VELEGA SAVALI, Plaintiff,
v.
LEGISLATURE
OF
High Court of
Trial Division
CA 131-99
April 28, 2000
[1] Damages for the intentional infliction of emotional
distress are awarded in the context of employment termination only where the
employer’s method of terminating the employee, or conduct accompanying the
termination, is outrageous.
[2] The Legislature of
[3] In
[4] A public employer’s oral
promises of job security may provide a basis for including a just cause
requirement in an employment relationship that is otherwise at-will, but the
employer must possess the statutory authority to modify the contract in order
to imply the requirement.
[5] Under A.S.C.A. § 7.0203,
employees of the Legislature of American Samoa are excluded from career service
status, and thus are denied the protection afforded by the just cause
requirement set out for the termination of career service employees in A.S.C.A.
§ 7.0801.
[6] Where a plaintiff does
not allege that he reasonably relied to his detriment on an employer’s
statements concerning just cause, promissory estoppel
cannot be a basis for a wrongful termination claim; and while 18 years of
employment could assist in establishing a course of conduct, that alone is not
sufficient to imply a just cause for termination requirement. [4ASR3d146]
[7] The implied covenant of
good faith and fair dealing is a contract law doctrine which cannot be used to
impose a just cause requirement on an employment relationship as a matter of
law; a terminated employee cannot use that covenant to transform a
terminable-at-will contract into a terminable-only-for-cause employment
contract by construing a discharge without cause as a breach of the covenant.
[8] Although a public
employee may possess a property right in continued employment which the state
may not take without affording the employee due process, he must have a
legitimate claim of entitlement to it, and an express or implied guarantee of
continued employment is essential to the creation of such property interest in
employment.
[9] A public employee possesses
a liberty interest in his reputation which cannot be taken in conjunction with
termination without affording the employee due process; but to trigger due
process protections, the charges attending dismissal must be false, publicized,
provide the employee no chance to clear his name, and be so stigmatizing that
he cannot secure new employment.
Before KRUSE, Chief Justice,
TUAOLO, Chief Associate Judge, and LOGOAI, Associate Judge.
Counsel: For Plaintiff, Katopau T. Ainu`u
For Defendant,
For Defendants Ama Saoluaga Nua and Tuilefano Vaela`a,
Roy J.D. Hall, Jr.
ORDER DENYING IN PART AND
GRANTING IN PART DEFENDANT’S MOTION FOR SUNMARY JUDGMENT
Plaintiff Velega Savali (“Velega”) filed a complaint on December 14, 1999, alleging
wrongful discharge, violation of due process, and intentional infliction of
emotional distress against defendants Ama Saoluaga Nua and Tuilefano Vaela`a (jointly the
“Legislators”), as well as the Legislature of American Samoa (“Fono”). Velega seeks his reinstatment to
his former position as Legislative Financial Officer (“LFO”) with the salary
and benefits he previously enjoyed in this position, award back pay and
benefits from the date of his dismissal, and award compensatory damages. The Legislators filed an answer and
counter-claim on January 14, 2000, in which they denied any wrongdoing and
sought damages against Velega for incompetence,
failure to perform work, and slander and libel.
The Legislators then filed a motion for summary judgment on January 31,
2000. The Fono
filed its answer and counterclaim on February 3, 2000, in which it also sought
restitution for sums paid to Velega after his
termination. Velega
answered the counterclaims of all defendants on February 24, 2000, and[4ASR3d147] filed his opposition to the motion for summary
judgment on March 28, 2000. At the hearing held March 30, 2000, the Fono joined the Legislators in their summary judgment
motion. Counsel for
all parties were present and argued the motion.
Facts
For purposes of the motion
the motion before us, we glean the following from the extent of the record
before us: the Fono celebrated its 50th anniversary
in October 1998. To commemorate the
occasion, the 25th legislature established a committee consisting of members of
both houses to plan and conduct the Golden Jubilee celebration. On January 27, 1999, the committee chairman
submitted a report to the Senate showing that expenditures for the celebration
had exceeded the approved budget of $100,000 by over half a million
dollars. In response, the Senate
established an investigative committee on February 3, 1999, to look into this
mismanagement of public funds.
At the time of these events,
Velega was employed as Legislative Financial Officer
(“LFO”) by the Fono.
He held this position from 1995 until 1999. He did not appear to experience professional
difficulties during these years until the Senate’s investigation into the
Golden Jubilee. At that point, Velega’s standing changed dramatically when the investigative
committee’s report concluded that Velega had been at
least partially responsible for authorizing the excessive Golden Jubilee
expenses.
Based on the committee’s
report, the Senate passed resolution 26-15 on April 1, 1999, calling for Velega’s resignation.
However, President of the Senate Lutu Tenari S. Fuimaono (“Lutu”), for reasons not apparent on the record before us,
rejected the resolution and refused to terminate Velega. Velega remained as
LFO for about three more months, until Lutu travelled off-island.
At that point, Velega was terminated on July
23, 1999 pursuant to a letter signed by the Legislators. Velega left the
office and did not return to work. Upon
his return from off-island, Lutu retained Velega on the payroll and continued to approve payment to Velega as if he were on paid leave. This state of affairs continued until Lutu, under pressure from other Fono
members, halted compensation in November 1999.
Velega has not secured other employment
subsequent to termination.
Discussion
A. Summary Judgment
Defendants move for summary
judgment pursuant to T.C.R.C.P. 56. Summary judgment is appropriate only when
the pleadings and [4ASR3d148] supporting
papers show “that there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.” T.C.R.C.P. 56; Etimani v. Samoa Packing Co., 19 A.S.R.2d 1,
4 (Trial Div. 1991). In ruling on
a summary-judgment motion, the court must view all pleadings and supporting
papers in the light most favorable to the opposing party, treat the opposing
party’s evidence as true, and draw from such evidence the inferences most
favorable to the opposing party.
B. Intentional Infliction of Emotional
Distress
[1] Velega
asserts that his termination has damaged his reputation and has handicapped his
ability to find other employment. Velega asserts that, in terminating him, the Legislators
abused their authority to further their personal and political interests, and
that such conduct was “malicious, outrageous, extreme, and exceeded all
possible bounds of decency.” Velega’s hyperbole, however, fails to conceal the fact that
he has alleged no conduct on which a claim of intentional infliction of
emotional distress can be based.
Damages for the intentional
infliction of emotional distress have been awarded in the context of
terminations only where the employer’s method of terminating the employee, or
conduct accompanying the termination, was outrageous. Even a cursory glance at these cases will
demonstrate that the employer’s conduct must sink to despicable levels in order
to provide a basis for abusive discharge.
See, e.g., Dean v. Ford Motor Credit Co., 885 F.2d
300, 303-05 (5th Cir. 1989) (employer manipulated evidence to subject employee
to accusation of crime in order to provide grounds for termination); Crump
v. P&C Food Markets, Inc., 576 A.2d 441, 445 (Vt. 1990) (lengthy
interrogation without rest, coercion to sign untrue statement of culpability,
and summary termination after 18 years of employment).
Velega has alleged no conduct that
can give rise to an abusive discharge claim.
The letter terminating Veiega, signed by both
Legislators, is quite proper in tone. Velega has not alleged that either Legislator, or the Fono for that matter, ever maliciously attacked him
verbally or in print. Velega merely alleges that he was fired for political
reasons. Even if true, this assertion
does not provide a basis for a claim of infliction of emotional distress. Accordingly, defendants are granted summary
judgment against Velega’s claim of intentional
infliction of emotional distress.
C. Wrongful Discharge
Velega asserts that he was
wrongfully discharged because his termination did not comport with: (1) the requirement
that he be [4ASR3d149] terminated by
mutual consent of the Speaker of the House and President of the Senate, (2)
procedural safeguards on disciplinary actions against him, (3) contractual
requirements of termination only for just cause, and (4) an implied covenant of
good faith and fair dealing. We examine
these bases for Velega’s claim of wrongful
termination in sequence.
1. Termination by Mutual
Consent of the Speaker and President
[2] Velega
first takes issue with the procedure utilized by the Fono
to discharge him. Velega
and the Fono agree that he could be terminated by the
mutual consent of the Speaker of the House and the President of the
Senate. The statute
to which they refer, however, does not explicitly provide for this
procedure. A.S.C.A. §
2.0601 states that the Speaker and President jointly appoint the LFO, but makes
no mention of the process required for his or her removal. The statute further states that the
legislative finance office is responsible to the Fono,
not merely to these two individuals.
Be that as it may, we
acknowledge for obvious separation of powers reasons, wide discretion in the Fono to implement its internal procedures. If the legislative branch has decided that
removal of the LFO may be accomplished by the same means as his appointment, a
logical conclusion, there can be little quarrel with that determination.
It appears, however, that Velega asserts that his removal was not accomplished by
proper means. Although not explicitly
pled, we conjecture that he contends that only the permanent President of the
Senate, and not the President Pro Tempore, can agree with the Speaker of the
House to terminate an LFO. But this is
erroneous as a matter of law. Senate
Rule 9 provides that “[i]n the event of illness or
absence of the President, the President Pro Tempore shall assume the duties of
and be invested with the powers of the President.” Thus, the President Pro Tempore of the Senate
was functionally equivalent to the President while the latter was
off-island. This leads to the
inescapable conclusion that his concurrence with the Speaker of the House
satisfied the procedure for terminating Velega
pursuant to the letter of July 23, 1999.
2. Procedural Safeguards
on Disciplinary Actions
Velega asserts that the process by
which he was terminated violated procedural safeguards included in his
employment contract. Velega,
however, argues no procedural safeguards aside from the above mutual consent
requirement and the following just cause requirement. Having asserted no independent procedural
safeguards, this bald assertion of the same must fail.[4ASR3d150]
3. Just Cause Requirement
for Termination
[3] Velega
claims that his employment contract with the Fono
required that he be terminated only for just cause. As a matter of law, this submission is in
error.
In
Velega has pled no express just
cause termination requirement in any written employment contract. According to A.S.C.A. § 7.0203, Fono employees are not career service employees. Velega thus does
not enjoy the just cause requirement set out for the termination of career
service employees in A.S.C.A. § 7.0801.
He has demonstrated no just cause provisions in any materials related to
his employment, such as an employee handbook or internal personnel
guidelines. See Palelei
v. Star Kist Samoa, Inc., 5 A.S.R.2d at 165-166. In sum, Velega can
point to no writing to establish a just cause requirement.
Instead, Velega
appears to assert that just cause has been implied in his contract by the oral
statements made by Lutu on the subject. Velega claims, and we take as true for purposes of summary
judgment, that Lutu asserted that his termination
required just cause on three occasions: on January 7, 1999 to Speaker of the
House Nua; in February of 1999 to Senator Tuilefano; and on April 21, 1999, in conjunction with his
rejection of the recommendation of Senate Resolution 26-15.
[4] To begin, a public employer’s
oral promises of job security may provide a basis for including a just cause
requirement in an employment relationship that is otherwise at-will. Perry v. Sinderman,
508
[5] The applicable statute,
A.S.C.A. § 7.0203, excludes Fono employees from
career service status, and thus denies them the protection afforded by the just
cause requirement set out for the termination of career service employees in
A.S.C.A. § 7.0801. This statutory
scheme, enacted by the Fono as a whole, cannot be
abrogated or modified by the unfounded statements of only one of its members,
no matter how well-intentioned[4ASR3d151] those statements may be. In other words, Lutu,
as a single legislator, did not possess the authority to unilaterally modify a
statute crafted by the entire legislature so as to introduce a just cause
termination requirement into Velega’s employment
relationship with the Fono.
[6] It appears that this
implied contract claim, which we have now rejected, provides Velega’s
only basis for asserting a just cause termination requirement. Velega has not
alleged that he reasonably relied to his detriment on Lutu’s
statements concerning just cause. Contra Shebar v. Sanyo Bus. Sys.
Corp., 544 A.2d 377, 379-80 (N.J. 1988) (employee declined job offer
from employer’s competitor after employer promised job for life, but
subsequently discharged employee). Velega similarly
does not argue that he took or remained in the LFO position based on just cause
assurances. Contra Kestenbaum v. Pennzoil Co.,
766 P.2d 280, 285 (N.M. 1988) (employee was promised long terra, permanent
employment during initial negotiations).
Promissory estoppel is thus likewise
unavailable as a basis for the wrongful termination claim.
A course of conduct
demonstrating a policy of termination only for just cause could help to
establish the existence of the same in Velega’s
contractual relationship, but he has asserted none. See, e.g., Kestenbaum,
766 P.2d at 286 (employer’s officials testified that company only fired
permanent employees for good reason); Morriss
v. Coleman Co., Inc., 738 P.2d 841, 844 (1987) (employer failed to
follow established methods of discharging employees). Furthermore, while Velega’s 18 years of employment could assist in
establishing a course of conduct, it alone is not sufficient to imply a just
cause requirement. See,
e.g., Cleary v. Am. Airlines, Inc., 168
In sum, Velega
has failed to allege any facts upon which we could imply a just cause
requirement for termination in his employment relationship with the Fono.
4. Implied Covenant of
Good Faith and Fair Dealing
[7] The implied covenant of
good faith and fair dealing is a contract law doctrine that has been applied to
employment contracts by approximately one fifth of the states. Mark A. Rothstein et al., Employment Law § 9.6, at 537
(1994). Even if the covenant were
to apply to employment relationships within the territory, it would not afford Velega a basis for recovery in this case.
In the present case, we
“view the invocation of the implied covenant as a plaintiff’s attempt to impose
a just cause requirement on an employment [4ASR3d152]
relationship as a matter of law, where, as a matter of fact, the
relationship is at will, and [we] decline to adopt it for that reason.” Mark A. Rothstein et al.,
Employment Law § 9.6, at 537 (1994). Courts have held that a
terminated employee “cannot use the covenant of good faith and fair dealing to transform
a terminable-at-will contract into a terminable-only-for-cause employment
contract by construing a discharge without cause as a breach of the
covenant.” Comeaux
v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1272 (9th Cir.
1990) (citing Mundy v. Household Fin. Corp., 885 F.2d 542, 544
(9th Cir. 1989); Foley v. Interactive Data Corp., 765 P.2d 373,
400 n.39 (Cal. 1988)); see also McMahon v. Penn. Life Ins. Co., 891
F.2d 1251, 1256-57 (7th Cir. 1989). It
appears that Velega is attempting precisely this kind
of transformation. Having failed to
establish that termination only for cause was a term included in his contract, Velega may not claim protection of the implied covenant of
good faith and fair dealing with respect to his discharge.
C. Due Process
Article I, Section 2 of the
Revised Constitution of American Samoa provides that “[n]o person shall be
deprived of life, liberty, or property, without due process of law . . .
.” Public employees possess liberty, and
on occasion, property interests in their employment that cannot be taken by the
state without due process.
1. Property Interest
[8] Public employees with
legally recognized interests in continued employment possess a property right
in that employment that the state may not take without affording the employee
due process.
To have a property interest
in a benefit, a person must have more than an abstract need or desire for
it. He must have more than unilateral
expectation of it. He must, instead,
have a legitimate claim of entitlement to it.
Bd. of
Regents v. Roth, 408
In the present case, we have
determined, in the previous section, that Velega’s contract contained no guarantees of continued
employment, whether express or implied.
Such a guarantee is essential to the creation of a property interest in
employment. Thus Velega
may not, as a matter of law, assert a due process claim on the basis of a
deprivation of a property right in employment against the Fono.
2.
[9] All public employees, even
those without property interests in their employment, possess liberty interests
in their reputations. This liberty
interest cannot be taken in conjunction with termination without affording the
employee due process. Faumuina v. Am. Samoa Gov’t
Employees Ret. Fund, 1 A.S.R.3d 112, 118 (Trial Div. 1997) (citing Wisconsin
v. Constantineau, 400
The Supreme Court has held
that a deprivation of a liberty interest in employment occurs if the charges
attending dismissal are so stigmatizing that the former employee cannot secure
new employment. Statements that the
former employee failed to perform adequately do not constitute sufficient
grounds for a due process claim.
Accusations of dishonesty or immorality, on the other hand, can provide
such grounds. Roth, 408
Velega has not alleged any
specific accusations of immorality or dishonesty by the Legislators, or for
that matter, any Fono member. However, construing the
facts in his favor, Senate Resolution 26-15 could arguably be read to accuse Velega of a lack of integrity with respect to approving
expenditures for the Jubilee celebration. The veracity of the report’s findings
are an issue of fact rather than law, and the findings
must be viewed as false under the summary judgment standard. The report and its charges were obviously
published, and Velega has asserted that the
circumstances of his termination have prevented him from securing other
employment. Accordingly, we assume, for purposes of summary judgment, that Velega was deprived of his liberty interest in reputation.
A public employee whose
liberty interest in his reputation has been violated has the right to notice of
and a hearing to clear his name. Faumuina, 1 A..S.R.3d at 118 (citing Loudermill,
470
We cannot determine from Velega’s complaint whether he has had the opportunity to be
heard with regards to his termination.
The complaint at paragraph 42 states that “[n]ot since [the Legislators] manufactured Velega’s purported termination has the Fono
offered Velega an opportunity to be heard on this
employment action.” However, Velega asserts in a later affidavit that he was never
afforded an opportunity to defend himself against accusations of mishandling
funds. Once again, construing the facts
in favor of the non-moving party, Velega has alleged
sufficient facts to support his due process claim.
However, Velega
should take note that even if he can prove a deprivation of his liberty
interest at trial, the most he can hope for is a hearing before the Fono to clear his name.
Mark A. Rothstein
et al., Employment Law § 9.6, at 537 (1994). He will have no other recourse by which he
may seek to regain his position as LFO.
Order
For the foregoing reasons we
grant defendants’ summary judgment motion on Velega’s
claims of intentional infliction of emotional distress and wrongful discharge,
but deny the same for Velega’s due process claim.
It is so ordered.
**********