CARREER (JAMES D.) VS. CABINET FOR HEALTH AND FAMILY SERVICES, ET AL.
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RENDERED: JUNE 18, 2010; 10:00 A.M.
TO BE PUBLISHED
MODIFIED: JULY 02, 2010; 10:00 A.M.
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-000155-MR
JAMES D. CARREER
v.
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 07-CI-02025
CABINET FOR HEALTH AND FAMILY SERVICES,
JOHN P. HAMM, APPOINTING AUTHORITY; AND
KENTUCKY PERSONNEL BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: VANMETER, ACTING CHIEF JUDGE; ACREE AND WINE,
JUDGES.
WINE, JUDGE: James D. Carreer appeals from an order of the Franklin Circuit
Court which affirmed a decision by the Kentucky Personnel Board (“the Board”)
dismissing his claim against the Cabinet for Health and Family Services (“the
Cabinet”). Carreer asserts that he was involuntarily transferred and demoted from
his merit position without just cause. We agree with the circuit court, however,
that the Cabinet acted within its statutory authority, that the Board afforded Carreer
all the procedural due process to which he was entitled, and that the Cabinet
presented substantial evidence to show just cause for its action. Hence, we affirm
the circuit court’s order affirming the Board.
Factual and Procedural History
Prior to June 2004, Carreer was a classified merit employee who was
employed as a Staff Assistant 9619, Grade 17, in the Commissioner’s Office in the
Department for Public Health (“DPH”) within the Cabinet for Health Services. His
duties at the time included serving as a personnel and legislative liaison to DPH
Commissioner Dr. Rice Leach. On May 11, 2004, then-Governor Ernie Fletcher
issued an executive order directing that the Cabinet for Health Services and the
Cabinet for Families and Children be merged into the Cabinet for Health and
Family Services.
As the merger and reorganization developed, Carreer’s position was
changed to “Internal Policy Analyst III,” and was to be transferred to the new
Division of Administration and Finance Management. In his new position, Carreer
would perform the same functions and have the same responsibilities. However,
he would no longer report to the DPH Commissioner, but would report to the
division director of the Division of Administration and Finance Management.
Some time in late March 2004, Carreer discovered a draft of a
confidential document which detailed the proposed reorganization of the DPH.
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The document had inadvertently been left at an office copier. Upon finding that
his position was to be moved out of the new Commissioner’s Office, he confronted
Commissioner Leach and several other individuals with his concerns about how
the reorganization would affect his position. At the time, Carreer was told that he
would not be moved out of the Commissioner’s Office. But when the merger and
reorganization plans were finalized in June 2004, he was informed that his position
was to be transferred to the new Division.
After the reorganization plans were announced, Commissioner Leach
resigned as DPH Commissioner and Dr. William Hacker was appointed as Acting
Commissioner on July 1, 2004. Sometime after June 25, 2004, Carreer met with
Dr. John Burt, the new division director and Carreer’s new supervisor in the
Division of Administration and Finance Management. Burt told Carreer that he
would keep his old office and duties, but he needed to re-write his position
description to be consistent with the new designation of Internal Policy Analyst III.
On July 15, 2004, Commissioner Hacker told Carreer that he would be reporting to
the Commissioner half of the time and to Division Director Burt the other half of
the time. Commissioner Hacker also showed Carreer the new position description
of an Internal Policy Analyst. After these meetings, Carreer tendered his notice of
retirement, effective July 31, 2004.
On September 1, 2004, thirty days after Carreer retired, a new Staff
Assistant position was established in the Office of the Health Department
Commissioner. This new position was created to advise the Commissioner on
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handling bio-terrorism and to assist in monitoring $15 to $20 million of funds to
counter bio-terrorism for the newly reorganized DPH.
After learning of the creation of this new position, Carreer brought
this action before the Board on June 5, 2005. In his appeal, Carreer alleged that the
Cabinet’s action amounted to an involuntary transfer and a demotion.
Consequently, he asserted that the action amounted to a penalization under
Kentucky Revised Statute (“KRS”) 18A.095 and that this action amounted to a
constructive discharge. He sought reinstatement to his former position with back
pay. After taking of discovery, the matter was submitted to the hearing officer for
adjudication. The hearing officer issued findings of fact, conclusions of law, and a
recommended order on September 11, 2007.
Since Carreer’s new position had substantially the same duties and
responsibilities and maintained the same pay, the hearing officer concluded that it
was not a demotion. However, the hearing officer agreed with Carreer that the
reclassification of his position amounted to an involuntary transfer under KRS
18A.005(37). The hearing officer further found that the involuntary transfer
amounted to a penalization, KRS 18A.005(24), requiring the Cabinet to show that
it was exercised for cause. However, the hearing officer concluded that the
Cabinet had met that burden. The hearing officer found no evidence that Carreer
had been specifically targeted for disparate treatment. Rather, the hearing officer
found that the transfer was part of a lawfully enacted merger and reorganization of
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the two executive Cabinets. Finally, the hearing officer found that Carreer was not
constructively discharged as a result of the involuntary transfer.
Thereafter, the Board adopted the hearing officer’s findings of fact
and conclusions of law. Carreer appealed from the Board’s final order to the
Franklin Circuit Court pursuant to KRS 13B.140. The circuit court affirmed the
Board’s order on November 26, 2008. Carreer now appeals to this Court.
The Cabinet’s failure to give written notice of the action was not made moot
by Carreer’s resignation
As an initial matter, Carreer first argues that the circuit court erred in
finding that the involuntary transfer was not technically a “penalization”, because
Carreer resigned before the transfer became effective. In its opinion and order, the
circuit court concluded that Carreer was not technically penalized within the
meaning of KRS 18A.005(24) because his resignation became effective before the
transfer took effect. However, this conclusion conflicts with the Board’s finding
that Carreer was penalized within the meaning of the statute. He was subjected to
an involuntary transfer. Furthermore, while his pay, duties and responsibilities
remained the same, his position was changed to a lower grade. Thus, the trial
court’s contrary determination was clearly erroneous.
However, the issue does not affect the outcome of this appeal.
Although the trial court erroneously found that Carreer had not been penalized, the
Board found that Carreer had been penalized by the involuntary transfer. From
this conclusion, the Board determined that the Cabinet had the burden of showing
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that there was just cause for the transfer. Furthermore, the circuit court addressed
the other issues presented in Carreer’s appeal even though it found that Carreer had
not been penalized.
As thus presented, the question of when Carreer was penalized is
relevant only to determine when the Cabinet was required to give him written
notice and when the time for an appeal commenced. Since Carreer was penalized
within the meaning of the statute, the Cabinet was required to give him written
notice setting out the reasons for the penalization and his right to appeal. KRS
18A.095(7) & (8). Ordinarily, an employee has sixty days to appeal from the
penalization, running from the date he receives the written notice. KRS
18A.095(8)(d). If the employee has not received the required written notice, he
still must file his appeal with the Board within one year from the date of the
penalization or from the date that he reasonably should have known of the
penalization. KRS 18A.095(29). See also Com., Department of Revenue, Finance
and Administration Cabinet v. McDonald, 304 S.W.3d 62 (Ky. App. 2009).
Here, the Cabinet gave Carreer oral notice of the reorganization on
July 16, 2004. Since Carreer’s resignation became effective as of July 31, 2004,
the Cabinet did not give him the required written notice. The Cabinet maintains
that it had sixty days to complete necessary personnel actions, 101 KAR 2:020 §1,
and that it was not required to give Carreer the written notice until the action
became final. We need not reach this issue, however, because the Cabinet does not
argue that Carreer’s appeal was untimely. Thus, any question about the effect of
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Carreer’s resignation on the Cabinet’s obligation to give written notice is not
relevant to this appeal.
Standard of Review
Thus, we turn to the substantive issues presented in this appeal.
Judicial review of an administrative decision is limited to a determination of
whether the agency acted within the constraints of its statutory powers, whether the
agency’s procedures afforded procedural due process, and whether the agency’s
decision is supported by substantial evidence of record. Bowling v. Natural
Resources and Environmental Protection Cabinet, 891 S.W.2d 406, 410 (Ky. App.
1995). See also KRS 13B.150(2). Carreer challenges the Board’s order on each of
these grounds.
The Cabinet acted within its statutory authority
Carreer first argues that the Cabinet cannot reclassify his position
except as provided by KRS 18A.110(7)(a). Since the Cabinet’s attempt to
reclassify his position did not comply with the statute, he maintains that the
Cabinet’s action exceeded its authority and therefore is void. See also
Commonwealth, Education & Humanities Cabinet Dept. of Education v. Gobert,
979 S.W.2d 922, 926 (Ky. App. 1998).
In support of this argument, Carreer relies on KRS 18A.110(7), which
sets out the requirements for administrative regulations governing the classified
service. Subsection (7)(a) requires, among other things, that the secretary shall
allocate the position of every employee in the classified service to one of the
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classes in the plan. The subsection further provides that “[t]he secretary shall
reallocate existing positions, after consultation with appointing authorities, when it
is determined that they are incorrectly allocated, and there has been no substantial
change in duties from those in effect when such positions were last classified.” In
Gobert, supra, this Court held that these findings are a prerequisite to any
reclassification of a position, and any attempt to reclassify a position without
making these findings is void. Id. at 926.
However, KRS 18A.110(7)(a) governs modification of job
classifications with existing governmental agencies. Likewise, Gobert involved an
attempt to change a job classification after the position had been posted. The
present case, on the other hand, involves the reallocation and transfer of a position
pursuant to a reorganization of state government organizational structures. KRS
12.028 specifically sets out the procedure for implementing such changes. While
such reorganizations are being implemented, the head of any department is
authorized to “abolish unnecessary offices and positions, transfer officers and
employees between positions, and change the duties, titles and compensation of
existing offices and positions . . . .” KRS 12.060(2). The merger and
reorganization of the Cabinet for Families and Children and the Cabinet for Health
Services was accomplished pursuant to these sections. Consequently, the
provisions of KRS 18A.110(7) were not applicable.
The Board afforded Carreer his procedural due process rights
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Carreer next argues that the Cabinet failed to afford him procedural
due process. During the discovery process at the administrative level, Carreer
submitted requests for admissions and interrogatories seeking to determine the
identity of the person who made the decision to transfer his position. The Cabinet
initially identified Deputy Secretary Shawn Crouch as the decision-maker. When
Crouch stated that he was not the decision-maker, the Cabinet then identified
Commissioner Leach as the decision-maker. Commissioner Leach testified that he
did not make the decision, but he believed the decision had been made by
Secretary Mark D. Birdwhistle. However, Secretary Birdwhistle testified that he
did not make the decision to transfer Carreer’s position.
Although other individuals testified about the process surrounding the
organization, the Cabinet did not identify the specific individual who made the
decision to transfer his position. Carreer maintains that he was entitled to this
information to rebut the Cabinet’s evidence that there was just cause for the
transfer. Carreer contends that the Cabinet’s failure to provide this information
deprived him of his due process right to confront and cross-examine witnesses.
But as the circuit court noted, there was no evidence of any conscious
or orchestrated move directed specifically toward Carreer or any particular state
employee. The only evidence of record was that Carreer’s position was transferred
and reclassified as part of a reorganization that affected a number of employees.
No single individual made the decision to transfer his position. Carreer was
permitted to call or cross-examine all of the individuals who were involved with
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the reorganization process.1 Carreer does not show that the Cabinet failed to
disclose any other person who was involved with the decision. Therefore, we
conclude that the administrative proceedings satisfied Carreer’s due process rights.
There was substantial admissible evidence supporting the Board’s finding that
the transfer was for just cause
Thus, we turn to the central question presented in this case: the
sufficiency of the evidence supporting the Board’s finding that Carreer’s transfer
was for just cause. There is no question that the reclassification of Carreer’s
position amounted to an involuntary transfer and a penalization within the meaning
of KRS 18A.005.2 A classified employee may not be penalized except for cause.
1
The Cabinet and Carreer called numerous witnesses during the administrative proceedings. In
addition to Deputy Secretary Crouch, the Cabinet called five other individuals who were
involved in the reorganization of the Cabinet: Trinta Cox, Personnel Branch Manager of the
Office of Human Resource Management in the CHFS; Sarah Wilding, special assistant to the
Health Department Commissioner; Dr. Hacker, acting Commissioner of Public Health; Dr. Burt,
division director for the Department of Administration and Finance Management; and Donna
Mulder, executive secretary to the Commissioner for Public Health. Carreer called Dr. Leach,
Secretary Birdwhistle, and eight other witnesses: Charles Kendall, the Staff Assistant hired by
the Commissioner’s office after Carreer’s retirement; Gloria S. Clark, Administrative Specialist
in the Division of Administration and Financial Management; Samuel Burnette, former assistant
Director of the Division of Public Implemention and Safety; Robert L. Nelson, Administrative
Section Supervisor in the Department of Public Health; Beverly Stone, division secretary for
local health operation in the Department of Public Health; Steve Davis, Deputy Commissioner
for the Department of Public Health; Paul Royce, Assistant Director of Epidemiology and Health
Planning; and Marvin Miller, Assistant Director of Adult and Child Health Improvement.
Carreer also testified on his own behalf. Each of these witnesses was subject to crossexamination.
2
Carreer’s position as a Staff Assistant was classified as Grade 17. His proposed new position
of Internal Policy Analyst III was classified as Grade 15. KRS 18A.005(11) defines “demotion”
to mean “a change in the rank of an employee from a position in one (1) class to a position in
another class having a lower minimum salary range or less discretion or responsibility.” Carreer
did not argue that the proposed change in his class would amount to a demotion, but only that the
transfer would assign him to a lower-level division without direct access to the DPH
Commissioner. The Board disagreed, finding Carreer was not demoted because he would be
performing substantially the same duties at the same pay. The only difference would be the
supervisor to whom he reported. Since Carreer does not argue that the change in class alone
would have constituted a demotion, we not address this issue. Moreover, since the Board found
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KRS 18A.095(2). The Board found that the Cabinet had met is burden of proving
that there was just cause for the penalization. In particular, the Board found that
the restructuring and transfer of Carreer’s position served a legitimate public
purpose: to improve the economy and efficiency of operations within the merged
Cabinet.
The reorganization strategy was designed to address several issues
which existed in the former Cabinets. First, there were inconsistencies in the
organizational structures of various departments. Second, there were multiple staff
who were reporting directly to the Secretary and the Commissioner. The
reorganization was designed to streamline the administrative structure and combine
related divisions and functions into a single division. Finally, the Board found no
evidence that Carreer had been singled out for different treatment than other
employees affected by the reorganization.
Carreer challenges the sufficiency of the evidence supporting these
conclusions on two related grounds. First, since the actual decision-maker did not
testify, Carreer argues that the Board’s findings as to why he was transferred were
based on hearsay. And for the same reason, he asserts that the Board’s findings
were based on conjecture and upon evidence outside of the record.
We agree with the circuit court that the Board’s findings were
supported by more than hearsay evidence or conjecture. As previously noted, the
that Carreer was penalized within the meaning of KRS 18A.005(24), the Cabinet bore the burden
of proof of showing cause for the action regardless of whether it was a demotion or an
involuntary transfer.
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Cabinet and Carreer called all of the individuals who were involved with the
reorganization. In addition to their testimony, the Cabinet introduced the
Executive Order, organizational charts and forms of requests for personnel action.
While no one person took responsibility for making the decision to transfer
Carreer’s position, the Cabinet fully documented its reasons for the reorganization
The Board found that the stated reasons for the reorganization were credible.
Nevertheless, Carreer contends that the Cabinet’s justifications for the
reorganization were mired in inconsistencies. He contends that the reorganization
did not consistently combine administrative and financial functions into a new
division, but only for the Department for Public Health. He also notes that a new
staff assistant position was created in the Commissioner’s Office only thirty days
after he resigned. Carreer argues that these inconsistencies demonstrate that the
Cabinet’s stated reasons for the reorganization were not worthy of credence.
Our standard of review for evaluating the circuit court’s decision to
uphold the Personnel Board’s ruling is whether there is substantial evidence in the
record to support the Board’s findings. Kentucky Commission on Human Rights v.
Fraser, 625 S.W.2d 852, 856 (Ky. 1981). If there is substantial evidence to
support the findings, they will be upheld, even though there may be conflicting
evidence in the record. Id. It is important to note that “the fact that [we] may not
have come to the same conclusion regarding the same findings of fact does not
warrant substitution of [our] discretion for that of an administrative agency.”
Kentucky Unemployment Insurance Commission v. Landmark Community
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Newspapers of Kentucky, Inc., 91 S.W.3d 575, 582 (Ky. 2002). As fact-finder, the
Board is afforded great latitude in its evaluation of the evidence heard and the
credibility of the witnesses appearing before it. Kentucky State Racing
Commission v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972). The court shall not
substitute its judgment for that of the agency as to the weight of the evidence on
questions of fact. KRS 13B.150.
It is not the role of the Board or the courts to judge the wisdom or the
efficacy of the Cabinet’s reorganization program. The only question is whether the
Cabinet met its burden of proving that there was just cause for the reorganization,
that it was not implemented in an arbitrary or capricious manner, and that it was
not tainted by any improper motive. Although there was evidence to the contrary,
we agree with the circuit court that there was substantial evidence supporting the
Board’s conclusion that the Cabinet met its burden of proof. The inconsistencies
in how the plan was implemented merely go to the weight and credibility of the
evidence, which was a matter for the Board to decide.
Furthermore, the Cabinet presented evidence explaining the
subsequent creation of a Staff Assistant position in the DPH Commissioner’s
office. The new staff assistant position was created to assist the DPH
Commissioner in the area of emergency preparedness. Charles Kendell was hired
to fill the new position. His duties were to advise the Commissioner on matters
pertaining to bio-terrorism, the relationship of the Cabinet to other cabinets, and
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divisions within the department. While some of Kendell’s duties were similar to
those which Carreer performed, the focus of the new position was different.
The creation of this new position does tend to undermine the
Cabinet’s contention that the reorganization would reduce the number of
employees who reported directly to the Secretary or the DPH Commissioner.
Likewise, the creation of the new position runs counter to the Cabinet’s stated goal
of grouping administrative and financial functions into a single division. However,
the new position was significantly different from Carreer’s position. And given the
specialized duties of the position, the Cabinet stated a reasonable basis for
directing that the new Staff Assistant would continue to report directly to the DPH
Commissioner. Under the circumstances, we cannot find that this evidence would
compel a finding that the Cabinet’s decision was arbitrary or capricious.
Therefore, the circuit court properly affirmed the Board’s order dismissing
Carreer’s claims.
Accordingly, the November 25, 2008 opinion and order by the
Franklin Circuit Court is affirmed.
ALL CONCUR.
BRIEFS AND ORAL ARGUMENT
FOR APPELLANT:
BRIEF AND ORAL ARGUMENT
FOR APPELLEE:
James D. Carreer
Shelbyville, Kentucky
Alea Amber Arnett
Frankfort, Kentucky
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