Walls v. Central Contra Costa Transit Auth.

After the signing of a Last Chance Agreement, an employee may not be considered an at-will employee and thus requires notice prior to dismissal.

Kerry Walls worked as a bus driver for Central Contra Costa Transit Authority (“CCCTA”) until terminated on January 27, 2006. On March 2, 2006 Walls was reinstated pursuant to a Last Chance Agreement (“Agreement”) but incurred an unexcused absence, violating the Agreement and was thus terminated. Walls brought suit alleging the discharge violated the Family Medical Leave Act (“FMLA”) and his due process rights to a pre-termination hearing. The district court granted summary judgment in favor of CCCTA on both claims, stating Walls was not eligible for FMLA benefits and had waived his due process rights. Walls appealed. The facts state that on March 1, 2006, Walls verbally requested leave until April 10. Although the parties agree that a verbal request was made, Walls was not technically reinstated as an employee of CCCTA until March 2 when the Agreement became effective, and therefore was not an employee of CCCTA at the time of his request. The Ninth Circuit held that as Walls was not an employee at the time of his request, FMLA protection did not apply. Walls also argued he was deprived of due process when denied a pre-termination hearing. The Ninth Circuit held that as the Agreement specified certain events that must occur for Walls to be terminated, he was no longer an at-will employee and therefore held a protected property interest in his job. The Supreme Court of California has held that such an employee must be given “‘certain procedural rights before’ being removed.” As the Agreement did not expressly state Walls would be forfeiting his right to a pre-termination hearing, he therefore did not knowingly waive his rights and was improperly denied notice prior to his dismissal. AFFIRMED in part, REVERSED and REMANDED in part.