Terminating the Employment Relationship

Finally, while for cause employees have procedural due process protections, at-will employees may have similar, but lesser rights, when the a termination is based on reasons that stigmatize an employee’s reputation, seriously impair their opportunity to earn a living, or might seriously damage their standing or associations in the community. 4 This pre-disciplinary process is described as a liberty interest hearing. d. Liberty Interest Hearing There are situations where even an “at - will” employee is entitled to limited due process rights. Courts have consistently held that where a dismissal involves charges that stigmatize the employee’s reputation (e.g., an at -will employee is terminated for theft, dishonesty or immoral conduct), the constitutional right to liberty may be implicated. In such cases, the employee is entitled to a “liberty interest hearing”, which is also commonly referred to as a “name clearing” or “ Lubey Conference .” 5

Kreutzer v. City and County of San Francisco In this case, the City released a physician and did not publicly disclose the reason(s) for his release. The physician then sued the City to challenge his discharge and alleged that his liberty interest in his reputation had been infringed due to the stigma created by his discharge. During litigation, the City disclosed its rationale for releasing the physician. The appellate court noted that an inference drawn from dismissal alone is insufficient to implicate a liberty interest. The Court held that where a government employee is released from employment for non-disciplinary reasons and the employer does not publicly disclose those reasons at the time of release, the employee’s liberty interest in their reputation has not been infringed and the employee is not entitled relief. 6 Further, a depriva tion of an employee’s liberty interest in reputation entitles the employee only to a name-clearing hearing and does not give rise to any right to sue for monetary damages or equitable relief. 7

To be entitled to a liberty interest hearing, the stigmatizing reasons must be publicly known and the employee must deny them. An employee who admits the charges for which he was discharged cannot later claim that the resulting stigmatization violated his liberty interest. 8 If these prerequisites are met, the emplo yer must afford the employee a “hearing” to allow the employee the opportunity to clear the employee’s name. 9 Unless otherwise required by an agency’s rules or a memorandum of understanding, t he “hearing” is not a full evidentiary type hearing akin to a p ost-discipline appeal by a for cause employee. Rather, a liberty interest hearing is an opportunity for the employee to make a formal record of the employee’s explanation of the stigmatizing events that led to the dismissal. The hearing need not involve witnesses, cross examination, exhibits or any other features of a typical due process hearing. It is more in the nature of a response provided by the employee to an agency manager who has authority to assure that a record of the response is available. Although the manager conducting the hearing has discretion to modify the discipline, there is no duty to do so.

Terminating the Employment Relationship ©2022 (s) Liebert Cassidy Whitmore 13