February 24, 2009
IN THE MATTER OF ANTHONY D'ALTRUI
On appeal from the Merit System Board, Department of Personnel, Docket Nos. 2002-4692 and 2004-1226.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 10, 2008
Before Judges Lisa, Sapp-Peterson, and Alvarez.
Petitioner Anthony D'Altrui appeals a Merit System Board (MSB or the Board) December 21, 2007 final decision removing him from the position of Construction Official with the Borough of Sayreville. We affirm.
On April 16, 2002, petitioner was suspended indefinitely pursuant to a preliminary notice of disciplinary action. That same day, petitioner was arrested and charged with various criminal offenses. The charges and the suspension stemmed from the same allegations, namely, that for years, petitioner had falsified payroll records for the sub-code officials under his supervision. The Borough issued a final notice of disciplinary action after a departmental hearing on June 5, 2002, affirming the indefinite suspension. The grand jury declined to indict petitioner.
On March 23, 2003, the Borough served petitioner with a second preliminary notice of disciplinary action, charging him with neglect of duty, conduct unbecoming a public employee, and other cause. Following another departmental hearing, he was served with a final notice of disciplinary action sustaining the charge of conduct unbecoming a public employee. He was removed from his position effective September 9, 2003.
Petitioner appealed the suspension and the removal separately. The matters were transmitted to the Office of Administrative Law (OAL) and consolidated for disposition. On October 10, 2007, the Administrative Law judge (ALJ) issued a written opinion finding that the Borough had established that petitioner was guilty of conduct unbecoming a public employee by a preponderance of competent and credible evidence. The ALJ recommended that petitioner's removal be affirmed. On December 21, 2007, the Board affirmed the decision despite petitioner's filed exceptions. This appeal followed.
Petitioner was initially employed by the Borough in February 1994 as a temporary electrical inspector. Approximately a month later, he was hired as the permanent electrical sub-code official by the Borough construction official, Edward Jasinowski. Jasinowski told petitioner that he would be compensated for nineteen hours of work weekly, but did not explain how those nineteen hours would be structured. He did indicate that the general practice was for on-site inspections to be performed on Tuesdays and Thursdays.
Petitioner was selected to replace Jasinowski when in April 1997, Jasinowski was terminated for leaving work early to tend to personal matters, performing inspections improperly, and "questionable operations in the office." Soon after, the Borough increased the weekly hours for construction department employees from nineteen to twenty-one.
Shortly after petitioner became the construction official, the Borough issued an employee handbook, which required all employees to accurately record all hours worked. It also specified that the mayor, council, and the relevant union president must formally approve any deviations from the handbook's policies and procedures as to any employee.
When petitioner hired the three sub-code officials, he instructed them that they had to be present for work on Tuesdays and Thursdays, and that "administrative things" could be performed in the office or off-site. He also told them that they would not be compensated for more than twenty-one hours per week.
At the OAL hearing, petitioner testified that occasionally construction office personnel worked more than twenty-one hours per week. He perceived this to be a benefit to the municipality because the employees, himself included, never sought additional compensation. His perspective was that weeks in which they worked more than twenty-one hours were offset by weeks in which they worked fewer than twenty-one hours. There were no records maintained, however, as to any excess hours worked by petitioner or the three sub-code officials.
The union that includes Borough sub-code officials, the American Federation of State, County and Municipal Employees (AFSCME), had previously entered into a labor agreement with the Borough that required part-time employees to be paid by the hour. It also places a ceiling on the number of hours that could be worked by a part-time employee before he or she was considered a full-time employee and paid full-time benefits.
The Borough's business administrator, Joseph D'Arco, who served in that capacity until September 2000, testified that although petitioner had the authority to modify the weekly schedule, he was not permitted to modify the union contract or deviate from handbook procedures absent prior authorization. Petitioner had no authority to pay employees for hours they did not work.
Petitioner's duties as construction official included verification of the sub-code officials' payroll records. On January 7, 1998, petitioner was sent a memorandum from the Borough finance office requiring all payroll sheets to reflect actual hours worked for each day, total hours, rate of pay, and the total amount of pay due for each employee.
According to petitioner, in order to determine whether sub-code officials were working the hours specified on the time sheets that they submitted to him, he reviewed their inspection logs and the number of permits that they processed each week. The sub-code officials did not keep time records, and petitioner did not require them to perform their work functions while physically in the Borough.
In 2000, petitioner's department experienced an unusual influx of permit activity. As a result, petitioner sought increases in staffing and facilities. When these requests were refused, petitioner corresponded with the New Jersey Department of Community Affairs (DCA). On July 11, 2001, a DCA representative wrote to the Borough, as a result of petitioner's communications, advising that more funds should be invested in the construction department to alleviate critical staffing shortfalls.
Petitioner's request in October 2001 that the Borough make him the permanent director of code enforcement was denied. He responded by writing to the council chairman, the mayor, and the business administrator to express his disappointment. In the letter, he referred to the flexibility given to the sub-code officials to work "both on and off site . . . without any negative ramifications."
On April 11, 2002, petitioner wrote to the newly appointed business administrator in order to bring him "up to speed" on the operations of his department. He explained that inspectors were available by phone every day, and that inspections were performed Tuesdays, Thursdays, and any other day by special appointment. Plan reviews were conducted both on-site and off-site, usually on Wednesdays. Petitioner also explained that this flexibility allowed the sub-code officials to provide full service to the Borough, despite their part-time status. In exchange for this flexibility, petitioner added, the sub-code officials would never put in for additional pay.
The Borough police investigation into petitioner's office, including surveillance, culminated in his arrest on April 16, 2002. Over a three-month period, petitioner had signed time sheets certifying that the sub-code officials worked specific hours, and worked the requisite total number of hours, even though they were not present in the office at those times. The investigation was precipitated by a complaint made by two council members, one of whom had only been in office for a few days.
At the administrative hearing, the Borough established that although the sub-code officials were present on Tuesdays and Thursdays, they usually left early. Despite petitioner's testimony that plan review was sometimes done off-site, no set of construction plans had ever been removed from the office by sub-code officials.
In contrast to petitioner, D'Arco testified that the sub-code officials were prohibited from working outside Borough limits. D'Arco had interpreted petitioner's written references to the unique flexibility afforded to sub-code officials as references to work being performed in the field, that is, construction site inspections. It was D'Arco's recollection that when he hired petitioner, he reviewed the employee handbook with him. D'Arco assumed that any scheduling changes made by petitioner related only to the days of the week during which the officials would be available to the public.
A full-time building sub-code official testified for the Borough that it was common knowledge that the three part-time sub-code officials had a "special deal" that allowed them to be paid for twenty-one hours regardless of the actual amount of time worked. That employee did not have a similar arrangement; nor did his predecessor, who had been a part-time employee. To his knowledge, no one took construction plans home, although it was not prohibited.
A clerk in the construction department testified that when she worked part-time, if she worked more hours than allowed, she had to document her time in order to be paid for the excess. The clerk said that the sub-code officials worked mornings in the office and then went out to do inspections. After she became full-time, she never saw them in the office when she left at 5:00 p.m. She also testified that two sets of plans were kept in the office for each project, and that none had ever been removed.
Wayne Kronowski replaced D'Arco temporarily from September 2000 to January 2002 and again from January 2003 to June 2003. He testified that under the Borough's agreement with AFSCME, part-time employees were to be compensated only for hours actually worked. Additionally, pursuant to the employee handbook, accurate time sheets had to be submitted for all employees without exception. Kronowski was unaware of any authorization for the sub-code officials to receive pay for twenty-one hours regardless of the number of hours actually worked. He was aware of the Borough's practice of permitting full-time sanitation workers to leave work when they had completed all of their scheduled pickups. Kronowski knew of no employee authorized to work from home, although there was no policy that expressly prohibited it. He too thought that when petitioner talked about job flexibility in his office, he meant that sub-code officials could work on construction sites, not just in the office.
Frank Makransky, who also testified as a Borough witness, was a councilman from 1990 to 1995 and again from 1999 to 2005. He was council president for several years. His understanding was that the Borough handbook applied to every Borough employee. He was unaware of any special arrangement with regard to the construction office or of any policy that permitted employees to be paid for hours that they did not work. As far as he was aware, employees were to be paid only for hours worked. Furthermore, the terms and conditions of employment fixed by the AFSCME contract were not subject to modification on an individual basis. If conditions of employment were to be changed, the mayor and council had to act formally to change them. It was possible for a business administrator to negotiate terms with an individual employee, but he had to obtain the advice and consent of council before the terms were binding.
The Borough also presented the testimony of Scott Kominkiewicz, a councilman from 1995 to 1997, who had been council president and chairman of planning and zoning during his tenure. He agreed that the Borough handbook was binding on all employees without exception, and that the business administrator could not appoint employees at compensation rates at variance with the union contract. Employees in the construction office, like any other Borough employee, were to be paid only for actual hours worked. Kominkiewicz was unaware of the mayor or council ever discussing a different arrangement.
Petitioner presented as his witness former council member Mary Novak, who served on council from January 1, 1995, to December 31, 2000. She stated that the sub-code officials were to be paid for twenty-one hours of work per week, regardless of whether they worked forty hours or ten. She did not believe that the arrangement violated the union contract because it was "basically comp time." According to Novak, the arrangement was first used with petitioner, and council first learned of it after D'Arco issued a report on the subject. She recalled discussion of the arrangement at council meetings, during which the Borough attorney and members of the public were present. She did not recall if the arrangement was ever actually reduced to writing.
Novak likened the arrangement to that of the sanitation workers or the police, who might write reports at headquarters, at home, by a river, or behind the high school. She claimed that AFSCME was "alright" with the Borough allowing the part-time employees in the construction department to benefit from this arrangement. She asserted that some Borough employees were simply exempt from the handbook's policies, including the sub-code officials.
Petitioner also presented Jeffrey Pawlowski, a Borough councilman from 1998 to 2000. In Pawlowski's opinion, the construction department functioned so efficiently in part because of their flat salary. While the department workload fluctuated greatly from season to season, the public was saved from paying for full-time benefits for construction employees.
David Herbert, the fire sub-code official, also testified for petitioner. He claimed that D'Arco told him when he was hired that although he would not receive any benefits, he would be paid for nineteen hours weekly, and that there would be times when he would work more or less than the nineteen hours. D'Arco also told him that he did not have to be at the Borough office all day on his scheduled work days, which was important to Herbert because he was also a fire marshal in East Brunswick. D'Arco said that Herbert should not document the actual hours he worked, including weekends, because it would raise issues regarding benefits.
Petitioner does not deny the conduct with which he is charged. His defense is that not only were mayor and council aware of his office's "special arrangement," but they condoned or authorized it and should, therefore, be estopped from taking any disciplinary action against him.
The ALJ found the Borough's witnesses, who disputed any "special arrangement," to be far more credible and knowledgeable about Borough procedures, the employee handbook, and the union contract. Their testimony, he opined, "had the ring of truth." He reasoned that D'Arco, a person who as a matter of custom and routine documented everything, would not have entered into a special arrangement with petitioner without obtaining the advice and consent of mayor and council, as well as AFSCME. The ALJ credited D'Arco's testimony that he never discussed with mayor and council payment of sub-code officials for hours they did not work or the conversion of their positions from part-time hourly to part-time salaried.
The ALJ similarly found past council members who testified as Borough witnesses to be more credible than those who testified on behalf of petitioner due to their more detailed recollections. In the words of the ALJ, petitioner's witnesses who were past council members "did not fare as well" because they had only "a passing familiarity with the policies and procedures" set forth in the union contract and the employee handbook. They had little understanding of the requirements for formal action by council. Neither understood that the employee handbook and the union contract are binding upon council. The ALJ did not consider Herbert's testimony to be convincing because he knew "virtually nothing about the terms and conditions of his employment."
The ALJ also found that petitioner's memo to council alluding to the sub-code officials' employment flexibility could easily be interpreted as referring to the completion of work both on- and off-site. He also noted that, obviously, because excess hours were not tracked, they could not be "banked" for use at a later date. The arrangement was not the virtual equivalent of "comp time," and there was not a scintilla of proof supporting the purported understanding.
It is undisputed that petitioner routinely signed off on time sheets that he knew to be false. The ALJ concluded that petitioner, who understood employee policies and procedures, deliberately chose to run his department in the manner he deemed best. The ALJ attributed this to "hubris" and described petitioner as a person who had "little understanding of and patience for bureaucrats." He opined that petitioner's course of conduct erodes the trust that the public places on government to maintain accurate records. Petitioner's actions "substantially disadvantaged" the public, thereby establishing good cause for removal.
The ALJ determined that the Borough had met its burden of proving that petitioner was guilty of conduct unbecoming an employee by the preponderance of competent, relevant, and credible evidence and that the penalty of removal was appropriate. The MSB adopted the ALJ's findings of fact and conclusions and the recommendation that the removal be upheld.
First, we address petitioner's contention that the MSB's decision disregarded the totality of the circumstances and was therefore arbitrary and capricious. Our role in reviewing a decision of an administrative agency is limited to determining whether it is "'arbitrary, capricious or unreasonable' or it is unsupported by 'substantial credible evidence in the record as a whole.'" In re Morrison, 216 N.J. Super. 143, 160 (App. Div. 1987) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)). In making this determination, our inquiry is limited to the following:
(1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [Karins v. City of Atlantic City, 152 N.J. 532, 540 (1998) (quoting George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)).]
Even if we would have come to a different result after evaluating the record, if "the evidence and the inferences to be drawn therefrom support the agency head's decision, then [we] must affirm." Campbell v. N.J. Racing Comm'n, 169 N.J. 579, 587 (2001). The reviewing court should impose its own conclusions only if the agency's finding is so clearly mistaken that the interests of justice demand intervention. Id. at 587-88.
Once the ALJ has made factual findings as to the credibility of witnesses, an agency "may no longer sift through the record anew to make its own decision." Cavalieri v. Bd. of Trs. of Pub. Employees Ret. Sys., 368 N.J. Super. 527, 534 (App. Div. 2004); N.J.S.A. 52:14B-10(c). In this case, the ALJ heard the testimony of eleven witnesses and concluded that petitioner's witnesses lacked the credibility and knowledge demonstrated by the Borough's witnesses. These findings are entitled to great deference. Overall, petitioner's position was significantly undermined by the sub-code officials' inability to explain how they banked their excess hours or even maintained any record whatsoever of the hours they worked. The MSB's decision was therefore neither arbitrary nor capricious.
Petitioner asserts that because neither the ALJ nor the MSB considered the Borough's alleged retaliatory purpose in commencing the investigation, the outcome was an "outrageously unjust result." Indisputably, N.J.S.A. 11A:2-24 forbids appointing authorities from retaliating against an employee for "lawful disclosure of information on the violation of any law or rule, governmental mismanagement or abuse of authority." Even if we were to accept that the Borough initiated the police investigation into the construction department's payroll practices as a result of petitioner's letter to the DCA about staffing needs, as the ALJ said, "Whether the township had an improper motivation for bringing charges . . . is of absolutely no moment if what [petitioner] did was improper."
N.J.A.C. 1:1-15.1(c) provides that an ALJ "may, in his or her discretion, exclude any evidence if its probative value is substantially outweighed by the risk that its admission will either: (1) Necessitate undue consumption of time; or (2) Create substantial danger of undue prejudice or confusion." As a result, it was well within the ALJ's discretion to exclude evidence that was irrelevant and not probative of the issue before him. This court should defer to such evidentiary rulings. Cf. State v. Morton, 155 N.J. 383, 453 (1998) (holding that "[t]raditional rules of appellate review require substantial deference to a trial court's evidentiary rulings"); State v. Carter, 91 N.J. 86, 106 (1982) (holding that "[w]hether the probative value of evidence is outweighed by the potential prejudice is a decision left to the discretion of the trial judge" and that "the decision of the trial court must stand unless it can be shown that the trial court palpably abused its discretion").
Furthermore, despite petitioner's argument to the contrary, the grand jury's decision not to indict petitioner does not collaterally estop the Borough from using evidence at the OAL hearing that was developed in the criminal investigation. These are two different proceedings with different goals and standards of proof. Delguidice v. N.J. Racing Comm'n, 100 N.J. 79, 84 (1985). That the grand jury did not find that a crime was committed does not mean that petitioner acted properly by falsifying employee time records over many years.
Petitioner further asserts that the doctrine of equitable estoppel prevents the Borough from bringing charges against him. The principle behind equitable estoppel is that "'one may, by voluntary conduct, be precluded from taking a course of action that would work injustice and wrong to one who with good reason and in good faith has relied upon such conduct.'" Maltese v. Twp. of N. Brunswick, 353 N.J. Super. 226, 240 (App. Div. 2002) (quoting Summer Cottagers' Ass'n of Cape May v. City of Cape May, 19 N.J. 493, 503-04 (1955)).
Petitioner failed to prove that the Borough authorized or encouraged the alleged special arrangement within his department. His witnesses could not define it and offered conflicting testimony about its parameters and to whom it applied. In light of petitioner's own wrongful conduct and failure to adhere to the union contract and employee handbook, he has failed to demonstrate any compelling circumstance that would justify application of equitable estoppel.
Petitioner also contends that termination was a "shockingly disproportionate result." He analogizes his situation to that of the water department employees in Belleville v. Coppla, 187 N.J. Super. 147, 149 (App. Div. 1982), who were terminated for refusing to perform an assignment after being returned to their regular positions following temporary promotions. In that case, the ALJ held that termination was unreasonably severe given the employees' otherwise clean disciplinary records. Id. at 150. We affirmed, finding that termination was not necessary and distinguishing the facts from termination cases involving employees of the corrections system, where strict discipline is in the public interest. Id. at 154.
In this case, petitioner did far more than refuse to complete a task. His verification of records he knew to be false spanned several years. He authorized the use of public funds to pay employees under his supervision for hours they never worked. His conduct substantially disadvantaged the public. Golaine v. Cardinale, 142 N.J. Super. 385, 397-98 (Law Div. 1976), aff'd o.b., 163 N.J. Super. 453 (App. Div. 1978), certif. denied, 79 N.J. 497 (1979). We agree that it was conduct "so patently inimical to the public interest and to the public trust" as to warrant the penalty of removal. Id. at 397.
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