On appeal from the Civil Service Commission, Docket Nos. 2005-1341 and 2008-1587.
The opinion of the court was delivered by: Ashrafi, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 15, 2010
Before Judges Fuentes, Gilroy and Ashrafi.
Appellant Anthony Hearn appeals from a final decision of the Merit System Board (the Board) denying him back pay and attorney's fees after he successfully appealed his demotion as a State employee. We reverse and remand to the Civil Service Commission (the Commission)*fn1 to determine an appropriate amount of attorney's fees and costs to award.
Hearn, who is a certified public accountant, was employed in the Office of Compliance Investigations of the Department of Education (DOE) and was assigned to manage the Single Grant Audit Unit. In that position, he directed the work of eight employees who audited school districts and other educational entities for compliance with State and federal grants. Hearn displayed a high level of technical expertise and generally performed his duties in an "exemplary manner."
The DOE hired Crystal Feliciano, an African-American woman, in July 2003 to perform audits of federal Perkins Grants under Hearn's supervision. Hearn had been on Feliciano's interview committee and had "argued strenuously" in favor of hiring her. On April 8, 2004, Feliciano filed a discrimination complaint with the Office of Equal Employment Opportunity/Affirmative Action accusing Hearn of racial discrimination. In a letter accompanying her complaint, Feliciano detailed examples of Hearn's alleged discrimination, such as requiring Feliciano to read and take notes from a voluminous book about Perkins Grants, referring to the African-American Director of the Office of Compliance Investigations as a "political appointee," failing to attend the first day of Feliciano's first audit, asking Feliciano to photocopy a document, paging Feliciano while she was driving on the Turnpike, and failing to give Feliciano consideration for favored work assignments and schedules.
On September 7, 2004, the DOE Commissioner wrote to Hearn advising that Hearn had violated the State Policy Prohibiting Discrimination in the Workplace (anti-discrimination policy), N.J.A.C. 4A:7-3.1. On that same date, the Director of Administration and Human Resources wrote that the DOE was "taking formal disciplinary action" against Hearn by removing his supervisory responsibilities, demoting him, and requiring him to attend diversity training.
Hearn was demoted from his title of Manager 1, Education, in the unclassified service to the title of Planning Associate 1, School Finance, in the non-competitive division of the career service. He filed an appeal to the Board. On July 13, 2005, the Board granted Hearn's request for a hearing by an Administrative Law Judge (ALJ). Before the administrative hearing was held, Hearn applied for and obtained a regular appointment to the title of Education Program Development Specialist 1, which is also in the non-competitive division of the career service. See N.J.S.A. 11A:4-13(a) and N.J.A.C. 4A:3-1.2 (setting forth types of career service appointments).
The hearing before the ALJ was held on nine dates from August through October 2006. On April 13, 2007, the ALJ issued his decision finding that Hearn did not discriminate against Feliciano and other minority employees because of their race and did not violate the State anti-discrimination policy. The ALJ noted that Hearn lacked "certain important elements of supervisory skill" in that "[h]e spoke quickly, could be abrasive, rude, sharp, abrupt and loud." He also noted that Hearn "valued efficiency and a machine-like approach over the consideration of personal needs and human realities." With respect to Feliciano's allegations, the ALJ stated:
Given the totality of the evidence and having assessed the individual incidents and circumstances described and the complete picture presented, I am convinced that Mr.
Hearn was credible when he testified that he did not treat anyone differently because of their race or ethnicity.
The ALJ recommended that the finding of discriminatory conduct be purged from Hearn's personnel record and that he be restored to his former title of Manager 1. He concluded that Hearn was entitled to recover back pay if appropriate. He also recommended that Hearn should receive an award for counsel fees, as such is fully appropriate given the nature of the allegations and findings below, the burden placed upon Hearn to clear his name, and the significant costs involved to do so in a case in which, unlike those who merely defend against an agency's charges in [Merit System Board] appeals of agency discipline, he had to take on the burden to prove his innocence.
On October 24, 2007, the Board adopted the ALJ's findings of fact and recommendation to return Hearn to his former title, but it declined to adopt the ALJ's recommendation to award Hearn back pay and attorney's fees. Hearn filed a motion for the Board to reconsider rescission of his appointment to a classified position. On June 27, 2008, the Board confirmed its decision.
Hearn filed a notice of appeal to this court in which he challenged the action of the Board in rescinding the classified title he obtained while his appeal was pending and in refusing to award back pay, attorney's fees, and costs. On December 17, 2008, pursuant to the agreement of the parties, we granted a limited remand for the Commission to conduct a desk audit of the duties performed by Hearn in his classified appointment and to reconsider the decision to return him to his former title. On February 11, 2009, the Commission issued a final administrative action amending its prior decision and ordering Hearn to return to the title of Planning Associate 1, retroactive to July 23, 2005. Hearn no longer challenges the designation of his title and position.
Furthermore, although Hearn's prayer for relief included back pay, he did not prove that he lost pay as a result of the DOE's actions. Neither the ALJ nor the Board found that Hearn actually lost pay. On appeal, the DOE takes the position that Hearn is not entitled to differential back pay because he refused reinstatement to the Manager 1 title and chose to remain as a Planning Associate 1. Hearn has not refuted that position. Therefore, the only issue that remains on appeal is the Board's denial of attorney's fees and costs.
In rejecting the ALJ's award of attorney's fees and costs, the Board explained:
[A]ppellant has not shown that the actions of the appointing authority in finding a violation of the State Policy and terminating his unclassified position were made in bad faith. An investigation of Feliciano's complaint was properly conducted and the appointing authority concluded, albeit erroneously, that the appellant violated the State Policy. The record does not reflect that the appointing authority's conclusion was made with invidious motivation. Therefore, the appellant is not entitled to back pay or counsel fees.
We exercise limited powers in reviewing actions of an administrative agency. In re Carter, 191 N.J. 474, 482 (2007). "An administrative agency's final quasi-judicial decision will be sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record." In re Herrmann, 192 N.J. 19, 27-28 (2007).
Our inquiry is limited to determining:
(1) whether the agency's action violates express or implied legislative policies, that is, did ...