Jailall v. Nc Dept. of Public Instruction

• Decision Date: 07 April 2009
• Docket Number: No. COA08-352.,COA08-352.
• Citation: 675 S.E.2d 79
• Parties: Mahatam S. JAILALL, Petitioner, v. NORTH CAROLINA DEPARTMENT OF PUBLIC INSTRUCTION, Respondent.
• Court: North Carolina Court of Appeals

675 S.E.2d 79

Mahatam S. JAILALL, Petitioner, v. NORTH CAROLINA DEPARTMENT OF PUBLIC INSTRUCTION, Respondent.

No. COA08-352.

Court of Appeals of North Carolina.

April 7, 2009.

Appeal by petitioner from order entered 3 March 2008 by Judge A. Leon Stanback in Wake County Superior Court. Heard in the Court of Appeals 11 September 2008.

Law Offices of Michael C. Byrne, P.C., by Michael C. Byrne, Raleigh, for petitioner-appellant.

Attorney General Roy Cooper, by Assistant Attorney General Laura E. Crumpler, for respondent-appellee.

State Employees Association of North Carolina, Inc., by Thomas A. Harris, General Counsel, for amicus curiae State Employees Association of North Carolina, Inc.

GEER, Judge.

Petitioner Mahatam S. Jailall appeals from the superior court's order affirming the dismissal of his contested case by the Office of Administrative Hearings ("OAH"). Jailall's petition for a contested case hearing alleged that he had been discharged without just cause when his employment was terminated as a result of a reduction in force ("RIF"). Both the OAH administrative law judge ("ALJ") and the superior court concluded that Univ. of N.C. at Chapel Hill v. Feinstein, 161 N.C.App. 700, 590 S.E.2d 401 (2003), disc. review denied, 358 N.C. 380, 598 S.E.2d 380 (2004), required that the contested case be dismissed. Although Jailall contends that Feinstein is distinguishable, we have concluded it controls this appeal, and, under In re Appeal from Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989), we are required to affirm the decision below. The concerns raised by both Jailall and the amicus curiae, State Employees Association of North Carolina, Inc., as to the consequences of Feinstein cannot influence this panel's decision, but rather must be addressed to the Supreme Court and the General Assembly.

Facts

In 2007, Jailall was employed as an education consultant by respondent North Carolina Department of Public Instruction ("DPI"). Because he had in excess of 24 months of continuous state service, he was a career State employee under N.C. Gen.Stat. § 126-1.1 (2007). On 30 August 2007, DPI sent Jailall a "Notice of Reduction in Force (RIF) Separation." The notice stated that his position was 100% funded by a federal program that had been discontinued and, therefore, the funding for his position would expire on 30 September 2007. The notice advised Jailall that he had a right to appeal the decision to terminate his employment and that he was entitled to priority re-employment.

On 2 October 2007, Jailall filed a petition for a contested case with OAH, alleging that he was selected for the RIF because of "(a) his race and national origin (Asian Indian and Guyana, respectively), in violation of state and federal law, and (b) for the additional discriminatory reason of protecting from RIF on the grounds of race the positions of one or more African-American females having less seniority than Petitioner also in violation of state and federal law." After following DPI's internal grievance procedures and obtaining a final agency decision upholding his RIF on 2 November 2007, Jailall filed a second petition with OAH on 7 November 2007, alleging that he was "involuntarily separated from employment without just cause." In this petition, Jailall alleged that DPI "(1) [e]xceeded its authority or jurisdiction, (2) [a]cted erroneously, (3), [sic] [f]ailed to use proper procedure, (4)[f]ailed to act as required by law or rule, and/or (5) was arbitrary, capricious, and/or abused its discretion."

On 10 December 2007, DPI moved to dismiss the 7 November 2007 petition pursuant to N.C.R. Civ. P. 12(b)(1) or (b)(6) or alternatively for summary judgment. DPI noted that the petition asserted that the RIF was without just cause. DPI contended that Feinstein precluded such a claim and, therefore, OAH had no jurisdiction over Jailall's petition. On 21 December 2007, the OAH ALJ granted DPI's motion pursuant to N.C.R. Civ. P. 12(b)(1).

On 2 January 2008, Jailall filed a petition for judicial review in Wake County Superior Court. The Honorable A. Leon Stanback entered an order on 3 March 2008, noting that Jailall alleged that he was involuntarily separated from employment due to a RIF and that he was entitled to appeal his involuntary RIF separation under N.C. Gen.Stat. § 126-34.1 (2007) for lack of just cause and for procedural violations. The trial court ruled: "Based upon reviewing the legal question raised in this petition for judicial review on a de novo basis, this Court finds that it is constrained by the Court of Appeals' decision in Univ. of N.C. at Chapel Hill v. Feinstein, 161 N.C.App. 700, 590 S.E.2d 401 (2003), [disc. review denied], 358 N.C. 380, 598 S.E.2d 380 (2004), holding that career state employees separated under a RIF could not bring either just cause or procedural appeals based on that separation." The trial court, therefore, affirmed the ALJ's decision dismissing Jailall's contested case petition. Jailall timely appealed to this Court.

Discussion

Jailall argues that the trial court erred in affirming the ALJ's decision dismissing Jailall's contested case for lack of subject matter jurisdiction. Jailall first contends that N.C. Gen.Stat. § 126-34.1, read in conjunction with N.C. Gen.Stat. § 126-35 (2007), provides OAH jurisdiction to hear contested cases brought by former state employees alleging that their involuntary separation due to a RIF was without just cause. Jailall also argues that OAH has subject matter jurisdiction to hear his contested case based on the allegation in his petition that DPI "[f]ailed to use proper procedure" in conducting the RIF.¹

N.C. Gen.Stat. § 126-34.1 provides in pertinent part:

(a) A State employee or former State employee may file in the Office of Administrative Hearings a contested case under Article 3 of Chapter 150B of the General Statutes only as to the following personnel actions or issues:

(1) Dismissal, demotion, or suspension without pay based upon an alleged violation of G.S. 126-35, if the employee is a career State employee.

. . . .

(e) Any issue for which appeal to the State Personnel Commission through the filing of a contested case under Article 3 of Chapter 150B of the General Statutes has not been specifically authorized by this section shall not be grounds for a contested case under Chapter 126.

N.C. Gen.Stat. § 126-34.1(a)(1) and (e). In turn, N.C. Gen.Stat. § 126-35, the provision referenced in N.C. Gen.Stat. § 126-34.1(a)(1), states:

(a) No career State employee subject to the State Personnel Act shall be discharged suspended, or demoted for disciplinary reasons, except for just cause. . . .

. . . .

(c) For the purposes of contested case hearings under Chapter 150B, an involuntary separation (such as a separation due to a reduction in force) shall be treated in the same fashion as if it were a disciplinary action.

N.C. Gen.Stat. § 126-35(a) and (c).

Jailall reads the reference in N.C. Gen. Stat. § 126-34.1(a)(1) to N.C. Gen.Stat. § 126-35 as establishing OAH jurisdiction over his just cause RIF claim "given [that] 126-35 itself states that the statute is violated not only by a disciplinary dismissal without just cause, but also by an involuntary separation, `such as . . . a [RIF],' without just cause. . . ." Feinstein, however, holds to the contrary.

In Feinstein, three state employees who worked in the university system had their positions eliminated as a result of a RIF. 161 N.C.App. at 701-02, 590 S.E.2d at 402. On appeal, this Court addressed whether N.C. Gen.Stat. § 126-34.1 "excludes appeals to OAH of RIFs on grounds of lack of just cause and procedural violations." Id. at 702, 590 S.E.2d at 402.

With respect to whether an employee dismissed as a result of a RIF may assert a claim for dismissal without just cause, the panel in Feinstein noted first:

N.C. Gen.Stat. § 126-34.1(a)(1) specifically refers to "dismissal, demotion, or suspension" without just cause but does not mention RIFs for lack of just cause as a basis for appealing a RIF. RIFs are specifically referred to only twice in the statute. The General Assembly clearly stated in N.C. Gen.Stat. § 126-34.1 that a contested case that "has not been specifically authorized by this section shall not be grounds for a contested case under Chapter 126." N.C. Gen.Stat. § 126-34.1(e) (2001) (emphasis supplied).

Id. at 704, 590 S.E.2d at 403. The Court reiterated: "The language of N.C. Gen.Stat. § 126-34.1 clearly and unambiguously states that the statutory list of appeal grounds in N.C. Gen.Stat. § 126-34.1 is exclusive. This list does not provide for appeals to OAH of RIFs based on lack of just cause." Id. (emphasis added).

The Court acknowledged the language in N.C. Gen.Stat. § 126-35(c) providing that a separation due to a reduction in force "shall be treated in the same fashion as if it were a disciplinary action," N.C. Gen.Stat. § 126-35(c), but noted that § 126-34.1 was enacted five years after N.C. Gen.Stat. § 126-35. Feinstein, 161 N.C.App. at 704, 590 S.E.2d at 403. The Court then reasoned:

By its own terms of exclusion, N.C. Gen. Stat. § 126-34.1 supersedes and controls over any contrary earlier enactments. N.C. Gen.Stat. § 126-35(c) existed as statutory law when N.C. Gen.Stat. § 126-34.1(e) was enacted. Our Supreme Court has held that construing conflicting statutes to give validity and effect to both is only possible if it can be done without destroying the evident intent and meaning of the later enacted act. Given its clear and unambiguous language, the later enacted N.C. Gen.Stat. § 126-34.1 supplants N.C. Gen.Stat. § 126-35. Otherwise, the evident intent of the later enacted N.C. Gen.Stat. § 126-34.1 in setting out the specific contested cases that are appealable to OAH would be eliminated.

Id. (internal citations omitted).

With respect to the employees' claim that the university had violated the procedures governing RIFs, the panel in Feinstein reviewed the...