Employment Manuals and Property Rights

A case last year in the 10^th Circuit shows the federal courts increasing reluctance to provide municipal employees with property rights in their continued employment.  In that case, Darr v. Town of Telluride, Co., 2007 WL 2218882 (10^th Cir. 2007), Mr. Darr was hired as a deputy marshal in 2001.  At that time, the City’s policies provided all employees with notice and a hearing before their employment was terminated.  However, during 2001 the policies were being revised and the manual Mr. Darr received had “Undergoing Revision” on its cover.  Ultimately, new policies were adopted the following year in 2002, which did not provide for a pre-termination notice or hearing.

As typical with employment manuals, both the City’s old and new policies stated that they were “not intended to serve as an employment contract,” and that employment was “at will.”  Both the old and new policies also provided that the City reserved the right at all times to amend or alter the benefits provide to employees.

Mr. Darr signed an acknowledgement form stating that he had been provided the new policies, understood that it was not an employment contract and that the City reserved the right to alter or eliminate any benefits.  

In 2003, the City began receiving complaints about Mr. Darr and he was ultimately fired with prior notice or a hearing.  Mr. Darr subsequently brought a Section 1983 action alleging, among other things, his procedural due process rights were violated when he was deprived him of his property interests in a pre-termination hearing.  Mr. Darr argued that the old employment policies gave him a property right by requiring a pre-termination hearing.

The trial court granted summary judgment and the U.S. Court of Appeals for the Tenth Circuit affirmed the grant of summary judgment in favor of the City.  The courts found that the relevant policies were clear that Mr. Darr was an “at-will” employee and, even assuming that the old policies created a property interest in a pre-termination hearing, the City amended the old policies and Mr. Darr had no basis to rely upon said policies.

What this, along with a number of other recent appellate cases, shows is that the federal courts are becoming much more conservative in their approach to municipal employment law.