Appeal of New Hampshire Dept. of Employment Sec.

• Court: New Hampshire Supreme Court
• Writing for the Court: JOHNSON
• Citation: Appeal of New Hampshire Dept. of Employment Sec., 672 A.2d 697, 140 N.H. 703 (N.H. 1996)
• Decision Date: 07 March 1996
• Docket Number: No. 94-681,94-681
• Parties: , 11 IER Cases 1140 Appeal of NEW HAMPSHIRE DEPARTMENT OF EMPLOYMENT SECURITY (New Hampshire Department of Labor).

Page 697

672 A.2d 697

140 N.H. 703, 11 IER Cases 1140

Appeal of NEW HAMPSHIRE DEPARTMENT OF EMPLOYMENT SECURITY (New Hampshire Department of Labor).

No. 94-681.

Supreme Court of New Hampshire.

March 7, 1996.

Jeffrey R. Howard, Attorney General (Daniel J. Mullen, Senior Assistant Attorney General, on the brief and orally), for petitioner.

Silverman, Penna, Pike & Gaige, Dover (Stephen E. Gaige on the brief and orally), for respondent.

JOHNSON, Justice.

The respondent, Maurice Tandy, filed a complaint pursuant to the Whistleblowers' Protection Act, RSA chapter 275-E, against the petitioner, New Hampshire Department of Employment Security (DES). See RSA 275-E:4, I (Supp.1995). He alleges that the DES discharged him for reporting its violation of a federal veterans' preference law. See 38 U.S.C. § 4103A(a)(1) (1988); RSA 275-E:2, I(a) (Supp.1995). The New Hampshire Department of Labor (DOL) found the complaint valid, and the DES appeals. See RSA 275-E:4, II (Supp.1995); RSA 541:6 (1974). We affirm.

Tandy is a disabled, Vietnam-era veteran. He began working part-time in the DES' Portsmouth office in February 1992. In August of that year, he applied for a full-time DES position in Manchester in the disabled veteran outreach program (DVOP). Darrell Gates, manager of the Manchester office, interviewed Tandy for the job and later informed him that another person had been selected. The person chosen is a disabled veteran, but not of the Vietnam era.

In a September 9 letter confirming his hiring decision, Gates described all who interviewed as "well qualified." DES general counsel Michael Black later dismissed the significance of this mailing, describing it as a standard "can letter." According to Black, Gates determined that Tandy was not qualified for the Manchester DVOP job. At the DOL hearing, Gates himself simply testified that Tandy was not "the best candidate."

Tandy questioned Gates about the hiring decision, both in a September 14 telephone conversation and in a September 29 letter. In the letter, Tandy wrote that "an honest mistake may have occurred in the decision to hire [the other veteran] rather than myself." He cited 38 U.S.C. § 4103A(a)(1), which states that "[p]reference shall be given in the appointment of [DVOP positions] to qualified disabled veterans of the Vietnam era." Tandy wrote a similar letter the next day, September 30, to David Houle, the director of the United States Department of Labor (USDOL) Veterans Employment and Training Service. In this letter, Tandy asked Houle to "open a formal investigation." The same day, the DES stopped providing Tandy with hours for work. At the DOL hearing, his supervisor cited lack of funding as the reason.

Tandy met with Gates, Houle, and others on October 7 to discuss the Manchester DVOP hiring decision. Again, Tandy expressed his concern about the application of 38 U.S.C. § 4103A(a)(1). The next day, Tandy wrote to Houle that

[a]fter hearing the explanations of the hiring practices ... and your professional interpretation of the word "preference" as it applies in this case I can understand why the selection of [the other veteran] was made over myself.

I have no more questions dealing with this issue. I will put it behind me and go on to more important things.

On October 15, Houle wrote Tandy a letter "acknowledg[ing] the closing of the informal DVOP appointment review, in accordance with my understanding of your letter of October 8, 1992."

Tandy then wrote to Thomas Norris, a DES worker and a local veteran employment representative involved with the American Legion as chairman of its veterans' preference and economics committee. In this letter, dated October 16, Tandy related most of the events described above, including the chosen veteran's status as a disabled, non-Vietnam-era veteran. Houle learned of the letter and called another meeting, held on October 21, at which the preference issue was again discussed.

Meanwhile, another DVOP position opened up, in Laconia, and Tandy interviewed for it in late December. Black, the DES general counsel, then called a meeting. In reviewing Tandy's application for the Laconia position, he had become concerned that Tandy had violated DES confidentiality requirements by disclosing information to Norris about the veteran hired for the Manchester DVOP position. A confidentiality form signed by Tandy states that a breach "is sufficient cause for immediate discharge." Black was also troubled by Tandy's interpretation of veterans' preference law. He testified, however, that if "[Tandy's] account was satisfactory on those two issues, it was my intention that he be hired for that position in Laconia."

Black's meeting took place on January 21, 1993. The Laconia DES manager who had interviewed Tandy and the DES assistant director of operations were in attendance, in addition to Black and Tandy. During the discussion, Tandy satisfied Black that he would not breach a DES confidence again but continued to disagree with the DES' interpretation of veterans' preference law.

Tandy was not hired for the Laconia position, and his services with the DES were officially terminated effective February 10, 1993. His termination letter cited the preference law disagreement, characterizing it as "particularly disturbing since the position in Laconia would be to administer programs regarding veterans['] preference.... Regretfully, this combined with your failure to follow procedures regarding the release of confidential information establishes a pattern of behavior inconsistent with this Department's missions[,] objectives, and policies[.]"

Tandy requested an appeal from DES Commissioner John Ratoff, but Ratoff deemed Tandy's part-time status a bar to such a remedy. Tandy then turned to the New Hampshire Personnel Appeals Board for relief, but the board similarly dismissed his claim.

Meanwhile, USDOL regional administrator Norman Ahlquist came to the conclusion that the DES had erred in its interpretation of veterans' preference law. In January 1994, Ahlquist and Ratoff negotiated a settlement whereby the Manchester DVOP position would be reposted and all interested applicants considered. This was done, with Tandy in the applicant pool, but he was not selected.

Tandy filed this complaint on February 10, 1994. The DES responded with a motion to dismiss. Upon receipt of the motion, the DOL informed the parties that it "chooses to take no action on the Motion to Dismiss, as the issues raised may more properly be argued before a hearings officer before this Department." On July 7, 1994, following a hearing, the DOL ruled Tandy's complaint valid. The DOL specifically found Tandy to be a qualified, disabled, Vietnam-era veteran, and concluded:

[T]he employer discharged the claimant and also failed to consider him in a fair light when subsequent DVOP positions became open due to the fact that the claimant reported, both verbally and in writing, what he had a reasonable cause to believe was a violation of a law or rule adopted under the laws of the United States, specifically 38 USC, and that the claimant brought the alleged violation of 38 USC to the attention of people having supervisory authority with the employer, allowing them a reasonable opportunity to correct the violation.

In reaching this conclusion, the DOL found:

[T]he release of confidential information regarding [the status of the veteran hired for the Manchester position] was apparently not so serious in the eyes of the NHDES that it could not have been taken care of at the January 21, 1993 "counselling session" at which the Department was apparently ready to forgive any infraction of the confidentiality breach made by the claimant if he stated that he understood that the information ... was confidential, and in light of the fact that the January 21, 1993 meeting was also to discuss the DVOP position in Laconia with the claimant.

The DES moved to reconsider. The DOL denied the motion, and the DES appealed to this court.

This case involves the application of the Whistleblowers' Protection Act, RSA chapter 275-E, which prohibits employers from retaliating against an employee for reporting what he or she reasonably believes is a violation of the law. The alleged violation Tandy reported is the decision not to hire him for the Manchester DVOP position. See RSA 275-E:2, I(a). According to the DOL, the retaliation for the reporting is Tandy's September 30 layoff and the DES' decision not to hire him for the subsequent DVOP positions.

At the outset, it is important to note what is not at issue. The DES does not argue that Tandy failed to give it a reasonable chance to correct the alleged violation of veterans' preference law before reporting it to persons other than DES supervisors. See RSA 275-E:2, II (Supp.1995). Moreover, although at oral argument the DES denied firing Tandy for reporting the alleged violation, the DES did not make this point in its notice of appeal. We therefore do not consider it. See Sup.Ct.R. 16(3)(b); State v. Peterson, 135 N.H. 713, 714-15, 609 A.2d 749, 750-51 (1992).

Our standard of review is dictated by RSA 541:13 (1974):

Upon the hearing the burden of proof shall be upon the party seeking to set aside any order or decision of the commissioner to show that the same is clearly unreasonable or unlawful, and all findings of the commission upon all questions of fact properly before it shall be deemed to be prima facie lawful and reasonable; and the order or decision appealed from shall not be set aside or vacated except for errors of law, unless the court is satisfied, by a clear preponderance of the evidence before it, that such order is unjust or unreasonable.

See Appeal of State of N.H., 138 N.H. 716, 719, 647 A.2d 1302, 1305 (1994).

I. Jurisdiction

In its brief, the DES first argues that the DOL lacked jurisdiction to hear Tandy's complaint because 38 U.S.C. § 4103A "does not involve issues of federal law which are within the...