COURT OF APPEALS OF VIRGINIA
Present: Judges Chafin, Russe ll and Senior Judge Clements Argued at Richmond, Virginia

EVELYN C. OSTERLOH MEMORANDUM OPINION * BY v. Record No . 0495-18-2 JUDGE TERESA M. CHAFIN DECEMBER 18, 2018 VIRGINIA DEPARTMENT OF SOCIAL SERVICES

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND T.J. Markow, Judge David R. Simonsen, Jr., for appellant. W. Ryan Waddell, Assistant Atto rney General (Mark R. Herring, Attorney General; Samuel T. Towell, Deputy Attorney General; Gregory C. Fleming, Senior Assist ant Attorney General, on brief ), for appellee.
Evelyn C. Osterloh was terminate d from her employment with the Virginia Department of Social Services (the Depart ment). She appeals from an order of the Circuit Court of the City of Richmond (“circuit court”) affirming the decisions of a hear ing officer and the Department of Employment Dispute Resolution (EDR) 1 upholding that termination. For the following reasons, we affirm.

* Pursuant to Code § 17.1-413, this op inion is not designated fo r publication.

1 Effective on January 1, 2017, the D irector of the Office of ED R assumed the responsibility for administra tive review of hearing officer dec isions pursuant to Code § 2.2-3006(A). See Murphy v. Dep’t of State Police, 68 Va. App . 716, 813 S.E.2d 21 (2018).UNPUBLISHED‐ 2 - I. BACKGROUND Osterloh was employed as a manager by the Department. On June 29, 2016, Osterloh was issued a “Notice of Improve ment Needed” and was subsequentl y placed on a three-month re-evaluation plan. See Departme nt of Human Resource Managemen t (“DHRM”) Policy 1.40. 2 During the three-month period, Ost erloh received plan updates f ocusing on areas in which she still needed improvement. However, Osterloh did not complete some of the tasks that were assigned, and she refused t o sign several of the re-evalua tion update documents.

2 DHRM Policy 1.40 states, The re-evaluation process does not prevent the agency from taki ng disciplinary action b ased on the employee’s poor performance or other reasons stipulated in [ DHRM] Policy 1.60, Standards of Conduct, or issuing additional Im provement Needed/Substandard Performance forms. DHRM Policy 1.40 also states that An employee whose performan ce during the re-evaluation period is documented as not improving, m ay be demoted within the three (3)-month period to a position in a lower Pay Band or reassigne d to another position in the same Pa y Band that has lower level duti es if the agency identifies another pos ition that is mor e suitable fo r the employee’s performance level. A demotion or reassignment to another position will end the re-evalu ation period. DHRM Policy 1.40 further states that If the agency determines that there are no alternatives to demo te, reassign, or reduce the employee’ s duties, termination based on the unsatisfactory re-evaluation is th e proper action. The employe e who receives an unsatisfactory re-e valuation will be terminated at the end of the three (3 )-month re-evaluation period.‐ 3 - On March 14, 2017, Osterloh was notif ied of the Department’s in tent to issue formal discipline under DHRM Policy 1.60. 3 The Department issued a Group II Written Notice of disciplinary action on March 16, 201 7. Osterloh’s performance did not improve, and on March 24, 2017, she was again given notice that the Department intend ed to issue new formal discipline. On March 30, 2017, the Department issued a second Group II Written Notice which included the termination of Ost erloh’s employment. The notice indicated that she was provided an additional opportuni ty to provide the req uested reporting th rough the March 16, 2017 Group II Written Notice, but she “has not followed through with meeti ng deadlines and performing the assigned tasks.” Osterloh filed a grievance to di spute her termination on April 12, 2017. A hearing officer heard argument on June 15, 2017. The DHRM supplied the hearing officer with an official policy interpretation e xplaining the relati onship between DHRM Policies 1.40 and 1.60. The interpretation makes clear that an employee being in the re-eva luation process provided for in Policy 1.40 does not prohibit an age ncy from simultaneously tak ing disciplinary action based on the reasons stated in Policy 1.60. The hearing officer entered hi s first written decision on July 5, 2017. Significantly, the hearing officer found that Osterl oh’s “supervisor testified con sistently with the a llegations in the Written Notices” and that “his testimony credibly establishes” Osterloh’s alleged misconduct.

3 DHRM Policy 1.60 provides that Group II offenses include acts of misconduct that a re more serious and/or repeat nature that require formal disc iplinary action. This level is appropriate for offenses that have a significant impact on busi ness operations and/or constitute ne glect of duty, insubordination, the abuse of state resources, viol ations of policies, procedures, o r laws. Failure to follow instructions and repeated instances of poor j ob performance are specifically considered Group II offenses.‐ 4 - Nevertheless, the hearing officer r eversed Osterloh’s terminati on based on his determination that early termination under DHRM Policy 1.60 is “irreconcilable wit h the three-month re-evaluation plan under [DHRM] Policy 1.40.” The hearing officer also found that the Department “acted from an improper motivation.” H is reasoning for this finding w as that there was an “absence of any other explanation for why the [ Department] concurrently imp osed its correction power through two punitive processes, either one of which could have resulted in an orderly termination (if supported by the evidence).” The hearing officer went on t o state that “the reasonable inference is that the [Departmen t] improperly retaliated agains t [Osterloh] by its disciplinary process imposed to end prematurel y the re-evalu ation period wit h termination.” Osterloh and the Department reque sted an administrative review of the July 5, 2017 written decision. On review, DHRM’ s Office of EDR determined t hat the hearing officer did not properly apply the official polic y interpretation of DHRM Polic ies 1.40 and 1.60 and remanded the matter back to the hearing officer. On September 5, 2017, the hearing o fficer issued a second writt en opinion. The hearing officer again found that the eviden ce established Osterloh’s mi sconduct, noting that the Department’s “assessment of [Osterloh’s] poor performance appea rs based on [Oste rloh’s] actual conduct and behavior, all of whi ch was solely within the contro l of” Osterloh and that “[t]he conduct as stated in the writte n notice occurred.” The hearing officer upheld the first Group II Written Notice, but, despite his conclusion regarding Osterloh’ s misconduct, rescinded the second Group II Written Notice, f inding that “[t]he [Department ], by issuing two Group II notices for continuing poor perfor mance with early termination, applied Policies 1.40 and 1.60 inharmoniously.” The hearing offi cer further determined that O sterloh’s unimproved performance warranted the “issu ance of one Written Notice durin g the re-evaluation period,” but‐ 5 - that DHRM’s official policy int erpretation did not “sanction mu ltiple Written Notices during the [three]-month re-evaluation.” H e also determined that There is nothing to suggest that the [Department’s] view of [Osterloh’s] work performan ce was retaliatory beyond the [Department’s] procedural acti ons to speed the termination via the disciplinary process rather than the exis ting re-evaluation pla n. The Department again sought admin istrative review of the heari ng officer’s decision, contending that the decision was i nconsistent with DHRM Policie s 1.40 and 1.60. On October 17, 2017, EDR vacated the hearing officer’s second decision. S pecifically, EDR concluded that the hearing officer’s determina tion that “the agency’s discipli nary process was re taliatory in this case is unsupported and must be reversed on remand.” On remand, the hearing officer e ntered a third and final decis ion on October 19, 2017. Given his prior findings of Osterloh’s misconduct and the fact that EDR’s most recent policy ruling vitiated the sole stated b asis of his prior findings of retaliation, the hearing officer was compelled to conclude that Oste rloh’s termination was “due to a ccumulation of disciplinary action.” He upheld both Group II Written Notices and her resul ting termination. Osterloh appealed to the c ircuit court. On January 22, 2018, the circuit court heard argument and dismi ssed Osterloh’s appeal. Osterloh filed a motion for rec onsideration. The circuit court granted the motion and again heard argument on the appeal on Feb ruary 27, 2018. The circuit court once more dismissed Osterloh’s appeal, upholding her termination f rom her position with the De partment. Osterloh now appeals the circuit court’s decision to this Court . She argues that the circuit court applied the wrong standar d of review in the proceedings b elow. Additionally, she asserts that the final order of the h earing officer “is contradictory t o law because it is inconsistent with and contradictory to the guiding pr inciple of Virginia law that the [h]earing [o]fficer acts as the‐ 6 - finder of fact.” Finally, she c ontends that by reversing his o wn factual finding as to retaliation, that the hearing officer’s fin al decision is not based on the h earing officer’s own factual finding.
II. ANALYSIS As a preliminary matter, we address Osterloh’s contention that the circuit court erred in failing to apply the proper standard of review. “On appeal from a state employ ee grievance decision, courts are bound by the factual findings of the hearing officer a nd may only reverse or modify the decision if it is ‘contradictory to law.’” Osburn v. Va. Dep’t of Alcoholic Bev. Control, 295 V a. 10, 17 (2018) (quoting Va. Polytechnic Inst. & State Univ. v. Quesenberry, 277 Va. 420, 42 9 (2009)). “The appealing party must identif y a constitutional provision, statute, regulation or judicial decision which the hearing offi cer’s decision contradicted.” [Qu esenberry, 277 Va. at 429.] Questi ons regarding whether a decision is co ntradictory to law, including the meaning of any underlying statutes, are reviewed de novo . See id.; REVI, LLC v. Chicago Title Ins. Co., 290 Va. 203, 208, 776 S.E.2d 808, 810 (2015). Osburn, 295 Va. at 17 (internal quotation marks omitted). Virginia’s employee grievance pr ocedure confines the scope of r eview of each body that reviews a grievance after it ha s exhausted an agency’s internal resolution steps. The General Assembly has established a “trip artite review procedure” that s ets forth the following roles: (1) the hearing officer is the finder of fact and final authori ty on factfinding; (2) DHRM and EDR determine whether the heari ng officer’s ruling is in compli ance with personnel policy and grievance procedure (respectivel y); and (3) the circuit courts determine whether the grievance determination is “contradictory t o law.” Va. Dep’t of State Po lice v. Barton, 39 Va. App. 439, 445 (2002); see Code § 2.2-3006. The h earing officer’s factual findings, EDR’s administrative determinations of compliance w ith grievance procedure, and DHRM ’s determination of compliance with personnel polic y are not subject to judicial re view. Id. Therefore, the circuit‐ 7 - courts are given an especially na rrow scope of review, and any decision of the circuit court “presents a pure question of law and is accordingly subject to de novo review.” Warrington v. Commonwealth, 280 Va. 365, 370 (2010) ( quoting Jones v. Commonw ealth, 276 Va. 121, 124 (2008)). In this case, the circuit court failed to utilize the standard of review that is mandated by the tripartite review procedure . The role of the courts in thi s procedure is solely to determine whether the grievance determination is “contradictory to law.” Barton, 39 Va. App. at 445. The circuit court reviewed the reco rd in order to determine whether there was sufficient evidence to support the hearing officer’s deci sion to terminate Osterloh’s employment, thus employing an improper standard of review.
Our de novo review of the circuit court’s decision . . . is conceptually analogous to the cir cuit court’s review of the [he aring officer’s] decision. The circu it court conducted no factfindin g to which we must defer. Nor were th ere any discretionary calls ma de during the course of the circu it court’s proceedings. Reston Hosp. Ctr., LLC v. Remley, 63 Va. App. 755, 771 n.9 (201 4). As this appeal presents a question of pure law requiring a de novo review of the hearing office r’s final decision, it is unnecessary to address the circu it court’s lega l conclusions. Therefore, this Court will conduct an independent review of the r ecord to determine whether the he aring officer’s third and final determination was contradictory to law. Osterloh contends that the EDR’ s “failure to acc ept the hearin g officer’s factual finding of unlawful retaliati on as final and bindi ng is a violation of [Code § 2.2-3005.1(C)(iii)].” Code § 2.2-3005.1(C)(iii) clearly states that “[t]he decision of the hearing officer shall . . . be final and binding if consistent with law a nd policy.” “Pursuant to the s tate employee grievance procedure, the General Assembly has vested review of policy issues involve d in such cases in DHRM, and‐ 8 - not in the courts.” Passaro v. V a. Dep’t of State Police, 67 V a. App. 357, 370 (2017) (citing Code § 2.2-3006). Here, the hearing officer’s opinion s make clear that the sole basis for his finding retaliation was his conclusion tha t the Department’s concurrent use of the two disciplinary processes was contrary to policy. 4 EDR appropriately reviewed the policy determination inherent in that finding and inf ormed the hearing officer of hi s error. EDR stated in its October 17, 2017 written decision that an agency does not “elect” to man age an employee’s performance under either [DHRM] Polic y 1.40 or [DHRM] Policy 1.60. Both policies may be applied as appropriate and necessary to address unsatisfactory or other misc onduct, and the terms of both polic es are applicable to employees who have been placed on a re-evaluation plan. Because the factual finding of retaliation was not consistent w ith policy, it was not final or binding. See Code § 2.2-3005.1(C)(iii). With the sole reason for his f inding of retaliation no longer viable, the hearing officer was left to determine only whether O sterloh committed the alleged m isconduct and whether such misconduct supported the written notices and the ultimate sanct ion imposed. Given his repeated findings that Osterloh had engage d in the alleged misconduct, t he hearing officer upheld both the written notices and the sanction of termination. Ultimately, “the party appealing the hearing officer’s decisio n properly bears the burden of identifying the law thereby c ontradicted.” Quesenberry, 277 Va. at 429. For the reasons stated above, Osterloh has faile d to demonstrate such an error. Accordingly, we hold that the

4 On appeal, Osterloh argues that t here are other potential reas ons to conclude that the Department engaged in retali ation. The hearing officer, howeve r, did not base his finding of retaliation on anything other than a n inference flowing from th e alleged policy violation.‐ 9 - termination decision is consis tent with law and policy as requi red by Code § 2.2-3005.1(C)(iii), and thus, is final and bindi ng. Accordingly, we affirm. Affirmed.