In Joseph v. City of Atwater, 74 Cal. App. 5th 974 (5th Dist. 2022), the Court of Appeal held that an employment agreement created a hybrid employment relationship between a city and a plaintiff employed as a chief of police. In reaching its conclusion, the Court found that under the terms of the agreement, plaintiff’s employment as chief of police was at will, and that plaintiff’s employment as a lieutenant (were he to be removed from the chief of police position) was not at will.
In November 2016, plaintiff Samuel Joseph and defendant City of Atwater (“City”) entered into a “CHIEF OF POLICE EMPLOYMENT AGREEMENT” which specified the terms, benefits, and requirements regarding the City’s employment of Joseph as its chief of police. Section 2.2 addressed the City’s removal of Joseph from his employment as chief of police by stating:
Joseph shall be designated an ‘at-will’ employee. Accordingly, the City Manager may terminate this [Chief of Police] Employment Agreement and remove Joseph from the position of Police Chief at any time, for any reason, with or without cause. If the City Manager removes Joseph from the position of Police Chief for any reason other than willful misconduct in office or conviction of a crime of moral turpitude, Joseph shall be given the option to either:
2.2.1 Return to his previous position of Police Lieutenant, where his compensation will be based on Step 6 of Range 315 of the Salary Schedule for Police Lieutenant; or
2.2.2 Terminate his employment with the City and receive four (4) months wage continuation pay, with such pay to be computed at the highest base salary received by Joseph during his service with the City. This Section 2.2.2 shall not apply in the event of a ‘Resignation’ as defined [in] Section 2.1.
In September 2018, the city manager sent Joseph and his attorney a notice informing Joseph of the city manager’s “intention to terminate [plaintiff’s] employment as Police Chief with the City for willful and other misconduct.” The notice listed policy and Penal Code violations, described four types of willful misconduct, and set forth other mismanagement issues.
The notice also described Joseph’s right to appeal the termination decision. Under Section 3304(c) of the Public Safety Officers Procedural Bill of Rights Act (“POBRA”; Government Code section 3300 et seq.), no chief of police may be removed from office without being provided written notice of the reasons “and an opportunity for administrative appeal.” The notice of intended discipline stated that, in accordance with Section 3304(c), Joseph was “entitled to present any testimony or documentary evidence [he] believe[d] should be considered regarding [his] termination … to a neutral arbitrator at the City’s expense.” Joseph also was informed that (1) he could submit testimony in person or in writing; (2) he could bring representation to the hearing; (3) the hearing would not be “a full evidentiary hearing in that you are not entitled to cross-examine witnesses and the City is not obligated to call any witnesses or present any evidence beyond this Notice and its attachments”; (4) the hearing officer would make a recommendation on the proposed termination to the city manager; and (5) the city manager would make the final, binding decision.
Joseph’s attorney responded to the City in a letter stating Joseph was appealing the proposed termination and was objecting to the appeal procedure offered by the City. The letter asserted Joseph was “entitled to a hearing before a ‘truly neutral arbitrator’ (not one selected by the City at the City’s expense), at which the City will be required to bear the burden of proving the charges, be required to call witnesses in support of the charges, and [plaintiff] will be afforded the opportunity to cross-examine those witnesses, and present witnesses to testify on his behalf.” Although the City and Joseph exchanged further correspondence thereafter, they ultimately were unable to agree as to the type of hearing that Section 3304 required. Joseph refused to participate in a hearing that did not comply with his interpretation of POBRA and so no hearing was held. In November 2018, the City terminated Joseph’s employment as chief of police for willful and other misconduct.
Joseph filed a petition for writ of mandate, alleging that the City failed to provide him with the type of hearing necessary to afford him “an opportunity for administrative appeal.” The trial court denied the petition and entered judgment in favor of the City. The trial court concluded that Joseph was an at-will employee pursuant to the terms of his employment contract, and that the hearing offered by the City satisfied the statutory requirement of providing “an opportunity for administrative appeal” under Section 3304(c). Joseph appealed.
The Fifth District Court of Appeal initially noted that Labor Code section 2922 states that “[a]n employment, having no specified term, may be terminated at the will of either party on notice to the other.” An employer and employee may agree to any limit, otherwise lawful, on the employer’s right to terminate the employment relationship for any or no reason. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 336.) The City and the trial court characterized Joseph’s employment with the City as an at-will employee. Joseph argued he had the contractual right to be returned to the position of lieutenant if his termination as police chief was without cause; City’s decision to terminate his employment for willful misconduct deprived him of his right to employment as a lieutenant; and the termination for cause created a situation where he was entitled to the same procedural rights as other public safety officers terminated or disciplined for cause.
The Fifth District explained that the threshold question when interpreting a written contract is whether its text is ambiguous—that is, reasonably susceptible to more than one interpretation. The Court’s focus was the question of whether the agreement was reasonably susceptible to the interpretation that Joseph was an at-will employee not only as a police chief, but in any capacity.
The Court noted that Section 2.2 of the employment agreement stated that Joseph “shall be designated an ‘at-will’ employee. Accordingly, the City Manager may terminate this Employment Agreement and remove Joseph from the position of Police Chief at any time, for any reason, with or without cause.” The Court decided that the plain meaning of this part meant that Joseph’s employment as police chief could be terminated at any time for any reasons and, consequently, his employment in the police chief position was properly characterized as at will.
The Court described the remainder of Section 2.2 as imposing a limit on the City’s right to terminate Joseph’s employment for any reason. That portion provided that if Joseph’s employment as police chief was terminated for reasons other than “willful misconduct in office or conviction of a crime of moral turpitude,” Joseph had a right to continued employment as a lieutenant or a payment of four months’ salary, at his option. The Court stated: “Thus, section 2.2 necessarily implies that City’s right to terminate plaintiff’s employment as a lieutenant is limited to the specified reasons—that is, willful misconduct or conviction of a crime of moral turpitude, which necessitate certain procedural protections.”
The Fifth District thus determined that when Section 2.2 was read as a whole, it was not reasonably susceptible to the interpretation that all of Joseph’s rights to employment were at will. The Court concluded that the employment agreement instead “unambiguously created a hybrid employment relationship between City and plaintiff. First, plaintiff’s employment as chief of police was at will. Second, plaintiff’s employment as a lieutenant was not at will because it could be terminated only on the grounds specified in the agreement. Interpreting the agreement otherwise would deprive plaintiff of the job security for which he bargained.”
As for the type of “opportunity for administrative appeal” provided by POBRA’s Section 3304, the Fifth District noted that subdivision (b) provides “[n]o punitive action, nor denial of promotion on grounds other than merit, shall be undertaken by any public agency against any public safety officer …without providing the public safety officer with an opportunity for administrative appeal.” Subdivision (c) of Section 3304 provides in part: “No chief of police may be removed by a public agency, or appointing authority, without providing the chief of police with written notice and the reason or reasons therefor and an opportunity for administrative appeal. For purposes of this subdivision, the removal of a chief of police by a public agency or appointing authority, for the purpose of implementing the goals or policies, or both, of the public agency or appointing authority, for reasons including, but not limited to, incompatibility of management styles or as a result of a change in administration, shall be sufficient to constitute ‘reason or reasons.’”
The Court concluded that Joseph’s rights to employment as chief of police were governed by subdivision (c) of Section 3304 as that provision addressed removal of a chief of police from office. However, the Court noted that subdivision (c) did not cover Joseph’s rights to employment as a lieutenant. The Court concluded that those rights were governed by subdivision (b) of Section 3304, which applied to punitive action against “any public safety officer[,]” which included a lieutenant. The Court correspondingly concluded that the termination of Joseph’s right to employment as a lieutenant entitled him to an administrative appeal pursuant to Section 3304(b). The Court stated that the employment agreement established Joseph’s right to employment as a lieutenant could be terminated only for “willful misconduct in office or conviction of a crime of moral turpitude.” As a result, Joseph’s right to employment as a lieutenant was entitled to the procedural protections afforded other public safety officers whose employment could be terminated only for cause.
The Fifth District explained that the more extensive procedural protections applicable to public safety officers who could be terminated only for cause were addressed in Caloca v. County of San Diego (4th Dist. 1999) 72 Cal.App.4th 1209 (Caloca I) and Caloca v. County of San Diego (4th Dist. 2002) 102 Cal.App.4th 433 (Caloca II). In Caloca II, the Fourth District Court of Appeal concluded that the law clearly recognized some minimum procedural protections necessary to satisfy POBRA’s requirement for an administrative appeal. A compliant administrative appeal required (1) an independent reexamination of the decision, (2) the reexamination be conducted by someone who was not involved in the initial determination, (3) the independent administrative decision maker to set forth findings to bridge the analytical gap between the raw evidence and the ultimate decision, (4) the hearing to “be treated as a de novo proceeding at which no facts are taken as established” and (5) the proponent of a particular fact to bear the burden of establishing it. (Id., at pp. 443–444.) The Caloca II court also concluded the hearing could not be closed over the officer’s objection.
Here, the Fifth District found that these minimum procedural protections must be provided to Joseph in the administrative appeal provided to him in connection with the termination of his rights to employment as a lieutenant. The Court concluded that the hearing offered by City did not satisfy these requirements and, therefore, did not comply with Section 3304(b). The Court explained that the retention of final authority by the city manager did not provide Joseph with a hearing by an independent decision maker as required by Caloca II and other case law because the city manager was involved in the initial decision to terminate Joseph’s employment. Moreover, the City’s proposed hearing did not provide Joseph with a full evidentiary hearing where he had the right to cross-examine witnesses and the burden of proving a particular fact was placed on its proponent. The Fifth District Court of Appeal accordingly reversed the order denying the petition for writ of mandate and remanded for further proceedings.
HOW THIS AFFECTS YOUR AGENCY
Agencies that agree to hirings with similar hybrid employment relationships between themselves and employees may wish to assess the implications of these agreements considering the Court’s decision here. If in doubt as to whether an employee may be terminated only for cause, the more conservative, prudent course of action would be to afford the employee full procedural protections set forth in POBRA.
As always, if you want to discuss any of this in greater detail, do not hesitate to contact James Touchstone at email@example.com or by telephone at (714) 446-1400.
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 The notice of intended discipline stated that if Joseph wished to appeal the proposed termination, he should inform the city manager by October 10, 2018; the hearing would occur no later than 60 days after his request, unless the parties agreed to a continuance; the neutral hearing officer would be chosen and paid by City; and Joseph would remain on the payroll until the city manager made a final decision.
 Smith v. Adventist Health System/West, 182 Cal.App.4th 729, 754–755 (5th Dist. 2010).
 Italics added.
 The Court added that because this contractual limitation on the City’s right to terminate Joseph’s overall employment was more specific than the sentence stating Joseph was an at-will employee, the more-specific sentence must be given effect. See Code Civ. Proc., Section 1859 [if a general provision in a contract conflicts with a specific provision, the specific provision controls].
 See Parker v. City of Fountain Valley, 127 Cal.App.3d 99, 106 (4th Dist. 1981) [police sergeant’s position described as permanent and tenured because he would be removed from his position only for cause].