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In re Kanc


July 23, 2008


On appeal from the Merit System Board, DOP Docket No. 2007-3116.

Per curiam.


Submitted April 14, 2008

Before Judges A. A. Rodríguez and C. L. Miniman.

Michael Kanc (appellant) challenges the Final Administrative Action of the Merit System Board (Board), which upheld the decision by the Division of Human Resources Information Service (HRIS) in the Department of Personnel (DOP), removing his name from an eligible list for promotion to Manager 2 position. This is the second time that this matter is before us. In an earlier appeal, we reversed and remanded to the Board, noting that a hearing may be required to fully develop the record regarding the impact on this controversy presented by administrative regulations, specifically N.J.A.C. 4A:4-4.7(a)(9), -7.1(c)(2) and -7.4(c). In re Kanc, A-1670-05T5 (App. Div. Feb. 9, 2007). We did not retain jurisdiction. This appeal is from the Board's decision following our remand. We affirm.

It is undisputed that appellant has served the State meritoriously for more than thirty-six years. He began his civil service career with the Department of Treasury, Management and Financial Data Center in 1971 as a Data Processing Programmer Trainee. In November 1985, appellant became Manager 1, Information Processing in the Office of Information Technology (OIT).

In February 1999, DOP announced a promotional examination for a Manager 2, Information Processing (Manager 2) position, symbol PS7874U. Appellant applied to take the exam. The exam was open to applicants in Unit Scope U915 (OIT/Client Services) who were currently serving in the title of Manager 1, Information Processing and had an aggregate of one year continuous, permanent service in that title. Appellant took the exam. Thereafter, appellant was temporarily reassigned to Unit Scope U935.

OIT underwent a reorganization, which created several new unit scopes. As a result, appellant was reassigned to Unit Scope U965 (Enterprise Solutions/e-Government Services), one of the newly created unit scopes. As a result of the reorganization, the Division of Selection Services determined that because examinations had been announced for provisional appointments made prior to January 1, 2000, those examinations would continue and the resultant eligible lists would be certified against the provisional appointments and any vacancies. The eligible list for Manager 2, Information Processing, OIT, was promulgated on March 28, 2002. OIT appointed eight of the twelve eligible employees listed on the certification list, effective August 1, 2002. However, OIT requested the removal of appellant's name because he was no longer employed in Unit Scope U915.

Appellant filed a Placement Services Appeal with HRIS. The appeal was denied and appellant challenged that denial to the Board. Appellant argued that: (1) he should not have been removed from the subject eligible list on the basis that he was no longer in the appropriate unit scope because OIT's published policy during the reorganization provided that the lists would be utilized on a one-time basis; and (2) he was treated differently than Susan Colbert, a Manager 1 provisionally in the title, who was appointed to Manager 2.

The Board issued a final administrative action concluding that the appointing authority had appropriately removed appellant from the eligible list because he no longer served in the appropriate unit scope. The Board noted that after the reorganization, all of the provisionals in the title of Manager 2, Information Processing continued to serve in Unit Scope U915, unlike appellant. Thus, appellant was not treated differently and was properly removed from the eligible list.

Appellant then took his challenge to the Board's decision to us. We remanded because the Board did not discuss the impact of N.J.A.C. 4A:4-4.7(a)(9), -7.1(c)(2), and -7.4(c) on the propriety of the OIT's action in seeking removal of appellant's name from the eligible list.

On remand, the Board considered the impact of these regulations on this controversy. The Board found that the regulations pertaining to transfers and retention of promotional rights were inapplicable to this matter. The Board explained that: N.J.A.C. 4A:4-7.1 defines a "transfer" as reassignment of an employee between different appointing authorities, rather than different units within the same appointing authority; a "reassignment," as defined by N.J.A.C. 4A:4-7.2, is movement between different units in the same appointing authority; and the retention of promotional rights provided in N.J.A.C. 4A:4-4.7(a)(9) does not apply to a reassignment. The Board therefore denied appellant's challenge.

In this appeal from the Board's remand decision, appellant contends that the Board: (1) acted unreasonably; (2) acted in an arbitrary, capricious and clearly erroneous manner by finding that OIT's published policy and DOP's alleged longstanding, unpublished policy were one and the same; and (3) incorrectly concluded that appellant was challenging the disposition of the Manager 1 certification. Defendant also contends that OIT and DOP acted in an arbitrary, capricious and unreasonable manner. However, the only matter before us is the decision by the Board. That is the only appealable decision because it is a final action by an administrative agency. R. 2:2-3(a)(2).

The contentions against OIT are that it acted arbitrarily, unreasonably and in violation of express or implicit legislative policy by failing to consistently follow its published policy on how it would handle promotions for employees impacted by the reorganization and that it acted arbitrarily by treating provisional and non-provisional employees within the same unit scope differently. Appellant also faults DOP for failing to address the applicability of OIT's published policy to his case, and because DOP's unpublished policy is not the product of the rulemaking process, and therefore its reliance on that policy is arbitrary, capricious and unreasonable agency action.

We must reject these contentions against the Board. The applicable regulations, N.J.A.C. 4A:4-2.1(c)(3), -2.6(a)(2), -6.1(a)(1), and -6.2(a)(5), clearly provide that an applicant must be serving in the appropriate unit scope in order to be eligible for an examination. Here, it is undisputed that appellant was serving in Unit Scope U965 when he sought a position in Unit Scope U915. He makes several arguments why the clear mandate of the regulation should not be followed in his case.

Our standard of review is well settled. We will not upset the ultimate determination of an agency unless shown that it was arbitrary, capricious or unreasonable, that it violated legislative policies expressed or implied in the act governing the agency, or that the findings on which the decision is based are not supported by the evidence. Prado v. State, 186 N.J. 413, 427 (2006); Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963). We will respect the agency's expertise, but ultimately, interpretation of statutes is a judicial, not administrative, function and we are in no way bound by the agency's interpretation. Mayflower Secs. Co. v. Bureau of Secs., 64 N.J. 85, 93 (1973).

On the other hand, our scope of review of administrative regulations is extremely limited. Administrative regulations have a presumption of validity. Lewis v. Catastrophic Illness in Children Relief Fund Comm'n., 336 N.J. Super. 361, 369-70 (App. Div.), certif. denied, 168 N.J. 290 (2001). A party who challenges them bears the burden of showing that they are arbitrary, capricious or unreasonable, or beyond the scope of the power delegated to the agency by the Legislature. Id. at 369.

Moreover, the courts have a "strong inclination to defer to agency action provided it is consistent with the legislative grant of power." Id. at 370. As we said in Blecker v. State, 323 N.J. Super. 434 (App. Div. 1999):

When an administrative agency interprets and applies a statute it is charged with administering in a manner that is reasonable, not arbitrary or capricious, and not contrary to the evident purpose of the statute, that interpretation should be upheld, irrespective of how the forum court would interpret the same statute in the absence of regulatory history. [Id. at 442.]

Applying that standard here, we conclude that appellant has failed to meet his burden. He has not shown that the Board's interpretation is arbitrary, capricious or unreasonable. In our view, the Board's decision is sound and grounded on the applicable regulations.



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