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Moore v. Alaska Dept. of Transportation (6/17/94), 875 P 2d 765
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NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501.
THE SUPREME COURT OF THE STATE OF ALASKA
PETER MOORE, ) Supreme Court No. S-5324
)
Appellant, ) Superior Court
) No. 3AN-92-4102 CI
v. )
) O P I N I O N
STATE OF ALASKA, DEPARTMENT OF )
TRANSPORTATION AND PUBLIC ) [No. 4093 - June 17, 1994]
FACILITIES, )
)
Appellee. )
________________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Karl S. Johnstone, Judge.
Appearances: Kevin Dougherty,
Anchorage, for Appellant. Carolyn E. Jones,
Assistant Attorney General, Anchorage,
Charles E. Cole, Attorney General, Juneau,
for Appellee. James A. Gasper, Jermain,
Dunnagan & Owens, P.C., Anchorage, for Amicus
Curiae Public Safety Employees Association.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton, Justices, and
Bryner, Justice, pro tem.*
BRYNER, Justice, pro tem.
RABINOWITZ, Justice, with whom COMPTON,
Justice, joins dissenting.
This appeal calls upon us to decide whether the merit
principle of employment embodied in article XII, section 6 of the
Alaska Constitution forbids state agencies from seeking to reduce
public spending by "privatizing"state jobs -- that is, by
eliminating positions on the state workforce in favor of lower
cost private contracts for the same services.
I. BACKGROUND
The facts are not disputed. The State of Alaska,
Department of Transportation and Public Facilities (DOT), owns
and operates 219 rural airports, including the Tanana Airport.
The Tanana Airport serves a population of approximately 420
people. In the past, maintenance at the Tanana Airport has been
performed by two DOT employees, one full-time and one seasonal.
As of fiscal year 1992, annual maintenance costs for the airport
were estimated at $164,626.
DOT hired Peter Moore for the full-time position at the
Tanana Airport on October 25, 1983. He worked at the job under a
contract between the State and Public Employees Local 71 (AFL-
CIO), Labor, Trades and Crafts Unit Employees, for the next eight
years, receiving favorable evaluations each year, as well as
several commendations and awards.
Some time during fiscal year 1992, DOT, prompted by
declining state revenues, began examining various cost-cutting
options. As part of this process, DOT conducted a cost
comparison of the Tanana Airport and six similar airports. The
comparison led DOT to conclude that Tanana Airport could be
operated more economically if airport maintenance were contracted
to a private firm. In March 1992, DOT solicited bids for
maintenance at the airport. In May, DOT awarded a one-year
maintenance contract to a private firm for $38,500, the lowest
bid received. The State notified Moore that his position had
been eliminated and that, as a result, his state employment would
terminate effective June 30, 1992. On July 1, the private
contractor took over maintenance at the airport.
Meanwhile, in response to DOT's termination notice,
Moore filed a complaint in the superior court seeking declaratory
relief. The complaint alleged that DOT's elimination of his job
in favor of a private contract for the same services violated the
merit principle set forth in article XII, section 6 of the Alaska
Constitution and sought a declaration that the private
maintenance contract was void. Moore moved for summary judgment
on his claim; DOT opposed and filed a cross-motion for summary
judgment. After hearing argument, Superior Court Judge Karl
Johnstone denied Moore's motion for summary judgment and granted
DOT's cross-motion.
II. DISCUSSION
A. Exhaustion of Administrative Remedies.
On appeal, Moore renews the constitutional claim he
raised below. As a threshold matter, however, we must consider
whether Moore's declaratory judgment action was properly brought.
The State characterizes Moore's claim as a challenge to DOT's
termination of his state employment. Based on this
characterization, the State maintains that Moore should be barred
from pursuing a remedy in court until he has exhausted his
administrative remedies. See, e.g., Standard Alaska Prod. Co. v.
Alaska, 773 P.2d 201, 210-11 (Alaska 1989); Ben Lomond, Inc. v.
Anchorage, 761 P.2d 119, 122 (Alaska 1988) (exhaustion of
administrative remedies required when a claim for declaratory
relief can be characterized as raising both constitutional and
non-constitutional issues, as well as mixed questions of law and
fact). Because Moore's state employment was subject to a
collective bargaining agreement that prescribed a union grievance
procedure as the exclusive means of resolving disputes over
dismissal, demotion, and suspension, the State insists that Moore
was obliged to pursue this contractual remedy instead of filing
an action for declaratory relief. See, e.g., Beard v. Baum, 796
P.2d 1344, 1348-49 (Alaska 1990); Walt v. State, 751 P.2d 1345,
1350-51 (Alaska 1988); Public Safety Employees Ass'n v. State,
658 P.2d 769, 772-73 (Alaska 1983).
The State's characterization of Moore's claim is
inaccurate. Moore raises no factual issues concerning the
circumstances surrounding the termination of his employment. He
does not question DOT's good faith in deciding to eliminate his
position. Nor does he contend that he was discharged for any
reason other than DOT's desire to cut costs by entering into a
private contract for airport maintenance, or that DOT will not in
fact save money by eliminating his position and entering into the
private contract. Likewise, Moore does not argue that DOT
violated the collective bargaining agreement, any of its own
regulations, or any applicable statutes. Moore elected to
request declaratory judgment on only a single, narrow
proposition: that the Alaska Constitution's merit system
provision categorically bars the State from privatizing state
jobs. As raised in this case, the issue is one of purely
constitutional dimension.
We have previously recognized that "[e]valuations of
constitutionality and other 'pure' issues of law are within the
special expertise of the courts rather than [agencies]." United
States v. RCA Communications, 597 P.2d 489, 507 (Alaska 1979).
For this reason we have stated that "exhaustion, generally, is
not required when the constitutionality of [state action] is the
only issue raised in a case." Ben Lomond, 761 P.2d at 121-22
(citing 4 K. Davis, Administrative Law Treatise, 26:6 (2d ed.
1983)).
Moore's case is not one in which a procedural challenge
to agency decisionmaking has simply been dressed in
constitutional clothing. See, e.g., Eidelson v. Archer, 645 P.2d
171, 178 (Alaska 1982). Nor is it one involving an attempt to
substitute a damage claim in tort for an unperfected
administrative remedy. See, e.g., Walt v. State, 751 P.2d at
1350-51 (Alaska 1988).
Neither DOT nor an arbiter under the collective
bargaining agreement would have been competent to afford Moore
the relief he seeks: a declaration that the constitution bars
privatization of state jobs. Since Moore's request for
declaratory relief called upon the superior court to review only
the scope of the Alaska Constitution's merit system language, it
cannot fairly be characterized as being merely a challenge to
DOT's decision to terminate his employment. Cf. Owsichek v.
State, 627 P.2d 616, 619 (Alaska 1981) (holding that portion of
complaint requesting declaratory relief from allegedly
unconstitutional state action should have been heard as original
action in superior court, while portion of complaint requesting
injunctive relief and damages requiring review of prior
administrative agency action, was properly heard as an appeal).
Under these circumstances, exhaustion of administrative remedies
was not required.1
B. Privatization and the Merit Clause
We proceed to the substance of Moore's claim. Because
Moore raises a question of law requiring interpretation of the
Alaska Constitution, we review the trial court's ruling
independently and "adopt the rule of law that is most persuasive
in light of precedent, reason, and policy." Guin v. Ha, 591 P.2d
1281, 1284 n.6 (Alaska 1979).
Article XII, section 6 of the Alaska Constitution
commands the legislature to "establish a system under which the
merit principle will govern the employment of persons by the
State." As Delegate Sundborg noted during the Alaska
Constitutional Convention, the principal policy reason for
adopting this provision was to ensure that state employees would
be hired and retained "on the basis of their merits rather than
on the basis of their politics." 4 Proceedings of the Alaska
Constitutional Convention (PACC) 2887-88 (Jan. 23, 1956).
Delegate Sundborg went on to add: "The converse of the merit
principle is the spoils system, and anyone who doesn't want to
have a merit principle . . . must, I think, be in favor of a
spoils system." Id. at 2888.
Recently, in Alaska Pub. Employees Ass'n
v. State, 831 P.2d 1245 (Alaska 1992), this
court emphasized the broad and complex nature
of the constitutionally mandated merit
principle: Generally defined, the merit
principle requires the recruitment,
selection, and advancement of public
employees "under conditions of political
neutrality, equal opportunity, and
competition on the basis of merit and
competence." In actual practice, however,
"the merit principle is more complex and
ambiguous than the above definition reveals."
Id. at 1249 (citations omitted).
The Alaska legislature adopted the State Personnel Act
(AS 39.25.010-.220) for the express purpose of defining and
implementing the merit principle. Id. The Act's provisions
strongly suggest that the merit principle extends not only to the
process of selecting and retaining individual state workers, but
also to the process of creating and eliminating state jobs. The
Act's opening provision, which defines the merit principle,2
expressly recognizes the need to keep partisan politics from
playing a role in the elimination of either state workers or
their jobs. Thus, AS 39.25.010(b) includes within the ambit of
the merit principle "retention of employees with permanent status
on the basis of the adequacy of their performance . . . ,"
AS 39.25.010(b)(3), as well as "selection and retention of an
employee's position secure from political influences,"
AS 39.25.010(b)(5).
The Personnel Act's inclusion of state jobs as well as
state workers within the ambit of the Alaska Constitution's merit
system language is hardly surprising in light of the merit
principle's overriding objective of eliminating the spoils system
of government: "History, both recent and distant, show[s] that
reductions in force and administrative reorganization have been
used as a means of circumventing employee protections." R.
Vaughn, Principles of Civil Service Law [hereinafter Vaughn]
4.4, at 4-25 (Matthew Bender 1976). Standing alone, however,
the mere conclusion that the merit principle applies to the
state's relations with public workers and jobs alike tells us
little, for it begs the crucial question: What does the merit
principle allow, and what does it forbid, regarding the
elimination of jobs, as opposed to the termination of individual
workers?
This question is susceptible to no ready answer; its
resolution requires the balancing of competing factors. On one
hand, we must not lose sight of the merit principle's basic goal
of insulating the state workforce from political influence. On
the other hand, we must bear in mind that the basic function of
state government is to govern, not to employ; and to govern
effectively, the state must govern efficiently.
The potential for conflict between the merit principle
and need for governmental efficiency was apparent to the drafters
of the Alaska Constitution when they considered the language of
the merit system provision; they made it clear that the merit
principle was not intended to impede the efficient management of
state affairs. For example, in advocating language making
implementation of the merit principle mandatory, Delegate
Sundborg expressed his desire that Alaska's government service
"be one in which all of the people who are working are people
with ability and people who are entitled to hold the positions
they have on the basis of their merits rather than on the basis
of their politics." 4 PACC 2888 (Jan. 23, 1956) (Comments of
Delegate Sundborg). At the same time, however, Delegate Sundborg
assured the convention that "[a] man isn't frozen into his job
permanently just because he is hired under a merit system." Id.
at 2894.
The premise that the merit principle does not bind the
government to retain a workforce it cannot afford has long been
established: "The authority of government to separate employees
for economic reasons is widely accepted. The necessity for this
authority is apparent if the government is faced with financial
or organizational difficulties." Vaughn, 4.4, at 4-16. Thus,
government agencies functioning under various forms of the merit
system have traditionally been accorded broad latitude to
eliminate jobs for economic, as opposed to political reasons:
Perhaps the greatest discretion which
the agency exercises is the ability to
determine whether or not a reduction-in-force
is to take place. [United States Civil
Service] Commission regulations state: "Only
the agency can decide what positions are
required, where they are to be located, and
when they are to be filled, abolished, or
vacated."
Id. at 4-19 (footnote omitted).
In keeping with this approach, the State Personnel Act
broadly authorizes Alaska's personnel board to adopt rules
providing for "layoffs for reason of lack of money or work,
abolition of positions, or material changes in duty or
organization[.]" AS 39.25.150(13). Personnel rules adopted
under the authority of the Act set forth elaborate provisions to
mitigate the impact of layoff orders on affected state workers
but leave intact the broad power of agencies to decide when
layoffs should be ordered and what positions should be
eliminated.3 In relevant part, the rules allow agencies to "lay
off an employee in the classified service if . . . the employee's
position is abolished, if there is a shortage of work or money,
or for other reasons outside the employee's control." 2 AAC
07.405(a).
We think it clear, then, that the merit principle, as
expressed in article XII, section 6 of the Alaska Constitution,
ordinarily allows state agencies broad discretion to eliminate
positions and order layoffs for reasons of efficiency and
economy, provided that their decisions are not politically
motivated. The remaining issue for decision here is whether a
different, more restrictive rule is constitutionally compelled in
the specific context of privatization, when the decision to cut
spending by ordering layoffs is accompanied by a plan to enter
into lower-cost private contracts for the same services.
Other jurisdictions addressing the relationship between
privatization and the merit principle are divided: some conclude
that the merit principle neither bars nor restricts agency
discretion to privatize;4 others express reservations concerning
the compatibility of privatization and the merit principle, at
least in the absence of detailed regulations specifying the
circumstances under which existing jobs may be eliminated in
favor of private sector contracts.5
The differences reflected in the case law may be
explained to some extent by the variety of factual circumstances
courts have considered and by the peculiarities of the statutory
and constitutional schemes within which each case has arisen and
been decided. To a larger extent, however, these differences
simply reflect the divergent judicial views that different courts
have brought to a genuinely close and difficult issue -- an issue
that necessitates the resolution of competing policies:
Privatization of government services has
significant policy implications for the state
personnel system. Privatization can provide
important benefits by reducing costs and
increasing governmental efficiency and
productivity. See Note, Civil Service
Restrictions on Contracting out by State
Agencies, 55 Wash. L. Rev. 419, 424-26
(1980). See generally R. Cass,
Privatization: Politics, Law, and Theory, 71
Marq. L. Rev. 449 (1988). On the other hand,
privatization operates as a labor policy in
that it affects the qualifications and
conditions of employment of persons who will
perform services for the government. See
Becker, With Whose Hands: Privatization,
Public Employment and Democracy, 6 Yale L. &
Pol'y Rev. 88 (1988).
Colorado Ass'n of Pub. Employees v. Department of Highways, 809
P.2d 988, 994 (Colo. 1991).
Considering these policies in light of the underlying
purposes of the merit system and in light of the traditional
discretion accorded governmental agencies to determine the need
for reductions in force, we are not convinced that the Alaska
Constitution's merit system provision should be construed as a
categorical bar to privatization.
Nothing in the Personnel Act or the Public Employment
Relations Act, AS 23.40.070-.260, restricts the state from
reducing its workforce and laying off personnel for reasons of
economy. More specifically, neither act prohibits state agencies
from resorting to privatization as a cost-cutting measure. In
addition, the State Procurement Code, AS 36.30.005-.995, vests
the executive branch with broad authority to enter into contracts
for services and professional services;6 no provision of the
Procurement Code bars privatization.
Under the laws and regulations currently in force,
there appears to be relatively little danger that privatization
could successfully be used as a device for subverting the merit
principle's primary goal of shielding state workers and jobs from
political influence. As we have previously noted, state
personnel rules that deal with layoffs offer protection against
political influence by ensuring that state workers who are
potential targets of layoff are treated fairly and that the
effects of any actual layoff are mitigated. Furthermore, the
State Procurement Code establishes extensive control over agency
contracting procedures. These measures are calculated to ensure
that the State accords fair treatment to persons and businesses
seeking to enter into state contracts.
Moore nevertheless argues that privatization could be
used as a means of subverting state policies relating to worker
qualifications, conditions of employment, and benefits. He
points to numerous statutory provisions that confer rights and
benefits on state workers.7 Moore argues that, since private
contractors will be under no obligation to afford their workers
the same benefits, privatization violates public policy by
allowing the State to avoid costs of employment that it should
properly bear.
To a limited extent, this argument provides legitimate
cause for concern. There is at least some danger that
privatizing state jobs can be used as a means of circumventing
policies relating to qualifications and conditions of employment.8
In our view, however, the potential danger to the merit system
appears relatively slight. While the social costs of privatizing
the state workforce might justify legislative scrutiny, and while
situations requiring judicial intervention on a case-by-case
basis may arise from time to time, the risk that privatization
poses to the merit system does not warrant the somewhat drastic
measure of declaring it constitutionally barred.
Establishing qualifications and conditions of
employment to ensure a stable and experienced body of civil
service workers is unquestionably among the varied goals of the
merit principle. But in terms of the principle's constitutional
purpose, this goal is secondary to the principle's primary
objective of securing state workers against the evils of the
spoils system. As we have already mentioned, to the extent that
privatization creates a risk of exposing state workers to
political influence, that risk is largely obviated by provisions
of the State Personnel Act and state personnel rules dealing with
layoffs and by provisions of the State Procurement Code and the
rules promulgated thereunder dealing with state contracts.
Furthermore, while various state statutes and
regulations dealing with qualifications, conditions of
employment, and benefits for state workers are certainly meant to
further the merit principle, it is not the goal of these
provisions to establish minimum standards of employment for
general, statewide application. Statewide labor standards and
benefits are extensively dealt with under Title 23 of the Alaska
Statutes,9 as well as under Title 36, which establishes specific
standards applicable to public contracts.10 Provided that a
state contract for services meets the requirements of the
Procurement Code and complies with applicable statewide
standards, as well as with specific standards applicable to
public contracts, we fail to see how the contract could be deemed
to violate public policy.
Finally, any risk arising from privatization must be
balanced against the countervailing dangers of an unduly rigid
reading of the Constitution's merit system language -- a reading
that could well extend the merit system provision beyond its
originally intended scope.11 In this regard, it is worthwhile
recalling Delegate Sundborg's assurance that state workers would
not be "frozen into [their] job[s] permanently just because [they
were] hired under a merit system." 4 PACC 2894 (Jan. 23, 1956)
(Comments of Delegate Sundborg).
In short, neither the political nor the social danger
of privatization appears so threatening to the merit principle as
to justify reading a categorical bar against privatization into
the Alaska Constitution's merit system provision. To the extent
such dangers prove real, we are confident that existing
contractual, administrative, and judicial channels for case-by-
case review of agency action will be capable of enforcing the
merit principle and of providing redress to aggrieved employees.12
III. CONCLUSION
In the present case, Moore advanced no claim that his
position was eliminated in bad faith or for reasons unrelated to
cost-savings. Nor did Moore assert that the elimination of his
position failed to accomplish its cost-saving goal, or that it
violated any applicable procedural requirement. We have
indicated in this opinion that such claims, had Moore desired to
assert them, should have been raised in the first instance
through available administrative or contractual channels.
Moore's sole contention here is that article XII, section 6 of
the Alaska Constitution categorically bars privatization of state
jobs for economic reasons. We hold that it does not.
The superior court's order granting summary judgment is
AFFIRMED.
RABINOWITZ, Justice, with whom COMPTON, Justice, joins,
dissenting. Article XII, section 6 of the Alaska
Constitution provides that "The legislature shall establish a
system under which the merit principle will govern the employment
of persons by the State." Although I agree with the court's
conclusion that this constitutional provision does not stand as a
categorical bar to the privatization of state jobs for economic
reasons, I am unable to join in the court's sanguine predictions
that privatization is unlikely to subvert the existing merit
system and that "existing contractual, administrative, and
judicial channels for case-by-case review of agency action . . .
will be capable of enforcing the merit principle."
The court's analysis of the issues in this appeal fails
to address several significant questions that Moore has raised.
A conclusion that article XII, section 6 is not a categorical bar
to privatization for economic reasons leaves unresolved how to
preserve the merit system that has been established in response
to this constitutional mandate. For instance, assuming the
absence of any impermissible political motive, is either the
executive or legislative branch of Alaska's government free to
privatize all existing and future governmental jobs and thus
totally subvert the merit system? If not, upon what principles
and criteria are restraints upon privatization to be fashioned?
Should governmental positions customarily and historically filled
by civil servants be immune from privatization? Should current
civil servants, and current positions, be given more protection
than prospective employees and newly created positions? Or
should privatization be barred by our constitution's merit
principle, in the absence of detailed standards specifying the
circumstances under which existing jobs may be eliminated in
favor of private sector contractors?13
As to this last question, I find persuasive the
approach of the Colorado Supreme Court:
[P]rivatization operates as a labor
policy in that it affects the qualifications
and conditions of employment of persons who
will perform services for the
government. . . .
. . . Absent specific statutory
requirements, private contractors need not
follow the legislatively mandated pay scales,
veteran's preferences, and other employment
practices that apply to the civil service.
The civil service laws and regulations
protect public workers from arbitrary and
oppressive treatment, and require due process
protections before disciplinary action or
termination; private employees lack these
protections.[14/] These constraints are
necessary in government employment to carry
out the functions of the civil service,
promote competence in government, and ensure
a politically independent civil service.
These labor policy aspects of privatization,
which are essential components of its cost
efficiency, have significant consequences for
the civil service.
This critical impact of
privatization on the state personnel system
implicates the legislature's role in
structuring the system consistent with
constitutional constraints, and invokes both
the Board's rulemaking mandate and the
Director's duty to provide leadership in
state personnel management. The scope and
characteristics of any plan of privatization
and means by which such a plan is to be
implemented require careful consideration.
Legislation, rules, or some combination
thereof establishing standards will be
necessary to ensure that privatization does
not subvert the policies underlying the state
personnel system. This requires an
evaluation of the effects of the concept of
privatization on the state personnel system
as a whole, rather than a case specific
consideration of the effect of a particular
privatization plan of a single state agency
on individual employees.
Colorado Ass'n of Pub. Employees v. Department of Highways, 809
P.2d 988, 994 (Colo. 1991) (emphasis added) (footnote omitted).
I conclude that in order to effectuate the provisions
of article XII, section 6 and ensure that privatization does not
subvert the state's merit system, the legislature must enact
discrete standards setting the preconditions for privatization.15
These standards should be fashioned after a careful evaluation of
the effects of privatization on the state's merit system for
public employment as a whole, rather than upon a case-specific
consideration of the effect of a single agency's particular plan
upon individual employees. In my view, this court is ill-equipped
to resolve the genuinely difficult policy issues inherent in the
tension between privatization of government services and
preservation of Alaska's merit personnel system. I would reverse
the superior court's decision.
_______________________________
* Sitting by assignment made under article IV, section
16 of the Alaska Constitution.
1 Subsequent to the briefing and argument in this case,
the State forwarded to the court an arbitrator's decision
concerning a grievance filed by Moore's union concerning Moore's
layoff. It appears that after the superior court's decision in
this case, a grievance on Moore's behalf was timely filed. The
arbitrator ruled in favor of the State, concluding as a matter of
contract interpretation that the merit system principles embodied
in the contract were not violated by the layoff of Peter Moore.
The arbitrator declined to rule on the constitutional question
presently before us, stating:
It is undisputed that the grievant has
the right to assert in a court of law that
contracting out the maintenance work at the
Tanana Airport, abolishing his state job
there, and subsequently laying him off
violated section 6 of article XII of the
Alaska Constitution . . . .
Public Serv. Employees Local 71, AFL-CIO v. Department of
Transp., p. 15 (Nov. 19, 1993) (Dorsey, Arb.).
2 AS 39.25.010 provides:
(a) It is the purpose of this chapter
to establish a system of personnel
administration based upon the merit principle
and adapted to the requirements of the state
to the end that persons best qualified to
perform the functions of the state will be
employed, and that an effective career
service will be encouraged, developed and
maintained.
(b) The merit principle of employment
includes the following:
(1) recruiting, selecting, and
advancing employees on the basis of their
relative ability, knowledge, and skills,
including open consideration of qualified
applicants for initial appointment;
(2) regular integrated salary programs
based on the nature of the work performed;
(3) retention of employees with
permanent status on the basis of the adequacy
of their performance, reasonable efforts of
temporary duration for correction in
inadequate performance, and separation for
cause;
(4) equal treatment of applicants and
employees with regard only to consideration
within the merit principles of employment;
and
(5) selection and retention of an
employee's position secure from political
influences.
3 Specifically, the topic is addressed in 2 AAC 07.405,
which provides:
(a) An appointing authority may lay off
an employee in the classified service if the
employee holds a substitute appointment, if
the employee's position is abolished, if
there is a shortage of work or money, or for
other reasons outside the employee's control.
A layoff does not reflect discredit on the
service of the employee. The name of a laid-
off employee must be placed on the
appropriate noncompetitive eligible list and
may remain on it for a period of two years.
If the employee is not reappointed within two
years, the employee is considered to have
separated without prejudice.
(b) No permanent or probationary
employee in the classified service may be
laid off while there are emergency,
provisional, or nonpermanent employees
serving in the same class in the same
department or organizational unit, or serving
in other classes performing work to which the
permanent or probationary employee could
reasonably be assigned.
(c) The order of layoff must be based
upon performance reports and seniority under
a formula esatablished by the director. The
appointing authority may allow an employee to
volunteer for layoff before an employee whose
name appears higher in the order of layoff.
(d) The appointing authority shall give
a permanent or probationary employee at least
two weeks' notice before the employee is laid
off. The notice must be written and must
state the reason for the layoff. The
appointing authority must provide the
director with a copy of the notice.
(e) The names of permanent or
probationary employees who are voluntarily
demoted instead of being laid off will be
placed on the appropriate layoff list for the
class from which demoted and remain on it for
a period of two years until appointed to a
position at or above the salary range from
which demoted, whichever comes first. (In
effect before 6/28/84; am 6/28/84, Register
91)
4 See, e.g., Michigan State Employees Assoc. v. Civil
Serv. Comm'n, 367 N.W.2d 850, 852 (Mich. Ct. App. 1985); Carter
v. Ohio Dep't of Health, 504 N.E.2d 1108, 1109 (Ohio 1986);
Moncrief v. Tate, 593 S.W.2d 312, 314 (Tex. 1980).
5 See, e.g., Colorado Ass'n of Pub. Employees v.
Department of Highways, 809 P.2d 988 (Colo. 1991); Jack A. Parker
& Assoc., Inc. v. State, 454 So. 2d 162 (La. Ct. App. 1984);
Washington Fed. Etc. v. Spokane Community College, 585 P.2d 474,
477-78 (Wash. 1978); cf. California State Employees Ass'n v.
State, 245 Cal. Rptr. 232 (Ct. App. 1988).
6 See AS 36.30.005, .015, .040.
7 See, e.g., AS 39.25.150(3) (providing for selection of
state workers through open competitive examinations based on
capacity and fitness); AS 39.30.090 (insurance); AS 39.20.225
(personal leave); AS 39.25.159 (veterans preference).
8 In this regard, the economic benefits of privatizing
may, in some instances, be more illusory than real. As the
Colorado Supreme Court has observed:
The competitive cost advantage of the
private companies, however, may result from
their freedom from the state personnel
system. For example, private companies have
great latitude in selecting, promoting,
transferring and terminating employees; they
are not required to employ competitive tests
of competence. Absent specific statutory
requirements, private contractors need not
follow the legislatively mandated pay scales,
veteran's preferences, and other employment
practices that apply to the civil service.
Colorado Ass'n of Pub. Employees, 809 P.2d at 994 (footnote
omitted). In some instances, the short term economic benefit to
the state in employing lower-cost contract labor, may, in the
long term, be more than offset by social costs of employing
workers who are not subject to state qualifications standards and
are not provided with various benefits to which state workers
would be entitled.
9 See, e.g., AS 23.10.050-.150 (Alaska Wage and Hour
Act).
10 See, e.g., AS 36.05.010-.110 (wages and hours of
employment); AS 36.10.005-.990 (labor preference).
11 With regard to the weight the merit principle deserves
in this balance, Moore attaches inordinate significance to this
court's recent decision in Alaska Pub. Employees Ass'n (APEA),
831 P.2d at 1245. Moore argues that the merit system, as
construed in APEA, protects the right of state employees against
elimination of their positions, even where contracting the work
out to the private sector would result in substantial savings to
the State. The Public Safety Employees Association, as amicus,
also argues that this Court's holding in APEA establishes that
the merit system protects public employees' rights "first and
foremost, and prohibit[s] the unilateral disregard of those
rights by the state, particularly on the basis of mere
economics."
In APEA, this court found a potential conflict between
the state's authority to assign salary ranges to job
classifications -- an aspect of its responsibility to carry out
the merit principle -- and the economic interest of state workers
in having salary range assignments be made a subject of
collective bargaining. Id. at 1250. Emphasizing the breadth and
significance of the merit principle, we found the state's
interest in the merit principle outweighed the economic interest
of the employees. Id. at 1249, 1251-52.
The State correctly recognizes that APEA has little
precedential significance regarding the issue currently before
this court. APEA involved a conflict between the merit principle
and the economic interests of state employees that arose in the
narrow context of a collective bargaining issue. Nothing in APEA
stands for the broad proposition that the state's economic
interests should be categorically subservient to the merit
principle whenever a conflict arises. In APEA we balanced the
competing interests in light of the specific circumstances
presented, finding those circumstances to present "a close and
difficult question." Id. at 1250 (quoting State v. Public Safety
Employees Ass'n, 798 P.2d 1281, 1287 (Alaska 1990)). The case
before us now presents different circumstances, and the balance
of competing interests yields a different conclusion.
12 Cf. Moncrief v. Tate, 593 S.W.2d 312, 314 (Tex. 1980)
(declining to prohibit privatization and holding "that the issue
of good faith in abolishing a civil service position presents a
question of an abuse of discretion by the [abolishing agency]
which is a question of law for the decision of the judge").
The case-by-case approach taken in Moncrief also
appears to be the formula advocated by Robert Vaughn in his
treatise, Principles of Civil Service Law:
A familiar rule of evidence is that the
party with best access to the facts carry the
burden of producing evidence on a particular
issue. Given the complexity of reduction-in-
force actions it seems appropriate to place
the burden of coming forward with evidence to
establish good faith upon the government.
This burden, appropriately interpreted, would
not unduly hamper the administrative agency
nor improperly restrict the scope of
administrative discretion. . . . [A] showing
that the reduction in force was primarily
motivated by economic or other permissible
reasons would seem sufficient to meet this
burden. Once this burden had been met by the
agency, it would become the responsibility of
the employee to establish other motivation
for the action. Only by allocating the
burden of proof in this matter can the
legitimate purposes not only of reduction in
force authority but also of the procedures
for employee removal be adequately protected.
Otherwise, reductions in force will become a
mechanism for subverting procedural
protections applied to disciplinary removals
from public employment.
Vaughn, 4.4, at 4-24, 4-25.
13 For example, California statutory law prohibits the
award of private contracts when the impact would be to undercut
state pay rates, displace civil service employees, or hinder the
state's affirmative action efforts. See Cal. Gov't Code
19130(a)(2)-(4) (West 1994). California also requires that the
contracting agency balance the potential economic advantage of
contracting against the public's interest in having the state
government perform certain functions directly. See id.
19130(a)(11).
14 It has been observed that privatization constitutes a
fundamental restraint on the power of organized labor in the
public sector. See Craig Becker, With Whose Hands:
Privatization, Public Employment, and Democracy, 6 Yale L. &
Pol'y Rev. 88, 90 (1988) (citing Harry Wellington & Ralph Winter,
The Unions and the Cities, 62-65 (1971)).
15 We discussed the essentials of a merit system in Alaska
Public Employees Ass'n v. State, 831 P.2d 1245 (Alaska 1992):
Generally defined, the merit principle
requires that recruitment, selection, and
advancement of public employees "under
conditions of political neutrality, equal
opportunity, and competition on the basis of
merit and competence." R. Vaughn, Principles
of Civil Service Law 9.3[6], at 9-27 (1976)
(quoting Stanley, What Are Unions Doing to
the Merit Principle?, 31 Pub. Personnel Rev.
109 (1970)). In actual practice, however,
"the merit principle is more complex and
ambiguous than the above definition reveals."
Id. Our legislature adopted the Personnel
Act for the express purpose of implementing
the constitutionally mandated merit principle
in state employment. AS 39.25.010(a).
Clearly recognizing the complexity of its
task, our legislature also provided a
detailed definition for the merit principle.
Thus, by statute, "[t]he merit principle of
employment includes . . . regular integrated
salary programs based on the nature of the
work performed." AS 39.25.010(b). The
elements of the merit principle's "salary
programs," of course, are the classification
plans and the salary plans adopted pursuant
to AS 39.25.150.
Id. at 1249 & n.7 (alterations in original) (footnote omitted).
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