STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
RICHARD HERRING, )
)
Petitioner, )
)
vs. ) CASE NO. 87-2172RX
)
) DEPARTMENT OF ADMINISTRATION, )
)
Respondent. )
)
FINAL ORDER
On July 30, 1987, a final hearing was held in this cause in accordance with Section 120.56, Florida Statutes. Following the conduct of the hearing, a transcript of the proceedings was prepared. That transcript has been reviewed prior to the entry of this order. In addition, the post-hearing deposition of Vivian Pyle has been considered. The evidence entered has also been assessed.
The proposed final orders suggested by the parties have been analyzed. In this connection, the fact finding offered has been used to some extent in the preparation of this order. Otherwise, the suggested facts are distinguished in an appendix to the final order.
APPEARANCES
For Petitioner: David P. Gauldin, Esquire
Post Office Box 142 Tallahassee, Florida 32302
For Respondent: Augustus Aikens, Esquire
General Counsel
Department of Administration
530 Carlton Building Tallahassee, Florida 32399-1550
ISSUES
The issues raised in this case are those set forth in a petition of May 18, 1987, in which the Petitioner, Richard Herring, challenged former Rule 22SM- 3.007, Florida Administrative Code, which became effective on May 29, 1986, and the amendment to that rule which had an effective date of February 1, 1987. In particular, Petitioner believes that the rule in its prior and existing forms exceeded the authority of the enabling legislation which is stated to underlie the promulgation. Petitioner contends that the rule in the prior and present form is arbitrary and capricious. Petitioner claims that the rule in its terms establishes penalties not authorized by the legislature. Petitioner believes that material changes were made to the rule following public hearing which were not supported or noticed or required by statute. Finally, Petitioner argues that the economic impact statements associated with the prior version of the
rule and the February 1, 1987, version are not adequate, in that they do not apprise the Petitioner or others similarly situated of the negative implications of the rule.
Exhibits and witnesses
Richard Herring testified in his own behalf and called as witnesses Pam Hill and Vivian Pyle. In furtherance of his claims he submitted Petitioner's Exhibits 1-29, 32-39 and 42-45 which were received into evidence. Respondent offered Don Bradley as a witness in defense of this action.
FINDINGS OF FACT
On July 30, 1984, Richard Herring became a member of the Senior Management Service Personnel System within the State of Florida. He was recognized as a member of Senior Management from that day until March 2, 1987, the date he voluntarily left that system. During that time he served as Deputy Director of Developmental Services within the State of Florida, Department of Health and Rehabilitative Services (HRS).
In confirmation of his elevation to the status of Senior Management employee, correspondence of August 3, 1984, was sent to the Petitioner over signature of Vivian Pyle, Central Personnel Officer for HRS. A copy of that letter may be found as Petitioner's Exhibit 2 admitted into evidence. As had been explained in his recruitment, the letter reminded the Petitioner that any future annual leave which he accumulated in excess of 480 hours effective as of the anniversary date of his employment would be converted to sick leave on an hour for hour basis. It further stated that at the point of separation from Senior Management Service, Herring, as an appointee to that system, would be paid for unused annual leave, not to exceed 480 hours. The rule provision pertaining to annual leave in effect at the time of Petitioner's acceptance into Senior Management Service was Rule 22SM-1.12(3), Florida Administrative Code. That rule became effective on March 16, 1981. A copy of the rule may be found as Petitioner's Exhibit 1 admitted into evidence. The rule in the aforementioned subpart stated:
(3) A Senior Management appointee shall be paid for unused annual leave upon separation, not to exceed 480 hours; all
other Senior Management benefits shall cease. Payment for sick leave may be made when permitted by Section 110.122, Florida Statutes.
The Department of Administration determined to revise the existing rules pertaining to Senior Management Service. To this end, on February 21, 1986, Respondent gave notice of its proposed rule changes. This notification was given in the Florida Administrative Weekly. A copy of the notice, together with the full text of the proposed rule as contemplated in the notice, may be found as Petitioner's Exhibits 4 and 5 submitted into evidence. The notification states that the change calls for the repeal of existing Rules 22SM-
1.01 through 22SM-1.14, Florida Administrative Code, and the contemporaneous adoption of Rules 22SM-3.001 through 3.011, Florida Administrative Code. This meant that the Respondent had in mind the repeal of the aforementioned Rule 22SM-1.12(3), Florida Administrative Code. The stated purpose of these changes was ". . . to provide a more clearly defined rule structure for the Senior
Management Service and to allow for 1985 statutory revisions." The statement of
economic impact of the rule was that it would be limited only to the administrative cost of promulgation of the new rules.
As noticed, the proposed Rule 22SM-3.007 at Section (6) stated:
Upon appointment to a Senior Management position of a person moving from a position in state government outside the Senior Management Service, any leave accrued and unused by the person in the prior position shall be subject to the following:
Special compensatory leave credits shall be paid for in cash prior to appointment to the Senior Management Service.
Regular compensatory leave shall not be transferred into the Senior Management Service.
Annual leave shall be retained and be credited to the employee's account for use by the employee with approval of the agency head pursuant to Section 22SM-3.007(3) or paid for on termination from state government. Termination from state government shall mean that the person is not on any state payroll for at least thirty-one (31) calendar days following separation from the Senior Management Service.
Sick leave not paid for shall be retained and be used or be subject to terminal payment in accordance with Subsection (4) above.
Subsection (6)(c) to proposed Rule 22SM-3.007 as it speaks to the payment previously earned for annual leave upon termination from state government pertains to new employees who would be appointed to Senior Management positions following the effective date of the rule. It does not contemplate the question of payment of annual leave for those persons who had been appointed to Senior Management Service prior to the effective date of the proposed rule. In fact, the overall Chapter 22SM-3 as proposed did not speak to the question of payment of unused annual leave accrued by those existing employees when they left Senior Management. Conversely, Subsection (4) to this proposed rule spoke to the matter of payment for sick leave for employees who were in Senior Management before the effective date of the proposal, a counterpart to Subsection (6)(d) dealing with employees who would come after the effective date of the proposed rule.
The statement of the summary of the rule changes contemplated by the notice of February 21, 1986, may be found in a copy of the summary, Petitioner's Exhibit 6 admitted into evidence. In that summary it indicated:
. . . The rule sets certain requirements agencies must conform to in the areas of appointments, performance evaluations, attendance and leave for employees appointed to positions in the Service. Agencies are
required to maintain personnel files and records which shall be subject to post audit review by the Department of Administration.
Under the statement of economic impact in the summary dealing with cost or benefits to persons directly affected, it was stated:
It is estimated that the leave benefits will benefit Senior Management Service employees, but calculation of the amount is not feasible, since such depends upon salary and individual leave utilization patterns. . . .
A public hearing was held on the proposed Chapter 22SM-3. The hearing date was March 7, 1986. In the summary of the hearing and changes, a copy of which may be found as part of Petitioner's Exhibit 7 admitted into evidence, it is noted that the State of Florida, Department of Insurance, recommended that the payment be made for excess annual leave when an employee leaves Senior Management Service and moves to another service. That change was not adopted.
The executive summary of the proposed Rules 22SM-3, found as part of Petitioner's Exhibit 7 admitted into evidence identified the fact of the replacement of Chapter 22SM-1 with proposed Chapter 22SM-3 and the fact that any changes to the noticed version of the rule of February 21, 1986, were said to represent only minor technical changes recommended by the Joint Administrative Procedures Committee. It was stated that no changes were made as a result of the public hearing held on March 7, 1986. This is taken to mean that there were no substantive changes made in that the summary of the public hearing and changes did identify certain modifications to the proposal that were recommended and adopted following the public hearing session. None of those changes that resulted from the public hearing spoke to proposed Rule 22SM-3.007.
On May 6, 1986, Glenn W. Robertson, Jr., Secretary to the Administration Commission, wrote to Gilda H. Lambert, Secretary, Department of Administration, to advise her that on that date the Administration Commission had approved with amendment the request to repeal existing Rules 22SM-1.01 through 1.14, Florida Administrative Code, and to adopt proposed Rules 22SM-
3.001 through 3.011. A copy of that correspondence may be found as Petitioner's Exhibit 8, together with the statement of the executive summary identifying the proposed permanent rule amendments which were contemplated by the Administration Commission. Within the statement of amendments promoted by the Administration Commission was an amendment to proposed Rule 22SM- 3.007(6)(c), which stated:
(6)(c) Annual leave shall be retained and credited to the employee's account for use by the employee with approval of the agency head pursuant to Section 22SM-3.007 or if the employee is transferring to Career Service, up to 240 hours of Annual leave will be transferred. Any Annual leave balance after the 240 transfer will be paid for except that the amount accrued (sic) since the employee's last anniversary will be paid for on a prorated basis in accordance with the appropriate accrual rate for Career Service. Annual leave will be paid for on termination
from state government. Termination from state government --.
This change to proposed Rule 22SM-3.007(6)(c) was at the instigation of the Commissioner of Agriculture in the language.
. . . or if the employee is transferring to Career Service, up to 240 hours of Annual leave will be transferred. Any Annual leave balance after the 240 transfer will be paid for except that the amount accrued (sic) since the employee's last anniversary will be paid for on a prorated basis in accordance Service. Annual leave will be paid for on termination from state government.
This was not the choice of the Department of Administration in terms of the substance or placement of this language. Ultimately, the language set forth in the amendments to the proposed Rule 22SM-3.007(6)(c) as found in Petitioner's Exhibit 8 made their way into the final version of the rule. The language prompted by the Agriculture Commissioner had not been contemplated by the language noticed when the rule was proposed on February 21, 1986, nor was it the product of public comment in the public hearing of March 6, 1986, or based upon remarks received from the APA committee or material received by the proposing agency within 21 days of notice of the proposed rule. The language was never noticed in the Florida Administrative Weekly.
In May 1986, upon an unspecified date, certification was given from the Department of Administration to the Secretary of State confirming the adoption of Rules 22SM-3.001 through 22SM-3.011, Florida Administrative Code. The effective date of this adoption was May 29, 1986. A copy of that certification to the Department of State may be found as Petitioner's Exhibit 9.
A copy of the summary of changes by the Administration Commission in its May 6, 1986 meeting setting out the suggested language of the Agriculture Commissioner on the topic of Rule 22SM-3.007(6)(c), Florida Administrative Code, may be found in Petitioner's Exhibit 10. This item, as well as the language from Subsection (6)(c) and which was sent to the Secretary of State's office and became the final version of that rule subsection, included an additional sentence which stated, "Termination from state government shall mean that the person is not on any state payroll for at least thirty-one (31) calendar days following separation from Senior Management Service," and which had not been set out completely in the executive summary sent to Secretary Lambert on May 6, 1986, found as Petitioner's Exhibit 8 admitted into evidence. This most recently quoted language is, however, the same language as found in the last sentence of Subsection (6)(c) to the notice of that matter given on February 21, 1986. In the final analysis, the changes suggested by the Commissioner of Agriculture were a part of the Administration Commission's deliberations.
The final summary of the rules amendments which was filed with the Secretary of State on May 9, 1986, did not depart from the initial summary of the rules amendments pertaining to the replacement of Rules 22SM-1.01 through 22SM-1.14 with Rules 22SM-3.001 through 22SM-3.011. The statement of economic impact remained the same as well. A copy of the summary of the rules amendments and the final statement of economic impact may be found as Petitioner's Exhibit
11 admitted into evidence.
The final version of proposed Rule 22SM-3.007(6)(c), which was enacted, was no more specific on the subject of payment of annual leave credits upon termination of an employee who had been appointed to Senior Management Service prior to the effective date of the rule than was the version of that provision noticed on February 21, 1986. When Subsection (6)(c) is read in the context of the overall Section (6), the language describes that experience pertaining to persons appointed to Senior Management following the effective date of the rule and their leave credits brought with them. It does not describe those who were already employees in the Senior Management system before the effective date of the rule and their annual leave credits or annual leave credits earned by new employees upon admission to the Senior Management Service. This circumstance, taken together with the repeal of the previous Rule 22SM- 1.12(3), Florida Administrative Code, means that the question of the payment for annual leave hours upon the termination from Senior Management Service after May 29, 1986, for those who had been appointed to Senior Management Service before that date was unresolved by rules of the Department of Administration beyond May 29, 1986, as was the matter of how to deal with hours earned by the new members who came into the Senior Management Service. This circumstance would remain until the passage of an amendment to Rule 22SM-3.007, Florida Administrative Code, effective February 1, 1987.
Petitioner challenged Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, by petition of May 18, 1987. In that same petition, he challenged Rule 22SM-3.007, Florida Administrative Code, effective February 1, 1987.
All accumulated annual leave for which Petitioner claims entitlement to payment had been accumulated prior to February 1, 1987.
As forecast, Respondent determined to amend certain rules within Chapter 22SM-3, Florida Administrative Code, to include Rule 22SM-3.007, Florida Administrative Code. To this end, on October 17, 1986, Respondent gave notice in the Florida Administrative Weekly of its intention. The summary given by the notice of October 17, 1986, stated:
The rule amendments provide for clarification of the designation of positions to be included in the Senior Management Service, provide for the transfer of leave between services, provide for the accrual of
240 hours of annual leave and 120 hours of sick leave each year, and provide for membership in the Senior Management Service class of the Florida Retirement System.
The comments on economic impact found in the notice were to the effect:
The executive agencies will be required to expend approximately $11,628 in the aggregate to implement the provisions of this rule.
The overall purpose and effect of the rules changes was explained as being implementation of provisions made by the 1986 Legislature, as to Part IV, Chapter 110, Florida Statutes. See Petitioner's Exhibit 13/14 admitted into evidence.
In this amendment to Rule 22SM-3.007, Section (6) in existing language becomes Section (10) in the new language. Subsection (6)(c) in the existing language is modified at Subsection (10)(c) by referring to employees as members and deleting the language beginning with " . . or if the employee is transferring . . ." to the end of that Subsection (6)(c). There are added Sections (5) and (6) in the proposed rule which address the circumstance of annual leave credit for persons who were in Senior Management Service at the point the prospective effective date of the rule noticed on October 17, 1986, as well as annual leave credits earned by employees who became members after the effective date of the amendment to the rule. This is a new addition not found in Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, which was silent on the treatment of annual leave credits for persons who had been in Senior Management Service before May 29, 1986, and the leave credits yet to be earned by those who became members after that date. For Petitioner's purposes, in this challenge, the proposal to add Sections (5) and (6) was tacit recognition of the fact that in the provisions set forth in Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, the question of payment for annual leave upon termination of employees who had been hired before the effective date of that rule was not addressed.
The language of the proposed amendment to Rule 22SM- 3.007 at Section
as noticed on October 17, 1986, indicated:
Upon transfer of a Senior Management Service member to a position in state government outside the Senior Management Service, annual leave credits shall be retained and shall be calculated and credit as follows:
All annual leave credits accrued on the member's last anniversary date shall be prorated at the rate of 20 hours monthly or
9.230 hours biweekly for each period worked thereafter.
If the member is transferring to the Career Service, up to 240 hours of annual leave will be transferred and any annual leave balance in excess of 240 hours shall be paid for in cash.
Subsection (5)(b) in the proposed amendment spoke to the transfer of 240 if the employee transferred to Career Service, and payment for excess balance over 240 hours earned while Senior Management employees for all that class of employees regardless of their point of employment in the same way Subsection (6)(c) of the May 29, 1986, rule spoke to those matters of payment for annual leave brought with them related to employees who would become members of the Senior Management Service on May 29, 1986, and subsequently.
A second category of payment for annual leave was described in the proposed rule noticed on October 17, 1986, Rule 22SM-3.007(6), which stated:
Annual leave will be paid for upon termination from state government. Termination from state government shall mean that the person is not on any state payroll for at least thirty-one (31) calendar days
following separation from the Senior Management Service.
This statement pertained to those employees who were members of the Senior Management Service prior to the enactment of the proposed rule and those who would become members and earn credits after the enactment.
None of the provisions in the proposed amendments advertised on October 17, 1986, dealt specifically with transfer of or payment for annual leave credits for persons who were not leaving state government, not going to Career Service, but leaving the Senior Management Service to go into other positions within state government over which the Department of Administration had no control as to personnel matters. Effective March 3, 1987, Petitioner transferred to such an organization, namely, the State Legislature.
The proposed amendment to Rule 22SM-3.007 noticed October 17, 1986, at Section (3) increased the credit for annual leave and sick leave from 176 hours to 240 hours and 104 hours to 120 hours, respectively. It is couched in terms of giving these benefits upon the appointment and on the anniversary date of appointment to the Senior Management Service.
At the commencement of the steps taken to amend Rule 22SM-3.007, Florida Administrative Code, the overall summary of the amendments spoke in terms of the provision for transfer of leave between the personnel services, and the increase in accrued leave to 240 hours of annual leave and 120 hours of sick leave and the provision of membership in the Senior Management Service class of the Florida Retirement System. The statement of the economic impact indicated that the executive agencies would be required to expend approximately $11,628 in the aggregate to implement this rule. The statement of costs or benefits to persons directly affected was said to be:
It is estimated that the leave benefits will benefit Senior Management Service members, but calculation of the amount is not feasible, since such depends upon salary and individual leave utilization patterns.
This comprehensive statement of the summary of rules and the economic impact statement may be found as Petitioner's Exhibit 15 admitted into evidence.
A public hearing was scheduled for November 7, 1986, and was held in the Larson Building auditorium, Tallahassee, Florida. This was the sole public hearing held to consider the amendments contemplated by the October 17, 1986, notice.
By letter of November 5, 1986, a copy of which may be found as Petitioner's Exhibit 16 admitted into evidence, James J. Parry, Director of the Office of Human Resources, State University System of Florida, made mention of his concerns about the proposed amendments. In particular, he was concerned that the higher annual leave and sick leave credits provided in the Senior Management Service and the ability to convert those to sick leave presented potential liability to the State University System when hiring individuals who had been members of the Senior Management Service. He urged change in the language of proposed Rule 22SM-3.007(5) which would make it clear that the annual leave credits had to be transferred from Senior Management Service to the receiving employer according to that governmental body's personnel plan, if unaffiliated with the Department of Administration. Furthermore, he suggested
that if the annual leave had been converted to sick leave while the employee was with Senior Management Service, upon the affiliation of the employee with the State University System there was a potential of passing along the cost of payment of that unused sick leave upon the termination of that employee's affiliation with the State University System or other governmental employer. He pointed out his belief that the economic impact statement in the proposed rule amendment only spoke to the increase in annual leave credit when in fact there would be an increase in sick leave credit as well. This references the economic impact statement at paragraph 1 to Petitioner's Exhibit 15 where mention is made of the cost incurred to an agency for annual leave accrual rates without mention of concomitant increases in cost for sick leave credits.
Parry, by his November 5, 1986, remarks set out in the Petitioner's Exhibit 16, did not reference any specific concern about whether the agency for whom a Senior Manager had worked prior to transfer to the State University System would be liable for payment of annual leave hours accrued prior to transfer.
Don Bradley, Chief of the Bureau of Classification and Pay, Department of Administration, received the November 5, 1986, Parry letter on November 6, 1986, a day before the public hearing. (Bradley is the principal author of the version of Rule 22SM-3.007, Florida Administrative Code, under consideration.) That letter was introduced into the record of the public hearing. Bradley recalls that Parry's concern as expressed in the letter and at the point of the public hearing revolved around the fact that the State University System would not allow accumulation of annual leave credit as high in total hours as was allowed by the Senior Management Service. Parry, according to Bradley, wanted to see a revision to the rule amendment which specifically stated that any transferred hours from Senior Management Service to the State University System be in accordance with the personnel rules on annual leave credits utilized by the State University System.
Parry is not reported to have expressed an interest at the public hearing on the question of the employing agency of an employee within the Senior Management Service needing to pay for unused annual leave credits prior to transfer of the employee into the State University System, per se. Bradley recalls that there was a related discussion on who would pay for annual leave the State University System did not accept in an effort by Parry to clarify that his organization would not be responsible for payment.
The proposed amendments to existing Rule 22SM-3.007 were presented to the Administration Commission. This was done by transmittal to the Office of Planning and Budget of the Governor's Office and from there to the Cabinet Aides to members of the Administration Commission. This submission occurred a week prior to the Cabinet meeting at which the Administration Commission considered the question of the amendments. As set out in Petitioner's Exhibit 17 containing a memorandum from the Department of Administration Secretary, Gilda
H. Lambert, dated November 25, 1986, reference is made to the Cabinet Aides' consideration of proposed amendments to 22SM-3.007, described in that document as 22SM-1.007 and changes brought about in this session. That meeting of Cabinet Aides took place on the morning of November 25, 1986, causing certain revisions to be made to the proposed rules on Senior Management Service. It is unclear how the notice was given of the Cabinet Aides' meeting at which point Mr. Bradley and Mr. Parry discussed changes to the proposed amendment to Rule 22SM-3.007, Florida Administrative Code. In any event, it does not appear that Petitioner would have been apprised of this session. Among those items addressed by Secretary Lambert was a description of what was referred to there
as 22SM-1.007 on attendance and leave at Section (5) on page 8 wherein she says that the revision was made to:
Clarify that upon transfer to a position in state government outside the Senior Management Service, unused annual leave credits shall not be paid for and may be transferred subject to the rules governing the system into which the member is transferring.
Within Petitioner's Exhibit 17 is the exact nature of Section (5) with the revision being employed. The new language is underlined in this rendition of the version of Section (5) after the Cabinet Aides' meeting.
Upon transfer of a Senior Management Service member to a position in state government outside the Senior Management Service, annual leave credits shall not be paid for and may be transferred subject to the rules governing the system into which the member is transferring. All annual leave credits accrued on the member's last anniversary date shall be prorated at the rate of 20 hours monthly or 9.230 hours biweekly for each pay period or portion thereof, worked subsequent to the member's last anniversary date.
As can be seen by this action, Subsection (5)(b) was deleted. These changes were not noticed by publication in the Florida Administrative Weekly.
Mr. Bradley describes the underlined changes alluded to in the preceding paragraph as a product of ongoing negotiations between him and Mr. Parry which took place at the point of the Cabinet Aides' meeting dealing with the proposed amendment to Rule 22SM-3.007(5), Florida Administrative Code. In the response to the Parry concerns, Mr. Bradley did not feel that it was necessary to change the proposed language put out in the notice of October 17, 1986, pertaining to Rule 22SM-3.007(5) dealing with transfer of hours to a personnel system not administered by the Department of Administration, in that the receiving employers outside DOA controls were not obligated to receive annual credits above what was called for in their personnel systems. Nonetheless, he acquiesced in the inclusion of language in Section (5) arrived at in the Cabinet Aides meeting which made this point abundantly clear. It is that aspect of the change dealing with the transfer of annual leave credit subject to the rules of the governing system into which the member would be transferring that is seen to address Parry's concerns. The portion of the changes that deal with the unwillingness to pay for annual leave credits unless the employee is leaving Senior Management Service to go out of state government as contemplated by Section (6) may be seen as a related matter, in that the nonpayment of annual leave could cause the entire amount of those credits to be transferred over to the State University System or the Legislature to which Petitioner made his transfer. Nevertheless, Parry's emphasis was to make certain that the State University System not have to accept more annual leave credit than it would allow its employees to carry at any given point in time. The fact of nonpayment increases the potential liability for payment of unused annual leave on the part of a receiving agency. This reality does not comport with Parry's contribution before and at the point of public hearing in
protecting his organization. His secondary concern expressed at the public hearing about not paying for excess annual leave his agency would not accept coincides with the idea that he wished to minimize the financial exposure of the State University System. This auxiliary position is not tantamount to advocacy which called for the abolishment of all payment for annual leave upon transfer. Finally, this last expression on the topic of payment for unused annual leave left at point of transfer does not give rise to the notion that it was sufficiently debated to notice interested parties that a rule would be enacted that disallowed payment for annual leave upon transfer to any state agency from Senior Management Service.
The changes that came about in Section (5) by the Bradley/Parry discussion at the Cabinet Aides' meeting brought forth the additional penalty to the employee in Senior Management Service that annual leave credit would not be paid for in the future. This expression was contrary to the repealed Rule 22SM- 1.12(3), Florida Administrative Code, in effect prior to May 29, 1986, which allowed payment for annual leave upon any transfer, overturned the silence on this point in Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, and set aside the less restrictive statement on payment for annual leave in Section (5) as advertised on October 17, 1986. On balance, the addition of the language following the Cabinet Aides' meeting in which it is stated that annual leave credits shall not be paid for in transfer to other state government employment is seen to be a product of the thinking of the Department of Administration, not sufficiently foreseen by actions in the public hearing on November 7, 1986, not duly noticed in the Florida Administrative Weekly and not based upon remarks received from the APA committee or material received by the proposing agency within 21 days of the October 17, 1986 notice.
The summary of the hearing on November 7, 1986, pertaining to the proposed amendment to the rule describes the participation on the question of proposed Rule 22SM-3.007 of other agencies in state government, as well as Mr. Parry from the State University System. A copy of that summary of hearing and changes may be found as Petitioner's Exhibit 20 admitted into evidence. The statement of changes found within that exhibit included the elimination of the payment of annual leave in excess of 240 hours if an employee transfers to another position in state government outside of the Selected Exempt Service. This is taken to mean transfer of a Senior Management Service employee to Career Service as described in Subsection (5)(c) noticed on October 17, 1986. It does not speak to the absolute prohibition of payment for annual leave hours accrued prior to transfer from Senior Management Service to any receiving governmental agency.
On December 30, 1986, the amendments to Rule 22SM- 3.007 were filed with the Secretary of State. A copy of that filing may be found as Petitioner's Exhibit 19 admitted into evidence. Those amendments to Rule 22SM-3.007, to include the changes at Section (5) disallowing payment for annual leave credits upon transfer to another state government agency from Senior Management Service are included. In accordance with the final language of the rule, there is set forth a summary of the rule amendments which may be found as part of Petitioner's Exhibit 21. It states:
The rule amendments provide for clarification of the designation of positions to be included in the Senior Management Service, provide for the transfer of leave between services, provide for the accrual of 240 hours of annual leave and 120 hours of sick
leave each year, and provide for membership in the Senior Management Service class of the Florida Retirement System.
The statement of justification for the amendments was that the changes were made to implement 1986 legislation of Part IV, Chapter 110, Florida Statutes. The economic impact statement found within Petitioner's Exhibit 21 said that the aggregate cost to the executive agencies was $11,628. It stated that the number of position descriptions that were involved would be approximately four hundred. On January 31, 1987, there were 1370+ positions in Senior Management Service before the new rule provisions were placed in effect. On February 1, 1987, as a result of the implementation of the 1986 amendment to Chapter 110, Florida Statutes, there were left approximately three hundred fifty Senior Managers.
Within the economic impact statement as finally established for the amendments effective February 1, 1987, it is said:
It is estimated that the leave benefits will benefit Senior Management Service members, but calculation of the amount is not feasible, since such depends upon salary and individual leave utilization patterns.
Mr. Bradley, author of Chapter 22SM-3, Florida Administrative Code, effective May 29, 1986, and the amendment to those provisions as printed out on February 1, 1987, said that the Department of Administration had in mind the creation of a Senior Management Service system to try to retain Senior Managers. This included the idea of the discontinuation of payment to Senior Managers except under circumstances where they left state government. He had in mind limiting the idea of automatic payment when a Senior Management Service employee went to the Legislature or the State University System or the court system. To his way of thinking, this would encourage the senior management to remain with the employing agency. As described before, his desired outcome is not achieved until such point as the last version of Rule 22SM-3.007(5), Florida Administrative Code, effective February 1, 1987, came into effect. This was an arrangement without due notice and without regard for the hardship created by the imposition of the nonpayment for transfer rule, unless it can be said that the increase in annual leave credit and sick leave credit contemplated by the February 1, 1987, version of Rule 22SM-3.007, Florida Administrative Code, is seen as an offset. It cannot be so regarded for persons such as the Petitioner who gained very little profit from the increase in annual leave and sick leave hours while losing a substantial number of annual leave credits when he left HRS to go to the Legislature.
Petitioner had been made aware sometime in December 1986, of the language of the proposed amendment noticed on October 17, 1986, pertaining to Rule 22SM-3.007. The language discussing the purpose and impact of the proposed amendments would not have given rise to any concerns on his part about the changes that were eventually brought forth in the final version of the rule effective February 1, 1987.
On December 10, 1986, Petitioner had an annual leave balance of approximately 536 hours. He used some leave around the Christmas holidays and reduced that, having in mind his belief that only 480 hours could be carried forward into the new year. He felt that he was being threatened in his position as a Senior Manager at HRS, given the fact that a number of Senior Managers were being replaced in that organization in late 1986. By cashing in an amount
approaching 500 hours of annual leave, he expected to be paid an amount approximating $10,000, which might assist him in his change in job positions.
On April 23, 1987, having not received word on his request for payment of annual leave for Senior Management Service, Petitioner wrote to the Secretary of the Department of Administration to ascertain the outcome of his request for payment. The Secretary was and is Adis Vila. At the same time he wrote to Vivian Pyle, HRS personnel official, making the same request. He expressed concern in his correspondence on the subject of an excessive amount of leave balance being shown by his present employer, the Florida Legislature. Copies of the correspondence to those two individuals may be found as Petitioner's Exhibits 26 and 27 admitted into evidence.
By way of response, as noted in Petitioner's Exhibit 28 admitted into evidence, Ms. Pyle answers his inquiry and cites to the fact that Rule 22SM- 3.007(5), Florida Administrative Code, effective February 5, 1987, does not allow for the payment of annual leave upon transfer into the State Legislature system.
In correspondence of that same date from Secretary Vila, a copy of which may be found as Petitioner's Exhibit 29 admitted into evidence, the Department of Administration makes reference to the fact that the May 29, 1986, Sections 22SM- 3.007(5) and (6), Florida Administrative Code, indicated that the annual leave should be transferred subject to the rules governing the system where the employee was transferred and that accrued annual leave would be paid only upon termination from state government. The rule referred to in the correspondence does not contemplate persons who had been employed before the rule became effective transferring annual leave to the State Legislature from Senior Management or being paid for that annual leave. Moreover, at the time of his transfer, the applicable version of the rule was the February 1, 1987, statement which specifically disallowed payment for annual leave in any circumstance other than leaving state government. Although an interpretation may be given that the Department of Administration believes that the version of Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, controls the question of the entitlement of Petitioner to payment for annual leave upon his termination from Senior Management Service on March 2, 1987, that interpretation is not an appropriate one. That version of the rule was amended on February 1, 1987, and by such amendment the language of the May 29, 1986, rule was superseded, regardless of the construction given the May 29, 1986, version of the rule. Consequently, the resolution of the Petitioner's claim to entitlement for payment for annual leave credits accrued must necessarily be resolved under the terms of the rule effective February 1, 1987, if controlled by rule.
Based upon computer printout information about Senior Management Service employees who were in the program as of February 1, 1987, a copy of which may be found as Petitioner's Exhibit 32 admitted into evidence, Petitioner made calculations as to the value of accumulated annual leave for those employees if they were paid by the Department of Administration at that juncture. That value was in excess of $1.9 million.
The calculation made by the Petitioner concerning the amount of potential money Senior Managers would have been entitled to upon transfer does not take into account the possibility of reduced payments in transfer to Career Service under the terms of Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986. Obviously, under that version of the rule and the
version of February 1, 1987, termination from state government would allow for the payment of all outstanding annual leave.
Petitioner's Exhibit 34 admitted into evidence is a copy of the employee handbook in effect at the time that Petitioner took his position with the Florida Legislature. It establishes that the employee may only carry 360 hours of annual leave forward into January 1 of an ensuing year. Hours above that are converted into sick leave. The sick leave credits are not paid in full if the Petitioner leaves state government after working in the Florida House of Representatives. The value of those sick leave hours would be 1/4 of all hours not to exceed 480 hours.
When Petitioner left HRS, he asked to be paid for all but approximately 24 hours accumulated annual leave. It was determined subsequently that this meant that 432 hours were being requested for payment. Instead, HRS transferred 432 hours of annual leave to the Florida House of Representatives. The beginning balance of annual leave hours with the Florida House of Representatives was limited to 360 hours with the balance of 72 hours being subject to conversion to sick leave.
The conversion of 72 hours of annual leave to sick leave upon the date of employment with the Florida House of Representatives was further exacerbated by the fact that 476.15 hours of sick leave was also sent over. The significance of this was that with the addition of 3.85 sick leave hours, he would reach the maximum number of allowable sick leave hours to be maintained at any given point by an employee of the Legislature. That amount of hours would have been added in the first month in that 8 hours and 40 minutes of sick are obtained for each month of employment by an employee of the Florida House of Representatives. Consequently, not only had 72 of his hours been disallowed as annual leave credit hours but also 68.15 hours within that 72 hours would have no value, in that 476.15 hours had been transferred as sick leave hours, leaving only 3.85 hours to be converted to sick leave from the 72 annual leave hours. Finally, throughout the 1987 year, Petitioner would earn annual leave credits and compensatory leave credits with the Florida House of Representatives, creating a potential loss in annual leave hours at the conclusion of the calendar year 1987 based upon the maximum number of hours having been transferred into the Florida House of Representatives personnel system upon his hiring and the influence of additional hours added to that total.
In the payment for sick leave and annual leave as a member of the Legislature, Petitioner would receive a reduced hourly rate compared to the Senior Management position which Petitioner held with HRS, evidencing further economic disadvantage imposed by disallowing the Petitioner's request for payment for the annual leave upon transfer from HRS to the Florida House of Representatives.
To further explain, when Petitioner transferred to the Florida House of Representatives, he took an $8,640 pay cut. Again, payment for the claimed hours of annual leave would have been somewhere approximating $10,000, which would have offset the dire consequences of the salary reduction when changing from HRS to the Florida House of Representatives.
Petitioner never sought to present evidence or argument concerning Rule 22SM-3.007, Florida Administrative Code, effective May 29, 1986, and the amendment to that rule effective February 1, 1987. Prior to this case, he did not participate in the public hearing which was conducted concerning those matters.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Sections 120.56 and 120.57, Florida Statutes.
Rule 22SM-3.007, Florida Administrative Code, in effect on May 29, 1986, does not affect the substantial interest of the Petitioner. It was not the pertinent rule at the juncture at which Petitioner sought payment for annual leave credits accrued. As a result, it cannot be seen as the procedural statement that the agency could employ in responding to the request for payment of annual leave credit. Instead, it was the February 1, 1987, version of that rule which addresses the procedures to determine whether Petitioner is entitled to payment for annual leave hours when he left the Senior Management Service. Furthermore, the May 29, 1986, version was neutral on the question of the entitlement to payment for annual leave credit when leaving from Senior Management Service to assume a position within the Florida House of Representatives. It profits the Petitioner not at all, nor does it hinder his attempt to gain payment for his annual leave credit. In this vein, this neutral position of silence cannot be construed as supporting the proposition that the Petitioner could not be paid for his annual leave credits. The rule simply makes no contribution in reconciling the differences between the Petitioner and the State of Florida on this question. While the rule in effect on May 29, 1986, continues to describe the amount and method by which annual leave credits are accrued beyond the effective date and has importance for that reason, that aspect of the rule is not the subject of the present challenge. See Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979), cert. denied 376 So.2d 74 (Fla. 1979). Finally, the position of the Department of Administration as expressed in correspondence from the Secretary of Respondent agency to the effect that the May 29, 1986, rule controls the question of entitlement of the Petitioner to be given payment for annual leave credits accrued does not afford standing to the Petitioner in the face of proof presented at the hearing, to include the comments of the Department of Administration's spokesperson identifying the applicability of the February 1, 1987, rule amendments to the exclusion of the May 29, 1986, version of that rule. See also Kearse v. Department of Health and Rehabilitative Services, 474 So.2d 819 (Fla. 1st DCA 1985) on rehearing.
By contrast, since the rule in effect on February 1, 1987, forms the basis for disallowing the Petitioner's claim for payment for unused annual leave, Petitioner has standing to challenge its terms. He is substantially affected. In particular, language found in Section (5) which disallows payment for annual leave credit upon the transfer of a Senior Management Service employee to a state governmental position outside the Senior Management Service gives rise to his standing.
Among the grounds for challenge to Rule 22SM-3.007, Florida Administrative Code, effective February 1, 1987, is an attack on the adequacy of the economic impact statement that accompanies this rule enactment, provided that challenge is fashioned within one year of the effective date of the rule. See Section 120.54(2)(d), Florida Statutes (1986). Petitioner has made a timely challenge to the economic impact statement. In this connection, Respondent has failed to adequately identify the negative implications of the rule enactment for Petitioner and persons similarly situated who leave the Senior Management Service and wish to cash in their annual leave credits rather than transfer those credits into an account with the receiving employer in state government.
This comment pertains to the statements concerning economic impact made by the Department of Administration at every juncture for Rule 22SM-3.007(5), Florida Administrative Code. See Department of Health and Rehabilitative Services vs. Wright, et al., 439 So.2d 937 (Fla. 1st DCA 1983). The economic impact statements make no mention of the deprivation which befalls persons in the Petitioner's position who suffer a loss of cash value in view of the rule's terms which prohibit the payment for annual leave credits.
The failure to provide an adequate economic impact statement causes the rule to be procedurally deficient and the phrase described then constitutes an invalid exercise of delegated legislative authority for failure to comply with the procedural requirements in Section 120.54(2)(d), Florida Statutes (1986). This outcome is mandated wherein, as here, the inadequacy impaired the fairness of the rulemaking proceeding, see Plantation Residents' Asso., Inc. v. School Board of Broward County, 424 So.2d 879 (Fla. 1st DCA, 1982)
In addition, the Department of Administration brought about a change in the rule amendment as noticed on October 17, 1986, which was not the product of information developed in the record of the public hearing of November 7, 1986, is not a technical change unrelated to substance, a change in response to written material relating to the rule received by the agency within 21 days of the time of notice and made a part of the record of the proceedings, nor constituted of the response to the proposed amendments in the way of an objection by the APA committee. This refers to language in the rule as enacted effective February 1, 1987, at Section (5) that disallowed the payment for annual leave upon transfer from the Senior Management Service to any organization within state government. The class of changes described in this paragraph are the only changes recognized in Section 120.54(13)(b), Florida Statutes (1986). The change concerning payment for annual leave was not authorized by this provision. Therefore, it was incumbent upon the agency to comply with the notice requirements of Section 120.54(1), Florida Statutes (1986), in identifying this substantive change to the rule if the Department of Administration intended to employ these terms. Notice was not given, and in the absence of further notice, the change as described is an invalid exercise of delegated legislative authority for failure to comply with the procedures set out in Section 120.54, Florida Statutes (1986).
Finally, given that the questioned phraseology within Section (5) to Rule 22SM-3.007, Florida Administrative Code, in effect on February 1, 1987, without recognition of the vested rights which Petitioner had to his annual leave credits caused the diminution of the value of those annual leave credits, it constitutes arbitrariness on the part of the enacting agency. It is an arbitrariness sufficient to cause the excision of that language from the rule. See Agrico, supra.
Petitioner has requested the hearing officer to take official recognition of certain requests for production which Petitioner made to the Respondent agency. This overture dates from August 9, 1987, beyond the point of final hearing, and refers back to requests for production propounded to the Respondent on May 29, 1987. There is also pending a request to the hearing officer for compulsory official recognition of Cabinet meeting records which date from August 24, 1987. Attached to that request is certain material, to include tape cassettes. No indication was made by the Petitioner before hearing or at the time of hearing that these requests would be forthcoming. Under the circumstances, the requests are denied.
Having considered the facts found and in recognition of the legal conclusions reached, it is,
That that language within Rule 22SM-3.007(5), Florida Administrative Code, effective February 1, 1987, which states ". . . shall not be paid for and . . . " is stricken as being an invalid exercise of legislative authority. That provision now reads:
(5) Upon transfer of a Senior Management Service member to a position in state government outside the Senior Management Service, annual leave credits may be transferred subject to the rules governing the system into which the member is transferring. All annual leave credits accrued on the member's last anniversary date shall be prorated at the rate of 20 hours monthly or 9.230 hours biweekly for each pay period or portion thereof, worked subsequent to the members's last anniversary date.
In all other respects the petition is dismissed.
DONE AND ORDERED this 18th day of September, 1987, at Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 1987.
APPENDIX TO FINAL ORDER, CASE NO. 87-2172RX
In the findings of fact set forth in the final order, all suggested fact proposals of the parties have been incorporated with the exception of:
Petitioner's facts
Paragraph 6 is not necessary to the resolution of the dispute.
At paragraph 19, the bracketed sentence is not necessary to the resolution of this dispute.
Paragraph 24 is subordinate to facts found.
Paragraphs 28, 32, 33, 34, 35 and 42 are not necessary to the resolution of this dispute.
Paragraph 44 is subordinate to facts found.
Respondent's facts
Those facts suggested are subordinate to facts found.
COPIES FURNISHED:
David P. Gauldin, Esquire Post Office Box 142 Tallahassee, Florida 32302
August Aikens, Esquire General Counsel
Department of Administration
530 Carlton Building Tallahassee, Florida 32399-1550
M. Floy Mikell, Esquire Assistant General Counsel Department of Health and
Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard
Tallahassee, Florida 32399-1550
Adis Vila, Secretary Department of Administration
435 Carlton Building Tallahassee, Florida 32399-1550
Liz Cloud, Chief
Bureau of Administrative Code 1802, The Capitol
Tallahassee, Florida 32301
Carroll Webb, Executive Director Administrative Procedure Committee
120 Holland Building Tallahassee, Florida 32399-1300
NOTICE OF RIGHT TO JUDICIAL REVIEW
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED
| Issue Date | Proceedings |
|---|---|
| Sep. 18, 1987 | Final Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 18, 1987 | DOAH Final Order | Struck language from Senior Management Personnel Rule that limited amount of annual accrued leave which employee would be entitled to claim. |
RICHARD HERRING vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 87-002172RX (1987)
JAMES C. BREEN vs DEPARTMENT OF BANKING AND FINANCE, 87-002172RX (1987)
BRUCE M. DETERDING vs DEPARTMENT OF HEALTH, 87-002172RX (1987)
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES vs WILLIAM DUNN, 87-002172RX (1987)
