Opinion
No. 2178 C.D. 2005.
Submitted: June 8, 2006.
September 20, 2006.
BEFORE: JUBELIRER, Judge; LEAVITT, Judge; FLAHERTY, Senior Judge.
Gregory L. Cutler petitions for review of an adjudication of the State Civil Service Commission (Commission) sustaining the decision of the Office of Administration not to appoint him to the position of Pennsylvania Management Associate. The Commission held that Cutler, a veteran, was not entitled to have ten points added to his civil service examination test results because he had already used a veterans' preference at the time he was first hired by the Commonwealth. In this case, we consider the validity of the Commission's holding that a veterans' preference may be used once, and once only, in the course of one's employment in the classified service of the Commonwealth.
The facts material to this case are as follows. Cutler served six years of active duty in the U.S. Army, which was followed by eighteen years in the Army Reserve and Pennsylvania National Guard. He remains a reservist; as recently as 2003, he was activated and served in Kosovo. Upon his return, Cutler took a job in July 2004 as an income maintenance worker with the Pennsylvania Department of Public Welfare. In December 2004, while still within his six month probationary period, Cutler applied for a Pennsylvania Management Associate (PMA) position. Individuals chosen for the PMA program undergo eighteen months of intensive on-the-job-training in the areas of human resources, budget and public policy for careers in state government. Applicants must have a post-graduate degree and are required to take a civil service examination designed particularly for the PMA position. Cutler, who has a law degree, took the civil service examination along with numerous other applicants.
On April 15, 2005, after the examinations were scored, the Commission issued a list of eligible candidates. Cutler's name appeared at the top of the list as the only candidate to receive a score of 118. The Director of the PMA program, Richard Whorl, phoned Cutler to offer him the position as a PMA, and Cutler accepted. The offer was confirmed by correspondence dated May 24, 2005, which Cutler signed and returned.
The next day, Whorl's assistant noticed that Cutler's application showed that he was a "working vet," a designation that indicates that Cutler had been given a veterans' preference when he was hired as an income maintenance worker. However, a management directive of the Governor's Office provides that the veterans' preference may be used only once by an employee in the classified service. Believing that Cutler's top score on the PMA examination resulted from a veterans' preference, to which he was not entitled under this management directive, Whorl's assistant contacted the Commission. Agreeing that it had made a mistake, the Commission removed the ten-point veterans' preference from Cutler's score and reissued the certified list with the original date of April 15, 2005. On the reissued list, Cutler was one of twenty-nine applicants to receive a score of 108, now the top score on the examination.
The Office of Administration then examined Cutler's qualifications and compared them to those of the other twenty-eight applicants who had also scored 108 on the civil service examination. On his most recent performance evaluation of December 17, 2004, Cutler received a "needs improvement" rating, specifically in the areas of work habits, communication and job skills. As a result, his probationary status was extended for six months. The Office of Administration found Cutler not qualified for one of the thirteen openings in the PMA program. Accordingly, on May 27, 2005, Whorl called Cutler and informed him that the offer of employment as a PMA was being rescinded; this conversation was confirmed by a letter dated June 9, 2005.
Cutler appealed to the Commission. Initially, he appealed the refusal to add ten points to his civil service examination test results. He later amended his appeal to add a claim of discrimination, asserting that it was Cutler's forthcoming National Guard duty that prompted the Office of Administration to rescind the job offer. By way of relief, Cutler requested the Commission to direct the Office of Administration to appoint him to the position of PMA and to award "[m]onetary damages equal to loss of pay [and] punitive damages." Reproduced Record at 76b (R.R. ____). In response, the Commission scheduled an investigative hearing to determine "whether there was a merit-related basis for the rescission of the May 24, 2005 offer of employment." R.R. 80b. Noting Cutler's performance evaluation rating of "needs improvement," the Commission concluded that the Office of Administration acted on the basis of merit and dismissed Cutler's appeal. Cutler then petitioned for this Court's review.
On appeal, Cutler presents four issues for our consideration. First, he contends that the Commission erred by removing the veterans' preference from his civil service examination results. Specifically, he contends that the management directive limiting the veterans' preference to a one-time use was based upon an improper construction of the veterans' preference statute, and, therefore, in no way can this management directive justify the Commission's holding. Second, Cutler contends that the Commission erred in treating his appointment to the position of PMA as a promotion rather than an initial appointment. Third, Cutler contends the Commission erred because it was impossible that in less than two days the Office of Administration could have given due consideration of Cutler's qualifications, as compared to those of twenty-eight other candidates. Fourth, Cutler contends that the Commission erred in concluding that he did not effect a valid enforceable contract with the Office of Administration when he signed and returned the offer letter of May 24, 2005.
The standard of review involving agency adjudications is limited to a determination of whether constitutional rights have been violated, errors of law have been committed, or whether the findings of the agency are supported by substantial evidence. Department of Corrections v. State Civil Service Commission (Clapper), 842 A.2d 526, 531, n. 7 (Pa.Cmwlth. 2004).
Cutler often fails to distinguish between the appointing authority, which is the Office of Administration, of the Governor's Office, and the Commission, the independent agency that is charged with enforcement of the State Civil Service Act. The entities are separate and distinct as we explain in this opinion.
As a preliminary matter, we consider, first, the contention of the Office of Administration that Cutler has waived two of his appellate issues: (1) the claim that the Commission improperly denied him a veterans' preference and (2) the claim that the Commission improperly refused to enforce his employment contract. In support, the Office of Administration notes that although Cutler appealed pursuant to Section 951(b) of the Civil Service Act, Act of August 5, 1941, P.L. 752, as amended, 71 P.S. § 741.951(b), the hearing was governed by Section 951(d). As such, the scope of the Commission's investigatory hearing was limited to the issues listed in its hearing notice, and the Commission's list did not include either Cutler's veterans' preference claim or his contract claim. Further, Cutler did not object to the scope of the Commission's hearing notice.
Section 951 of the Civil Service Act provides in relevant part:
(a) Any regular employe in the classified service may, within twenty calendar days of receipt of notice from the appointing authority, appeal in writing to the commission. Any permanent separation, suspension for cause, furlough or demotion on the grounds that such action has been taken in his case in violation of the provisions of this act, upon receipt of such notice of appeal, the commission shall promptly schedule and hold a public hearing.
(b) Any person who is aggrieved by an alleged violation of section 905.1 of this act [relating to discrimination] may appeal in writing to the commission within twenty calendar days of the alleged violation. Upon receipt of such notice of appeal, the commission shall promptly schedule and hold a public hearing.
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(d) Notwithstanding any other provisions of this section, the commission may, upon its own motion, investigate any personnel action taken pursuant to this act and, in its discretion, hold public hearings, record its findings and conclusions, and make such orders as it deems appropriate to assure observance of the provisions of this act and the rules and regulations thereunder.
71 P.S. § 741.951 (a)-(b), (d).
It is true that the hearing below was governed by Section 951(d) of the Civil Service Act. However, the Commission allowed Cutler, without any objection from the Office of Administration, to present evidence on whether he was entitled to a veterans' preference on his PMA civil service examination and whether he was entitled to contract damages. Further, the Commission addressed these issues in its adjudication dismissing his appeal. We conclude, therefore, that these issues have been preserved for this Court's review.
Turning to the merits of Cutler's appeal, we consider the heart of this case, i.e., whether Management Directive 580.21(2)(d), which limits the veterans' preference to a one-time use, expresses a correct interpretation of Chapter 71 of the Military Affairs Code, entitled "Veterans' Preference," 51 Pa. C.S. §§ 7101- 7109. Cutler contends this management directive is invalid and unenforceable because it is not consonant with the Military Affairs Code.
Section 2(d) of Management Directive 580.21, as amended June 5, 1997, provided in relevant part:
Current classified service employees assigned regular or probationary status, except for those occupying positions described in 2.c., are not eligible for the [the veterans' preference] in 2.a.
This Management Directive was amended effective March 6, 2006. In the March 6, 2006, Management Directive, the language of former Section 2(d) is found at section 2(f), in substantially the same form. All references in this opinion are to Management Directive 580.21, as amended June 5, 1997.
A management directive is one of several means by which the Governor manages executive branch agencies under his control. In 1972, the Governor's Office issued a statement of policy that explained the "Directives Management System," 4 Pa. Code § 1.2(1)-(4), which includes management directives. Management Directives "announce detailed policies, programs, responsibilities, and procedures that are relatively permanent and are signed by the Governor." 4 Pa. Code § 1.2(2). The management directive must be consistent with any statute applicable to the subject matter of the directive. Indeed, it has been said that a management directive has the force of a law so long as it tracks the applicable statutory or constitutional law. See, e.g., Mirarchi v. Department of Corrections, 811 A.2d 1096, 1100 (Pa.Cmwlth. 2002). A management directive is not a formal agency regulation promulgated in accordance with the Commonwealth Documents Law. A management directive derives its force from the statute it seeks to implement.
The most direct and informal means is a simple call from the Governor to the appropriate officer or employee in the Governor's chain of command.
The Directives Management System was designed in 1972 "to provide comprehensive statements of policy and procedure on matters that affect agencies and employees under the Governor's jurisdiction." 4 Pa. Code § 1.1.
As the note to Title 4, Part I of the Pennsylvania Code explains, the Directives Management System addressed in 4 Pa. Code §§ 1.1-1.5 has been published as a statement of policy. It is not a regulation promulgated in accordance with Section 208 of the act frequently referred to as the Commonwealth Documents Law, Act of July 31, 1968, P.L. 769, 45 P.S. § 1208. Further, publication is not required in order for an executive order, directive or proclamation to be effective. However, since 1970, "gubernatorial documents" that are "general and permanent in nature," such as the Directives Management System, are published in the Pennsylvania Code. 4 Pa. Code, Part I, Note.
In many cases, a management directive will not require an authorizing statute. For example, the Governor might issue a management directive directing all bureau directors, regardless of which agency they serve, to report to their posts between the hours of 7:00 a.m. to 4:00 p.m. each day. Because it is an inherent management prerogative to set the hours worked in a day, the Governor does not need a statute to issue such a management directive. Further, a management directive of the type presented in our example would not be justiciable. Of course, the Governor's inherent management prerogative has been limited by statutes. The Governor is bound by such statutes as Act 195, the Civil Service Act and the veterans' preference provisions in the Military Affairs Code.
The subject matter of Management Directive 580.21 is the implementation of the veterans' preference by the agencies under the supervision of the Governor. This veterans' preference is established in the Military Affairs Code and provides that at any time in a state or local government career, whether at the point of appointment or at the point of promotion, the applicant with a history of military service is entitled to preferential treatment. Specifically, the Military Affairs Code states, in relevant part, as follows:
When any soldier shall take any civil service appointment or promotional examination for a public position under the Commonwealth, . . . he shall be given credit in the manner hereinafter provided[.]
51 Pa. C.S. § 7102(a) (emphasis added). The "credit . . . hereinafter provided" is the addition of ten points to a civil service examination that has been passed. Section 7103(a) states:
Whenever any soldier shall successfully pass a civil service appointment or promotional examination for a public position under this Commonwealth, or any political subdivision thereof, and shall thus establish that he possesses the qualifications required by law for appointment to or promotion in such public position, such soldier's examination shall be marked or graded an additional ten points above the mark or grade credited for the examination, . . . and shall determine his standing on any eligible or promotional list, certified or furnished to the appointing or promoting power.
51 Pa. C.S. § 7103(a) (emphasis added). Although the meaning of the statute is clear, its constitutionality is not.
The case law precedent addressing the constitutionality of a veterans' preference statute begins with Commonwealth ex rel. Graham v. Schmid, 333 Pa. 568, 3 A.2d 701 (1938). In that case, our Supreme Court considered the validity of Section 4401 of the Third Class City Law, Act of June 23, 1931, P.L. 932, 53 P.S. § 12198-4401, which gave a preference to the hiring of soldiers seeking employment with a third class city. The statute's validity was reviewed against Article III, Section 7 of the Pennsylvania Constitution, which prohibited "granting to any corporation, association or individual any special or exclusive privilege or immunity." PA. CONST. ART. III, § 7 (1874). In finding the veterans' preference to be constitutional, the Supreme Court explained that
The Supreme Court traced the origins of a veterans' preference to the desire to give Civil War veterans, and their families, a preference in public positions throughout the Commonwealth. Schmid, 333 Pa. at 571, n. 3, 3 A.2d at 703, n. 3.
[t]here must be some reasonable relation between the basis of preference and the object to be obtained, the preference of veterans for the proper performance of public duties. Public policy, as well as constitutional restrictions, prohibits an unrestrained preference as it does a preference credit based on factors not representative of true value.
Schmid, 333 Pa. at 573, 3 A.2d at 704 (emphasis added). The Supreme Court found a reasonable relation to exist because a soldier's military experience makes him a more desirable applicant for public employment where discipline, loyalty and public spirit are essential, just as they are in military service. Id. However, the Supreme Court cautioned against legislation that would assign military service an "unrestrained preference." Id.
Indeed, the Supreme Court held that a fifteen percent credit called for in the Third Class City Law was too great. Schmid, 333 Pa. at 579-580, 3 A.2d at 707.
In 1945, the General Assembly enacted a comprehensive statute authorizing a preference for veterans seeking employment in both state and local government. Act of May 22, 1945, P.L. 837, 51 P.S. §§ 492.1-492.8. This statute applied the preference not just to the soldier seeking employment but also to the soldier seeking promotion or the soldier who was at risk of furlough. This extension of a veterans' preference to those seeking a promotion was challenged as unconstitutional under Article III, Section 7 of the Pennsylvania Constitution, as it was in Schmid. This time, the Supreme Court found in favor of the challenger.
The Supreme Court found the statute unconstitutional under the Schmid test because the statute placed too high a value on the benefit of military service when applying it to those seeking a promotion. Commonwealth ex rel. Braden v. O'Neill, 368 Pa, 369, 373, 83 A.2d 382, 383 (1951). The Supreme Court reasoned as follows:
[T]he legislature, in authorizing the addition of ten percentage points to the veterans' final examination marks in all competitive examinations for higher positions than the original appointments, has placed far too high a value on the benefit to the public service of the military training of veterans. In the case of an original appointment, the training a veteran has received in the armed forces will, no doubt, make him more amenable to the following of orders, the observance of regulations and, in other ways, tend toward making him a desirable employee. But the advantages to the public of this training are not absolute and, as time passes, the proportional benefit accruing to the public from the employment in such a service of veterans in preference to non-veterans gradually diminishes as both become proficient in the performance of their duties. In determining who is to be awarded a promotion, the skill of the particular examinees in the performance of their tasks is the prime consideration and compared to it the training gained by veterans solely as a result of military service becomes of very little importance. To credit veteran examinees in examinations for successive promotions with the same total of gratuitous percentage points as in the instance of their original appointment to a public position is, therefore, a totally unjustified appraisal of the value of their military training and highly prejudicial to the public service.
368 Pa. at 372-73, 83 A.2d at 383. Thus, the Supreme Court held that giving a ten point credit to employees taking an exam for promotion was unconstitutional. Id. at 375, 83 A.2d at 384.
Thereafter, in 1968, Pennsylvania amended its constitution to delete the prohibition against the statutory grant of special or exclusive privileges set forth in Article III, Section 7 in the 1874 Constitution. It was replaced by Article I, Section 17, which states that a law shall not make "irrevocable any grant of special privileges or immunities. . . ." PA. CONST. ART I, § 17. In 1975, the General Assembly codified the veterans' preference statute to make it Chapter 71 of the Military Affairs Code. Chapter 71 included the very provision held to be unconstitutional in O'Neill, i.e., it mandates a ten point preference to veterans taking a civil service examination for a promotion as well as for first time appointments.
In Hoffman v. Township of Whitehall, 544 Pa. 499, 677 A.2d 1200 (1996), our Supreme Court considered whether the change in the Pennsylvania Constitution removed the impediment to giving veterans a preference when taking an examination for a promotion. The Court held that O'Neill remained good law, notwithstanding the change to the Pennsylvania Constitution and notwithstanding the legislature's clear intention to have a veterans' preference apply with equal force to all examinations, whether taken for an initial appointment or for a subsequent promotion.
Most recently, our Supreme Court considered whether the Commission had authority to enforce Chapter 71 of the Military Affairs Code, a statute in pari materia with the Civil Service Act. Housing Authority of the County of Chester v. Pennsylvania State Civil Service Commission, 556 Pa. 621, 730 A.2d 935 (1999). The Supreme Court held that when certifying a list of candidates eligible for a position in the classified service, it was appropriate for the Commission to add ten points to the examination results of a veteran candidate. It affirmed the authority of the Commission to enforce both Chapter 71 of the Military Affairs Code and Management Directive 580.21(2)(a)(1), which stated as follows:
Statutes in pari materia must be read together as one statute. 1 Pa. C.S. § 1932. Accordingly, it would be error for the Commission to ignore Chapter 71 to the extent it addressed the topic of state civil service examinations.
a. Persons entitled to veterans' preference under the Military Affairs Act who take civil service examinations for appointment will:
(1) Receive 10 additional points on their final earned ratings.
County of Chester, 556 Pa. at 634, 730 A.2d at 942 (quoting Management Directive 580.21(2)(a)(1)). The Supreme Court affirmed, again, the bright line test that a veterans' preference is constitutional when applied to those seeking appointment but not to those seeking a promotion.
In sum, it has been established that an applicant for public employment may use the veterans' preference when taking an examination for an appointment in government service but not thereafter when he takes a promotional examination. The Military Affairs Code has expressly granted veterans an unlimited right to use the preference both for job applications and for job promotions, but our Supreme Court has held that this express grant is too generous to withstand the Pennsylvania Constitution's limit on statutory privileges. However, the Supreme Court has never held that the veterans' preference can be used for only one appointment in government service.
We turn then to the appeal at hand. The Governor's Office believes that the veterans' preference may be used once, and only once, by a veteran employed in one of the executive branch agencies under the direction of the Governor. Accordingly, the Governor's Office issued Management Directive 580.21 on June 5, 1997, which states, in relevant part, as follows:
2. Policy. Veterans' preference applies to appointment only, as follows:
a. Eligible veterans under the Military Affairs Act who have completed their military service commitment and who have been honorably discharged PRIOR to taking a civil service examination, spouses of disabled veterans, and widows or widowers of veterans:
(1) Receive 10 additional points on their final earned ratings, provided they pass the examination.
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d. Current classified service employes assigned regular or probationary status, except for those occupying positions described in 2.c., are not eligible for the entitlements in 2a.
(emphasis added). It was by authority of Management Directive 580.21(2)(d) that the Commission denied Cutler the use of a veterans' preference in his application for the PMA position, because he is already employed in the classified service as an income maintenance worker for the Department of Public Welfare.
As explained above, a management directive is used by the Governor to "announce . . . policies . . . and procedures that are relatively permanent." 4 Pa. Code § 1.2(2). It is binding upon executive branch agencies under the Governor's supervision. The Commission, however, is an independent agency that does not report to the Governor. Accordingly, Management Directive 580.21(2)(d) is not binding on the Commission. In any case, this management directive simply expresses an interpretation of law. It is not a regulation but a statement of policy; as such it is not a binding norm. See Pennsylvania Human Relations Commission v. Norristown Area School District, 473 Pa. 334, 374 A.2d 671 (1977) (explaining the difference between a regulation, which has the force and effect of law, and a guideline or statement of policy, which interprets a statute but is not a "binding norm."). As a guideline, Management Directive 580.21(2)(d) draws its strength from the statute it seeks to implement: Chapter 71 of the Military Affairs Code. The dispositive question, therefore, is whether Management Directive 580.21(2)(d) correctly implements the Military Affairs Code.
Under the Commonwealth Attorneys Act, the State Civil Service Commission is defined as an "Independent Agency." Section 102 of the Act of October 15, 1980, 71 P.S. § 732-102.
We consider, first, Cutler's argument that his application for the PMA position was not a promotion but, rather, an application for an entirely different position. Cutler contends that under the Civil Service Act, the move he sought was a lateral one. We agree.
Act of August 5, 1941, P.L. 752, as amended, 71 P.S. §§ 741.1-741.1005.
Under the Civil Service Act, "promotion" is defined as "the movement of an employee to another class in a pay range with a higher maximum salary." Section 3 of the Civil Service Act, 71 P.S. § 741.3. It is uncontested that the position of income maintenance worker and the position of PMA have the same pay grade and the same maximum salary. As such, Cutler's transfer to the PMA position does not qualify as a "promotion" under the Civil Service Act. This means that the Supreme Court's holdings in Hoffman and in County of Chester do not apply. These cases established that an employee may not use a veterans' preference when taking a promotional examination if he has used the preference when he was first appointed. However, they do not speak to a situation where a veteran seeks a new appointment, which is the case here.
However, the Commission did not refuse to give Cutler a ten point veterans' preference for the reason that he sought a promotion. Its refusal was based solely on the management directive that forbids employees in the classified service from using the veterans' preference more than once. For the Commission's holding to be valid, the management directive must be consistent with Chapter 71 of the Military Affairs Code. It is not.
Chapter 71 mandates that a veteran receive ten points on every civil service examination, whether taken for an initial appointment or later for purposes of a promotion. To date, the Supreme Court has not held that a veterans' preference is limited to a single use in a career in public employment. To the contrary, as noted by our Supreme Court, "section 7104(b) [of the Military Affairs Code] clearly intends for the mandatory preference to apply to all appointments, entry-level or otherwise, and that the statute does not thereby operate in an unconstitutional manner." County of Chester, 556 Pa. at 644, 730 A.2d at 947-948 (emphasis added). Further, the constitutionality of allowing the use of a veterans' preference each time a soldier takes a different examination for a new appointment is not a question before us. It has not been raised by either party in this appeal.
Cutler, of course, seeks the vindication of repeated use of the veterans' preference, not its repudiation.
Management Directive 580.21(2)(d) may express a future constitutional interpretation of Chapter 71 by our Supreme Court. However, we must presume that statutes are constitutional as written. See, e.g., In re Municipal Reapportionment of Township of Haverford, 873 A.2d 821, 833. n. 18 (Pa.Cmwlth. 2005) (determining the constitutionality of a statute or ordinance is beyond the province of an administrative agency). Unless and until the Supreme Court holds that it would be unconstitutional for a veteran already employed by the Commonwealth to use the statutory preference when applying for a new job in state government, we are constrained to hold that Chapter 71 is a valid statute that was not applied correctly by the Commission. Management Directive 580.21(2)(d) is not consistent with the plain language of Chapter 71 of the Military Affairs Code; as such, it is unenforceable to the extent it seeks to limit the use of the preference to a one-time use. Because the Commission's holding cannot be reconciled with Chapter 71 of the Military Affairs Code, it must be set aside.
The outcome of such a constitutional challenge is not obvious. In County of Chester, the Supreme Court explained the rationale for not allowing a preference for promotions as follows:
The reason for this distinction is simple. In the promotions context, the competing candidates are seeking to move up from within the same organization. They will have had ample opportunity during their tenure in that agency or organization to hone the skills relative to the promotion which they seek. If, during the period in which they have had the opportunity to develop their skills in the exact same environment as the rival candidates, they have failed to progress to the same skill level as those rivals, then the fact that they had experience in the armed services is not probative and does not justify the candidate's shortcomings. On the other hand, when candidates seek appointment to a position in an organization or agency in which none of them have any experience, the fact that one of the candidates has military experience may rationally be viewed as that which distinguishes him as the superior candidate for the position.
556 Pa. at 647, 730 A.2d at 949. Here, the candidates for the PMA position each came from a different background and have not had "ample opportunity . . . to hone the skills relative to the promotion which they seek." Id.
Because we reverse, we need not address Cutler's claim that the Office of Administration did not expend enough energy in reviewing his qualifications as one of 29 persons eligible for 13 positions. We also need not address Cutler's argument that the Commission erred when it found that a valid contract was not created when the Office of Administration offered Cutler the PMA position, and Cutler accepted. The Commission held that a contract was not effected because of a mutual mistake of the parties. If there was a contract, it is the Board of Claims that has exclusive jurisdiction. Employers Insurance of Wausau v. Department of Transportation, 581 Pa. 381, 392, 865 A.2d 825, 832 (2005).
For these reasons, we reverse.
ORDER
AND NOW, this 20th day of September, 2006, the order of the State Civil Service Commission dated September 28, 2005, in the above captioned matter is hereby reversed.