12-3100-11258-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE DEPARTMENT OF VETERANS AFFAIRS

Patrick Allan Shaw, Petitioner, v. Independent School District 709, Respondent.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND RECOMMENDATION

The above-entitled matter came on for hearing before Administrative Law Judge Steve M. Mihalchick on August 27, 1997, at the St. Louis County Veterans Service Office, 222 East Superior Street, Duluth, Minnesota. The record closed upon receipt of a redacted copy of Ex. 10 on August 29, 1997.

Patrick A. Shaw, 2212 West 10th Street, Duluth, Minnesota 55806-1235, appeared on his own behalf. Elizabeth A. Storaasli, Bye, Boyd, Agnew, Ltd., 200 Sellwood Building, 202 West Superior Street, Duluth, Minnesota 55802-1960, appeared on behalf of Respondent, Independent School District 709 (ISD 709).

This Report is a recommendation, not a final decision. The Commissioner of Veterans Affairs will make the final decision after a review of the record which may adopt, reject or modify the Findings of Fact, Conclusions, and Recommendations contained herein. Pursuant to Minn. Stat. § 14.61, the final decision of the Commissioner shall not be made until this Report has been made available to the parties to the proceeding for at least ten days. An opportunity must be afforded to each party adversely affected by this Report to file exceptions and present argument to the Commissioner. Parties should contact Bernie Melter, Commissioner of Veterans Affairs, 200 Veterans Service Building, 20 W. 12th Street, St. Paul, Minnesota 55155, to ascertain the procedure for filing exceptions or presenting argument.

STATEMENT OF ISSUES

1. Whether Petitioner's reduction to half-time was based upon a good faith abolition of his position.

2. If ISD 709 violated Petitioner's veterans preference rights, what is the appropriate amount of damages?

Based upon the record herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

1. Petitioner was honorably discharged from the U.S. Navy on January 15, 1970, after nearly four years of active duty. Ex. 1.

2. In July, 1972, Petitioner began work for ISD 709 as an Audio Visual Production Technologist (or Technician) in the Media Services Department (Media Services). The job duties evolved over the years to include photography, laminating documents, copying tapes and computer disks, transferring photographs to different media, recording television programs “off-air,” doing the paperwork for repair of equipment, and preparing videos for particular schools by recording and editing events. The Petitioner would also photograph students and prepare student identification cards to be used as bus passes. For eight years, Petitioner videotaped a television program as part of his duties. Petitioner's Testimony; Ex. 5.

3. Media Services consisted of nine employees, performing cataloging, distribution of material from a teacher resource center (“Media Center”), and equipment repair. Ex. 4. Hourly employees were used as needed for some of the routine functions. The Media Center distributed print materials, videotapes, and films. For its repair function, Media Services employed 2.5 full-time equivalent positions (FTEs).

4. ISD 709 has approximately 2,000 employees and between 13,500 and 14,000 students enrolled in its schools. The total cost of Media Services was calculated at $427,461.10 for the 1996/1997 school year. Ex. 10. Revenue generated by that division over that period totaled $8,116.50. Id.

5. In 1988, concerns began to arise about problems in Media Services. Complaints concerning insufficient services and a lack of coordination were heard from that point forward.

6. In 1995, Mary Ann Lucas Houx became Director of Curriculum and Staff Development. The Director of Curriculum and Staff Development oversees the Media Center.

7. Lucas Houx came to have concerns about the efficiency and effectiveness of the Media Center. She requested information on the utilization of the Media Center and was mostly refused any of the requested information. Because of her concern, on March 12, 1996, she requested that an internal audit be performed of the Media Center. Ex. 6.

8. Constance Carter, C.P.A., is the internal auditor for ISD 709. She began the audit of Media Services in November, 1996. Carter interviewed the head of Media Services, had job questionnaires filled out by employees, and had logs maintained by each employee, breaking down the day into fifteen minute intervals. Carter also assessed the use of Media Services by teachers, interviewed principals to assess what use was being made of the facility and what plans were for the future in this area.

9. Focus groups of teachers and administrators were formed by Carter at six schools in the district to assess the utility of the Media Center. Ex. 10. Teacher use of the Media Center was one of the issues discussed. Many participants urged that the Media Center be eliminated and its resources located in individual schools. Principals of schools passed on complaints of repairs not done. The costs of the services provided were compared to other alternatives. Carter interviewed staff from other districts to determine what approaches to the provision of media to schools were being taken in those districts.

10. Media Services resisted providing data on usage and omitted significant data from the information provided to Carter. Ex. 10. In one instance, estimates were provided in place of actual records. Carter concluded that many of the materials maintained in Media Services were not being used. She also concluded that the repair function was inefficient. Phonographs, cassette recorders, computer pointing devices (often referred to as a mouse), and filmstrip projectors were being repaired at costs in excess of the cost of replacement.

11. Carter found other inefficiencies in Media Services. Using the estimate of the Media Center for number of bookings, Carter found that a single teacher call for print services (one transaction) resulted in a cost to ISD 709 of $304.73. Ex. 10. However, when booking a request from another district for videos (the equivalent of one transaction in the audit) Media Services charged the requesting district only $6.00, plus shipping. On other occasions, punch cards were sold to other districts for a charge of $20.00 per card. Each card authorized the holder to make 36 transactions in print media. None of the other districts Carter spoke to maintained a centralized media services department. AV repair costs were charged to other districts at a rate of $20.00 per hour. Total labor cost to ISD 709 was $26.47 per hour.

12. The breakdown of Petitioner’s job functions showed that he spent 46.88 percent of his time on working with repaired equipment, laminating, bus passes, and disk copying. Ex. 10. Most of the remaining time was spent on checking equipment in and out and other assorted tasks. Ex. 11.

13. Carter completed her audit report and submitted it to Lucas Houx on February 28, 1997. Ex. 10.

14. Based upon the audit report, on March 4, 1997, Lucas Houx recommended to the Superintendent of ISD 709 that the two Media Center positions dedicated to AV equipment repair be transferred to the Maintenance Division to coordinate supervision and parts acquisition. Ex. 7, at 2. Under this recommendation, 16mm films and filmstrips would no longer be supported. Any materials that continue to be needed would be used in video format. Id., at 3. The Media Center would be discontinued and its print holdings distributed to individual buildings. Id. at 4. The reasons given for the change were the low utilization and high cost of the current distribution system. Id. The video collection would be housed with the textbook distribution system and video utilization would be assessed in the upcoming school year. Id. at 5. Lamination would be assigned to the print shop. Id.

15. In connection with the elimination the Media Center, Lucas Houx recommended to the Superintendent that the positions of Supervisor of Media Services, Secretary to Supervisor, Catalog Clerical, and two Media Assistant positions be eliminated. Ex. 7, at 6. All hourly positions not part of a student learning program were to be discontinued. Id. The AV Production Technician position, held by Petitioner, would have a job analysis done. Lucas Houx anticipated that the position would “probably support only a part-time position or hourly employee. This position could be cut back in time for the remainder of the 1996-97 school year if supported by an analysis.” Id. at 6.

16. Terri Kronzer, Director of Human Resources for ISD 709, initiated an evaluation of the position held by Petitioner for purposes of comparative worth. Pursuant to a Memorandum of Understanding (MOU) entered into as part of the collective bargaining agreement with Petitioner’s bargaining representative, an independent auditor was selected. Ex. 12, at 36. On June 2, 1997, the auditor concluded that Petitioner’s position should placed in a lower class, since more than half the job duties did not require photography or videography skills. Ex. 13.

17. The Superintendent passed on to the School Board of ISD 709 the recommendations for staffing changes arising out of Lucas Houx’s study. On June 17, 1997, the Board voted to eliminate Media Services as a separate entity in the school district, to eliminate four positions from the Media Center, and to reduce Petitioner’s position to .5 FTE (one-half of a full time equivalent). Exs. 2 and 8. Petitioner was advised of this action by letter the next day. Ex. 2. The notification indicated that Petitioner would continue to be responsible for bus passes, laminating, copying disks and videotapes, and videotaping Board meetings. Id. The change in position became effective on July 1, 1997. Ex. 16.

18. Parents of students attending ISD 709 schools had advocated for more media generalists to be assigned to individual schools. Media generalists are holders of a teaching certificate and typically hold a master’s degree. Videotaping, computer disk copying, database management and other library functions are within the expertise of media generalists. As part of eliminating Media Services, media generalists are assigned at least half-time to each school.

19. The reduction of Petitioner’s position to .5 FTE triggered bumping rights (i.e., the ability to move into the position of any less senior employee). Petitioner does not qualify under the Collective Bargaining Agreement to bump any currently existing position in ISD 709.

20. On June 27, 1997, Kronzer advised Petitioner of his right to request a veteran’s preference hearing on the reduction in hours of his position. Ex. 18. On July 7, 1997, Petitioner requested a hearing on the reduction of his hours by letter addressed to Kronzer. Ex. 3.

21. Kronzer sought an MOU with the bargaining representative to bypass the hiring process for custodial workers to allow Petitioner to fill a half time position in that area in addition to the half-time AV position. The MOU was not agreed to, but the bargaining representative did agree to a unilateral transfer, accomplishing the same result. Petitioner was assigned to a .5 FTE Custodian II position in maintenance working from 6:00 a.m. to 10:00 a.m. The combination of two positions results in Petitioner retaining his benefits as a full-time employee. Petitioner receives an additional $100.00 per month as a longevity payment. Petitioner’s longevity payment is not affected by the adjustment of his position.

22. On July 9, 1997, Petitioner filed his Petition with the Department of Veterans Affairs, alleging that his rights under the Veterans Preference Act have been denied. Ex. 1. A Notice of and Order for Hearing in this matter was issued on July 22, 1997.

23. Between July 1, 1997, and July 29, 1997, Petitioner was on half-time in his AV Technician position. To avoid losing his full time pay pending the resolution of his veteran’s preference appeal, Petitioner used ten half-days of his accrued vacation time. On July 29, 1997, ISD 709 changed Petitioner’s rate of pay back to the full time AV Technologist rate, pending resolution of this matter. Ex. 19.

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1. The Administrative Law Judge and the Commissioner of Veterans Affairs have jurisdiction in this matter pursuant to Minn. Stat. §§ 14.50 and 197.481.

2. Petitioner's appeal was brought in a timely fashion.

3. Petitioner is an honorably discharged veteran entitled to the protections of Minn. Stat. § 197.46, the Veterans Preference Act.

4. Minn. Stat. § 197.46 prohibits removal of a veteran from public employment except for incompetency or misconduct shown after a hearing, upon due notice and upon stated charges in writing. However, public employers may abolish positions notwithstanding the Veterans Preference Act if the abolition of a position is in good faith. State ex rel. Boyd v. Matson, 155 Minn. 137, 193 N.W.30 (1923); Young v. City of Duluth, 386 N.W.2d 732 (Minn. 1986).

5. The burden of proof is upon Petitioner to prove by a preponderance of the evidence that he was removed from his position in violation of Minn. Stat. § 197.46. Respondent's claim that Petitioner's position was reduced to one-half time in good faith is an affirmative defense for which Respondent has the burden of proof. Minn. R. 1400.7300, subp. 5.

6. Petitioner’s position was not reduced due to incompetency or misconduct on his part.

7. Respondent abolished Petitioner's position in good faith due to changes in work and efficient and effective job design considerations.

8. Respondent has denied Petitioner rights provided to him by Minn. Stat. § 197.46 only to the extent that he was not paid in full during the pendency of this veterans preference proceeding and was required to use some of his own vacation time to maintain full compensation.

Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

RECOMMENDATION

IT IS RESPECTFULLY RECOMMENDED that the Commissioner of Veterans Affairs order that the petition of Patrick A. Shaw be GRANTED to the extent of backpay plus interest for ten half-days of vacation. In all other respects, the Judge recommends that the petition be DENIED.

Dated this 24th day of September, 1997.

_______________________________

STEVE M. MIHALCHICK

Administrative Law Judge

NOTICE

Pursuant to Minn. Stat. § 14.62, subd. 1, the agency is required to serve its final decision upon each party and the Administrative Law Judge by first class mail.

Reported: Tape recorded, not transcribed. Three Tapes.

MEMORANDUM

Under Minn. Stat. § 197.46, a political subdivision may only discharge a veteran for incompetency or misconduct. However, our Supreme Court has recognized that the Veterans Preference Act is not intended to prevent public employers from abolishing positions in good faith. State ex rel. Boyd v. Matson, 155 Minn. 137, 193 N.W. 30 (1923). A lack of good faith is proved when it is established, after a hearing, that the public employer, under the pretext of abolishing a veteran's position, actually continued it under some other name or reassigned the veteran's duties to a less senior employee. Young v. City of Duluth, 386 N.W.2d 732 (Minn. 1986). The standard of a good faith established in Young was developed more fully in Gorecki v. Ramsey County, 437 N.W.2d 646 (Minn. 1989), as follows:

In examining the conduct of this public employer, we are guided by two separate principles. The first is that the Veterans Preference Act itself was designed to "'take away from the appointing officials the arbitrary power, ordinarily possessed, to remove such appointees at pleasure; and to restrict their power of removal to the making of removals for cause.'" Young v. City of Duluth, 386 N.W.2d 732, 737 (Minn. 1986) (quoting State ex rel. Boyd v. Matson, 155 Minn. 137, 151-42, 193 N.W. 30, 32 (1923). See also Johnson v. Village of Cohasset, 263 Minn. 425, 435, 116 N.W.2d 692, 699 (1962) (VPA protects honorably discharged veterans from the ravages of a political spoils system). While the impact of political decisions upon a veteran's employment are minimized, the act cannot be viewed as fully restricting the government's exercise or control over its administrative affairs. See State ex rel. Boyd v. Matson, 155 Minn. 137, 193 N.W. 30 (1923). A ministerial or perfunctory act of coordinating an actual position with its appropriate classification will withstand scrutiny if based upon a reasonable exercise of administrative discretion. The second principle is one requiring this court to examine the substance of the administrative decision rather than its mere form. See Myers v. City of Oakdale, 409 N.W.2d 848 (Minn. 1987).

The evidence in this case is clear that the position was eliminated in good faith. The entire Media Services structure was examined due to concerns with the quality of services provided, changes in media technology, and the alternatives of providing the services to teacher and students in more effective and efficient ways. Substantial efforts were made to identify what work was required and whether individual positions were cost effective. Four positions were eliminated, in addition to the reduction of Petitioner’s job to half-time. A fundamental change in the manner that media support was to be provided was carried out. The facts indicate that ISD 709 reduced the position to half-time in good faith and not as a subterfuge for denying Petitioner’s rights as a veteran.

Petitioner maintains that the work he performed will be done by less senior nonveterans. There is no doubt that some of Petitioner’s job duties will be performed by the media generalists who will be hired to go into schools, at least on a half time basis. This fact does not change the fundamental nature of ISD 709’s action. The nature of the services provided by the Media Center and by Petitioner changed over the years. New technologies have arrived. The changes were appropriate. Petitioner has retained the core of his job functions in his half-time position. The transfer of functions that were part of Petitioner’s position, now being performed by others, arises from the dissolution of the Media Center and the emphasis on media generalists. ISD 709 took that action to address the educational needs of its students. The changes were made for legitimate reasons, not for the purpose of removing Petitioner. Petitioner's Veteran’s Preference rights have not been violated by the change in his position from full-time to half-time.

While the change in position has been done in good faith, the Administrative Law Judge recommends that the Commissioner award backpay in the amount of the ten half-days to compensate Petitioner for vacation time that Petitioner was forced to take in order to avoid a wage loss. There was some confusion on the part of ISD 709 as to what its obligation was to the veteran during the pendency of this proceeding. While it gave Petitioner a notice of his veterans preference right, it incorrectly gave him notice of his right to a hearing before the Civil Service Board on allegations of incompetency or misconduct. Instead, it should have given him notice of his right to challenge the elimination of his position in a mandamus action in district court or by petition to the Commissioner of Veterans Affairs. Effective July 29, 1997, ISD 709 correctly adjusted Petitioner’s compensation to maintain his prior earnings level pending resolution of this matter. There is no reason to omit the adjustment from July 1 to July 28. In all other respects, the Administrative Law Judge recommends that the Petition for Relief be DENIED.

S.M.M.