Due Process Rights of Public Employees upon Termination

Public employers hope that every new employee they hire will be a good fit in their office. And they expect that all of their current employees will continue to serve the mission of the office effectively and cooperatively. Sometimes it works out that way and sometimes it doesn’t.

Occasionally, employers find that some employees either cannot or will not perform the work that they were hired to do. When counseling fails, discipline in the form of a reprimand, suspension, demotion, or termination may follow. But when facing these types of actions, public employees often have rights and remedies generally not available to private sector employees. This article briefly discusses (1) the rights and remedies that employees have when working in the private sector, (2) the additional rights and remedies typically enjoyed by public employees, (3) the impact of the “due process” clause on public sector employers and employees, and (4) forms of recovery available to public sector employees.

The Private Sector

The default rule in the United States is that employees of private employers are "at-will" employees. The pure at-will rule holds that, absent some type of applicable employment contract or collective bargaining agreement (CBA), employees in the private sector can generally be fired for a good reason, a bad reason, or no reason at all with no warning.

But that rule is modified in most states that have adopted a "public policy" exception, which rewords the rule to state that an employee can be fired for "any reason or no reason as long as it is not an illegal reason." An illegal reason is usually a reason barred by statute, such as a prohibited discriminatory or retaliatory action. An example of a prohibited retaliatory action would be the firing of an employee who acted as a whistleblower, who refused to lie under oath for the employer, or who filed for workers' compensation.

Some states have adopted an "implied contract" exception to the general rule, which recognizes that an employee manual (with organizational policies related to employment), or promises to an employee, may be construed as a contract. A few states recognize a "covenant of good faith" exception, which provides that an employer may only terminate employees for "just cause," also known as "good cause," even though no employee manual or written promise gives that assurance.

Most private sector employees have no remedy when terminated if their termination did not violate a statute or some recognized public policy exception to the general rule of at-will employment. The few private sector employees who have an individual employment contract may seek to enforce the terms of that contract in state court should they be terminated. Usually though, only high-ranking executives will have these types of contracts, which often provide that the employee cannot be terminated without just cause and may provide a substantial severance package. Those employees who do not have an individual contract may attempt to assert that their employee manual was a contract or that they were given some type of oral or written assurance that they would not be terminated absent just cause; however, these cases are difficult for employees to prove.

Private sector employees who are members of a union will usually have a CBA that requires some type of hearing before a termination and possibly the right to arbitration. But in 2019, only about six percent (about 7.1 million) of private employees were unionized, compared to about 33 percent (about 7.5 million) of public sector employees.

The Public Sector

Like private sector employees, public sector employees are assumed to be at-will employees. But there are often statutes, regulations or ordinances that give public sector employees (with the typical exception of probationary and upper-management employees) multiple rights protecting them from being suspended or terminated without just cause. Rights may be created by laws such as civil service acts, merit board statutes, school codes, and police and fire board ordinances. In addition, government bodies, similar to private employers, may adopt personnel codes, issue employee handbooks, or enter into contracts with individual employees.

As in the private sector, public sector employees may seek to protect their positions by forming unions and negotiating CBAs. These CBAs usually contain detailed “pre-disciplinary” procedures that an employer must follow before suspending or terminating an employee. In addition, CBAs typically afford an employee a “post-disciplinary” opportunity to grieve the suspension or termination through multiple steps up to and including arbitration.

Normally, in order to establish just cause to terminate an employee, a public employer must establish that the employee engaged in some type of misconduct or failed to perform his job adequately despite warnings. The employer also may have to demonstrate that it engaged in progressive discipline before terminating an employee.

Due Process

The most significant difference between the rights of private and public employees stems from the application to public employment of the due process clause, contained in both the Fifth and Fourteenth Amendments. This clause provides that the government may not deprive individuals of "life, liberty, or property, without due process of law."

When these amendments were adopted, it is likely that Congress construed property to be land, buildings or money -- not government jobs. As one judge observed, "There is no basis for thinking that the framers of the Fourteenth Amendment, in applying the due process clause of the Fifth Amendment verbatim to state action, wanted to give 'property' a brand new meaning." In fact, in 1950, the Court of Appeals for the District of Columbia Circuit stated thus:

It has been held repeatedly and consistently that Government employ is not "property" and that in this particular it is not a contract. We are unable to perceive how it could be held to be "liberty". Certainly, it is not "life". So much that is clear would seem to dispose of the point. In terms the due process clause does not apply to the holding of a Government office.

But courts later rejected the concept that constitutional rights turn upon whether a governmental benefit is characterized as a "right" or as a "privilege." In 1972, the Supreme Court observed in Board of Regents v. Roth that it was clear "that the property interests protected by procedural due process extend well beyond actual ownership of real estate, chattels, or money," and that an employee could have a property right in his position (although it ultimately found that Phillip Roth did not have such a right).

The Roth Court clarified that the Fourteenth Amendment itself did not convey any rights to public employees. Rather, "[t]he Fourteenth Amendment's procedural protection of property is a safeguard of the security of interests that a person has already acquired in specific benefits. These interests — property interests — may take many forms." Employees may acquire these property interests from the statutes, regulations, codes, contracts or personnel manuals mentioned above -- if they provide that an employee has a right to some type of due process before being deprived of a government position. "To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it."

The Court went on the clarify that

[p]roperty interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law -- rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.

Legitimate and reasonable reliance on a promise from the state can be the source of property rights protected under the due process clause.

The Roth Court also acknowledged that an employee might have a liberty interest that could be impacted by a termination by a public employer. If a public employer makes public comments impugning a terminated employee's good name, honor or reputation that so stigmatize the employee that he is unable to find other work in his field, an occupational-liberty claim may arise. Ineligibility for employment in a sector of the economy is of sufficient significance to be characterized as a deprivation of an interest in liberty.

While defamation is a tort actionable under the laws of most states, it alone is not a constitutional deprivation. In other words, an employee's interest in his good reputation is not, by itself, a constitutionally protected liberty interest — but an employee's liberty to pursue a chosen occupation may be impaired by an employer's published negative comments about that employee post-termination.

However, if the reasons for a termination are not made public, that termination cannot properly form the basis for a claim that the petitioner's interest in his "good name, reputation, honor, or integrity" was impaired. That is true even if the reasons for a termination are not valid. The "truth or falsity of a manager's privately communicated reasons for termination neither enhance nor diminish an employee's claim that his constitutionally protected interest in liberty has been impaired." What is important is what information is publicly communicated.

If an employee has stated the necessary elements of a claim of stigmatization, the due process clause requires that the employee be given an opportunity to refute the charge. "The purpose of such notice and hearing is to provide the person an opportunity to clear his name."

So, if it is clear that employees have a property or liberty right in their position that could be impaired by a termination, the next questions become thus:

1. What type of process is due?
2. When is it due?

Type of Due Process

Once it is determined that the due process clause applies, "the question remains what process is due."

Courts have not provided any firm rules but rather have generally stated that "[d]ue process is flexible and calls for such procedural protections as the particular situation demands." Factors that must be considered include (1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used; (3) the probable value, if any, of additional or substitute procedural safeguards; and, finally, (4) the government's interest, including the administrative and fiscal burdens that any additional or substitute procedural requirement would impose. The type of process due may vary according to the applicable ordinance, statute or codes. It also may vary according to the position held by the employee and what type of deprivation is contemplated (suspension, demotion, termination or other adverse action).

But the Supreme Court has rejected the "bitter with the sweet" rule, which had held that if a statute or code conveyed a property right in employment, that same statute or code could dictate what type of due process, however little, would have to be provided in order to take away that property right. Instead, courts have determined that there is at least a minimum level of due process that must be provided in order to deprive an employee of an existing property right in his position. The type of process that is due will depend upon whether a pre-disciplinary or post-disciplinary hearing is conducted. These hearings may alternatively be referred to as "pre-deprivation" or "post-deprivation" hearings.

Provision of Due Process: Pre-Deprivation Hearings

Most statutes, codes and ordinances provide that, absent an emergency, a public employee must be given some type of hearing before being suspended or terminated. This is often referred to as a Loudermill hearing. In Cleveland Board of Education v. Loudermill, the Supreme Court stated that "[w]e have described 'the root requirement' of the Due Process Clause as being 'that an individual be given an opportunity for a hearing before he is deprived of any significant property interest,'" and that "some kind of a hearing" must be provided "prior to the discharge of an employee who has a constitutionally protected property interest in his employment."

This pre-deprivation hearing does not need to be elaborate and can be "something less" than a full evidentiary hearing. The reason for this type of hearing is to ensure that a public employee is not deprived of a property or liberty right without that employee being given at least an informal opportunity to refute the reasons for his suspension or termination and possibly convince the employer that the reasons are unfounded.

When a public employer perceives a significant hazard in keeping the employee on the job, it can avoid the problem of trying to immediately conduct a pre-disciplinary hearing by suspending the employee with pay until a full hearing can be conducted. But the Supreme Court has rejected the notion that an employer must always suspend with pay if it cannot conduct a hearing right away. When an employee faces only a temporary suspension without pay, a pre-deprivation hearing may not be constitutionally required if the suspended employee receives a sufficiently prompt post-suspension hearing.

In addition, "in an instance where an employee is suspended due to committing a crime, the arrest and filing of charges may well suffice to provide the necessary reasonable grounds, making a separate pre-deprivation hearing unnecessary." Instead, the employer may suspend without pay immediately. As the Supreme Court noted, "the government does not have to give an employee charged with a felony a paid leave at taxpayer expense."

But these decisions should be read with caution. While they indicate that the Constitution may not require a pre-deprivation hearing for a suspension, an applicable statute or code may provide that an employee is entitled to one. In those instances, a public employer should not dispense with the pre-deprivation hearing.

Provision of Due Process: Post-Deprivation Hearings

If the pre-deprivation hearing does not provide a public employee with a full opportunity to present testimony, tender evidence and question the employer's evidence, a public employer must later provide that employee with a more complete post-deprivation hearing.

The Loudermill Court recognized that an employee's constitutional rights could be violated if his post-termination hearing was not held in a timely manner. The Court held that the due process clause requires holding a hearing "at a meaningful time" and that at some point a delay in the post-termination hearing would become a constitutional violation. But the Court held that the alleged nine months it took to adjudicate James Loudermill's termination was not "unconstitutionally lengthy per se."

In Federal Deposit Insurance Corp. v. Mallen, the Supreme Court observed that the significance of a delay in the post-suspension hearing "cannot be evaluated in a vacuum." The Court held that "[i]n determining how long a delay is justified in affording a post-suspension hearing and decision," it would be "appropriate to examine the importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the Government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken."  

Forms of Recovery Open to Public Employees

Generally, if public employees want to appeal their suspension or termination, there are two routes that they may follow, depending upon whether they are unionized or not.

Unionized employees often will have CBAs that (1) require pre-disciplinary hearings prior to suspension or termination and (2) allow post-disciplinary grievances that permit those employees to grieve their suspensions or terminations up to and including independent arbitration. State law would determine if those arbitration decisions may be appealed to state court but may well limit such appeals to only those situations where the arbitrator’s decision violates public policy.

As for nonunionized employees, public employers will likely have disciplinary procedures, created by statute, ordinance or personnel codes, applicable to those who have a property right in their positions. Normally, the imposed discipline may be appealed to some type of independent board. Depending upon the applicable statutory framework, the decisions of these boards may be appealed to state court under an administrative review law or a common law writ of certiorari.

In addition, terminated public employees may file with administrative agencies or in state courts all of the types of claims that terminated private sector employees may file. These would include discrimination claims, contract claims, and tort claims such as intentional infliction of emotional distress or intentional interference with contract.

Public employees also may file suit in federal court under 42 U.S.C. § 1983. This is because public employees may allege that their employer violated the Fifth or Fourteenth Amendment because it denied them a property right or liberty right without due process. Plus, the state claims enumerated above may be added as pendant claims.

Conclusion

While public sector and private sector employees enjoy many of the same rights and remedies, public sector employees have additional rights and remedies because courts have held that public employment may be a “property right” under the due process clause. Therefore, assuming that an employee has a property right in his position, an employer must exercise care to provide appropriate pre- and post-discipline due process before suspending or terminating that employee. While a claim alleging a denial of liberty without due process is much less common than a property right claim, public employers also should take care to not publicly disparage a terminated employee because stigmatizing comments may give rise to a liberty claim. In any instance, public employees would be wise to consult with counsel to fully understand their rights and possible remedies.