Pre-Layoff Due Process Hearings: What’s Required?

Alameda County Management Employees Association v. Alameda County Superior Court (Alameda Superior Court Case No. RG09-464432) (Tentative ruling issued 12/9/09)

In 2008, the Ninth Circuit Court of Appeal issued a surprise ruling in Levine v. City of Alameda, 525 F.3d 903 (9th Cir. 2008) suggesting that a public employee who is laid-off from work is entitled to a pre-layoff due process hearing. That decision shocked public employers because no other decision had suggested such a requirement. Levine also seemed to conflict with Duncan v. Department of Personnel Administration, 77 Cal.App.4th 1166 (2000), a California appellate decision which held that pre-layoff due process hearings are not required. After Levine became final, the consensus among most public practitioners was that pre-layoff hearings are only potentially required in situations where the employee argues that he or she has been targeted for layoff, in lieu of discipline. In situations involving mass layoffs, it was believed that Duncan would still apply. However, because of the uncertainty and risk, many public agencies decided to offer pre-layoff Skelly-type hearings just to be safe.

Recently, the court in Alameda County Management Employees Association v. Alameda County Superior Court issued a tentative ruling on whether pre-layoff hearings are required. To my knowledge, this is one of the first times any court has addressed this issue.

Are Pre-Layoff Hearings Required?

In considering whether pre-layoff due process hearings are required, the court quoted extensively from Duncan. The court seemed to agree with Duncan that a layoff, unlike a disciplinary action, carries no “stigma” that attaches to the employee. This is especially true in the case of mass layoffs. The court also agreed with Duncan that, “It is one thing for the State to provide a predeprivation hearing for a single employee who has been demoted because of misconduct. [Citation omitted] It is quite another to require the State to conduct pre-layoff hearings for 95 employees in the midst of a financial crisis. Indeed, the cost of such hearings would simply exacerbate the crisis, primarily because the State would have to keep the affected employees on the payroll pending the outcome of the hearings.”

However, despite this favorable language from Duncan, the court noted that Levine held that an employee selected for layoff is entitled to a pre-layoff hearing where there is evidence that the employee was targeted for layoff. Here—not surprisingly—all the employees in the lawsuit were alleging that they were targeted for layoff as a pretext for discipline.

If so, What Exactly Is Required?

Instead of ruling on whether pre-layoff hearings are required, the court was able to avoid the issue by finding that even if a pre-layoff hearing was required, the employees here received that.

Specifically, that court noted that due process in these situations does not require a full trial-type evidentiary hearing. Instead, the court held that as a minimum, what was required was, “notice of the proposed action, the reasons therefore, a copy of the charges and materials upon which the action is based, and the right to respond, either orally or in writing, to the authority initially imposing discipline.” Here, all the employees received the following notice with the layoff paperwork:

“If you think that the [Employer] has incorrectly determined to lay off your position, you may within three (3) working days from receipt of this notice, submit an explanation in writing to the Assistant Executive Officer.”

The court held that such notice and the opportunity to respond in writing was sufficient to meet any pre-layoff due process rights. This was especially true, according to the court, since the employees all had the right to a post-layoff evidentiary hearing.

Comments:

This is a tentative ruling in a superior court case, so you can’t read too much into it. However, it should be noted that the ruling was authored by Justice Mallano, the Presiding Justice of Division One of the Second District Court of Appeal. (He was appointed to avoid a conflict of interest by the Alameda superior court judges)
The tentative ruling largely confirms the consensus among practitioners that Levine kicks in only when there is an allegation that the layoff is pretextual. Of course, the problem is that unions aren’t stupid and that given Levine, they are going to advise employees to argue pretext in every layoff situation. This case is a prime example of that. Here, the layoffs were done by seniority. Nevertheless, all 13 of the laid-off employees argued that they were “targeted.”
So what’s an employer to do? Well, if you want to play it absolutely safe, an employer should give employees some opportunity to respond to the layoff notice. This ruling says that the response can be in writing, which certainly makes things easier. But again, it’s just a tentative ruling in a non-precedential superior court case so you can’t read too much into it. Hopefully, in the near future we’ll get some more clarification from the courts.