Ayers v. Currituck Cnty. Dep't of Soc. Servs.

279 N.C.App. 514

866 S.E.2d 785

Judith M. AYERS, Petitioner,

v.CURRITUCK COUNTY DEPARTMENT OF SOCIAL SERVICES, Respondent.

No. COA20-464

Court of Appeals of North Carolina.

Filed October 5, 2021

Hornthal, Riley, Ellis, & Maland, L.L.P., Elizabeth City, by John D. Leidy, for petitioner-appellee.

The Twiford Law Firm, P.C., Elizabeth City, by John S. Morrison, for respondent-appellant.

MURPHY, Judge.

¶ 1 When a party challenges findings of fact and conclusions of law in an administrative law judge's ("ALJ") order reviewing discipline of a career State employee, we conduct a whole record test to determine whether substantial evidence supported the findings of fact and review the challenged conclusions of law de novo. When determining whether an agency had just cause for the disciplinary action taken against a career State employee, we must evaluate: (1) whether the employee engaged in the conduct the employer alleges; (2) whether the employee's conduct qualifies as unacceptable personal conduct under the North Carolina Administrative Code; and (3) whether that employee's misconduct amounted to just cause for the disciplinary action taken. See Warren v. N.C. Dep't. of Crime Control & Pub. Safety , 221 N.C. App. 376, 382-83, 726 S.E.2d 920, 925, disc. rev. denied , 366 N.C. 408, 735 S.E.2d 175 (2012).

¶ 2 However, when the Record shows an agency failed to consider a necessary factor in determining appropriate disciplinary action to take against a career State employee, resulting in the agency's failure to fully exercise its discretionary review under Wetherington v. N.C. Dep't of Pub. Safety , the ALJ must remand to the agency for an investigation that considers each required factor. Without the agency's full consideration of all factors, we cannot conduct an adequate de novo review on appeal. See Wetherington v. N.C. Dep't of Pub. Safety , 368 N.C. 583, 592, 780 S.E.2d 543, 548 (2015) (" Wetherington I "). Here, the agency failed to consider a required factor under Wetherington I –resulting harm from the career State employee's unacceptable personal conduct–in its decision to terminate the career State employee, and the administrative law judge failed to remand this matter to the agency for a complete investigation and consideration of the required factor.

BACKGROUND

¶ 3 Respondent-Appellant Currituck County Department of Social Services ("DSS" or "the agency") brings its second appeal in this case. While facts from this case are set out in the original appeal, Ayers v. Currituck Cty. Dep't of Soc. Servs. , 267 N.C. App. 513, 514-17, 833 S.E.2d 649, 651-53 (2019) (" Ayers I "), we include a recitation of "the facts and procedural history relevant to the issues currently before us." Premier, Inc. v. Peterson , 255 N.C. App. 347, 348, 804 S.E.2d 599, 601 (2017).

A. Prior to Incident

¶ 4 Petitioner-Appellee Judith Ayers had been employed with DSS from 2007 until the incident in 2017. Ayers was the supervisor for the Child Protective Services Unit at DSS who reported directly to the DSS Director. Neither party contests that Ayers was a career State employee.¹

¶ 5 Ayers consistently received positive work performance reviews and had never been disciplined as a DSS employee before the incident occurred. Until 30 June 2017, her boss was the DSS Director, Kathy Romm, who had hired Ayers; Romm had asked Ayers whether she wanted to take her position upon Romm's retirement. Ayers declined to pursue the position, and Romm hired another DSS employee, Samantha Hurd. Both Ayers and Hurd are Caucasian women.

¶ 6 Prior to Hurd's promotion, she supervised DSS's Foster Care Unit, and she and Ayers had a history of disagreements and conflict in their roles. The disagreements and conflict continued after Hurd's promotion.

B. Incident

¶ 7 On 3 November 2017, Hurd asked Ayers about a racial demarcation–"NR"–that a social worker had included on a client intake form; Hurd did not recognize the demarcation, asked Ayers what it stood for multiple times, and Ayers responded with a racial epithet. Ayers claimed she said "nigra rican," while Hurd claimed Ayers said "[n-----] rican" ("the N word"). According to testimony from Hurd and Ayers, Ayers initially laughed about the comment, but became apologetic and embarrassed soon afterward. After investigation, Hurd and Ayers discovered the client referred to on the form was Caucasian.

C. Disciplinary Action

¶ 8 The incident occurred on Friday, 3 November 2017, and Hurd conferred with DSS's counsel over the following weekend. After receiving guidance, Hurd applied a twelve-factor test, derived from a guide for North Carolina public employers published by the University of North Carolina at Chapel Hill Institute of Government, to Ayers's comment and instituted disciplinary proceedings against her on Monday, 6 November 2017. The twelve-factor test² included the following considerations:

1. The nature and the seriousness of the offense and its relation to the employee's duties, position, and responsibilities, including whether the offense was intentional or technical or inadvertent, was committed maliciously or for gain, or was frequently repeated.

2. The employee's job level and type of employment, including supervisory or fiduciary role, contacts with the public, and prominence of the position.

3. The employee's past disciplinary record.

4. The employee's past work record, including length of service, performance on the job, ability to get along with fellow workers and dependability.

5. The effect of the offense upon the employee's ability to perform at a satisfactory level and its effect upon [the] supervisor's confidence in the employee's ability to perform assigned duties.

6. The consistency of the penalty with those imposed[ ] upon other employees for the same or similar offenses.

7. The impact of the penalty upon the reputation of the agency[.]

8. The notoriety of the offense or its impact upon the reputation of the agency.

9. The clarity with which the employee was aware of any rules that were violated in committing the offense or had been warned about the conduct in question.

10. The potential for the employee's rehabilitation.

11. The presence of mitigating circumstances surrounding the offense such as unusual job tension; personality problems[;] mental impairment ; harassment; or bad faith, malice or provocation on the part of others involved in the matter.

12. The adequacy and the effectiveness of alternative sanctions to deter such conduct in the future by the employee or others.

¶ 9 After meeting with Ayers, Hurd placed her on investigatory status with pay, and subsequently terminated her employment with DSS; Ayers appealed, and Hurd affirmed her decision. Ayers filed a Petition for a Contested Case Hearing with the Office of Administrative Hearings.

D. 13 June 2018 ALJ Decision

¶ 10 An ALJ held a contested case hearing on 19 April 2018 and reversed Hurd's termination decision in a Final Decision filed 13 June 2018 ("First ALJ Order"). Findings of Fact 23 and 47 in the First ALJ Order described Ayers's and Hurd's different recollections of the word Ayers used, but the First ALJ Order also included the word "negra-rican," which was a third variation of the word. A fourth variation, "negro-rican," appeared in Conclusion of Law 13. The ALJ applied the three-prong test from Warren , determined the first prong of "whether the employee engaged in the conduct the employer alleges[,]" was not met in light of the disagreements on verbiage, and reversed Hurd's termination of Ayers. See Warren , 221 N.C. App. at 382-83, 726 S.E.2d at 925. DSS appealed the First ALJ Order.

E. Ayers I

¶ 11 In an opinion filed 1 October 2019, we vacated and remanded the First ALJ Order. Ayers I , 267 N.C. App. at 513, 833 S.E.2d at 649. We noted Finding of Fact 23 from the First ALJ Order, which included a third and incorrect variation of the word used when describing the disagreement on epithet verbiage between Ayers and Hurd, was the "critical finding driving the ALJ's analysis" in its reversal of Hurd's termination decision. Id. at 523, 833 S.E.2d at 656. We found,

the ALJ's [f]inding is not supported by the evidence in the Record[, particularly Ayers's own testimony]. It is then apparent the ALJ carried out the remainder of its analysis under the misapprehension of the exact phrase used and that the ALJ's understanding of the exact phrase used was central to both the rest of the ALJ's [f]indings and its [c]onclusions of [l]aw. Therefore, we vacate the [First ALJ Order] in its entirety and remand this matter for the ALJ to reconsider its factual findings in light of the evidence of record and to make new conclusions based upon those factual findings.

Id. at 524, 833 S.E.2d at 656-57. In addition to noting "the ALJ's conclusions and considerations of the ‘totality of the circumstances’ were also grounded in its misapprehension of the evidentiary record[,]" we held either " ‘n----- rican’ or the variant ‘nigra rican’ " "constitute[d] a racial epithet[,]" and DSS "met its initial burden of proving [Ayers] engaged in the conduct alleged under Warren ." Id. at 525-26, 833 S.E.2d at 657-58. In vacating the First ALJ Order, we instructed the ALJ to "make new findings of fact supported by the evidence in the record and continue its analysis under Warren of whether [Ayers] engaged in unacceptable conduct constituting just cause for her dismissal or for the imposition of other discipline." Id. at 526-27, 833 S.E.2d at 658.³

F. ALJ Decision on Remand

¶ 12 On remand, the ALJ entered its Final Decision on Remand ("Second ALJ Order") on 5 May 2020, made additional findings of fact and conclusions of law, applied the three-prong Warren test, and reversed DSS's termination of Ayers. The ALJ decided the first two prongs of the Warren test–Ayers engaging in the conduct alleged and the conduct constituting unacceptable personal conduct–were met. Ayers, as the appellee, does not contest that decision. However, the ALJ concluded the third prong of the War...