A closer look at the Palenick lawsuit

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On one side is an opinion by the New Mexico Attorney General’s office and Palenick’s contract, submitted as supporting evidence to the 13th Judicial District as part of the lawsuit filed by Palenick’s attorney, Dan Faber. On the other is a resolution by the Governing Body in response to the opinion of the AG’s office and Section 3.05 of the City Charter regarding the suspension and removal process of a city manager.

Palenick was terminated by the city council in December 13, 2006. The AG’s opinion states that the firing was decided by a “rolling quorum” of the Governing Body and then-mayor Kevin Jackson in violation of the state’s Open Meetings Act.

After the ruling came down in the form of a letter dated September 21, 2007, from Assistant Attorney General Mary H. Smith to Deputy City Attorney Margot  J.  Steadman, the council passed a resolution containing it’s interpretation of the incident. Based on the ruling, Palenick is suing the city for more than $130,000 in back pay plus benefits, interest, attorney’s fees and other damages left to the discretion of the judge.

Palenick’s contract, dated Nov. 8, 2006, identifies him as an “at-will employee of the city” who “shall be employed for an indefinite term, serving at the pleasure of the Governing Body.” The next paragraph goes on to state that, “Nothing in this Agreement shall prevent, limit or otherwise interfere with the Governing Body’s right granted in the Charter to terminate this agreement, with or without cause, at any time …”

Mayor Mike Williams spent 10 years as the president of Local 7911 of the Communications Workers of America, the union that represents public safety officials from around the state. Williams contends that clause, which is supported by the city charter, gives the city the right to fire Palenick.

But consider the rest of that sentence, which reads “… subject only to the provisions set forth in Section 3 of this Agreement, the laws of the State of New Mexico, City Charter or Ordinances of the City of Rio Rancho, as they may be applicable.”

The question then, seemingly, is this: Will Judge George Eichwald (or perhaps a jury) rule that the state’s Open Meetings Act is “applicable” in this case? And will the judge or a jury agree with the Attorney General’s Office that the Governing Body did indeed break the law by meeting in a “rolling quorum”?

Faber said Monday as a point of law, because the case involves seeking an injunction, he was not sure that a jury could be involved in the case. He said he would not ask for a jury to hear the case because it depends on interpretation of contracts and documents, not appealing to the emotions of citizens.

“I think it’s pretty straight forward and something a judge could handle best,” Faber said.

Palenick’s attorney said his case is based on the contention that violations occurred before the actual public vote to fire his client at a city council meeting on Dec. 13, 2006. But there are other elements to the situation that could be figured into possible damages or even in any defense the city might mount.

The city charter

Section 3.05, Subsection A of the city charter states: “The mayor may propose suspension of the city manager to the Governing Body. A copy of such proposed suspension shall be served immediately upon the city manager. No proposed suspension shall go into effect until approved by resolution of the Governing Body. The proposed suspension shall be scheduled by the Governing Body for its next regularly scheduled meeting, but nothing herein shall preclude the Governing Body from considering the suspension at an earlier special meeting.”

Subsection B goes on to state that “The Governing Body may, by resolution, suspend the city manager. A copy of the suspension shall be served immediately upon the city manager.”

Subsection C reads, “From the time of service of the suspension on the city manager, the city manager shall have twenty-four hours or until 5 p.m. of the next business day, whichever is later, in which to request that the Governing Body reconsider a suspension issued pursuant to Subsections A or B of this section. The city manager’s request for reconsideration shall be in writing and shall be filed with the city clerk. The Governing Body shall take up the city manager’s appeal or request for reconsideration within five days of the filing thereof.”

And finally, Subsection D: “Upon the filing of a request for reconsideration, the city manager shall be afforded a public hearing. After the public hearing and after full consideration, the Governing Body shall adopt a resolution confirming, overturning, or modifying the suspension.”

Palenick claims he was never given a “public hearing.” He did appear at a Governing Body meeting on Dec. 13, 2006, and made a public statement in advance of a resolution regarding his termination, which passed unanimously without any public input or discussion or debate from the Governing Body.

Palenick speaks: Then

In his prepared statement, which is archived as video on the city’s web site, Palenick mostly reiterated accomplishments the city made during his 3½ year tenure. He did, however, acknowledge the controversy in a few ways:

Although he had not yet been fired, Palenick was made to sit in the audience and was the only speaker allowed to address the council on the matter by Jackson, who said it was because it was a personnel issue. As such, Palenick was required, like all speakers from the audience, to state his name and address for the record, which he did, before adding, “and for a few brief remaining moments I also serve as the city manager for he city of Rio Rancho.”

After asking for the council’s indulgence because his prepared statement might go over the normal three-minute time limit, Palenick said, “In the course of the last hours, and barely aggregating into days, there has been a juggernaut-like force to remove me from office before questions could be asked, options could be pondered or the public could be informed or allowed to weigh in. Its absolute suddenness and ostensible reason or logic has so taken me by surprise that I have yet to respond in any manner. To that end, I am now fully prepared to do so.”

From there, Palenick went on to sum up his tenure, noting that “it is likely to serve as my legacy.” The last accomplishment he listed was, “Until last week, dramatically heightened respect throughout the state. The list could go on, but it seems the point is evident. I have only pride for my accomplishments and effort, and my record of fair, honest, respectful dealings with all. I am pleased that if I am leaving, and it certainly appears by the bullet train-nature of this railroad job that I am, that if I do so with the utmost integrity intact, with a record that withstand any level of scrutiny, and knowing that I have left the City of Rio Rancho in a dramatically better state than when its leadership was first entrusted to me. My skills are easily transferable and I will have success in the future. I am simply disappointed, however, that it won’t be in representation of the City of Rio Rancho, my adopted home.”

More from the charter

The rest of section 3.05 regarding the removal of a city manager reads as follows:

Subsection E: “The city manager may be removed by a majority vote of all of the members of the Governing Body.  Action to remove the city manager may be initiated by the mayor or by motion of any city councilor, which is seconded by two other city councilors, at a meeting of the Governing Body.”

Subsection F: “As the city manager serves at the pleasure of the Governing Body, the city manager may be removed by the Governing Body at any time, with or without cause.  The city manager shall have no property rights arising from employment with the City other than the right to accrued salary and benefits, and the hearing and appeal rights specified herein in connection with suspension.  The city manager shall have no right to continued employment with the City, and the granting of appeal or hearing rights in connection with suspension shall not cause any additional rights to inure to the benefit of the city manager which would limit the Governing Body's ability to remove the city manager at any time, or change the city manager’s status as an at will employee of the City.”

In the archives

At the time of his firing, Subsection F was important in how the city dealt with Palenick.

According to archived news reports, Palenick requested a hearing in a Dec. 14, 2006, letter to city officials, the day after the council vote. The city denied the request.

"Please take note that the Governing Body has not followed proper Charter requirements to move through the process of suspension and removal, nor has it afforded me proper and lawful due process," Palenick's letter stated.

In a letter to Palenick denying his request, acting City Attorney Margot Steadman emphasized a Section F. Steadman was moved up to fill the spot because City Attorney was named to fill Palenick’s spot on an interim basis until another city manager could be hired.

Published reports at the time quoted Babin as saying that Palenick was an "at-will" employee, meaning Palenick and other department heads could be fired at any time without a reason.
 
"At-will people don't have those rights (to a hearing)," Babin said. "What they have is contractual rights."

Reports at the time said that Babin said if Palenick had been suspended without pay, he would have been afforded the hearing.

Because city officials apparently skipped the suspension steps described in the charter and immediately fired him, it is not clear if he lack of due process could become an issue in the lawsuit.

Faber says it doesn’t matter, because his lawsuit is focused on how the city acted before the termination, not after. “I don’t have a copy of any of that,” he said. “That happened before I got in the case.”

Under the law, the city has 30 days to respond to the suit from the day it was served (Jan. 16). That makes the response deadline Feb. 14.

Faber said he has not heard from the city about any possible settlement.