Motion to Dismiss, Account Stated

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					STATE OF NORTH CAROLINA                               IN THE OFFICE OF
                                                ADMINISTRATIVE HEARINGS
STOKES COUNTY                                            99 OSP 0105

LARRY R. LANE,                      )
  Petitioner,                       )
       v.                           )     RECOMMENDED DECISION
   Respondents.                     )

        On April 24, 2001, Administrative Law Judge Melissa Owens Lassiter heard this contested
case in High Point, North Carolina,

                              PROCEDURAL BACKGROUND

        On January 29, 1999, Petitioner Larry R. Lane ("Petitioner") filed a Petition for Contested
Case Hearing in the Office of Administrative Hearings ("OAH"). The petition stated that Petitioner
was "forced to be terminated on August 31, 1998, due to not accepting retirement September 1,
1998." (Petition, § 5). On April 5, 1999, Respondent North Carolina Department of Transportation
("Respondent" or "DOT") filed a Motion to Dismiss with accompanying affidavits and exhibits, and
a Brief Supporting such Motion to Dismiss.

        On April 7, 1999, Chief Administrative Law Judge ("ALJ") Julian Mann, III filed and mailed
a Request for Response to Respondent’s Motion to Dismiss to Petitioner, giving Petitioner until
April 7, 1999, to respond or otherwise object to Respondent’s Motion to Dismiss. On or about April
12, and April 19, 1999, Petitioner provided a response to Respondent’s Motion to Dismiss to the
OAH via facsimile transmission. On June 11, 1999, ALJ Mann entered a Final Decision in the
matter dismissing Petitioner’s case because OAH and the State Personnel Commission lacked
subject matter jurisdiction under Chapter 126 of the General Statutes (the State Personnel Act) to
hear the matter. On June 24, 1999, ALJ Mann entered an Order Amending Final Decision to correct
a clerical error.

       On July 8, 1999, Petitioner filed an "Appeal" in the Stokes County Superior Court. On
August 2, 1999, Respondent filed a Motion to Dismiss and Response to Petitioner’s "Appeal." On
September 22, 1999, Senior Resident Superior Court Judge Clarence W. Carter held a hearing on
Respondent’s Motion to Dismiss, and a hearing on Petitioner’s "Appeal" as a Petition for Judicial
Review. Over Respondent’s objection, Judge Carter allowed Petitioner to testify at such hearing.
On November 12, 1999, Judge Carter entered an Order with new Findings of Fact and Conclusions
of Law, and ultimately remanded the case to the OAH for a contested case hearing.
         On December 2, 1999, Respondent filed a Notice of Appeal to the North Carolina Court of
Appeals. The Record on Appeal was filed on February 17, 2000. On May 18, 2000, Respondent
filed its Brief, and on July 13, 2000, Petitioner filed his Brief. Respondent filed a Reply Brief on
December 1, 2000. On December 19, 2000, the Court of Appeals issued an opinion, per N.C.R.
App. P. 30(e), dismissing Respondent’s appeal as being interlocutory.

       On remand to the OAH, the case was assigned to ALJ Melissa Owens Lassiter by Order dated
January 31, 2001.


       For Petitioner:                Mark H. Badgett
                                      Attorney at Law
                                      P.O. Box 961
                                      King, NC 27021

       For Respondent:                Sarah Ann Lannom
                                      Assistant Attorney General
                                      North Carolina Department of Justice
                                      P.O. Box 25201
                                      Raleigh, NC 27611


                                  N.C. Gen. Stat. § 126-34
                    N.C. Department of Transportation Personnel Manual
        N.C. Department of Transportation Violence in the Workplace Policy – Section 6


       Whether Respondent forced or compelled Petitioner to retire?


       Petitioner presented testimony from the following witnesses: Petitioner, Edward Leon

       Respondent presented testimony from the following witnesses: William Rodney ("Rod")
Friddle, Gary Franklin Neal, Mike Shaffner, Cynthia Eller Patton, Denise Ketcham.


       Petitioner’s Exhibits 1-2 were offered and received into evidence.

       Respondent’s Exhibits 1-7 were offered and received into evidence.

                                      FINDINGS OF FACT

                                        Adjudicated Facts

        Based upon the official documents in the file, the sworn testimony of the witnesses, and the
other competent evidence admitted at the hearing, the undersigned finds the following facts:

1.      As of May 9, 1998, Petitioner had completed 36 years of service with the Respondent DOT.
Petitioner’s entire tenure with the DOT was spent working in Division 9 of the Division of Highways
in positions involving maintenance. When he left employment in August 1998, Petitioner held the
position of Equipment Operator Specialist (pay grade 62). (T pp 25-27; 153) Petitioner was 57 years

2.      Petitioner’s immediate supervisor was Rod Friddle (Transportation Supervisor III). Friddle’s
supervisor was Gary Neal (County Maintenance Engineer) and Neal’s supervisor was Mike Shaffner
(District Engineer). (T pp 83, 133, 135, 152-53, 163)

3.      Petitioner’s supervisors generally considered him to be a good employee with above-average
job performance and few problems until June of 1998. (T pp 138, 153) In June of 1998, Petitioner
began experiencing some problems on-the-job involving a relatively new female employee, Elizabeth
Dewees. Prior to that time, Dewees often had been assigned to work with Petitioner so that he could
help train her. (T pp 47-48, 138, 154, 156)

4.       On June 10, 1998, Petitioner and Dewees were at a job site when Petitioner’s motor grader
broke down. (T pp 27-28) Petitioner and Dewees called the DOT shop to report the machinery
breakdown. The DOT shop foreman instructed Petitioner to stay with the vehicle until someone
arrived to repair it. After someone repaired the motor grader, Petitioner and Dewees went to lunch at
a local restaurant. (T p 29) By memorandum dated July 14, 1998, Neal issued Petitioner a written
warning for job performance based on what had occurred on June 10, 1998. (Petitioner’s Exh. 1)
The written warning was issued to Petitioner at that time because Petitioner’s supervisors did not
became aware of the June 10, 1998 incident until after they conducted an investigation into another
situation involving Petitioner. The specific basis for the written warning was Petitioner’s failure to
notify his supervisor that his equipment had been inoperable for three hours. Petitioner was issued
the written warning because as the on-site supervisor that day, he was held responsible for the
situation. Neal and Friddle held a separate counseling session with Dewees to address her behavior.
(T pp 159-60)

5.      On the afternoon of Friday, June 12, 1998, Dewees met with Friddle and Neal and indicated
to them that Petitioner was "smothering her" and had an obsession with her. Dewees asked to be
moved to another job assignment away from Petitioner. In response, Neal directed Friddle to "split
[Petitioner and Dewees] up," so that even though Petitioner and Dewees might be working on the
same crew, they would not be riding in a truck together. (T pp 135-36, 154; Respondent’s Exh. 6)

6.      On Monday, June 15, 1998, Petitioner asked Friddle whether Dewees was going to ride with
Petitioner that day and whether she was ever going to ride with him again. On Tuesday, June 16,
1998, Petitioner asked Friddle why another employee was able to ride with Dewees while he was not
able to ride with her. On Wednesday, June 17, 1998, Friddle informally counseled Petitioner
regarding the problem with Dewees and told Petitioner that he was acting like a "jealous man."
Friddle told Petitioner to "think about what [he was] doing." (T pp 85-86, 135-39; Respondent’s Exh.

7.     On Thursday, June 18, 1998, Neal and Friddle held a counseling session with Petitioner about
his behavior with respect to Dewees. Neal indicated to Petitioner that if he continued the behavior,
he could be subject to disciplinary action. Petitioner was also referred to the Employees’ Assistance
Program ("EAP"). The counseling session was memorialized in a memorandum dated June 22,
1998. (T pp 88, 140; Respondent’s Exh. 7)

8.      Petitioner’s obsessive behavior toward Dewees escalated and became disruptive to the
workplace. Neal became concerned that Petitioner might violate the DOT’s Violence in the
Workplace Policy. Although Neal counseled Petitioner several times to "leave it alone," to "quit
being obsessed with [Dewees]," and to go to EAP, the behavior continued. (T pp 154-55)
Petitioner’s supervisors were both shocked and concerned by his behavior. (T pp 139, 156) In one
counseling session, Neal told Petitioner that he should consider retiring because Neal, recognizing
that Petitioner was an over-thirty-year employee with the DOT, "did not want to see [Petitioner] go
through the disciplinary process and lose his job that way," but to "go out like he deserved." (T p
169) Moreover, Petitioner himself had brought up the subject of retirement in the past with Neal and
Friddle when he had been unhappy in his position. (T pp 168-69)

9.      On July 22, 1998, Petitioner contacted Sergeant Evans at the Department of Correction
("DOC") to report what Petitioner considered to be suspected illegal activity between Dewees and an
inmate working on one of the DOT maintenance crews. Although it was normal DOT procedure to
report any problems with inmates to a DOT supervisor, Petitioner never reported his suspicions to
Friddle or Neal. Neal learned of Petitioner’s contacting the DOC through prison officials. Petitioner
also went off the job site that day during lunchtime with DOC officials without the knowledge of
Friddle. (T pp 89-90, 92-93, 141-42, 156-57) DOC officials never substantiated any illegal activity
between an inmate and Dewees. (T p 142, 157)

10.    Later in the day on July 22, 1998, Petitioner went to Neal and claimed that Dewees was
making "drug deals" with inmates and using alcohol. On July 23, 1998, upon learning that Petitioner
had contacted DOC officials without Neal’s knowledge, Neal met with Petitioner again and
counseled him about proper procedure and his fixation on Dewees. (T pp 155-56; Respondent’s Exh.

11.    Leon Hatcher, another DOT employee who worked in Forsyth County, had also heard and
observed Dewees engaging in inappropriate behavior and using inappropriate language with inmates.

12.    In order to conduct an investigation into the matter and because Neal was concerned for
Dewees’ safety, Neal decided to place Petitioner on investigatory placement with pay status on July
27, 1998. Petitioner was directed to report back on Monday, August 3, 1998 at 9:00 a.m. for a
meeting to conclude the investigation. (T pp 162-63; Respondent’s Exh. 1)

13.     On August 3, 1998, Petitioner reported to the meeting as directed. Neal, Friddle, and
Shaffner attended the meeting. The purpose of such meeting was to question Petitioner and obtain
his responses to complete the pending investigation. Neal asked Petitioner a series of questions,
while Friddle and Shaffner took notes. Petitioner’s responses to the questions were "rambling,"
"sporadic," "confusing and disjointed," and no matter what the question posed to him concerned,
Petitioner continually turned the conversation back to Dewees. (T pp 96-97, 144, 163-64, 179-81;
Respondent’s Exh. 2)

14.    Following the morning meeting on August 3, 1998, Petitioner was asked to return for an
additional meeting at 2:30 p.m. that day. Petitioner returned for the meeting as requested. In
addition to Petitioner, Friddle, Neal, Shaffner, and Cynthia Patton, a DOT Employee Relations
Representative also attended the meeting. Ms. Patton attended pursuant to Petitioner’s request. The
purpose of the meeting was to review a memorandum from Neal to Petitioner about the scheduling
of a pre-disciplinary conference for the following day. Neal wanted to be sure that Petitioner
understood the results of the DOT’s investigation, and give Petitioner time to respond, at the next
day’s predisciplinary conference, to the recommendation that he be dismissed for unacceptable
personal conduct. (T pp 97-98, 164-66, 181, 191-92; Respondent’s Exh. 2)

15.      At the afternoon meeting on August 3, 1998, Neal read the pre-disciplinary memorandum
out loud to Petitioner. After the letter was read, Petitioner asked to meet with Shaffner and Patton
alone. Neal and Friddle left the meeting. (T pp 167, 182, 192) Petitioner asked Shaffner and Patton
"what [his] options were." Shaffner and Patton explained that Petitioner could go ahead and attend
the pre-disciplinary conference the following day or consider retiring. (T pp 182, 192) Although
dismissal was the recommended disciplinary action being considered for the pre-disciplinary
conference, the Division Engineer for Division 9, Doug Waters, had the final authority regarding any
disciplinary action and the recommended action was always subject to change. (T pp 145, 166-67,
174, 186-88, 192) Neither Shaffner nor Patton had the authority to discipline Petitioner by
dismissing him. (T pp 99, 186, 193)

16.      Petitioner asked Shaffner for his opinion on "what to do." Shaffner told Petitioner that the
decision was entirely up to Petitioner. Neither Shaffner nor Patton told Petitioner that he "had" to
retire, nor did anyone coerce Petitioner. (T pp 173, 182-83, 192-94) At the conclusion of the
meeting, Petitioner had not made a decision about how he was going to proceed. (T pp 183, 193)

17.    Denise Ketcham, Office Assistant III, worked for Neal at the Forsyth County Maintenance
Unit and was responsible for preparing documents for employees wishing to retire. On the morning
of August 4, 1998, Petitioner telephoned Ketcham and told her that he wanted to retire. Ketcham
prepared the retirement papers for Petitioner to sign. Petitioner then came to the office and signed

the papers, giving a retirement date of September 1, 1998. Petitioner exhausted any remaining leave
from August 4, 1998 until his retirement date of September 1, 1998. (T pp 100-01, 199-201)

18.     After submitting his retirement papers to the DOT and State Retirement System, Petitioner
had second thoughts about retiring. However, Petitioner never contacted anyone at the DOT,
including Neal, about being reinstated to his position, nor did he return to work. Petitioner never
filed an internal grievance with the DOT concerning his retirement. Petitioner did not contact the
Human Resources Director, the Secretary of Transportation, or the DOT Benefits Manager about
challenging his retirement. Instead, an attorney wrote a letter on Petitioner’s behalf to the governor
about his job status. (T pp 67, 76, 79, 184, 194, 201-02)

19.     Petitioner’s retirement from employment with the DOT was effective September 1, 1998.
(Respondent’s Exh. 4) After September 1, 1998, Petitioner never contacted anyone at the DOT to
indicate that he wanted to rescind his retirement. (T pp 103, 106, 108, 170, 184, 194, 201-02 )

20.      Petitioner sent a letter dated October 15, 1998 to the State Retirement System indicating he
did not intend to retire. Petitioner enclosed his first retirement check, dated September 25, 1998,
with the letter. (T pp 67-68; Respondent’s Exh. 3) Petitioner did not provide a carbon copy of the
letter to anyone at the DOT, nor did he write a separate letter to the DOT at that time stating that he
did not intend to retire. (T p 104)

21.    By letter dated October 27, 1998, Joann Tart, Benefits Coordinator with the State Retirement
System, notified Petitioner that his benefits had been suspended. Petitioner’s October retirement
check, however, had been deposited automatically into Petitioner’s account with the State
Employees’ Credit Union. Petitioner returned the amount of the October benefit check to the State
Retirement System as requested. (T pp 68-70; Respondent’s Exh. 4) Tart’s letter was not carbon
copied to anyone at the DOT. (T p 105)

22.    On January 29, 1999, Petitioner resubmitted his application for retirement to the State
Retirement System. (T pp 70, 107; Respondent’s Exh. 5) Petitioner received a retroactive benefit
check in February 1999, and has received his monthly retirement benefit checks, through direct
deposit, continuously since that time. (T p 107)

23.     On January 29, 1999, Petitioner filed his Petition for Contested Case Hearing with the OAH.
In section 4 of the petition, Petitioner stated that his appeal was based on "termination," and "forced
retirement." In section 5 of the petition, Petitioner indicated that he was "forced to be terminated on
August 31, 1998, due to not accepting retirement September 1, 1998." (Petition for Contested Case

24.    The DOT’s grievance policy has no provision allowing an employee to challenge his or her
retirement. (T p 194)

                                   CONCLUSIONS OF LAW

1.      The parties are properly before the Office of Administrative Hearings and received proper
notice of the hearing in this matter.

2.      Pursuant to the November 10, 1999 Superior Court order ordering the Office of
Administrative Hearings to conduct a contested case hearing in this matter, the undersigned has
jurisdiction to hear this case.

2.     Petitioner was a career State employee pursuant to N.C. Gen. Stat. § 126-1.1.

3.     N.C. Gen. Stat. § 126-34.1(e) states:

       [a]ny issue for which appeal to the State Personnel Commission through the filing of
       a contested case under Article 3 of Chapter 150B of the General Statutes has not been
       specifically authorized by this section shall not be grounds for a contested case under
       Chapter 126.

4.      N.C. Gen. Stat. § 126-34.1 does not include a provision for an employee to file a contested
case regarding any issue involving his or her retirement from employment with a state agency.
Chapter 126 also does not provide for any remedy for an employee who desires rescission of his or
her retirement.

5.     N.C. Gen. Stat. § 126-35 states in pertinent part:

       (a)      No career State employee subject to the State Personnel Act shall be
       discharged, suspended, or demoted for disciplinary reasons, except for just cause. In
       cases of such disciplinary action, the employee shall, before the action is taken, be
       furnished with a statement in writing setting forth in numerical order the specific acts
       or omissions that are the reasons for the disciplinary action and the employee’s
       appeal rights. The employee shall be permitted 15 days from the date the statement is
       delivered to appeal to the head of the department. . . . The employee, if he is not
       satisfied with the final decision of the head of the department, or if he is unable,
       within a reasonable period of time, to obtain a final decision by the head of the
       department, may appeal to the State Personnel Commission. Such appeal shall be
       filed not later than 30 days after receipt of notice of the department head’s decision.

               *              *                *              *               *

       (c) For the purposes of contested case hearings under Chapter 150B, an involuntary
       separation (such as a separation due to a reduction in force) shall be treated in the
       same fashion as if it were a disciplinary action.

6.     Petitioner claims that he was "forced to retire" and thus, termination was forced upon him
pursuant to either N.C. Gen. Stat. § 126-35(a) or (c),

7.      North Carolina courts have yet to recognize the employment tort of constructive discharge.
Graham v. Hardee’s Food System, 121 N.C. App. 382, 465 S.E.2d 558 (1996). However, federal
courts recognizing such tort, provide guidance evaluating factual circumstances similar to
constructive discharge. The 4th Circuit court in Stone v. University of Maryland Medical System
Corporation, 855 F. 2d 167, 174 (1988) provided that :

       ... [A] resignation may be found involuntary if on the totality of the circumstances it
       appears that the employer’s conduct in requesting resignation effectively deprived the
       employee of free choice in the matter. Factors to be considered are:

       (1)     whether the employee was given some alternative to resignation;
       (2)     whether the employee understood the nature of the choice he was given;
       (3)     whether the employee was given a reasonable time in which to choose; and
       (4)     whether he was permitted to select the effective date of resignation.

8.      A preponderance of the competent evidence in the record reflects that, during a meeting on
the afternoon of August 3, 1998, Neal notified Petitioner that he was going to conduct a pre-
disciplinary conference the following day. Neal notified Petitioner that day to allow Petitioner 24
hours to think about his response to Neal’s recommendation that Petitioner be dismissed for
unacceptable personal conduct. Petitioner then asked to speak privately with Shaffner, Neal’s
supervisor, and Patton, an Employee Relations Representative, about his options. Shaffner and
Patton explained to Petitioner that he could either (1) proceed with the pre-disciplinary conference—
the outcome of which was to be determined by Doug Waters, the Division Engineer, or (2) choose to
take retirement, an option for Petitioner due to his number of years of service.

        Petitioner made no decision by the end of that meeting. However, on the following day,
August 4, 1998, Petitioner initiated the process to retire, completed his retirement papers, and
submitted them to the DOT with an effective retirement date of September 1, 1998. Petitioner chose
his own effective retirement date. Officials at the DOT never heard from Petitioner again until he
filed his Petition for Contested Case Hearing on January 29, 1999.

9.     At the administrative hearing, Petitioner admitted that after his retirement date on September
1, 1998, he never contacted anyone at the DOT for information or assistance, but dealt exclusively
with personnel at the State Retirement System regarding his retirement.

10.     Substantial evidence proved that Respondent gave Petitioner an alternative to retirement,
Petitioner understood the nature of the choice he was given, Petitioner was given a reasonable time
in which to choose an option, and if he was permitted to select the effective date of retirement.

11.     There is no evidence in the record indicating that Petitioner was misled by DOT officials or
otherwise relied upon assurances given by any DOT officials regarding the filing of any grievance or

12.    Accordingly, Petitioner has not demonstrated by a preponderance of the evidence that he was
"forced to retire" or that Respondent forced retirement upon him.

                                 RECOMMENDED DECISION

      Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned hereby
recommends that Petitioner’s retirement be left undisturbed, and the State Personnel Commission
AFFIRM Petitioner’s decision to retire.

                                      ORDER AND NOTICE

        The State Personnel Commission will make the Final Decision in this contested case. It is
required to give each party an opportunity to file exceptions to this Recommended Decision and
present written arguments to those in the agency who will make the final decision. N.C. Gen. Stat. §

        Pursuant to N.C. Gen. Stat. § 150B-36(b), the State Personnel Commission is required to
serve a copy of the Final Decision on all parties and furnish a copy to the parties’ attorney of record
and to the Office of Administrative Hearings.

       This the 16th day of July 2001.

                                               Melissa Owens Lassiter
                                               Administrative Law Judge


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