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Pederson-Szafran v. D. Baily and F. Baxter (8/14/92), 837 P 2d 124
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NOTICE: This opinion is subject to
formal correction before publication in the
Pacific Reporter. Readers are requested to
bring typographical or other formal errors to
the attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
THERESA PEDERSON-SZAFRAN, )
) Supreme Court No. S-4257
Appellant, )
)
v. ) Superior Court No.
) 4FA-87-945 CIVIL
DOUGLAS B. BAILY, Attorney )
General of the State of Alaska,)
FRANK BAXTER, Commissioner of )
Administration of the State ) O P I N I O N
of Alaska; and STATE OF ALASKA,)
)
Appellees. )
_______________________________) [Op. No. 3877, August 14,
1992]
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Fairbanks,
Richard D. Savell, Judge.
Appearances: Robert M. Goldberg,
Anchorage, for Appellant. Randy M. Olsen,
Assistant Attorney General, Fairbanks,
Charles E. Cole, Attorney General, Juneau,
for Appellees.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Justices.
RABINOWITZ, Chief Justice.
Theresa Pederson-Szafran (Szafran) appeals the
dismissal of her complaint by the superior court. Szafran's
complaint alleged wrongful termination and improper blacklisting
from state employment and violation of her rights as an employee
and citizen of the State of Alaska. She also claimed that she
had exhausted her administrative remedies.
FACTS & PROCEEDINGS
Szafran was hired on October 14, 1985 by the State of
Alaska (State) to fill a paralegal position with the Department
of Law in Barrow. In preparation for the job, Szafran was
scheduled to receive training in the Fairbanks District
Attorney's Office from October 14 through November 1, 1985. She
was to report to work in Barrow on November 4, 1985.
Upon commencing her employment Szafran was on probation
for twelve months. The state cites Whaley v. State, 438 P.2d 718
(Alaska 1968), and 2 AAC 07.415 for the proposition that during
the probationary period Szafran could be terminated without cause
for any reason except one due to racial, religious, or political
discrimination.
On November 8, 1985, after three weeks of training and
observation, Szafran was notified of her termination. Among the
reasons given for her dismissal, her termination letter stated
that "[d]uring your training you demonstrated a marked lack of
interest in the specific duties you would be required to perform,
frequently absented yourself and failed to pay attention, making
you unable to demonstrate that you had absorbed the information
imparted to you."
When Szafran was hired, probationary employees were
covered by a collective bargaining agreement between the Alaska
Public Employees Association (APEA) and the State of Alaska. The
agreement provided that as a probationary employee she could
grieve her termination through Step Four of the grievance
process. Step Three involved review of the personnel decision by
the department head of the hiring agency. Step Four involved
review of the hiring agency's termination decision by the State's
Department of Administration. Step Five provided for binding
arbitration of all disputes under the agreement, except the
termination of probationary employees.
Upon her request, APEA filed a grievance on Szafran's
behalf. She alleged that her dismissal was based on the
Department's unfair judgment of her performance during a training
period which was disorganized and lacked supervision. At Step
Three Szafran's grievance was denied by Harold Brown, the then
Attorney General. A Step Four Hearing was requested by APEA and
was conducted in Fairbanks on January 23 and 24, 1986. According
to the Department of Administration's response to the APEA
grievance, "[t]he purpose of the hearing was to determine the
facts and circumstances involved in the termination of the
grievant, Ms. Theresa Szafran." After taking evidence and
testimony from both sides the hearing officer confirmed the
termination.
Six weeks prior to Szafran's Step Four hearing, we held
in Hemmen v. State, 710 P.2d 1001, 1003 (Alaska 1985), that
despite union agreements to the contrary, all public employees'
grievance procedures must have binding arbitration as a final
step. However, following Szafran's Step Four hearing, APEA did
not request binding arbitration under Hemmen. On February 19,
1986, Szafran was advised by the APEA that it had exhausted all
remedies available to her as a terminated probationary employee.
On February 19, 1986, the Department of Administration
issued a letter to Szafran stating that under the General
Government Unit Agreement Articles 18.6.6 and 18.11.1, she could
not exercise any rehire rights nor apply to have her name put on
any eligible list for the classified state service until she
could give references showing twelve months satisfactory service
with another employer. Under the union agreement Szafran had a
right to seek review of any restrictions on future state
employment. The required "improved attitude evidence" was a
condition which was subject to all of the grievance steps
including binding arbitration. Szafran did not file a grievance
of the decision by the Department of Administration.
On November 7, 1986, Szafran filed a complaint in the
superior court in Nome alleging breach of her employment
contract. Thereafter, the superior court granted the State's
motion to transfer venue from Nome to Fairbanks. In her
complaint Szafran stated that she had exhausted the
administrative remedies provided for in the applicable collective
bargaining agreement. Relying on Kollodge v. State, 757 P.2d
1028, 1033 (Alaska 1988), which held that a former employee
disappointed by administrative remedies is in the posture of an
appellant in the superior court, the State sought judgment on the
pleadings pursuant to Rule 12(c) of the Alaska Rules of Civil
Procedure. In response, Szafran filed an affidavit which stated:
"By exhausting the administrative remedies I mean that I
attempted to seek administrative relief but was denied relief and
I was not a member of the union. I was denied relief as not
being a member of the union and not entitled to grievance."
Szafran's complaint was dismissed by the superior court for
failure to establish the superior court's subject matter
jurisdiction.
On appeal we held:
Here Szafran alleges that she was denied
the right to utilize such administrative pro
cedures. She further claims in her affidavit
that the state-union contract does not afford
her any grievance rights. Based on Szafran's
affidavit, and the absence of any counter
vailing evidence, it appears that a grievance
procedure was in fact not afforded to her.
It follows under Reed [v. Municipality of
Anchorage, 741 P.2d 1181 (Alaska 1987)] that
the filing of an original action in the
superior court was appropriate in this case.
The superior court therefore erred in
dismissing the complaint for lack of subject
matter jurisdiction.
Szafran v. State, Mem. Op. & J. No. 452 at 7 (Alaska May 10,
1989). Following our remand, Szafran filed an amended complaint
in which she conceded that she had received an administrative
hearing at Step Four of the grievance process. She also alleged
that the Department of Administration's decision to declare her
ineligible for any state job until she had earned a favorable
recommendation from a private employer was in violation of
Alaska's constitution.
After establishing that Szafran had access to union
assistance in processing union grievances, the State moved for
summary judgment. Szafran filed a cross motion for summary
judgment, arguing among other things, that she was entitled to
five years of back pay until she was granted binding arbitration.
The superior court determined that Szafran had received
an administrative hearing. Accordingly, the superior court ruled
that its role should be that of an appellate court reviewing an
administrative decision. Kollodge v. State, 757 P.2d 1028, 1033
(Alaska 1988). In this regard the superior court ruled in part
that:
here Theresa Pederson-Szafran, had a
hearing Step 4 before the hearing examiner as
a designee of the Commissioner of
Administration and the Commissioner of
Administration made what the Supreme Court,
under numerous cases, including [Kollodge]
and Ballard, Weingartner and others, made an
administrative decision. As such, and tied
into the foundation of Casey, review could
have been sought and was available with
. . . the Superior Court, but that review is
governed by Rule 602 . . . Rules of Appellate
Procedure. The challenge to [the
termination] had to be brought within 30 days
of that administrative decision and it not
having been done so, the challenge is
untimely.
The superior court further concluded that summary
judgment in favor of the State was appropriate as to Szafran's
claim that the State had unlawfully blacklisted her. The
superior court disposed of this claim on alternative grounds.
First it concluded that Szafran's appeal of this issue was
untimely. In so doing the superior court reasoned as follows:
The question, therefore, remains is
[Szafran] entitled to declaratory relief or
court action challenging the period of
ineligibility or does it too go the way of
the discharge claim as this court has
interpreted it? [Szafran] argues that the
discharge and the resulting contractual
ineligibility are inextricably bound
together. A review of termination involves a
review of the propriety of the ineligibility
and that they cannot be viewed separately.
As such, the court must conclude that the
review of the ineligibility likewise was
subject to judicial review and that review is
likewise untimely.
(Emphasis supplied.) The superior court further concluded, as an
alternative rationale to Szafran's suggestion that the issues of
termination and ineligibility (blacklisting) were "inextricably
intertwined and that the challenge[d] hearing grievance appeal or
other procedural devices arising from the termination were part
and parcel and carried with it the ineligibility,"that she had
failed to exhaust her administrative remedies.
If they were not tied together so that
one carries with it the outcome of the other
it was incumbent upon [Szafran] when she was
advised either constructively [of] her
termination and constructively of the
ineligibility because it was in the contract,
or specifically in February 1986, to
challenge the applicability of the
ineligibility as overly harsh or otherwise
place in motion the steps of the dispute
resolution mechanism. The court cannot find
. . . a request for arbitration after Step 4
or request for any relief or resolution of
the contractually imposed ineligibility
provision.
Given the above holdings, the superior court further
ruled that it was not necessary to reach the question of damages.
Szafran appeals from the grant of summary judgment.1
I. WAS THE SUPERIOR COURT'S GRANT OF SUMMARY JUDGMENT TO THE
STATE INCONSISTENT WITH SZAFRAN V. STATE, MO&J 452 (ALASKA
MAY 10, 1989) (SZAFRAN I)?
Szafran asserts that when we first considered this
matter in Szafran I, we sustained her contention that she could
bring an original action in superior court to protest her
termination. Szafran argues that on remand, "no countervailing
evidence was offered to demonstrate that Appellant was afforded a
legally permissible grievance procedure." Szafran further
contends that the only "new development"on remand was that the
State conceded that she had an absolute right to have binding
arbitration as a final step to a grievance process and that this
was denied her.
Szafran asserts that in light of this court's rejection
of Kollodge v. State, 757 P.2d 1028 (Alaska 1988), "in the
context of this record,"Szafran I, n.2, the superior court erred
by relying on that case and granting summary judgment to the
State.
The State argues that Szafran I involved an order to
dismiss based on the sufficiency of the pleadings and that this
court's decision regarding jurisdiction was based on Szafran's
affidavit that no administrative remedies were afforded her.
Given the foregoing, the State notes that this court ruled, in
Reed v. Municipality of Anchorage, 741 P.2d 1181, 1186-87 (Alaska
1987), that a terminated employee may bring an original action
when administrative grievance procedures are not available.
However, when grievance procedures are available, an employee
must exhaust contractual or administrative remedies before
pursuing a direct judicial action against the employer. Casey v.
City of Fairbanks, 670 P.2d 1133, 1136 (Alaska 1983); Beard v.
Baum, 796 P.2d 1344, 1348 (Alaska 1990).
The State asserts that its affirmative defense of
failure to exhaust administrative remedies was not struck. The
State further asserts that the remand from Szafran I had the
purpose and effect of allowing the litigation to proceed past the
pleading stage. Thus, the State contends that entertaining a
motion for summary judgment on newly developed facts was not a
violation of this court's remand following Szafran I.
In Szafran I this court reversed the superior court's
order dismissing Szafran's complaint based on the following
rationale:
In Reed it was explained that a
plaintiff can bring an original action in the
superior court to challenge a job termination
where administrative grievance procedures are
not made available to the employee. Id.
Here Szafran alleges that she was denied the
right to utilize such administrative
procedures. She further claims in her
affidavit that the state-union contract does
not afford her any grievance rights. Based
on Szafran's affidavit, and the absence of
any countervailing evidence, it appears that
a grievance procedure was in fact not
afforded to her. It follows under Reed that
the filing of an original action in the
superior court was appropriate in this case.
Szafran v. State, Mem. Op. & J. No. 452, at 7 (Alaska May 10,
1989). However, following remand, Szafran filed an amended
complaint conceding that she had received an administrative
hearing at Step Four of the grievance process. Thus, Szafran's
own amended complaint contradicts her assertion that on remand no
new countervailing evidence was presented to demonstrate that she
was afforded a legally permissible grievance procedure. In
Szafran I we rejected the application of Kollodge v. State, 757
P.2d 1028 (Alaska 1988), to the case in the context of the record
we then had before us. However, given Szafran's concession in
her amended complaint that a grievance procedure was in fact
afforded her, we conclude that Kollodge was correctly applied by
the superior court. Therefore, we conclude that the superior
court's grant of summary judgment to the State was not
inconsistent with Szafran I.
II. WAS THE SUPERIOR COURT'S GRANT OF THE STATE'S MOTION FOR
SUMMARY JUDGMENT CORRECT?
The superior court concluded that Szafran had failed to
file a timely appeal from the administrative determination of her
wrongful termination and blacklisting claims under Appellate Rule
602(a)(2). Our review of the applicable case law and record per
suades us that the superior court correctly determined this
question.
In our view this issue is controlled by our decision in
Kollodge v. State, 757 P.2d 1028, 1033 (Alaska 1988). There,
quoting Ballard v. Stich, 628 P.2d 918, 920 (Alaska 1981), we
noted that:
[T]he test for determining when an
entity is acting as an "administrative
agency" is functional. Whenever an entity
which normally acts as a legislative body
applies policy to particular persons in their
private capacities, instead of passing on
general policy or the rights of individuals
in the abstract, it is functioning as an
administrative agency within the meaning of
Appellate Rule [602(a)(2)].2
The collective bargaining agreement between the State and the
APEA, at the time of Szafran's hire, provided that the grievance
procedure was the sole means for settling disputes. As noted at
the outset, upon Szafran's request the APEA commenced grievance
procedures on her behalf and followed them up to and including
Step Four. Further, at Step Four of the grievance procedure, a
full evidentiary hearing was conducted to determine the facts and
circumstances involved in Szafran's termination. The record
shows that following the hearing officer's adverse decision on
Szafran's alleged wrongful termination claim, Szafran failed to
request binding arbitration and did not file her superior court
action until November 7, 1986, some nine months after the
conclusion of the grievance procedure. Under Appellate Rule 602,
Szafran's challenge had to be brought within 30 days of the Step
Four hearing officer's decision. Since Szafran failed to do so,
we hold that the superior court properly granted summary judgment
in the State's favor.3
Alternatively, we hold that even if the issues of
termination and ineligibility or blacklisting are not viewed as
inextricably intertwined, the superior court properly granted
summary judgment to the State on the ground that Szafran failed
to exhaust her administrative remedies concerning her
blacklisting claim prior to seeking judicial review of that
issue. Casey v. City of Fairbanks, 670 P.2d 1133, 1136 (Alaska
1983); Beard v. Baum, 796 P.2d 1344, 1348 (Alaska 1990).
AFFIRMED.
_______________________________
1. Both parties agree that the supreme court standard of
review of a superior court's conclusions of law is the
independent judgment standard. Foss Alaska Line, Inc. v.
Northland Services, Inc., 724 P.2d 523 (Alaska 1986); Walsh v.
Emerick, 611 P.2d 28 (Alaska 1980); Guin v. Ha, 591 P.2d 1281
(Alaska 1979).
2. In Kollodge we said:
We concluded that the school board in
Ballard was acting as an administrative
agency because it was "applying general
policy to a particular person." Id.
The same analysis applies to
Kollodge. Kollodge's complaint, like
Ballard's, requested reinstatement, back pay
and compensatory damages. Kollodge's relief
in court turns on a review of the hearing
conducted before hearing officer Hennen of
the State Division of Labor Relations. In
essence, this is an appeal of the decision
rendered by the designee of the Commissioner
of Administration which resulted from the
Division of Labor Relations' hearing.
Furthermore, the hearing involved the
application of policy to a particular person
(Kollodge) in his private capacity. Clearly,
Kollodge's claim is an appeal from an
administrative agency. Therefore, it is
subject to the thirty-day period of limita
tion contained in Appellate Rule 602(a)(2).
After the hearing, the Department
of Administration notified Kollodge of its
decision in a letter dated July 26, 1982.
The arbitration procedure mandated by step
five of the grievance procedure was completed
on January 23, 1983, the date of APEA's final
decision not to arbitrate. Kollodge did not
file his complaint in the superior court
until April 25, 1984, long past the thirty-
day limit. Accordingly, we affirm the
superior court's grant of summary judgment.
757 P.2d at 1033 (footnotes omitted).
3. Szafran raised other issues on appeal including claims
that her due process rights were violated and that the superior
court erred in failing to address the issue of damages. However,
our conclusion that the superior court correctly granted summary
judgment to the state because of Szafran's failure to file a
timely administrative appeal, or to exhaust her administrative
remedies, makes it unnecessary to address these issues.
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