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In Tully v. City of Wilmington, No. COA15-956 (N.C. Ct. App. Aug. 16, 2016), the Court of Appeals held for the first time in North Carolina that a governmental employee had alleged a valid property and liberty interest in requiring the employer to comply with its own promotional process.

The case arose after Tully, a successful police officer who had been named the Wilmington Police Officer of the Year in 2011 and had received the highest award bestowed upon a police officer in the United States, sought a promotion within the city’s police department. Under WPD policies, the first step in the promotional process was a written examination. Tully took the exam but was informed he failed and, therefore, was ineligible for promotion.

However, after comparing his exam responses to the correct responses, Tully discovered that many of the “correct” responses were based on outdated law. This meant that while Tully’s accurate knowledge of the law decreased his score, other officers’ inaccurate knowledge increased their score. In that way, Tully was “doubly disadvantaged” as other officers advanced toward promotion.

WPD policy permits officers to appeal “any portion of the selection process[,]” so Tully appealed the exam scoring. The department rejected his appeal, however, telling Tully that the exam answers “were not a grievable item.”

Tully then sued WPD for failing to follow its own established rules and policies regarding its promotion process. The issue on appeal was whether that failure amounted to a violation of Tully’s rights under the Equal Protection and “fruits of their own labor” clauses of the North Carolina Constitution.

In a split decision, the Court of Appeals held for the first time that “it is inherently arbitrary for a government entity to establish and promulgate policies and procedures and then not only utterly fail to follow them, but further to claim that an employee subject to those policies and procedures is not entitled to challenge that failure.” Therefore, Tully had “a valid property and liberty interest in requiring [WPD] to comply with its own established promotional process[.]”

The court made clear that Tully’s constitutional interest was not in receiving the promotion; rather, the right recognized by the court was WPD’s alleged failure to follow its own promotional process. In other words, Tully claimed it was arbitrary and irrational for WPD to (1) use a test based on incorrect and outdated law and (2) fail to provide him with a grievance process. The majority agreed.

One judge disagreed, focusing on the difference between the city acting as employer, rather than as sovereign. In the dissenting judge’s mind, when the government acts as employer, the usual constitutional analysis does not apply, and, therefore, Tully had not stated a valid claim. Nonetheless, the dissent “strongly urge[d]” the Supreme Court to review this case.

The Tully decision has the potential to greatly expand the liability of governmental employers. At a minimum, it means disgruntled governmental employees’ constitutional claims will survive motions to dismiss and reach discovery. Governmental employers are advised to watch this case to see whether the N.C. Supreme Court reverses. In the meantime, governmental employers should review their employment policy manuals and, most importantly, ensure they comply with the provisions contained in those manuals

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