The opinion
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
FILED
EVELYN LOGUE, )
February 1, 2000
)
Petitioner/Appellant, ) Cecil Crowson, Jr.
) Appeal No.
Appellate Court Clerk
VS. ) M1999-02555-COA-R3-CV
)
THE SHELBYVILLE HOUSING ) Bedford Chancery
AUTHORITY, THE BOARD OF ) No. 22,024
COMMISSIONERS for the )
SHELBYVILLE HOUSING )
AUTHORITY, and HAROLD )
ROSE, in his official capacity as )
Chairman of THE BOARD OF )
COMMISSIONERS for the )
SHELBYVILLE HOUSING )
AUTHORITY, )
)
Respondents/Appellees. )
APPEALED FROM THE CHANCERY COURT OF BEDFORD COUNTY
AT SHELBYVILLE, TENNESSEE
THE HONORABLE TYRUS H. COBB, CHANCELLOR
FOR APPELLANT: FOR APPELLEES:
W. GARY BLACKBURN JOHN R.WHITE
JOHN R. CALLCOTT Union Planter’s Bank Building,
414 Union Street, Suite 2050 Suite 202
Nashville, Tennessee 37219 Shelbyville, Tennessee 37160
STEVEN M. BERNSTEIN
DARREN T. HORVATH
945 East Paces Ferry Road
Atlanta, Georgia 30326
AFFIRMED AND REMANDED
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
CONCUR:
KOCH, J.
COTTRELL, J.
OPINION
The controlling issues in this appeal are (1) whether under the terms
of an employee policy manual the dismissed employee was something other than
an employee at will, and (2) whether the action of the Board of the Shelbyville
Housing Authority in upholding the dismissal was arbitrary or illegal or lacked
material evidence to support it. The Chancery Court of Bedford County reviewed
the record and found that the Board’s action was supported by substantial and
material evidence and was not arbitrary nor illegal. We affirm.
I.
Early in 1998 Evelyn Logue, a Public Housing Manager with the
Shelbyville Housing Authority, received a written disciplinary warning for
insubordination and disrespectful treatment of other employees. The charge
arose from several incidents where Ms. Logue gave orders to employees in
another department in violation of the Authority’s chain of command. Ms. Logue
refused to accept the warning and insisted on presenting her case to Mr. Thrasher,
the Executive Director of the Authority.
Mr. Thrasher met with Ms. Logue, her immediate supervisor, and
the head of the department whose workers had complained about Ms. Logue’s
dictatorial conduct. The meeting did not go well. Ms. Logue insisted that she
had done nothing wrong; she questioned the veracity of her supervisor, the other
department head, and the men who had complained.
After considering the matter overnight Mr. Thrasher terminated Ms.
Logue for insubordination toward a supervisor and disrespectful treatment of
other employees. Ms. Logue appealed to the Board of the Housing Authority,
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and the Board dismissed the insubordination charge but found that Ms. Logue had
been disrespectful to other employees.
II.
Ms. Logue’s Employment Contract
Ms. Logue contends that the Authority’s policy manual conferred
on her certain contract rights, among which was the status of a permanent
employee that could only be dismissed for causes set out in the manual. The
Authority counters with the argument that she was an employee at will.
The courts have had many occasions to review the status of
employees under company handbooks, policy manuals, or manuals of operation.
The results have been varied, but the courts arrived at different conclusions
through the application of some fixed principles. The first is a presumption that
employees in Tennessee are employees at will. Rose v. Tipton County Public
Works Department, 953 S.W.2d 690 (Tenn. Ct. App. 1997). Therefore a contract
for an indefinite time is a contract at will, and may be terminated by either party
at any time without cause. Bringle v. Methodist Hosp., 701 S.W.2d 622 (Tenn.
Ct. App. 1985); Whittaker v. Care-More, Inc., 621 S.W.2d 395 (Tenn. Ct. App.
1981). A promise of permanent employment is a promise for an indefinite term
unless supported by consideration beyond the services to be furnished by the
employee. Nelson v. Martin, 958 S.W.2d 643 (Tenn. 1997). An employee
manual or handbook that creates a definite term or other employee benefit must
contain specific language showing the employer’s intent to be bound by the
handbook’s provisions. Smith v. Morris, 778 S.W.2d 857 (Tenn. Ct. App 1988).
The reservation of a unilateral right to change the handbook contradicts an intent
to be contractually bound by its provisions. Id.; Williams v. Memphis Housing
Authority, No. 02A01-9608-CV-00190, 1997 WL 287645 (Tenn. Ct. App. June
2, 1997).
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In this case, the personnel policy provided that the power to appoint,
promote, transfer, demote, suspend and separate personnel is vested in the
Executive Director of the Agency. In another section under the broad heading of
“Dismissals” the policy provides: “The Executive Director may dismiss or
demote any employee in the Shelbyville Housing Authority.” The policy also
provided for a probationary period of six months during which the Executive
Director must make “a decision as to whether the employee should be dismissed
or placed in the position permanently.” If the Executive Director does not act,
“the employee shall automatically achieve regular status.”
After giving the Executive Director blanket authority to dismiss or
demote any employee, the policy provides a long list of reasons for dismissal, but
also states that the list is not exclusive. Among the listed reasons are
“insubordination that constitutes a serious breach of discipline” and “disgraceful
personal conduct or language toward . . . fellow officers or employees.”
Disrespect of fellow employees is not a listed reason for dismissal.
Finally, the policy provides that it may be amended by a resolution
of the Board.
Viewing the policy as a whole and in light of the legal precedents
in this state, we conclude that the personnel policy did not become a part of Ms.
Logue’s employment contract with the Shelbyville Housing Authority. The
Authority’s reservation of a right to amend the policy generally precludes that
conclusion. Smith v. Morris, 778 S.W.2d 857 (Tenn. Ct. App. 1988); Williams
v. Memphis Housing Authority, No. 02A01-9608-CV-00190, 1997 WL 287645
(Tenn. Ct. App. June 2, 1997). The policy also lacks the specific evidence of an
intent to be bound by its provisions that we have held is essential to a finding of
a binding contract. Smith v. Morris, 778 S.W.2d 857 (Tenn. Ct. App. 1988).
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Even if the policy did make a binding contract with the employee,
its provisions did not guarantee that Ms. Logue would be employed for a definite
term or that she could only be terminated for cause. The policy specifically
provides that the Executive Director had the unrestricted right to terminate
employees – subject to a review by the Housing Authority itself. The list of
reasons for dismissal set out in the policy is non-exclusive and may be taken only
as illustrative. In other words, the policy itself leaves Ms. Logue as an employee
at will.
III.
The Board’s Action
The conclusion that the personnel policy does not create a contract
with the Authority’s employees makes most of the issues raised on appeal moot.
Ms. Logue argues that the initial disciplinary proceeding had been closed with a
simple reprimand and that she was dismissed for protesting her innocence before
Mr. Thrasher; that the Board, therefore, affirmed her dismissal on a ground for
which she was not disciplined; and that the Board ignored its own procedural
rules in dealing with her appeal.
We think this version of the facts ignores the undisputed testimony
that when she was first reprimanded for being disrespectful to the maintenance
workers and their supervisor, Ms. Logue refused to accept the discipline, refused
to sign the reprimand, stated this is “not over”, and insisted on taking the matter
to Mr. Thrasher. At that hearing she inpugned the truthfulness of all the
Authority’s employees involved, including the head of her department and the
head of the maintenance department. After viewing this episode, Mr. Thrasher
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decided to terminate her. It is, therefore, not accurate to say that Ms. Logue’s
case was closed with only a reprimand. She chose to keep it open.
Mr. Thrasher did testify that had Ms. Logue accepted the
responsibility for her prior acts, the matter would have been settled with the
reprimand. We do not think, however, that Mr. Thrasher was bound to let the
matter stay there when Ms. Logue’s protestations of innocence included a charge
that her co-workers and two supervisors (including her own) were lying.
With respect to the procedural requirements of the personnel policy,
we think the Board substantially complied with them. As we have pointed out
the policy gave a terminated employee the right to have the Board review the
Executive Director’s action. The policy also provided that the employee would
be given written notice of the Executive Director’s proposed action one week
prior to the effective date, in order to allow an appeal to the Board. That
provision was not complied with in this case, but the Board granted the appeal
(rescinded the termination) and when Ms. Logue’s attorney sought a clarification
of the charges against her he received the following specification from the
Board’s attorney:
(1) Over the past two years, Ms. Logue has engaged
in a pattern of conduct that included directing
orders to individuals over whom she had no
supervisory authority.
(2) This practice was inconsistent with internal
policy requiring employees to respect the
hierarchy of supervision within the office, and
to refrain from instructing employees outside
the chain of command.
(3) Ms. Logue was reminded of this policy and
counseled to abide by it in recent months, yet
she continued to deviate from it.
(4) On Saturday, February 28th , Ms. Logue again
violated this policy by directing maintenance
employees to perform work in the office area,
bypassing both the maintenance manager and
the maintenance superintendent in the process.
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This contravened previous directives given to
Ms. Logue.
(5) Ms. Logue compounded the problem by
berating these individuals and treating them
with a lack of respect, despite the fact that she
exerted no supervisory authority over them.
(6) On Monday, March 2nd, the maintenance
employees responded by complaining to the
maintenance superintendent, who in turn
directed their concerns to the maintenance
manager.
(7) That same day, Ms. Logue again deviated from
the chain of command by directly instructing
maintenance employees to leave the field and
report to her office, without the knowledge or
consent of any supervisor or manager in the
maintenance department. In a loud tone of
voice, Ms. Logue subsequently attempted to
give orders to the maintenance manager when
he questioned her about it.
(8) On Wednesday, March 4th, Ms. Logue was
presented with a written warning documenting
the Authority’s concerns over her recent
misconduct, including insubordinately refusing
to direct her instructions through maintenance
supervision, and treating her maintenance co-
workers with disrespect.
(9) In a meeting held later that day, Ms. Logue
refused to accept responsibility for misconduct
that had since been confirmed. Instead, she
simply insisted that no witnesses would come
forward to corroborate the charges against her.
(10) On Thursday, March 5th, a second meeting was
convened in the presence of the Director. Ms.
Logue again denied the charges, questioning the
veracity of all witnesses to the events of
February 28th. Ms. Logue again refused to
accept responsibility for her misconduct,
leaving the Director with no choice but to
terminate her employment.
The Board heard the proof and upheld the dismissal. We think Ms.
Logue’s rights were protected at all levels.
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We conclude that the Board’s action was not illegal, arbitrary, nor
capricious, and that its findings were supported by substantial and material
evidence. See McCallen v. City of Memphis, 786 S.W.2d 633 (Tenn. 1990).
The judgment of the court below is affirmed and the cause is
remanded to the Chancery Court of Bedford County for any further proceedings
that may become necessary. Tax the costs on appeal to the appellant, Evelyn
Logue.
_______________________________
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
CONCUR:
____________________________
WILLIAM C. KOCH, JR., JUDGE
____________________________
PATRICIA J. COTTRELL, JUDGE
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