North Carolina Dept. of Justice v. Eaker

• Decision Date: 03 May 1988
• Docket Number: No. 8710SC857,8710SC857
• Court: North Carolina Court of Appeals
• Parties: NORTH CAROLINA DEPARTMENT OF JUSTICE v. Jay EAKER.

Page 392

367 S.E.2d 392

90 N.C.App. 30

NORTH CAROLINA DEPARTMENT OF JUSTICE v. Jay EAKER.

No. 8710SC857.

Court of Appeals of North Carolina.

May 3, 1988.

Marc W. Sokol, Raleigh, for petitioner-appellant.

Atty. Gen. Thornburg by Sr. Deputy Atty. Gen. Jean A. Benoy and Sp. Deputy Atty. Gen. James Peeler Smith, Raleigh, for respondent-appellee.

EAGLES, Judge.

Judicial review of State Personnel Commission decisions is governed by Chapter 150B, the Administrative Procedure Act. G.S. 150A-1(c) (now G.S. 150B-1(c)); Area Mental Health Authority v. Speed, 69 N.C.App. 247, 317 S.E.2d 22, disc. rev. denied, 312 N.C. 81, 321 S.E.2d 893 (1984) (decided under former G.S. 126-43). Petitioner argues that in reversing the Commission's decision, the superior court erred when it concluded that: (1) the Commission lacked jurisdiction to reinstate him, (2) the Commission's findings that the Department failed to follow the applicable policies for accomplishing a reduction in force were unsupported by substantial evidence, (3) petitioner was not entitled to any remedy because he failed to show prejudice, and (4) any remedy available to petitioner before the Commission should have been limited to the Commission remanding the case to the Department for reconsideration. We review each of these issues in order.

I.

G.S. 126-4(7a) gives the State Personnel Commission the power, subject to the approval of the Governor, to establish policies and rules governing "[t]he separation of employees." G.S. 126-4(7a). The Department contends that a reduction in force is not a "separation" within the meaning of G.S. 126-4(7a), but is a "management" decision reserved solely to department heads under G.S. 143B-10(c). The Department concedes that the Commission has authority under G.S. 126-36 and G.S. 126-35 to reinstate employees whose positions have been abolished improperly as a result of unlawful discrimination or for a disciplinary motive. Otherwise, the Department argues, the Commission has no statutory authority to order reinstatement of an employee whose position has been abolished. In contrast, petitioner argues that a reduction in force is a "separation," and that under G.S. 126-4(7a) the Commission has authority to reinstate employees whose positions were abolished in violation of its policies and rules. We believe that both parties have failed to make the distinction between the management decision to abolish a position and personnel matters which may necessarily be a consequence of that management decision.

The purpose of Chapter 126 is "to establish for the government of the State a system of personnel administration under the Governor, based on accepted principles of personnel administration and applying the best methods as evolved in government and industry." G.S. 126-1. In addition to the power to promulgate policies and rules regarding the "separation" of employees, the Commission has the same policy and rule making power over "[t]he appointment, promotion, transfer, demotion, and suspension" of employees under G.S. 126-4(6) and "programs and procedures as may be necessary to promote efficiency of administration and provide for a fair and reasonable system of personnel administration" under G.S. 126-4(10). Chapter 126 clearly gives the State Personnel Commission the power to establish rules and policies governing personnel matters.

We need not fully delineate the extent of the Commission's powers; nor do we need to decide whether it has the power to issue rules and policies which attempt to affect when a reduction in force should occur. The only policies of the Commission which purport to do that were found in a portion of the State's Personnel Manual entitled "Suggested Guidelines for Reductions in Force." Those "guidelines" provide, among other things, that a reduction in force should occur only after "a thorough evaluation of the accomplishments of specific programs" and "measures such as a hiring freeze on vacant positions, limits on purchasing and travel, retirement options and job sharing and work schedule alternatives have proven insufficient." The superior court, however, correctly concluded that these guidelines were not mandatory and that the Department was not obligated to comply with them. Since, at the time petitioner's position was abolished, the Commission had not attempted to exercise any authority over the Department's decision to make a reduction in force, we need not decide whether the Commission has the authority to do so.

The only mandatory policy regarding reductions in force dealt with the retention of employees whose positions have already been abolished. It provided, in pertinent part, as follows:

Retention of employees in classes affected shall be based on systematic consideration of type of appointment, length of service, and relative efficiency; the relative weight of each of these factors is to be determined by management in making reduction-in-force decisions.

25 N.C.A.C. 1D.0504. It is immaterial whether the required "systematic consideration" of the listed factors is accomplished after the position is abolished or occurs as a means of deciding which position, among those similarly classified, should be abolished. In either case, the policy governs a personnel matter which does not interfere with "management" determinations such as whether a position is necessary, cost-effective, or consistent with the department's mission, or whether the department's limited resources could best be used elsewhere. Because retention of employees in abolished positions is clearly a personnel matter affecting the "separation" of employees, under G.S. 126-4(7a) the Commission has authority to issue the policy and to require the Department to follow it.

II.

In a conclusion of law, which would more appropriately be labelled a finding of fact, the Commission found that the Department had failed to follow the policy regarding retention of employees. It stated that:

14. [T]he retention of the other Research Associate in the Sheriff Standards Division and similar employees throughout the Department was not based on a systematic consideration of type of appointment, length of service and relative efficiency. Petitioner's skills, knowledge, and productivity were not compared to the skills, knowledge, and productivity of employees in similar positions who were retained in employment by Respondent. Mr. Roark, in fact, admitted that the people in the affected positions and their job performances were not evaluated as part of his own reduction in force process. Petitioner was dismissed even though he may have possessed more skills and knowledge and been capable of greater productivity than employees in similar positions who were retained.

The superior court concluded that this finding was not supported by the record and that Mr. Roark's procedures were sufficiently systematic to insure that the decision to abolish plaintiff's position was neither arbitrary or capricious.

Whether the Department's decision to abolish the position was arbitrary or capricious is not germane to the question of whether the Commission's personnel policies were followed. Court review of an agency's findings of fact is limited to determining, from an examination of the whole record, whether there is evidence to support the finding. Goodwin v. Goldsboro Board of Education, 67 N.C.App. 243, 312 S.E.2d 892, disc. rev. denied, 311 N.C. 304, 317 S.E.2d 680 (1984). If, after considering all of the evidence, including that which contradicts as well as that which supports the finding, the court finds competent, material, and substantial evidence in support of the finding, the finding is deemed conclusive on appeal. Boehm v. Board of Podiatry Examiners, 41 N.C.App. 567, 255 S.E.2d 328, cert. denied, 298 N.C. 294, 259 S.E.2d 298 (1979). We find, from the whole record, that the trial court erred and that there is substantial evidence to support the Commission's finding that the Department failed to follow the policy regarding retention of employees whose positions are abolished as part of a reduction in force.

Although there is substantial evidence to support the Commission's finding that the Department failed to follow the policy, and, as a result, the Department is not entitled to prevail on those grounds; nevertheless, we must remand this case to the Commission. In one of the Commission's conclusions of law complained of by the Department, the Commission stated that "[r]espondent has not satisfied its burden of proving that appropriate reduction in force procedures were utilized." We agree with the Department that the Commission improperly placed that burden on the Department.

Generally, the burden of proof is on the party attempting to show the existence of a claim or cause of action and, if proof of his claim includes proof of negative allegations, it is incumbent on him to do so. See Johnson v. Johnson, 229 N.C. 541, 50 S.E.2d 569 (1948). Neither Chapter 126 nor the Administrative Procedure Act indicate that the burden is shifted to the department or agency to show that it followed the Personnel Commission's rules, policies, or procedures. Moreover, we do not believe that the facts tending to show whether the policy was followed are so peculiarly within the knowledge of the Department that the burden should be on the Department to show the policy was followed. Cf., Joyce v. Sell, 233 N.C. 585, 64 S.E.2d 837 (1951).

Because the Commission acted under a misapprehension of the law, this case must be remanded. See Insurance Co. v. Chantos, 298 N.C. 246, 258 S.E.2d 334 (1979). The rule fixing the burden of proof constitutes a substantial right of the party upon whose adversary the burden rests and must be rigidly enforced. Owens v. Kelly, 240 N.C. 770, 84 S.E.2d 163 (1954). The law relating to the burden of proof is equally applicable to proceedings which are not conducted before a jury. Joyner v. Garrett, Comr. of Motor Vehicles, 279 N.C....