Opinion ID: 1196444
Heading Depth: 1
Heading Rank: 5

Heading: The Authority to Dismiss At Pleasure

Text: In urging that the CEO was authorized to discharge Sargent, the Bank relied solely on its own bylaws which declare that the Board's authority to remove officers is delegated to Executive Officers and Senior Vice Presidents. Before probing through the evidentiary materials in the record to assess the absence of a fact issue in this regard, we must decide whether the § 24(Fifth) power to dismiss may be delegated by a national bank's board of directors. We hold it may not. By clear and simple terms, § 24(Fifth) mandates that a national banking association shall become ... a body corporate, and as such ... it shall have power    by its board of directors to appoint ... officers ... [and] dismiss such officers or any of them at pleasure. ... (Emphasis added.) The statute not only defines the Board's power as one permitting an officer's discharge at will, but it specifies that this power is to be exercised on behalf of the body corporate. No other entity is given the statutory right to act for the bank in terminating an officer's employment at will. Had Congress intended to place chief executive officers on the same plane that boards occupy, it would have done so. A national bank cannot bestow unto either itself or its chief officer  via bylaws  any more authority (or immunity) than that which is conferred by the federal law. [26] The Bank insists that the validity of its bylaws, and in particular its delegation of the statutory dismissal power to its CEO, is supported by the terms of 12 C.F.R. § 7. 4425, which provide: The board of directors of a national bank may not delegate responsibility for its duties but may assign the performance thereof. (Emphasis added.) If this provision is to be interpreted consistently with § 24(Fifth), we must conclude that the regulation does no more than sanction the assignment of performance or execution of a decision which has already been made by the board. Carrying out an order is to performance what deciding an officer's fate is to fulfilling a responsibility. In short, the responsibility for deciding whether to dismiss an officer necessarily includes the nondelegable duty to actually make that decision. The record contains nothing to indicate that the Board had either approved or ratified the plaintiff's March 24, 1986 termination for cause. Indeed, the CEO states in his affidavit: On or about March 24, 1986 ... I discharged the Plaintiff from CNB [the Bank]. According to the minutes of the March 19, 1986 board meeting, Sargent, along with many others, came to be slated for layoff to reduce overhead. The Plaintiff's last day was to have been June 16, 1986. This information leaves no doubt that a fact issue still exists on whether Sargent's dismissal was effected by the Board. In sum, the summary judgment record does not establish a federally protected discharge  i.e., one which has been accomplished by the only entity with the § 24(Fifth) power to dismiss at will  the board of directors. Should other fact issues regarding the federal law's applicability develop on remand and take the plaintiff out of the statute's purview, pre-emption will not avail as a bar to actionability on Sargent's contract-related theories.