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Hunt v. N.C. Department of Public Safety

Court of Appeals of North Carolina

June 19, 2018

JEFFREY HUNT, Petitioner,

          Heard in the Court of Appeals 16 May 2018.

          Appeal by respondent from orders entered 5 April 2017, 17 August 2017, and 28 August 2017 by Administrative Law Judge Melissa Owens Lassiter in the Office of Administrative Hearings, No. 17 OSP 1269

          Law Offices of Michael C. Byrne, by Michael C. Byrne, for petitioner-appellee.

          Attorney General Joshua H. Stein, by Assistant Attorney General Tamika L. Henderson, for respondent-appellant.

          DAVIS, JUDGE.

         In this case, a state agency refused to allow an employee to return to work on the ground that he had resigned from his employment. When the employee attempted to file a grievance in which he denied that he had, in fact, resigned, the agency refused to consider the grievance, and the employee filed a petition for a contested case hearing in the North Carolina Office of Administrative Hearings ("OAH"). An administrative law judge ruled in favor of the employee and ordered that he be reinstated to his former position. Because we hold that no legally effective resignation occurred and the agency lacked just cause to terminate his employment, we affirm.

         Factual and Procedural Background

         In November 2016, Jeffrey Hunt was a career status state employee who worked for the North Carolina Department of Public Safety ("DPS") as a correctional officer at Scotland Correctional Institution. During the summer of 2016, Hunt received two warnings about his tardiness and absenteeism.

         On 2 November 2016, Hunt's unit manager, Queen Gerald, asked him to report to the prison before his shift began the following day. At 5:27 p.m. on 3 November 2016, Hunt entered the facility and met with Gerald in an administration area room. Gerald informed him that she was investigating his alleged absence from work on 18 August 2016 and asked him to sign paperwork regarding the absence. Hunt informed Gerald that he would not sign documents regarding an absence for which he had no recollection. He became upset and walked out of the prison through the main door.

         Gerald later testified that she heard Hunt say either "I quit" or "I'm quitting" as he walked away. Hunt denied making such a statement. An individual in the vicinity recalled hearing Hunt state: "I'm tired of this s[***]."

         Hunt left the prison without "swiping out, " and Gerald informed the officer-in-charge that Hunt had resigned. Several minutes later, Hunt tried to re-enter the prison to begin working his shift but was denied entry by the officer-in-charge.

         On 4 November 2016, Hunt attempted to contact Superintendent Katy Poole by telephone to discuss his job status but learned that she was on vacation. Poole returned to the office on 7 November 2016, and an assistant superintendent informed her that Hunt had verbally resigned to Gerald.

         On 9 November 2016, Poole spoke with Hunt by telephone. Hunt inquired whether "he could return to work." Poole asked him if he was rescinding his resignation to which Hunt responded: "Yes." Poole informed him that she had already accepted his verbal resignation and that she was unwilling to rescind it based on "his history of pending investigations and corrective actions" as well as his behavior toward Gerald during the 3 November 2016 incident.

         That same day, Hunt received a letter from DPS confirming that he had resigned on 3 November 2016. The letter did not contain any information about his ability to appeal the separation of his employment. On 21 November 2016, DPS received a letter from Hunt in which he stated that "at no time during my conversation with Mrs. Gerald (Unit Manager) on 11/3/2016 did I give a resignation."

         On 20 January 2017, Hunt submitted a Step 1 grievance letter to DPS's Grievance Intake Office. DPS notified Hunt by letter on 14 February 2017 that his internal grievance could not be processed by the agency because he had resigned from his employment.

         On 22 February 2017, Hunt filed a petition for a contested case hearing in OAH. DPS moved to dismiss the petition on 24 March 2017 based on lack of subject matter jurisdiction. In its motion, DPS asserted that Hunt had "failed to exhaust the internal agency grievance process" and "failed to file his grievance within fifteen (15) days of the event pursuant to DPS policy."

         On 5 April 2017, Administrative Law Judge Melissa Owens Lassiter (the "ALJ") entered an order denying DPS's motion to dismiss. A hearing was held before the ALJ on 15 June 2017.

         On 17 August 2017, the ALJ issued a Final Decision pursuant to N.C. Gen. Stat. § 150B-34 in which she determined that Hunt had "never submitted a verbal statement of resignation to any DPS employee authorized to accept it." The ALJ concluded that DPS had, therefore, acted unlawfully by terminating Hunt's employment without just cause. The ALJ ordered that Hunt be reinstated to the same - or a similar - position held by him prior to his separation and that he receive back pay and attorneys' fees.

         On 22 August 2017, Hunt filed a petition for attorneys' fees, which the ALJ granted in an order entered 28 August 2017 (the "Attorneys' Fees Order") awarding him $11, 720.00 in attorneys' fees and $20.00 in filing fees. DPS filed a timely notice of appeal as to the 5 April 2017 order, the Final Decision, and the Attorneys' Fees Order.


         On appeal, DPS contends that the ALJ erred by (1) denying its motion to dismiss Hunt's contested case petition for lack of jurisdiction; (2) concluding that the separation of Hunt from his employment resulted from a discharge rather than a voluntary resignation; and (3) awarding attorneys' fees to Hunt. We address each argument in turn.

         I. Subject Matter Jurisdiction of OAH

         DPS's first argument is that the ALJ improperly denied DPS's motion to dismiss because OAH did not possess subject matter jurisdiction over Hunt's appeal. DPS contends that jurisdiction was lacking because Hunt failed to properly follow the mandatory grievance procedure required under North Carolina law before filing a contested case petition in OAH. Hunt, conversely, asserts that because DPS refused to consider his grievance the agency made it impossible for him to follow the grievance procedure.

         "Our standard of review of a motion to dismiss for lack of [subject matter] jurisdiction . . . is de novo." Brown v. N.C. Dep't of Pub. Safety, __ N.C.App. __, __, 808 S.E.2d 322, 324 (2017) (citation and quotation marks omitted), disc. review denied, __ N.C. __, 811 S.E.2d 589 (2018). "Under de novo review, the Court considers the matter anew and freely substitutes its own judgment for that of the trial court." Id. at__, 808 S.E.2d at 324 (citation and quotation marks omitted).

         In order to assess DPS's arguments, it is necessary to review the pertinent statutes that apply to these facts. Prior to 2013, the statutory scheme governing personnel actions against State employees was known as the State Personnel Act. "In 2013, our General Assembly significantly amended and streamlined the procedure governing state employee grievances and contested case hearings, applicable to cases commencing on or after 21 August 2013." Harris v. N.C. Dep't of Pub. Safety, __ N.C.App. __, __, 798 S.E.2d 127, 131, aff'd per curiam, __ N.C. __, 808 S.E.2d 142 (2017). The revised set of statutes remains codified in Chapter 126 of the North Carolina General Statutes but is now called "the North Carolina Human Resources Act."

          N.C. Gen. Stat. § 126-35(a) sets out the procedure by which a career state employee may appeal disciplinary action taken against him and states as follows:

(a) No career State employee subject to the North Carolina Human Resources Act shall be discharged, suspended, or demoted for disciplinary reasons, except for just cause. In cases of such disciplinary action, the employee shall, before the action is taken, be furnished with a statement in writing setting forth the specific acts or omissions that are the reasons for the disciplinary action and the employee's appeal rights. The employee shall be permitted 15 days from the date the statement is delivered to appeal to the head of the agency through the agency grievance procedure for a final agency decision. However, an employee may be suspended without warning for causes relating to personal conduct detrimental to State service, pending the giving of written reasons, in order to avoid undue disruption of work or to protect the safety of persons or property or for other serious reasons. If the employee is not satisfied with the final agency decision or is unable, within a reasonable period of time, to obtain a final agency decision, the employee may appeal to the Office of Administrative Hearings. Such appeal shall be filed not later than 30 days after receipt of notice of the final agency decision. The State Human Resources Commission may adopt, subject to the approval of the Governor, rules that define just cause.

N.C. Gen. Stat. § 126-35(a) (2017) (emphasis added). "In order for the OAH to have jurisdiction over [a] petitioner's appeal pursuant to N.C. Gen. Stat. §[ ] 126-35 . . ., [the] petitioner is required to follow the statutory requirements outlined in Chapter 126 for commencing a contested case." Nailing v. UNC-CH, 117 N.C.App. 318, 324, 451 S.E.2d 351, 355 (1994) (citation omitted), disc. review denied, 339 N.C. 614, 454 S.E.2d 255 (1995).

          N.C. Gen. Stat. § 126-34.01 establishes a grievance procedure that employees are generally required to follow in situations involving a discharge, suspension, or demotion.

Any State employee having a grievance arising out of or due to the employee's employment shall first discuss the problem or grievance with the employee's supervisor, unless the problem or grievance is with the supervisor. Then the employee shall follow the grievance procedure approved by the State Human Resources Commission. The proposed agency final decision shall not be issued nor become final until reviewed and approved by the Office of State Human Resources. The agency grievance procedure and Office of State Human Resources review shall be completed within 90 days from the date the grievance is filed.

N.C. Gen. Stat. § 126-34.01 (2017).

         "Once a final agency decision is issued, a potential, current, or former State employee may appeal an adverse employment action as a contested case pursuant to the method provided in N.C. Gen. Stat. § 126-34.02 . . . ." Harris, __ N.C.App. at __, 798 S.E.2d at 131. ...

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