Kirkmeyer v. Department of Local Affairs

Citations: 313 P.3d 562; 2011 Colo. App. LEXIS 489; 2011 WL 1168289Docket: No. 09CA0725

Court: Colorado Court of Appeals; March 31, 2011; Colorado; State Appellate Court

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Barbara Kirkmeyer, a former state employee in the Senior Executive Service (SES), sought reinstatement to a vacant position in the traditional pay plan after her SES contract expired. She appealed a summary judgment favoring the Colorado Department of Local Affairs (DOLA) and its executives, which upheld her separation from state employment. The court reversed this summary judgment and instructed the trial court to pause further proceedings until Kirkmeyer's appeal to the Colorado State Personnel Board is resolved.

Under Colorado law, state employment appointments and promotions must be based on merit and fitness, irrespective of personal attributes or political affiliation. Employees in the personnel system typically retain their positions until retirement or efficient service standards are not met, which requires just cause for termination. The SES consists of a limited number of high-salary positions that involve a competitive selection process and annual contract negotiations. Employees may opt to stay in the traditional pay plan despite being nominated for SES. If they accept an SES position, they may waive certain appeal and grievance rights regarding non-renewal of their contracts, which can lead to separation from state service unless offered a different position. Furthermore, employees in the SES after July 1, 2008, waive retention rights in the broader personnel system but retain reinstatement rights to previously certified positions.

In 2001, DOLA hired Kirkmeyer, who advanced to a management position within three years. By 2004, her division director role was designated for the Senior Executive Service (SES), leading to the signing of three SES contracts. The first two contracts included a clause stating that SES employees have no rights to positions outside SES and limited layoff rights, while allowing Kirkmeyer retention rights for vacant management positions under certain circumstances. 

The key terms of her final SES contract, effective from July 1, 2006, to June 30, 2007, included provisions for non-renewal, stating that if she received written notice by May 1, she could either be separated from state service or appointed to a vacant non-SES position at a specified salary. The contract also stipulated that SES employees had no retention or reemployment rights with respect to other state positions, and that Kirkmeyer waived all appeal rights regarding her separation from state service due to contract expiration, except for specific rights agreed to by the Executive Director.

A significant provision, referred to as the safe harbor clause (SHC), guaranteed that if Kirkmeyer was not offered a new contract for the 2007-2008 fiscal year, she would revert to the classified pay plan at a specified salary. Kirkmeyer acknowledged that the SES contracts implied no guarantee of positions outside SES but believed she retained rights within the state personnel system. The SHC was introduced in light of concerns from long-term SES employees about potential non-renewal of contracts by a new administration, particularly during the gubernatorial election year of 2006. Kirkmeyer, serving as the acting Executive Director of DOLA at the time, was involved in the approval of the SHC and included it in her contract, ensuring it was signed by the governor's chief of staff to address concerns about conflicts of interest.

In January 2007, Governor Bill Ritter appointed Kirkpatrick as the Executive Director of DOLA. In February, Kirkpatrick notified Kirkmeyer that the State Human Resources Code (SHC) would not be honored as it conflicted with Colorado law. In April, Kirkpatrick informed Kirkmeyer that her Senior Executive Service (SES) contract would not be renewed and that she would be separated from service upon its expiration, without reinstatement to a traditional pay plan position. 

Kirkmeyer appealed to the Board, claiming DOLA violated the SHC by not offering her a position and discriminating against her politically. The Board's administrative law judge (ALJ) dismissed her appeal for lack of subject matter jurisdiction, stating she was not a certified employee under section 24-50-104(5)(c) and had no post-SES employment rights under the SHC. On appeal, the court found Kirkmeyer entitled to a hearing about her rights to compete for open positions. Upon remand, the same ALJ held a hearing but ultimately rejected Kirkmeyer’s claims against DOLA. The Board adopted this decision, leading to further appeal by Kirkmeyer.

While awaiting the ALJ's jurisdictional ruling, Kirkmeyer initiated a separate district court action, which was consolidated with her appeal. She primarily alleged violations of the SHC and claimed political discrimination by DOLA under the Colorado Constitution. After some discovery, summary judgment motions were filed by DOLA, Kirkpatrick, and Gonzales, while Gonzales did not file a motion. The trial court granted summary judgment in favor of DOLA, finding the SHC illegal and unenforceable due to non-compliance with statutory and rule provisions. Kirkmeyer argued that these provisions conflicted with the merit-based personnel system established by the Colorado Constitution. DOLA countered that Kirkmeyer, by entering the SES under contracts referencing the conflicting statute, waived her rights to return to a traditional pay plan position, asserting that any SHC terms in her contract were void.

The parties agree that both the current appeal and Kirkmeyer II should be resolved with simultaneous opinions. In Kirkmeyer II, the majority upholds the Board's decision except for the aspect limiting the hearing to Kirkmeyer's competition for open positions. The majority finds the State Human Resources Code (SHC) ambiguous, directing the Board to clarify whether Kirkmeyer possesses any additional employment rights. 

The review of summary judgment is conducted de novo, and such judgment is warranted only when no material factual disputes exist. Kirkmeyer argues that section 24-50-104(5)(c), which denies individuals in the senior executive service (SES) the right to positions outside that service, is unconstitutional, both facially and as applied. She claims this provision creates a parallel personnel system that violates article XII, section 18, and contends that its application deprived her of her rights as a state employee upon the expiration of her third SES contract. 

The court first assesses Kirkmeyer’s standing to challenge the statute, concluding that she lacks standing for a facial challenge as it applies only to SES employees. Standing is a prerequisite for jurisdiction, requiring a plaintiff to demonstrate an injury to a legally protected interest. 

The analysis centers on whether the SHC infringes section 24-50-104(5)(c) by guaranteeing Kirkmeyer reemployment rights to vacant traditional pay plan positions she was certified for, post-SES contract nonrenewal. If the statute indeed undermines her reinstatement claim, the court would need to evaluate its constitutionality in light of article XII, section 13(8), which assures job security for classified employees during efficient service until retirement. Kirkmeyer's standing is thus closely linked to the statute's interpretation. The court acknowledges that the Board's potential remand findings could allow it to avoid addressing her constitutional claims temporarily, but the statute's interpretation remains critical, as it is intricately related to the provisions of Kirkmeyer’s SES contracts and section 24-50-104(5)(c). All interpretations of the statute will be conducted de novo.

Judicial economy is not served by deferring interpretation to the Board on remand, as the statutory language is clear and unambiguous, allowing for straightforward analysis based on its plain meaning. The phrase in question pertains specifically to 'any person in the senior executive service' (SES), indicating that it applies solely to those holding SES positions. This interpretation is reinforced by the structure of section 24-50-104(5)(c) and (d), which outlines the SES framework, including entry processes and employee rights. The final sentence of subsection 104(5)(c) specifically addresses employees 'in' the SES, while the subsequent sentences in subsection 104(5)(d) detail pay practices for SES employees and appeal rights for those dismissed from SES positions. 

Three key rationales support this interpretation: first, the annual cycle of SES contracts necessitates clarity to prevent turnover in high-level positions; second, the Colorado Constitution protects state employees' continued employment, and an interpretation negating retention rights would undermine this protection; third, enforcing the SHC does not allow individuals to benefit from increased SES salaries without relinquishing their right to continued employment, as individuals like Kirkmeyer do not claim bumping rights. 

Additionally, there is a legal obligation to avoid interpretations that could question the constitutional validity of statutes. Thus, the interpretation of section 24-50-104(5)(c) proposed by DOLA, Gonzales, and the trial court, which could lead to constitutional issues, is rejected. The last sentence of subsection 104(5)(c) will not be construed as waiving future rights to return to non-SES positions, as such a reading could imply a parallel personnel system that lacks the protections established by the Colorado Constitution.

The interpretation of section 24-50-104(5)(c) indicates that an employee is prohibited from returning to an 'outside' position only while serving in the Senior Executive Service (SES). Kirkmeyer lacks standing to challenge this statute on its face since it applies only during an SES tenure, and her contract has expired. However, she has standing to contest its constitutionality as it was invoked against her by Gonzales, DOLA, and the trial court, though this challenge is deemed moot based on the statute's interpretation.

DOLA argues that specific Board Rules (1-19, 2-11(C), and 2-18) bar Kirkmeyer from using the State Hearing Council (SHC) to secure a traditional pay plan position. Kirkmeyer claims these rules contradict the merit-based personnel system and are unconstitutional. The court refrains from addressing this constitutional issue, stating that it should be resolved in future Board proceedings after remand from Kirkmeyer II, where the SHC's ambiguity necessitates a hearing to clarify Kirkmeyer's rights.

Kirkmeyer seeks summary judgment on her declaratory judgment and breach of contract claims, but the ambiguity of the SHC and the existence of factual disputes regarding her rights prevent this. Kirkmeyer’s assertions of vested rights being violated by section 24-50-104(5)(c) are dismissed since the statute does not invalidate the SHC. Her argument regarding due process violations is also premature as the case is being remanded for further proceedings. Lastly, her claim of discrimination based on political affiliation has been rejected by the Board and affirmed in Kirkmeyer II.

The trial court's affirmation of Gonzales' decision regarding Kirkpatrick's actions towards Kirkmeyer was erroneous. Kirkmeyer argues that the court prematurely supported Gonzales' conclusion that Kirkpatrick acted appropriately by not offering Kirkmeyer a position in the traditional pay plan. The Attorney General asserts that the record was sufficient and that a separate motion for summary judgment was unnecessary due to overlapping issues. However, the court finds it unnecessary to address these procedural matters since it has rejected the rationale behind Gonzales' decision, specifically that section 24-50-104(5)(c) prevents enforcement of the SHC. In appeals for judicial review under section 24-4-106(7), C.R.S. 2010, the appellate court uses the same standard as the trial court and can overturn an agency's decision if it misinterpreted the law. Gonzales concurred with Kirkpatrick in deeming the SHC unenforceable, leading to the conclusion that Gonzales' decision cannot be upheld based on the court's interpretation of the statute.

Summary judgment in favor of DOLA, Kirkpatrick, and Gonzales has been vacated, and the case is remanded following the precedent set in Kirkmeyer II. Further proceedings before the district court or Gonzales are stayed until Kirkmeyer's action before the Board is final, including any appeals. The judgment is reversed, with concurrence from Judges Russel and Gabriel. Gonzales, although not formally appearing in the case, is addressed due to the trial court's ruling against Kirkmeyer and the Attorney General's representation. The excerpt references constitutional provisions and past cases that illustrate limitations on employment protections for state employees, specifically noting exemptions from the merit system and the implications of reorganizations on job security. Kirkmeyer has clarified her claim does not include rights to displace incumbents but only to occupy vacant positions. The senior executive service is limited in number, with specific criteria established for appointments, and employees within this service do not have guaranteed positions outside of it. Salary determinations for these positions are contract-based, with limited avenues for appeal in cases of dismissal for performance issues. The excerpt concludes that all procedural errors related to the summary judgment are deemed moot in light of the remand.