Carreer v. Health

• Decision Date: 02 July 2010
• Docket Number: No. 2009–CA–000155–MR.,2009–CA–000155–MR.
• Citation: 339 S.W.3d 477
• Parties: James D. CARREER, Appellant,v.CABINET FOR HEALTH AND FAMILY SERVICES, John P. Hamm, Appointing Authority; and Kentucky Personnel Board, Appellees.
• Court: Kentucky Court of Appeals

339 S.W.3d 477

James D. CARREER, Appellant,

v.CABINET FOR HEALTH AND FAMILY SERVICES, John P. Hamm, Appointing Authority; and Kentucky Personnel Board, Appellees.

No. 2009–CA–000155–MR.

Court of Appeals of Kentucky.

June 18, 2010.As Modified July 2, 2010.Discretionary Review Denied by

Supreme Court June 8, 2011.

James D. Carreer (argued), Shelbyville, KY, for appellant.Alea Amber Arnett (argued), Frankfort, KY, for appellee.Before VANMETER, Acting Chief Judge; ACREE and WINE, Judges.

OPINION

WINE, Judge:

James D. Carreer appeals from an order of the Franklin Circuit Court which affirmed a decision by the Kentucky Personnel Board (“the Board”) dismissing his claim against the Cabinet for Health and Family Services (“the Cabinet”). Carreer asserts that he was involuntarily transferred and demoted from his merit position without just cause. We agree with the circuit court, however, that the Cabinet acted within its statutory authority, that the Board afforded Carreer all the procedural due process to which he was entitled, and that the Cabinet presented substantial evidence to show just cause for its action. Hence, we affirm the circuit court's order affirming the Board.

Factual and Procedural History

Prior to June 2004, Carreer was a classified merit employee who was employed as a Staff Assistant 9619, Grade 17, in the Commissioner's Office in the Department for Public Health (“DPH”) within the Cabinet for Health Services. His duties at the time included serving as a personnel and legislative liaison to DPH Commissioner Dr. Rice Leach. On May 11, 2004, then-Governor Ernie Fletcher issued an executive order directing that the Cabinet for Health Services and the Cabinet for Families and Children be merged into the Cabinet for Health and Family Services.

As the merger and reorganization developed, Carreer's position was changed to “Internal Policy Analyst III,” and was to be transferred to the new Division of Administration and Finance Management. In his new position, Carreer would perform the same functions and have the same responsibilities. However, he would no longer report to the DPH Commissioner, but would report to the division director of the Division of Administration and Finance Management.

Some time in late March 2004, Carreer discovered a draft of a confidential document which detailed the proposed reorganization of the DPH. The document had inadvertently been left at an office copier. Upon finding that his position was to be moved out of the new Commissioner's Office, he confronted Commissioner Leach and several other individuals with his concerns about how the reorganization would affect his position. At the time, Carreer was told that he would not be moved out of the Commissioner's Office. But when the merger and reorganization plans were finalized in June 2004, he was informed that his position was to be transferred to the new Division.

After the reorganization plans were announced, Commissioner Leach resigned as DPH Commissioner and Dr. William Hacker was appointed as Acting Commissioner on July 1, 2004. Sometime after June 25, 2004, Carreer met with Dr. John Burt, the new division director and Carreer's new supervisor in the Division of Administration and Finance Management. Burt told Carreer that he would keep his old office and duties, but he needed to re-write his position description to be consistent with the new designation of Internal Policy Analyst III. On July 15, 2004, Commissioner Hacker told Carreer that he would be reporting to the Commissioner half of the time and to Division Director Burt the other half of the time. Commissioner Hacker also showed Carreer the new position description of an Internal Policy Analyst. After these meetings, Carreer tendered his notice of retirement, effective July 31, 2004.

On September 1, 2004, thirty days after Carreer retired, a new Staff Assistant position was established in the Office of the Health Department Commissioner. This new position was created to advise the Commissioner on handling bio-terrorism and to assist in monitoring $15 to $20 million of funds to counter bio-terrorism for the newly reorganized DPH.

After learning of the creation of this new position, Carreer brought this action before the Board on June 5, 2005. In his appeal, Carreer alleged that the Cabinet's action amounted to an involuntary transfer and a demotion. Consequently, he asserted that the action amounted to a penalization under Kentucky Revised Statute (“KRS”) 18A.095 and that this action amounted to a constructive discharge. He sought reinstatement to his former position with back pay. After taking of discovery, the matter was submitted to the hearing officer for adjudication. The hearing officer issued findings of fact, conclusions of law, and a recommended order on September 11, 2007.

Since Carreer's new position had substantially the same duties and responsibilities and maintained the same pay, the hearing officer concluded that it was not a demotion. However, the hearing officer agreed with Carreer that the reclassification of his position amounted to an involuntary transfer under KRS 18A.005(37). The hearing officer further found that the involuntary transfer amounted to a penalization, KRS 18A.005(24), requiring the Cabinet to show that it was exercised for cause. However, the hearing officer concluded that the Cabinet had met that burden. The hearing officer found no evidence that Carreer had been specifically targeted for disparate treatment. Rather, the hearing officer found that the transfer was part of a lawfully enacted merger and reorganization of the two executive Cabinets. Finally, the hearing officer found that Carreer was not constructively discharged as a result of the involuntary transfer.

Thereafter, the Board adopted the hearing officer's findings of fact and conclusions of law. Carreer appealed from the Board's final order to the Franklin Circuit Court pursuant to KRS 13B.140. The circuit court affirmed the Board's order on November 26, 2008. Carreer now appeals to this Court.

The Cabinet's failure to give written notice of the action was not made moot by Carreer's resignation

As an initial matter, Carreer first argues that the circuit court erred in finding that the involuntary transfer was not technically a “penalization”, because Carreer resigned before the transfer became effective. In its opinion and order, the circuit court concluded that Carreer was not technically penalized within the meaning of KRS 18A.005(24) because his resignation became effective before the transfer took effect. However, this conclusion conflicts with the Board's finding that Carreer was penalized within the meaning of the statute. He was subjected to an involuntary transfer. Furthermore, while his pay, duties and responsibilities remained the same, his position was changed to a lower grade. Thus, the trial court's contrary determination was clearly erroneous.

However, the issue does not affect the outcome of this appeal. Although the trial court erroneously found that Carreer had not been penalized, the Board found that Carreer had been penalized by the involuntary transfer. From this conclusion, the Board determined that the Cabinet had the burden of showing that there was just cause for the transfer. Furthermore, the circuit court addressed the other issues presented in Carreer's appeal even though it found that Carreer had not been penalized.

As thus presented, the question of when Carreer was penalized is relevant only to determine when the Cabinet was required to give him written notice and when the time for an appeal commenced. Since Carreer was penalized within the meaning of the statute, the Cabinet was required to give him written notice setting out the reasons for the penalization and his right to appeal. KRS 18A.095(7) & (8). Ordinarily, an employee has sixty days to appeal from the penalization, running from the date he receives the written notice. KRS 18A.095(8)(d). If the employee has not received the required written notice, he still must file his appeal with the Board within one year from the date of the penalization or from the date that he reasonably should have known of the penalization. KRS 18A.095(29). See also Com., Department of Revenue, Finance and Administration Cabinet v. McDonald, 304 S.W.3d 62 (Ky.App.2009).

Here, the Cabinet gave Carreer oral notice of the reorganization on July 16, 2004. Since Carreer's resignation became effective as of July 31, 2004, the Cabinet did not give him the required written notice. The Cabinet maintains that it had sixty days to complete necessary personnel actions, 101 KAR 2:020 § 1, and that it was not required to give Carreer the written notice until the action became final. We need not reach this issue, however, because the Cabinet does not argue that Carreer's appeal was untimely. Thus, any question about the effect of Carreer's resignation on the Cabinet's obligation to give written notice is not relevant to this appeal.

Standard of Review

Thus, we turn to the substantive issues presented in this appeal. Judicial review of an administrative decision is limited to a determination of whether the agency acted within the constraints of its statutory powers, whether the agency's procedures afforded procedural due process, and whether the agency's decision is supported by substantial evidence of record. Bowling v. Natural Resources and Environmental Protection Cabinet, 891 S.W.2d 406, 410 (Ky.App.1995). See also KRS 13B.150(2). Carreer challenges the Board's order on each of these grounds.

The Cabinet acted within its statutory authority

Carreer first argues that the Cabinet cannot reclassify his position except as provided by KRS 18A.110(7)(a). Since the Cabinet's attempt to reclassify his position did not comply with the statute, he maintains that the Cabinet's action exceeded its authority and therefore is void. See also Commonwealth, Education & Humanities Cabinet Dept. of Education v....