IN THE MATTER OF SHERYL MANEICE

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN THE MATTER OF

SHERYL MANEICE1 AND

TERRENCE GILLIAM,

MERCER COUNTY BOARD

OF SOCIAL SERVICES.

January 16, 2014

Submitted January 7, 2014 Decided

Before Judges Reisner and Carroll.

On appeal from the Civil Service Commission, Docket No. 2011-175.

Terrence Gilliam, appellant pro se.

Joshua L. Markowitz, Chief Counsel, attorney for respondent Mercer County Board of Social Services.

John J. Hoffman, Acting Attorney General, attorney for respondent New Jersey Civil Service Commission (Todd A. Wigder, Deputy Attorney General, on the brief).

PER CURIAM

Appellant Terrence Gilliam was previously employed as a social worker by respondent Mercer County Board of Social Services (MCBSS). He appeals from the December 21, 2011 final agency decision of the Civil Service Commission (Commission) upholding his layoff by the MCBSS as part of a reduction in force for reasons of economy and efficiency. The Commission concluded that Gilliam failed to meet his burden to prove that the layoff was implemented in bad faith. Applying the customary deferential standard of review that governs appeals from administrative agency decisions, we affirm the Commission's decision.

Gilliam commenced employment with the MCBSS as a social worker on September 23, 2008. On May 10, 2010, Frank Cirillo, director of the MCBSS, advised the Commission's Division of State and Local Operations (SLO) that budget constraints presented a likelihood of layoffs. Due to extensive decreases in funding totaling $4 million, the MCBSS submitted a layoff plan to the SLO, to be effective as of July 1, 2010. Most of the positions affected by the funding cuts were social workers, and consequently the layoff plan proposed to eliminate twenty-one Social Worker and Social Worker Supervisor positions, including those in the Medical Transportation Unit where Gilliam worked. The layoff plan was approved by the Commission, and notices were sent to the affected employees. On June 23, 2010, Gilliam was advised that his Social Services Supervisor had been laid off, and had been granted a demotional displacement right to take his position. As a result, Gilliam was laid off from his permanent position as a social worker in the Medical Transportation Unit as of July 1, 2010.

On July 10, 2010, Gilliam appealed his layoff to the Commission, arguing that it had been undertaken in "bad faith."2 The Commission transferred the appeal to the Office of Administrative Law (OAL). Essentially, Gilliam contended that the MCBSS administrators showed favoritism to certain employees. Specifically, Debra Anderson, a non-permanent social worker, was allowed to demote into a lower position, and Vincent Conte and Pamela Riley, two provisional employees with less seniority, remained employed and were unaffected by the layoff. Gilliam maintained that he should have been offered any available position, especially that of Human Services Specialist 1 (HSS1), because he was a permanent employee who had seniority over others. In opposing Gilliam's appeal, the MCBSS asserted that it had applied layoff rights and seniority correctly, and had fully complied with all statutory, Civil Service, and union requirements.

Hearings on the appeal were held before the OAL on March 8, 2011, April 15, 2011, and June 10, 2011. At the hearing, Cirillo, the MCBSS director, testified that the affected employees had been laid off specifically due to the loss of funding, with no personal animus. He explained that the Medical Transportation Unit, in which Gilliam worked, was targeted for layoff when its funding was eliminated as a result of privatization. "[I]t was a hundred percent matched funding from state and federal offices that was no longer there. So that's what was targeted. They were the titles funded by those funding sources, and they were primarily social work titles, with the exception of some clerical titles and others."

Cirillo indicated that the MCBSS was responsibile for determining employees' layoff rights and displacement opportunities, but it was the Commission that decided which employees would be laid off or separated. He maintained that the MCBSS complied with N.J.A.C. 4A:8-1.3(b) and attempted to lessen the impact of the layoffs by placing employees without permanent status, and those with the least seniority, in positions that were being vacated, reclassified, or abolished. He further testified that there had been numerous meetings involving the MCBSS, the Commission, and the union, during which targeted employees were advised of their options, including voluntary demotion.

Union President Beverly Sample was called to testify regarding the steps that had been taken to reduce the number of positions affected by the layoff. She stated that the union retained counsel, and met with its members and MCBSS management. It informed employees of their options, which included being placed on a rehire list or, in some cases, taking clerical positions. When asked specifically if she had made it known to social workers whether they had a right to demote to HSS1 or clerical positions, Sample responded that it depended on their status. According to Sample, seniority is determined by Civil Service, and Civil Service "trumps [the] union contract," which contained a clause specifically addressing seniority. She also expressed that the union's role was to ensure that its 400 members were treated fairly. Sample believed that management had not unfairly targeted anyone, had acted in good faith, and that the union was not in collusion with management. The union agreed with the layoff plan submitted by the MCBSS, and ultimately it was approved by the Commission.

Joe Marion Hill, Jr., the Assistant Director of the Division of SLO, testified that the Commission's main objective is to ensure proper application of its rules to the end that employees are appointed on a merit-based system. The appointing authority is generally required to impose layoffs in inverse order of seniority, and here the MCBSS had complied with seniority rules and statutory requirements. He was familiar with N.J.A.C. 4A:8-1.3, which provides that appointing authorities shall lessen the impact of layoffs by implementing, as appropriate, pre-layoff actions. Available options include, but are not limited to, separating non-permanent employees. Emphasizing the "as appropriate" qualifying language of the regulation, Hill indicated that a provisional employee would have "every right to remain in that position if the [appointing] agency feels that that provisional is still essential to the functioning of the agency." To his knowledge, other pre-layoff actions considered by the MCBSS in this case included temporary furloughs and job-sharing, both of which would have adversely impacted the customers served by it had they been implemented.

Delores G. Smith is the Assistant Personnel Officer for the MCBSS, whose role in the layoff was to gather information and assist employees and the agency wherever needed. Having reviewed all the layoffs, she was satisfied that they were done in good faith, that no information was withheld from any employee, nor was any favoritism shown. She testified that "[a]n inordinate amount of time was devoted by the union, by administration, and [] Civil Service, to make sure that these layoffs were done properly." Here, social workers were being laid off in the Medical Transport Unit, where the funding had been lost.

Smith also discussed Debra Anderson, a social worker in provisional status who was subject to layoff. Anderson had voluntarily demoted to another department. Smith stated that, although a permanent employee would have been awarded the position over Anderson, there was no evidence that any permanent employee ever posted for that position.

As for Conte and Riley, although they were provisional HSS1 employees, they were not laid off because the layoff was targeted for social worker positions in the Medical Transport Unit, not for HSS1 positions. Further, according to Smith, an employee has to "have been in that title in order to go back to that title," so that a social worker could not return to an HSS1 position if he never previously held it.

Evelyn Woods has been employed by the Commission since 1973, and currently serves as supervisor in the SLO division. She testified that it is the Commission's function to review the layoff plan submitted by an appointing authority to "determine whether any mistakes were made." Here, the Commission spent "a considerable amount of time going over this layoff plan," and "took every reasonable step to ensure impartiality." The Commission was satisfied with the plan that the MCBSS had implemented, and approved it.

Conte and Riley both testified at the hearing. Conte presently works as a HSS1 in the Income Maintenance unit of the MCBSS. He had originally been hired as a seasonal employee in December 2009. Although he received a layoff notice and was laid off, the following week he was notified that his position was again available, and he was hired back to his same position.

Riley had previously worked for the MCBSS, and had been laid off twice in the past. In her latest stint, she was hired as a HSS1 in the child support unit in January 2010. Although she had earlier received a layoff notice, at the end of June 2010, she was called into the personnel office and advised that she would not be affected by the layoff.

In his testimony at the OAL hearing, Gilliam maintained that the MCBSS had acted in bad faith because it had not separated provisional or HSS1 employees with less seniority than Gilliam. He referenced a list of ten employees having less seniority that were still employed at the MCBSS, including Conte and Riley. However, he conceded that none of these employees were social workers, and that all were either in clerical or HSS1 positions. He also acknowledged that he had received documentation that a social worker could not replace, or demote to, the title of HSS1. In sum, Gilliam asserted that the layoff had not been implemented in a fair and just manner.

In her Initial Decision, the Administrative Law Judge (ALJ) concluded that Gilliam proved by a preponderance of the credible evidence that his layoff was conducted in bad faith. The ALJ found that (1) the MCBSS did not separate non-permanent employees or take other action that would lessen the impact of the layoffs; (2) there was bad faith in finding Anderson another title in which to serve, when she was a provisional employee and Gilliam was permanent and was not offered the same opportunity; (3) there was bad faith in failing to separate provisional employees such as Conte and Riley prior to layoffs, in order to lessen the extent and impact of the layoffs; and (4) HSSs were protected and saved from separation to the detriment of social workers who were targeted for layoff, contrary to N.J.S.A. 11A:8-1 and 11A:8-2.

The MCBSS filed exceptions and, in a December 21, 2011 final decision, the Commission reversed the ALJ's determination and upheld the layoffs. The Commission found that it was undisputed that the layoffs were for reasons of economy and efficiency, and that the MCBSS faced a $4 million loss in funding, which primarily affected the Medical Transportation Unit and the social workers in that unit. It then discussed the implementation of the required layoffs, and concluded that Gilliam had failed to meet his burden of proving bad faith. The Commission reasoned:

Initially, contrary to the ALJ's findings, N.J.S.A. 11A:8-2a(2) does not mandate that an appointing authority separate non-permanent employees in titles not affected by a layoff. Rather, an appointing authority shall lessen the impact of a layoff by implementing pre-layoff actions, which may include separating non-permanent employees. Indeed, retaining a provisional employee may be necessary to meet a critical operational need. Riley and Conte were provisional Human Service Specialists 1. Their positions were not targeted for layoff and no other employee exercised rights to their positions. Thus, they did not have to be separated. Furthermore, Anderson's provisional appointment as a Social Worker was appropriately terminated at the time of the layoff. Although the MCBSS placed Anderson in an interim Account Clerk position, it had no obligation to place permanent employees in titles to which the employees had no rights or offer such positions to laid off employees. It is emphasized that an employee is entitled to displace another individual if the individual is serving in a title to which the employee has rights. . . . In this regard, as revealed in the Classification Support System, a Social Worker has lateral title rights to Social Worker Drug Abuse, Social Worker Drug Abuse and Alcoholism Control, Social Worker Health, Social Case Worker, Social Worker Institutions, and Family Service Worker. A Social Worker also has demotional title rights to Social Service Assistant and Social Service Assistant Typing. Thus, a Social Worker does not have title rights to clerical positions or to Human Services Specialist positions. . . . Therefore, since the record does not demonstrate that the MCBSS violated any laws with respect to separating non-permanent employees or not offering the appellants other positions, the appellants have not established bad faith on the part of the MCBSS.

Furthermore, the ALJ found that Human Services Specialists were saved from layoff without regard to status or seniority to the detriment of Social Workers. It is well established that an appointing authority has the discretion to decide how savings are achieved. The mere fact that Social Workers were targeted does not demonstrate that the appellants' layoffs were for invidious reasons.

[Citations omitted.]

This appeal followed.

"Courts provide the widest possible interpretation of the [Civil Service] Act as it was designed to procure efficient public service and to maintain stability and continuity in ordinary public employment." In re Johnson, 215 N.J. 366, 377 (2013) (citing State Dep t of Civil Serv. v. Clark, 15 N.J. 334, 341 (1954); Aparin v. Cnty. of Gloucester, 345 N.J. Super. 41, 55 (Law Div. 2000), aff d o.b., 345 N.J. Super. 24 (App. Div. 2001)). "In order to reverse an agency's judgment, an appellate court must find the agency's decision to be 'arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole.'" In re Stallworth, 208 N.J. 182, 194 (2011) (alteration in original) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)).

In general, appellate review is limited to determining:

(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[In re Carter, 191 N.J. 474, 482-83 (2007) (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)).]

"'[I]f in reviewing an agency decision an appellate court finds sufficient credible evidence in the record to support the agency's conclusions, that court must uphold those findings even if the court believes that it would have reached a different result.'" In re Carluccio, 426 N.J. Super 15, 24 (App. Div. 2012) (quoting In re Taylor, 158 N.J. 644, 657 (1999)).

In the present case, for the reasons that follow, we conclude that there was nothing arbitrary, capricious, or unreasonable about the Commission's disposition of the dispute.

"A permanent employee may be laid off for economy, efficiency or other related reason." N.J.S.A. 11A:8-1a. Here, Gilliam does not challenge the bona fides of the layoff implemented by the MCBSS. Rather, he concedes that the layoff was for reasons of economy and efficiency, predicated on the massive $4 million funding cut that was visited on the social services agency.

Gilliam also does not dispute the agency's right to abolish his social worker position, or that elimination of that position would achieve significant savings. Rather, he argues on appeal, as he did before the Commission, that the MCBSS failed to implement the layoff in good faith. Specifically, he contends that the MCBSS did not enact any pre-layoff actions that would have prevented his layoff, as mandated by N.J.S.A. 11A:8-2a. Further, he contends that the MCBSS failed to separate non-essential and non-permanent employees, who had less seniority, to the detriment of permanent employees, such as himself, and that he should have been offered placement in a lesser HSS1 position.

Pre-layoff actions are guided by N.J.S.A. 11A:8-2, which provides, "An appointing authority shall lessen the possibility, extent or impact of layoffs by implementing pre-layoff actions, which may include but need not be limited to: (1) initiating a temporary hiring or promotion freeze; (2) separating non-permanent employees; (3) returning provisional employees to their permanent titles; (4) reassigning employees; and (5) assisting potentially affected employees in securing transfers or other employment." N.J.A.C. 4A:8-1.3 mirrors the statute, except that notably it also includes the phrase "as appropriate" before enumerating the pre-layoff actions that the appointing authority may take.

It is clear from our reading of this statutory and regulatory framework that an appointing authority is required to take actions to alleviate the effect of a contemplated layoff. It is equally clear that the listed pre-layoff actions are not mandated, but rather they may be considered along with any other appropriate actions. See, e.g., N.J.S.A. 11A:8-3 ("The commission . . . may adopt rules on voluntary reduced work time or other alternatives to layoffs"). Here, the MCBSS also specifically considered voluntary furloughs and job-sharing as measures to reduce the effect of the layoff. These measures were rejected due to the adverse effect they would have on the customers who were dependent on this social services agency.

In implementing the layoffs, the MCBSS logically targeted the Medical Transportation Unit, and particularly its social worker positions, due to the drastic loss of funding that primarily affected this unit. While Gilliam argues that provisional workers having less seniority, including Conte and Riley, continued to be employed by the MCBSS, he acknowledged in his own testimony that these provisional workers were in clerical and HSS1 titles, and were in units and/or positions that were not affected by the layoffs.

The evidence does not show, nor does Gilliam contend, that social workers having less seniority were retained by the MCBSS, to his detriment. See N.J.S.A. 11A:8-1 ("Permanent employees . . . shall be laid off in inverse order of seniority"). While Anderson had been a provisional social worker, she voluntarily demoted to a lesser position in a different department, and there was no evidence that either Gilliam or any more senior social worker ever applied for that position. Further, we again note that Gilliam did not appeal from the Commission's determination that he had no layoff rights to the HSS1 position.

Where it is shown that a layoff action "is motivated by a bona fide desire to effect economies . . . [t]he presumption of good faith attends the municipal action, and the burden is on petitioner to show bad faith." Greco v. Smith, 40 N.J. Super. 182, 189 (App. Div. 1986) (citations omitted). In the present case, we find sufficient evidence in the record to support the Commission's conclusion that Gilliam failed to prove bad faith by the MCBSS in implementing the layoffs that were indisputably motivated by economic conditions. Rather, the MCBSS considered appropriate pre-layoff actions, and conferred extensively with the union, which deemed the layoff plan fair, and the Commission, which reviewed and approved it.

1 Although a named party, Sheryl Maneice has not pursued an appeal of the Commission's December 21, 2011 final decision, and she is not a party to this current appeal.

2 Pursuant to N.J.S.A. 11A:8-4, a "permanent employee who is laid off . . . shall have the right to appeal the good faith of such layoff to the Civil Service Commission." Gilliam also filed a separate appeal with the Commission of the determination of his layoff rights. The Commission denied that appeal on August 19, 2011, finding that he did not have title rights to clerical positions or to Human Services Specialist 1 (HSS1) positions. Gilliam did not appeal that determination. Thus, the "bad faith" appeal is the only matter before us.