Opinion ID: 1312270
Heading Depth: 1
Heading Rank: 2

Heading: conclusion

Text: 1. G.S. 126-5(d)(1) allows the Governor to designate certain positions as exempt policymaking. The purpose is to allow the Governor to make partisan personnel decisions in order to have loyal supporters who will carry out administration policies. G.S. 126-5(c) and (h) allow employees in these positions to challenge such designations. The North Carolina Supreme Court reiterated in Abels v. Renfro Corp., 335 N.C. 209, 218[, 436 S.E.2d 822, 827] (1993), that it would [`]look to federal decisions for guidance in establishing evidentiary standards and principles of law to be applied in discrimination cases.['] [ (Quoting] Dept. of Correction v. Gibson, 308 N.C. 131[, 136, 301 S.E.2d 78, 82 (1983)) ]. 2. The Supreme Court of the United States ruled in Branti v. Finkel, 445 U.S. 507, [518, 100 S.Ct. 1287, 1295, 63 L.Ed.2d 574, 584 (1980),] that when employees challenge these political decisions, ... the ultimate inquiry is not whether the label [`]policymaker[`] or [`]confidential[`] fits a particular position; rather, the question is whether the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved. It is my conclusion that this standard must be followed when positions are declared policymaking exempt from the State Personnel Act, which was not done in this case. Respondent has not shown why a political confidant is a necessary requirement in this position. Branti states [i]t is equally clear that party affiliation is not necessarily relevant to every policymaking or confidential position. [ Id. ] 3. Reversal of the designation of this position is in order pursuant to G.S. 126-5(d)(6) which states: Subsequent to the designation of a policymaking position as exempt ... the status of the position may be reversed ... by the Governor ... in a letter to the State Personnel Director, the Speaker of the North Carolina House of Representatives, and the President of the North Carolina Senate. Based on the foregoing Findings of Fact and Conclusions of Law, the Administrative Law Judge makes the following: RECOMMENDED DECISION The designation of the position as exempt be reversed. As can readily be seen, only finding 3 was in any way related to the issue to be resolved at the contested case hearing, and none of the conclusions were in any way based upon that finding. Most of the other findings and all of the conclusions were based upon considerations of whether being a political confidant of the Governor or being affiliated with a particular political party was an appropriate requirement for the effective performance of the position at issue. The recommended decision quite simply did not mention or address the single issue properly presented by the parties and to be decidedwhether the position of Chief of the Internal Audit Section in DOT had properly been designated by DOT as a policymaking exempt position in accordance with all the provisions of N.C.G.S. § 126-5. Therefore, the recommended decision was not only affected by, but was the result of, an error of law. The Commission's decision and order merely adopted the findings of fact and conclusions of law of the ALJ as its own and ordered that the designation of the position in question as policymaking exempt under N.C.G.S. § 126-5 be reversed. The result was to repeat the error of law affecting the recommended decision of the ALJ. Therefore, the order of the Superior Court based upon its findings and conclusions to the effect that the decision of the Commission was not affected by any error of law was erroneous and was properly reversed by the Court of Appeals. Having determined that the Commission had committed error of law and that the order of the Superior Court must be reversed for concluding to the contrary, the Court of Appeals could have remanded this case to the Superior Court for further remand to the Commission with instructions that the Commission address and resolve the question of whether the position at issue had been properly designated as policymaking exempt in accord with N.C.G.S. § 126-5. Instead, the Court of Appeals concluded that the undisputed record evidence and the single finding by the Commission relating to the matter at issue before it supported a conclusion that the position of Chief of the Internal Audit Section of DOT was properly designated policymaking exempt. Accordingly, the Court of Appeals remanded with the mandate that the position of Chief of the Internal Audit Section be designated policymaking exempt. The Court of Appeals did not err in this regard. The proper scope of judicial review to be applied in an appeal from a decision of a state administrative agency depends on the issues presented on appeal. Our courts have held that if it is alleged that an agency's decision was based on an error of law then a de novo review is required. Brooks, Comr. of Labor v. [McWhirter] Grading Co., 303 N.C. 573, 281 S.E.2d 24 (1981). `When the issue on appeal is whether a state agency erred in interpreting a statutory term, an appellate court may freely substitute its judgment for that of the agency and employ de novo review.' Id. at 580-81, 281 S.E.2d at 29, quoting Savings & Loan League v. Credit Union Comm., 302 N.C. 458, 465, 276 S.E.2d 404, 410 (1981). A review of whether an agency decision is supported by sufficient evidence requires the court to apply the whole record test. Thompson v. [Wake County] Board of Education, 292 N.C. 406, 233 S.E.2d 538 (1977). The whole record test is also applied when the court considers whether an agency decision is arbitrary and capricious. High Rock Lake Assoc. v. Environmental Management Comm., 51 N.C.App. 275, 276 S.E.2d 472 (1981). Brooks v. Rebarco, Inc., 91 N.C.App. 459, 463, 372 S.E.2d 342, 344 (1988). However, in the present case, the decision of the Court of Appeals must be affirmed no matter which standard is applied. The sole issue raised by petitioner Hodge in his petition for a contested case hearing was whether his position was a `policymaking position' as defined in NCGS 126-5(b). At all times pertinent to this appeal, N.C.G.S. § 126-5(b) defined policymaking position as a position delegated with the authority to impose the final decision as to a settled course of action to be followed within a department, agency, or division. The only finding by the Commission relating to the question of whether the position held by Hodge was delegated with the authority to impose the final decision as to a settled course of action to be followed within a department, agency, or division was finding 3, which stated: As Chief of the Internal Audit Section, the Petitioner exercised broad flexibility and independence. In addition to supervising other auditors, he could decide who, what, when, how, and why to audit within the Department. While he could not order implementation of any recommendations, he was free to contact the State Bureau of Investigation concerning his findings. (Emphasis added.) Certainly, the uncontroverted evidence compelled this finding by the Commission, but the uncontroverted evidence also required additional findings. According to the job description for the position of Chief of the Internal Audit Section, the person holding that position independently directs and supervises all activities and personnel in the Internal Audit Section. The Internal Audit Section is responsible for all internal audits of DOT, which include financial and compliance audits, economy and efficiency audits, management analysis audits, and special investigative audits. Those audits encompass all activities and phases of operations within the Division of Highways, the Division of Motor Vehicles, the State Ports Authority, and the Governor's Safety Program. Auditors are assigned by the Chief of the Internal Audit Section to conduct particular audits, and the Chief of the Internal Audit Section also controls the scope, objectives, findings, and recommendations of any audit conducted in any of the divisions of DOT. Further, the Chief of the Internal Audit Section prepares manuals, guide programs, and audit procedures and gives related instructions for all auditors to utilize in performing audits throughout the entire DOT. The testimony of petitioner Hodge was that his decisions in all the foregoing regards were not reviewable or reviewed by anyone in DOT or elsewhere. All of this evidence was uncontroverted before the Commission and is unchallenged on this appeal. I conclude that the unfettered and unreviewable power to establish auditing procedures to be applied throughout an entire department of government and to implement those procedures throughout the entire department, combined with the unfettered and unreviewable power to decide who and what throughout the department will be audited, when those audits will be conducted, the manner in which audits will be conducted throughout an entire department, and whether findings of any audit conducted within the entire department shall be referred to the State Bureau of Investigation, is the power to impose the final decision as to a settled course of action to be followed within a department, agency, or division within the meaning of N.C.G.S. § 126-5(b). The uncontroverted and incontrovertible evidence of record before the Commission and before this Court establishes that the position of Chief of the Internal Audit Section carries with it these powers and more. Accordingly, I believe that the Court of Appeals was correct in holding that the Commission's findings and the record evidence compelled the legal conclusion that the position of Chief of the Internal Audit Section is a policymaking position within the meaning of N.C.G.S. § 126-5(b) and had properly been designated as such. Accordingly, I would affirm the decision of the Court of Appeals. For the foregoing reasons, I must respectfully dissent.