Cole v. N.C. Dep't of Pub. Safety

253 N.C.App. 270

800 S.E.2d 708

Randall COLE, Petitioner,

v.NORTH CAROLINA DEPARTMENT OF PUBLIC SAFETY, Respondent.

No. COA16-340

Court of Appeals of North Carolina.

Filed: May 2, 2017

John C. Hunter, Asheville, for Petitioner.

Attorney General Joshua H. Stein, by Assistant Attorney General Tamika L. Henderson, for Respondent.

McGEE, Chief Judge.

The North Carolina Department of Public Safety ("Respondent") appeals from a final decision of the Office of Administrative Hearings ("OAH") concluding as a matter of law that Respondent lacked just cause to dismiss Randall Cole ("Petitioner") from his position as a laundry plant manager, and ordering that he be retroactively reinstated but demoted. We conclude Respondent had just cause to dismiss Petitioner and, therefore, reverse the final decision of OAH.

I. Background

Petitioner worked for Respondent as an assistant director of the Craggy Laundry facility from November 2003 until his promotion to the position of plant manager in December 2010. Upon his promotion to plant manager, a change of command audit ("the audit") was performed by Respondent. The audit is performed each time a new plant manager is hired, and serves as a "report of the condition of that particular facility under the prior management." The audit revealed that improvement was needed in some areas of the laundry facility, and "significant improvement" was needed in others. Petitioner’s direct supervisor, Ronald Young ("Young"), discussed the results of the audit with Petitioner at a 3 February 2011 meeting. Due to the magnitude of the problems, "Petitioner was told that a follow-up audit would be conducted to verify corrective action was implemented."

Young sent an email to Petitioner on 1 March 2011 reminding him that the problems that were found in the audit needed to be rectified. Although the problems had not been corrected by that time, Petitioner responded to Young and indicated that all of the issues had been corrected. The promised follow-up audit was conducted on 7 June 2011, and found that some of the issues identified in the audit had not been corrected. Due to these deficiencies, an unsatisfactory rating was entered into Petitioner’s employee appraisal, known as the appraisal process ("TAP") for July 2011. An "employee action plan" was issued to Petitioner on 24 August 2011, that directed him to correct "all violations set forth in [the audit]."

Sometime in November 2011, Young documented in Petitioner’s TAP that Petitioner had abated all of the audit violations identified in the 24 August 2011 employee action plan. The TAP stated in the "performance log" that "[a]ll violations noted in [the audit] have abated." Despite this notation in Petitioner’s TAP, Petitioner in fact had not abated all of the issues in the audit, and was issued a written warning for unsatisfactory job performance on 15 December 2011 (the "first written warning") for "not satisfactorily implementing or correcting actions prescribed on [the] action plan" issued 24 August 2011. The first written warning alerted Petitioner that he might "be subject to further discipline up to and including dismissal" if the problems were not corrected.

As a part of Petitioner’s promotion to plant manager, Petitioner was required to become certified as a Laundry Manager under the Association of Linen Management Program. Petitioner was aware of this requirement, and the requirement was documented in his work plans in 2010, 2011, and 2012. Petitioner was also issued an action plan on 21 December 2012 that gave him until 31 January 2013 to obtain the certification. Despite the deadline being extended at least twice, Petitioner failed to obtain the required certification, and was issued another written warning on 20 March 2013 (the "second written warning").¹

The second written warning notified Petitioner that if he failed to achieve his certification by 20 April 2013,² he would "receive further disciplinary action up to and including dismissal."

As a part of Petitioner’s job responsibilities as plant manager, he was required to reconcile receipts and send the information and invoices to a central office in Raleigh for payment. Petitioner was not fulfilling this job requirement and, in July 2013, Young reached out to Petitioner to inquire why the receipts and invoices were not being properly forwarded. Petitioner told Young that he would complete this task; however, he never did. As a result, Petitioner received a written warning for unsatisfactory job performance related to his failure to perform this task, as well as his failure to correct issues found in an audit conducted 15 August 2013 (the "third written warning"). The third written warning advised Petitioner that he was expected to take "immediate corrective measures" or be subjected to "further disciplinary action up to and including dismissal." Shortly after the third written warning was issued, a semi-annual safety inspection of the Craggy Laundry Facility was conducted and several violations were found, including failures to maintain safety reports and properly train staff on safety programs.

Karen Brown, the Director of Correction Enterprises and Young’s direct supervisor, "felt disciplinary action was warranted because of Plaintiff’s continued unsatisfactory job performance," and a pre-disciplinary conference was held with Petitioner. Following this conference, Petitioner was dismissed from his position for unsatisfactory job performance. Following his dismissal, Petitioner utilized Respondent’s internal appeal procedure, and a final agency decision affirmed his dismissal. Petitioner filed a petition for a contested case hearing with OAH on 3 April 2014, alleging he was dismissed from his position of employment without just cause. Petitioner voluntarily dismissed his petition 144 days later, on 25 August 2014. More than eleven months later, on 12 August 2015, Petitioner filed a second petition for a contested case hearing.

Respondent filed a motion to dismiss the second petition, arguing that N.C. Gen. Stat. § 1A-1, Rule 41(a)(1) is inapplicable to OAH proceedings and, therefore, a petition for a contested case hearing may not be voluntarily dismissed and refiled within one year. The Administrative Law Judge ("ALJ") assigned to the case ruled that " Rule 41 of the N.C. Rules of Civil Procedure applies to contested cases heard by [OAH]," and denied Respondent’s motion. The ALJ held a hearing on the merits of Petitioner’s claims. Following that hearing, the ALJ issued a final decision concluding as a matter of law that "[a]lthough just cause existed for terminating Petitioner, Respondent failed to meet its burden of proof that it did not act erroneously or fail to use proper procedure" in terminating Petitioner from his employment "because Petitioner did not have two active warnings at the time he was disciplined and terminated." According to the final decision, Respondent lacked just cause to terminate Petitioner but had "sufficiently proven that it had just cause to demote Petitioner based on his unsatisfactory job performance." Therefore, the ALJ ordered Petitioner retroactively reinstated but demoted to the position of assistant manager. Respondent appeals.

II. Analysis

Respondent argues the ALJ erred by: (1) denying Respondent’s motion to dismiss and concluding that N.C.G.S. § 1A-1, Rule 41(a)(1) applies to proceedings before OAH; (2) entering several findings of fact that were not supported by substantial evidence in the record; (3) concluding that Respondent lacked just cause to dismiss Petitioner for unsatisfactory job performance; and (4) imposing a lesser form of discipline rather than remanding the case to the employing agency to impose a new form of discipline.

A. Applicability of N.C.G.S. § 1A-1, Rule 41(a)(1) to OAH Proceedings

Respondent first argues the trial court erred in denying its motion to dismiss Petitioner’s second contested case petition. We review this argument de novo .

Dion v. Batten , ––– N.C.App. ––––, ––––, 790 S.E.2d 844, 851 (2016) (noting that this Court reviews issues of statutory interpretation de novo ). Respondent contends that N.C.G.S. § 1A-1, Rule 41(a)(1), that permits a voluntarily dismissed claim to be refiled within one year of such dismissal, does not apply to cases before OAH. We disagree. N.C.G.S. § 1A-1, Rule 41(a)(1) provides, in relevant part:

Subject to the provisions of Rule 23(c) and of any statute of this State, an action or any claim therein may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before the plaintiff rests his case[.] ... Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice[.] ... If an action commenced within the time prescribed therefor, or any claim therein, is dismissed without prejudice under this subsection, a new action based on the same claim may be commenced within one year after such dismissal unless a stipulation filed under (ii) of this subsection shall specify a shorter time.

N.C. Gen. Stat. § 1A-1, Rule 41(a)(1) (2015). We begin with the assumption that the Rules of Civil Procedure apply to contested case hearings as they do in the trial courts, unless a statute or administrative rule dictates otherwise: "The Rules of Civil Procedure as contained in G.S. 1A-1 ... shall apply in contested cases in the Office of Administrative Hearings (OAH) unless another specific statute or rule of the Office of Administrative Hearings provides otherwise." 26 NCAC 03 .0101(a) (2015) (emphasis added). Cases from this Court have interpreted N.C.G.S. § 1A-1, Rule 41(b) as applying to contested case hearings before OAH. See Scott v. N.C. Dep't of Crime Control & Pub. Safety , 222 N.C.App. 125, 730 S.E.2d 806 (2012) ; Lincoln v. N.C. Dep’t of Health & Human Servs. , 172 N.C.App 567, 616 S.E.2d 622 (2005).

Respondent contends that N.C.G.S. § 1A-1, Rule 41(a)(1) is inapplicable to contested case proceedings because it...