                IN THE SUPREME COURT OF IOWA
                              No. 15–1131

                           Filed June 9, 2017

                       Amended August 25, 2017


LARRY SHAWN WHITWER,

      Appellee,

vs.

CIVIL SERVICE COMMISSION OF THE CITY OF SIOUX CITY, IOWA,

      Appellant.



      Appeal from the Iowa District Court for Woodbury County,

Jeffrey A. Neary, Judge.



      A civil service commission appeals a district court’s reinstatement

of a civil service employee after he was terminated pursuant to a last-

chance agreement. REVERSED.



      Justin Vondrak, Assistant City Attorney, Sioux City, for appellant.



      Jay E. Denne of Munger, Reinschmidt & Denne, LLP, Sioux City,

for appellee.
                                       2

MANSFIELD, Justice.

      This case requires us to determine the enforceability of a so-called

“last-chance agreement” entered into by a civil service employee. After a

municipal firefighter pled guilty to domestic abuse assault, the

municipality offered to discipline him with a short suspension instead of

terminating his employment.         However, in exchange, the municipality

insisted that the firefighter agree to give the municipality discretion to

terminate him immediately and without appeal if he violated the law

again or violated the related no-contact order. The firefighter accepted

the   municipality’s   proposal     and    signed   the   written   last-chance

agreement.

      Just over a year later, the firefighter violated the no-contact order

related to the domestic abuse assault.        When the city terminated his

employment in reliance on the agreement, the firefighter attempted to

appeal his termination to the civil service commission. The commission

declined to hear his appeal.      On judicial review, however, the district

court reinstated the firefighter.    The district court ruled that the last-

chance agreement was not valid because the commission had not

approved or reviewed it before the parties entered into it.

      On appeal, we now reverse the district court. Consistent with the

authority in other jurisdictions, we conclude that a civil service employee

may enter into a valid last-chance agreement.             Such an agreement,

however, remains subject to principles of contract law, such as the duty

of good faith and fair dealing. Accordingly, we do not decide whether a

last-chance agreement can be used to terminate a civil service employee

when there has been a significant lapse of time or the breach is de

minimis or unrelated to the reason for the agreement.
                                    3

      I. Background Facts and Proceedings.

      For over twenty years, Larry Whitwer served as a firefighter with

the Sioux City Fire Department. In July 2012, Whitwer was arrested for

an assault. He later pled guilty to domestic abuse assault in violation of

Iowa Code section 708.2A(2)(a) (2013). At sentencing, the court granted

Whitwer a deferred judgment.      The court also extended a previously

entered no-contact order for five years. See id. § 664A.5. On September

26, the day after Whitwer pled guilty, he was placed on administrative

leave from the fire department, with pay, and a predisciplinary hearing

was scheduled for October 5.

      Before that hearing, Fire Chief Tom Everett spoke with Dan

Cougill, a representative from the firefighters’ union, about the

appropriate discipline for Whitwer’s actions.   Although Whitwer could

have been terminated, Everett and Cougill discussed the possibility of

Whitwer signing a last-chance agreement.         Under the agreement,

Whitwer would not be terminated because of the domestic abuse assault

guilty plea and he would instead serve a short suspension.       Whitwer

would agree, among other things, to abide by the no-contact order and

consent to immediate termination if he violated that order.      Whitwer

would also be required to waive the right to appeal if he were later

terminated under the last-chance agreement.           In an email sent

September 27, Chief Everett noted that he “spoke for some time [with

Cougill] about . . . what exactly the last chance means.”   Chief Everett

and Cougill then separately discussed the proposed discipline and last-

chance agreement with Whitwer’s personal attorney.

      Meanwhile, Connie Anstey, an attorney for the City of Sioux City

(City), drafted the two-page document titled “Disciplinary Agreement” in

anticipation of the hearing. The agreement provided that it would be a
                                     4

“complete resolution to the disciplinary action relating to incidents which

took place on or about July 21, 2012.”       The agreement then included

several provisions that “Whitwer, the Sioux City Professional Fire

Fighter’s Association, and the City of Sioux City agree to . . . in lieu of

Mr. Whitwer’s immediate termination:”

            1. The City agrees that the only disciplinary action
      which will be taken regarding the alleged misconduct . . . is
      contained in this agreement unless this agreement is
      breached by Mr. Whitwer. In the event of breach of this
      agreement by Mr. Whitwer, the City reserves the right to
      impose further disciplinary action up to and including
      immediate termination.

             2. That Mr. Whitwer shall be subject to transfer at the
      sole discretion of the Fire Chief and shall receive a five (5)
      shift suspension from work without pay for violation of Sioux
      City Fire Rescue Rules and Regulations . . . .

            ....

            5. That Mr. Whitwer shall strictly abide by all court
      issued no contact orders in Woodbury County Case No. . . . ,
      and shall not, either while on duty or off duty violate the
      court imposed no contact order in person, by telephone or
      through the use of third parties.

            ....

             7. That this agreement is a last chance agreement and
      as such, it is agreed that Mr. Whitwer may be terminated
      from his employment with the City without cause and
      without appeal rights under the labor agreement between the
      City and Union or under the provisions of the Iowa Civil
      Service laws at any time following the execution of this
      agreement. It is understood that Mr. Whitwer may be
      immediately terminated under this provision for any
      violation of the law (excluding simple misdemeanor traffic or
      parking tickets), violation of the no contact order, violation of
      Fire Department Rules and Regulations or the City
      Administrative Policies which may occur during this
      agreement.

            8. The Union and Mr. Whitwer specifically waive all
      claims, disputes, appeals and grievances which have arisen
      or which may arise from the discipline given Mr. Whitwer
      pursuant to this Agreement.
                                            5

        Due to scheduling conflicts, the hearing was moved forward to

October 1. 1       On that day, Chief Everett, Anstey, and Bridey Hayes,

director of human resources for the City, were in attendance on behalf of

the City. Cougill and a second representative from the firefighters’ union

were present, as was Whitwer. Whitwer’s personal attorney was not at

the meeting, although neither Whitwer nor the union asked that the

meeting be continued for that reason.

        All parties understood that the purpose of the hearing was to

review the last-chance agreement.               After that review, Whitwer could

either sign the agreement or be terminated for the domestic abuse

assault guilty plea. Chief Everett read aloud the entire agreement and

asked Whitwer if he had any questions. Whitwer was given time to study

the document.           The union representatives asked to discuss the

agreement in private with Whitwer.              City officials honored the request

and left the room.           When they returned, Whitwer and the union

representatives had several questions relating to the proposed shift

suspensions. Chief Everett asked Whitwer if he had any other questions

about the agreement, and Whitwer replied that he did not. At that point,

Whitwer, Chief Everett, and Cougill each signed five copies of the

agreement.        Whitwer then became emotional and apologized.                  Chief

Everett responded to Whitwer, “[W]e really want you to be successful.”

        For the next thirteen months, Whitwer continued to work as a

firefighter without incident.        However, in November 2013, police were

dispatched on reports that Whitwer was texting and attempting to meet

with and otherwise reach the victim in violation of the no-contact order.


        1The   October 1 hearing was audio recorded and is a part of the record in this
case.
                                    6

Officers reviewed an actual text message, confirmed the no-contact order

was still active, and arrested Whitwer.      On November 18, Whitwer

appeared before the district court and admitted to violating the no-

contact order. The court found him in contempt and sentenced him to

two days in jail with credit for time served.      A separate job-related

hearing was held on November 22 and Whitwer was terminated from the

Sioux City Fire Department for violating the last-chance agreement.

      Whitwer appealed his termination to the Sioux City Civil Service

Commission pursuant to chapter 400, which governs the rights of civil

service employees.    See id. § 400.18(1).    However, the Commission

declined to determine whether Whitwer was properly terminated because

of the waiver-of-appeal provision in the last-chance agreement. Although

Whitwer claimed that he was under duress and suffering from depression

when he signed the agreement, the Commission determined it had no

authority to hear the appeal.

      Whitwer appealed the Commission’s decision to district court. See

id. § 400.27.   At the district court hearing, several City employees

testified regarding the City’s use of last-chance agreements.       Bridey

Hayes explained that the agreements are not prescribed in the City code

or administrative regulations. Instead, the decision of whether to offer a

last-chance agreement is at the discretion of human resources, the City

attorney’s office, and the relevant department head.       Connie Anstey

testified that when a last-chance agreement is appropriate, the City uses

a form agreement which is then tailored to the circumstances involved.

For instance, Anstey elaborated that if the last-chance agreement is

based on criminal conduct, the agreement will require no further

violations of the law. Anstey stated that the waiver-of-appeal provision is

a “standard provision” in the form agreement. Anstey emphasized that
                                            7

the   decision    to   offer   a    last-chance   agreement   depends     on   the

circumstances of the misconduct, the disciplinary options available, and

the employee’s work history.          Finally, Anstey acknowledged that there

was no end-date for the last-chance agreement in this case.

      Chief Everett confirmed that if Whitwer had declined to sign the

last-chance agreement on October 1, 2012, he would have been

terminated at that meeting.           Everett explained that public trust was

extremely important to the fire department, and a violation of law “begins

to chip away or erode that public trust and certainly speaks to integrity

and decision-making.”          Chief Everett also observed that last-chance

agreements, when appropriate, are generally beneficial to the fire

department because the department “put[s] a lot into these individuals,”

and a last-chance agreement allows the employee to “see what they’ve

done and make corrections moving forward so that they can continue to

serve in a manner that’s . . . highly ethical.”

      Following trial, the district court filed a written ruling reinstating

Whitwer to his position with the Sioux City Fire Department. The court

emphasized that offering a last-chance agreement is “entirely in the

discretion of the city.”       In the court’s view, using the agreement to

terminate Whitwer “essentially circumvented the public policy which

forms the basis for the establishment of a Civil Service Commission,”

specifically,    protection    of   civil   service   employees   from   arbitrary

termination. The court continued,

      The decision to offer a last chance agreement is just as
      central in this process as the decision to terminate the
      employee, and can be just as easily abused or manipulated.
      It is precisely this discretion that should be subject to review
      by the Defendant Commission and approval or denial based
      upon their role as a neutral evaluator of the facts in each
      case.
                                     8

Therefore, the court found,

             [The] Commission must be permitted to make such a
      determination prior to the offering of a last chance
      agreement or it must be permitted to approve a last chance
      agreement in order to perform one of its essential purposes.
      If Defendant Commission is not allowed to do so, the intent
      of the legislature in passing the civil service commission
      legislation would be defeated. Civil service legislation was
      designed to assure that municipal employees were being
      employed and retained based on their skills and
      qualifications, and not due to any prohibited ground for
      consideration, such as favoritism or nepotism. As applied to
      the facts here, the Commission must be allowed to verify
      that no employee is subjected to arbitrary termination,
      regardless of the device used to terminate or continue
      employment.

(Citation omitted.)

      The Commission appealed, and we retained the appeal.

      II. Standard of Review.

      Our review of the district court’s decision is de novo. Lewis v. Civil

Serv. Comm’n, 776 N.W.2d 859, 861 (Iowa 2010).             “Although we give

weight to the findings of the district court, we are not bound by them.”

Dolan v. Civil Serv. Comm’n, 634 N.W.2d 657, 662 (Iowa 2001). Further,

“[w]e confine our review to the record made in the district court.”      Id.

Thus, “we do not receive new evidence” and “we limit our review to the

same issues that were raised in the district court.” Id.

      III. Analysis.

      A. Validity of Last-Chance Agreements. Civil service employees

are entitled to a variety of rights arising under Iowa Code chapter 400,

including the right not to be arbitrarily discharged and the right to seek

review of a discharge. See City of Des Moines v. Civil Serv. Comm’n, 540

N.W.2d 52, 56 (Iowa 1995). In this case, we are asked whether a civil

service employee may prospectively waive those rights through a last-

chance agreement that avoids termination proceedings.
                                         9

       We begin with a review of the relevant statutes. 2 Iowa Code section

400.18 establishes that a civil service employee

       shall not be removed, demoted, or suspended arbitrarily,
       except as otherwise provided in this chapter, but may be
       removed, demoted, or suspended after a hearing by a
       majority vote of the civil service commission, for neglect of
       duty, disobedience, misconduct, or failure to properly
       perform the person’s duties.

Iowa Code § 400.18(1); cf. id. § 400.19 (allowing the “chief of the fire

department      [to]   peremptorily    suspend,     demote,     or   discharge     a

subordinate” for the same grounds). Section 400.20 specifies that any

such discipline “may be appealed to the civil service commission within

fourteen calendar days after the suspension, demotion, or discharge.” Id.

§ 400.20. At the hearing before the commission, the employee has the

right to be represented by counsel or a union representative, id.

§ 400.18(3), and proper notice must be given, id. § 400.23. A civil service

commission has jurisdiction “to hear and determine matters involving

the rights of civil service employees under [chapter 400], and may affirm,

modify, or reverse any case on its merits.” Id. § 400.27.

       We have long recognized these statutes protect a civil service

employee such as Whitwer from being arbitrarily discharged. City of Des

Moines, 540 N.W.2d at 56; accord Anderson v. Bd. of Civil Serv. Comm’rs,

227 Iowa 1164, 1168, 290 N.W. 493, 494 (1940); see also Lewis, 776

N.W.2d at 862 (“It is improper for a civil service employee to be removed,

demoted, or suspended for reasons other than those found in sections

400.18 and 400.19 . . . .”).      The commission review process, therefore,

serves to protect employees “as long as they are not guilty of misconduct

       2The  general assembly recently amended several provisions of chapter 400. See
H.F. 291, 87th G.A., 1st Sess. §§ 55–63 (Iowa 2017). We are deciding this case based
on the version of chapter 400 in effect when Whitwer’s employment was terminated.
                                    10

or failure to perform their duties.” Misbach v. Civil Serv. Comm’n, 230

Iowa 323, 327, 297 N.W. 284, 286 (1941). Review by a commission “does

not exist to change the issues or scope of the original termination

decision.”   Dolan, 634 N.W.2d at 665.         Instead, the main thrust of

commission review is to determine whether the decision to terminate a

civil service employee, for either a disciplinary or nondisciplinary reason,

was arbitrary. City of Des Moines, 540 N.W.2d at 59; Misbach, 230 Iowa

at 327, 297 N.W. at 286 (“The commission is protection and a shield to

the civil service employee against an arbitrary or capricious removal.”).

      Chapter 400 further provides for judicial review of an employee’s

termination:

             The city or any civil service employee shall have a right
      to appeal to the district court from the final ruling or
      decision of the civil service commission. The appeal shall be
      taken within thirty days from the filing of the formal decision
      of the commission. The district court of the county in which
      the city is located shall have full jurisdiction of the appeal
      and the said appeal shall be a trial de novo as an equitable
      action in the district court.
             ....
            In the event the ruling or decision appealed from is
      reversed by the district court, the appellant, if it be an
      employee, shall then be reinstated as of the date of the said
      suspension, demotion, or discharge and shall be entitled to
      compensation from the date of such suspension, demotion,
      or discharge.

Iowa Code § 400.27. We have distinguished the phrase “trial de novo,”

which appears in this statute, from mere review de novo. See Sieg v. Civil

Serv. Comm’n, 342 N.W.2d 824, 828 (Iowa 1983). In a trial de novo, the

district court “hear[s] the case anew” and may receive evidence not

presented to the commission.     Dolan, 634 N.W.2d at 662.       Ultimately,

“the objective of a trial de novo is to permit the district court to

independently   determine    whether     the   sanction   imposed   by   the
                                    11

commission was warranted.” Id. at 663. Consequently, a district court—

and by extension, this court on review—may modify any disciplinary

decision of the Commission.      Id.; see also Lewis, 776 N.W.2d at 862

(“[T]his court ‘independently construe[s] the factual record as a whole to

determine if the [employee’s] discipline was warranted.’ ” (second and

third alterations in original) (quoting City of Des Moines v. Civil Serv.

Comm’n, 513 N.W.2d 746, 748 (Iowa 1994))).

      In this case, it is undisputed that Whitwer was entitled to the

rights of a civil service employee—the Commission only points out that

nothing in chapter 400 prevents Whitwer from waiving those rights, as

the last-chance agreement clearly reflects. According to the Commission,

Whitwer could have elected not to sign the agreement in October 2012,

faced termination for the domestic abuse assault guilty plea, and then

contested that termination. Instead, Whitwer signed the agreement and

kept his job for thirteen additional months subject only to the conditions

outlined in the agreement.    So long as he entered into the agreement

voluntarily, the Commission maintains that the agreement is valid and

enforceable.

      At the outset, we note that nothing in chapter 400 expressly bars

agreements waiving civil service appeal rights. In certain other contexts,

the legislature has declared that any purported waiver of statutory rights

is void against public policy.    See, e.g., Iowa Code § 96.15(1) (“Any

agreement by an individual to waive, release, or commute the individual’s

rights to [unemployment] benefits or any other rights under this chapter

shall be void.”); id. § 216E.6(2) (“Any waiver of rights by a consumer

under this chapter is void.”); id. § 322G.13 (declaring that a waiver of

rights related to defective motor vehicles “is void as contrary to public

policy”); id. § 579B.6 (providing that a waiver of the right to file a lien
                                    12

under chapter 579B “is void and unenforceable”). However, no similar

provision exists in chapter 400. Further, the relevant statutes indicate

that the right to appeal the discharge is an individual right, to be

exercised at the discretion of the employee. Section 400.20 provides that

any suspension, demotion, or discharge “may be appealed to the civil

service commission,” id. § 400.20 (emphasis added), and notice is

required “[i]f the appeal be taken,” id. § 400.21 (emphasis added).

      In the federal system, employees covered by the Civil Service

Reform Act may be removed “only for such cause as will promote the

efficiency of the service.” 5 U.S.C. § 7513(a) (2012). Federal law provides

that “[a]n employee against whom an action is taken under [section

7513] is entitled to appeal to the Merit Systems Protection Board.” Id.

§ 7513(d); see id. § 7701 (providing the procedures for appellate review);

see also Dep’t of Navy v. Egan, 484 U.S. 518, 526, 108 S. Ct. 818, 823

(1988) (“A removal for ‘cause’ embraces a right of appeal to the Board

and a hearing of the type prescribed in detail in § 7701.”). However, the

United States Court of Appeals for the Federal Circuit—the circuit where

many federal employment cases arise—regularly upholds and enforces

last-chance agreements related to removals. See, e.g., Buchanan v. Dep’t

of Energy, 247 F.3d 1333, 1338, 1340 (Fed. Cir. 2001). So long as the

agreement is validly executed, an employee’s removal is predicated on a

breach of the agreement, not whether the employee was removed for

cause. See Stewart v. U.S. Postal Serv., 926 F.2d 1146, 1148 (Fed. Cir.

1991); see also Buchanan, 247 F.3d at 1337, 1340 (affirming the removal

of an employee for “failing to be on duty for a significant portion of the

day”). Further, “[i]t is settled that an employee can waive the right to

appeal in a last-chance agreement.”       Buchanan, 247 F.3d at 1338

(quoting Gibson v. Dep’t of Veterans Affairs, 160 F.3d 722, 725 (Fed. Cir.
                                       13

1998)); see Annotation, Enforceability of Waiver of Right to Appeal in

Federal Employees’ Last Chance Agreement, 16 A.L.R. Fed. 2d 593, 593

(originally published in 2007) (“It is well established that a federal

employee can waive future appeal rights in a last chance agreement.”).

        A   valid   waiver-of-appeal   provision   in   a     federal   last-chance

agreement divests the Merit Systems Protection Board of jurisdiction,

Gilbert v. Dep’t of Justice, 334 F.3d 1065, 1070 (Fed. Cir. 2003), and the

Federal Circuit applies basic contract principles in determining whether

the agreement should be enforced, Link v. Dep’t of Treasury, 51 F.3d

1577, 1582 (Fed. Cir. 1995) (“A last-chance agreement is a settlement

agreement, and a settlement agreement is a contract.”). Accordingly, in

order to overcome the waiver-of-appeal provision, the federal employee

must either prove compliance with the agreement, that he or she did not

knowingly or voluntarily enter into the agreement, or that the agency

breached the agreement.         Id.; see also Gilbert, 334 F.3d at 1070

(recognizing that the employee has the burden of proof to establish

jurisdiction).      The employee may also demonstrate a last-chance

agreement is invalid if the agency acted in bad faith. Link, 51 F.3d at

1582.

        Significantly, federal courts recognize the validity of last-chance

agreements despite several policy arguments similar to those raised by

Whitwer in this case. See McCall v. U.S. Postal Serv., 839 F.2d 664, 667–

68 (Fed. Cir. 1988). In McCall, the Federal Circuit rejected the idea that

last-chance      agreements   are   inherently     coercive     due     to   unequal

bargaining power between the employer and employee. Id. at 667; see

also Williams v. U.S. Postal Serv., 58 Fed. App’x 469, 471 (“The choice

between removal and signing the agreement is inherent in any last

chance agreement.”). The court acknowledged that individuals “are often
                                     14

forced to make difficult choices which effectively waive statutory or even

constitutional rights.” McCall, 839 F.2d at 667. Nevertheless, the court

recognized that an employee obtains a substantial benefit from entering

into a last-chance agreement: retaining employment and being given an

opportunity to improve his or her conduct. See id. So long as the waiver

is knowing and voluntary, the agreement simply “reflects a rational

judgment on the part of [the employee].” Id.

      In McCall, the Federal Circuit also addressed the argument that

enforcement of last-chance agreements may incentivize agencies to bring

disciplinary actions that “might otherwise not be sustainable before the

board.” Id. The court recognized the public interest at stake in allowing

a full and fair consideration of all disciplinary actions; however, the court

pointed out that a federal employee’s right to appeal is a private decision

of the employee. Id. Consequently, the court concluded, “We cannot say

that the comparatively remote public interest in the effectiveness of the

Civil Service Reform Act should displace [the employee’s] knowing and

voluntary decision that he would benefit personally from the agreement.”

Id.

      Finally, the Federal Circuit rejected the idea that last-chance

agreements are “contrary to the goals of the Civil Service Reform Act” and

“open[ ] the door to completely subjective evaluation by the agency.” Id.

Specifically, the agreement in McCall required the employee to conduct

himself in a manner “acceptable to management” or face removal. Id. at

665. As the court explained,

      We agree that the term “acceptable to management” does
      introduce an element of subjectivity into the agreement, but
      this does not mean that agencies would have a free hand to
      take arbitrary action against employees. We think it is
      implicit in the agreement here that the agency must abide by
      it in good faith. Thus, the agreement itself serves as a check
                                             15
      on arbitrary agency action. If an agency acts in bad faith or
      takes other arbitrary and capricious action, as a breaching
      party it would not be able to enforce the agreement.

Id. at 667 (emphasis added).                 The court also distinguished cases

involving the waiver of substantive guarantees for individual employees,

noting that the removal statutes at issue were directed only “to the

procedures by which civil servants are hired and fired.” Id. at 668; cf.

Callicotte    v.     Carlucci,    698   F. Supp.      944,    946–47    (D.D.C.   1988)

(concluding that a waiver of an employee’s right to file a claim of

workplace discrimination was invalid as contrary to public policy).

      Likewise,         several    state     courts    have    enforced    last-chance

agreements as a valid waiver of a civil service employee’s rights related to

the termination of employment. See, e.g., Muth v. City of Leominster, No.

12–P–1498, 2013 WL 3939948, at *1 (Mass. App. Ct. Aug. 1, 2013);

Chilefone v. Metro. Council, No. C0-02-2260, 2003 WL 21694564, at *3

(Minn. Ct. App. July 22, 2003); Watson v. City of East Orange, 815 A.2d

956, 957–58 (N.J. 2003) (per curiam) (enforcing the terms of an

agreement in part because “[a] contrary conclusion likely would chill

employers from entering into last chance agreements to the detriment of

future employees”); Abramovich v. Bd. of Ed., 386 N.E.2d 1077, 1079–80

(N.Y. 1979) (“[W]hen a waiver is freely, knowingly and openly arrived at,

without      taint    of   coercion     or   duress,    the    sturdy   public    policy

underpinnings of section 3020-a are not undermined.”); Monahan v.
Girouard, 911 A.2d 666, 672–73 (R.I. 2006); City of Yakima v. Yakima

Police Patrolmans Ass’n, 199 P.3d 484, 490 (Wash. Ct. App. 2009). At

least two other states expressly authorize waiver by statute.                       See

McCollins v. Cuyahoga County, 20 N.E.3d 1221, 1225 n.3 (Ohio Ct. App.

2014) (“The statute and case law treat Last Chance Agreements like any

other contract . . . .”); City of Austin Firefighters’ and Police Officers’ Civil
                                    16

Serv. Comm’n v. Stewart, No. 03–15–00591–CV, 2016 WL 1566772, at *3

(Tex. App. Apr. 14, 2016) (recognizing that when an agreement

authorized by statute addresses disciplinary actions, it “supersedes any

contrary statute, ordinance, or rule, including provisions under the [Civil

Service] Act”); see also Ohio Rev. Code Ann. § 124.34(B) (West, Westlaw

current through 2017 File 5 of the 132d Gen. Assemb.); Texas Loc. Gov’t

Code Ann. §§ 143.306–.307 (West, Westlaw current through chapters

effective immediately through Chapter 34 of the 2017 Reg. Sess.).

      Whitwer cites only one example of a state court that declined to

enforce an employee’s waiver of termination rights in a last-chance

agreement. See Farahani v. San Diego Comm. Coll. Dist., 96 Cal. Rptr. 3d

900, 905–06 (Ct. App. 2009). However, Farahani is easily distinguishable

because such waivers in California are expressly prohibited by statute, a

circumstance which does not exist in Iowa under chapter 400. Id. at 905

(“By its terms, section 87485 renders null and void any agreement to

waive the benefits of Chapter 3, ‘Employment.’ ”).

      We find the reasoning from McCall persuasive and conclude that a

last-chance agreement waiving civil service appeal rights afforded to a

civil service employee under chapter 400 can be valid and enforceable.

      Here, the district court concluded that while a municipal

government may enter into a last-chance agreement with an employee,

such an agreement is not effective until the Commission has had an

advance opportunity to review and approve the agreement. However, this

notion bends the duties and responsibilities of the Commission too far.

No provision in chapter 400 authorizes the Commission to review and

approve such agreements or provides it with standards for doing so.

Rather, the Commission acts in an adjudicatory capacity when it reviews

the removal, demotion, or suspension of a civil service employee. Sieg,
                                      17

342 N.W.2d at 828.      This review process is predicated on a sanction

having already occurred.      Cf. Bevel v. Civil Serv. Comm’n, 426 N.W.2d

380, 383 (Iowa 1988) (concluding that the appeal time in section 400.20

begins once the employee receives notice of the sanction).

        We also do not accept that a last-chance agreement becomes

arbitrary simply because the municipality retains discretion whether to

offer the agreement. Primarily, this ignores the fact that the employee

has comparable discretion to reject the agreement, if and when offered.

Further, any disciplinary decision begins with an exercise of discretion

by the municipality in any event. The City should retain discretion to

determine whether to offer an employee an opportunity to remain on the

job through a last-chance agreement despite otherwise “removable”

misconduct. For example, in this case, Whitwer was described as having

an exemplary record of nearly two decades before committing assault in

2012.    See id. at 382 (construing chapter 400 liberally to “assist the

parties in obtaining justice”).

        Of course, a civil service employee does not waive any rights

protected by chapter 400 if the agreement itself is invalid.        Because a

last-chance agreement is essentially a settlement agreement, general

principles   of   contract   law   should   apply   to   their   creation   and

interpretation. See Estate of Cox v. Dunakey & Klatt, P.C., 893 N.W.2d

295, 302 (Iowa 2017); see also Rick v. Sprague, 706 N.W.2d 717, 723

(Iowa 2005) (“[W]e also look to contract principles when we interpret

offers to confess judgment.”).

        B. The October 2012 Agreement. The district court determined

the last-chance agreement was invalid as a matter of law since it lacked

the Commission’s prior imprimatur. Thus, the court did not reach the

issue of whether the agreement was otherwise enforceable and valid.
                                    18

Whitwer does not dispute that he violated the no-contact order, which

resulted in a direct violation of the last-chance agreement.

      Whitwer instead characterizes the circumstances surrounding his

signing the agreement as “incredibly problematic.” Whitwer points out

that the meeting was rescheduled at the last minute from October 5 to

October 1, and that his personal attorney was not present.          He also

claims that he was under stress when the document was signed and

faced a “Hobson’s choice”: either sign the agreement “as is,” or be

terminated.

      Upon our de novo review, we are satisfied that Whitwer entered

into the agreement voluntarily, knowingly, and intelligently.           The

agreement provided a significant benefit—continued employment with a

five-shift suspension in lieu of termination proceedings.      The fact that

Whitwer’s attorney was not present when he signed the agreement is not

controlling.   Whitwer’s attorney was informed of the terms of the last-

chance agreement before the hearing, and no objection was raised to his

absence. Whitwer’s interests were represented by two union officials at

the hearing. Whitwer was given ample time, outside the presence of any

City personnel, to review the agreement with the union officials. Except

for the scheduling of his shift suspensions, Whitwer raised no questions

or concerns about the agreement despite several opportunities to do so.

On these facts, we conclude that Whitwer agreed to the last-chance

agreement and was fully aware of both its benefits and its consequences.

      It is also notable that in this case, the violation of the last-chance

agreement occurred a little over a year after the agreement was signed

and was connected to the misconduct underlying the original disciplinary

proceeding. Additionally, first responders often have to deal with volatile

in-home situations, including incidents of domestic violence. Thus, full
                                       19

public confidence in the ability of first responders to perform these

functions is particularly important.

      We do not foreclose the possibility that in a different case in the

future, such as a case involving a significant lapse of time or a de

minimis or unrelated breach, attempted enforcement of the last-chance

agreement might be contrary to public policy or might violate the duty of

good faith and fair dealing. See McCall, 839 F.2d at 667 (“[I]t is implicit

in the agreement here that the agency must abide by it in good faith.

Thus, the agreement itself serves as a check on arbitrary agency

action.”). Such a case is not before us today and we do not address it in

today’s opinion.

      IV. Conclusion.

      For the above reasons, we conclude the last-chance agreement

signed by Whitwer was valid and enforceable. Accordingly, we reverse

the judgment of the district court and uphold the City’s termination of

Whitwer’s employment under the circumstances of this case. See Lewis,

776 N.W.2d at 865.

      REVERSED.

      All justices concur except Appel and Hecht, JJ., who dissent.
                                    20

                                   #15–1131, Whitwer v. CSC of Sioux City

APPEL, Justice (dissenting).

      Iowa Code section 400.30 (2013) states, “The provisions of this

chapter shall be strictly carried out by each person or body having

powers or duties thereunder.”     If the provisions of the Code are to be

strictly carried out, it seems to me a person

      shall not be removed, demoted, or suspended arbitrarily,
      except as otherwise provided in this chapter, but may be
      removed, demoted, or suspended after a hearing by a
      majority vote of the civil service commission, for neglect of
      duty, disobedience, misconduct, or failure to properly
      perform the person’s duties.

Id. § 400.18(1).

      The Iowa legislature has clearly provided, except for certain

exceptions not applicable here, termination may occur only “after a

hearing by a majority vote of the civil service commission for neglect of

duty, disobedience, misconduct, or failure to properly perform the

person’s duties.” Id. That did not happen here.

      I do not think the parties can agree to opt out of the system

because they think their agreement is more beneficial than the statutory

framework. The majority suggests last-chance agreements are at least

sometimes good for the employee and good for the public employer.

Perhaps so. But that is not the question. The question here is a simple

one: Does the statute authorize dismissal of an employee without a

majority vote of the civil service commission after a hearing for the

enumerated causes? There is nothing in the statute allowing the parties

to finesse this language.

      The majority opinion declares there is nothing in the statute

prohibiting last-chance agreements. There is no such specific language

dealing with last-chance agreements. But the fact the language of Iowa
                                       21

Code section 400.18(1) is broad and not narrow does not defeat its

application to last-chance agreements that do not provide for a hearing

and vote by a majority of the civil service commission.

      The majority correctly points out the civil service statute does not

expressly declare waivers are void as do many other statutes. That is a

fair point.   But it also does not expressly authorize last-chance

agreements, as do some civil service statutes. In any event, the failure to

provide such a declaration does not eviscerate the mandatory provisions

of Iowa Code section 400.18(1), which the legislature has instructed the

participants to strictly enforce. I do not think it can be fairly said this

provision has been strictly enforced in this case.

      For these reasons, I would affirm the judgment of the district

court. Tinkering with the statute should be left to the legislature.

      Hecht, J., joins this dissent.
