Opinion
No. C5-96-431.
Filed August 20, 1996.
Appeal from the Department of Veterans Affairs, File No. 63-3100-9976-2.
Jesse Gant, III, Gant Law Office, (for Respondent Lloyd)
Scott M. Lepak, Barna, Guzy Steffen, Ltd., (for Relator)
Hubert H. Humphrey, III, Attorney General, (for Respondent Department of Veterans Affairs)
Considered and decided by Norton, Presiding Judge, Parker, Judge, and Harten, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1994).
UNPUBLISHED OPINION
Faribault County challenges a decision by the Commissioner of Veterans Affairs that it violated an employee's rights under the Veterans Preference Act. We affirm the decision applying the Veterans Preference Act, but vacate and remand the damage award.
FACTS
Respondent Larry M. Lloyd served on active duty in the United States Navy from 1960 to 1963 and is an honorably discharged veteran. He was initially employed by Relator Faribault County (the County) on June 28, 1972 as assistant county auditor and park and recreation administrator. Beginning in 1974, he served as county park and zoning administrator. Agricultural inspection was later added to his duties. The parks and zoning administrator/agricultural inspector position was classified at level C-4-2.
In 1986, Lloyd was notified in writing that his year-round, full-time zoning/parks position was being reduced to eight months per year and that he "may have" rights under the Veterans Preference Act (VPA). Since 1987, he has been on the job with the County from April to November each year and has spent the winter months in the Cook Islands. Using accumulated vacation and compensatory time accrued during his eight months on the job, he has been able to remain in "pay status" and receive health insurance benefits for most of the four months per year when he was not on duty (in 1994-95, for instance, he missed only three paychecks). His hourly wages have not been reduced and he continues to be classified at level C-4-2. During his yearly absences, the zoning and parks duties were handled by Bonita Hagedorn, Roger Peterson, or Greg Isakson, all non-veterans with less seniority than Lloyd.
In March 1989, the County posted in-house a position for a full-time coordinator for planning and zoning and solid waste. Lloyd and Hagedorn applied, but the position was rescinded. In December 1989, when Lloyd was not on duty, the County posted in-house a zoning administrator/clerk position. Lloyd was not notified of the posting. On January 16, 1990, Hagedorn was hired to fill the position, which was classified at level B-2-3, a classification lower than Lloyd's with lower pay.
When Lloyd returned to work the following April, the County notified him that he was no longer the planning and zoning administrator. He was reassigned to traffic administration without being notified of his rights under the VPA. Although this position was classified at level B-2-3, Lloyd's pay remained at the C-4-2 level (he was earning $11.70 per hour at the time, whereas Hagedorn was paid $9.53 per hour). He spent most of his time doing highway maintenance such as erecting street signs, shoveling, and helping the survey staff. In 1994, he was required to join the union. In 1995, he received a letter notifying him that his wages would be frozen pursuant to the union contract and that he had a VPA right to a hearing.
Lloyd petitioned the Commissioner for a hearing, which was held before an ALJ. The ALJ recommended that Lloyd be reinstated to full-time, year-round zoning administrator duties, together with back pay, benefits, and interest. The Commissioner adopted the ALJ's recommendation. The County appeals, arguing that (1) the Commissioner lacked jurisdiction, (2) the findings that Lloyd was demoted in bad faith were erroneous, and (3) the damage award is excessive.
The Commissioner granted partial summary disposition to the County, holding that any actions before July 31, 1989 were barred by the six-year statute of limitations. See Johnson v. County of Anoka, 536 N.W.2d 336, 339 (Minn. App. 1995) (six-year statute of limitations applies to VPA), review denied (Minn. Sept. 28, 1995). The parties also withdrew the issue of the 1995 wage freeze because it is being decided by a three-member board pursuant to Minn. Stat. (1994).
DECISION 1. Jurisdiction
The County argues that the Commissioner lacked subject matter jurisdiction to hear the case. Jurisdiction is a question of law that we review de novo. Ojala v. St. Louis County , 522 N.W.2d 342, 343 (Minn.App. 1994).
In its June 12, 1995 letter, the County notified Lloyd of his right to a VPA hearing pursuant to Minn. Stat. § 197.46 (1994), which includes a mandamus remedy and entitles a veteran to a hearing before a local three-member panel. Section 197.46 was enacted in 1907 to protect veterans from unwarranted removal from government jobs. Young v. City of Duluth , 386 N.W.2d 732, 736 (Minn. 1986). In 1973, the legislature enacted an alternative enforcement mechanism separate from the procedures authorized by section 197.46. Id. Section 197.481 states:
A veteran who has been denied rights by the state or any political subdivision, municipality, or other public agency of the state under sections 43A.11, 197.46, 197.48 or 197.455 may petition the commissioner of veterans affairs for an order directing the agency to grant the veteran such relief the commissioner finds justified by said statutes.
Minn. Stat. § subd. 1 (1994). Section 197.481 authorizes the Commissioner to hold a hearing pursuant to chapter 14, the Administrative Procedures Act. Id. , subd.
The supreme court has stated:
It is evident from the language of the [VPA] that the legislature intended to allow veterans to enforce their rights by either petitioning for a writ of mandamus under section 197.46 or by requesting an order from the commissioner under section 197.481.
Young , 386 N.W.2d at 737 (emphasis added). The plain language of the two statutes and the holding in Young allow veterans the option of a hearing under section 197.481 or section 197.46. Lloyd chose to petition the Commissioner for a hearing under section 197.481.
The County urges this court to construe Young narrowly and hold that only when a veteran is denied his procedural right to notice and a hearing does he have the option of petitioning the Commissioner under section 197.481. The County also argues that the Commissioner lacked jurisdiction because there had been no violations of section 197.46.
The issue of whether the VPA is applicable is ultimately a question of law. Grehl v. Minneapolis Pub. Schs. , 484 N.W.2d 815, 817 (Minn.App. 1992). The VPA states that a veteran may be discharged by a public employer only for misconduct or incompetence. Minn. Stat. § Caselaw has added a third ground under Minn. Stat. § faith abolition of a position. Ochocki v. Dakota County Sheriff's Dep't , 464 N.W.2d 496, 497 (Minn. 1991); State ex rel. Boyd v. Matson , 155 Minn. 137, 141-42, 193 N.W. 30, 32 (1923). The VPA applies here because Lloyd claims that he was demoted and that his position was abolished in bad faith. See Young , 386 N.W.2d at 737 (VPA and all rights afforded by it apply if position abolished in bad faith). We conclude that the Commissioner had jurisdiction to administer Lloyd's case under section 197.481.
2. Bad Faith
Whether a public employer abolished a position in bad faith is a question of fact. State ex rel. Caffrey v. Metropolitan Airports Comm'n , 310 Minn. 480, 487, 246 N.W.2d 637, 641 (1976). Findings of fact are reviewed to determine whether they are supported by substantial evidence on the record as a whole and will be sustained unless clearly erroneous. Id. at 488, 246 N.W.2d at 641. Here, the Commissioner adopted the ALJ's finding that Lloyd was demoted and removed from his position in bad faith in January 1990.
Under pretext of abolishing a veteran's position, a public employer cannot in good faith continue the position under some other name or reassign the duties to a less-senior employee. Young , 386 N.W.2d at 738. The lowering of an employee's rank, grade, or position constitutes a demotion. Ammend v. County of Isanti , 486 N.W.2d 3, 6 (Minn.App. 1992).
The ALJ found that the County completely divested Lloyd of his zoning administrator duties, gave them to a non-veteran with less seniority, and assigned Lloyd to traffic administrator duties. Zoning administrator is an office position requiring education and experience. Lloyd is a college graduate with several years of experience in zoning. The traffic position — which included duties such as shoveling, sweeping, and putting up road signs — involves much more physical labor than does the zoning position. The ALJ based her decision on the hearing testimony and a review of the relevant job descriptions. The Commissioner determined that the County's action abolishing Lloyd's position and reassigning him constituted a demotion.
The County argues that this situation is not like that in Young because there the employee's position was completely abolished; here, only a limited number of Lloyd's duties were reassigned. Furthermore, although the traffic administrator position was classified at a lower level, the County points out that it continued to pay Lloyd at a higher rate. Finally, the County contends that a public employer retains the power to administer its own operations, including personnel actions. See Young , 386 N.W.2d at 737.
The County's arguments lack merit. Lloyd's zoning activities were completely removed and replaced by traffic duties, even though his agricultural inspection operations were continued and his pay remained undiminished. We hold that the Commissioner's findings that Lloyd was demoted and that his position was abolished in bad faith are supported by substantial evidence in the record as a whole.
3. Full-Time Position
The Commissioner determined that Lloyd was entitled to reinstatement to the full-time zoning administrator position at level C-4-2 classification and to damages — including back pay, benefits, and interest — for the four-month period he was off duty each year. If a public employer has abolished a veteran's position in bad faith, the veteran is entitled to reinstatement to his former position with back pay. Young , 386 N.W.2d at 738-39. The County argues that Lloyd has not held a full-time position with the County since 1986 and therefore he is only entitled to his previous eight-month-per-year zoning administrator position. The statute of limitations narrows the controversy to events after July 31, 1989. The County thus contends that returning Lloyd to a full-time zoning position reestablishes his pre-1989 full-time employment status.
The ALJ's Conclusion of Law No. 13, adopted by the Commissioner, states:
Because the [County] increased the position of Zoning Administrator/Clerk to a full-time status on January 16, 1990, [Lloyd] is entitled to reinstatement to his former position as full-time Zoning Administrator (in addition to his position as Parks Coordinator and Agricultural Inspector which he currently holds) at the C-4-2 classification, and is entitled to damages in the amount of back wages, including benefits for the months of December through March each year beginning January 16, 1990. [Lloyd] is also entitled to pre-judgment interest in accord with Minnesota Statutes § 344.01, calculated from the time each paycheck was due.
The ALJ stated in her memorandum:
If the [County] had not abolished the position occupied by [Lloyd] in 1990, and re-assigned the duties to Bonita Hagedorn, [Lloyd] would have been assigned a year round full-time position as Planning and Zoning Administrator to perform those duties full-time in conjunction with his Agricultural Inspection and Parks Coordinator jobs.
It is undisputed that Lloyd applied and interviewed for a full-time zoning position in March 1989, a date outside the scope of our inquiry. The County's decision to hire Hagedorn in January 1990, however, falls within the relevant limitations period.
Additional evidence about full-time status was limited. Hagedorn testified that there was enough work to justify a full-time position. Robert Witty, director of public works, testified that in the fall of 1989, he asked Lloyd to return to full-time work and Lloyd declined. Lloyd, however, testified that he did not recall any such conversation and, in any event, he was not told that the zoning position would be given to someone else if he did not return to full-time status. The ALJ credited the testimony of Lloyd over that of Witty. The ALJ stated that
[i]t is incredible for the ALJ to believe [Lloyd] would have applied for a full-time 12 month position in March of 1989, and then decline full-time employment, if in fact it had been offered to him, in the fall of 1989.
Based on the evidence presented and the factfinder's weight and credibility determinations, we affirm the Commissioner's decision entitling Lloyd to the full-time twelve-month zoning administrator position.
4. Damages
The County argues that even if Lloyd is entitled to twelve-month employment, excessive damages were awarded him. A veteran is not entitled to double recovery. Myers v. City of Oakdale , 465 N.W.2d 702, 706 (Minn.App. 1991), review denied (Minn. Apr. 18, 1991). The purpose of the VPA is to provide security in public employment, not double recovery. Lewis v. Minneapolis Bd. of Educ. , 408 N.W.2d 905, 910 (Minn.App. 1987), review denied (Minn. Sept. 23, 1987). To avoid double recovery, it is proper to offset the amount the employer owes by the amount the employee earned during the relevant period. Id.
The Commissioner concluded that Lloyd is entitled to back wages for the months of December through March of each year beginning January 16, 1990. However, the ALJ's Finding of Fact No. 14 states that by using accumulated vacation and compensatory time, Lloyd remained in paid employment status each year for varying periods during December through March. The County contends that because Lloyd was already paid for portions of those periods, the award of full salary for the four months of each year results in at least partial double recovery.
At oral argument counsel agreed that the effect, if any, of such unemployment compensation Lloyd may have received for periods within his annual four month off-duty time is not before this court.
Neither the Commissioner nor the ALJ made findings on whether the damage award granted to Lloyd results in double recovery to any extent for the four months of each year when Lloyd was off the job but receiving payment for accrued compensatory time and vacation. We understand that the County made the payments and apparently allowed Lloyd payment for accrued compensation time and vacation even though he remained an employee of the County. The County nevertheless insists that Lloyd's damage award must be reduced by the compensation he received for his accrued compensatory time and vacation, which he redeemed during the annual four months he was off the job. This dispute may involve official County personnel policies that are not of record. In short, we cannot review the asserted double recovery without pertinent findings of fact and conclusions of law by the factfinder.
We note that the record does contain a copy of the County's collective bargaining agreement, which may or may not affect Lloyd. It states that an employee is not entitled to cash payment in lieu of unused vacation except by mutual agreement by employer and employee or at the termination of an employment relationship. It also places a cap on the number of vacation hours that may be accrued and defines the accumulation of compensatory time. We do not know if similar provisions are in the County personnel policies.
Accordingly, we vacate the damage award and remand to the Commissioner with instructions to make findings of fact and conclusions of law regarding the alleged double recovery, and if necessary based thereon, revise the damage award.