Articles

Minnesota Veteran's Preference Act: A View from the Front Lines

HCBA Section on Labor & Employment

Charles Horowitz
(email)
Mansfield, Tanick & Cohen, P.A.
1700 U. S. Bank Plaza South
Minneapolis, MN 55402
Tel: 612.339.4295
FAX: 612.339.3161

November 20, 2001

I. Overview

As with many other states, Minnesota long ago enacted legislation providing preferential treatment to veterans of the U.S. armed services employed or seeking employment in the public sector. The legislative purpose is to recognize "that training and experience in the military services of the government and loyalty and sacrifice for the government are qualifications of merit which cannot be readily assessed by examination." Minn. Stat. § 43A.11, Subd. 1. This article will summarize recent developments in Veteran's Preference litigation, and will provide some pointers to hopefully benefit practitioners in this field.

II. Hiring

Minn. Stat. § 43A.11 provides for preferential hiring of veterans, giving them a leg up on non-veterans seeking civil service positions in state, county and local governments. For veterans participating in "competitive open examinations," it awards a five point credit toward their final score, ten points for disabled veterans. Subd. 3, 4. These mandatory plus points even extend to spouses of deceased veterans, who may not themselves be veterans. Subd. 6. The same section mandates ranking equally scored veterans over non-veterans, and requires notification of veterans of their right to use Veteran's Preference to augment passing ratings. Subd. 7, 8. The full complement of Veteran's Preference rights extends to employees of all political subdivisions of the state. See Minn. Stat. § 197.455 (encompassing any "county, city, town, school district, or other municipality or political subdivision of this state"); Minn. Stat. § 383B.39 (Hennepin County). The Supreme Court has ruled that this directive requires municipalities to convert their hiring procedures to a one hundred point system, in order to effectuate the five-point hiring bonus, irrespective of whether they unit have a "civil service system" as such. Hall v. City of Champlin, 463 N.W.2d 502 (Minn. 1990).

Employment attorneys on occasion may encounter hiring issues under the Veteran's Preference laws. These requirements, however, are rather mechanical and have not generated a tremendous amount of litigation or reported case law, at least so far. Much more commonly litigated is the provision affecting termination, which shall constitute the focus of this article.

III. Termination

A. What Constitutes "Removal" Under the Statute

The provision garnering far and away the most judicial scrutiny and attention from practitioners is Minn. Stat. § 197.46, which protects veterans against removal for any reason other than "incompetency or misconduct." It is not difficult to identify actions that will trigger Veterans Preference rights. An employee is "removed" in the vast majority of cases when he or she is terminated. To be more precise, it will be the veteran's receipt of a "notice of intent to terminate" because, technically, the employee is not officially terminated until he or she has exhausted his or her rights of review under the statute, or chooses not to exercise them within the requisite 60 days.

Courts take a functional, pragmatic approach this question, there being no magic language or form of notice that triggers the veteran's rights under the statute. Thus, for instance, placing a public employee on long term disability leave, where it was unlikely or improbable that the employee would ever return to work, has been deemed a removal. Myers v. City of Oakdale, 397 N.W.2d 424 (Minn. Ct. App.), aff'd. 409 N.W.2d 848 (1986). By contrast, in another case, revocation of a promotion that violated the county's personnel rules and was seriously flawed in general was deemed not to be a removal. Ochocki v. Dakota County Sheriff's Dept., 464 N.W.2d 496 (Minn. 1991). See also Brula v. St. Louis County, C5-98-997 (Minn. Ct. App. 1/19/99) (employee who voluntarily quits because of post-traumatic stress syndrome attributable to prior military service not entitled to Veterans Preference hearing, where county had "no role" in the disorder that caused him to resign); Jagodzinsky v. St. Paul Public Housing Agency, 1994 WL 6847 (Minn. Ct. App. 1/11/94) (unpublished) (employee who requests he be placed on medical leave of limited duration not "removed" for purposes of Act); Gorecki v. Ramsey County, 437 N.W.2d 646 (Minn. 1989) (rule of general application reclassifying workers to a lower level position implementation of a broad administrative plan, and not a "removal;" job duties and responsibilities remain unchanged following demotion).

The statute by its terms excludes certain job categories from coverage as follows:

Nothing in section 197.455 or this section shall be construed to apply to the position of private secretary, teacher, superintendent of schools, or one chief deputy of any elected official or head of a department, or to any person holding a strictly confidential relation to the appointing officer. The burden of establishing such relationship shall be upon the appointing officer in all proceedings and actions relating thereto.

Of these terms, the only one presenting any difficulty is "confidential relationship," a term not defined in the statute. One court has held that confidential relationships have some or all of the following characteristics: (1) they are appointed, (2) they are bound by rules of professional ethics, (3) they are able to stand in the stead of their supervisor as an "alter ego," and (4) they serve at the pleasure of their employer. Ulmer v. City of Duluth, 428 N.W.2d 855 (Minn. Ct. App. 1988), review denied. In Ulmer, the employee seeking Veterans Preference protections was an assistant city attorney, who was retained at the pleasure of his appointing officer under authority of the city charter. However, high level employees serving at the pleasure of the public employer are not ipso facto exempt from the statute, unless the statute under which their position was created specifically states that the position is to be exempt from its strictures. State ex rel. Caffrey v. Metropolitan Airports Commission, 310 Minn. 480, 246 N.W.2d 637 (1976); Minn. Stat. § 197.48.

Other limitations on the statute have been imposed by the courts. Thus, for instance, the Veterans Preference statute does not apply to public sector employees who are occasional or part-time workers. Crnkovich v. Indep. School Dist. No. 701, Hibbing, 273 Minn. 518, 142 N.W.2d 284 (Minn. 1966) (relying on C.J.S. and opinions of the attorney general). In general, where an employee is suspended without pay pending hearing into whether or not the employee will be discharged, the suspension triggers his or her Veteran's Preference rights and thus right to continued pay. Mitlyng v. Wolff, 342 N.W.2d 120 (Minn. 1984); Kurtz v. City of Apple Valley, 290 N.W.2d 171 (Minn. 1980).

B. Standard of Review

The statute does not define the terms "incompetency" or "misconduct," and but at least one court has equated "misconduct" with the "just cause" standard which is found in most collective bargaining agreements. Cass County v. Law Enforcement Labor Services, inc., 353 N.W.2d 627 (Minn. Ct. App. 1984). Thus, the statute effectively unionizes those public sector employees (who happen to be veterans) not already covered under a collective bargaining agreement, for purposes of challenges to dismissal. As such, covered veterans are afforded protections not available to "at will" public sector employees. However important it may be to get along with one's supervisors and fellow employees, workplace harmony is a lesser good than continued employment for veterans. See State ex rel. Jenson v. Civil Service Comm'n, City of Minneapolis, 268 Minn. 536, 130 N.W.2d 143, cert. denied 380 U.S. 943 (personality and philosophical disagreements with one's superiors will not warrant the dismissal of a public employee under the Veterans Preference statute).

In an important clarification, the Supreme Court in Myers v. City of Oakdale, 409 N.W.2d 848 (Minn. 1987) ruled that the term "incompetency" is broader than just poor performance, but actually includes the physical inability to perform a job, such as may result from injury. In Myers, the protesting veteran had sustained permanent injury to his back which precluded his performing his ordinary duties as a police officer. Thus, he was entitled to a Veteran's Preference hearing. On remand, however, the officer was deemed to be (in fact) "incompetent" as a result of the injury, and was not entitled to reinstatement.

Relying on nothing more than a dictionary definition, the Court of Appeals went one step further in State ex rel. Indep. School Dist. No. 625 v. Roettger, 1988 WL 113746 (Minn. Ct. App. 12/30/98) (unpublished), holding that "incompetence" may include lack of a license or certification, quite apart from the employee's ability to perform the job duties satisfactorily. In that case, a school district employee did not obtain his master plumber license and certificate of competency within the required deadline, and was therefore terminated. One situation commonly encountered in this field is the loss of a drivers license due to a DWI, where a drivers license is a term of employment. In such instances, the lawyer for the veteran is sometimes capable of negotiating reinstatement at such future date as driving privileges are restored.

It is well settled that an employer may abolish the position held by a veteran, but only if it is done in good faith for a legitimate purpose, and not as a subterfuge to remove the veteran. Gorecki v. Ransey County, 437 N.W.2d 646 (Minn. Ct. App. 1988). See also State ex rel. Caffrey v. Metropolitan Airports Commission, 310 Minn. 480, 246 N.W.2d 637 (1976). In light of the current economic downturn and the growing intolerance of higher taxes by the public in general, this situation is likely to occur with greater frequency.

C. Relief and Damages

A veteran who is successful in challenging his or her termination, naturally, is entitled to reinstatement, with an award of backpay if the public employer wrongfully failed to continue wage payments for the interim period. One interesting question not yet reached by the Minnesota appellate courts is whether an employee who is incapable of returning to work as a result of an injury may be entitled to reinstatement on an indefinite medical leave. This was the very question raised by the employee in Myers v. City of Oakdale, 461 N.W.2d 242 (Minn. Ct. App. 1990). The court did not reach that question, however, because the board (whose decision the court was reviewing) ruled against the employee and found him to be "incompetent" owing to inability to perform his job functions. Significantly, however, the court stated in dicta that "the board would have been justified in making the modification asked for by Myers," i.e. indefinite medical leave. Id. at 244. This leaves open the door for future employees who are medically unable to work but who wish to remain employed in order to take advantage of the employer's benefits or for some other reason.

As with the right to collect re-employment insurance, a terminated veteran awaiting hearing on his or her claim has a duty to mitigate damages, and any wages earned (including re-employment compensation) will be offset against present wages. Pawelk v. Camden Township, 415 N.W.2d 47 (Minn. Ct. App. 1987); Robertson v. Special School Dist. No. 1, 347 N.W.2d 265 (Minn. 1984); Lewis v. Minneapolis Bd. of Education, Special School Dist. No. 1, 408 N.W.2d 905 (Minn. Ct. App. 1987) (no recovery of both salary and sick pay leave during pendency of proceedings).

D. Procedure

1. Challenge to Termination

As previously stated, a veteran covered under the act may not be "terminated" as such in the first instance. Rather, he or she is given a "notice of intent to terminate," informing him or her of the right to challenge the dismissal. If the veteran elects to do so -- which must be done in writing within 60 days of receipt of the notice -- he or she remains on the payroll with full benefits until such time as the claim is resolved. Depending on how far the ultimate decision is appealed, the amount of money being paid for a non-working individual can obviously be substantial.

The statute provides for two mechanisms for hearing of Veterans Preference claims, depending on the public entity involved. For those having an established civil service board or commission, or merit system authority, the hearing is to take place before such board, commission or authority. Naturally, this will apply to the larger cities and counties, such as the Cities of Minneapolis and St. Paul. Where no such bodies exist, the hearing board consists of a delegate appointed as follows: one by the employer, one by the veteran and the third by the other two appointees. The statute is silent as to who is responsible for compensating the panelists, and no courts have reviewed the question, although the public employer as a practical matter normally compensates its delegate and the neutral, and the veteran compensates his or her delegate. If the two fail to appoint the third within 10 days, then a judge of the district court will make that selection.

The burden of proof in Veterans Preference hearings is on the employer to show that the employer acted reasonably in its decision to terminate. Matter of Schrader, 394 N.W.2d 796 (Minn. 1986). Likewise, the employer bears the burden of proving that an individual is the head of a department, where that is the basis of the employer's defense. Holmes v. Board of Com'rs of Wabasha County, 402 N.W.2d 642 (Minn. Ct. App. 1987). In considering the employee's challenge to termination, the function of the board is to determine whether the employer acted "reasonably" in its decision. Myers v. City of Oakdale, 409 N.W.2d 848 (Minn. 1987). The veteran may appeal an adverse decision to the District Court by filing a notice within 15 days of the notice of decision. The statute, however, does not give the public employer a comparable right.

2. Writ of Mandamus

In the situation in which the public employer for whatever reason decides that the affected employee is not entitled to a Veteran's Preference hearing, because such person was not "removed," was not qualified as a veteran under the statute, or some other reason, the employee may file a writ of mandamus with the district court. See Myers v. City of Oakdale, 465 N.W.2d 702 (Minn. Ct. App. 1991), review denied (writ of mandamus appropriate manner in which to seek redress if statutory rights are not properly extended to a veteran). Mandamus provisions provide for proceedings in the same manner as in a civil action, but infer no greater jury trial right than is generally available. Pawelk v. Camden Township, 415 N.W.2d 47 (Minn. Ct. App. 1987).

E. Practice Tips

Where the public entity involved in a Veterans Preference dispute is not covered by a civil service board, both parties will want to select a sympathetic delegate to represent them on the three member panel. Although the statute places no criteria who the parties may select, the delegate selected should be knowledgeable about employment in the public sector in general.

The normal delay inherent in litigation does not prejudice a Veteran's Preference plaintiff. Quite the contrary, he or she continues receiving pay throughout the proceedings. Although this author does not sanction or condone tactics of delay, attorneys representing discharged veterans should not rush to hearing and should consider serving legitimate discovery requests on the employer. The statute is silent on the topic of discovery, but Veterans Preference cases routinely involve exchanges of documents and, much less often, the taking of depositions. On obvious piece of documentation that should be reviewed is the employee's personnel file. Other information may include, where appropriate, minutes and other records of city council meetings, written policies and documents relating to past practices. Some of these requests may require use of subpoenas, especially where third parties such as unions may be involved..

In presenting a Veteran's Preference case, it is generally helpful to obtain the cooperation and participation of individuals and agencies who may be sympathetic to the employee, at least in theory. Where the alleged inability to perform is related to some disability, it will be necessary to work closely with medical providers, who will often be associated with the Veterans' Administration. Navigating this bureaucracy can be quite difficult, so expect delays, multiple telephone transfers and (at times) indifferent case workers. In addition, where applicable, public employee unions can provide a certain degree of assistance. However, one is best advised to act with caution in doing so, for the reason that many union representatives in the public sector have divided loyalties and do not always want to stick out their neck in these cases. Worse yet is the union rep who wants to play lawyer at a hearing, without the requisite skills or knowledge.

One sensitive issue in litigating Veterans Preference claims involves the question of alternative wages or pay that the veteran may earn during the pendency of the hearing. Although honesty may be the best policy as a matter of ethics, the statute does not on its face compel the veteran to voluntarily call replacement wages to the employer's attention, especially if the employer makes no such inquiries. The employer will normally be aware of re-employment benefits, but the issue is not likely to arise where the employee (properly) remains on the payroll during pendency of the hearing; there simply will be no re-employment benefits paid during such time, by virtue of the continuation of pay. As a practical matter, public employers and their attorneys do not care about such wages, and give them little or no consideration, in the course of settlement discussions. The reason for this is obvious; the settlement in the vast majority of cases will be essentially a buy-out, and the key inquiry will be future wages and not some short term double recovery. I will not opine on the rules of professional ethics as they apply to this whole topic, and recommend that the practitioner consult the ethics board for an advisory opinion should he or she face this question in the future.

The right to continuing pay, in combination with the generous review standard, burden of proof on the employer and appeal rights for the veteran only, combine to create a powerful incentive for cities, counties, school districts and the like to reach negotiated settlements with terminated veterans. Attorneys representing terminated veterans employed in the public service will notice another dynamic at play which should not be discounted for purposes of settlement. In many instances, there is more at stake for the public employer than money, namely if the employee wins then the employer has to have him or her back. The issue of serious personality conflicts becomes all the more important where the employer is a small unit of government (say, a township) which may only have a handful of full-time employees to begin with.

Another dynamic that sometimes favors settlement is the existence of insurance coverage for the employer. This makes settlement easier for small townships, which without such insurance coverage would face politically and financially difficult choices that threaten to divide the community. Certain policies are written in a manner that excludes coverage for garden variety Veteran's Preference claims. For that reason, it is sometimes helpful to append claims under the Americans With Disabilities Act, the Minnesota Human Rights Act, Title VII or other such laws, where appropriate.

In determining whether or not to settle, larger and better funded governmental units may also take financial considerations into question, owing to the not insubstantial costs of hiring outside counsel and generous standard of review. Also, in these uncommonly patriotic times, all public employers may be sensitive to the perception (whether right or wrong) that they are maltreating veterans, which also may encourage a less adversarial approach to these questions.

IV. Conclusion

Although not a absolute guarantee of perpetual employment, the Veteran's Preference standard affords veterans substantial protections, and makes their termination relatively difficult. In contrast to some other areas of employment law, in which the odds are stacked increasingly against the employees (or so it seems), Veterans Preference claims offer good odds of success and better odds of amicable resolution through settlement. 276881.1

Foot Note

¹The first incarnation of the Veteran's Preference Act, although not under that name, went into effect in 1887. Since that time, it has been periodically modified and expanded. For instance, the law no longer makes reference to a check list of qualified conflicts. Rather, its coverage extends to all forms of active service.

² For purposes of these statutes, a veteran is defined as "a citizen of the United States or a resident alien who has been separated under honorable conditions from any branch of the armed forces of the United States" for 181 consecutive days of active service or who meets minimum active duty qualifications under federal law. Minn. Stat. § 197.447. This definition excludes reservists who (in fact) have not seen active service for the requisite minimum period. Longman v. Gallagher, 377 N.W.2d 77 (Minn. Ct. App. 1985). The statute makes no mention of National Guard service, and no cases have been found construing whether such service is covered. Section 2101(2) of Title 5, United States Code, defines "armed forces" as the Army, Navy, Air Force, Marine Corps, and Coast Guard. No cases have been found considering Merchant Marine service for purposes of the Act.