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Committee debates removing third-step appeals for state employees; sponsor cites efficiency
Summary
Lawmakers debated House Bill 2540, which would remove the third-step independent appeal for state employee grievances; state HR told the committee the process yields about 20 step‑3 decisions a year and an estimated $150,000 fiscal savings. The committee moved the bill with a negative recommendation to Finance after a close vote.
House Bill 2540, presented as an update to the 2012 Team Act, would streamline state employee grievance procedures by eliminating the formal third-step appeal in most cases.
The bill’s sponsor said the change aims to bring “efficiency, accountability, and common-sense employment practices” while preserving employee protections. Eric Mayo, senior policy advisor for the Tennessee Department of Human Resources, told the committee the state sees "roughly we average about 20 appeals that make it to the to step 3," and that last year about six step‑3 decisions were changed, with roughly two reversals restoring terminated employees to their jobs. Mayo also cited a fiscal-note estimate of approximately $150,000 in savings tied to the appeals process and said agency attorneys’ time could be reallocated if the step is removed.
Opponents voiced concerns about due process and workplace morale. Representative McKenzie pressed for data and argued the third-step provides an independent review: "If we can save one person's job … isn't that something we will want to do?" Representative Fritz said she could not support the bill because removing the avenue to appeal would not sit well with many state employees.
Leader Lambert defended the sponsor’s outreach to employee organizations and framed the bill as a modest change amid recent pay and benefit increases for state workers. After debate, the clerk reported the committee’s roll-call result and the bill was advanced to the Finance committee with a negative recommendation (clerk announcement: "you have 5, 6 nays and 1 present not voting").
