Petition — Kline v. City of Fairfax

Supreme Court, U.S.

82-1113 FILED

| AN & 4993.

No. 82-

ER L. STEVAS

IN THE koe

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1982

LEONARD P. KLINE,

Petitioner,

City OF FAIRFAX, VIRGINIA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF VIRGINIA

GILBERT K. Davis

Counsel of Record

Joun D. TEw

DAVIS AND GILLENWATER

6801 Whittier Avenue

McLean, Virginia 22101

(703) 893-6011

Counsel for Petitioner

Washington, OC. « THIEL PRESS © (202) 638-4521

J

(t)

QUESTION PRESENTED

May the City of Fairfax, Virginia, compatibly with

the Fifth and Fourteenth Amendments’ proscription

against deprivation of property without due process of

law, impose an ordinance which retroactively divests

Chief Kline, the Petitioner, of his right at retirement to

be paid for his vested and unused accumulated leave?

PARTIES TO THE PROCEEDINGS

1. Leonard P. Kline, former Chief of Police for the

City of Fairfax, Virginia and the Plaintiff-Appellant

below is the Petitioner herein.

2. The City of Fairfax, a municipal corporation

organized under the laws of the Commonwealth of

Virginia, was the Defendant-Appellee below and is the

Respondent herein.

(i)

TABLE OF CONTENTS Page

QUESTION PRESENTED ....... A sthcey wks wie 4 5 ha (i)

PARTIES TO PROCEEDINGS ...... tees? eae Cacia (i)

OPINIONS AND JUDGMENTS BELOW......... ape 1

JURISDICTION......... caine Rip uds 6d bk 2

CONSTITUTIONAL AND ORDINANCE PROVISIONS..... 2

STATEMENT OF THE CASE ..........-- eve up ee 3

Factual Background ........... Faecaews ihesen 4

FEDERAL QUESTION RAISED .........-00eeeeee05 .

REASONS FOR GRANTING THE WRIT............-. 9

Where A Statute Or Contract Provides That A

Public Employee May Accumulate Leave With

Cash On Termination, The Benefit Is Vested As

Soon As Leave Is Accumulated And It Becomes

A Fixed Interest Which, As A Matter Of Con-

stitutional Due Process Should Be Protected

Against Retroactive State Action. ......++++e000. 9

A. Ordinance Provisions 2 oc cccccccccsccoseces 9

B; Vested Benefit Rights .. sc cceccccccccccves o oll

This Case Presents Issues Of General Importance

Directed To The Relationship Between Terms

Of Public Employment And Due Process Of

Law Under The United States Constitution—

Issues Which Merit The Consideration Of This

Court ....... Coveecoovresue Sccvce coeecees 13

APPENDICES:

A:

: Final Judgment Order ........00000005 coccee 28

5 Latter CORR 6 ood 0:6 6 wede biked coe ene covcce 48

: Constitutional Provisions .......+..++++e+0e++ 7a

: City of Fairfax, Virginia Ordinance 1974-4 ...,... 8a

: City of Fairfax, Virginia Ordinance 1975-27.......27a

: City of Fairfax, Virginia Ordinance 1975-52.......29a

Qrznmon

Order Denying Petition for Appeal. ...........+++ la

(it)

P

TABLE OF AUTHORITIES sa

Cases:

Bennet ex rel. Arizona State Personnel Commission v.

Beard, 27 Ariz. App. 534, 556 P.2d 1137 (1976) ........ 14

Board of Regents v. Roth, 408 U.S. 564 (1972). ....... 11,12

Christian v. County of Ontario, 399 N.Y.S.2d 379

(1977).'. wcse ne 2. 6.9 oenereeeeneeneeeeeeee oo. i a eM om 12, 18

City of Orange v. Chance, 325 SW.2d 838 (Tex. Civ.

App. 1959) O- £276.98 6.3) 2 2 = oF oe tt oe Oe Pe *oenreeee’ eoenerne eee 17

Clift v. City of at: 45 Sas Div. 2d 596, 360

N.Y.S.2d 356 (1974). ee st PM eee ee ee 17

Harryman v. Roseburg Rural Fire Protection District,

244 Ore. 631, 420 P.2d 51 (1966)..... peewee e cee 12,17

Ramey v. State, 296 Mich. 449, 296 NW. 523 (1941) .... 16,17

State of Mississippi v. Miller, 276 US. 174 (1928) ....13, 17, 18

Vangilder v. City of Jackson, 492 SW.2d 15 ass App.

EES Ge 5) sa c-dcnme ee B Pees eae 12,17

Constitutional Provisions:

PRth AMOMGMON ws cece ccenpee a OR RIC . » passim

Fourteenth Amendment, .........6++0e5+% v0.0 vale passim

Statutes and O;dinances:

Code of Virginia 1950 as Amended §15.1-7.1....... oee 049

City of Fairfax, Virginia Ordinance 1974-4 ..... nie he's 5,9

City of Fairfax, Virginia Ordinance 1975-27 ........... 7, 10

City of Fairfax, Virginia Ordinance 1975-52 ........... 7,10

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1982

LEONARD P. KLINE,

Petitioner,

City OF FAIRFAX, VIRGINIA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF VIRGINIA

Leonard P. Kline, former Chief of Police for the City

of Fairfax, Virginia, petitions for a writ of certiorari to

review the Judgment of the Supreme Court of Virginia

in this case.

OPINIONS AND JUDGMENTS BELOW

The Order of the Supreme Court of Virginia denying

the petition for writ of error was entered on October 8,

1982, and appears at page la of the Appendix to this

Petition.

2

The Final Judgment Order of the Circuit Court of

Fairfax County, Virginia, was entered on October 16,

1981, and appears at page 2a of the Appendix.

The findings and rulings of the Circuit Court of Fairfax

County, Virginia, were set forth in a letter opinion dated

July 21, 1981, and the opinion appears at page 4a of

the Appendix to this Petition.

JURISDICTION

The Order of the Supreme Court of Virginia denying

review of the dismissal of Plaintiff’s Motion for Judg-

ment was entered October 8, 1982 (App. A). A timely

Petition for Writ of Certiorari to the Supreme Court of

Virginia is hereby submitted to this Court and jurisdic-

tion is invoked under 28 U.S.C. § 1257(3).

CONSTITUTIONAL AND ORDINANCE

PROVISIONS

The Fifth and Fourteenth Amendments of the United

States Constitution are set out in the Appendix at 7a.

Ordinance No. 1974-4 providing for a system of per-

sonnel administration for employees in the career service

of the City of Fairfax, Virginia was adopted by the City

Council of the City of Fairfax, Virginia on May 21, 1974

and became effective on July 1, 1974. It is set out at

page 8a of the Appendix.

Ordinance No. 1975-27 amending the system of per-

sonnel administration was adopted on June 17, 1975 by

the City Council of the City of Fairfax and is included

at page 27a of the Appendix.

Ordinance No. 1975-52 amending the system of per-

sonnel administration was passed by the City Council

3

on October 20, 1975. It is set out at page 29a of the

Appendix to this Petition.

STATEMENT OF THE CASE

This Petition arises from the dismissal of Leonard

Kline’s Motion for Judgment against the City of Fairfax,

Virginia.

Leonard P. Kline was employed as a police officer by

the City of Fairfax from August 15, 1953 until June 30,

1977. When Mr. Kline retired in 1977, after almost

twenty-four years of service, he was Chief of Police for

the City of Fairfax and he had accrued a substantial

amount of earned, but unused, “leave’’. If Chief Kline

had retired prior to October 20, 1975, after twenty-two

years of faithful service, instead of working almost two

more years, he would have retired with a lump sum

payment for his unused leave just as many Fairfax City

employees did before October, 1975. Chief Kline,

however, relied on the fact that “leave” he had earned,

but not used due to job dedication and fortunate good

health, would be honored and compensated when he

finally retired. For this reason, and others, Chief Kline

did not retire after twenty-two years—he gave the City

of Fairfax nearly two years of additional service only to

find that the compensation he relied on and expected in

payment of his unused leave would not be honored.

Chief Kline alleged that his reliance on and expectation

of compensation for his earned leave was retroactively

undermined by the City of Fairfax and amounted to a

deprivation of property without due process of law.

The Circuit Court of Fairfax County, Virginia by letter

opinion dated July 21, 1981 and by final judgment

entered October 16, 1981 dismissed Chief Kline’s claim.

4

The Supreme Court of Virginia refused Chief Kline’s

petition for appeal on October 8, 1982.

FACTUAL BACKGROUND

Prior to July 1, 1974, employees of the City of

Fairfax accumulated “annual” and “sick” leave pursuant

to an established employee benefit plan of the City, as

follows:

An Employee could accumulate, at a prescribed rate

according to days worked, a maximum of thirty days

annual leave and an unlimited amount of unused sick

leave.

Annual leave in excess of thirty days was converted

to sick leave.

In addition to the permissible use of these categories

of leave during the term of employment, upon separa-

tion from employment, an employee received money

payment for accumulated annual leave up to the thirty

day maximum.

Also upon separation, unused sick leave would

count toward the thirty day maximum annual leave

to be paid on the basis of one day annual leave for

each three days accumulated sick leave.

In late 1973 and through the first half of 1974, the

City of Fairfax wanted to improve its personnel program

in several respects. City management was aware of

some employee unrest and was very concerned about

attempts to organize and unionize the Police Department.

(McNayr Tr. 36-38, Fleck Tr. 10-13.) There was also

concern about excessive use and abuse of sick leave by

certain employees. Moreover, a formal personnel policy

was required to be adopted by cities pursuant to state

law. Code of Virginia 1950 as Amended § 15.1-7.1. In

5

order to conform to statute, for the other specified

reasons, and to improve employee morale and produc-

tivity, the City Manager, Irving McNayr, hired Mr. Jack

Foster, retired Personnel Director of Artlington County,

Virginia, as a consultant “to come up with a program

which would be acceptable to all of the personnel and,

of course, to the City Council.” (McNayr Tr. 36-39,

41~43, 45-57, Fleck Tr. 10-11, Foster Tr. 4-7, 14-15,

21-23; see also reasons set terth in Exhibits 10-A and

10-B.)

Mr. Foster knew that the City had long experience

with certain employees using sick leave as fast as they

earned it (Foster Tr. 32), and so he proposed a modifi-

cation of the system of accumulation, use, and payment

for leave along the lines of programs in private industry.

This proposal was a part of revamping the entire person-

nel system. The change was discussed with all employees,

on both an individual and group basis. All had an oppor-

tunity to participate in the discussions, and suggested

changes were considered. When employees objected to

the fact that 2 hours less sick leave per pay period and

4 hours “bonus” per year were lost under the new

ordinance, the employees were told by management

that they had to “give up something to get something,”

i.e., the number of hours accumulated would be reduced

in return for the benefit of being paid for unused accu-

mulated hours. (Kline Tr. 131, Fleck Tr. 7-8, Foster

Tr. 7-8, McNayr Tr. 44-45, 57-58.)

Drafts of a proposed ordinance went to all employees

and to the City Council. When everyone finally con-

curred the result was the 1974 ordinance which for the

first time established a formal personnel policy and pay

plan for the City. (Foster Tr. 23-24.) By City ordinance

effective July 1, 1974 (App. p. 8a) the old employee

6

benefit plan was changed as follows: The categories of

“annual” and “sick” leave were eliminated and a single

category of “leave” was created. All earned, but unused

leave (“‘annual” and “sick’?) was combined into a new

total of “leave” (for example, thirty days “annual” and

thirty days “sick” leave became sixty days “leave’’).

Upon separation, “leave” above thirty days was to

be paid on the basis of one day for each two days accu-

mulated. No limit was established on the total number

of unused “leave” days which would be paid upon

separation from employment, except that ten days

accumulated “leave” had to be taken each year or it

was lost to the employee.

In addition to improved employee morale, benefits of

the new plan to the City were: the elimination of the

4 bonus hours of leave previously granted at the end of

each year, and two hours per pay period of sick leave.

Thereafter, the employees didn’t take sick leave as often

as they formerly took it. Also, financial cost was con-

sidered by the drafters of the original ordinance, The

cost of the program to the City would likely be less

because (1) fewer actual hours of leave would be accu-

mulated; (2) more efficiency would be obtained from

employees with higher morale who did not use sick leave

for flimsy reasons; (3) under the old system there was

a tendency of employees to use up sick leave before

retirement so that the leave was not “lost”; i.¢., no

difference if an employee was paid for not working

because he was “sick” or because he was entitled to

payment for unused leave at retirement.! (Foster Tr.

1 Actually, under the old system, an employee who used up sick

leave would be paid day for day, but he was not paid on a one for

one basis for unused leave under the new system.

7

8-9, 11-13, 18-19, 24-25, Kline Tr. 137-138, Fleck

Tr. 12-15, McNayr Tr. 43-44.)

In the spring of 1975, the City started preparing to sell

bonds to upgrade its sewer system. Auditors for the City

and a financial consultant from New York told the City

that it had to include the value of its leave program in

its financial statement. In order to reduce the City’s

“debt,” new City Manager George Hubler decided to

ask the City Council to rescind the leave portion of the

1974 ordinance, and thereby wipe out approximately ,

$150,000.00 of obligations. Mr. Hubler admitted, how-

ever, that there were options to improve the financial

statement other than retroactively taking away the right

of employees to be paid for unused leave at retirement.

He also admitted that the City was in no great financial

crisis because of its leave program. (Hubler Tr. 174-179,

185-186, 189-191, 193-196.)

On July 17, 1975, the 1974 ordinance was amended,

prospectively only, by the City Council of the City, as

follows: a limit of payment for forty-five days “leave”

was to be paid upon separation, for all “leave” accrued

subsequent to June 17, 1975. “Leave” in excess of

thirty days was to be paid on a ratio of one day for each

two days accrued.

On October 20, 1975, the City Council of the City

again amended the ordinance by reconstituting the

“leave” for the period prior to July 1, 1974, into

“annual” and “sick” leave designations. All leave over

thirty days was now to be paid on a ratio of one day

for each two days accrued. The ordinance stated that,

“No payment will be made for sick leave accrued upon

separation or retirement from City service.’ The Council

made these provisions retroactive.

As a result of the actions taken by the City on Octo-

ber 20, 1975, Leonard Kline lost the right to be paid for

his unused leave at the time of his separation from

employment (in his case by retirement) from the City.

Prior to October 20, 1975, Chief Kline could have

retired and received a lump sum payment (certain former

employees of the City did just that); after the council

meeting of October 20, 1975, such payment could not

be obtained. (Kline Tr. 123-124.) It is on the basis of

a retroactive taking of vested rights that the Petitioner

brought his action for deprivation of property without

due process of law.

FEDERAL QUESTION RAISED

Petitioner seeks review of issues involving the Fifth

and Fourteenth Amendments of the Constitution of the

United States which were timely raised below and

decided adversely to the Petitioner. The Federai Consti-

tutional provisions protect against the deprivation of

property without due process of law yet the City of

Fairfax, Virginia, in violation of these amendments,

passed an ordinance that retroactively divested Chief

Kline of his right to compensation for earned but unused

leave accumulated prior to October 20, 1975. This Court

is presented with an opportunity to consider and clarify

the important question of whether leave benefits of a

public employee, earned during the period of employ-

ment, are vested property rights within the meaning of

the Fifth and Fourteenth Amendments such that they

will be protected against retroactive deprivation by state

action.

9

REASONS FOR GRANTING THE WRIT

WHERE A STATUTE OR CONTRACT PROVIDES

THAT A PUBLIC EMPLOYEE MAY ACCUMULATE

LEAVE WITH CASH ON TERMINATION, THE

BENEFIT IS VESTED AS SOON AS LEAVE IS

ACCUMULATED AND IT BECOMES A FIXED

INTEREST WHICH AS A MATTER OF CONSTITU-

TIONAL DUE PROCESS SHOULD BE PROTECTED

AGAINST RETROACTIVE STATE ACTION,

1, Ordinance Provisions.

This case presents the spectacle of a Virginia munici-

pality granting by ordinance certain compensation and

leave benefits to its employees only to retroactively

divest said employees of accumulated benefits when the

City later had a need to improve the appearance of its

financial statement.

In late 1973 and early 1974 the City of Fairfax was

concerned about employee unrest and the possibility of

Teamster organization of the Police Department. In

addition, the City was under statutory mandate to

formulate official personne. policies. Code of Virginia

1950 as amended § 15.1-7.1. To conform to state law,

and in order to improve employee relations, the City

adopted Ordinance 1974-4 on May 21, 1974 which

provided that, “After successful completion of the

probationary period, the employee [would be] entitled

to the full benefits of a Career Service employee as

provided by [the] ordinance.” One such benefit was

agreed to as follows:

Upon separation or retirement an employee shall be

paid in full for all accrued leave up to a maximum

of 30 work days (240 hours). Leave in excess of

10

30 days shall be paid on a ratio of one day for each

two days accrued,

In late spring of 1975, barely one year after the formu-

lation of the City’s system of personnel administration,

a prospective amendment of Ordinance 1974-4 was

passed by the City Council. City of Fairfax, Virginia,

Ordinance 1975-27. The newly formalized leave benefits

were trimmed as far as future compensation of accu-

mulated leave was concerned. Since this action was

prospective in nature, Petitioner has no due process

argument with the validity of the Ordinance. The new

benefit provision read as follows:

Upon separation or retirement an employee shall be

paid in full for all accrued leave up to a maximum

of 30 work days (240 hours). Leave in excess of

30 days shall be paid on a ratio of one day for each

two days accrued, not to exceed payment for 15

additional days (120 hours). This 45-day limit

shall apply for leave accrued from the date of the

adoption of this ordinance.

(Emphasis added.)

Within three months the City Council once again

amended Ordinance 1974-4 by reconstituting leave accu-

mulated prior to July 1, 1974 into “annual” and “sick”

leave. City of Fairfax, Virginia Ordinance 1975-52.

Leave accrued after July 1, 1974 and up to the adoption

of the amendment was to be treated as “‘annual’’ leave.

After the date of the amendment, “sick” leave would

accrue for full-time employees at the rate of four hours

for each two week pay period. Upon separation or

retirement the new amendment allowed payment for

“annual” leave accumulated as follows:

Up to a maximum of 30 days accrued annual leave

shall be paid on the basis of one day for each day

11

of annual leave accrued. Accrued annual leave in

excess of 30 days shall be paid on a ratio of one day

for each two days accrued.

“Sick” leave was dealt with summarily:

No payment will be made for sick leave accrued

upon separation or retirement from City Service.

This new amendment, of course, had the effect of

retroactively divesting long term employees of all leave

accumulated prior io July 1, 1974 that was “reconsti-

tuted” into “sick” leave. In Chief Kline’s case his leave

balance was reconstituted into 1,587 hours “sick” leave

and 355 hours ‘‘annual”’ leave. Thus, the value of his

retroactively divested “sick” leave was $12,763.42.

(Trial Exhibit 38.)

2. Vested Benefit Rights,

It has been stated that the Federal Constitution’s

procedural protection of property is a safeguard of the

security of interests that a person has already acquired

in specific benefits. These interests—property rights—

can take many forms. See, Board of Regents v. Roth,

408 U.S. 564 (1972). As elaborated in Roth:

To have a property interest in a benefit a person

must have more than an abstract need or desire for

it. He must have more than a unilateral expectation

of it. He must, instead, have a legitimate claim of

entitlement to it. It is a purpose of the ancient

institution of property to protect those claims upon

which people rely in their daily lives, reliance that

must not be artibrarily undermined.

* * *

Property rights, of course, are not created by the

Constitution. Rather they are created and their

dimensions are defined by existing rules or under-

12

standings that stem from an independent source

such as state law—rules or understandings that

secure certain benefits and that support claims of

entitlement to those benefits.

408 U.S, 564, 577.

“Leave” is a claim upon which employees rely in their

daily lives and they have more than an abstract need for

such benefits. An employee typically plans his vacation,

determines the wisdom of taking sick days and even

considers his retirement based on his reliance on earned

leave being h. xored, It is with this in mind that courts

have stated that leave benefits are part of an employee's

overall compensation earned during the period of em-

ployment. See, Vangilder v, City of Jackson, 492 S.W.2d

15 (Mo. App. 1973). Moreover, it has been held (in

keeping with the Roth Court’s view that property rights

are created and defined by existing rules such as state

laws), that where a statute provides that employees may

accumulate leave with cash payment on termination, the

leave benefit is not contingent, but is vested as soon as

the leave is accumulated. Christian v, County of Ontario,

399 N.Y.S, 2d 379 (1977); Harryman v, Roseburg Rural

Fire Protection District, 244 Ore. 631, 420 P.2d 51

(1966).

Chief Kline has been deprived of a vested property

interest created by City ordinance—a specific benefit

was earned by Chief Kline and he relied on it being

honored, not retroactively rescinded.

13

THIS CASE PRESENTS ISSUES OF CENERAL

IMPORTANCE DIRECTED TO THE RELATION-

SHIP BETWEEN TERMS OF PUBLIC EMPLOYMENT

AND DUE PROCESS OF LAW UNDER THE UNITED

STATES CONSTITUTION—ISSUES WHICH MERIT

THE CONSIDERATION OF THIS COURT.

In State of Mississippi v. Miller, 276 U.S. 1974 (1928),

a statute which retroactively reduced the amount of

compensation that a revenue agent was to receive was

reviewed by this Court. In invalidating the statute, the

Court stated as follows:

It is well understood that the contract clause does

not limit the power of a state during the terms of

officers to pass and give effect to laws prescribing

for the future the duties to be performed by, or the

salaries or other compensation to be paid to, them.

Butler v, Pennsylvania, 10 How, 402, 13 L. Ed.

472. But, after services have been rendered by a

public officer under a law specifying his compensa-

tion, there arises an implied contract under which

he is entitled to have the amount so fixed. And the

constitutional protection extends to such contracts

just as it does to those specifically expressed.

The selection of plaintiff to be the revenue agent

amounted to a request or direction by the state that

he exert the authority and discharge all the duties

of that office. In the performance of services so

required of him plaintiff made the investigations

and brought the suits to discover and collect the

delinquent taxes. Under the statutes then in force

as construed by the highest court of the state, he

thereupon became entitled to the specified per-

centages of the amounts subsequently collected

on account of the taxes sued for, The retroactive

application of Chapter 170 would cake from him

a part of the amount that he had theretofore

14

earned. That would impair the obligation of the

implied contract under which he became entitled

to the commissions, This case is ruled by Fisk v.

Jefferson Police Jury, 116 U.S. 131, 6 S. Ct. 329,

29 L. Ed. 587.

This Court has thus recognized that although it may

be correct that public employees have no contractual or

vested right to the public office itself, it does not neces-

sarily follow that contractual or vested rights in benefits

of the office cannot accrue. This fact was also recognized

in Bennett ex rel. Arizona State Personnel Commission

v. Beard, 27 Ariz. App. 534, 556 P.2d 1137 (1976). In

Beard, an employee of the Arizona Highway Department

brought suit to invalidate an action by the Arizona State

Personnel Commission. The Commissior had instituted

a new policy under which annual leave would accrue at

the rate of only ten hours per month as compared to

the prior rate of twelve hours per month. This change

resulted in the plaintiff being entitled to only fifteen

days annual leave instead of the eighteen days he had

previously enjoyed. Unlike the action taken in the case

at bar, however, this change was not made retroactive.

Since the change was prospective only, the court held

that the plaintiff had no contractual right to continue

his past leave benefits into future employment. The

Commission’s prospective change could be invalidated

only if it was in violation of a formal written contract

or a statute prohibiting such a change.

The Court in Beard made it clear that if the change

had been made retroactive, it would have been invali-

dated. In reaching this conclusion, the court agreed that

public employees have no contractual or property right

to continued employment. However, according to the

court, that principle of law should not prevent a court

15

from invalidating any retroactive impairment of rights

which have already vested. The court stated:

The state, having the right to take the most

drastic step involved with appellee’s “contract of

employment”’—termination—without liability, may

the state without liability take the less drastic step

of changing the terms of appellee’s future employ-

ment by way of compensation, that is, benefits?

The answer is obviously yes, provided that the

change does not impair rights vested by reason of

the prior employment. Yeazell v. Copins, [98 Ariz.

109, 402 P.2d 541 (1965)]. Under this analysis,

the commission could not, say in July, 1969, pass

a rule that provided that retroactive to January 1,

1969, appellee’s leave benefits would be computed

at a rate less than was previously in effect from

January 1, 1969 to July, 1969. Such a result is

prohibited by Yeazell as affecting benefits vested by

reason of appellee’s compliance with the conditions

precedent to earning those benefits—his continued

employment during that period.

536 P.2d at 1140 (Court’s emphasis).

Accordingly, the key to determining whether rights

have vested is whether all of the conditions precedent to

the earning of the benefits have been satisfied. In Beard,

there was only one condition with whicl. it was necessary

for the employer to comply in order for his rights to

vest—his continued employment during the period when

the prior law was in effect. Since he had satisfied that

condition, he had acquired vested rights of which he

could not be retroactively deprived by the government.

Based on such reasoning, the Petitioner, Chief Kline,

had a vested right in payment of accrued leave according

to the terms of the prior ordinance. Like the plaintiff

in Beard, Chief Kline was required to comply with only

16

one condition subsequent in order for his rights to vest —

continued employment during the period when the

prior law was in effect. Having complied with that

requirement, Leonard Kline acquired a vested right of

which the municipality could not lawfully deprive him.

In a similar case, a Michigan court held that the

plaintiffs, inspectors employed by the Public Service

Commission, by continuing their employment through

the duration of the period for which the law in question

was in effect, had acquired a vested right in the benefits

provided for in that law. Ramey v. State, 296 Mich. 449,

296 N.W. 323 (1941). The law provided that employees

in the classified civil service were to be given vacations

with pay and that any such employee who was separated

from employment without having taken his vacation was

to be compensated for that unused benefit. Later, the

plaintiffs’ positions were removed from the classified civil

service, on the basis of which the state argued that they

were not entitled to reimbursement for unused vacation

time. The court held that since the employees had

acquired vested rights to the benefits, it was unlawful

for the state to have deprived them of the benefits. The

court stated as follows:

“Under the facts in this case, plaintiffs had per-

formed all acts necessary to insure to themselves

the right of a vacation with pay, or if dismissed

before exercised, to receive compensation for the

unused portion of their annual leave allowances.

There was nothing remaining for them to do except

exercise the right which depended on no contin-

gency, but was complete and matured. In my

opinion, vacation with pay is not a gratuity; it is

compensation for services rendered, It is a rule that

after the services are rendered under a law which

fixes the rate of compensation, there arises an

17

implied contract to pay for those services at that

rate and the contract cannot be impaired by subse-

quent legislation.” Fisk v. Jefferson Police Jury,

116 U.S. 131, 6 S. Ct. 329, 29 L. Ed. 587; Robert-

son v. Miller, 276 U.S. 174, 48 S.Ct. 266, 72

L, Ed. 517.

296 N.W. at 325.

According to the court in Ramey, not only did the

plaintiffs have a vested right to the benefits, they also

had an implied contract which could not be impaired by

subsequent legislation. This interpretation is consistent

with this Court’s view in State of Mississippi v. Miller,

276 U.S. 1974 (1928).

State courts in numerous other cases have held that

vested rights to employment benefits cannot be taken

away from a public employee. See Clift v. City of

Syracuse, 45 App. Div. 2d 596, 360 N.Y.S.2d 356

(1974) (the court held that an employee who had been

discharged before he could use his accumulated sick leave

was deprived of property without due process, since

vacations are conditions of employment, not gratuities);

Vangilder v. City of Jackson, 492 S.W.2d 15 (Mo. App.

1973) (sick leave benefits were held to be part of an

employee’s overall compensation, earned during the

period of his employment and forming a part of his

employment contract); Harryman v. Roseburg Rural Fire

Protection District, 244 Ore. 631, 420 P.2d 51 (1966)

(the court rejected the argument that sick leave was mere

gratuity for city employees and held that since the

plaintiff had accepted employment on the assumption

that sick leave was part of his compensation for services,

it was a contractual term of employment); City of

Orange v. Chance, 325 S.W.2d 838 (Tex. Civ. App.

1959) (payment for unused sick leave was not merely a

18

gratuity, but rather was part of the employee’s overall

compensation),

For the reasons discussed above, the divesting of Chief

Kline’s right to be paid for his unused leave was a taking

of property without due process of law. The City’s

action is comparable to giving an employee a bonus

contingent on his continued work for a specified period.

After the period passes and the bonus vests, the bonus

is abolished without notice or a hearing. Whether a

municipality may pass an ordinance such as the one

involved here and abolish vested property rights without

notice is an issue worthy of review by this Court.

CONCLUSION

This Court should take this case for its full review.

From the above, one of the last analogous decisions of

this Court on the subject of divesting public employee

entitlements is State of Mississippi v. Miller, 226 U.S.

1974 (1928). Today, public employees are increasingly

compensated by what are often termed “fringe benefits”

in addition to salary. No doubt, benefits such as the

right of Chief Kline to be paid for his unused leave in

accordance with a local law should not be thought of

as on the “fringe” of his total compensation package;

rather the entitlement to be paid on retirement is an

elemental part of that package which constituted his

remuneration for faithful public service. See, e.g.,

Christian v. County of Ontario, 399 N.Y.S.2d 379

(1977), Elemental fair dealing is at odds with the City

of Fairfax in this case, and elemental fairness is at the

heart of the due process clause. The tangible rewards of

public service are too few to permit further discourage-

ment to those who consider careers as servants of us all.

The millions of public servants, both state and federal,

19

look to this Court to condemn arbitrary action, including

the divesting of accrued entitlements. This case is impor-

tant to these millions, and is worthy of this Court’s full

attention and decision. The issue is simple, the facts are

uncomplicated, the import is far reaching, the need for

the highest precedence is clear. This petition should be

granted,

Respectfully submitted,

GILBERT K. Davis

Counsel of Record

Joun D. Tew

DAVIS AND GILLENWATER

6801 Whittier Avenue

McLean, Virginia 22101

(703) 893-6011

Counsel for Petitioner