# FILED

November 30, 1999 Cecil Crowson, Jr. Appellate Court Clerk 

## IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

DAVID E. KELLY, ) ) Plaintiff/Appellant, ) ) Davidson Chancery VS. ) No. 98-458-II ) THETENNESSEE CIVIL SERVICE ) COMMISSION and ) Appeal No. THETENNESSEE DEPARTMENT ) M1999-00168-COA-R3-CV OF LABOR, ) ) Defendants/Appellees. )

APPEAL FROM THE CHANCERY COURT FOR DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE THE HONORABLE CAROL L. McCOY, CHANCELLOR

For the Plaintiff/Appellant : For the Defendants/Appellees : FrankJ. Scanlon PaulG. Summers Watkins, McGugin, McNeilly& Rowan Attorney General and Reporter Nashville, Tennessee WilliamJ. Marett, Jr. AssistantAttorney General

Page 1

## AFFIRMED AND REMANDED

WILLIAM C. KOCH, JR., JUDGE

Page 2

## O P I N I O N

This appeal involves the two-day suspension of anemployee of

the Tennessee Department of Labor. After the Tennessee Civil Service Commission upheld the suspension, the employee filed a petition for judicial review in the Chancery Court forDavidson County challenging the factual basis of the Commission ’ s decision and asserting that the Department acted arbitrarily and capriciously. The trial court, sitting withoutajury, affirmed the suspension. On this appeal, the employee admits violating departmental policy but asserts that he should have received less serious discipline or no discipline at all. We affirm the trial court ’ s decision upholding the employee ’ s two-day suspension.

I.

David E. Kelly has worked for the State of Tennessee for approximately twenty years, the last eleven with the Department of Labor. He served as the Department ’ s director of management systems until 1993 when he was demoted for poor job performance. 1 Mr. Kelly continued to work as one of the Department ’ s
seven systems analysts and was assigned to the Division of Workers ’ Compensation. In addition to his responsibilities to the Division of Workers ’ Compensation, Mr. Kellyalso served as the Department ’ s security administrator and

was responsible for controlling access to all of the Department ’ s mainframe computers.

Mr. Kelly ’ s performance evaluations were generally good following his demotion. However, three incidents occurred between late 1994 and mid-1995 that caused the Department to discipline him. The first incident involved Mr. Kelly ’ s reluctance to assist newer systems analysts 2in gaining access to the Department ’ s mainframe computers even though the Commissioner had directed the systems analysts to cooperate witheach other. Despite repeated requests between December 1994 and July 1995, Mr. Kelly declined to assist one of the Department ’ s newer

Page 3analysts gain needed access to the computer. Mr. Kelly later explained his conduct

by stating thathewas “ totallyfrustrated withthembadgering 3meto do stuff thatwas notmy job to do. ” The second incident reflecting on Mr. Kelly ’ s job performance involved his delay incomplying withthe Department ’ s humanresources director ’ s instructions to clear the hallway near his office. In late 1994, the director instructed Mr. Kelly to clear the hallway of equipment and boxes that had accumulated on the floor, the windowsills, and top of the filing cabinets in violation of the fire code and the Americans with Disabilities Act. By June 1995, Mr. Kelly had removed the items fromthe floorbuthad notremoved the items fromthe filing cabinets or windowsills. Mr. Kellytold the directorthathe would remove the remaining items as soon as he found space and eventually completed the taskinSeptember1995.

The third incident involved Mr. Kelly ’ s unapproved attendance at a four-day educational seminarin July 1995. Mr. Kelly did not notify his superiors that he was attending the seminar and did not obtain prior approval as required by the Department ’ s policy. Mr. Kelly later explained that he “ forgot ” to follow departmental procedures for obtaining advance approval for training but also stated thathehad not attended many seminars because the Department ’ s human resources director “ gave me a hassle anytime I asked for a class. ” Mr. Kelly left the course early without completing it because he was needed at the Department. He later apologized to the acting director of management systems, saying that he “ didn ’ t know itwas going to be this big adeal.

. . . Ijustforgotto fill out the paperwork. I ’

m sorry. If itbothers you thatmuch I ’ ll pay forthe course myself. ”

On July 19, 1995, the acting director of management systems asked the Commissioner to suspend Mr. Kelly for three days for violating the Department ’ s policies and for failing to carry out direct instructions. On July 31, 1995, the Commissioner suspended Mr. Kelly from work for three days after taking the three incidents and Mr. Kelly ’ s earlierdemotion into consideration. Following an informal hearing presided over by the Department ’ s legal director, the Commissioner

Page 4shortened Mr. Kelly ’ s suspension to two days.

Mr. Kelly pursued a Step V grievance to the Tennessee Civil Service Commission. Following a hearing, an administrative law judge employed by the Secretary of State concluded that Mr. Kelly ’ s 1993 demotion should not have been considered and thatMr. Kelly ’ s acts did not constitute insubordination. According, the administrative law judge reduced Mr. Kelly ’ s two-day suspension to an oral warning and awarded him partial attorney ’ s fees. At the Department ’ s request, the Civil Service Commission reviewed the administrative law judge ’ s interim order. While it adopted the administrative law judge ’ s findings of fact, the Commission concluded that the evidence established insubordination and violation of departmental policies. Accordingly, the Commission reinstated Mr. Kelly ’ s two-day suspension and vacated the award of attorney ’ s fees.

Mr. Kelly filed a petition for judicial review in the Chancery Court for Davidson County seeking to overturn the Civil Service Commission ’ s decision. On April 27, 1999, the trial court affirmed the Commission ’ s decision after determining that Mr. Kelly ’ s suspension was not contrary to law, arbitrary or capricious, or unsupported by the evidence. The trialcourt also rejected Mr. Kelly ’ s argument that theCommission acted arbitrarily and capriciously by considering his 1993 demotion when determining whether his punishment was appropriate. Mr. Kelly now appeals fromthe trialcourt ’ s decision.

II.

Evidentiary Support for the Suspension

Mr. Kelly ’ s chief argument on this appeal is that the Department failed to presentsubstantial and materialevidence thathis two-day suspension was warranted. While he does not insist that he was completely blameless, Mr. Kelly asserts that thetwo-day suspension was too harsh and that either a less harsh punishment or no formal punishment at all would have been warranted. We find that the record

Page 5supports the Commissioner ’ s decision.

A. Standard of Review

Judicial review of decisions by the Tennessee Civil Service Commission are governed by the Tennessee Uniform Administrative Procedures Act. See Tenn. Code Ann. § 4-5-322(a)(1) (1998). Trial and appellate courts use the same standard of review. See Ware v. Greene , 984 S.W.2d 610, 614 (Tenn. Ct. App. 1998); Estate of Streetv. State Bd. of

Equalization , 812 S.W.2d 583, 585 (Tenn. Ct. App. 1990). When the factual support for an administrative decision is challenged, the courts mustexaminethe entirerecord to determine whetherthe decision is supported by substantial and materialevidence. See Tenn. Code Ann. § 4-5-322(h)(5) (1998).

The substantial and material evidence standard requires a searching and careful inquiry into the record to determine the basis for the administrative decision. See Sanifill of

Tennessee, Inc. v. Tennessee Solid Waste Disposal Control Bd. , 907 S.W.2d 807, 810 (Tenn. 1995); Wayne County v. SolidWaste Disposal Control Bd.

, 756 S.W.2d 274, 280 (Tenn. Ct. App. 1988). Courts do not reweigh the evidence in these cases, see Humana of Tennessee v. Tennessee Health Facilities Comm'n , 551 S.W.2d 664, 667 (Tenn. 1977); Jackson Mobilphone Co., Inc. v. Tennessee Pub. Serv. Comm'n , 876 S.W.2d 106, 111 (Tenn. Ct. App. 1993), but rather review therecord for “ such relevantevidence as areasonable mind might accept to support
a rational conclusion and such as to furnish a reasonably sound basis for the action under consideration. ” Southern Ry. Co. v. State Bd. of Equalization , 682 S.W.2d 196, 199 (Tenn. 1984).

We may not reverse an administrative decision supported by substantial and materialevidence solely because the evidence could also support another result. See Hughes v. Bd. of Comm'rs , 204 Tenn. 298, 305, 319 S.W.2d 481, 484 (1958); Metropolitan Gov ’ t of

Nashville and Davidson County v. Tennessee Solid Waste

Page 6Disposal Control Bd. , 832 S.W.2d 559, 561 (Tenn. Ct. App. 1991). Courts may

reject an agency's factual findings only if a reasonable person would necessarily draw adifferentconclusion fromthe record. See Jones v. Greene , 946 S.W.2d 817, 828 (Tenn. Ct. App. 1996).

B.

The Evidence Against Mr. Kelly

The state civil service rules permit supervisors to discipline employees “ whenever just or legal cause exists. ” Tenn. Comp. R. & Regs. r. 1120-10-.02 (1988). The record before us contains substantial and material evidence that Mr. Kelly refused to accept reasonable and proper assignments from his superiors, 4that he failed to maintain satisfactory and harmonious working relationships with his fellowemployees, 5 andthathe disrupted the normal operation of the Department and interferedwithhis superiors ’ abilityto manage. 6

Mr. Kellydid notcomply inatimely or cooperative manner with his superiors

’ repeated requests to assist other systems analysts seeking access to the Department ’ s mainframe computer or to clear the hallway of materials. He also ignored the Department ’ s policy requiring advance approval for training. This conduct reflects the absence of a satisfactory and harmonious relationship between Mr. Kellyand the othersystems analysts and the Department ’ s temporary directorof management systems. The conduct also caused disruption within the Department because Mr. Kelly ’ s coworkers ’ efficiency was impaired when they could not gain

access to the Department ’ s mainframe computer, and when Mr. Kelly was not available to perform needed work because he was attending training away from the office.

Both the Department ’ s legal counsel and the administrative law judge characterized Mr. Kelly ’ s conduct as “ disorganized ” and “ negligent” rather than insubordinate. However, the record contains substantial and material evidence that

Page 7supports both the Department ’ s and the CivilService Commission ’ s conclusion that

Mr. Kellywas insubordinate. His lack of respect for his superiors is reflected in his sarcastic responses when he was questioned about the unauthorized training, in his petulant objections to the “ cross-training thing ”

– his reference to his superiors ’ direction that the systems analysts work together rather than independently, and in his purposeful delay incarrying outassignments withwhichhedid notagree.

III. The Arbitrariness and Capriciousness of the Suspension

Mr. Kellyalso asserts thatthere are two reasons why the Commissioner ’ s and theCivilService Commission ’ s decision to suspend him for two days was arbitrary andcapricious. First, heargues that his conduct, even ifproven by substantial and material evidence, did not warrant such harsh punishment. Second, he insists that theCommissionerand the CivilService Commission should not have taken his 1993 demotion into account in considering the appropriate discipline for these three offenses.

Courts may modify or overturn a decision by an administrative agency that is

“ [a]rbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. ” Tenn. Code Ann. § 4-5-322(h)(4). This standard of review, while akin to the standard in Tenn. Code Ann. § 4-5-322(h)(5), requires the court to determine whether the administrative agency made a clear error in judgment. See Jackson Mobilphone Co. v. Tennessee Pub. Serv. Comm ’n , 876 S.W.2d at 110-11. An arbitrary decision is one that is not based on any course of reasoning or exercise of judgment, see State ex rel Nixon v. McCanless , 176 Tenn. 352, 354, 141 S.W.2d 885, 886 (1940), orthat disregards the facts or circumstances of the case without some basis that would lead a reasonable person to reach the

same conclusion. See Jackson Mobilphone Co. v. Tennessee Pub. Serv. Comm ’n , 876S.W.2d at111.

Page 8Tennessee ’ s civil service statutes and rules incorporate the doctrine of

progressive discipline. Accordingly, supervisors are expected to administer discipline beginning at the lowest appropriate step. See Tenn. Code Ann. § 8-30-330(a), (c) (1993); Tenn. Comp. R. & Regs. r. 1120-10-.07 (1996). Progressive discipline does not require a supervisor to begin at the lowest level of discipline regardless of the nature of the employee ’ s conduct. It simply means that thesupervisorshould impose the lowest appropriate punishment taking into account the nature or severity of the employee ’ s behavior. Accordingly, supervisors have the discretion to determine what punishment fits the offense. See Berning v. State Dep ’ t of Correction , 996 S.W.2d 828, 830 (Tenn. Ct. App. 1999).

We do not sit as some sort of super Civil Service Commission when we review cases involving the discipline of state employees. Based on Mr. Kelly ’ s conduct, we cannot fault either the Commissioner or the Civil Service Commission fornotgivinghimeitheran oral or written warning or some other lesser punishment. Nor can we fault the Commissioner for decreasing Mr. Kelly ’ s suspension from threeto two days. As one member of the Civil Service Commission observed, Mr. Kelly was “ lucky to get by with a two day suspension. ” Based on the evidence in this record, we decline to conclude that Mr. Kelly ’ s supervisors abused their discretion by setting his punishmentatatwo-day suspension.

Likewise, we decline to find that either the Commissioner or the Civil Service Commission acted arbitrarily or capriciously by arriving at Mr. Kelly ’ s discipline in lightof his entireworkhistory, including his 1993 demotion. Whileprior disciplinary actions have no bearing on whether an employee has engaged in work-related conduct that warrants discipline, an employee ’ s prior conduct, both good and bad,

can be considered when determining what the appropriate disciplinary action should be. See Tennessee Dep ’ tof Human Servs. v. Mahon , No. 01A01-9504-CH-00143, 1995 WL 581086, at *4 (Tenn. Ct. App. Oct. 5, 1995) (No Tenn. R. App. P. 11 application filed) (citing the employee ’ s “ long history of progressive discipline coupled withno overall improvement ” ); Memphis & Shelby County Health Dep ’ tv.

Page 9Bailey , Shelby Eq., slip op. at 3 (Tenn. Ct. App. Dec. 6, 1984) (No Tenn. R. App.

P. 11 application filed) (stating that an employee ’ s prior record was admissible in determining punishmentonce the factof the employee ’ s conduct has been settled).

The administrative law judge permitted Mr. Kelly to, in effect, collaterally attack the validity of his 1993 demotion. In its order upholding the two-day suspension, the Civil Service Commission expressly held that “ both the Administrative Law Judge ’ s decision to admit evidence on the Grievant ’ s 1993 disciplinary demotion which was not grieved and the Administrative Law Judge ’ s decision that the demotion could not be relied upon as a prior act of progressive discipline constitute reversible error in this action. ” We agree with the Civil Service Commission ’ s conclusion on these issues. IV.

We affirm the judgment and remand the case to the trial court for whatever furtherproceedings may be required. We also tax the costs of this appeal to David E. Kellyand his surety forwhichexecution, if necessary, may issue.

______________________________ WILLIAM C. KOCH, JR., JUDGE

CONCUR:

________________________________ BENH. CANTRELL, PRESIDING JUDGE, M.S.

________________________________ WILLIAM B. CAIN, JUDGE

Page 10