Committee advances bill to remove third‑step appeals for state employees amid pushback
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Summary
The House Government Operations Committee voted to forward an amended bill that would remove the current "step 3" administrative appeal for state employees, citing efficiency and modest fiscal savings; members and the governor’s adviser warned the change may harm morale and remove an independent review.
The House Government Operations Committee moved an amended bill to finance with a negative recommendation after a contested debate over removing the third‑step appeal in state employee disciplinary and hiring disputes.
Chairman McCallum presented House Bill 2540 as an update to the 2012 Team Act intended to "bring efficiency, accountability, and common sense employment practices" while preserving employee protections. The committee first adopted an amendment (drafting code 016802) before hearing extended questions and testimony.
Several committee members objected to eliminating the third appeal, saying it removes an outside review and could undermine morale. Representative Fritz said much of the bill was positive but that "the ability to appeal things and changing that flow is probably not gonna sit well with the average state employee." Representative McKenzie pressed for data on how often step‑3 appeals are used and whether the process saves—or costs—the state.
Eric Mayo, senior policy adviser for the Tennessee Department of Human Resources, told the committee, "we average about 20 appeals that make it to the to step 3" and that "last year, we had 6 decisions that were changed at step 3," with only two reversals restoring previously terminated employees. Mayo said the department estimated a positive fiscal impact of about $150,000 in savings tied to step‑3 administration and argued that steps 1 and 2 are sufficiently thorough.
Members who opposed the change emphasized that even a small number of reversals can meaningfully affect individuals’ lives and careers. Representative McKenzie said the independent third step matters because it provides an additional neutral review and that allowing employees to sue the state is not an adequate substitute for that forum.
The clerk reported the committee vote as 5 ayes, 6 nays, and 1 present not voting; committee paperwork moved HB 2540 to the finance committee with a negative recommendation. The fiscal note and the agency’s plan to communicate changes to employees were raised repeatedly during questioning. No final action on the substance of the appeal removal occurred in this committee; the next step is the finance committee consideration.
