Lower than expected state revenues in 2008 and other conditions led to a state budget deficit that resulted in several agency-wide job abolishments, which led to many appeals to the State Personnel Board of Review (SPBR). Many of those cases have been finally decided and provide guidance on questions that bedevil human resource employees.1 Reviewing the body of decisions as a whole, some themes emerge that will help state agencies as they undertake abolishments in the future.
An emphasis on fairness. The few abolishment and layoff cases that state agencies lost over the last two years were lost because the SPBR found that commonplace rules of “fairness” were violated. Of course, neither the Ohio Revised Code nor the Ohio Administrative Code defines or even references fairness, yet in several decisions the lack of fairness proved fatal to an otherwise sound abolishment.
It’s probably no surprise that SPBR expects that all classified employees will be treated the same. Most would agree that equal treatment is smart in the employment world. Yet, SPBR’s application of this abiding principle was surprising in two appeals. In one appeal, an employee whose position was abolished was offered an opportunity to take a bargaining unit position. He declined. Another employee, whose position was also abolished, accepted the opportunity to take a second, separate bargaining unit job. The employer permitted the second employee to work in his original, abolished position for an additional month beyond the original abolishment date, because the bargaining unit position had not yet been established. In contrast the layoff date for the employee who refused to accept a lower position never changed. The SPBR found that the employees were similarly situated but treated differently; it ordered the employer to pay the appellant who declined the bargaining unit position one month of salary.
In another case, the SPBR Administrative Law Judge (ALJ) found bad faith when two employees in the same classification were notified that their respective positions were going to be abolished, but one employee negotiated a year long delay of the abolishment. After the employer filed objections, the SPBR, with one dissent, found that there was no bad faith. Yet, the fact that the ALJ found the mere difference in treatment showed bad faith, even though there was no causal relationship between the treatment received by the other employee and the appellant’s abolishment or layoff, suggests that fairness issues will continue to trouble SPBR ALJs.
Several SPBR decisions show that the fairness standard will be equally applied to employers and employees. In one mass layoff, several employees were offered displacement positions that were identical to the positions from which they were abolished, with one small difference. The difference was that the employees were to report to a different, albeit nearby, location of the appointing authority. Given that the distance to the new work location was not too far, SPBR held that the employees experienced no adverse employment action through the abolishment of their positions. The employees’ appeals were dismissed.
Similarly, the SPBR dismissed appeals by several employees of their layoff or abolishment after they took advantage of an employer’s early retirement incentive plan. SPBR reasoned that employees cannot claim harm by the employer in the form of an abolishment or layoff, and then take advantage of a benefit that is predicated upon their termination of the employment relationship.
Those cases focused on fairness during the abolishment process itself. SPBR, however, has also taken to looking at how employees were treated prior to the abolishment. In one case, two months before the abolishment rationale statement and retention points were submitted to the Department of Administrative Services, an employer completed the selection process for a position, promoting the selected candidate into the next level of his classification series. Admittedly, there was confusion in the testimony about whether Governor Strickland’s hiring freeze applied to this promotion, but the decision issued by SPBR imparts a cautionary lesson.
The SPBR held that the employer “abused its discretion” by going forward with the promotion, even though there was little evidence at the time of the promotion that it would affect the appellant.
The promotion, in fact, had a significant effect on the appellant. Had the promotion not taken place, the appellant would have displaced the selected candidate, since he possessed more retention points than the promoted employee. This case has been appealed to the Franklin County Court of Common Pleas on several issues.
In an appeal of a displacement that has not yet been heard by SPBR, the ALJ asked the employer to identify all positions in the classification that had been moved in the six months prior to the submission of the abolishment rationale and retention point calculation, and explain why the positions had been moved. Looking this far back may feel arbitrary to employers, but the SPBR believes it is reasonable in the name of assuring that the civil service system is not manipulated to protect certain employees from layoffs or subject others to it. Knowing that SPBR might look this far back at the movement of positions in classifications that later become identified for abolishment should prompt state employers to take extra care to document why changes were made.
Needed Guidance. One question that troubled human resource staff has been definitively answered by SPBR. The question arose from this fact pattern: Two employees in the same classification had their positions subjected to abolishment. One employee was more recently promoted into the position, and at the time of the election of displacement rights was serving a probationary period. By the projected effective date of the abolishment, however, this employee would no longer be probationary, plus he had more retention points than the other employee, who had completed probation much earlier. The SPBR reasoned that since the employee, by operation of law, became permanent by or before the effective date of the abolishment, the effective date should be used to determine probationary status for displacement purposes. Therefore, the employee who had most recently completed probation, and had higher retention points, was found to have greater displacement rights.
Another question that was answered concerned vacancies. R.C. § 124.321(3) and Ohio Adm. Code 123:1-41-12 (a) provide a right to an employee to displace into a vacancy. However, it has never been absolutely clear until now whether the employee or the employer had the right to choose which vacancy the employee could take if there was more than one. The SPBR agreed that since the Ohio Administrative Code and Revised Code are silent on this issue, discretion lies with the appointing authority. It might be worth noting though, consistent with the overriding concern for fairness that the SPBR has shown, sticking an employee in a highly undesirable location when there is evidence of personality differences or some other dispute, might strike an ALJ as an “abuse of discretion” or “bad faith.”
Nicole S. Moss
Associate Assistant Attorney General
1 Because some of the cases discussed in this article have not been decided, few case names will be discussed.