Case Title: Virginia Dept. of Taxation v. Daughtry

Citation: 

Docket Number: 941729

State: virginia

Court: Virginia Supreme Court

Date: 1995-11-03T00:00:00Z

Document:
Present:  Carrico, C.J., Compton, Stephenson, Lacy, Hassell, 
Keenan, JJ., and Whiting, Senior Justice 
 
VIRGINIA DEPARTMENT OF TAXATION 
                                            OPINION BY 
v.   Record No. 941729 
SENIOR JUSTICE HENRY H. WHITING 
 
                                          November 3, 1995 
MAURIE L. DAUGHTRY 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS 
 
Randolph T. West, Judge 
 
VIRGINIA DEPARTMENT OF CORRECTIONS 
 
v.   Record No. 941955 
 
JAMES DILLON 
 
 
FROM THE CIRCUIT COURT OF HALIFAX COUNTY 
 
Charles L. McCormick, III, Judge 
 
 
In these appeals, the common issue is whether state-agency 
employers implemented the decisions of two grievance panels 
issued pursuant to the provisions of former Code § 2.1-114.5:1. 
 
The plaintiffs in these cases are state employees entitled 
to file grievances under the provisions of former Code § 2.1-
114.5:1, in modified form now Code §§ 2.1-116.05 to -116.07.  
Following are the pertinent provisions of the statutes in effect 
when these issue arose: 
 
 
Definition of grievance. -- A grievance shall be a 
complaint or dispute by an employee relating to his 
employment, including but not necessarily limited to 
(i) disciplinary actions, including dismissals, 
demotions and suspensions[.] 
 
Former Code § 2.1-114.5:1(A) (Supp. 1994).  
 
 
 
Management responsibilities. -- Management 
reserves the exclusive right to manage the affairs and 
operations of state government.  Accordingly, the 
following complaints are nongrievable: . . . (vii) the 
. . . transfer [and] assignment . . . of employees 
within the agency. 
 
Former Code § 2.1-114.5:1(B) (Supp. 1994). 
 
 
 
 
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The decision of the panel shall be final and 
binding and shall be consistent with 
provisions of law and written policy. 
 
Former Code § 2.1-114.5:1(D)(4)(d) (Supp. 1994). 
 
 
 
Either party may petition the circuit court having 
jurisdiction in the locality in which the grievant is 
employed for an order requiring implementation of the 
panel decision. 
 
Former Code § 2.1-114.5:1(F) (Supp. 1994). 
 
 
I. 
 
 
Maurie L. Daughtry was first employed in the Norfolk 
district office of the Virginia Department of Taxation as a field 
representative, dealing in person with delinquent taxpayers.  In 
July 1990, the Department terminated Daughtry's employment for a 
number of asserted reasons.  A grievance panel determined that 
the Department proved several of these reasons, which included 
lying to management, disruptive behavior, arguing, and 
insubordination, but reversed Daughtry's dismissal and imposed a 
30-day suspension.  The panel also recommended that she be 
transferred to another office. 
 
The Department reinstated Daughtry and transferred her to 
its Peninsula district office in Newport News.  On March 13, 
1992, Daughtry's employment was again terminated because of her 
alleged unsatisfactory job performance and the Department's 
receipt of information from the office of Daughtry's psychiatrist 
and another Department employee that Daughtry had threatened to 
kill one of her supervisors and herself if she were terminated. 
 
 
 
 
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Daughtry appealed that decision to a grievance panel.  The 
panel held a hearing on whether the Department was justified in 
terminating Daughtry because of the threats and her 
unsatisfactory job performance.  At that hearing, a witness 
described the Department's receipt of information about the 
threats, and Daughtry did not deny making them.  The grievance 
panel found that Daughtry's termination "was motivated in part 
because of the alleged immediate need to remove the employee from 
the premises of the Peninsula Office." 
 
The panel "modifie[d] the termination action by the agency 
because of mitigating circumstances and recommend[ed] 
reinstatement to the same or similar position" after Daughtry was 
evaluated by a mental health professional who would certify that 
Daughtry was fit to return to the stresses and demands of her 
position in the Department.  The panel also recommended that 
Daughtry be assigned to an office other than the Peninsula 
office, where Dallas Parker, a supervisor with whom Daughtry had 
a problem, worked. 
 
After being notified that it could not require or recommend 
the mental health evaluation, the panel modified its decision by 
(1) "order[ing Daughtry's] reinstatement to the same or similar 
position," (2) deleting its recommendations of an evaluation by a 
mental health professional and a transfer to another office, and 
(3) adding the following:  "The panel did not feel that the 
Agency was justified in termination either for threatening a 
 
 
 
 
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supervisor or unsatisfactory job performance." 
 
Upon the conclusion of the Department's unsuccessful appeal 
of the amended panel decision, the Department reinstated Daughtry 
as an employee.  However, the Department transferred her 
temporarily to its Richmond office and advised Daughtry that she 
could elect to be assigned permanently to that office or to any 
district office other than the Norfolk, Peninsula, or Bristol 
offices.
1  The Department also directed Daughtry to undergo a 
mental health evaluation to certify her "readiness for duty" 
prior to reporting for work on December 16, 1992.  Although 
Daughtry reported for work, she did not provide the required 
certificate and she did not begin work. 
 
Thereafter, the Department advised Daughtry that if she 
failed to report for work with the required certification by 
December 23, this would be considered as her resignation.  
Whereupon, Daughtry filed a petition in the circuit court to 
implement the panel's decision under the provisions of former 
Code § 2.1-114.5:1(F).  She also secured a temporary injunction 
restraining the Department from terminating her employment 
pending a hearing. 
 
     
1The record discloses that Richmond is the closest office to 
Daughtry's home in Chesapeake, other than the Norfolk and 
Peninsula offices where Daughtry had experienced prior 
disciplinary problems. 
 
 
 
 
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Following an ore tenus hearing, the chancellor held that the 
Department had not implemented the panel's decision and ordered 
it to reinstate Daughtry in "the same or similar position in its 
Newport News or Norfolk Office" without requiring Daughtry "to 
undergo a mental evaluation as a condition for reinstatement."  
The Department appeals. 
 
The Department contends that since the grievance panel "did 
not find [that] the death threat was not made," it would have 
been irresponsible not to transfer Daughtry from the office in 
which the evidence showed that the death threats were made.  
Thus, the Department argues that its transfer of Daughtry to 
another office and its requirement of a mental health evaluation 
before she resumed work were "within management's prerogative 
[under former Code § 2.1-114.5:1(B)] and consistent with its duty 
to provide a safe working environment for all employees." 
 
Daughtry contends that "the agency's attempt to block Ms. 
Daughtry's return to duty was in bad-faith," and that we decided 
this issue adversely to the Department's contention in Zicca v. 
City of Hampton, 240 Va. 468, 397 S.E.2d 882 (1990).  We disagree 
with Daughtry. 
 
Zicca involved an employer's effort to subvert the grievance 
panel's decision by the subterfuge of assigning Zicca on paper to 
his former position, but never having him perform the duties of 
that position, and transferring him the following day to another 
position.  Id. at 469-71, 397 S.E.2d at 882-83.  Here, there was 
 
 
 
 
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no finding or evidence of an attempted subterfuge or bad faith; 
rather, the Department informed Daughtry by letter dated three 
weeks before she returned that she would be assigned to the 
Richmond office. 
 
Further, the employer in Zicca gave no reason for Zicca's 
transfer; here, the record provides uncontradicted evidence of a 
compelling necessity to transfer Daughtry from the office in 
which she had made threats to kill her supervisor.  And the 
chancellor could not direct Daughtry's reassignment to the 
Norfolk office because such reassignments are the sole 
responsibility of the employer under the provisions of former 
Code § 2-114.5:1(B).  Accordingly, we conclude that the 
Department, in the proper exercise of its management 
responsibilities reserved under this code section, was justified 
in transferring Daughtry to its Richmond office. 
 
Next, we consider whether the Department had the right under 
these circumstances to require that Daughtry obtain a mental 
health evaluation before returning to work, as it claims on 
appeal.  Daughtry successfully contended before the chancellor 
that the Department had no right to impose this condition upon 
the panel's order reinstating Daughtry, especially since it had 
not adopted a written policy giving it the right to require that 
its employees submit to mental examinations.  Again, we disagree 
with Daughtry. 
 
Given the serious nature of Daughtry's threats, the evidence 
 
 
 
 
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of her apparently unstable mental condition, and the Department's 
responsibility for the safety of the supervisors and employees in 
the Richmond office, we think that the Department was justified 
in requiring Daughtry to establish her fitness to return to work. 
 Nor, under the circumstances of this case, do we think that the 
Department was required to have adopted a written policy giving 
it such a right, as Daughtry urges.
2  See Hill v. City of Winona, 
454 N.W.2d 659, 661 (Minn. App. 1990) (employer can require 
employee to submit to psychological examination if unwritten 
policy is reasonably applied).  Accordingly, we hold that the 
Department was justified in requiring that Daughtry submit to and 
pay for a mental examination by a mental health professional of 
her choice prior to resuming work. 
 
Therefore, we will reverse the final decree of the 
chancellor and enter a final decree dismissing the petition. 
                     
     
2We note that an unwritten policy does not give the 
Department unfettered discretion to require employees to submit 
to mental examinations.  If the Department unreasonably required 
such an examination, the employee could have refused to submit to 
the examination and raised the issue as a grievance if the 
employee was disciplined as a result of such refusal.  Former 
Code § 2.1-114.5:1(A)(i) (Supp. 1994).  And the employee's right 
to raise the issue has not been abrogated by the amendments to 
the grievance statute.  Code § 2.1-116.06(A)(i). 
 
 
 
 
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II. 
 
James R. Dillon was employed by the Bureau of Industrial 
Enterprises, a division of the Virginia Department of Corrections 
(individually and collectively the Department), as the supervisor 
of the Halifax Correctional Sign Shop.  After he failed to report 
to work on two days for which he had requested and been denied 
annual leave to attend a non-job-related seminar, Dillon was 
terminated in March 1992 for "[f]ailure to follow supervisor's 
instructions, perform assigned work or otherwise comply with 
applicable established written policy."  Upon Dillon's appeal to 
a grievance panel, the panel "felt that the written notice 
[specifying the grounds for termination] was warranted."  
However, it modified Dillon's termination to a 30-day suspension 
without pay because of "mitigating circumstances." 
 
During Dillon's absence from work following his first 
termination, the Department discovered that the monthly sales 
records of the Sign Shop prepared by inmate workers were inflated 
by $432,630 or 137.7% in late 1991 and early 1992, four months of 
the period in which Dillon was responsible for verifying the 
accuracy of these records.  Although inmate workers prepared 
these reports and incentive payments were made to some of the 
inmate workers based upon the monthly sales records, Dillon 
signed them without verifying their accuracy.  The reports were 
then sent to the Department which made substantial overpayments 
to some of the inmate workers as a result of these inflated 
 
 
 
 
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figures. 
 
Dillon's employment was again terminated because of his 
"[f]ailure to adequately perform assigned work and comply with 
[the] applicable written pay plan for [the Sign S]hop."  Dillon 
appealed that decision to another grievance panel.  Although 
upholding the grounds for termination, the panel overturned the 
termination decision and directed that Dillon be suspended for 
another 30 days, again because of "mitigating circumstances." 
 
Upon Dillon's reinstatement, he was not returned to his 
former position as Sign Shop Supervisor, but was assigned to the 
position of Building and Grounds Supervisor at the Dillwyn 
Correctional Center.  Pursuant to former Code § 2.1-114:5:1(F), 
Dillon filed a petition in the circuit court for implementation 
of the grievance panel decisions.  Concluding that the panel had 
no authority to reinstate Dillon except to the position from 
which he was discharged, the trial court held that "the result of 
the panel opinion in this case is reinstatement of this employee 
to his former position" and that the Department had not complied 
with the panel's decision.  Accordingly, the trial court ordered 
the Department to reinstate Dillon to his former position as Sign 
Shop Supervisor. 
 
The Department argues that the trial court erred in ordering 
this reinstatement because (1) neither panel ordered Dillon to be 
reinstated to his former or a similar position, (2) Dillon's 
transfer was for compelling reasons related to his job 
 
 
 
 
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performance, (3) former Code § 2.1-114.5:4(B) gave the Department 
the right to transfer Dillon to another job for which he was 
well-qualified at the same pay, and (4) the Department was 
required to hire a replacement for Dillon in his former job while 
his first grievance was pending.  Dillon responds that (1) the 
grievance panel had no authority to transfer Dillon to another 
position, and (2) since he prevailed in both his grievance 
petition proceedings, this case is controlled by Zicca, which he 
reads as holding that "[w]hen the agency loses a discharge case, 
it must reinstate the person to the job that he previously held." 
 
We agree with Dillon that the grievance panel had no 
authority to transfer him to another position.  See Jones v. 
Carter, 234 Va. 621, 625-26, 363 S.E.2d 921, 924 (1988) 
(grievance panel does not have authority to promote aggrieved 
employee).  And we think that if the employee is reinstated by 
the panel, in the absence of evidence of justification for a 
transfer to another position within the agency, the agency must 
reinstate the person to his former position. 
 
In this case, however, the evidence demonstrated Dillon's 
unsatisfactory job performance in several important respects.  In 
1990, Dillon closed the shop for two and a half days without 
authorization and was suspended for 10 days for that offense.  In 
1992, during a telephone conversation with one of his 
supervisors, Dillon was told that the Department had no one who 
could replace him for the two days when Dillon wanted to take 
 
 
 
 
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leave and that the Department could not close down the shop 
during that time.  Dillon responded that he would not come to 
work those two days and "you do what you have to do" and then 
hung up the telephone.  In 1990, Dillon had been warned that his 
job performance was unsatisfactory because of inadequate 
production records in the sign shop.  Yet, as noted earlier in 
this opinion, in 1991 and 1992, Dillon never checked the sales 
records kept by inmate workers and thus permitted them to 
substantially inflate the sales figures resulting in overpayments 
to some of the inmate workers. 
 
We conclude that this evidence amply justified the 
Department's exercise of the management responsibilities reserved 
to employers under former Code § 2.1-114.5:1(B) to reassign 
Dillon within the Department to another position in the same pay 
grade.  Accordingly, we will reverse the judgment of the trial 
court and enter a final order dismissing the petition. 
                 Record No. 941729 - Reversed and final decree. 
 
Record No. 941955 - Reversed and final judgment.