employment contracts

Taxpayer Can Sue to Void “Illegal” Government Employment Contract

Robert C. Lockwood
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Government taxpayer employment contract Alabama Employment Law
If a governmental entity enters into a “illegal” employment contract, Alabama taxpayers can sue to void it.

Last week, the Alabama Supreme Court ruled that Alabama taxpayers can sue to void “illegal” government employment contracts.  Ingle v. Adkins, No. 1160671, 2017 WL 5185288 (Ala. Nov. 9, 2017).  At issue was an employment contract between the Walker County Board of Education and the Superintendent of the Walker County Schools.  After he was re-elected as Superintendent in 2014, Jason Frank Adkins signed an employment contract with the Walker County school board.  The contract provided:  a $159,500 salary with annual pay raises; a $1,000 per month travel stipend; reimbursement for a cell phone; and, a promise to allow him to return to his previous job as a tenured employee.

Apparently, Sheila Mote Ingle thought that contract was excessive.  So, she sued, claiming that, as a taxpayer, she was entitled to have the “unconstitutional, illegal and void” contract vacated.   Ms. Ingle also sought to recover monetary amounts that she claimed were improperly paid to Mr. Adkins.  Mr. Adkins and the school board immediately moved to dismiss Ingle’s law suit.  They claimed that the Alabama Constitution of 1901 confers immunity from law suits to them, and that Ms. Ingle had no “standing” to challenge the contract, because she was not a party to it.  Without giving a specific reason, a trial court in Walker County granted that motion to dismiss and Ms. Ingle appealed.

The Alabama Supreme Court found that Ms. Ingle was entitled to pursue her claims to vacate the contract, but not her claims for money.  The Court reiterated a string of cases holding that Alabama School Boards and Superintendents are absolutely immune from claims for money damages under the Alabama Constitution.  But, the Court refused to extend that immunity to claims for declaratory and injunctive relief.  In short, the Court found that immunity could not bar Ms. Ingle’s claim to have the employment contract declared invalid.

The Supreme Court also rejected the Board’s standing defense.  The Court found that its cases have “continually held that taxpayers have standing to seek an injunction against public officials to prevent illegal payments from public funds.”

Accordingly, the Supreme Court reversed dismissal of Ms. Ingle’s case to allow her to pursue her theory that the contract between Mr. Adkins and the School Board is illegal.  At the same time, the Court refused to comment on whether her actual theories had any merit.  That decision will come at a later date after the parties fully litigate the issue.

Electronic Signature Can Result In Arbitration

Robert C. Lockwood
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United States District Court Judge Lynwood Smith recently found that an electronic signature on an arbitration agreement was sufficient to compel arbitration of a sexual harassment claim.  Humphrey v. Cheddar’s Casual Cafe, Inc., No. 5:16-CV-00704-CLS, 2016 WL 3483168 (N.D. Ala. Jun. 27, 2016).

There is a strong federal policy favoring arbitration.  Nevertheless, the party requesting arbitration must prove that a binding arbitration agreement exists.  In Humphrey, the plaintiff did not explicitly deny that she completed the on-line arbitration agreement.  Instead, she argued that her employer failed to meet its burden prove that she was the person who actually e-signed the agreement.

Nevertheless, Judge Smith disagreed.  He found that the information surrounding the e-signature was sufficient to establish that the plaintiff e-signed the agreement.  Among other things, she provided the following information contemporaneously with signing the agreement:  (1) her social security number; (2) her first name, middle initial, and last name; (3) her street address; (4) her telephone number; (5) her email address; (6) her date of birth; and (7) her gender.

In summary, Humphrey demonstrates that in this age of on-line commerce, e-signatures are the functional equivalent of the “real thing.”