Arden & Coulter v. State Employees' Appeals Com'n

• Decision Date: 26 September 1991
• Docket Number: No. 73A01-9011-CV-452,73A01-9011-CV-452
• Citation: 578 N.E.2d 769
• Court: Indiana Appellate Court
• Parties: ARDEN & COULTER, et al., Brenda Carter, Muriel Cousins, Carole Gates, Wilma Jacona, Lisa D. Parker, Beth Saremba, and Derralean Wilson, Appellants-Petitioners, v. STATE EMPLOYEES' APPEALS COMMISSION, et al., Appellees-Respondents.

Page 769

578 N.E.2d 769

ARDEN & COULTER, et al., Brenda Carter, Muriel Cousins Carole Gates, Wilma Jacona, Lisa D. Parker, Beth Saremba, and Derralean Wilson Appellants-Petitioners, v. STATE EMPLOYEES' APPEALS COMMISSION, et al., Appellees-Respondents.

No. 73A01-9011-CV-452.

Court of Appeals of Indiana First District.

Sept. 26, 1991.

Rehearing Denied Nov. 7, 1991.

David W. Stone, IV, Stone Law Office & Legal Research, Anderson, Nancy S. Brown, Brown and Brown, New Castle, for appellants-petitioners.

John F. Kautzman, Ruckelshaus, Roland, Hasbrook & O'Connor, Indianapolis, for additional appellants-petitioners Coulter, et al.

Linley E. Pearson, Atty. Gen., Brenda Franklin Rodeheffer, Deputy Atty. Gen., Indianapolis, for appellees-respondents.

BAKER, Judge.

This is a consolidated appeal from two judgments of the Shelby Circuit Court. The petitioner-appellants are state employees working at the Richmond State Hospital in Richmond, the Indiana School for the Deaf in Indianapolis, and the LaRue Carter Memorial Hospital in Indianapolis. The Richmond State and School for the Deaf employees are subdivided into two groups: those who are eligible for overtime pay, and those who are not. All the LaRue Carter employees are eligible for overtime pay. All the overtime eligible employees will be referred to as Group A Employees. The non-overtime eligible employees will be referred to as Group B Employees. ¹

The issue regarding the Group A Employees is whether the State, under its current statutory and regulatory scheme, may require clerical employees in a given classification to work 40 hours per week for the same salary as that received by other clerical employees in the same classification who work only 37.5 hours per week. We hold that it may not.

The issue regarding the Group B employees is whether the State, under its current statutory and regulatory scheme, may increase the weekly work hours of professional employees working in state institutions from 37.5 hours to 40 hours. We hold that it may.

Affirmed in part, reversed in part, and remanded.

FACTS

The facts underlying this case are not in dispute. For some undetermined period of time prior to the fall of 1987, both the Group A and the Group B Employees worked 37.5 hours per week. In October 1987, Thomas Beasley, the State Personnel Director, issued an order requiring employees at state institutions to work 40 hours per week, and employees in state offices to work 37.5 hours per week. Record at A-344; C-171. The rule made no mention of salary.

After the rule went into effect, appointing authorities at state institutions began requiring both Group A and Group B Employees to work 40 hours per week with no change in biweekly salary. All the Employees objected to the uncompensated increase in hours and timely pursued all administrative remedies, but the State Employees' Appeals Commission (SEAC) issued a decision denying relief. On the Employees' petition for judicial review, the trial court affirmed SEAC, and the Employees now appeal.

DECISION

Applicable statutes and regulatory enactments

This case was decided on stipulated facts. In such a situation, our task is to determine whether the trial court properly interpreted and applied the applicable law to the stipulated facts. Indiana Ins. Co. v. Knoll (1968), 142 Ind.App. 506, 236 N.E.2d 63 (when facts are stipulated, only questions of law remain for review). Of course, we must bear in mind that, ultimately, we are reviewing an agency determination, and must pay due deference to the agency's expertise. See Conquest v. State Employees' Appeals Com'n (1991), Ind.App., 565 N.E.2d 1086, trans. denied; Citizens Action Coalition v. Northern Ind. Pub. Serv. Co. (1990), Ind.App., 555 N.E.2d 162. Nonetheless, the questions here are questions of law, not of fact, and questions of law are questions for the courts. State, ex rel. Bd. of Dental Examiners v. Judd (1990), Ind.App., 554 N.E.2d 829, 833, n. 4.

The authority to regulate state employee policies and practices is committed to the Indiana Personnel Department (the Department) under the direction of the state personnel director (the Director). IND.CODE 4-15-1.8-7; 4-15-1.8-3. Among other duties, the Department must:

(1) Develop personnel policies, methods, procedures, and standards for all state agencies.

(2) Formulate, establish, and administer position classification plans and salary and wage schedules, all subject to final approval by the governor.

* * * * * *

(8) Promulgate and enforce personnel rules.

* * * * * *

(18) Administer the state personnel law, IC 4-15-2. IND.CODE 4-15-1.8-7(a). Additionally, the Director is specifically charged with the authority and responsibility to ensure that a pay plan for state employees is prepared and maintained. IND.CODE 4-15-2-6(a).

Under the authority of these statutes, the Department promulgated 31 I.A.C. 2-11-1, ² which provides in pertinent part:

The normal minimum working week shall be 40 hours except as otherwise established by statute or by specific ruling of the State Personnel Director.

Id. (emphasis added). ³

We come next to the eye of the hurricane, the legislative Gibraltar around which the maelstrom swirls, the almost four decades old IND.CODE 4-1-2-1, which mandates that:

state offices be open and able to conduct public business at all times during an eight and one-half (8 1/2) hour working day. Each employee shall work for a full seven and one-half (7 1/2) hours each working day and provision for a one (1) hour lunch period shall be provided each employee. Lunch hours of employees shall be staggered to permit the conduct of business at all times during a working day.

(Emphasis added.) The Department interpreted the emphasized language as placing a cap of 7 1/2 hours per day, or 37 1/2 hours per week, on the time state office employees could work without being paid for overtime, ⁴ and the Director gave life to this interpretation by issuing the October 1987 order discussed above as a specific ruling creating an exception to 31 I.A.C. 2-11-1. Record at C-171; A-344. ⁵

This system might well be appropriate but for one fact: 31 I.A.C. 2-4-2 requires "[a]ll regulations ... shall be designed ... to guarantee ... equal pay for comparable work in the several agencies of the state service." This language mandating equal pay for comparable work is not mere verbiage. In Indiana Personnel Bd. v. Galloway (1976), 168 Ind.App. 238, 342 N.E.2d 903, and again in State v. King, supra, note 2, this court held the State's payment of lower salaries to county welfare workers than to state welfare workers doing comparable work was illegal under 31 I.A.C. 2-4-2. ⁶

The question, then, becomes two-fold: 1) are the Employees performing work comparable to that performed by their state office counterparts, and 2) if they are, are they receiving pay equal to that received by their state office counterparts?

GROUP A EMPLOYEES

Comparable Work

There is no question the Group A Employees and their state office counterparts perform comparable work. The record contains the jointly admitted Department classification profiles for the positions held by the Group A Employees. Record at A-315-19, 323-30; C-148-70. The profiles make no distinction between work done in state offices and work done in state institutions. At oral argument, the State relied on the fact that state institutions have the care and custody of people, e.g., penal inmates, psychiatric patients, and blind students, while state offices serve the general public. Thus, according to the State, institutional employees perform different tasks than do office employees. The State, however, stipulated that none of the Group A Employees holds a position requiring different staffing levels, coverage, or qualifications than would be required in a state office. Record at A-291, 295, 298, 301, 303; C-139-40. ⁷ In other words, the State agrees that a Clerk Typist V at LaRue Carter Memorial Hospital, Richmond State Hospital, or the Indiana School for the Deaf performs exactly the same work as a Clerk Typist V in a state office. ⁸

The Group A Employees perform work comparable, indeed equal, to that performed by their state office counterparts, and are thus entitled to receive the same pay as those office employees. ⁹

Equal Pay

Indiana state employees are paid salaries rather than hourly wages. See 31 I.A.C. 2-4-2. Salaries are computed biweekly, not annually. See IND.CODE 4-15-5.9-1. Overtime earnings are based on an hourly wage calculated by dividing an employee's biweekly salary by the minimum number of hours the employee is required to work in a two-week period. See 31 I.A.C. 2-11-2. When the Director's October 1987 order took effect, no change occurred in the Group A Employees' biweekly salaries. Record at A-294, 300, 306; C-140-41. They thus receive the same pay for 40 hours of work that their state office counterparts receive for 37.5 hours per week.

In a display of frighteningly flawless Orwellian logic, the State argues that like-classified employees receive equal pay, regardless of whether they work 40 hours or 37.5 hours for that pay, because the effective hourly wage is immaterial: only the biweekly salary matters, and the biweekly salaries are the same. Appellee's Brief at 12. Taken to its extreme, the State's argument would lead to an absurd conclusion that the Employees could be compelled to work 24 hours per day, seven days per week (a total of 168 hours) for the same salary like-classified state office employees receive for only 37.5 hours of work. The Department's own regulation, 31 I.A.C. 2-4-2, precludes the success of such an argument. State v. King, supra; Indiana Personnel Bd. v. Galloway, supra. ¹⁰ Moreover, the State has forgotten the common-sense stipulations it entered into to the effect that an increase in hours worked with no concomitant increase in salary is analogous to a decrease in salary. Record at A-293, 299, 300, 305; C-141. These...