Opinion
No. A06-1684.
Filed August 14, 2007.
Gregg M. Corwin, Katherine L. Miller, Gregg M. Corwin Associates Law Office, St. Louis Park, MN (for relator).
Julie A. Fleming-Wolfe, St. Paul, MN 55105 (for respondent).
Considered and decided by Randall, Presiding Judge; Willis, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
In this certiorari appeal, relator challenges respondent's decision to terminate her employment, arguing that respondent's reasons for its termination decision are fraudulent, arbitrary, oppressive, unreasonable, and unsupported by substantial evidence. Relator also argues that she was denied the right to procedural due process. We affirm the termination decision and deny respondent's motion to amend the certified record.
FACTS
Respondent City of Maplewood (city) employed relator Sherrie Le as its human resources director. On May 9, 2006, she submitted to the interim city manager, Greg Copeland, a memorandum in which she offered to resign from her employment and waive any hostile-work-environment, discrimination, and retaliation claims that she may have against the city if the city agreed to certain severance terms. After Copeland failed to respond, Le forwarded the memorandum to the mayor and city council members. Along with the memorandum, Le included a document listing several examples of alleged retaliation against her and other city employees by the mayor and city council members and a letter advising the city that it was required to initiate an independent investigation of these allegations.
The city retained attorney Derk Schwieger to conduct an independent investigation of Le's allegations. Schwieger interviewed Le and other city officials and employees. He also reviewed documents provided by Le, Copeland, and the city council, including memoranda, meeting minutes, letters, and email. Schwieger summarized the results of his investigation in an August 7, 2006 report, in which he concluded:
Le has experienced a change in the regime that makes her incredibly anxious, and this anxiety has led her to have some health issues. However, this regime change was achieved through the democratic process. . . . Right or wrong, the new Council has a perfect right to deliver on their agenda, and perhaps Ms. Le was too comfortable in a job she held for over a decade, and for which she was paid above comparable salaries.
Schwieger advised the city that awarding a severance package to Le would be beneficial to the city in order to avoid litigation, and he suggested that the city retain a mediator to assist the parties in negotiating the severance terms. The city did not follow this suggestion. Rather, in a letter dated August 11, 2006, the city informed Le that it was terminating her employment effective immediately because Schwieger's investigation had revealed that Le "fabricated a claim regarding a hostile work environment," as well as Le's "disdain and unwillingness to work with not only the majority of the City's elected officials, but its manager as well." In response, Le submitted a grievance letter in which she alleged that the city's termination decision violated the right to due process, the city's personnel policies, and Minnesota statutes. This certiorari appeal from the city's termination decision followed.
DECISION I.
As an initial matter, pending before us is the city's motion to amend the certified record by striking the April 2006 version of the city's personnel-policies manual (policy manual) and replacing it with the November 2001 policy manual. This amendment is necessary, the city argues, because the city did not formally adopt the April 2006 policy manual and, therefore, the November 2001 policy manual remained in effect at the time of Le's termination.
A determination of which policy manual was in effect at the time of Le's termination is relevant to our resolution of the substantive issues before us in this appeal. Therefore, we deny the city's motion to strike the April 2006 policy manual and replace it with the November 2001 policy manual. However, we supplement the certified record with the November 2001 policy manual and the affidavit of the former city manager, Richard Fursman, which Le submitted in response to the city's motion to modify the certified record. See Minn. R. Civ. App. P. 110.05 ("If anything material to either party is omitted from the record by error or accident or is misstated in it. . ., the appellate court, on motion by a party or on its own initiative, may direct that the omission or misstatement be corrected, and if necessary that a supplemental record be approved and transmitted."), 115.04, subd. 1 (making rules regarding record on appeal applicable to certiorari appeals).
In her response to the city's motion, Le argues that we should award her attorney fees and costs incurred in defending this motion. A party seeking attorney fees on appeal must submit such a request by motion and must include sufficient documentation to enable us to determine the appropriate amount of fees. Minn. R. Civ. App. P. 139.06, subd. 1. Because Le has not complied with rule 139.06 or shown a substantive basis for an award of attorney fees, see Barr/Nelson, Inc. v. Tonto's Inc., 336 N.W.2d 46, 53 (Minn. 1983) (providing that attorney fees generally are not recoverable absent authorization by contract or statute), we decline to address her argument that she is entitled to attorney fees and costs.
II.
Le challenges the city's decision to terminate her employment, arguing that the decision was fraudulent, arbitrary, oppressive, and unreasonable, and is not supported by substantial evidence, as it was based on Schwieger's biased investigation report. Generally, we review a city's quasi-judicial decision to terminate an employee to determine whether the proceedings were proper and whether the termination decision was arbitrary, oppressive, unreasonable, fraudulent, based on an erroneous interpretation of the law, or unsupported by the evidence. Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn. 1992). But when the employee is an at-will employee, that employee may be terminated for any reason or no reason at all. Randall v. N. Milk Prods., Inc., 519 N.W.2d 456, 459 (Minn.App. 1994). Thus, by definition, an at-will employee's termination cannot be procedurally improper, arbitrary, oppressive, unreasonable, or unsupported by the evidence. Reierson v. City of Hibbing, 628 N.W.2d 201, 204 (Minn.App. 2001). Thus, we begin our analysis of the propriety of the city's termination decision with a determination of whether Le's employment with the city was "at will," which is a question of law that is appropriate for our certiorari review. Dietz, 487 N.W.2d at 240.
Ordinarily, when one's employment is for an indefinite term, as here, the employment is "at will." Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn. 1983). But an at-will employment relationship may be modified by an employer's policy manual or handbook if a unilateral contract on the terms defined in the policy manual or handbook has been formed. Id. at 625-26. Whether such a modification of the employment relationship has occurred is a question of law, which we review de novo. Campbell v. Leaseway Customized Transp., Inc., 484 N.W.2d 41, 43 (Minn.App. 1992).
A policy manual or handbook constitutes an offer for employment on particular terms if it is communicated to the employee and is definite in form. Pine River, 333 N.W.2d at 626. An employee may accept that offer for employment on particular terms, thus forming a unilateral contract, by retaining employment with knowledge of those terms. Id. at 627.
Le argues that her at-will employment relationship that existed under the November 2001 policy manual was modified in April 2006. The "Dismissal" section of the November 2001 policy manual provides: "The City Manager may dismiss an employee for substandard work performance, serious misconduct, behavior not in keeping with City standards, or if in their judgment the employee is unsuited to employment with the City." That section of the April 2006 policy manual provides: "The City Manager may dismiss an employee for just cause." According to the affidavit of former City Manager Fursman, the April 2006 modification was made in accordance with the amendment procedure established in the November 2001 policy manual. Under the amendment procedure, "[r]evisions and amendments [to the policies] shall become effective upon approval by the City manager." Thus, contrary to the city's argument, the city's April 2006 policy manual was in effect when the city terminated Le's employment.
When an employer "chooses to modify its existing policies, a new unilateral contract is offered, and an employee can signify acceptance by remaining on the job." Brookshaw v. S. St. Paul Feed, Inc., 381 N.W.2d 33, 36 (Minn.App. 1986), review denied (Minn. Apr. 11, 1986); see also Restatement (Third) of Employment Law § 3.05 cmt. c (Discussion Draft 2006) ("In the context of promises contained in unilateral employer statements altering the at-will nature of the employment relationship, the general rule is that. . . terminations that occur. . . after the policy has been modified or revoked are governed by the new policy."). Le argues that the April 2006 policy manual constituted an offer of employment that could be terminated for cause because it contained the following provisions: "[t]he City Manager may dismiss an employee for just cause," "[d]isciplinary action shall be for cause," and "[d]ischarge may result for good cause other than those specified but of equal magnitude." By remaining on the job after the April 2006 amendments to the policy manual were enacted, Le argues, she accepted the city's offer of employment that could be terminated for cause.
The city counters that, even if we conclude that the April 2006 policy manual was an offer for employment on the terms contained therein, the following disclaimers in the April 2006 policy manual prevent the formation of a unilateral contract: "The[se] provisions do not establish terms and shall not be construed as contractual provisions," "[t]he City may terminate a non-union employee at any time subject to requirements of applicable laws and rules," "[n]othing in this manual shall be construed to imply that. . . an employee has any vested interest or property right to City employment," and "[n]othing in this article or these personnel policies implies that any City employee has a property right to the job they perform."
Limiting language in a policy manual may prevent the formation of an employment contract on the terms contained therein. In Kulkay v. Allied Cent. Stores, Inc., we observed:
In addition to finding the policy language. . . sufficiently definite to form a contract, we also note the absence of limiting language which could have been used by [the employer] to avoid this result. For example, [the employer] could have indicated in the written personnel policy that its provisions did not constitute an offer of an employment contract or otherwise stated that the policy did not alter the status of at-will employees.
398 N.W.2d 573, 578 (Minn.App. 1986) (emphasis added), review denied (Minn. Feb. 13, 1987). In Audette v. Ne. State Bank, we considered the effect of the following disclaimer in a policy manual: "The policies described here are not conditions of employment, and the language is not intended to create a contract between [the employer] and its employees." 436 N.W.2d 125, 126 (Minn.App. 1989). Relying on Kulkay, we concluded that this limiting language prevented the formation of a unilateral employment contract on the terms contained in the policy manual because it "clearly and effectively indicate[d] [the employer's] intent not to create an employment contract." Id. at 127; see also Michaelson v. Minn. Mining Mfg. Co., 474 N.W.2d 174, 180 (Minn.App. 1991) (holding that employer may include contract disclaimer as "valid expression of its intentions"), aff'd mem., 479 N.W.2d 58 (Minn. 1992). Because a unilateral contract on the terms contained in the policy manual was not formed, we held that the employer in Audette was not contractually bound to follow the disciplinary policy contained in its policy manual before terminating an at-will employee. 436 N.W.2d at 126-27.
Although the Minnesota Supreme Court has not directly addressed the effect of such a disclaimer, our holding in Audette is consistent with the supreme court's dictum in Feges v. Perkins Rest., Inc., 483 N.W.2d 701 (Minn. 1992). There, the employer distributed to the employee a policy manual that detailed procedures for progressive discipline. Feges, 483 N.W.2d at 705. Two years later, the employer distributed an employee handbook that contained a substantially similar progressive-discipline policy but also contained a "Disclaimer" section, which stated that the handbook "shall not be construed to form a contract." Id. The Feges court held that, because the progressive-discipline policy in the handbook did not contradict that found in the policy manual and it did not communicate an intent to revoke the policy manual, the handbook did not do so. Id. The disclaimer in the handbook, therefore, did not affect the employee's existing rights under the policy manual. Id. But the Feges court observed that, because "an offer to make a contract may be revoked by words or conduct inconsistent with the offer," the handbook's disclaimer "presumably precludes employees hired after its distribution from claiming contractual rights under the [h]andbook." Id.
Our holding in Audette also is consistent with the disclaimer doctrines of other jurisdictions. See 2 Mark A. Rothstein, Employment Law § 9:3, at 408 (2004) ("All courts recognizing the handbook exception would find that, absent a disclaimer, language explicitly providing that discharge can occur only for cause binds the employer. . . ." (Emphasis added.)); 82 Am. Jur. 2d Wrongful Discharge § 25 (2003) ("Some employers successfully use disclaimers which declare that employment is `at will' or that the employment can be terminated `at any time' or other similar language.").
For example, in Miller v. Citizens Sec. Group, Inc., the United States Court of Appeals for the Eighth Circuit considered a Minnesota breach-of-contract claim based on a provision in an employee handbook. 116 F.3d 343, 348 (8th Cir. 1997). Observing that the Minnesota Supreme Court "has not ruled on the effect of. . . a disclaimer in an employee handbook," the Eighth Circuit attempted to "predict the result the Minnesota Supreme Court would reach on this issue." Id. Citing the dictum in Feges and our holdings in Audette and Michaelson, the Eighth Circuit concluded that "the Minnesota Supreme Court would hold that a disclaimer prevents an employee from claiming contractual rights under an employee handbook even when other provisions of the handbook are specific and unequivocal." Id. at 349; see also Ewald v. Wal-Mart Stores, Inc., 139 F.3d 619, 622 (8th Cir. 1998) (citing Michaelson for rule that "employer's disclaimer of intent to form a contract in a handbook will prevent it from being construed as an offer"); McGraw v. Sears, Roebuck Co., 21 F. Supp. 2d 1017, 1021-22 (D. Minn. 1998) (applying Miller to hold that disclaimer precludes contract formation).
Both the November 2001 policy manual and the April 2006 policy manual contain disclaimer language that is substantially similar to that in Audette. Specifically, section one of both policy manuals states: "The[se] provisions do not establish terms and shall not be construed as contractual provisions." This language clearly and effectively indicates the city's intent to avoid creating an employment contract on the terms contained therein, thereby precluding contract formation. See Audette, 436 N.W.2d at 127. Because a contract was not formed, Le's at-will employment status was not altered by the policies contained in the city's policy manual.
We reject Le's contention that the city's clear intent to create a for-cause employment contract on the terms contained in the April 2006 policy manual is evident from the former city manager's affidavit, in which he avers: "I. . . clearly intended to create/reinforce a contract or property right with the full-time and regular part-time benefit-earning employees, particularly those not covered by a collective bargaining agreement" because the existence of an offer to form a unilateral contract is "determined by the outward manifestations of the parties, not by their subjective intentions." Pine River, 333 N.W.2d at 626. Le's argument that the for-cause language added to the April 2006 policy manual negates the disclaimer in the November 2001 policy manual also is unavailing. Because a modification of existing policies constitutes an offer for a new unilateral contract, Brookshaw, 381 N.W.2d at 36, and the April 2006 policy manual contains both the for-cause language and the disclaimer, the disclaimer prevents the formation of a unilateral contract.
Le was an at-will employee when the city terminated her employment. Accordingly, the city acted within its authority to terminate her for any reason. See Randall, 519 N.W.2d at 459; see also Reierson, 628 N.W.2d at 204 (city may terminate at-will employee for any reason or no reason at all).
III.
Le also argues that the city violated her right to procedural due process when it terminated her employment without just cause and failed to give her a name-clearing hearing.
The United States and Minnesota constitutions forbid a state to "deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV; Minn. Const. art. I, § 7. To establish the existence of a procedural-due-process violation, one must demonstrate that she has a property or liberty interest and that the government deprived her of that interest. See Mathews v. Eldridge, 424 U.S. 319, 332, 96 S. Ct. 893, 901 (1976) (holding that procedural due process constrains only government decisions depriving individuals of interests protected under due-process clauses of federal constitution). Without a protected interest, the government has no constitutional obligation to provide due process. Phillips v. State, 725 N.W.2d 778, 782-83 (Minn.App. 2007) (citing Singleton v. Cecil, 155 F.3d 983, 987 (8th Cir. 1998)), review denied (Minn. Mar. 28, 2007).
Le argues that she was entitled to due process because she had a property interest in her employment with the city. But Minnesota courts have held that an at-will employee does not have a property interest in continued employment. Rutherford v. County of Kandiyohi, 449 N.W.2d 457, 460 n. 1 (Minn.App. 1989), review denied (Minn. Feb. 28, 1990). Le, an at-will employee, did not have a property interest in continued employment and, therefore, was not entitled to due process before the city terminated her employment. Le also argues that the city violated her right to due process when it failed to comply with its own grievance procedures. But an employer's "failure to follow its procedural rules and regulations does not, by itself, give rise to a protected property or liberty interest." Phillips, 725 N.W.2d at 783 (citing Batra v. Bd. of Regents, 79 F.3d 717, 720 (8th Cir. 1996)).
Finally, Le argues that she has a "constitutionally protected liberty interest in her good name" and that the city deprived her of that interest when, during open city-council meetings, it accused her of engaging in dishonesty and deception. "A person's liberty interest in continued employment may be implicated when [her] `good name, reputation, honor, or integrity is at stake' because of government action that `impose[s] on [her] a stigma or other disability that foreclose[s] [her] freedom to take advantage of other employment opportunities.'" Phillips, 725 N.W.2d at 784 (quoting Bd. of Regents v. Roth, 408 U.S. 564, 573, 92 S. Ct. 2701, 2707 (1972)). To demonstrate a violation of a liberty interest, one must establish that the reasons for the employer's termination decision were stigmatizing and that the employer made these reasons public. Id. (citing Bishop v. Wood, 426 U.S. 341, 348-49, 96 S. Ct. 2074, 2079-80 (1976)). A person whose liberty interest has been violated by the publication of stigmatizing information is entitled to due process in the form of a name-clearing hearing. Washington v. Indep. Sch. Dist. No. 625, St. Paul Pub. Sch., 590 N.W.2d 655, 659 (Minn.App. 1999) ("Where a person's liberty interests are at stake, that person is entitled to notice and an opportunity to be heard."); Schleck v. Ramsey County, 939 F.2d 638, 642 (8th Cir. 1991) ("A public employee has the right to a name-clearing hearing at a meaningful time if [her] termination is accompanied by publication of stigmatizing reasons for [her] termination that might impair future employment opportunities.").
Because the guarantees of due process are the same under both the United States and Minnesota constitutions, we may look to federal law when analyzing a due-process claim. Humenansky v. Minn. Bd. of Med. Exam'rs, 525 N.W.2d 559, 565 (Minn.App. 1994), review denied (Minn. Feb. 14, 1995).
Even if we assume that the reasons for the city's termination decision are stigmatizing, Le has not cited any record or non-record evidence to support her allegation that the city made these reasons public. See City of Bloomington v. City of Burnsville, 666 N.W.2d 414, 419 (Minn.App. 2003) (holding that under certain circumstances, reviewing court may consider evidence outside administrative record); see also Minn. R. Civ. App. P. 110.05 (stating that "[i]f anything material to either party is omitted from the record by error or accident or is misstated in it," reviewing court may grant a party's motion to correct omission or misstatement). Therefore, based on the evidence before us, we are unable to conclude that the city made its reasons for terminating Le public. Consequently, the facts and information before us do not establish a basis for us to conclude that Le's liberty interests were violated so as to warrant a name-clearing hearing.
Affirmed; motion denied.