A former Cedar Bluff town employee who was fired after objecting to the town’s alleged mishandling of withheld earnings may have a wrongful discharge claim under Virginia law, a federal judge has ruled.
The decision by U.S. District Judge James P. Jones expands somewhat Virginia’s narrow exception to the employment-at-will doctrine.
The former assistant town clerk also gets a chance to advance her claim that town officials violated her First Amendment rights when they fired her for speaking out.
A 32-year employee for the Tazewell County town of Cedar Bluff, Marilyn Altizer worked as an assistant town clerk.
Altizer participated in a deferred compensation plan in which the town withheld $110 from each of her biweekly paychecks. The money – intended for retirement – was to be deposited in a trust account managed by a third party, according to her lawsuit.
Reviewing her benefits statement for the trust account in April 2013, she saw that no contributions had been made to the account that year, despite the deductions from her paychecks.
Altizer said she learned there was a town policy, directed by the town manager, to hold the employee deductions for later payment to the trust account, using the “float” for the town’s benefit, according to the judge’s summary of her allegations.
Altizer claimed she was ordered by the mayor not to disclose the policy.
Altizer disagreed with the town policy. As Jones later noted, federal law requires the income generated by the retirement plan to be held in trust for the exclusive benefit of the employees.
Altizer claimed her efforts to talk privately with town leaders about the policy were unsuccessful. She and her husband, Timothy, took the issue to a town council meeting, with Timothy requesting a public explanation of the apparent misuse of employee earnings.
Three days later, the town manager fired Altizer. She claimed he falsely accused her of poor job performance.
She sued for $300,000 plus punitive damages “in an amount to be determined.” She alleged wrongful termination and an unlawful “taking” in violation of the U.S. Constitution and state law.
Town officials opposed her First Amendment claim saying her complaints were mere “personal grievances” regarding a term of her employment, not a matter of public concern.
The judge disagreed.
“I find that the public comments alleged to have been made on Mrs. Altizer’s behalf were sufficiently focused on the purported malfeasance of the Town and its manager rather than simply about her personal grievance,” Jones said in his June 5 opinion, Altizer v. Town of Cedar Bluff (VLW 014-3-299).
Jones also concluded the right of public employees to speak about government misconduct without reprisal is clearly established, so he allowed the First Amendment claim to survive the defendants’ motion to dismiss.
Jones also gave a green light to the wrongful discharge claim based on Virginia’s Bowman doctrine.
The doctrine is based on a 1985 Virginia Supreme Court decision recognizing a “public policy” exception to the at-will employment rule. While various manifestations of the exception have been recognized over the years since, the court still defines Bowman as a “narrow” window.
One requirement is that a plaintiff must point to a Virginia statute violated by the employee’s termination. In Altizer’s case, Va. Code § 15.2-1512.4 recognizes the right of local government employees to express opinions to officials on matters of public concern without retaliation.
Jones said the alleged violation of that statute would support Altizer’s wrongful discharge claim.
Jones rejected Altizer’s Fifth Amendment “takings” claim, even though he agreed that she successfully alleged a loss of interest in the income generated by the deferred payments. Jones concluded her right to the money was not clearly established since there is no case law that “bears on similar facts.”
Jones also rejected claims based on conversion and breach of fiduciary duty.
Jones dismissed claims on behalf of Altizer’s husband, deciding he alleged no injury and failed to show how a favorable decision would “redress any injury.”
Jones denied Altizer’s motion for reconsideration on June 16.
Roanoke’s Thomas E. Strelka was among the employment plaintiffs’ lawyers who welcomed the decision on the state wrongful discharge claim.
“Anything that’s out there that at least recognizes the validity of Bowman is great as far as my practice is concerned,” Strelka said. “That’s a gem of any opinion in my mind,” he added.
“In a sense, it is a typical whistleblower case,” said Terry N. Grimes, another Roanoke employment lawyer. “The message is clear – the government cannot fire an employee for complaining about alleged unlawful acts of government officials,” he said.
Altizer is represented by Michael A. Bragg of Abingdon. The town and the town manager are represented by W. Bradford Stallard, also of Abingdon.
Neither immediately responded to a request for comment.
Trial is scheduled for three days in February.