Lead Opinion
OPINION
This appeal presents the question of whether two police officers possess a property interest in their continued employment. The district court held that they do not. We hold that they do. We therefore REVERSE the judgment of the district court and REMAND this case for proceedings consistent with this opinion.
I.
A.
In 2002, Terry Freeze was hired by the City of Decherd’s (the City or Decherd) Police Department. He was promoted to Chief of Police in August of 2007. Earnest Colvin, Freeze’s brother-in-law, worked as a patrolman in Decherd beginning in November of 2007. The City’s Board of Mayor and Aldermen (the Board) is responsible for hiring and firing the City’s employees. During the events leading up to this case, the Board consisted of Mayor Betty Don Henshaw, Alderman Scott Moore, Alderman Johnny Etheridge, and Alderman Jeffrey Stratton.
Two meetings in 2009 provide most of the factual background for this case. The first came on February 25, 2009, when Alderman Moore met with Freeze and Alderman Etheridge to discuss a number of issues with the police department. Freeze testified that Alderman Moore convened the meeting; Moore testified that Freeze, in fact, requested the meeting. Either way, the meeting’s first order of business was a discussion about the proper procedure for buying dog food for the City’s police canine. Those present soon moved to a more serious topic, as Etheridge told Freeze that Mayor Henshaw did not care for Freeze’s wife. According to Freeze, the Aldermen told him that they “might need to just let [him] resign as the Chief and put [him] in as a sergeant at $15 an hour.” R. 26-1 at 9. Freeze indicated that he felt “outnumbered,” id. at 10, and told the Aldermen that “if it’s going to keep my job, yes, I will take a demotion,” id. at 11. Two days later, Moore told Freeze that he discussed the new employment arrangement with Mayor Henshaw, as well as with Aldermen Etheridge and Stratton. Soon thereafter, Freeze asked Mayor Henshaw “if it was going to be all right with her” if he took the demotion. Id. at 16. According to Freeze, she said it was and “that she went out on a limb to hire [him], anyway.” Id.
The parties met again on March 9, 2009, this time during a regularly scheduled open Board meeting. The meeting was eventful. Joseph Madden, another police officer for the City, was present. He nearly came to blows with a City employee over his suspension for an on-the-clock car accident. Neither Colvin, Freeze, nor several other officers present intervened to subdue Madden. After Madden was escorted from the meeting, the Board voted to terminate his employment. Colvin then became angry and accused Alderman Moore of lying about a harassment charge that Colvin had filed against him. Following this exchange, the Board voted to terminate the employment of Colvin and
Freeze and Colvin claim that, at the time of discharge, no grounds were given for their terminations, other than for the “betterment” of the city. R. 25-2 at 2; R. 25-3 at 2. They claim that the Board did not notify them that their terminations would be considered at the March 9, 2009 meeting. The meeting’s agenda made no reference to considering their terminations. For her part, Mayor Henshaw had no knowledge that their terminations were to be considered. The City admits that it did not provide Freeze and Colvin with written notice that their terminations would be considered at the March 2009 meeting. The City does claim, however, that it provided Freeze and Colvin with oral notice that “their general job performance may be discussed.” R. 25-5 at 2. Neither Freeze nor Colvin were provided an opportunity to present witnesses or evidence at the meeting, and the Board did not provide them with a hearing on the merits.
On March 12, 2009, Freeze requested a hearing before the Board. Mayor Hen-shaw denied the request in a letter dated March 23, 2009, explaining that “[t]he City does not conduct such a hearing.” R. 25-3 at 2. The separation notice regarding Freeze’s termination reads: “Action of city board to dismiss — No reason given.” R. 25-4 at 26-27. Mayor Henshaw later filed a document with the Tennessee Department of Labor and Workforce Development regarding Freeze’s separation. R. 33-6 at 62. As the “final incident that caused the discharge,” Mayor Henshaw wrote that the “Board felt that the De-cherd Police Department needed to go in a new direction.” Id. Mayor Henshaw also wrote that Freeze violated the Tennessee Uniform Purchasing Act. Id. The City now admits that Freeze did not violate the Tennessee Uniform Purchasing Act, as no such law exists.
B.
Two pieces of legislation that the City enacted prior to Freeze’s or Colvin’s employment also figure prominently in this case. The first came in November of 1999, when the Board adopted Resolution 8-99 to govern the personnel policies of the City (the Personnel Resolution). The Personnel Resolution designates every city worker as an at-will employee. The resolution also states that its terms should not be construed to create a property right in employment.
A few months later, in January of 2000, the Board adopted Resolution R-01-00— the Decherd Police Department Policies and Procedures Manual (the Police Resolution). The Police Resolution governs the employment relationship between the City and its police-department employees. Section 2 of the resolution states that “all resolutions or parts of resolutions [that] conflict” with the Police Resolution “are hereby repealed to the extent of that conflict.” R. 33-6 at 54. The Police Resolution states that “discipline shall be for cause and shall follow the basic concepts of due process.” Id. at 55; id. at 56. The legislation also provides for an agency poli
C.
Following their terminations, Freeze and Colvin filed suit against the City, May- or Henshaw, and Aldermen Moore, Ether-idge, and Stratton (collectively referred to as the City). Freeze and Colvin allege that they were terminated in violation of (a) their due process rights under 42 U.S.C. § 1983, (b) the Tennessee Open Meetings Act, Tenn.Code Ann. §§ 8-44-101-201, and (c) Tennessee common law. Colvin asserts a fourth claim for a violation of the Tennessee Public Protection Act. See TenmCode Ann. § 50-1-304. Freeze and Colvin moved for partial summary judgment on their due process claims, contending that they had a reasonable expectation of continued employment and were fired without notice, explanation, or an opportunity to respond. The City also moved for summary judgment, asserting that Freeze and Colvin had no property interest in continued employment and that their due process claims therefore failed. The district court, after referring the motion to a magistrate judge, agreed with the City. It held that Freeze and Colvin did not have a property interest in continued employment and, therefore, could not maintain their due process claims. It also declined to exercise supplemental jurisdiction over the state-law claims and therefore dismissed the ease. Freeze and Col-vin argue on appeal that the district court erred as to each of these conclusions.
II.
“We review a district court’s grant of summary judgment de novo.” Geiger v. Tower Auto.,
III.
Based on 42 U.S.C. § 1983, Freeze and Colvin contend that the City terminated their employment in violation of their Fourteenth Amendment right to due process.
A.
We look to state law to determine whether Freeze and Colvin had a reasonable expectation that their termination would be only for good cause. See Bd. of Regents v. Roth,
Freeze and Colvin appeal to this latter point in an effort to save their due process claim. They base their property interest on the Police Resolution that the Board passed in January of 2000. According to their argument, this Resolution created a contract that changed their status from at-will employees to those with a property right in continued employment, which includes the right to termination only for good cause. The Police Resolution was passed as an employee manual, which Tennessee courts have consistently held “can form a contract between the employee and the employer.” Id. “In order to constitute a contract, however, the handbook must contain specific language showing the employer’s intent to be bound by the handbook’s provisions.” City of Niota,
B.
In turning to the case at hand, we hold that the facts here meet this high bar. First, the Police Resolution does contain unequivocal language demonstrating the City’s intent to be bound by the handbook’s provisions. Section 2, for example, provides “[t]hat all resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of that conflict.” R. 33-6 at 54. Put another way, it plainly states that the Police Resolution trumps any other conflicting agreements pertaining to police-officer employment. We read Section 2’s language as an unequivocal statement of the City’s intent to be bound by its provisions according to Tennessee law. See Reed, 4 S.W.3d at 688 (“[There is] no clearer way for an employer to express its intent to be bound by a handbook’s provisions than the employer’s specific statement that the document represents the parties ‘entire agreement of employment’ and that the employer ‘promises and agrees to abide by all its terms and conditions.’ ”). The City could have included language expressing its intent not to be bound. See id. (noting that there is “no clearer way for an employer to express its intent not to be bound by an employee handbook’s provisions than the ... specific statement that [it] is not a contract or that [it] should not be construed as a contract”). The Personnel Resolution — enacted before the Police Resolution — did just this. But the City did not rest on this language. It instead issued another resolution that, as we explain below, conflicted with the Personnel Resolution and established a contractual relationship between the police officers and the City.
Second, the Police Resolution also contains unequivocal terms demonstrating an intent to be bound to an agreement prohibiting termination without good cause. It states in plain language that “discipline shall be for cause and follow the basic concepts of due process.” R. 33-6 at 56 (emphasis added). As a general matter, a wide variety of courts have held that the use of the terms “shall” or “will” creates a binding obligation. See, e.g., Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach,
More to this second point, the Police Resolution’s plain language also sets this case apart from the City’s reliance on cases such as Pate v. Wallace,
Third, Tennessee law requires us to interpret the Police Resolution “in the context of the entire handbook.” Rose,
In reaching this conclusion, we address two final issues as they pertain to contracts, employee manuals, and property interests in employment under Tennessee law. Both relate to our prior decision in City of Niota. There, the Tennessee city of Niota’s board of commissioners voted to terminate the employment of two police officers. See
As an initial difference, we held in City of Niota that the termination rule at issue did not create a contract between the city and its police officers. See id. at 721. In doing so, we pointed to the “permissive” language of the rule, specifically that “the board of commissioners ‘may’ fire a[n] employee.” Id. We then contrasted this language with the “cases in Tennessee courts [that] have found an employment contract to exist” — those where “the employee handbook contained the mandatory terms ‘shall’ and ‘will.’ ” Id. In this case, by contrast, we have already held that the language at issue did convert the employee manual to a contract. And we have already explained that this language included terms “shall” and “will” in the context of termination.
Another difference centers on Tennessee’s term-of-years presumption. Tennessee courts presume that “employment for an indefinite term may be terminated at any time ... without cause.” Woods,
The case of Hooks v. Gibson applies with particular force here. There, the Tennessee Court of Appeals examined a police policies-and-procedures manual to determine whether it contractually bound the city to follow its terms when terminating or disciplining officers. The Hooks court held that it did. It explained that even though the manual did “not create a term of employment, it repeatedly set[] forth the procedures for terminating employees. The mere fact that the plaintiffs’ employment was for an indefinite term is not determinative.” Hooks,
The City advances several counterarguments, none of which persuades us to reach a different conclusion. It points to England v. Andrews, No. 2:05-0008,
The City next argues that the handbook did not create a property interest in continuing employment because it provides situations that call for no-questions-asked termination. See R. 33-6 at 56 (noting the agency’s policy “to terminate members” in situations of (1) economic necessity, (2) performance deficiencies, or (3) where “failing to terminate the member would create an unreasonable risk of negligently retaining” an incompetent employee); id. at 57-58. The fact that the Police Resolution lists examples that call for termination without progressive discipline does not undercut our conclusion that the termination must still be for cause. On the contrary, we think this point provides additional support for our conclusion. For example, the Police Resolution explains that an employee may be terminated for “fail[ing] to display the necessary competencies to remain in his or her job position.” Id. at 56. But a termination under this example — termination without progressive discipline— would still be termination for cause, with the cause being that the employee’s skills failed to meet a necessary bar to be deemed competent. Again, because an employee can be terminated without progressive discipline does not change the only unequivocal language in the Police Resolution as it pertains to termination: that “discipline shall be for cause and shall follow the basic concepts of due process.” Id. at 55.
The City also relies on a possible distinction between “discipline” and “termination.” It broadly argues that discipline and termination are two entirely different things; by this argument, according to the City, the Police Resolution’s “for cause” language applies only in the context of discipline and not in the context of termination. Tennessee law dictates otherwise. After all, it directs that we interpret this kind of language “in its plain, ordinary, and popular sense.” Maggart v. Almany Realtors, Inc.,
The City brings a final, related counterargument. It points to the following passage to show that the Police Resolution’s terms did not bind the City: “When discipline is deemed appropriate, this agency will use a progressive discipline system
IV.
For the reasons stated, we reverse the judgment of the district court and remand for proceedings consistent with this opinion.
Notes
. Colvin argued below that Tennessee Code Annotated §§ 38-8-304 and 305 provide for a property right in his employment. Both pertain to police-officer discipline. The former could be read to mandate written notification and a chance to respond for a police officer before discipline, see Tenn.Code Ann. § 38-8-304; and the latter to mandate a pre-termi-nation hearing, see id. § 38-8-305. The district court did not find this argument persuasive. Colvin mentions the statutes only in the facts section of his briefing and thus waives the argument. See Leary v. Daeschner,
. Both parties urge us to resolve the rest of this case. From the City’s point of view, Freeze and Colvin were given the proper level of process with their dismissal even if they had a property right in their continued employment. The City also argues that defendants benefit from qualified immunity, meaning this case should be dismissed either way. Freeze and Colvin disagree, arguing that they did not receive the proper level of process prior to their dismissal. The district court did not address these arguments and we thus decline to do so here.
Dissenting Opinion
dissenting.
I respectfully dissent. I would affirm for the reasons stated by the district court.
Tennessee law presumes that employment is at-will absent “unequivocal language demonstrating the employer’s intent” to enter into a contract changing the employment to a just-cause relationship. Brown v. City of Niota,
Here, the district court followed its previous decision in Madden v. City of Decherd, No. 4:10-cv-13 (E.D.Tenn. March 27, 2012), to hold that the Police Manual does not contain clear and unequivocal language changing the employment relationship of at-will specified by the City Personnel Policy and presumed by state law. Specifically, as noted by the district court, the Police Manual begins with the following policy statement: “It is the policy of this agency to avoid terminating an otherwise productive member when conduct, behavior or performance problems occur, if possible.” (Emphasis added.) Further, the section of the Police Manual relied upon by plaintiffs states in full: “When discipline is deemed appropriate, this agency will use a progressive system when practicable. Furthermore, discipline shall be for cause and shall follow the basic concepts of due process.” (Emphasis added.)
Thus, the goal of the Police Manual is progressive discipline “if possible” and when “practicable” and “appropriate” in the judgment of the City. In my view, the Police Manual is riddled with permissive language which does not show an unequivocal intent to bind the City to just-cause employment. The district court, in adopt
[The Police Manual] does not conflict with either the presumption that the City of Decherd is an at-will employer or [the Personnel Policy’s] explicit statement to that effect. The portion of the [Police Manual] on which Plaintiff relies outlines the Decherd Police Department’s “grievance and disciplinary procedures.” In its introduction, it provides a general policy statement that: “It is the policy of this agency [i.e., the Decherd Police Department] to avoid terminating an otherwise productive member when conduct, behavior or performance problems occur, if possible.” When, in the following section, it defines the processes by which the police department will employ discipline, the Resolution states: “When discipline is deemed appropriate, this agency will use a progressive system when practicable. Furthermore, discipline shall be for cause and shall follow the basic concepts of due process.”
(Internal record citations omitted). I see no reason to depart from this rationale, as it is consistent with Tennessee law. See Brown,
For the foregoing reasons, I would affirm the district court and therefore respectfully dissent.
