Wray v. City of Greensboro: Public Employers, Officials Should Closely Consider Employment Contracts, Resolutions

By Leslie Lasher

In its recent decision in Wray v City of Greensboro, N. C. S. Ct. Aug 18, 2017, the Supreme Court suggested that a public official may be able to overcome the doctrine of governmental immunity (which bars suit against public entities in certain scenarios) by asserting a breach of contract claim. Now, this sounds like a typical holding for those who are familiar with the doctrine of governmental immunity, as there is no question that a public entity can waive its immunity by entering into certain types of contracts.  However, the interesting fact in Wray, is that there was no contract.

The short version of the facts include that Wray was a named as a party to several high-level lawsuits both in his individual and official capacities, in which the City denied him a defense and indemnification.  Wray apparently incurred litigation expenses to the tune of more than $220,000 in these matters. In this particular case, Wray sought to require the City to reimburse him for these amounts.  Wray claimed that the City failed to provide the contractual rights “promised” to him via a 1980 City Resolution which stated, in part, that “if a City officer or an employee were sued in either their individual or official capacities, the City would provide for the defense of said employee or individual and pay any judgment resulting from said suit against the employee or official.”

In essence, Wray argued that the City waived its governmental immunity from suit by virtue of passing this resolution, and thus “breaching” its “contractual rights” to him.  The City, and the League of Municipalities as amicus curiae, argued that the Resolution did not provide contractual rights, and that, taking Wray’s argument to its conclusion would mean that any public entity could waive its immunity by virtue of passing any type of resolution at any time.

Because this matter was decided on a Rule 12(b)(6) motion, the courts’ final opinions on this issue are not yet clear. Regardless, the insight provided by the Supreme Court should lead public entities and officials alike to review any “promises” on the right to a defense, indemnification, or any other benefits, for that matter.  This should include taking a close look at any resolutions, ordinances, personnel policies, and internal policies (especially when an active claim is involved). This case also highlights the need to closely consider and regularly review of any employment agreement that may be in place with non-elected official.

I am passionate about the public sector and enjoy routinely advising public entities and public officials on employment law issues including governmental immunity, specific duty statute requirements, public sector wage and hour issues, First and Fourth Amendment issues, and the State Human Resources Act.  If you have questions about public sector employment law issues, please do not hesitate to call.