Campbell v NC Wildlife Resources Comm'n, 156 NC App 217 (02-189) 02/04/2003

Appeal by respondent from judgment and order entered 24 October 2001 by Judge Wade Barber, Jr., in Wake County Superior Court. Heard in the Court of Appeals 17 October 2002.

The Edmisten and Webb Law Firm, by William Woodward Webb, Jr., for petitioner appellee.

Attorney General Roy Cooper, by Assistant Attorney General C. Norman Young, Jr., for respondent appellant.

    McCULLOUGH, Judge.

    This appeal arises from two separate petitions filed by Larry A. Campbell on 9 February 2000. In his petitions, Mr. Campbell appealed his 14 October 1999 termination from the North Carolina Wildlife Resources Commission (Wildlife Commission) and alleged a lack of just cause for dismissal, racial discrimination, a hostile work environment, and retaliation for being a whistleblower. On 29 June 2000, a hearing was conducted before Administrative Law Judge Robert R. Reilly, Jr. (the ALJ). The evidence at the hearing showed that Mr. Campbell began working at the Wildlife Commission as a personnel officer in August 1990. His duties includedrecruitment, payroll, training, employee relations, personnel records, EEO, health insurance program maintenance, risk control services, and other employee benefits. From 1 August 1990 until July 1998, Mr. Richard Hamilton served as Mr. Campbell's immediate supervisor. Thereafter, Ms. Carol Batker supervised Mr. Campbell.     In March 1998, Mr. Campbell was put in charge of implementing a safety manual for the Wildlife Commission. His deadline was extended at least three times, with the final extension memorialized in an 8 July 1998 written warning for Unsatisfactory Job Performance. On 27 May 1999, Mr. Campbell received a written warning from Ms. Batker for Unsatisfactory Job Performance due to chronic lateness. According to Ms. Batker's testimony, Mr. Campbell was late to work on five occasions between 18 December 1998 and 27 May 1999. On 18 December 1998, Mr. Campbell was told to attend a 9:00 a.m. meeting at a location other than his office. He went directly to the meeting from his home and arrived on time. However, because he did not first go to his office, he was considered late to work. On 4 February 1999, Mr. Campbell was caught in a traffic jam on Highway 64. On 9 February 1999, Mr. Campbell was late to work because he had to care for his child, who suffers from asthma. When Mr. Campbell arrived at work later that day, he presented Ms. Batker with a leave slip for the time missed due to his tardiness that morning. On 20 May 1999, Mr. Campbell was again caught in traffic and arrived twenty minutes late for a meeting being conducted away from his regular office. Finally, on27 May 1999, Mr. Campbell was late to work due to an accident that delayed traffic.
    On 14 October 1999, Mr. Campbell was dismissed by the Wildlife Commission for both Unsatisfactory Job Performance and Grossly Inefficient Job Performance. The dismissal was precipitated by Mr. Campbell's failure to complete the safety manual (despite at least three extensions) and his chronic lateness. On 10 January 2000, after an internal grievance hearing, Mr. Campbell's dismissal was revised to “Unsatisfactory Job Performance.”
    Based on the evidence presented at the hearing, the ALJ found that Mr. Campbell was properly given a written warning for failing to complete the safety manual on time. He further found that Mr. Campbell was late for work five times, but was forgiven or gave reasonable excuses each time for his tardiness. The ALJ also made the following conclusions of law:
            1.    The petitioner was not discriminated against because of race.

            2.    The petitioner was not subject to a hostile work environment.

            3.    The petitioner was not retaliated against because he was a whistleblower.

            4.    The State Personnel Manual requires that, in order to dismiss [an] employee for Unsatisfactory Job Performance, an employee must be given two active written warnings or disciplinary actions by the immediate supervisor.

            5.    The petitioner has established by a preponderance of evidence that the May 27, 1999 written warning for chronic lateness lacked both merit and substance. In order to uphold a dismissal for Unsatisfactory Job[P]erformance there must be two written warnings or disciplinary actions against the employee.

            6.    The proper procedure for the respondent to employ would have been to issue a second written warning for failure to have the safety manual completed.

            7.    Having established by a preponderance of evidence that the May 27, 1999 written warning for chronic lateness was invalid because it lacked merit and substance, the petitioner cannot be dismissed for Unsatisfactory Job Performance after only one written warning or disciplinary action.

            8.    Accordingly, the petitioner is entitled to reinstatement to the same or a comparable position and to back and front pay and benefits from October 14, 1999 until his reinstatement as well as all costs and attorney's fees.

The ALJ's Recommended Decision was finalized on 3 October 2000.
    On 9 February 2000, the Wildlife Commission filed a Petition for Contested Case Hearing with the Office of Administrative Hearings. On 15 February 2001, the State Personnel Commission (SPC) held a meeting and considered the ALJ's Recommended Decision. By Decision and Order dated 8 March 2001, the SPC fully adopted the ALJ's recommended findings of fact and conclusions of law and ordered (1) that the Wildlife Commission's disciplinary action be reversed; (2) that Mr. Campbell be reinstated; (3) that he receive back pay and “all other applicable benefits of continuous state employment from the date of [his] dismissal until such time as he is reinstated.” On 5 April 2001, the Wildlife Commission filed a Petition for Judicial Review pursuant to N.C. Gen. Stat. § 150B-45 (2001) and requested that the Wake County Superior Court reversethe SPC's Decision and Order and affirm the Wildlife Commission's dismissal of Mr. Campbell. On 24 October 2001, the superior court issued its judgment and order on the Petition for Judicial Review. The superior court stated:
            For the reasons set forth herein the Decision and Order of the State Personnel Commission entered herein on March 8, 2001 is affirmed and adopted as the Judgment and Order of the Court in this action.

            The Court, having considered the record in its entirety, the Briefs of the parties and the argument of counsel and having applied the standard for judicial review set forth in N.C.G.S. § 150B-51(b), hereby concludes as follows:

                    (1) The Findings of Fact adopted by the State Personnel Commission are affirmed considering the record as a whole.

                    (2)    The Conclusions of Law adopted by the State Personnel Commission are affirmed considering the record as a whole.

On 21 November 2001, the Wildlife Commission appealed to this Court.
    On appeal, the Wildlife Commission argues that the superior court (I) erred as a matter of law in affirming the ALJ's conclusions of law regarding the written warning for lateness; and (II) erred in affirming the ALJ's finding that the written warning for lateness was “without merit or substance” because that finding of fact was not supported by the substantial evidence of record. For the reasons set forth herein, we disagree with the WildlifeCommission's arguments and affirm the judgment and order of the superior court.
    This Court has previously articulated the standard of review in cases such as this:
            This court's review of a trial court's consideration of a final agency decision is to determine whether the trial court failed to properly apply the review standard articulated in N.C. Gen. Stat. § 150B-51. In re Kozy, 91 N.C. App. 342, 371 S.E.2d 778 (1988), disc. review denied, 323 N.C. 704, 377 S.E.2d 225 (1989). Our review is further limited to the exceptions and assignments of error set forth to the order of the superior court. Watson v. N.C. Real Estate Commission, 87 N.C. App. 637, 362 S.E.2d 294 (1987), cert. denied, 321 N.C. 746, 365 S.E.2d 296 (1988).

            . . . .

            . . . The proper standard to be applied depends on the issues presented on appeal. If it is alleged that an agency's decision was based on an error of law then a de novo review is required. Brooks, Comm'r of Labor v. Rebarco, Inc., 91 N.C. App. 459, 372 S.E.2d 342 (1988). A review of whether the agency decision is supported by the evidence, or is arbitrary or capricious, requires the court to employ the whole record test. Id.

Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 353-54 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991).
            The proper standard for the superior court's judicial review “depends upon the particular issues presented on appeal.” Amanini v. N.C. Dep't of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d 114, 118 (1994). When the petitioner “questions (1) whether the agency's decision was supported by the evidence or (2) whether the decision was arbitrary or capricious, then the reviewing court must apply the 'whole record' test.” Inre Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993). See also Associated Mechanical Contractors v. Payne, 342 N.C. 825, 467 S.E.2d 398 (1996) (concluding that the proper standard of review of agency decisions to determine the sufficiency of the evidence is the “whole record” test). “The 'whole record' test requires the reviewing court to examine all competent evidence (the 'whole record') in order to determine whether the agency decision is supported by 'substantial evidence.'” Amanini, 114 N.C. App. at 674, 443 S.E.2d at 118.

            As to appellate review of a superior court order regarding an agency decision, “the appellate court examines the trial court's order for error of law. The process has been described as a twofold task: (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.” Id. at 675, 443 S.E.2d at 118-19.

ACT-UP Triangle v. Commission for Health Services, 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997). It is the role of the agency (here, the SPC) to make determinations regarding the credibility of witnesses and to resolve conflicts in testimony. “Agency findings of fact are conclusive if, upon review of the whole record, they are supported by competent, material, and substantial evidence.” In re Humana Hosp. Corp. v. N.C. Dept. of Human Resources, 81 N.C. App. 628, 633, 345 S.E.2d 235, 238 (1986). With these principles in mind, we turn to the case at hand.
    The Wildlife Commission first argues that the superior court erred as a matter of law in affirming the ALJ's conclusions of law regarding the written warning for lateness. Specifically, the Wildlife Commission contends that the superior court failed toapply the correct standard of review and lacked jurisdiction to hear Mr. Campbell's claims. We consider each of these arguments separately.

    In this case, the superior court appears to have employed the “whole record test,” which is appropriate where the petitioner alleges that an agency decision was either unsupported by the evidence, or was arbitrary and capricious. De novo review is used when the petitioner alleges that the agency decision was based on an error of law. See Amanini, 114 N.C. App. at 674, 443 S.E.2d at 118. However, we must also consider that the superior court stated it “applied the standard for judicial review set forth in N.C. Gen. Stat. § 150B-51(b).”
    The Wildlife Commission contends its petition for judicial review alleged that the SPC's decision was an error of law, which warrants de novo review. In its petition, the Wildlife Commission argued first that the written warning for chronic lateness was facially valid and had merit. The Wildlife Commission also argued that the written warning should not have been subject to review (i.e., that the ALJ lacked jurisdiction to consider Mr. Campbell's claims regarding the written warning for lateness) because the SPC rules prohibit appeal of written warnings unless a violation of N.C. Gen. Stat. § 126-25 (2001) is alleged, which is not the case here. See N.C. Admin. Code tit. 25, r. lJ.0615(d)(2) (June 2002) The Wildlife Commission notes that Mr. Campbell never alleged that the written warning regarding his tardiness was “inaccurate ormisleading” and never attempted to appeal on that basis, even though he knew the written warning would become part of his personnel file. The Wildlife Commission also maintains that, even if Mr. Campbell's excuses for his tardiness raised a defense of inaccurate or misleading information in his personnel file, he waived the defense by not timely appealing its inclusion in his personnel file. The Wildlife Commission concluded in its petition for judicial review that “[a] written warning is [generally] not appealable pursuant to G.S. § 126-34.1. If the written warning is not appealable and not grounds for a contested case, then it follows that the subject matter of the warning should not be reviewable in a subsequent action.”
    The problem with the logic of the Wildlife Commission's argument is that it ascribes finality to the written warning previously issued when the statute does not mandate that an employee contest a warning when it is issued. While N.C. Gen. Stat. § 126-25 allows an employee to contest the accuracy of information placed in his personnel file, such is not required. Furthermore, nothing in that statute, the North Carolina Administrative Code, or the State Personnel Manual provisions cited by the Wildlife Commission precludes review in a disciplinary proceeding of the first written warning for tardiness placed in Mr. Campbell's personnel file. The SPC has the authority to review the ALJ's decision, judge the credibility of witnesses, and make appropriate findings of fact and conclusions of law. See N.C. Gen. Stat. § 150B-36 (2001); and Eury v. N.C. Employment Security Comm.,115 N.C. App. 590, 597-98, 446 S.E.2d 383, 388, appeal dismissed, disc. review denied, 338 N.C. 309, 451 S.E.2d 635 (1994).
    As the State Personnel Manual mandates that an employee must receive two active written warnings or disciplinary actions before being dismissed for unsatisfactory job performance, there was no way to avoid consideration of the 27 May 1999 warning. In response to the Wildlife Commission's argument that Mr. Campbell was unfairly allowed to “litigate retroactively the basis for the May 27, 1999 warning,” we note that the reviewing body is allowed to examine whether prior warnings were facially valid and whether there existed an accurate factual basis for the warning. The SPC credited Mr. Campbell's explanation and ordered reinstatement. Thereafter, the superior court properly limited its review to consideration of whether the evidence in the record supported this conclusion. Accordingly, the Wildlife Commission's first assignment of error is overruled.

    By its second assignment of error, the Wildlife Commission argues the superior court erred in affirming the ALJ's finding that the written warning for lateness was “without merit or substance” because the finding was not supported by substantial evidence in the record. We do not agree.
    The Wildlife Commission argues the standard of review for this assignment of error is the “whole record test.” Though it concedes that the superior court apparently applied this standard of review, the Wildlife Commission nonetheless argues that the standard wasapplied incorrectly. According to the Wildlife Commission, the ALJ applied a “hindsight test” and “improperly focus[ed] on the ultimate impact of this first written warning rather than its validity.” The Wildlife Commission urges this Court to examine the entire record and consider that the warning was issued in the overall context of Mr. Campbell's poor job performance.
    Under the provisions of the State Personnel Manual, written warnings are the lowest level of formal disciplinary action a supervisor may take. Written warnings are also the first type of disciplinary action an offending employee may receive. In the present case, Ms. Batker issued a written warning to Mr. Campbell for chronic lateness. The warning documented five instances of lateness from 18 December 1998 to 27 May 1999. While Mr. Campbell could challenge the factual basis for the warning pursuant to N.C. Gen. Stat. § 126-25, he did not need to do so until formal disciplinary action was taken. See N.C. Gen. Stat. § 126-25.
    Ms. Batker's 27 May 1999 written warning satisfies the six requirements for written warnings outlined in the State Personnel Manual § 7, p. 11. Indeed, Mr. Campbell never argued that the warning was deficient in any form. His only response to the warning was to provide excuses for his lateness each time. On appeal, the Wildlife Commission contends that the written warning was meritorious despite the arguably valid excuses provided by Mr. Campbell. When presented with the evidence, the ALJ determined that Mr. Campbell's explanations were sufficient to excuse his lateness and concluded that the written warning on that subject wasnot justified. The SPC, exercising its power to make the final decision, adopted the ALJ's recommendation.
    In sum, the Wildlife Commission believes Mr. Campbell's repeated lateness justified the written warning, even though he presented excuses each time he was late. The Wildlife Commission also believes the ALJ failed to consider the warning in the context in which it was issued and in the context of Mr. Campbell's overall poor job performance. The Wildlife Commission maintains the ALJ's finding that the warning was “without merit or substance” was based solely on the fact that Mr. Campbell gave excuses for his tardiness. Though the Wildlife Commission believes the ALJ ignored the evidence of record and made a finding contrary to that evidence, warranting reversal of that finding, we again note that determination is within the power of the SPC.
    Mr. Campbell argues, and we agree, that the superior court correctly affirmed the ALJ's finding (later adopted by the SPC) that the written warning for lateness was “without merit or substance” and that this finding was supported by substantial evidence of record. The superior court's order employed the “whole record test” and considered the entire record in arriving at its findings of fact and conclusions of law, including the finding contested by the Wildlife Commission. If the findings of fact are supported by evidence, they are conclusive and must stand on appeal. In re Humana Hosp. Corp., 81 N.C. App. at 633, 345 S.E.2d at 238.    The superior court determined that the SPC correctly concluded the written warning for lateness was without merit or substance, thereby rendering it invalid. Mr. Campbell was therefore left with only one valid written warning for failing to complete the safety manual on time. Because two valid written warnings are needed for dismissal, and Mr. Campbell only had one, the ALJ, SPC and superior court properly determined that he could not be dismissed for unsatisfactory job performance.
    After careful review of the record and the arguments of the parties, we conclude the superior court did not err in upholding the SPC's decision to reinstate Mr. Campbell. Accordingly, the order of the superior court is
    Affirmed.
    Judges WALKER and CAMPBELL concurred in this opinion prior to 31 December 2002.
    Report per Rule 30(e).

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