DOT v. Central Personnel Div., 990085.

• Decision Date: 20 October 1999
• Docket Number: No. 990085.,990085.
• Citation: 1999 ND 198,600 N.W.2d 861
• Parties: NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Petitioner and Appellee, v. CENTRAL PERSONNEL DIVISION, Office of Management and Budget, Office of Administrative Hearings, Respondents and Anthony J. Schumacher, Respondent and Appellant.
• Court: North Dakota Supreme Court

600 N.W.2d 861

1999 ND 198

NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Petitioner and Appellee, v. CENTRAL PERSONNEL DIVISION, Office of Management and Budget, Office of Administrative Hearings, Respondents and Anthony J. Schumacher, Respondent and Appellant.

No. 990085.

Supreme Court of North Dakota.

October 20, 1999.

Steven L. Latham, Wheeler Wolf, Bismarck, ND, for respondent and appellant.

Tag C. Anderson, Assistant Attorney General, Bismarck, ND, for petitioner and appellee.

KAPSNER, Justice.

[¶ 1] Anthony J. Schumacher appealed from a district court judgment which reversed an Administrative Law Judge's order requiring reinstatement of Schumacher's employment with the Department of Transportation. Because the Administrative Law Judge had no authority to order reinstatement, we affirm the district court's judgment.

I.

[¶ 2] Anthony Schumacher was employed by the Department of Transportation ("DOT") as an equipment operator and supervisor in Edgeley, North Dakota. On December 6, 1995, Schumacher sold some DOT scrap metal and received a check from the recycling center for $57.55 payable to him. The next day, he deposited those proceeds in his personal bank account.

[¶ 3] Early in 1998, the DOT learned of allegations of misuse and misappropriation of property at the Edgeley site. The DOT requested the Bureau of Criminal Investigation investigate the allegations. On February 17, 1998, Schumacher told an investigator for the Bureau of Criminal Investigation he had deposited the scrap metal proceeds in his personal account, intending to purchase tools and equipment for the DOT. Schumacher further asserted he had bought a jack for the DOT. Investigators later discovered Schumacher had purchased the jack on February 17, 1998. The Bureau of Criminal Investigation gave its report to the LaMoure County State's Attorney; the State's Attorney determined there was insufficient evidence to charge Schumacher with a crime.

[¶ 4] On April 7, 1998, the DOT sent a pre-termination letter to Schumacher. In the letter, the DOT alleged the following: Schumacher had sold DOT scrap metal and placed the proceeds in his personal account; Schumacher told an investigator for the Bureau of Criminal Investigation he had not commingled the proceeds with his personal funds and had used the proceeds, as he initially intended, to purchase a jack for the DOT; Schumacher had commingled the proceeds with his personal funds and had purchased a jack for the DOT on the same day he had talked with the investigator from the Bureau of Criminal Investigation. The DOT stated the record indicated Schumacher committed a theft of department property and thus cause existed to terminate his employment. The DOT indicated Schumacher had an opportunity to respond to the allegations before a final decision was made to terminate his employment. Schumacher was given until April 13 to submit any written statements or other documentation which would explain or disprove the allegations. The letter notified Schumacher he could review his personnel file and provided a copy of the DOT's grievance and complaint policy and a guide for administrative appeals to the Central Personnel Division.

[¶ 5] Three days later, Schumacher responded by letter. He asserted he had deposited the proceeds in a separate account for the purpose of buying tools for the DOT. He also asserted he never intended to keep the proceeds for himself and he was willing to pay back the scrap metal proceeds plus interest. In addition, Schumacher alleged the scrap metal incident was not the only reason for his termination. He asserted he was "being railroaded" by two DOT employees because one of the two employees wanted Schumacher's supervisory position. Finally, Schumacher emphasized the conclusion of the LaMoure County State's Attorney regarding the insufficiency of evidence for prosecution.

[¶ 6] On April 15, the DOT terminated Schumacher's employment. In the termination letter, the DOT noted it had reviewed Schumacher's letter, the evidence, and Schumacher's personnel file. The DOT explained there was no reason to change its proposed termination based on Schumacher's theft of department property. The letter explained Schumacher had a right to an internal DOT grievance procedure and a right to appeal his termination to the Central Personnel Division and instructed Schumacher on the way to start the appeal process.

[¶ 7] Schumacher waived the internal grievance procedure and appealed to the Central Personnel Division, and on July 8, 1998, a hearing was held before an Administrative Law Judge (ALJ). The ALJ found Schumacher's explanation that the proceeds were intended to buy tools for the DOT was "disingenuous" and his act "amount[ed] to theft." However, the ALJ emphasized it was "a one-time theft of a small amount of money" and Schumacher's performance otherwise had been exemplary for fifteen years. The ALJ accordingly concluded there was no cause for Schumacher's termination and progressive discipline must be used. The ALJ ordered Schumacher's reinstatement.

[¶ 8] The DOT appealed the ALJ's decision, and the district court reversed. Reasoning the theft of over fifty dollars in government property by an employee is a serious offense which is detrimental to the discipline and efficiency of the DOT, the district court found the ALJ's decision was not in accordance with the law and the ALJ's findings of fact did not support the ALJ's conclusions of law. Schumacher appealed.

II.

[¶ 9] This appeal is governed by N.D.C.C. § 54-44.3-12.2 (1995). Under N.D.C.C. § 54-44.3-12.2 (1995), a nonprobationary employee in the classified service¹ may appeal to the Central Personnel Division from certain decisions of an employer, including an employer's decision to dismiss the employee. The Central Personnel Division must certify an employee's appeal and request that the Director of the Office of Administrative Hearings designate an administrative hearing officer to "conduct the hearing and related proceedings, including receiving evidence and preparing findings of fact, conclusions of law, and issuing a final decision."² The decision of the designated hearing officer is a final decision. See Blanchard v. North Dakota Workers Compensation Bureau, 1997 ND 118, ¶¶ 14, 16, 565 N.W.2d 485 (N.D.1997)

(reasoning an ALJ was authorized to issue a final decision because the statutory scheme "manifests a legislative intent that an ALJ's decision is a final order" and noting in a hearing under N.D.C.C. § 54-44.3-12.2 the hearing officer issues a final decision). Section 54-44.3-12.2, N.D.C.C. (1995), indicates N.D.C.C. ch. 28-32 governs the appeal to the district court. Under N.D.C.C. § 28-32-21, an employee may appeal from the district court decision to this Court.

III.

[¶ 10] In Jacobs v. North Dakota State Personnel Bd., 551 N.W.2d 779, 781 (N.D.1996), we interpreted the proper standard of review prescribed by N.D.C.C. ch. 28-32 for employment cases brought under N.D.C.C. § 54-44.3-12.2.³ Accordingly, our review is limited to whether the findings of the designated administrative hearing officer are supported by a preponderance of the evidence, the officer's conclusions of law are supported by the findings of fact, and the decision is in accordance with the law. Id. In reviewing the decision, we do not make independent findings or substitute our judgment for that of the hearing officer; instead, we determine whether a reasoning mind could have reasonably determined the factual conclusions were supported by the weight of the evidence. Id.

IV.

[¶ 11] The arguments raised by the parties in this case create two issues appropriate for review. The first is whether the preponderance of the evidence supports the ALJ's finding Schumacher committed a theft. If that finding is supported by the preponderance of the evidence, the second issue is whether that finding supports the conclusion Schumacher should not have been dismissed.

A.

[¶ 12] Schumacher suggests the preponderance of the evidence does not support the finding he committed a theft which would allow the DOT to terminate his employment without engaging in progressive discipline. Because the ALJ ruled in his favor, Schumacher does not expressly argue the evidence does not support the ALJ's finding he committed a theft. However, Schumacher asserts the ALJ did not find he "committed a criminal act of theft and indeed, if such finding of fact had been made it would have been clearly erroneous based upon the conclusion of the States Attorneys Office that there is insufficient evidence to justify a criminal charge." Schumacher's argument misstates the required finding.

[¶ 13] Chapter 4-07-19 of the North Dakota Administrative Code governs disciplinary actions for state employees in classified positions. A regular employee may be disciplined only for cause. N.D. Admin. Code § 4-07-19-03. Schumacher was a regular employee under this chapter. "Cause" is "conduct related to a regular employee's job duties, job performance, or working relationships that is detrimental to the discipline and efficiency of the service in which the employee is or was engaged." N.D. Admin. Code § 4-07-19-02(1).⁴ [¶ 14] In addition, chapter 4-07-19 requires the use of progressive discipline for regular employees in most instances. "`Progressive discipline' means the disciplinary actions imposed to correct a regular employee's behavior, beginning with a less severe appropriate action and progressing to a more severe appropriate action, for repeated instances of poor job performance or for repeated violations of the same or similar rules or standards." N.D. Admin. Code § 4-07-19-02(4). However, progressive discipline is not required in all cases. Section 4-07-19-04, N.D. Admin. Code, provides as follows:

Progressive discipline must be used to correct a regular employee's job performance problems or for a violation of rules or standards, except when an infraction or a violation of a

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