1. Administrative Law--standard of review--whole record test
The standard of review applied by the Court of Appeals to a
State Personnel Commission decision was the whole record test
where, despite the allegation of certain errors of law, the crux
of the petition focused on whether the SPC's final decision was
supported by substantial evidence.
2. Public Officers and Employees--state employee--demotion and
transfer--not politically motivated--causal connection--
speculation
The trial court did not err by determining that a DMV
employee's transfer and demotion were not politically motivated
where the employee had reluctantly accepted a prior transfer from
Asheville to Wilmington, which he did not preserve for review,
immediately began trying to return to Asheville, and eventually
succeeded, although with a demotion. Petitioner satisfied the
first two elements of making a prima facie case in that his was
not a policymaking position and he was sympathetic to the
Republican Party although registered a Democrat (political
affiliation need not be strictly defined along party lines), but
did not show a causal connection between his political
affiliation in that his testimony to that affect was only
speculative.
3. Public Officers and Employees--state employee--demotion and
transfer--just cause
DMV did not act without just cause in demoting and
transferring an employee to Asheville where the employee had
previously worked in Asheville, specifically asked for a transfer
back to Asheville and was willing, however begrudgingly, to
accept a demotion if that was required.
4. Public Officers and Employees--state position--refusal to
hire--not political
The State Personnel Commission and the trial court correctly
concluded that DMV's refusal to hire petitioner for certain
positions in Asheville was not the result of political
discrimination where petitioner made a prima facie case in that
the position was non-policymaking, petitioner is a Republican
party sympathizer, and petitioner demonstrated a causal
connection in that the people hired were related to or knew high
officials in the Democratic Party, but DMV articulated a non-
discriminatory reason for refusing to hire petitioner in that hehad ineffective supervisory skills.
5. Public Officers and Employees--state employee--transfer--
salary reduction--breach of alleged agreement
The contention of a petitioner who was transferred by DMV
with a salary reduction that the reduction violated an agreement
he had with DMV was not addressed in an appeal from a contested
case hearing before the Office of Administrative Hearings and the
State Personnel Commission. Breaches of alleged agreements
between the State an employee are not among the statutorily
listed exclusive grounds for contested case hearings;
furthermore, the administrative law judge did not conclude that
any such agreement ever existed.
6. Public Officers and Employees--state employee--promotion and
demotion within one year--salary level
The salary of a DMV employee should have been adjusted to
its former level where he was promoted from Captain to Inspector
and then demoted to Sergeant within the same year in conjunction
with a move from Asheville to Wilmington and back to Asheville.
According to the plain language of the State Personnel Commission
Rule applicable at that time, petitioner's post-demotion salary
must return to the original salary and it is irrelevant that his
final position as Sergeant was at a lower level than the
beginning position as Captain. The rule applies anytime an
employee is promoted and then demoted to any lower class within
the same year.
Judge HUNTER concurring in the result.
Van Winkle, Buck, Wall, Starnes and Davis, P.A., by Albert L.
Sneed, Jr. and Jennifer W. Moore, for petitioner-appellant.
Attorney General Michael F. Easley, by Assistant Attorney
General Gwendolyn W. Burrell, for respondent-appellee.
LEWIS, Judge.
Petitioner Tony Lee Curtis is employed by the Enforcement
Section of the North Carolina Division of Motor Vehicles ("DMV").
Although he is a registered Democrat, he has several ties to the
Republican Party. In 1992, during the administration of RepublicanGovernor James G. Martin, petitioner was promoted to Captain at the
Asheville Weigh Station. After the present Governor, Democrat
James B. Hunt, Jr., took office in 1993, the DMV, in a letter dated
20 May 1993, informed petitioner he was being transferred to the
Wilmington Weigh Station to serve as Inspector. An internal
reorganization of the Enforcement Section was cited as the reason
for this transfer. The Inspector position to which petitioner was
being transferred actually was a promotion from his previous
position as Captain. Nonetheless, petitioner did not want to move
to Wilmington, as his wife had recently been diagnosed with cancer
and would receive better health insurance benefits with her
employer in Asheville. However, petitioner never filed a formal
grievance contesting this transfer. Instead, he begrudgingly
reported to Wilmington as directed. Petitioner immediately began
efforts to be reassigned back to Asheville. He eventually filed a
request with the DMV for a hardship transfer, in which he stated,
"If taking a demotion to Sergeant will enable me to return to
Asheville I have no complaints what so ever."
Meanwhile, four Inspector positions with the Asheville Weigh
Station opened up in 1993: two in May (before petitioner's
transfer), one in July, and one in August. Petitioner never
applied for the two May openings, but he did apply for the July andAugust openings. However, the DMV did not award petitioner either
of the Inspector positions, noting that his hardship transfer
petition had stated a willingness to accept the position of
Sergeant instead.
The DMV eventually granted petitioner his request to be
transferred back to Asheville, effective 1 September 1993. During
discussions regarding his requested transfer, petitioner claims he
was told that, should he be demoted to Sergeant, his pay would only
decrease a few dollars a month. No specific figures were
discussed. Upon his transfer, however, his annual pay decreased$3175, or some $265 per month.
Petitioner thereafter filed a petition for a contested case
hearing with the Office of Administrative Hearings ("OAH"),
alleging that his transfer and demotion to Asheville were done
without just cause, in violation of N.C. Gen. Stat. § 126-35, and
were politically-motivated, in violation of N.C. Gen. Stat. § 126-
34.1. The Administrative Law Judge ("ALJ") dismissed petitioner's
claims, concluding that the DMV's actions could not have been done
without just cause, nor were they politically-motivated, because
petitioner specifically asked for the transfer and demotion in the
first place. After the State Personnel Commission ("SPC") and the
Superior Court both affirmed the ALJ, this Court reversed. In an
unpublished opinion, we concluded that even voluntary requests for
transfers or demotions can serve as the basis for unjust cause and
political discrimination claims. We also held that petitioner had
adequately raised the issue of political discrimination in the
context of the DMV's refusal to hire petitioner for the Inspector
positions in Asheville that opened up.
On remand, the SPC reviewed the administrative record and
concluded petitioner's demotion and transfer to Asheville were
neither politically-motivated nor done without just cause.
Furthermore, the SPC concluded the DMV's refusal to hire petitioner
for one of the Inspector positions in Asheville was not
politically-motivated. Finally, the SPC concluded that the $265
per month pay cut resulting from his demotion violated no agreement
between him and the DMV, but fell within the salary range set forthby the applicable rules for DMV employees. Upon judicial review in
Superior Court, the trial judge adopted the findings and
conclusions of the SPC and then affirmed its order in every
respect. Petitioner appealed to this Court.
[1]At the outset, we must determine our standard of review.
That standard of review will depend upon the nature of the error
alleged in the petition for judicial review. Dorsey v. UNC-
Wilmington, 122 N.C. App. 58, 62, 468 S.E.2d 557, 559, cert.
denied, 344 N.C. 629, 477 S.E.2d 37 (1996). If errors of law are
alleged, our review is de novo. Id. If the alleged error is that
the final agency decision is not supported by the evidence, we
employ the "whole record" test. Id. Here, although the petition
for judicial review alleges certain errors of law, the crux of the
petition focuses on whether the SPC's final decision was supported
by substantial evidence. Accordingly, the appropriate standard of
review is the "whole record" test. That test requires us to
examine the administrative record and determine whether it contains
substantial evidence to support the agency's decision. Id. at 62,
468 S.E.2d at 560. With this standard in mind, we now proceed to
the merits of petitioner's claims.
[2]We begin by discussing petitioner's demotion and transfer
to Asheville. Significantly, we are not presented with the issue
of petitioner's original transfer to Wilmington. Despite
petitioner's repeated attempts before the ALJ and this Court to
make that an issue, he never filed a grievance contesting that
transfer. Accordingly, the ALJ correctly dismissed that issue asnot properly before him. Petitioner did not appeal that dismissal
or otherwise act to preserve the issue for our review. We
therefore only focus on petitioner's transfer from Wilmington back
to Asheville. In this regard, we will analyze his political
discrimination and unjust cause claims separately.
Our statutes expressly prohibit the demoting of State
employees based upon their political affiliation. N.C. Gen. Stat.
§ 126-34.1(a)(2)(b) (1999). However, our courts have not
heretofore outlined the elements of such a claim. As in the
context of other discrimination claims, we look to federal
decisions for guidance. Dept. of Correction v. Gibson, 308 N.C.
131, 136, 301 S.E.2d 78, 82 (1983). In our federal courts, a prima
facie case of political discrimination requires showing (1) the
employee works for a public agency in a non-policymaking position
(i.e., a position that does not require a particular political
affiliation), (2) the employee had an affiliation with a certain
political party, and (3) the employee's political affiliation was
the cause behind, or motivating factor for, the demotion or other
adverse employment action. Robertson v. Fiore, 62 F.3d 596, 599
(3d Cir. 1995) (per curiam). If the employee makes out a prima
facie case, the burden then shifts to the employer to articulate a
non-discriminatory reason for the adverse action. Graning v.
Sherburne County, 172 F.3d 611, 615 (8th Cir. 1999). The
employer's burden is simply one of production and nothing more.
Gibson, 308 N.C. at 138, 301 S.E.2d at 83. If the employer
satisfies this requirement, the burden then shifts back to theemployee to prove that the reason given was in fact just a pretext.
Graning, 172 F.3d at 615. In other words, the ultimate burden of
persuasion rests with the employee. Gibson, 308 N.C. at 138, 301
S.E.2d at 83.
We conclude petitioner has satisfied the first two elements of
his prima facie case. The position of Inspector is not a
policymaking position for which a particular political affiliation
may be required. Furthermore, petitioner has demonstrated that,
although a registered Democrat, he is in fact more sympathetic to
the Republican Party. In this respect, we disagree with the DMV's
contention that petitioner could not be politically discriminated
against because he and the administration in power were registered
members of the same party. For purposes of political
discrimination claims, an employee's political affiliation need not
be strictly defined along party lines; intra-party discrimination
may also form the basis for a complaint. Robertson, 62 F.3d at
600. This is so because "[t]he danger that employees will abandon
the expression or exercise of their political beliefs to appease
their supervisors is not diminished because a supervisor supports
a different identifiable faction within a party as compared to a
different party altogether." Id.
However, we conclude petitioner has not satisfied the third
element of his prima facie case. There is not substantial evidence
in the record before us to support a causal connection between his
political affiliation and his demotion and transfer back to
Asheville. At the hearing before the ALJ, petitioner admitted thedemotion and transfer was not the product of any disciplinary
actions but was the result of the letters he wrote requesting a
transfer. He even admitted he was willing to quit his job in
Wilmington altogether in order to return to Asheville. Although
his transfer request may not have been truly voluntary, instead
being compelled by his wife's circumstances, the only testimony
suggesting any sort of political discrimination is petitioner's
testimony to the following effect:
Q: Why then did you
write that letter
[requesting a transfer], marked as
Exhibit 25?
A: After seeing the
positions being filled
up here [in Asheville] with people I knew
that played politics, I knew I wouldn't
be able to get back as an inspector. So
that was my alternative, to come back as
a sergeant.
(1 Tr. at 30). This testimony amounts to nothing more than
speculation. Absent more specific evidence, we cannot say
petitioner met his burden of showing a causal connection. We
therefore uphold the trial court's determination that petitioner's
demotion and transfer to Asheville was not politically-motivated.
[3]We next determine whether his demotion and transfer were
done without just cause, in violation of N.C. Gen. Stat. § 126-35.
We reject this claim as well. Petitioner had specifically asked
for a transfer back to Asheville and was willing, however
begrudgingly, to accept a demotion if that was required. The DMV
thus gave petitioner exactly what he sought -- a position in
Asheville. By accommodating his request, the DMV did not act
without just cause. [4]Having rejected petitioner's claims based upon his
demotion and transfer to Asheville, we now consider whether the
DMV's refusal to hire petitioner for one of the Inspector positions
in Asheville was the product of political discrimination. Although
four such positions in Asheville became available, only the July
1993 and August 1993 positions are ones for which petitioner
applied. Accordingly, we limit our review to a consideration of
those two.
We conclude petitioner has made out a prima facie case of
political discrimination as to both the July and August openings.
Our previous analysis as to the first two elements is equally
applicable here: "Inspector" is a non-policymaking position, and
petitioner is a Republican Party sympathizer. Furthermore,
petitioner has demonstrated a causal connection between his
political affiliation and the DMV's refusal to hire him. In
particular, petitioner testified that Joe Whitt, the person to whom
the July position was eventually offered, is the brother of a
precinct chairman of the Democratic Party in Buncombe County. As
for the August position, petitioner testified that Joe Austin, the
one eventually hired, "knows a lot of people," including several
high-ranking officials in the Democratic Party. (1 Tr. at 39).
This testimony was sufficient to fulfill the causal connection
requirement.
Once petitioner satisfied the three elements of his prima
facie case, it was then incumbent upon the DMV to articulate some
non-discriminatory reason for refusing to hire petitioner. Graning, 172 F.3d at 615. The DMV did so. Arnold Craig, former
district supervisor in Asheville, testified that petitioner "was
weak as a supervisor” and could not manage the weigh station. (1
Tr. at 176). Specifically, according to Mr. Craig, petitioner "was
having difficulty in supervising the men out there. The men
weren't responsive." (1 Tr. at 176). Ineffective supervisory
skills was a legitimate non-discriminatory reason to satisfy the
DMV's burden. The burden then shifted back to petitioner to prove
the DMV's alleged reason was in fact pretextual. In addressing
this alleged reason,
[t]he trier of fact is not at liberty to
review the soundness or reasonableness of an
employer's business judgment when it considers
whether alleged disparate treatment is a
pretext for discrimination.
. . . “While an employer's judgment or
course of action may seem poor or erroneous to
outsiders, the relevant question is simply
whether the given reason was a pretext for
illegal discrimination. The employer's stated
legitimate reason must be reasonably
articulated and nondiscriminatory, but does
not have to be a reason that the judge or
jurors would act upon or approve.”
Gibson, 308 N.C. at 140, 301 S.E.2d at 84 (quoting Loeb v. Textron,
Inc., 600 F.2d 1003, 1012 n.6 (1st Cir. 1979)). Here, the SPC
ultimately concluded petitioner failed to prove that the DMV's
reason was pretextual. Upon our review of the entire record, we
hold there was substantial evidence to support this conclusion.
Petitioner was repeatedly asked for specific facts to back up his
allegations of political discrimination. His only response was, "I
guess the biggest fact is me being around for twenty-three years,and me knowing how things work out with politics, the rumor mill,
that sort of thing." (1 Tr. at 57). This scant evidence based
more on innuendo and conjecture than on actual facts is
insufficient to overturn the SPC's and the trial court's
conclusions.
[5]Finally, we turn to petitioner's decrease in pay as a
result of his demotion and transfer to Asheville. He first
contends his $265 per month salary reduction violated an agreement
he had with the DMV that his pay would only decrease a few dollars
a month. We need not address this specific contention as it is not
properly before us. This is an appeal from a contested case
hearing before the OAH and the SPC. N.C. Gen. Stat. § 126-34.1
lists the exclusive grounds for contested case hearings, including
harassment, dismissals, demotions, reductions in force,
suspensions, retaliatory actions, and certain other unlawful State
employment practices. Breaches of alleged agreements between the
State and the employee (even if regarding pay) are not among those
grounds specifically listed. Accordingly, neither the OAH, the
SPC, the Superior Court, nor this Court has subject matter
jurisdiction to consider this argument. Furthermore, the ALJ --
upon whose findings everything else is based -- nowhere even
concluded that any such "agreement" ever existed.
[6]In the alternative, petitioner claims his resultant pay
cut was not within the salary range prescribed by the SPC's own
rules regarding pay. Prior to his transfer to Wilmington,
petitioner's salary was $34,768. Following this transfer, at whichtime he was also promoted to Inspector, he earned $35,463 per year.
And following his demotion and return to Asheville, his salary
dropped to $32,288. Petitioner claims the applicable rules
required that, upon his return to Asheville, his pay should have
only been reduced to $34,768, the amount he was earning before his
initial transfer. We agree.
In 1993, the applicable SPC rules stated:
When an employee is promoted and subsequently
demoted or reassigned, or is reallocated
upward and subsequently reallocated downward,
demoted or reassigned to any lower class
within one year, the following shall apply:
(1) &nbs
p; the salary shall revert to the
salary being paid before the
promotion or reallocation, plus any
increases that would have been given
had the promotion not occurred.
N.C. Admin. Code tit. 25, r. 1D.04046(a) (Aug. 1991). Here,
petitioner was promoted from Captain to Inspector and then demoted
from Inspector to Sergeant all within the same year. According to
the plain language of the rule, petitioner's post-demotion salary
therefore must return to the same as that which he was earning
prior to his original promotion -- $34,768. The fact that his
post-promotion position of Sergeant was at a lower level than his
pre-promotion position of Captain is irrelevant under the
applicable rule; the rule applies anytime an employee, within the
same year, is promoted and then demoted “to any lower class.”
Although Rule 1D.0406 has subsequently been amended such that the
same salary requirement applies only if the pre-promotion position
and post-demotion position are “in the same grade level,” this
amendment did not take effect until 1995, after the relevant timeperiod here. Thus, petitioner's salary must be adjusted upward by
the SPC pursuant to its own rules.
Affirmed in part, reversed and remanded in part.
Judge WALKER concurs.
Judge HUNTER concurs in the result.
TONY LEE CURTIS,
Petitioner
v
.
&
nbsp; Buncombe County
&
nbsp; No. 98 CvS 1990
NORTH CAROLINA DEPARTMENT
OF TRANSPORTATION,
Respondent
HUNTER, Judge, concurring in the result.
I concur in the result of the majority opinion but write
separately to articulate my disagreement with part of the
majority's reasoning. I agree with the majority that petitioner
has not satisfied the third element of the prima facie case for his
claim that he was demoted and transferred from Wilmington to
Asheville due to his political affiliation. The third element
required for making a prima facie case of political discrimination
is a showing of a causal relationship between the petitioner's
political affiliation and the adverse employment action. Robertson
v. Fiore, 62 F.3d 596 (3rd Cir. 1995). The majority found that
this element was not satisfied since petitioner had written letters
to DMV requesting that he be demoted and transferred to Asheville.
Thus, the only evidence admitted suggesting political
discrimination was mere speculation.
I respectfully disagree with the majority's conclusion that
petitioner satisfied the elements required for making a prima faciecase with respect to DMV's refusal to hire petitioner for the
Asheville inspector positions that became available in July and
August of 1993. In my opinion, the third element for establishing
a prima facie case of political discrimination, the causal
connection requirement, was not met and the evidence presented by
petitioner on this claim, as the evidence presented for the
demotion and transfer claim, was mere speculation. The majority
finds that the causal connection requirement was met because of
petitioner's unsubstantiated testimony that Joe Whitt, the person
to whom the July inspector position was offered, is the brother of
a precinct chairman of the Democratic Party in Buncombe County.
Joe Austin, the person eventually hired for the August inspector
position, “knows a lot of people,” including several high-ranking
officials in the Democratic Party. This testimony was nothing more
than mere speculation. In my opinion, the petitioner did not
satisfy the causal connection existing between his political
affiliation and DMV's refusal to hire him. Under the majority's
holding, an employee working for a public agency in a non-
policymaking position, who has an affiliation with a certain
political party, need only speculate as to the causal connection
between the political affiliation and the adverse employment action
in order to make out a prima facie case for political
discrimination. I would hold that this is insufficient to satisfy
the causal connection requirement of a political discrimination
claim.
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