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Ross v. City of Sand Point (1/16/98), 952 P 2d 274
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
BRUCE ROSS, )
) Supreme Court No. S-7599
) Superior Court No.
v. ) 3AN-94-7727 CI
CITY OF SAND POINT, ) O P I N I O N
Appellee. ) [No. 4932 - January 16, 1998]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
John Reese, Judge.
Appearances: Kenton K. Pettit, Bogle & Gates,
P.L.L.C., Anchorage, for Appellant. Thomas M. Daniel, Perkins
Coie, Anchorage, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, and Bryner, Justices. [Compton, Justice, not participating.]
This appeal arises from the City of Sand Point's decision
to terminate Bruce Ross as public works director. Ross challenged
the City's decision through the City's grievance procedures, and a
grievance committee decided that Ross should be "returned to work."
The City's mayor subsequently offered to return Ross to a position
subordinate to the public works director, and Ross filed suit in
superior court alleging wrongful discharge and breach of the
implied covenant of good faith and fair dealing. The superior
court granted summary judgment in favor of the City on both claims.
Because we conclude as a matter of law that Ross was wrongfully
terminated from his position as public works director, we reverse.
II. FACTS AND PROCEEDINGS
The crucial facts underlying this litigation are
undisputed. Bruce Ross worked as the public works director for the
City of Sand Point, reporting directly to Mayor Alvin Osterback.
On the afternoon of Friday, February 4, 1994, during regular
working hours, the mayor went to Ross's home and discovered Ross
consuming beer with Derryl Koso, a Department of Public Works
employee. The mayor instructed Ross and Koso to be in his office
first thing Monday morning.
After returning to his office from Ross's home, the mayor
learned that Ross was on leave that afternoon, having used
compensatory time to have a partial day off. The mayor could not
locate a record of Derryl Koso being on leave.
Based on his conclusion that Ross had been drinking
alcohol "with an employee under [his] direct supervision while that
employee was supposed to be and should have been working,"the
mayor fired Ross. In a letter informing Ross of his termination,
the mayor explained that Ross's conduct on February 4 was
"unbecoming of a person who is responsible for a department of the
city." The letter also informed Ross that he could grieve the
mayor's decision to fire him under the provisions of the City of
Sand Point Personnel Policies and Procedures Manual.
On February 11 Ross filed a grievance pursuant to the
City's personnel manual. [Fn. 1] During the hearing, Ross
explained that he had allowed Koso to take the afternoon of
February 4 off to study for an upcoming work-related examination.
Subsequently, Koso went to Ross's house to be tutored for the
examination, met Ross and one of Ross's neighbors, and consumed
beer. Based on these facts, the grievance committee ruled in
Ross's favor, deciding that "Ross should be returned to work
because the policy regarding leave in the City Personnel Policy was
Despite the grievance committee's decision, the mayor did
not reinstate Ross as public works director. Instead, he informed
I strongly disagree with the grievance
committee, but I will abide by its decision. I am not bound,
however, to let the matter go unnoticed, nor am I bound to
reinstate you into the position of public works director. I do not
consider it to be in the best interests of the city for you to
continue as the public works director.
The mayor then offered Ross a position as "leadman,"[Fn. 2]
warning him that he would consider Ross to have resigned from his
job if he did not accept the position by March 1. Ross did not
report to work by March 1, and the City terminated his employment
on grounds that he had resigned.
After the City terminated Ross, he claimed unemployment
benefits from the Alaska Employment Security Division. The City
argued that Ross was not entitled to benefits because he had
voluntarily resigned. The Alaska Employment Security Division's
Appeal Tribunal disagreed and found in Ross's favor. The
Commissioner of the Department of Labor affirmed.
Ross also filed an action in the superior court, alleging
two causes of action: wrongful discharge and breach of the implied
covenant of good faith and fair dealing. Ross moved for summary
judgment on the latter cause of action on grounds that the City had
failed to honor the grievance committee's decision. The City filed
a cross-motion for summary judgment on both causes of action. It
argued that a wrongful discharge analysis was inappropriate because
Ross had voluntarily resigned and that the City had not breached
the implied covenant of good faith and fair dealing because the
mayor's statutory authority to remove municipal officials
superseded the grievance committee's ruling.
Superior Court Judge John Reese denied Ross's motion and
granted the City's motion. Judge Reese ruled that the facts did
not support a wrongful discharge claim because Ross had voluntarily
resigned by not reporting for work as a leadman. Judge Reese also
ruled that the City had not breached the implied covenant of good
faith and fair dealing, stating that the grievance committee's
decision did not specify the job to which Ross should have been
returned and that AS 29.20.500(1) granted the mayor the authority
to remove and appoint municipal employees. Ross unsuccessfully
moved for reconsideration, and this appeal followed.
A. Standard of Review
"Summary judgment will be affirmed if there are no
genuine issues of material fact and if the moving party is entitled
to judgment as a matter of law." Great Am. Ins. Co. v. Bar Club,
Inc., 921 P.2d 626, 627 (Alaska 1996). All reasonable inferences
of fact must be drawn against the moving party and in favor of the
nonmoving party. See Taranto v. North Slope Borough, 909 P.2d 354,
355 (Alaska 1996). In reviewing questions of law, this court
applies its independent judgment and adopts "the rule of law that
is most persuasive in light of precedent, reason, and policy."
Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
B. Did the City of Sand Point Wrongfully Discharge Ross?
An employer who fires an employee in violation of the
terms of an employment contract is liable for wrongful discharge.
See Eales v. Tanana Valley Medical-Surgical Group, Inc., 663 P.2d
958, 959 (Alaska 1983) (ruling that an employee who alleges that he
was fired without cause in violation of the terms of his contract
has a claim of wrongful discharge). The mayor's refusal to
reinstate Ross as director of public works, despite the decision of
the grievance committee, violated Ross's contract with the City and
constituted wrongful discharge as a matter of law.
The City concedes that the personnel manual, including
the grievance process, was part of Ross's employment contract. The
personnel manual therefore modified Ross's contract by providing
that he would not be fired if he successfully appealed his
supervisor's decision. See Jones v. Central Peninsula Gen. Hosp.,
779 P.2d 783, 787 (Alaska 1989) (holding that whether a personnel
policy manual modifies an employment contract is a question of
Ross did successfully appeal the mayor's decision to fire
him as the grievance committee ruled that he "should be returned to
work because the policy regarding leave in the City Personnel
Policy was vague." Webster's dictionary defines "return"as "to go
back or to come back again . . . ." Webster's Third New
International Dictionary 1941 (1966). One can only "go back"to a
place where one has already been. Thus, when the grievance
committee instructed that Ross should be "returned to work,"the
only position to which he could return was the position he had
already occupied: director of public works. In addition, any
ambiguity in the term "return"disappears upon consideration of the
facts of this case. Ross initiated the grievance procedure because
he felt that he had been fired unfairly and wanted his job back.
In this context, the committee's order that he be "returned to
work"can only be interpreted as requiring the mayor to reinstate
him as director. In fact, the City concedes that Ross's
interpretation of the committee's decision is reasonable.
Nevertheless, it urges us to ignore the mayor's refusal to abide by
the outcome of the grievance process.
Relying on Title 29 of the Alaska Statutes and the Sand
Point Municipal Code ("SPMC"), which grant the mayor the power to
"appoint, reassign, and remove city employees,"the City claims
that the mayor has the right to veto decisions reached by the
grievance committee. In essence, the City argues that the statutes
grant the mayor the power to ignore the terms of the employment
contracts entered into by the City. We disagree.
Under AS 29.20.250(a), the mayor of a city that has not
adopted a manager plan of government, which the City of Sand Point
has not, has the same powers and duties as those of a manager under
AS 29.20.500. Alaska Statute 29.20.500, in turn, provides:
[The mayor] shall
(1) appoint, suspend, or remove municipal
employees and administrative officials, except as otherwise
provided in this title and AS 14.14.065;
. . . .
(7) serve as personnel officer . . . .
(Emphasis added.) This statute is essentially identical to SPMC
2.30.010(b), which provides:
The mayor shall
(2) Suspend or remove by written order city
employees and administrative officers, except as provided
. . . .
(10) Execute other powers and duties specified
in AS Title 29 . . . .
(Emphasis added.) Despite the City's arguments to the contrary,
these provisions do not authorize the mayor to override the
decisions of the grievance committee.
Although AS 29.20.500(1) and SPMC sec. 2.30.010(b)(2)
the mayor to suspend or remove employees, they do not give him the
power to ignore the result of a grievance process that has been
incorporated into an employment contract. In interpreting a
statute, we look first to its language. See Lagos v. City and
Borough of Sitka, 823 P.2d 641, 643 (Alaska 1991). Alaska Statute
29.20.500 and SPMC sec. 2.30.010(b) specifically limit the mayor's
power with the language "except as otherwise provided in this
title"(AS 29.20.500) and "except as provided otherwise"(SPMC sec.
Fitting within this exception to AS 29.20.500, AS
29.20.410(a) modifies the mayor's power because it authorizes the
"governing body"of the City to "provide for a personnel system."
Pursuant to this provision, the City adopted the "Personnel
Policies and Procedures Manual." The manual nowhere provides that
the decision of the grievance process is merely advisory and that
the mayor can override it if he sees fit. Therefore, pursuant to
AS 29.20.410(a), the mayor must exercise his power to remove or
reassign employees subject to the grievance committee's decisions.
See Benner v. Wichman, 874 P.2d 949, 957 (Alaska 1994) (stating
"[w]henever possible, we construe each part or section of a statute
with every other part or section, to produce a harmonious whole").
Similarly, the personnel manual fits within the "except
as provided otherwise"language of SPMC sec. 2.30.010(b). Unlike
29.20.500, SPMC sec. 2.30.010(b) does not require exceptions to be
contained within the same title. Compare AS 29.20.500(1) with SPMC
sec. 2.30.010(b)(2). Therefore, the personnel manual also limits
the mayor's power under SPMC sec. 2.30.010(b). [Fn. 3]
The statutory provisions relied upon by the City do not
support its argument that the mayor has the power to ignore the
terms of employment contracts entered into by the City. Instead,
AS 29.20.500 and SPMC sec. 2.30.010(b) merely allow the mayor to
initial decisions regarding reassignment and termination. See
Taylor v. Crane, 595 P.2d 129, 134-35 (Cal. 1979) (interpreting
similar statutory language and concluding that it "vests in the
city manager the initial discretion to determine the proper
sanction for violation of city rules") (emphasis in original).
These decisions remain subject to review by the grievance process,
as adopted in the City's personnel manual pursuant to AS
29.20.410(a). See id. at 136 (upholding an arbitrator's ruling
that a police officer who had been discharged should be reinstated
where a collective bargaining agreement between the police and the
City provided for arbitration of grievances).
By refusing to reinstate Ross as director of public works
despite the decision of the grievance committee, Mayor Osterback
violated the terms of Ross's employment contract, which provided
that he would not be fired if he prevailed in the grievance
process. The mayor's actions constituted wrongful discharge as a
matter of law. The decision of the trial court is therefore
REVERSED and the case is REMANDED for further proceedings
consistent with this opinion. [Fn. 4]
Section XVI of the personnel policy manual explains the
grievance process. The manual provides in relevant part:
B. Steps for handling of grievances.
1. The grievance of any employee shall
be handled in the following manner, each step to be taken only if
a satisfactory adjustment cannot be obtained on the previous level
within five working days of the presentation of the grievances to
2. Failure to follow the procedure
outlined below will render the grievance invalid:
A. To the employee's immediate
B. To a grievance committee . . .
C. To the City Council whose
decision shall be final and binding unless there is judicial review
of the case.
In theory, a leadman receives the same pay as the public works
director. The leadman's salary, however, is based on an hourly
rate. Moreover, as leadman, Ross would have to report to the new
public works director and, according to Ross, would receive fewer
The City's interpretation of the power granted to the mayor is
also inconsistent with another provision of the Sand Point
Municipal Code that designates several positions as serving "at the
pleasure"of the City Council, but nowhere indicates that the
public works director serves "at the pleasure"of the mayor. See
SPMC sec.sec. 3.20.010, 3.30.010, 3.50.010.
On appeal, Ross also argued that the City had breached the
implied covenant of good faith and fair dealing and violated his
rights to due process by failing to reinstate him as public works
director. Because we conclude that Ross was wrongfully discharged
as a matter of law, we do not reach these other issues. For the
same reasons, we conclude that a constructive discharge analysis
was inappropriate under the facts of this case, and we do not
address the parties' arguments on this issue.