Walker v. NC Dept. of Human Resources

397 S.E.2d 350 (1990)

100 N.C. App. 498

Thomas WALKER v. NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES, Betty S. CAMP v. NORTH CAROLINA DEPARTMENT OF HUMAN RESOURCES.

Nos. 8920SC1322, 9010SC36.

Court of Appeals of North Carolina.

October 30, 1990.

*353 Edelstein, Payne & Nelson by M. Travis Payne, Raleigh, for petitioners-appellees.

Atty. Gen. Lacy H. Thornburg by Asst. Atty. Gen. John R. Corne, Raleigh, for respondent-appellant.

WELLS, Judge.

This court's review of a trial court's consideration of a final agency decision is to determine whether the trial court failed to properly apply the review standard articulated in N.C. Gen.Stat. § 150B-51. In re Kozy, 91 N.C.App. 342, 371 S.E.2d 778 (1988), disc. review denied, 323 N.C. 704, 377 S.E.2d 225 (1989). Our review is further limited to the exceptions and assignments of error set forth to the order of the superior court. Watson v. N.C. Real Estate Commission, 87 N.C.App. 637, 362 S.E.2d 294 (1987), cert. denied, 321 N.C. 746, 365 S.E.2d 296 (1988).

An agency decision may be reversed or modified by the reviewing court if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:

(4) Affected by other error of law; (5) Unsupported by substantial evidence... in view of the entire record as submitted; or *354 (6) Arbitrary or capricious.

N.C.Gen.Stat. § 150B-51(b) (1985). The proper standard to be applied depends on the issues presented on appeal. If it is alleged that an agency's decision was based on an error of law then a de novo review is required. Brooks, Com'r. of Labor v. Rebarco, Inc., 91 N.C.App. 459, 372 S.E.2d 342 (1988). A review of whether the agency decision is supported by the evidence, or is arbitrary or capricious, requires the court to employ the whole record test. Id.

Having set out the proper standard of review, we now determine whether the trial court correctly applied it. In each case, respondent has set out a long list of somewhat redundant assignments of error. We note initially that respondent did not object in either case to the adopted findings of fact at the superior court level. The findings of fact were binding, therefore, at that appellate level, and are binding for purposes of our review. See Long v. Morganton Dyeing & Finishing Co., 321 N.C. 82, 361 S.E.2d 575 (1987).

Respondent's primary contention on appeal is that the superior court erred by not applying the "whole record test" in reviewing the decision of the Commission. As we have noted, the whole record test was the proper scope of review for determining the merits of petitioners' contentions that the Commission's conclusions were not supported by its findings of fact. The order in each case states that the court reviewed "the briefs of the parties, the Order of the State Personnel Commission, the Recommended Decision of the Administrative Judge," and heard the arguments of counsel. We do not agree that this appeal record affirmatively shows that the superior court failed to apply the whole record test.

The whole record test generally requires examination of the entire record, including the evidence which detracts from the agency's decision. Thompson v. Board of Education, 292 N.C. 406, 233 S.E.2d 538 (1977). Neither party here, however, called the court's attention to any dispute in the evidence by excepting to or assigning error to any of the findings of fact adopted by the Commission. When an agency finds facts, it is required to resolve conflicting evidence. See Dunlap v. Clarke Checks, Inc., 92 N.C.App. 581, 375 S.E.2d 171 (1989). Since neither party objected to the findings adopted by the Commission, the superior court could reasonably assume that the Commission had properly resolved these conflicts, and that the findings in each case accurately and properly reflected the whole record.

The superior court was compelled then, to examine the conclusions of the Commission and determine whether they were supported by substantial evidence in the record, as reflected by the findings of fact. If an agency decision is not supported by substantial evidence in the record, it may be reversed. Joyce v. Winston-Salem State University, 91 N.C.App. 153, 370 S.E.2d 866, cert. denied, 323 N.C. 476, 373 S.E.2d 862 (1988). Substantial evidence is that which a reasonable mind would regard as adequately supporting a particular conclusion. Id. The court held that the conclusions of the Commission were not supported by the findings of fact. We agree.

The Commission concluded from the findings of fact that each petitioner's performance continued to be deficient during the probationary periods in that each petitioner failed to meet the reasonable expectations of respondent. The Commission further concluded that the findings of fact indicated that each petitioner was compelled to catch up on paperwork and documentation while keeping up a full workload because of "inadequate performance." Finally, the Commission concluded that each petitioner had improved during the probationary periods, but not to such an extent to merit continued employment. We do not find substantial evidence in the findings of fact which would support these conclusions, and view many of these findings to be directly contradictory to them. In each case, the findings support a conclusion that respondent's expectations for these petitioners were not reasonable, particularly regarding the mandatory placement of a set number *355 of clients in jobs each month. In each case, the findings support a conclusion that each petitioner was behind in paperwork at least in part because of extraneous forces, such as understaffing and an office fire.

The superior court concluded that respondent had not met its burden of showing just cause to uphold the terminations. N.C.Gen.Stat. § 126-35 provides that no permanent employee subject to the State Personnel Act shall be discharged except for just cause. Just cause is not defined. The words are to be given their ordinary meaning. Reed v. Byrd, 41 N.C.App. 625, 255 S.E.2d 606 (1979). There is no question that a state employee may be discharged for inadequate performance of duties. See Leiphart v. N.C. School of the Arts, 80 N.C.App. 339, 342 S.E.2d 914, cert. denied, 318 N.C. 507, 349 S.E.2d 862 (1986). We agree with the State Personnel Commission that the adequacy of an employee's work must be, to some extent, a subjective determination made by agency personnel. When an agency seeks to establish before the Commission that an employee was terminated for just cause, however, it cannot rest solely on the grounds that a supervisor's directives were not carried out to their fullest extent.

The standard of employee conduct implied in every contract of employment is one of reasonable care, diligence and attention. Wilson v. McClenny, 262 N.C. 121, 136 S.E.2d 569 (1964); McKnight v. Simpson's Beauty Supply, Inc., 86 N.C. App. 451, 358 S.E.2d 107 (1987). We cannot say that a state employee undertakes any greater duty. In attempting to establish that it had just cause to terminate an employee, then, an agency is bound to make a showing that the employee has not performed with reasonable care, diligence and attention. Failure to fulfill certain quotas and complete certain tasks to the complete satisfaction of a supervisor is not enough. The agency must show that these quotas and job requirements were reasonable, and if so, that the employee made no reasonable effort to meet them. The facts which the Commission adopted do not support such a conclusion, and several directly contradict it. The facts show that each petitioner was putting in extra effort to attempt to meet Rouse's requirements, and show that these requirements failed to take into account many of the realities of the school caseload. There is also nothing in the findings which would indicate that the inability of petitioners to meet Rouse's goals adversely affected the agency in any way. To the contrary, these findings indicate that respondent's clients were well served by each petitioner.

The trial court having correctly concluded that the Commission's own findings did not support its conclusion that just cause was established in these cases, the order of the trial court in each case must be and is

Affirmed.

EAGLES and LEWIS, JJ., concur.