Opinion ID: 852228
Heading Depth: 2
Heading Rank: 2

Heading: Ghosh's Termination from IDEM

Text: State merit employees may be terminated for cause by an appointing authority, the appointing authority's designee, or the ethics commission. I.C. § 4-15-2-34. An employee terminated by the appointing authority for cause may challenge that determination by filing a complaint, which must go through several levels of review, including a hearing with the appointing authority and review by the state personnel director. I.C. § 4-15-2-35. Employees who are not satisfied with the outcome of these procedures may appeal to SEAC, which is to hold a public hearing and render a timely decision. I.C. § 4-15-2-35(b). An employee terminated by the Ethics Commission must first petition the Ethics Commission to reconsider, then appeal to the SEAC with the same public hearing and timely decision requirements applied to terminations by the appointing authority. I.C. § 4-15-2-35.5(b). [1] Both the trial court and the Court of Appeals held that Ghosh is collaterally estopped from seeking review of his termination by reason of his failure to perfect his petition for judicial review of SEAC's order affirming his termination. See IDEM v. Ghosh, 2008 WL 638388, at . Collateral estoppel applies where a particular issue is adjudicated and then put in issue in a subsequent suit on a different cause of action between the same parties or their privies. McClanahan v. Remington Freight Lines, Inc., 517 N.E.2d 390, 394 (Ind.1988). One requirement for an agency ruling to be given collateral estoppel effect is that the issues sought to be estopped were within the statutory jurisdiction of the agency. Id. Ghosh argues that IDEM did not have the authority to terminate him for cause because the cause was an alleged violation of the Ethics Code, which is within the exclusive jurisdiction of the Ethics Commission. [2] Ghosh cites LTV Steel, which held that the Ethics Commission has exclusive jurisdiction . . . to adjudicate alleged violations of the Ethics Code. [3] 730 N.E.2d at 1258. Because of the Ethics Commission's exclusive jurisdiction, Ghosh argues, IDEM had no authority to terminate him for a violation of the Ethics Code, and therefore SEAC had no jurisdiction to address the issue. The Court of Appeals agreed with Ghosh that LTV Steel would prevent IDEM from terminating an employee for an alleged ethical violation. However, the Court of Appeals also found that IDEM had authority to terminate Ghosh because LTV Steel had been legislatively overruled by 2005 amendments to the State Personnel Act, which 1) authorized the Ethics Commission, in addition to the appointing authority, to terminate employees, and 2) mandated SEAC review of Ethics Commission terminations. I.C. §§ 4-15-2-34, -35.5. The Court of Appeals concluded that these amendments nullified LTV Steel's holding that the Ethics Commission is the sole body with authority to adjudicate disputes over alleged ethics violations. However, because SEAC has authority to hear appeals from all terminations, whether from the Ethics Commission or from the appointing authority, the Court of Appeals held that Ghosh's original appeal to SEAC adjudicated his claim. 911 N.E.2d at 145. Ghosh's argument would require the Ethics Commission to review any termination of a state employee when the basis for termination is an ethics violation. The Ethics Commission also supports the view that it alone should review terminations to supply consistency and fairness to all employees. That may be desirable policy, but the General Assembly has unequivocally given agencies the authority to terminate their employees for just cause. I.C. § 4-15-2-34. To be sure, just cause or cause to terminate an employee often defies precision, at least at the margins. See Roger I. Abrams & Dennis R. Nolan, Toward a Theory of Just Cause in Employee Discipline Cases, 1985 Duke L.J. 594, 599. The State's Personnel Policy reflects this: just cause includes violation of, or failure to comply with, Federal or State law, rules, executive order, policies or procedures; . . . dishonesty; . . . [and] actions which bring the agency or the individual into disrepute or impair the effectiveness of the agency or individual. State Pers. Dep't, Discipline Policy Statement (effective July 1, 2005), available at http://www.in.gov/spd/files/discpol.pdf. Despite the room for debate as to what just cause may mean in some contexts, it is clear that some acts that constitute just cause for termination are also ethics violations. For example, an employee who embezzles funds from a state agency is surely subject to termination for cause, and also violates the conflict of interest provision of the Ethics Code. We agree with the Ethics Commission that conduct that broadly implicates the Code of Ethics may also constitute `just cause' for dismissal. On the other hand, not every ethics violation is grounds for termination and some circumstances, for example incompetence, may be just cause for termination but do not constitute ethics violations. The statute thus authorizes both the Ethics Commission and the appointing authority to address facts that constitute just case for termination and also establish a violation of the Ethics Code. Both parties argue that the 2005 amendment did not legislatively overrule LTV Steel's holding that the Ethics Commission has exclusive jurisdiction to adjudicate alleged ethics violations. We agree. Prior to 2005, only the appointing authority could terminate a state employee. The 2005 amendments added termination to the available Ethics Commission sanctions, and gave SEAC the power to review the termination. By providing for SEAC review of Ethics Commission rulings on termination, the statute in question permitted SEAC to review a finding of an ethics violation. The amendment thus marginally affected the exclusive jurisdiction of the Ethics Commission by leaving the original jurisdiction in the Ethics Commission, but subjecting it to review by SEAC. But it did not extend the jurisdiction over ethical issues to any other agency and for the most part left the Ethics Commission's exclusive jurisdiction intact. In sum, IDEM had the authority to terminate Ghosh for cause. That decision was reviewable by SEAC, and SEAC's ruling was subject to judicial review. Ghosh therefore had a fair opportunity to litigate the issue of his termination and is collaterally estopped from seeking review of his termination. McClanahan, 517 N.E.2d at 394.