Utah Dept. of Human Services v. Hughes
| Decision Date | 27 March 2007 |
| Docket Number | No. 20050610.,20050610. |
| Citation | 156 P.3d 820,2007 UT 30 |
| Parties | UTAH DEPARTMENT OF HUMAN SERVICES, Petitioner, v. Brent N. HUGHES and Career Service Review Board, Respondents. |
| Court | Utah Supreme Court |
Mark L. Shurtleff, Att'y Gen., Debra J. Moore, J. Clifford Petersen, Asst. Att'ys Gen., Salt Lake City, for petitioner.
Phillip W. Dyer, Carey A. Seager, Salt Lake City, for respondent Hughes.
Robert W. Thompson, Salt Lake City, for respondent Review Board.
On Certiorari to the Utah Court of Appeals
INTRODUCTION
¶ 1 This case concerns the Hatch Act (or the "Act"), a federal statute that prohibits state employees whose principal activity is directly related to a federally financed program from running for elective office.1 Respondent Brent Hughes was terminated by the Utah Department of Human Services (the "Department") from his position as a collections/compliance supervisor based on the Department's determination that he had violated the Hatch Act by running for a seat in the Utah House of Representatives.
¶ 2 On appeal, the Utah Career Service Review Board (the "State Board") rescinded the Department's letter terminating Hughes. The State Board held that the federal Hatch Act preempts state law, including agency rules and policies, and that only the federal Merit Systems Protection Board (the "Federal Board") can make final determinations regarding alleged Hatch Act violations. Thus, the State Board concluded that the Department exceeded its authority in determining that Hughes violated the Hatch Act. Additionally, the State Board noted that Hughes had been treated differently from other employees, in potential violation of his due process rights.
¶ 3 We hold that, in enacting the Hatch Act, Congress did not intend to preempt state law. Indeed, the Hatch Act's very purpose is to provide an incentive for states to comply with its provisions and help achieve its overarching goals. Accordingly, state agencies may voluntarily comply with the Hatch Act and make independent determinations regarding perceived violations of the Act with respect to their employees. We therefore reverse the State Board's decision and remand so that the State Board may determine the sufficiency of Hughes's due process claim.
¶ 4 On March 17, 2004, a few months before his termination, Brent Hughes filed his candidacy to run for a seat in District 20 of the Utah House of Representatives. On June 18, 2004, Hughes was terminated from his employment as a collections/compliance supervisor in the Office of Recovery Services in the Utah Department of Human Services due to his failure to respond to the Department's request that he comply with the federal Hatch Act and the Department's conflict of interest policy.
¶ 5 The Department's conflict of interest policy provided as follows: "During work time or during off time, when an employee's principal activity is directly related to a federally-financed program . . . employees may not . . . be a candidate for political office." This policy explicitly referred to the Hatch Act, which prohibits state employees whose principal activity is directly related to a federally financed program from running for elective office. Additionally, in 2004, agency rules gave the executive director authority to investigate the validity of any alleged Hatch Act violations2 and terminate an employee for "adequate cause"3 in accordance with certain statutory procedures.4 Also, as part of every federal grant received by the Department, the Executive Director signed an agreement certifying that the Department would comply with the Hatch Act.
¶ 6 Hughes had been employed by the State since October 1979. On or about March 17, 2004, the Department learned that Hughes was a candidate for political office. Hughes's position with the Department's Office of Recovery Services was financed in whole or in part by federal funds, like most positions within the office.
¶ 7 On May 7, the Department advised Hughes that his candidacy violated the Hatch Act and gave him one week to comply with the Hatch Act by resigning his employment or withdrawing his candidacy. On May 13, the Department offered Hughes a third option of taking an unpaid leave of absence, pending the result of the election. The next day, Hughes asked for clarification of what would happen if he did not select one of the three options. The Department informed Hughes that his employment would be terminated if he failed to select one of the three options and gave Hughes until May 21 to make his decision.
¶ 8 Hughes did not exercise any of the above options, and on June 1, 2004, the Department issued him a notice of intent to dismiss. The notice stated that the reason for dismissal was "malfeasance," consisting of violating the Department's conflict of interest policy and failing to advance the good of the public service by deliberately violating the Hatch Act.5
¶ 9 Hughes requested and received a pretermination hearing before Executive Director Arnold-Williams. On June 18, 2004, Arnold-Williams officially terminated Hughes's employment.
¶ 10 Hughes appealed his termination to the Career Service Review Board. An evidentiary hearing was then held before a State Board hearing officer. At the conclusion of the Department's case-in-chief, Hughes moved for a directed verdict, based in part on his due process claim that the Department had applied the Hatch Act inconsistently, treating him differently from other employees. The hearing officer denied the motion, concluding that, among other things, any inconsistent treatment was because Hughes's circumstances were different than those of previous employees.
¶ 11 In his November 2, 2004 Findings of Fact, Conclusions of Law, Decision and Order, the hearing officer reversed the Department's decision to terminate Hughes's employment, holding that the Department was not authorized to enforce the Hatch Act and therefore had not met its burden of showing a Hatch Act violation. He concluded that "[o]nly the United States Merit Systems Protection Board can make a determination that a party. . . `absolutely, definitely, specifically, etc.' violated the Hatch Act," and that the executive director's saying a party violated the Hatch Act "does not make it so." The hearing officer also found that Hughes's violation of the Department's conflict of interest policy was premised on a violation of the Hatch Act. This finding was based upon testimony from Arnold-Williams, who specifically testified during cross-examination that if there had been no alleged violation of the Hatch Act, there would have been no other basis for discipline. Additionally, the hearing officer again rejected Hughes's due process claim that the Department treated him differently from other employees, concluding that Hughes's claim was not sustainable.
¶ 12 Because the hearing officer found that the Federal Board had exclusive jurisdiction to determine whether a Hatch Act violation had taken place, he held that the State had "not met its burden to show that the [Department] complied with all relevant statutory and administrative requirements as to showing `adequate cause' when terminating [Hughes's] employment." He therefore rescinded the Department's Final Decision-Dismissal letter of June 18, 2004.
¶ 13 The Department appealed the hearing officer's decision to the State Board. The Department argued that the Federal Board does not have exclusive authority to determine violations of the Hatch Act and that the hearing officer erred in requiring that the Federal Board determine that the Hatch Act had been violated before the Department could terminate an employee for violating the Department's conflict of interest policy. The State Board heard oral argument and then issued its Decision and Final Agency Action on June 17, 2005, affirming the decision of its hearing officer. The State Board noted, however, its "deep concern" that Hughes had been treated differently from other employees who had allegedly violated the Hatch Act.
¶ 14 The Department appealed the State Board's final agency decision to the Utah Court of Appeals pursuant to Utah Code section 78-2a-3(2)(a). The Utah Court of Appeals certified this case to us, and we have jurisdiction pursuant to Utah Code section 78-2-2(3)(b).
¶ 15 The Career Service Review Board's final agency decision raises "general questions of law"; therefore, we apply a correctness standard, granting no deference to the agency's decision.6
¶ 16 The federal Hatch Act directly regulates the political activity of federal employees and indirectly regulates the political activity of certain state and local government employees.7 It covers state and local employees "whose principal employment is in connection with an activity which is financed in whole or in part by loans or grants made by [the federal government]."8 The Hatch Act's primary language states that such employees "may not . . . be a candidate for elective office."9 The Hatch Act authorizes the federal government to withhold funding to state agencies where agencies or their employees fail to comply with the Act.10
¶ 17 It is clear that Hughes, whose principal employment was financed in whole or in part by federal funds, violated the Hatch Act when he filed his candidacy to run for elective office. Thus, the key issue in this case is whether the Department may voluntarily comply with the Hatch Act by making independent personnel decisions based on perceived violations of the Act. In other words, does the Hatch Act preempt state law, leaving jurisdiction solely to the federal Merit Systems Protection Board to make final determinations regarding alleged violations of the Act?
¶ 18 We hold that the Hatch Act does not preempt state law. Thus, the Department may voluntarily comply with the Hatch Act and make personnel decisions accordingly. Moreover, we hold that the State Board has authority to review such decisions made by...
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