City Council of Laramie v. Kreiling

Page 1037

911 P.2d 1037

CITY COUNCIL OF LARAMIE, Wyoming, Appellant (Defendant), v. Kirk KREILING, Appellee (Plaintiff).

No. 95-170.

Supreme Court of Wyoming.

Feb. 20, 1996.

Alan B. Minier and Andrea L. Richard of Rothgerber, Appel, Powers & Johnson, Cheyenne, for appellant.

Mary Elizabeth Galvan, Tracy L. Zubrod and Linda S. Basom of Mary Elizabeth Galvan, P.C.; and Mary J. Chinnock, Laramie, for appellee.

Before GOLDEN, C.J., and THOMAS, MACY, TAYLOR, and LEHMAN, JJ.

GOLDEN, Chief Justice.

Appellant City Council of Laramie (Laramie) appeals a bench trial verdict awarding police officer Kreiling (Kreiling) damages pursuant to 42 U.S.C. § 1983 and reinstatement.

We reverse.

ISSUES

Appellant states these issues:

I. "Promotional Procedures" are not a property interest protected by the United States Constitution or actionable under 42 U.S.C. § 1983.

II. The District Court improperly limited the City's statutory and legislative authority to set employee salaries.

III. The District Court erred in concluding that the City breached its implied contract with Kreiling.

Appellee presents these issues:

I. The District Court's conclusion that Officer Kreiling had a contractually protected interest in promotion through the Patrolman I, II and III ranks and in the grievance procedures of the Personnel Rules is supported by the overwhelming weight of the evidence, and clear principles of contract law.

II. The Personnel Rules provide an independent source of mutually explicit "rules or understandings" underlying Officer Kreiling's protected property interest in Appellant's promotional procedures and their attendant benefits which were, as the District Court found, based on competent evidence, arbitrarily undermined by the application of the 1990 reclassification to Officer Kreiling's status as an employee.

III. The District Court did not limit Appellant's statutory or legislatively granted authority to set employees' salaries by holding Appellant to its constitutional and contractual obligations to its employees in implementing such reclassification.

FACTS

For economic reasons, the City of Laramie amended its pay plan for patrol officers in the police department in 1990. Patrolman Kreiling claimed that the amendment as applied to him deprived him of contractual rights and he filed a grievance. The city manager of Laramie determined that the personnel rules did not permit a grievance hearing against a pay plan amendment and denied Kreiling's request for a hearing. Kreiling filed suit alleging breach of contract, promissory estoppel, and violations of federal procedural due process, substantive due process, and equal protection. Only the breach of contract and federal procedural and substantive due process claims survived pretrial motions and Kreiling does not appeal those pretrial decisions.

The due process claims arose from an asserted property interest in Kreiling's government employment. Kreiling relied on Wyoming's state civil service statutes, the City of Laramie Personnel Rules, the police department's General Order 89-3, and an employment contract between himself and the police department as the basis for his asserted property interest. That reliance necessitates that we understand the applicable provisions of those statutes, rules and policies, and the contract.

State Statutes

In Wyoming, the governing body of all cities and towns may establish and regulate a police department, pass ordinances relating to the department and adopt job descriptions for all department personnel. WYO.STAT. § 15-1-103(a)(xxxiv) (1992). In accordance with Wyoming's civil service statutes, Laramie has established a police commission to employ and promote only those candidates the commission rules eligible by virtue of merit and experience. WYO.STAT. §§ 15-5-102, -105, -119 (1992). WYO.STAT. § 15-5-106(a) (1992) sets out the respective responsibilities of the commission and the city regarding position classifications:

(a) The commissions shall classify the various positions in the departments into classes or schedules based upon the nature of the service to be rendered or duties to be performed. The governing body shall then establish uniform working hours and wages for all employees in each class or schedule and may regulate the rate of wages and the number of employees in any class or schedule as necessary....

See also WYO.STAT. § 15-5-119(a)(i)(A) (1992). WYO.STAT. § 15-5-112(b) (1992) provides for discharge or reduction in pay or rank only upon cause and after notice and an opportunity to respond unless the action is pursuant to a classification program under WYO.STAT. § 15-5-106 (1992).

Under state statutes, the city manager controls and manages the police department. WYO.STAT. § 15-4-206(a) (1992). Although the city manager has further powers regarding other city employees, see WYO.STAT. §§ 15-4-202(g), -206(b) (1992), the state statutes treat police officers differently and vests most powers with the police commission, if established, and the city council. WYO.STAT. § 15-5-101 to -121 (1992).

City of Laramie Police Department Civil Service Rules

These rules establish the Police Department Civil Service Commission. As directed by statute, the commission has organized positions in the police department into two classes: patrol officer and lieutenant. Other non-classified positions are established by the city council. City of Laramie Police Department Civil Service Rules, Chapter VI. Chapters V through XVI of the rules set out eligibility, employment, promotion, and discharge procedures.

City of Laramie Personnel Rules

As permitted by the state statute, Laramie has promulgated a handbook of personnel rules applicable to all classified employees and administered by the city manager. City of Laramie Personnel Rules, §§ 1.22, 2.31. Police officers classified as patrol officers or lieutenants are classified employees under the personnel rules and subject to those rules. Id. at § 1.22. Section 1.27 permits a department head to promulgate rules which are consistent with the personnel rules.

In accordance with the civil service statute, the rules require that positions be classified on the basis of the kind and level of their duties and responsibilities and all positions within a class must be sufficiently alike to permit use of the same job description, the same qualifications, and the same pay scale. Id. at § 3.11. The rules further provide that the city manager may revise the classification plan by adding, abolishing, consolidating, dividing, or amending existing classes. Id. at § 3.31. In addressing compensation, the rules state that there shall be salary ranges and those salary ranges shall be linked to the position-classification plan and shall be determined with due regard to ranges of pay for other classes, requisite qualifications, and other factors. Id. at § 4.12. The pay plan may be amended from time to time by the city council on its own initiative or on recommendations by the city manager, either through adjustment of rates or by reassignment of job classes to different pay ranges. Id. at § 4.13. Deviation from the pay plan for a new hire is permitted if the city manager deems it necessary to recognize exceptional qualifications of an applicant or if there are no available applicants at the minimum rate. Id. at § 4.21. The rules state that an employee's grade may be reduced as a consequence of reclassification of his position. Id. at § 11.51.

The rules also provide for six kinds of disciplinary action for a list of specified conduct constituting unsatisfactory performance. Id. at §§ 12.12, 12.22. Written notice and an opportunity to be heard is required before dismissal. Id. at § 12.42. However, the city has reserved the right for summary dismissal. Id. at § 13.51. The rules also reserve the city's right to abolish positions or conduct a reduction-in-force, id. at § 13.31, subject to a scheme which any employee laid off may utilize to retain employment. Id. at §§ 13.3-13.35.

Finally, grievance procedures and appeal procedures are set out at length in Section 14; however, the procedures are separate and distinct. Id. at §§ 14.1-14.48. Sections 14.11 through 14.14 assure classified employees that all grievances will be promptly considered by the department head who shall report the grievance to the city manager. Id. at § 14.12. The city manager is charged with the responsibility of determining if the grievance has been settled to the satisfaction of the employee and, if not, the employee may request the city manager to investigate or the city manager may initiate an investigation of his own. Id. at § 14.13. In case an agreement is not reached with the city manager, the employee may ask for a hearing of his grievance before the personnel board. Id. at § 14.14.

Although grievances are not limited to specified subjects, an appeal is confined to disciplinary actions, id. at § 14.21, specified as

reduction-in-grade, a suspension of more than ten (10) calendar days, a dismissal, and any other actions affecting the status of the employee, on the grounds that the action or decision complained of resulted from one or both of the following factors:

(a) Failure to observe or correctly apply the provisions of these rules or the terms of his appointment.

(b) Incomplete consideration of the facts.

Id. at § 14.41.

Pay Classification System

Since 1987, the Laramie City Council has operated a pay classification system which provided salary increases to police officers based upon time in service and satisfactory performance. Under that pay classification system, an entry level police officer was classified as a Patrolman I, Grade 15, Step A. Upon successful completion of a six month probationary period, the officer's pay increased to that of Grade 15, Step B. Thereafter, the officer's pay increased every twelve months through Steps C, D, and E if performance was satisfactory. An officer's progression continued at twelve...