made the following
pertinent conclusions of law:
3. A violation of known and written work
rules constitutes unacceptable personal
conduct.
4. Preferential treatment combined with
sexual harassment of an employee constitutes
unacceptable personal conduct.
5. Petitioner failed to meet his burden of
proof. The greater weight of the evidence is
that Petitioner violated known and written
work rules, gave an employee preferential
treatment, sexually harassed an employee, and
disobeyed a direct order of his supervisor.
6. Respondent DHHS has just cause to
discipline Petitioner up to and including
dismissal.
7. Petitioner was afforded his statutory due
process rights at each stage of the dismissal
process including proper notice of the
grounds for his dismissal.
Based on his findings and conclusions, the ALJ recommended
petitioner's dismissal be affirmed.
On 11 May 2000, the State Personnel Commission adopted the
recommended findings of fact and conclusions of law of the ALJ in
toto and ordered that respondent's dismissal of petitioner be
affirmed.
Pursuant to N.C. Gen. Stat. § 150B-43, petitioner sought
judicial review of the Commission's decision on the grounds that
certain findings of fact and conclusions of law were not
"complete, accurate or supported by the record," that respondent
failed to act as required by law, that respondent acted
erroneously and capriciously, and that petitioner's dismissal was
without just cause.
On 30 March 2001, the superior court entered an order
reversing the Commission's decision and ordering that petitioner
be reinstated and awarded back pay and benefits. The superior
court's decision was based on the following conclusions:
6. That Petitioner Kea was not afforded
constitutionally guaranteed due process by
Respondent during the process of his
discharge from the O'Berry Center and that
the Commission's decision was in violation of
Constitutional provisions, affected by error
of law, and unsupported by substantial
evidence admissible under N.C.G.S. § [150B]-
29(a), [150B]-30, or 150[B]-31;
Respondent appeals.
A final agency decision may be reversed or modified by the
superior court if the agency's findings, inferences, conclusions
or decisions are:
(1) In violation of constitutional
provisions;
(2) In excess of the statutory authority or
jurisdiction of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Unsupported by substantial evidence
admissible under G.S. 150B-29(a), 150B-30, or
150B-31 in view of the entire record as
submitted; or
(6) Arbitrary, capricious, or an abuse of
discretion.
N.C. Gen. Stat. § 150B-51(b) (2001). The standard of review
employed by the superior court is determined by the type of error
asserted by the petitioner; errors of law are reviewed de novo,
while the whole record test is applied to review allegations that
the agency decision was not supported by the evidence, or was
arbitrary and capricious. Zimmerman v. Appalachian State Univ.,
149 N.C. App. 121, 129, 560 S.E.2d 374, 379 (2002) (citing
Amanini v. N.C. Dept. of Human Resources, 114 N.C. App. 668, 443
S.E.2d 114 (1994). "De novo review requires a court to consider
the question anew, as if the agency has not addressed it."
Blalock v. N.C. Dep't of Health and Human Servs., 143 N.C. App.
470, 475-76, 546 S.E.2d 177, 182 (2001). Under the whole record
test, "the reviewing court [must] examine all competent evidence(the 'whole record') in order to determine whether the agency
decision is supported by 'substantial evidence.'" Amanini v.
N.C. Dept. of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d
114, 118 (1994). In reviewing a superior court order from an
appeal of an agency decision, this Court has a two-fold task:
"(1) determine whether the trial court exercised the appropriate
scope of review and, if appropriate; (2) decide whether the court
did so properly." Deep River Citizen's Coalition v. N.C. Dep't
of Env't & Natural Res., 149 N.C. App. 211, 213, 560 S.E.2d 814,
816 (2002).
Respondent first contends the superior court erred in
applying the de novo standard of review because petitioner never
raised errors of law for the superior court to review. We
disagree.
Petitioner sought judicial review of the Commission's final
agency decision on the grounds that many of its findings of fact
were not supported by the whole record and that respondent's
decision was capricious. Such errors are subject to the whole
record test. See Zimmerman, 149 N.C. App. at 129, 560 S.E.2d at
379. However, petitioner also alleged that several of the
Commission's conclusions of law, including its conclusion that
petitioner was afforded due process and given proper notice of
the grounds for his dismissal, were not supported by the record,
that respondent failed to act as required by law, and that
petitioner's dismissal was without just cause. These are all
questions of law which are subject to de novo review. See id. In its order, the superior court recited that it had reviewed the
whole record and conducted a de novo review. Accordingly, we
conclude the superior court applied the proper standards of
review and we must now determine whether it applied these
standards correctly.
As grounds for its decision to reverse the State Personnel
Commission, the superior court concluded petitioner was not
afforded due process by respondent during the course of his
dismissal. Respondent argues that petitioner's due process
rights were not violated. Petitioner contends he was not given
sufficient notice of the grounds for his dismissal and was not
given the required oral and written warnings. Petitioner further
contends he was denied a fair and impartial decision maker
because Farrell had reached certain conclusions prior to the
predisciplinary conference.
Pursuant to N.C. Gen. Stat. § 126-35(a) (2001), "[n]o career
State employee subject to the State Personnel Act ["Act"] shall
be discharged, suspended, or demoted for disciplinary reasons,
except for just cause." Just cause for dismissal of a career
State employee subject to the Act includes unsatisfactory job
performance and unacceptable personal conduct. 25 N.C.A.C. §
1J.0604(b) (2002). Prior to dismissal for unsatisfactory job
performance, a career State employee "must first receive two
prior disciplinary actions[.]" 25 N.C.A.C. § 1J.0605(b). The
employee is entitled to (1) one or more written warnings followed
by (2) "a warning or other disciplinary action which notifies theemployee that failure to make the required performance
improvements may result in dismissal." Id. However, an employee
"may be dismissed for a current incident of unacceptable personal
conduct, without any prior disciplinary action." 25 N.C.A.C. §
1J.0608(a). Dismissals for unacceptable personal conduct only
require (1) a pre-dismissal conference between the employee and
the person recommending dismissal, and (2) written notification
of the specific reasons for the dismissal and the employee's
right to appeal. 25 N.C.A.C. § 1J.0608(b), (c); N.C. Gen. Stat.
§ 126-35(a). Unacceptable personal conduct includes:
(1) conduct for which no reasonable person
should expect to receive prior warning; or
(2) job-related conduct which constitutes a
violation of state or federal law; or
. . .
(4) the willful violation of known or written
work rules; or
(5) conduct unbecoming a state employee that
is detrimental to state service; or
. . . .
25 N.C.A.C. § 1J.0614(i).
Petitioner was dismissed for, inter alia, violating known
and written work rules, sexually harassing a subordinate
employee, and disobeying a direct order from a supervisor. We
find that all of these grounds fall within the definition of
unacceptable personal conduct. Therefore, petitioner was not
entitled to oral or written warnings or prior disciplinary
action. However, as he contends, petitioner was entitled to apre-dismissal conference and sufficient notification under N.C.
Gen. Stat. § 126-35.
The record shows petitioner was informed of the allegations
against him and given a chance to respond in a meeting with
Eugene Hightower and Frank Farrell on 17 July 1998. At the
meeting, petitioner was asked to submit a written statement in
response to the allegations. Petitioner submitted the written
statement and had a second meeting with Farrell on 27 July 1998,
at which petitioner again denied the allegations against him.
Petitioner then received a letter dated 30 July 1998 which set
forth in detail the allegations against him and informed him of a
predisciplinary conference to be held on 4 August 1998.
Following the 4 August predisciplinary conference, petitioner
received the dismissal letter, dated 12 August 1998, which set
forth the specific acts or omissions supporting his dismissal, as
well as his appeal rights. The fact that this notice was given
simultaneously with the disciplinary action in this case is not a
violation of N.C. Gen. Stat. § 126-35. See Leiphart v. N.C.
School of the Arts, 80 N.C. App. 339, 350-51, 342 S.E.2d 914,
922-23 (1986). Based on this record, we conclude petitioner
received the pre-dismissal conference required under 25 N.C.A.C.
§ 1J.0608(b) and the notification mandated by N.C. Gen. Stat. §
126-35.
Petitioner also contends he was deprived of an impartial and
unbiased decision maker because Frank Farrell had reached certain
conclusions prior to the predisciplinary conference. A publicemployee facing an administrative hearing is entitled to an
unbiased, impartial decision maker as a requirement of due
process. Id. at 354, 342 S.E.2d at 924; see also Crump v. Bd. of
Education, 326 N.C. 603, 615, 392 S.E.2d 579, 585 (1990). "To
make out a due process claim based on this theory, an employee
must show that the decision-making board or individual possesses
a disqualifying personal bias." Leiphart, 80 N.C. App. at 354,
342 S.E.2d at 924. Mere familiarity with the facts of a case
gained by an agency or individual in the performance of its
statutory role does not, however, disqualify, a decision maker.
Id. at 354, 342 S.E.2d at 925 (citing Hortonville Dist. v.
Hortonville Ed. Asso., 426 U.S. 482, 493, 49 L. Ed. 2d 1, 9
(1976).
The record shows that Frank Farrell, the individual who made
the initial decision to dismiss petitioner, had reached certain
conclusions concerning petitioner's situation as of 30 July 1998,
prior to the 4 August 1998 predisciplinary conference. These
conclusions were reached after Farrell had conducted an
investigation into the allegations against petitioner, including
speaking with petitioner on two separate occasions and
considering the written statement submitted by petitioner.
Following the predisciplinary conference and further
investigation, Farrell made the decision to dismiss petitioner.
According to the dismissal letter, Farrell had not altered the
conclusions he had reached as of 30 July 1998. Accordingly,petitioner contends Farrell could not have been an impartial
decision maker. We disagree.
The United States Supreme Court has held that there is no
per se violation of due process when an administrative tribunal
acts as both investigator and adjudicator on the same matter.
Withrow v. Larkin, 421 U.S. 35, 58, 43 L. Ed. 2d 712, 730 (1975).
There is nothing in the record to indicate that Frank Farrell had
any disqualifying personal bias against petitioner. The mere
fact Farrell was familiar with the facts of petitioner's case and
acted as investigator and adjudicator on the matter is not a per
se violation of due process. Leiphart, 80 N.C. App. at 354, 342
S.E.2d at 924-25. Further, in the absence of any evidence that
Farrell had a disqualifying personal bias against petitioner, the
fact he had reached conclusions concerning petitioner's situation
prior to the predisciplinary conference does not amount to a due
process violation. The conclusions Farrell had reached were
based on an extensive investigation, which included interviewing
numerous individuals familiar with the situation, as well as
twice speaking with petitioner and considering petitioner's
written statement. Finally, we note that Farrell's decision to
dismiss petitioner was subsequently upheld by both the Secretary
of the Department of Health and Human Services, H. David Bruton,
and the State Personnel Commission. Accordingly, we conclude
petitioner has failed to show he was deprived of an impartial
decision-making process. In reversing the Commission, the superior court additionally
concluded that its Decision and Order was not supported by
substantial evidence. However, having reviewed the whole record,
we conclude there was substantial evidence to support the
Commission's findings of fact and these findings support the
conclusion that petitioner was dismissed for just cause based on
unacceptable personal conduct.
In summary, we find substantial competent evidence to
support the conclusion that respondent had just cause to dismiss
petitioner from his employment for unacceptable personal conduct.
In addition, we hold that petitioner's due process rights were
not violated during the course of his dismissal. Accordingly, we
reverse the trial court's order and remand for reinstatement of
the Commission's Decision and Order upholding respondent's
dismissal of petitioner.
Reversed and remanded.
Judge MARTIN concurs.
Judge HUDSON dissents in a separate opinion.
HUDSON, Judge, dissenting.
While I agree with the majority that we should remand this
case to the superior court, I do not believe that we are in a
position to order reinstatement of the Decision and Order of the
State Personnel Commission (SPC). Instead, I believe that a
remand is appropriate because the order of the superior court
does not separately delineate which standard of review itapplied to which issue before it. Thus, according to applicable
precedent, remand is necessary for the superior court to so
delineate, before we may review the merits.
Our appellate Courts have held repeatedly that [t]he proper
standard of review by the trial court [of an administrative
appeal] depends upon the particular issues presented by the
appeal. Deep River Citizen's Coalition v. N. C. Dep't of Env't
and Natural Res., 149 N.C. App. 211, 213 S.E.2d 814, 816 (2002),
citing ACT-UP Triangle v. Commission for Health Services, 345
N.C. 699, 706, 483 S.E.2d 388, 392 (1997); Brooks v. McWhirter
Grading Co., Inc., 303 N.C. 573, 580, 281 S.E.2d 24, 28 (1981).
In Deep River, where the trial court simply stated that it was
applying the standard of review set forth in the briefs, we
remanded to the trial court for delineation of the standard of
review applicable to each issue. In so doing, we relied upon the
cases cited above, and upon Hedgepeth v. N.C. Div. of Servs. for
the Blind, 142 N.C. App. 338, 543 S.E.2d 169 (2001), where we
held:
[T]he trial court in the case sub judice stated the proper
standards of review sought by petitioner. However, it . . .
failed to delineate which standard the court utilized in
resolving each separate issue raised. Furthermore, it is
difficult to discern whether the trial court actually
conducted both a whole record and de novo review . . . .
We are left to question whether [the trial court] referred
to only a whole record review, de novo review, or both . .
. . Given the nature of the trial court's order, we find
ourselves unable to conduct our necessary threshold review.
Id. at 349, 543 S.E.2d at 176 (citations omitted). Here, the
order refers to the standard of review only in the introductory
paragraph, where it states that it reached its conclusions based[o]n consideration of the oral arguments, a review of the whole
record, and conducting a de novo review. Because I do not see a
meaningful distinction between the order in this case and the
orders in Deep River and Hedgepeth, I would remand, as we did in
those cases, for the trial court to:
(1) advance its own characterization of the issues presented
by petitioners; and (2) clearly delineate the standards of
review, detailing the standards used to resolve each
distinct issue raised.
Deep River, 149 N.C.App. at 215, 560 S.E.2d at 817.
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