I. SYNOPSIS OF THE COURT’S ORDER
The Appellants in the above captioned matter filed a consolidated appeal with this Court in which they challenged the Final Decision [“Decision”] issued by the State Employee Grievance Committee [“Committee”] on February 18, 2009. The Appellants, 20 in all, are current and former certified educators who are currently employed or were at one time employed by the South Carolina Department of Corrections [“the Department”] within its Division of Education, also known as the Palmetto Unified School District No. 1 [“PUSD”].
The Appellants argued to this Court “that the Final Decision issued by the [Committee] dated February 18, 2009 must be reversed and Appellants awarded reinstatement to employment with back pay and benefits.”
By its Decision, the Committee denied the Appellants’ collective appeal of the Department’s decisions denying each of the grievances filed by the Appellants. In their respective individual grievances, all of which were identical in format and substance, the Appellants challenged their separation from employment as a consequence of a reduction-in-force [“RIF”] implemented by the Department effective June 1, 2003. Thus, by its Decision, the Committee rejected the various challenges to the Department’s June 1, 2003 RIF collectively presented by the Appellants, and, consequentially, the Committee affirmed the Department’s denial of each of the Appellants’ grievances.
Based upon the record on appeal submitted to the Court by the State Office of Human Resources [“OHR”], the principle briefs filed by counsel, the points articulated by counsel during oral argument, the supplemental materials filed by counsel after oral argument, and the applicable law and regulations, the Court DENIES the collective appeal filed by the Appellants and AFFIRMS the Decision issued by the Committee in the Department’s favor.
II. PROCEDURAL HISTORY
A. GRIEVANCES FILED BY THE 20 APPELLANTS, THE DEPARTMENT’S DENIAL OF THE GRIEVANCES, AND THE DECISION BY THE STATE HUMAN RESOURCES DIRECTOR TO AFFIRM THE DEPARTMENT’S DENIAL OF THE GRIEVANCES
On or about June 13, 2003, each of the 20 Appellants timely submitted grievances with the Department regarding their separation from employment as a consequence of a RIF implemented by the Department effective June 1, 2003, and, by their grievances, each of the 20 Appellants challenged the RIF. The Department’s responsible officials denied each of the 20 grievances by determining that no material issue of fact existed regarding the purported inconsistent or improper application of the Department’s RIF plan or policy. Accordingly, the Department did not conduct hearings regarding any of the Appellants’ grievances.
Each of the 20 Appellants appealed the Department’s denial of their grievances to the State Human Resources Director, and the State Human Resources Director affirmed the Department’s denial of these grievances. Each of the 20 Appellants moved the State Human Resources Director to reconsider his decision, and the State Human Resources Director denied the Appellants’ respective motions for reconsideration.
B. CONSOLIDATED COMPLAINT AND PETITION FOR JUDICIAL REVIEW FILED IN CIRCUIT COURT BY THE 20 APPELLANTS
Subsequent to the final decisions issued by the State Human Resources Director, the Appellants filed a consolidated complaint and petition for judicial review in the circuit court, specifically the Court of Common Pleas for Richland County. (R. pp. 29 – 39). The circuit court, pursuant to Ross v. Med. Univ. of S.C., 453 S.E.2d 880 (S.C. 1995), directed the Department to provide responses to the Appellants’ discovery requests and to make agency officials available for deposition. (R. pp. 2112 – 18). In accordance with the circuit court’s directive, Appellants’ counsel deposed agency officials in December 2005 and June 2006.
The circuit court heard argument regarding the Appellants’ consolidated Petition for Judicial Review on December 11, 2006 (R. pp. 2320 - 2357) and, by order issued January 10, 2007 (R. pp. 40 – 44), it ruled that material issues of fact existed regarding the Appellants’ contention that the Department inconsistently or improperly applied its RIF policy and plan in 2003. Consequentially, the circuit court remanded this matter back to OHR for disposition by hearing before the Committee.
C. THE DEPARTMENT’S APPEAL OF THE CIRCUIT COURT’S ORDER TO THE COURT OF APPEALS
The Department appealed the circuit court’s January 10, 2007 order to the Court of Appeals, and, by order issued May 14, 2008, the Court of Appeals dismissed the Department’s appeal. (R. pp. 45 – 47). By dismissing the Department’s appeal, the Court of Appeals animated the circuit court’s order which remanded this matter back to OHR for disposition by hearing before the Committee.
D. REMAND OF APPELLANTS’ GRIEVANCES BACK TO OHR, THE COMMITTEE’S CONSOLIDATED HEARING REGARDING THE APPELLANTS’ CLAIMS, AND THE COMMITTEE’S ADJUDICATION OF THE APPELLANTS’ CLAIMS
By letter dated June 4, 2008, OHR directed the Department to process each of the Appellants’ original 2003 grievances in accordance with its grievance policy within 45 days. (R. pp. 48 – 49). On July 23, 2008, after the Department did not meet the 45 day deadline established by OHR in its June 4, 2008 letter, the Appellants timely submitted this matter to OHR for disposition in accordance with the circuit court’s January 10, 2007 order.
OHR, in October 2008, detailed the adjudication of the Appellants’ collective appeal to the Committee and, by their October 14, 2008 “Statement of Grounds on Appeal,” the Appellants articulated their precise collective and individual challenges to the Department’s 2003 RIF. (R. pp. 2695 – 99).
The Committee, after conducting hearing proceedings on November 5, 6, 7, 10, and 17, 2008; December 15 and 18, 2008; and January 22, 26, and 29, 2009 (R. pp. 50 – 1453), issued its Final Decision in this matter on February 18, 2009. (R. pp. 8 – 17). By its Final Decision, the Committee denied the relief demanded by the Appellants in their appeal and upheld the RIF implemented by the Department effective June 1, 2003.
E. THE APPELLANTS’ APPEAL OF THE COMMITTEE’S FINAL DECISION TO THIS COURT
The Appellants timely filed their collective Notice of Appeal with the Administrative Law Court [“ALC”] on March 10, 2009, and this Court assumed jurisdiction of this appeal by an order dated and filed May 21, 2009. OHR filed the Record on Appeal on June 24, 2009.
The Appellants filed their principle brief on July 17, 2009, and the Department filed its principle brief on October 7, 2009. The Appellants did not file a reply brief.
This Court, by notice dated October 19, 2009, scheduled oral argument for October 28, 2009, and the Court entertained oral argument as scheduled. W. Allen Nickles, Jr., Esquire, and Dona Guffey, Esquire, appeared on behalf of the Appellants, and Lake E. Summers, Esquire, appeared on behalf of the Department.
At the conclusion of oral argument, the Court directed the parties to file supplemental materials, and the parties filed their respective supplemental briefs – in the format prescribed by the Court during the oral argument – on November 17, 2009.
By letter filed on November 18, 2009, the Appellants rebutted any assertion advanced by the Department in its supplemental brief that the Appellants had “waived” any equal protection claim during the argument they articulated to the circuit court on December 11, 2006 when the circuit court considered the Appellants’ petition for judicial review.
On November 19, 2009, the Department filed its objection to the entirety of the materials designated as “Attachment 1,” which the Appellants submitted in support of their supplemental brief, as well as the portion of the Appellants’ supplemental brief associated with the materials designated as “Attachment 1.” Along with its objection to “Attachment 1” and the portions of the Appellants’ supplemental brief associated with “Attachment 1,” the Department concurrently moved to strike these materials and the allied portions from the Appellants’ supplemental brief. On November 20, 2009, the Appellants filed their memorandum in opposition to the Department’s objections to and motion to strike “Attachment 1.”
III. APPLICABLE LEGAL STANDARD
The Appellants’ appeal from the Committee’s February 18, 2009 Final Decision is before this Court pursuant to S.C. Code Ann. §§ 1-23-600(D) and 8-17-340(F). Accordingly, this Court sits in an appellate capacity under the Administrative Procedures Act rather than as an independent finder of fact.
Thus, the provisions of S.C. Code Ann. § 1-23-380(5) govern the circumstances in which an appellate body, such as this Court, may reverse or modify an agency decision, such as the Committee’s Final Decision. In its entirety, § 1-23-380(5) reads as follows:
The court may not substitute its judgment for the judgment of the [Committee] as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(a) in violation of constitutional or statutory provisions;
(b) in excess of the statutory authority of the [Committee];
(c) made upon unlawful procedure;
(d) affected by other error of law;
(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
Additionally, this Court must not only review the manner in which the Committee applied the controlling legal principles, but it must also determine if the factual determinations made by the Committee meet the substantial evidence standard.
Under this standard, the party challenging an agency action has the burden of proving convincingly that the agency’s decision is unsupported by substantial evidence. Waters v. S.C. Land Res. Conversation Comm’n, 467 S.E.2d 913, 917 (S.C. 1996). In applying the substantial evidence rule, the factual findings of an administrative agency are presumed to be correct. Rodney v. Michelin Tire Co., 466 S.E.2d 357, 359 (S.C. 1996). The agency’s decision will not be set aside simply because reasonable minds may differ on the judgment. Lark v. Bi-Lo, Inc., 276 S.E.2d 304, 307 (S.C. 1981). Accordingly, the fact that the record, when considered as a whole, presents the possibility of drawing two (2) inconsistent conclusions from the evidence does not prevent the agency’s findings from being supported by substantial evidence. Waters, 467 S.E.2d at 917; Grant v. S.C. Coastal Council, 461 S.E.2d 388, 391 (S.C. 1995). In determining whether an agency’s decision is supported by substantial evidence, the reviewing court “need only find, looking at the entire record on appeal, evidence from which reasonable minds could reach the same conclusion that the administrative agency reached.” DuRant v. S.C. Dep’t of Health & Envtl. Control, 604 S.E.2d 704, 706 (S.C. Ct. App. 2004).
An “abuse of discretion occurs when the judge’s ruling is based upon an error of law, such as application of the wrong legal principle; or, when based upon factual conclusions, the ruling is without evidentiary support; or, when the judge is vested with discretion, but the ruling reveals no discretion was exercised; or when the ruling does not fall within the range of permissible decisions applicable in a particular case.” Ex parte Capital U-Drive-It, Inc., 630 S.E.2d 464, 467 (S.C. 2006). Additionally, a decision is arbitrary if no rational basis for the conclusion exists, or when it is based on one’s will and not upon any course of reasoning and exercise of judgment. A decision may also be arbitrary if it is made at pleasure without adequate determining principles or is governed by no fixed rules or standards. Converse Power Corp. v. S.C. Dep’t of Health & Envtl. Control, 564 S.E.2d 341 (S.C. Ct. App. 2002).
IV. ANALYSIS OF THE ISSUES ON APPEAL IDENTIFIED BY THIS COURT AFTER ITS REVIEW OF THE APPELLANTS’ PRINCIPLE BRIEF
A. ISSUES ON APPEAL AND SUPPORTING ARGUMENTS FROM THE APPELLANTS’ PRINCIPLE BRIEF
The Appellants did not identify distinct issues on appeal within their principle brief. Instead, the Appellants challenged the Committee’s Decision by providing 27 enumerated paragraphs from which they contended that the “record as a whole demonstrates that the Department deviated from controlling policy and law in the challenged RIF.”
This Court distilled the following three (3) distinct issues on appeal from the 27 paragraphs enumerated by the Appellants within their principle brief:
1. The Department violated its own RIF policy, state law and regulations controlling RIFs, and our state’s constitution by including the Appellants and other certified educators it employed in the RIF it implemented effective June 1, 2003;
2. The Department violated its own RIF policy, state law and regulations controlling RIFs, and our state’s constitution by its decision to divide the entire agency into 11 competitive areas, the key decision by which it implemented its RIF effective June 1, 2003; and
3. The Department violated its own RIF policy, state law and regulations controlling RIFs, and our state’s constitution in the manner by which it retained and hired temporary employees before and after the RIF it implemented effective June 1, 2003, as well as in the manner by which it retained employees who accepted the retirement opportunity it offered during the RIF recall period.
In support of these three (3) distinct issues on appeal, the Appellants provided a series of overlapping legal arguments divided into four (4) sections. These legal arguments identified instances in which the Department’s decisions and actions (1) purportedly violated provisions of the Department’s own RIF policy, (2) purportedly violated state statutes, (3) purportedly violated provisions of our state’s constitution, and (4) purportedly deprived the Appellants of rights apparently secured to them by the Department’s own RIF policy, state law, and state regulation.
B. THE DEPARTMENT’S ARGUMENTS IN RESPONSE
In response to the arguments offered by the Appellants, the Department argued within its principle brief that there was sufficient evidence before the Committee to allow reasonable minds to arrive at the findings rendered by the Committee in its adjudication of the Appellants’ collective appeal. The Department further argued that the Committee’s conclusions of law reflected the proper application of controlling legal principles, particularly in light of the reality that the interpretation and application of the applicable regulations, statutes, and precedent constituted matters of first impression before any judicial or quasi-judicial body.
C. ANALYSIS
As demonstrated below, this Court agrees with arguments presented by the Department in response to the Appellants’ principle brief.
1. The Department did not violate its own RIF policy, state law or regulations controlling RIFs, or our state’s constitution by including the Appellants and other certified educators it employed in the RIF implemented effective June 1, 2003.
In support of the first issue on appeal distilled by the Court from the 27 enumerated paragraphs provided by the Appellants in their principle brief, the Appellants effectively argued that the Department should have excluded them, and the other certified educators it employed, from the RIF it implemented effective June 1, 2003.
The Appellants presented the following description of the PUSD:
The [PUSD] is a single, statewide school district created by the General Assembly and administered by SCDC. (S.C. Code Ann. § 24-25-10, ROA p. 2281). All educators in the District must be employed, supervised and terminated according to SCDC policies and procedures. (S.C. Code Ann. § 24-25-90, ROA p. 2291).
The Appellants continued their description as follows:
The [PUSD] has one Board and one Superintendent. (S.C. Code Ann. §§ 24-25-40 through 90, ROA pp. 2285-2291). All educators are held to the same standards and there are no geographic regions within the [PUSD]. (ROA pp. 513-515, 525-528, 863-865, 913, 2614).
The Appellants then presented a chronology of events beginning with Director Ozmint’s appointment as the Department’s Executive Director in January 2003 and his decision to construct and implement a RIF. As acknowledged by the Appellants, the Department submitted a new RIF policy to OHR, which OHR approved on March 14, 2003. (R. pp. 1633 – 40). On March 28, 2003, the Department submitted its RIF plan to OHR, which described the process by which the Department would implement the RIF. (R. pp. 1626 – 59, 1953 – 59, 1926 – 27).
The Appellants then observed that Director Ozmint identified the positions which would be subject to separation pursuant to the Department’s RIF plan and that, of the 148 positions designated for separation pursuant to the plan, “approximately” 84 were certified educators. Finally, the Appellants observed the following:
Higher paid educators were eliminated to get the most “bang for the buck.” (ROA pp. 1038-1039, 1054-1056, 1072, 1079-1080, 2682). Appellants and SCDC witnesses testified that other SCDC employees complained about the “unfairness” of statutorily required educator pay raises. (Final Decision Findings of Fact No. 18, ROA p. 14). Director Ozmint testified that these raises were “taken out of the hide” of other employees. (ROA pp. 1045-1046; see also ROA pp. 1052, 1095-1096).
In the four (4) sections of their supporting legal argument, the Appellants challenged the legitimacy of the Department’s decisions and actions which identified their certified educator positions for elimination. In the section addressing the Department’s purported violations of applicable statutes, the Appellants argued that the Department violated § 24-25-40 by “conduct[ing] the RIF without conferring with the [PUSD] Board of Trustees or considering the laws creating and governing the [PUSD].” In the section addressing the Department’s purported violations of our state’s constitution, the Appellants argued that their separation from employment deprived them of property interests secured to them by Article I, § 3, and they also argued that their separation from employment affected their liberty interests to pursue their chosen profession in violation of Article I, § 22.
However, the Appellants offered these identical or nearly identical arguments to the Committee, and this Court concludes that the Committee, by applying and interpreting the applicable law, properly denied the Appellants’ appeal of the Department’s decision to deny their grievances.
The Appellants’ argument that the Department violated § 24-25-40 by “conduct[ing] the RIF without conferring with the [PUSD] Board of Trustees or considering the laws creating and governing the [PUSD],” reflects nothing other than their own interpretation of this statutory provision. Likewise, by stating that the PUSD “is a single, statewide school district created by the General Assembly and administered by” the Department, the Appellants offered nothing more than their own interpretation of § 24-25-10.
Thus, this Court concludes that the Committee properly recognized the realities of the relationship amongst and between the Appellants, the PUSD, and the Department as follows:
SCDC management was not obligated by statute or policy to consult with the PUSD School Board or obtain its approval before implementing the RIF. While good business relations may, in the opinion of some, dictate the feedback from management of affected areas be solicited, it is not required. The PUSD exists as a unit under the purview of the SCDC Executive Director, not as a separate entity; and, therefore, it is not afforded any special rights or treatment no afforded to other divisions within the agency. Further, § 24-25-90 of the South Carolina Code of Laws states: “[t]he superintendent of the district [PUSD] and all other educational personnel shall be employed, supervised, and terminated according to [the Department’s] personnel policies and procedures. (Committee Conclusion of Law No. 3, R. pp. 16 – 17).
The positions of 148 SCDC employees were eliminated effective June 1, 2003. Of those 148 positions, 84 (56.75%) were PUSD positions including Appellants in this appeal who were certified educators employed by SCDC in the PUSD. (Committee Exhibit #1, pp. 1 – 39).
Thus, 64 of the 148 positions, or 43.25%, eliminated under the RIF implemented by the Department effective June 1, 2003 were non-District positions. This fact reinforces the reality that the Appellants, like all other employees of the Department, were properly subject to the RIF implemented by the Department effective June 1, 2003.
This reality is again reinforced by an examination of the definitions of “Employee” and “Employing Agency” from the applicable state regulations. An “employee,” as defined by S.C. Regulation § 19-700, is “any person in the service of an agency who receives compensation from the agency and where the agency has the right to control and direct the employee in how the work is performed.” An “employing agency,” as defined by the same regulation, is “the agency having primary control over the services of the employee.” This Court concludes that the Committee properly harmonized the Department’s primacy, as the “employing agency,” over its “employees,” including the Appellants, within the context of a RIF driven by the need to address budgetary pressure:
SCDC’s RIF plan was, by design, based on budgetary pressure to reduce costs. As such, it is reasonable for SCDC to develop a plan that maximized savings while retaining as many employees as possible in essential areas. In SCDC’s efforts to reduce budget deficits, a hierarchy of priorities was identified and programs were evaluated for ways to reduce costs while still providing essential services. The education program was one area where significant cost-saving opportunities existed. Other areas, such as security, housing, clothing, food, and healthcare, in developing and implementing the RIF plan, were deemed to be areas where further cuts could not be tolerated. (Conclusions of Law, R. p. 16).
Thus, this Court concludes that the Committee properly determined that the Department legitimately and lawfully included the Appellants and other certified educators it employed in its June 1, 2003 RIF plan:
Additionally, the selection of education employee’s positions for inclusion in the RIF was not the result of a belief by other employees or members of [SCDC] management that educators were overpaid. This high number of educators involved in the RIF was the result of basic cost-saving principles to maximize savings and retain as many employees as possible due to the high salaries of most educators compared to other personnel. (Conclusion of Law No. 1, R. p. 16).
2. The Department did not violate its own RIF policy, state law or regulations controlling RIFs, or our state’s constitution by dividing itself into 11 competitive areas for the purposes of implementing its RIF effective June 1, 2003.
In support of the second issue on appeal the Court distilled from the 27 enumerated paragraphs provided by the Appellants in their principle brief, the Appellants argued that the Department violated its own RIF policy, state law and regulations, and our state’s constitution by dividing the agency into 11 competitive areas, the key decision by which it implemented its RIF effective June 1, 2003.
The Appellants presented their chronology of the events which resulted in the designation of these competitive areas. As recounted by the Appellants, Director Ozmint instructed the former Director of the Department’s Division of Human Resources, John Near, “to draw ‘competitive areas’ in a way to minimize employee bumping and maximize savings.” Mr. Near, upon receiving these instructions, “created [11] geographic regions within SCDC for purposes of the RIF,” regions which, according to the Appellants, “were not restricted to areas where staff was separately organized or clearly distinguishable from the staff in other areas.” According to the Appellants, “Director Ozmint admitted that the geographic regions existed only for the purpose of the RIF and to reduce bumping.”
After providing their accounting of the impact of the RIF upon certified educator positions at various institutions operated by the Department, the Appellants then invoked portions of the testimony provided to the Committee by Ms. Miro and the deposition testimony provided by former District Superintendent Wendell Blanton in an attempt to support their contention that the Department improperly established 11 competitive areas in the course of implementing its 2003 RIF.
In the four (4) sections of the their supporting legal argument, the Appellants challenged the legitimacy of the Department’s decisions and actions which resulted in the establishment of the 11 competitive areas it used to implement its RIF effective June 1, 2003. In the section addressing the Department’s purported violations of its own RIF policy, the Appellants invoked paragraph 1.1 of the March 14, 2003 edition of Policy Number ADM-11.05 and then provided six (6) succinct points and a narrative which argued that the Department violated its own RIF policy by establishing 11 competitive areas within its RIF plan. In the section addressing the Department’s purported violations of applicable statutes, the Appellants argued that the Department violated § 24-25-10 by establishing 11 competitive areas within its RIF plan as these areas “arbitrarily divided ‘the special statewide unified school district’,” and, consequentially, the RIF resulted in the reduction of “[PUSD] educational services to designated facilities that do not operate on a ‘statewide’ basis.” The Appellants also argued that the Department violated § 24-25-90 by establishing 11 competitive areas within its RIF plan.
However, the Appellants offered these identical or nearly identical arguments to the Committee, and this Court concludes that the Committee, by applying and interpreting the applicable law, properly denied the Appellants’ appeal of the Department’s decision to deny their grievances. For example, the Appellants, in arguing to this Court that the Department violated § 24-25-10 and § 25-25-90 by establishing 11 competitive areas within its RIF plan, simply offer nothing other than their own interpretation of these statutory provisions.
Furthermore, the Appellants argued the following:
There is no commuting limit for employees of SCDC. (ROA pp. 621-623). Ms. Miro, for example, has commuted forty-seven miles one way each day for her duties as Warden of Allendale Correctional Institution and as a [Division] Director of SCDC. SCDC staff often live far from their places of employment, including out of state. There is no requirement that an employee live close to his or her place of work and employees often choose to commute and advance in their service to SCDC. (ROA pp. 527-528).
In raising this argument, the Appellants assailed Mr. Near’s decision that an employee’s bumping rights under the 2003 RIF would be limited to a reasonable geographic radius of 30 miles. Mr. Near’s decision clearly manifested itself within the March 14, 2003 RIF policy Mr. Near and his staff developed, specifically within paragraph 7.2 of Policy Number ADM-11.05:
When a vacancy occurs in an employee’s competitive area which is (1) in the same job class, pay band, pay level or lower and functionally similar as the position held prior to the lay off, downward bumping, or reassignment and (2) within a reasonable geographic distance (30 mile radius) of the work location of the employee, then the eligible employee will be offered the vacancy provided s/he meets the minimum training and experience qualifications. The position must be accepted in writing by the employee within two (2) working days of the offer or s/he waives any future recall rights. (R. p. 1638). [emphasis supplied in policy].
Director Ozmint echoed this concept in his March 28, 2003 letter to OHR Director Wilkins when he described the competitive areas and competitive job classification series encompassed by the RIF plan:
The positions to be eliminated in this [RIF] plan are located across the state of South Carolina. Competitive areas have been designated to include entire groups of institutions and divisions within a reasonable geographic area to accommodate the realistic opportunity for staff relocation, and hopefully, recall and reinstatement. In addition, by expanding the number of locations, adverse impact may be minimized on specific groups of employees. (R. p. 1627).
In assailing the Department’s decision regarding the establishment of 11 competitive areas and the geographic limitations they represent, the Appellants overlooked the definition of “involuntary reassignment” provided in S.C. Regulation § 19-700:
INVOLUNTARY REASSIGNMENT – the movement of an employee’s principal place of employment in excess of 30 miles from the prior workstation at the initiative of the agency.
Thus, contrary to the Appellants’ arguments, this Court concludes that the 11 competitive areas and the geographic limitations they represent were reasonably derived from our state code of regulations.
By way of a final example, the Appellants offered a description of Ms. Miro as the “Director of the SCDC Education Division that includes the [PUSD].” However, this description is misleading, as, according to Ms. Miro’s testimony, the PUSD and the Department’s Division of Education are one and the same under the Department’s organizational structure. Ultimately, just as they did before the Committee, the Appellants overlooked the reality that the RIF undertaken by the Department in 2003 affected all of the Department’s divisions, not just the PUSD, which constitutes the Department’s Division of Education. In light of these realities, this Court concludes that the Committee properly determined that the Department legitimately and lawfully established the 11 competitive areas it used to implement its RIF effective June 1, 2003:
The development of the competitive areas did not violate SCDC’s RIF policy, nor were they drawn to retaliate against or punish SCDC educators. Such groupings are specifically allowed in SCDC’s RIF policy and, as reflected in the RIF policy, the manner in which the competitive areas are designated is left to the discretion of the Executive Director of SCDC. As such, the Committee finds that the geographical competitive areas were allowable under SCDC’s RIF policy and their determination was left to the discretion of the Executive Director. Further, the Committee finds that neither state law nor SCDC’s RIF policy required the PUSD to be treated as a single competitive area in the event of a RIF or that employees be afforded agency-wide bumping rights. In addition, the PUSD employees were not singled out because SCDC was divided into 11 competitive areas which also limited the bumping rights of employees not affiliated with the PUSD. (Conclusion of Law No. 2, R. p. 16).
3. The Department did not violate its own RIF policy, state law or regulations, or our state’s constitution by its decisions to retain and hire temporary employees before and after the RIF it implemented effective June 1, 2003 and to retain employees who accepted the retirement opportunity it offered during the RIF recall period.
In support of the third issue on appeal the Court distilled from the 27 enumerated paragraphs provided by the Appellants in their principle brief, the Appellants argued that the Department violated its own RIF policy, state law and regulations, and our state’s constitution by retaining and hiring temporary employees before and after the RIF it implemented effective June 1, 2003 and by retaining employees who accepted the retirement opportunity after the RIF it implemented effective June 1, 2003.
The Appellants provided a list of certified educators with less service than the Appellants who SCDC retained after the RIF. They also stated that some Appellants testified, purportedly without contradiction, that they had been “replaced by part-time, less experienced or temporary staff” and that “[t]emporary employees and part-time employees were retained and hired during the RIF recall period.” They then referenced Ms. Heather Pope, a managing partner of OHR, who “testified that the following question and answer appeared on the OHR website during the RIF period under review:”
Q. Can an agency hire a temporary employee to replace an employee affected by a RIF or to perform the functions of a person eliminated by a RIF?
A. An agency may not hire a temporary employee to perform the duties of an employee affected by a RIF. If these duties are to be performed within one year of the effective date of the RIF the agency should reestablish the position and implement its recall procedure.
The Appellants next discussed two (2) “retirement opportunities” purportedly implemented by the Department during the RIF recall period, which commenced on the RIF’s effective date of June 1, 2003 and concluded on May 31, 2004. According to the Appellants, these “retirement opportunities” allowed full-time employees to retire and return to work in “temporary” capacities at 75% of their former salaries.
The Appellants then provided their assessment of the regulatory authority purportedly applicable to the “retirement opportunities” the Department implemented during the RIF recall period. According to the Appellants, S.C. Regulation §§ 19-700 and 19-719.01 support the proposition that “a public employee who retires experiences a ‘break in service.’” The Appellants then cited S.C. Code Ann. § 9-1-1790 for the proposition that the retirees who accepted the “retirement opportunities” offered by the Department during the recall period “lose any enforceable right to re-employment” and for the proposition that a “retiree must leave active employment for a minimum of 15 days.” The Appellants then stated the following:
During the recall period of June 1, 2003 – May, 31, 2004, SCDC employed [23] individuals in temporary positions to perform services formerly provided by full-time, certified educators. During the same period, SCDC assigned responsibilities formerly performed by full-time, certified educators to 19 individuals as non-certified staff.
In an associated footnote, the Appellants argued that Appendix A to their principle brief established “that there were twice as many new permanent and temporary education employment actions during the recall period as the number of Appellants separated by RIF.”
The Appellants then asserted the following parameters associated with “temporary employee” status:
By regulation, a “temporary employee” cannot exceed one year of employment. Additionally, a “temporary position” cannot be in place for more than one year. S.C. Regulations R. 19-700. During the recall period, SCDC employed individuals as “temporary employees” and re-employed individuals in “temporary positions.”
In the four (4) sections of their supporting legal argument, the Appellants presented various challenges to the Department’s decision to retain and hire temporary employees before and after the June 1, 2003 RIF and to retain employees who accepted the only retirement opportunity it offered during the RIF recall period. In the section addressing the Department’s purported violations of its own RIF policy, the Appellants argued that the Department violated paragraph 2.3 of Policy Number ADM-11.05 by employing “individuals in temporary positions and permanent positions during the recall period without notifying RIF’ed employees,” and by offering “retiring employees return to employment after a ‘break in service’ during the recall period without notifying RIF’ed employees.” The Appellants further argued that the Department violated paragraphs 7.1, 7.5, and 11 of Policy Number ADM-11.05 in the manner by which it retained and managed its pool of temporary employees during the RIF’s recall period.
In the section addressing the Department’s purported violations of applicable statutes, the Appellants argued that the Department violated S.C. Code Ann. § 24-25-70(7) by employing “non-certified instructional staff” and “former certified instructional staff in non-certified positions to perform their former duties,” and by offering “instruction through individuals hired in non-certified positions.” The Appellants also argued that the Department violated S.C. Code Ann. § 24-25-90 and its own RIF policy when it purportedly “hired temporary employees to replace educators separated by RIF and allowed individuals who voluntarily separated for purposes of retirement to return to temporary positions in favor of employees separated by RIF.” The Appellants further argued that the Department violated S.C. Code Ann. § 8-11-185 by guaranteeing “re-employment at lower pay to employees who chose to ‘retire,”’ because, “[b]y law, these employees experienced a ‘break in service’ and were not entitled to preference over RIF’d employees who retained ‘covered employee’ status during the recall period.” Finally, in the section addressing the Department’s purported violations of our state’s constitution, the Appellants argued that SCDC violated Article I, § 3 of our state’s constitution, because, during the RIF’s recall period, it “allowed employees choosing to retire to return following a ‘break in service’ without allowing the Appellants the opportunity to recall.”
However, the Appellants offered these identical or at least very similar arguments to the Committee, and this Court concludes that the Committee, by correctly interpreting the applicable law and regulations, properly denied the Appellants’ appeal of the Department’s decision to deny their grievances. Just as they did to the Committee, this Court concludes that the Appellants offered nothing more than their own interpretation of the Department’s RIF provisions, state statutes and regulations, our state’s constitution, and precedent from our state’s courts.
In assailing the Department’s decision to implement the retirement opportunity during the RIF recall period and in assailing its management of personnel decisions associated with the implementation of this opportunity, the Appellants invoked the definition of “temporary employee” provided in S.C. Regulation § 19-700. However, neither S.C. Regulation § 19-700 nor § 19-719.01 include the following relevant terms: “retired,” “retiree,” “retirement,” “active service,” or “return to active service.” Thus, the provisions of these regulations are not precisely applicable to retirees who return to active service, such as the employees who accepted the only retirement opportunity implemented by the Department during the RIF recall period.
Instead, an examination of the statutes that apply to state retirees who return to state employment undermine the Appellants’ arguments on these issues. This critical distinction perhaps is best understood by an examination of § 9-1-1790 which is entitled “Amount which may be earned upon return to covered employment.” Section 9-1-1790(A) provides as follows:
A retired member of the system who has been retired for at least fifteen consecutive calendar days may be hired and return to employment covered by this system or any other system provided in this title without affecting the monthly retirement allowance he is receiving from the system. If the employment continues for at least forty-eight consecutive months, the provisions of Section 9-1-1590 apply. If a retired member of the system returns to employment covered by this system or any other system provided in this title sooner than fifteen days after retirement, the member's retirement allowance is suspended while the member remains employed by the participating employer. If an employer fails to notify the system of the engagement of a retired member to perform services, the employer shall reimburse the system for all benefits wrongly paid to the retired member.
Obviously, § 9-1-1790(A) references § 9-1-1590 which is entitled “Effect of restoring beneficiaries to active service,” and, by the term “beneficiaries,” this statute refers to state retiree beneficiaries. The third paragraph of § 9-1-1590 provides as follows:
Should any other beneficiary who has been restored to active employment continue in service for a period of forty-eight consecutive months and his annual compensation be equal to or greater than seventy-five percent of his average final compensation at retirement, then he may elect to cease his retirement allowance and become a contributing member again and void his election of an optional benefit. ... Any such beneficiary may request the board to allow him to repay to the System all monies received by him as benefits during any periods subsequent to the date of his reentry into active service and make a contribution equal to the amount he would have contributed had he been a member during the period of his restoration to active service prior to his again becoming a member, together with the interest which would have been credited to the contributions on account of such period of restoration up to the date such contribution is made. … In no event shall the retirement allowance payable upon subsequent retirement be less than the amount of his allowance previously payable plus any increases which would have been payable under Section 9-1-1810 had he not been restored to service.
The second and third cross references at the conclusion of § 9-1-1590 read as follows:
Application of this section to retired member whose return to covered employment continues for at least 48 consecutive months, see §§ 9-1-1790, 9-11-90.
Provision allowing retired members of the State Retirement System to return to work and earn certain amounts without having their monthly retirement allowance affected, see §§ 9-1-1790, 9-11-90.
Section 9-11-90 is entitled “Effect of restoring beneficiary to service; retirement after return to service,” and § 9-11-90(3) provides as follows:
Should any other beneficiary who has been restored to active employment continue in service for a period of forty-eight consecutive months and his annual compensation be equal to or greater than seventy-five percent of his average final compensation at retirement, then he may elect to cease his retirement allowance and become a contributing member again and void his election of an optional benefit. … In no event must the retirement allowance payable upon subsequent retirement be less than the amount of his allowance previously payable plus any increases which would have been payable under Section 9-11-310 had he not been restored to service.
Section 9-11-90(4)(a) then provides as follows:
Notwithstanding the provisions of subsections (1) and (2) of this section, a retired member of the system who has been retired for at least fifteen consecutive calendar days may be hired and return to employment covered by this system or any system provided in this title without affecting the monthly retirement allowance he is receiving from this system. If the employment continues for at least forty-eight consecutive months, the provisions of Section 9-11-90(3) apply. If a retired member of the system returns to employment covered by the South Carolina Police Officers Retirement System or any other system provided in this title sooner than fifteen consecutive calendar days after retirement, the member's retirement allowance is suspended while the member remains employed by a participating employer of any of these systems. If an employer fails to notify the system of the engagement of a retired member to perform services, the employer shall reimburse the system for all benefits wrongly paid to the retired member.
Thus, § 9-1-1790(A) clearly authorizes an agency, such as the Department, to hire a state retiree back to employment without the retiree incurring a suspension of his or her monthly retirement allowance so long as the state retiree has been “retired for at least fifteen consecutive calendar days.” Section 9-1-1790(A) still authorizes an agency, such as the Department, to hire back a state retiree to employment even if the state retiree has not been retired for at least fifteen consecutive calendar days, but, in such circumstances, the retiree will incur an suspension of his or her monthly retirement allowance for as long as the retiree remains employed.
The Appellants persistently assailed the Department’s decision to retain and hire temporary employees before and after its June 1, 2003 RIF and to retain employees who accepted the retirement opportunity it offered during the RIF recall period. However, § 9-1-1790 does not use term “break in service;” instead, it addresses a state retiree who has been retired for at least 15 consecutive calendar days. Moreover, § 9-1-1790 does not explicitly or even impliedly declare, as argued by the Appellants, that retirees who take advantage of “retirement “opportunities” lose any enforceable right to re-employment. Like § 9-1-1790, § 9-1-1590 and § 9-11-90 also apply precisely to state retirees, like those retirees who accepted the only retirement opportunity the Department offered during the recall period.
The Appellants anchored their arguments on provisions of our state regulations and statutes that do not precisely apply to the retirement opportunity in question, and they did not consider that a RIF presents an employee with the prospect if not the reality of involuntary separation from their employment while a retirement opportunity presents a retirement eligible employee only with the prospect of a 15 consecutive calendar day period of retirement before the he or she may return to their job without an interruption of their retirement allowance. Thus, in light of these realities, this Court concludes that the Committee properly determined as follows:
The retirement opportunity offered by SCDC after the RIF plan was implemented as a separate action designed to further reduce operating costs. Employees who elected to participate in this opportunity were removed from their full-time equivalent positions and placed into temporary positions. Recall rights are not applicable in the case of temporary positions; therefore, employees affected by the RIF were not provided recall rights in relation to these jobs. The SCDC employees who took part in the retirement opportunity were not offered new positions; rather, it was a way for them to retain their current positions, in a temporary capacity while significantly reducing SCDC costs by reducing salaries and eliminating the cost of benefits for these employees. SCDC was not obligated to offer the positions to Appellants under the RIF policy’s recall procedures because they were temporary positions. In addition, Mr. Ozmint’s cover letter to OHR that was submitted along with the RIF plan stated that “[t]emporary positions, particularly in the area of educational instruction to inmates, may be developed and made available to affected employees by the Reduction-in-Force;” this language indicates that this is a possibility, not a promise. Additionally, the formal RIF plan did not address, nor would it have addressed, the subject of temporary positions in terms of the recall rights for employees affected by the RIF. (Conclusion of Law # 4, R. p. 17).
This Court also concludes that the Committee also properly determined the following:
The retention of certain temporary and temporary grant employees did not violate the approved RIF policy. While these types of positions are often the first to be eliminated prior to enacting a RIF, there is no specific requirement in SCDC’s RIF policy that made this action mandatory. Since these employees do not have benefits and other extraneous costs to the agency like full time equivalent employees do, electing to keep these positions as opposed to full-time equivalent positions was one way to further maximize savings to the agency, which is in line with the stated purpose of the RIF. (Conclusion of Law # 5, R. p. 17).
D. THE APPELLANTS ABANDONED THE RETALIATION CLAIM THEY RAISED TO THE COMMITTEE
V. ANALYSIS OF ISSUES RAISED BY APPELLANTS DURING ORAL ARGUMENT AND IN MATERIALS SUBMITTED BY THE PARTIES AFTER ORAL ARGUMENT
A. THE APPELLANTS DID NOT ARTICUALTE A VIABLE EQUAL PROTECTION CLAIM IN THEIR INSTANT APPEAL
THE COURT: Information related to the temporary …
Therefore, this Court concludes that, under the authority discussed above, as well as our Court of Appeals’ recent decision in Harbit v. City of Charleston, 675 S.E.2d 776 (S.C. Ct. App. 2009), the Appellants failed to articulate a viable equal protection claim to this Court during their instant appeal of the Committee’s Final Decision.
In Harbit, 675 S.E.2d at 782 – 783, our Court of Appeals articulated the following standards associated with a viable equal protection claim:
Under the Equal Protection Clause of the Fourteenth Amendment, a state may not “deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const. amend. XIV, § 1; see S.C. Const. art. I, § 3 (“The privileges and immunities of citizens of this State and of the United States under this Constitution shall not be abridged, nor shall any person be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.”). This clause requires that “the states apply each law, within its scope, equally to persons similarly situated, and that any differences of application must be justified by the law's purpose.” Sylvia Dev. Corp., 48 F.3d at 818. It does not prohibit different treatment of people in different circumstances under the law. [Town of Iva ex rel. Zoning Admin., 374 S.C. at 541, 649 S.E.2d 110.] Instead, “‘the classification must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.’” Id. In a case such as this, the rational basis standard, rather than strict scrutiny, applies because the classification at issue does not affect a fundamental right and does not draw upon inherently suspect distinctions such as race, religion, or alienage. [Sunset Cay, LLC v. City of Folly Beach, 357 S.C. 414, 428 – 29, 593 S.E.2d 462, 469 (2004)].
…
Further, one seeking to show discriminatory enforcement in violation of the Equal Protection Clause must demonstrate arbitrary and purposeful discrimination in the administration of the law being enforced. See State v. Solomon, 245 S.C. 550, 574, 141 S.E.2d 818, 831 (1965). "[E]ven assuming [a governmental entity] is not enforcing [an] ordinance equally, the fact that there is some unequal treatment does not necessarily rise to the level of a constitutional equal protection violation." Denene, Inc. v. City of Charleston, 359 S.C. 85, 96, 596 S.E.2d 917, 922 (2004).
…
Consequently, because the record does not indicate that Harbit was the subject of purposeful, invidious discrimination, the circuit court did not err in granting summary judgment on his equal protection claim. See Sylvia Dev. Corp., 48 F.3d at 825 (internal citations omitted) ("While an equal protection claim must be rooted in an allegation of unequal treatment for similarly situated individuals, a showing of such disparate treatment, even if the product of erroneous or illegal state action, is not enough by itself to state a constitutional claim.").
Despite the efforts by the Appellants to excise this component of an equal protection analysis from the instant case, no evidence exists, as required under Harbit, that the Department, either in the manner by which it implemented the RIF or in the manner or timing of the retirement opportunity it offered during the recall period, arbitrarily and purposefully discriminated against the Appellants or any other employee.
As the Court recognized above in Section IV(D), the Appellants abandoned the retaliation claim they raised to the Committee. Additionally, Appellants’ counsel conceded to the Court during oral argument that the Appellants had “decided not to address any motivational issues in this appeal.” Finally, the Committee found, in its first “Conclusion of Law,” that the Appellants, certified educators employed by the Department, “were not unfairly targeted for termination in retaliation for an earlier lawsuit regarding wages.” (R. p. 16).
Thus, as established under Harbit, even if the Appellants’ equal protection claim is legitimately rooted in an allegation of unequal treatment of the Appellants as opposed to the employees who availed themselves of the retirement opportunity offered during the recall period, a showing of such disparate treatment, even if it was the product of erroneous or illegal action by the Department, is not enough by itself to state a constitutional claim.
Even if the equal protection analysis is limited in the manner urged by the Appellants under their flawed interpretation of Littlefield, neither the manner by which the Department implemented its RIF nor its retirement opportunity animated a legitimate equal protection claim.
In his argument to the Court, Appellants’ counsel focused on a paragraph from Director Ozmint’s March 28, 2003 letter to Mr. Wilkins, the State Human Resources Director. This paragraph read, in its entirety, as follows: “Temporary positions, particularly in the area of educational instruction to inmates, may be developed and made available to affected employees by the [RIF].” (R. p. 1630).
According to Appellants’ counsel, this paragraph represented a “promise” that, if temporary positions were made available as a result of the RIF, then the Department would offer these temporary positions to employees involuntarily separated by the RIF, such as the Appellants. Thus, when retirement eligible employees availed themselves of the retirement opportunity implemented by the Department during the recall period, their positions became “temporary positions” into which former employees involuntarily separated by the RIF had priority to fill. However, the plain wording of this paragraph indicates that no such “promise” was created by this paragraph (i.e. “may” vs. “must”).
Moreover, former employees involuntarily separated by the RIF, such as the Appellants, were not identically situated to the retirement eligible employees to whom the Department offered the “retirement opportunity.” As recognized by Harbit, the Equal Protection Clause “does not prohibit different treatment of people in different circumstances under the law.”
In their brief, the Appellants identified S.C. Code Ann. § 24-25-90 and § 8-17-330 as the statutes purportedly applied by the Department in an unequal and arbitrary fashion in the architecture and implementation of its RIF. Even if the Department somehow unequally or arbitrary applied by these statutes in formulating or implementing its RIF, a conclusion which the Court has not made and does not make here, the retirement opportunity implemented by the Department during the recall period fell under the provisions of an entirely different set of statutes, namely § 9-1-1790, 9-1-1590, and 9-11-90.
B. THE MATERIALS CONSTITUTING “ATTACHMENT 1” TO THE APPELLANTS’ SUPPLEMENTAL BRIEF REPRESENTED NEW FACTS NOT CONSIDERED BY THE COMMITTEE, AND, THEREFORE, THIS COURT GRANTS THE DEPARTMENT’S MOTION TO STRIKE “ATTACHMENT 1” AND THE PORTIONS OF THE APPELLANTS’ BRIEF RELATED TO “ATTACHMENT 1”
VI. ORDER OF THE COURT AFFIRMING THE DECISION OF THE STATE EMPLOYEE GRIEVANCE COMMITTEE
Thus, for all of the foregoing reasons, this Court determines that the administrative findings, inferences, conclusions and decisions rendered by the State Employee Grievance Committee in its February 18, 2009 Final Decision did not prejudice the Appellants’ substantial rights, and this Court further determines that the Appellants’ arguments do not provide a sufficient basis by which it may reverse or modify any aspect of the Committee’s February 18, 2009 Final Decision under the provisions of § 1-23-380(5).
Accordingly, this Court denies the Appellants’ instant appeal and denies the relief demanded by the Appellants in their principle brief, in their argument to this Court, and in their supplemental brief. Therefore, IT IS HEREBY ORDERED that the Final Decision of the State Employee Grievance Committee issued February 18, 2009 is AFFIRMED.
AND IT IS SO ORDERED.
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John D. McLeod, Judge
S.C. Administrative Law Court
June 2, 2010
Columbia, South Carolina