Case Name: MICHIGAN STATE EMPLOYEES ASSOCIATION v. CIVIL SERVICE COMMISSION
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1985-03-05
Citations: 141 Mich. App. 288
Docket Number: Docket No. 73710
Parties: MICHIGAN STATE EMPLOYEES ASSOCIATION v CIVIL SERVICE COMMISSION
Judges: Before: Danhof, C.J., and D. E. Holbrook, Jr., and C. W. Simon, Jr., JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 141
Pages: 288–301

Head Matter:
MICHIGAN STATE EMPLOYEES ASSOCIATION v CIVIL SERVICE COMMISSION
Docket No. 73710.
Submitted July 18, 1984, at Lansing. —
Decided March 5, 1985.
Leave to appeal applied for.
Plaintiffs, the Michigan State Employees Association, its president, Ron Holley, and John Lewis, a member of the association, brought an action against defendants, the Michigan Civil Service Commission and its individual members, the State Personnel Director, and others, challenging the constitutionality of a recently adopted policy of the Civil Service Commission which allows the state to contract out for personal services when "it has been determined that the use of the classified service is not economical or feasible”. The policy allows the use of independent contractors when to do so would result in "substantial long-term savings to the state when compared with having the service performed by classified employees”. Plaintiffs alleged that this policy is contrary to the intent of Const 1963, art 11, § 5, which section establishes the state civil service. Plaintiffs also alleged that an amendment to the Employee Relations Policy prohibiting any collective-bargaining agreements which limit independent contracting violates their due process rights. The Ingham Circuit Court, Thomas L. Brown, J., granted summary judgment to defendants, holding that plaintiffs had failed to state a claim upon which relief could be granted. Plaintiffs appeal. Held:
1. The Civil Service Commission is vested with plenary powers in its sphere of authority. Furthermore, plaintiffs have not shown any harm to the civil service system as a result of the new policy. Allowing the Civil Service Commission to utilize independent contractors does not violate the Michigan Constitution.
2. There is no constitutional right to collective-bargaining by civil service employees. The policy does not violate plaintiffs’ due process rights.
References for Points in Headnotes
[1] 5 Am Jur 2d, Appeal and Error § 853.
73 Am Jur 2d, Summary Judgment § 35.
[2, 4] 15 Am Jur 2d, Civil Service §§ 1, 3, 14.
[3] 15 Am Jur 2d, Civil Service § 57.
Affirmed.
Danhof, C.J., dissented. He would hold that allowing the contracting out of work for purely economic reasons violates the intent of the constitutional establishment of the state civil service. The policy would allow the abolishment of present positions in favor of independent contractors, which contravenes the purpose of abolishing the spoils system and of encouraging career service in state government. He would reverse.
Opinion of the Court
1. Appeal — Summary Judgment — Failure to State Cause of Action.
The Court of Appeals, when reviewing a grant of a summary judgment for failure to state a cause of action upon which relief can be granted, must give the benefit of any reasonable doubt to the party opposing the summary judgment and will affirm only when satisfied that there is no possibility a cause of action can be developed (GCR 1963, 117.2[1]).
2. Civil Service — Independent Contractors — Savings to State — Constitutional Law.
The Michigan Civil Service Commission has plenary power in its sphere of authority and was empowered to establish a rule which allows the utilization of independent contractors to perform personal services where such contracting out would result in substantial long-term savings to the state when compared to having the service performed by classified employees; such a rule does not violate the Michigan Constitution or the intent or purposes of the civil service act (Const 1963, art 11, §5).
3. Civil Service — Collective Bargaining — Constitutional Law.
Civil service employees have no constitutional right to collective bargaining.
Dissent by Danhof, C. J.
4. Civil Service — Independent Contractors — Constitutional Law.
A Civil Service Commission policy which allows for contracting work out when "the use of the classiñed service is not economical or feasible’’ confficts directly with the intent of the constitutional provisions providing for a classiñed civil service by allowing the abolishment of classiñed positions in favor of contracting work out; the policy contravenes the intent to do away with the spoils system and to encourage career service in state government and, therefore, is unconstitutional (Const 1963, art 11, §5).
Fraser, Trebilcock, Davis & Foster, P.C. (by Michael E. Cavanaugh and Brandon W. Zuk), for plaintiffs.
Warner, Norcross & Judd (by Joseph G. Scoville, Paul T. Sorensen and Richard A. Bandstra), for the Civil Service Commission, the individual Commissioners, the Department of Civil Service, and the State Personnel Director.
Frank J. Kelley, Attorney General, Louis J. Caruso, Solicitor General, and Arthur E. D’Hondt, Assistant Attorney General, for the Department of Transportation, the Department of Management and Budget, and Gerald J. McCarthy.
Before: Danhof, C.J., and D. E. Holbrook, Jr., and C. W. Simon, Jr., JJ.
Circuit judge, sitting on the Court of Appeals by assignment.

Opinion:
Per Curiam.
Plaintiffs appeal as of right from the order that granted defendants' motion for summary judgment pursuant to GCR 1963, 117.2(1). Plaintiffs consist of the Michigan State Employees Association, Ron Holley, the president of MSEA, and John Lewis, who is a member. Ten defendants named include the Michigan Civil Service Commission (CSC); the State Personnel Director, John F. Hueñi, Jr.; the Michigan Department of Civil Service; the Michigan Department of Management and Budget; the Michigan Department of Transportation; and a Deputy Director of the Department of Transportation, Gerald J. McCarthy.
The plaintiffs are challenging the constitutionality of two of the CSC's actions. Plaintiffs contend that allowing the state to contract out for personal services whenever there would be a substantial long-term savings to the state as compared with having the service performed by classified state employees is in violation of Const 1963, art 11, § 5. Additionally, plaintiffs believe that their due process rights have been violated, as the CSC has disregarded the collective-bargaining agreement. On appeal plaintiffs are attempting to show a claim upon which relief can be granted.
Our standard of review requires us to give every benefit of any reasonable doubt to the opposing party and be satisfied that there is no possibility that such claim can arise. Freeman v Colonial Penn Ins Co, 138 Mich App 444; 361 NW2d 356 (1984). Plaintiffs' argument is based on Const 1963, art 11, § 5, which provides, inter alia, that:
"Sec. 5. The classified state civil service shall consist of all positions in the state service except those filled by popular election, heads of principal departments, members of boards and commissions, the principal executive officer of boards and commissions heading principal departments, employees of courts of record, employees of the legislature, employees of the state institutions of higher education, all persons in the armed forces of the state, eight exempt positions in the office of the governor, and within each principal department, when requested by the department head, two other exempt positions, one of which shall be policy-making. The civil service commission may exempt three additional positions of a policy-making nature within each principal department."
Plaintiffs contend that this requires all positions in the state service to be within the classified civil service as long as it is feasible. MSEA believes that allowing the state to contract out when "[t]he service would be performed at substantial long-term savings to the state when compared with having the service performed by classified employees" is a violation of art 11, § 5. This clause was just recently added to the list of circumstances in which the CSC could contract for personal services. Procedure for Requesting Use of Contractual Personal Service, § IV D (November 3, 1982). The other reasons that allow for contracting out are that the services are temporary or intermittent, that the services are uncommon to state employment, or that the equipment and materials necessary are not possessed by the state and the cost of procurement would be disproportionate to the contract cost. Plaintiffs believe that this additional provision will result in numerous positions being removed from the civil service classification contrary to the intent of art 11, § 5.
"In interpreting this constitutional amendment, we must examine its historical context and the arguments employed by its proponents. Civil Service Comm v Auditor General, 302 Mich 673, 681; 5 NW2d 536 (1942). One of the primary reasons for the civil service amendment was to discontinue the 'spoils system', under which public employment was the reward for political work. Permitting the use of contractual personal services where it is neither feasible nor practical to establish a classified position to perform the required service, subject to Civil Service Commission approval, implements this intention. Approval or disapproval of the personal services remains with the Civil Service Commission." Detroit Automobile Inter-Insurance Exchange v Comm'r of Ins, 125 Mich App 702, 711-712; 336 NW2d 860 (1983), lv den 418 Mich 865 (1983).
Plaintiffs have not alleged that there was any bad faith or an attempt to reintroduce the "spoils system" on the part of defendants. Nor have plaintiffs been able to show that even one layoff has been attributed to the new provision. We can find no requirement that all who provide services for the state must be in a civil service position. Reed v Civil Service Comm, 301 Mich 137, 158; 3 NW2d 41 (1942). Rather, we find the Civil Service Commission to be vested with plenary power in its sphere of authority. Council No 11, AFSCME v Civil Service Comm, 408 Mich 385, 408; 292 NW2d 442 (1980). Article 11, § 5 also provides in part that '[positions shall not be created nor abolished except for reasons of administrative efficiency".
Accordingly, we hold that allowing CSC to utilize independent contractors does not violate the Michigan Constitution. A long-term substantial economic savings to the state does not violate the intent or purposes of the civil service act. In Michigan, before a civil service position may be abolished, good faith must be established by a showing that the position is to be abolished for reasons of efficiency and economy. Hutchinson v Dep't of Mental Health, 108 Mich App 725, 731; 310 NW2d 856 (1981), lv den 413 Mich 929 (1982). We find no harm to the civil service by virtue of this additional reason to hire independent contractors.
Plaintiffs' final argument alleges that their due process rights are violated by the amendment to the Employee Relations Policy which prohibits any collective-bargaining agreements that limit independent contracting. This argument is meritless. There is no constitutional right to collective bargaining by civil service employees. Welfare Employees Union v Civil Service Comm, 28 Mich App 343, 352; 184 NW2d 247 (1970), lv den 384 Mich 824 (1971).
As plaintiffs have not alleged any error in the adoption of this amendment, we assume that all procedures were properly followed. It is clear that the CSC may amend its rules.
"An administrative agency may amend, rescind or suspend its rules and regulations. Agencies may also have discretion to suspend a rule or regulation pending its administrative review. An administrative agency does not exhaust its power to make rules and regulations by having made a particular enactment. It may modify or repeal its rules and regulations, 2 Am Jur 2d, Administrative Law, § 309, 310." International Union of Civil Rights & Social Service Employees v Michigan Civil Service Comm, 57 Mich App 526, 530; 226 NW2d 550 (1975).
Therefore, we affirm the circuit court's holding.
Affirmed.
Each member of the commission has been named individually as well. They are: Michael A. Dively, John F. Dodge, Jr., Walter R. Green and Harriet B. Rotter.