88-002235RX Florida League Of Cities vs. Department Of Administration Status: Closed DOAH Final Order on Thursday, October 20, 1988.

Summary: Changes to proposed rule should have been published in Florida Admininstrative Weekly. Changes violated stipulation without notice.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA LEAGUE OF CITIES, )

)

Petitioner, )

)

vs. ) DOAH CASE NO. 88-2235RX

)

STATE OF FLORIDA, DEPARTMENT OF )

ADMINISTRATION, )

)

Respondent. )

__________________________________)

FINAL ORDER

Pursuant to notice, this cause came on for hearing before P. Michael Ruff,

duly designated Hearing Officer in Tallahassee, Florida on June 21, 1988.

APPEARANCES

For Petitioner: Cecil Howard, Esquire

Assistant General Counsel

Florida League of Cities

Post Office Box 1757

Tallahassee, Florida 32302

For Respondent: Andrea Bateman, Esquire

Senior Attorney

Department of Administration

Office of General Counsel

438 Carlton Building

Tallahassee, Florida 32399-1550

BACKGROUND

This case involves the Petition for Administrative Determination of the

Invalidity of Rules 22VP-1.099 and 1.016, Florida Administrative Code, rules of

the Department of Administration. A petition challenging the validity of the

subject rules was filed pursuant to both Sections 120.54(1) and Section 120.56,

Florida Statutes (1987). Challenges to two other rules, which were also

initially the subject of the petition, were settled by stipulation, whereby the

parties agreed to be bound by Attorney General's Opinion 88-24 regarding those

Rules, 22VP-1.011 and 22VP-1.015. That portion of the rule challenge has been

voluntary dismissed. The Petitioner presented two witnesses and two exhibits at

hearing and the Respondent presented two witnesses, one of whom was Don Bradley,

also a witness for the Petitioner. The Respondent presented six exhibits, five

of which were admitted into evidence, with Exhibit 4 not being admitted.

FINDINGS OF FACT

1. This cause concerns rules enacted in relation to Section 295.101,

Florida Statutes, which provides that:

A veteran's employment preference shall be

deemed to have expired after a person

eligible pursuant to 295.07 has applied and

been employed by any state or any agency of a

political subdivision of the state.

2. This provision took effect on October 1, 1987, as Chapter 87-356, Laws

of Florida. Proposed Rules 22VP-1.009 and 22VP-1.016 were noticed in the

Florida Administrative Weekly on November 6, 1987, and drew a timely Section

120.54(4)(a), challenge to their validity. They purportedly were proposed on

the authority of the statutory section quoted above.

3. The Department had originally proposed rules regarding expiration of

the veterans' preference provided for in Chapter 295, Florida Statutes, in a

somewhat different manner. Specifically, proposed Rule 22VP-1.012 provided

that:

Expiration of preference. After September

30, 1987 a veteran's employment preference

shall expire when the preference-eligible

applicant is employed in a position for which

the applicant has claimed preference.

(Emphasis supplied).

4. The Petitioner challenged this rule upon the basis that it conflicted

with Section 295.101, Florida Statutes. The Department also proposed Rule

1.016(1) which stated:

An applicant eligible for veteran's

preference who believes he or she was not

afforded employment preference in accordance

with this chapter may file a complaint with

the Division, requesting an investigation.

The complaint shall be filed within 21 days

from the date that the notice required by

Section 22VP-1.014(1) is received by the

applicant.

The notice requirement mentioned, in Rule 22VP-1.14(1), stated:

Within 30 days of the hiring decision, the

employer shall give written notice of the

hiring decision to each applicant claiming

veterans' preference who is not appointed and

shall inform the applicant whether the parson

appointed was a preference-eligible

applicant. Such notice shall further inform

the applicant of the right to an

investigation by the Division, the time

limits for requesting such investigation, and

the address to which the request for an

investigation should be sent.

5. As to the first proposed rule, quoted above, the Department

subsequently agreed to a stipulation whereby it would change the language of the

rule to the exact language contained in the statute quoted above. However,

although the adopted rule revealed the stipulated change, the Department also

included another change in a different rule, Rule 22VP-1.09(2), unbeknownst to

the Petitioner, which provided that:

Forms provided for application for covered

employment shall ask whether the applicant is

claiming veteran's preference, and whether

the applicant has claimed preference since

October 1, 1987.

6. The changed Rule, contained in 22VP-1.009, may be construed to imply a

departmental position and intention that the preference does not expire until it

is actually claimed by a veteran. The Department thus may have intended, all

through the negotiation and stipulation process, that that position should

ultimately prevail, although it had agreed and stipulated to use, instead, the

statutory language. This prompted the Petitioner to voluntarily dismiss its

original challenge to these rules in reliance on the Department's stipulation.

More importantly, though, 22VP-1.009(2), as purportedly adopted, became, in

effect, a different rule, because its language, as submitted for adoption,

contains a possible meaning quite the opposite of that the two parties

previously stipulated to. As a result, the Petitioner maintains that the

Department should have given new notice of the adoption of this language, as

required under Section 120.54(1), Florida Statutes, as if, in effect, a rule had

thus been proposed contrary to the agreement of those parties.

7. As to the substantial change quoted above in proposed Rule 22VP-1.016

and the related notice provision in Rule 22VP-1.014(1), the Petitioner had

challenged rule 22VP-1.014(1) (Closed DOAH Case No. 87-53 allegations that it

imposed too great a burden on employers when there were less restrictive means

of informing veterans of their right to an investigation of a hiring by an

employer, in which the veteran, entitled to preference, was not hired. As a

result of the Petitioner's challenge to that proposed rule, the Department

agreed to stipulate to the following language in 22VP-1.014(1):

The covered employer shall inform preference

eligible applicants at the time of

application of the right to an investigation

by the Division if that person is not

appointed to a position, the time limits for

requesting such investigation, and the

address to which the request for an

investigation should be sent.

(Emphasis supplied).

8. The point of this stipulation seems to have been that employers would

thereby be relieved of the requirement of mailing out notice to preference

eligible veterans, who were not hired, concerning their right to seek an

investigation and a hearing with regard to the hiring result. Instead the

employers could thus print the relevant information regarding claiming of

preference rights and the right to an investigation on the application form

itself, so that the veteran would know in advance. Thus, although Petitioner

apparently does not object to a requirement that preference-eligible veterans

bed notified of their rights, the employer would apparently not hake to undergo

the trouble and expense of mailing out notification to all rejected veterans

after the hiring decision, by the terms of the stipulation. That leaves

unanswered the question of how the veteran would get notified of the hiring

decision under the Department's and the petitioner's stipulation, however.

In any event, upon stipulation between the parties whereby the Department

accepted the above-quoted language to be placed in 22VP-1.014(1), the

Petitioner, with its "substantial interests" satisfied, voluntarily dismissed

that rule challenge.

9. The Department then submitted its rules for adoption, indeed showing

the agreed to language of 22VP-1.014(1). However, the Department changed the

language of 22VP-1.016(1) to the point that the agreed to language of 22VP-

1.034(1), no longer had any force or effect. It was nullified because the

adopted language of 22VP-1.016(1) was changed to provide that:

An applicant eligible for veterans'

preference who believes he or she was not

afforded employment preference in accordance

with this chapter may file a complaint with

the Division, requesting an investigation.

When notice of a hiring decision is given by

a covered employer, the complaint shall be

filed within 21 days from the date that he

notice is received by the applicant. When

notice of a hiring decision is not given by

the covered employer, the complaint may be

filed at any time by the applicant.

(Emphasis supplied).

10. This change in 22VP-1.016 in effect places a "mail-out notice"

requirement upon employers which the parties had agreed would be eliminated by

the stipulated language which was to be inserted in 22VP-1.014(1). The failure

to provide such notice would subject employers to complaints indefinitely.

11. This change by the Department resulted, in effect, in the adoption of

an entirely different rule, effectively nullifying the stipulation of the

parties concerning the language to be adopted. Had that agreement been adhered

to, it would have satisfied the substantial interests of the Petitioner.

Because the agency materially changed its intent, resulting in the adoption of,

effectively, a substantially different rule, the Petitioner maintains that

proper notice under Section 120.54(1), should have been given again so that the

Petitioner would have a new point of entry to object to that unforeseen,

unagreed to and capricious change.

CONCLUSIONS OF LAW

12. An agency is only authorized to make changes to proposed rules during

the promulgation process under certain circumstances. Those circumstances are

set forth in Section 120.54(13)(b), Florida Statutes, which provides that:

After the notice required in subsection (1)

and prior to adoption, the agency may

withdraw the rule in whole or in part or may

make such changes in the rule as are

supported by the record of public hearings

held on the rule, technical chances which do

not affect the substance of the rule, changes

in response to written material relating to

the rule received by the agency within 21

days after the notice and made a part of the

record of the proceeding, or changes in

response to a proposed objection by the

committee.

13. In the case at hand, the Department has failed to show that the rule

changes, by which the Department abrogated the stipulation; rules with a

markedly different substantial effect, were made in accordance with the

circumstances provided in the above-quoted subsection of the statute. In the

instant situation, although it might be argued, to some extent, that the changes

in the rule are supported by some comment received as a result of the public

hearing, the record does not clearly indicate that the adopted version of the

proposed rules concerning the "mail-out notice requirement" and that concerning

the "claiming" of a preference, in order to expend that preference, are changes

supported by those commenting upon the rules in a public hearing or otherwise.

14. Neither can it be found that the most recent changes in the rules were

in response to "written material relating to the rule received by the agency

within 21 days after the notice, and made a part of the record of the

proceeding." In fact, the changes were made contrary to written material

relating to the rule received by the agency, inasmuch as the Petitioner timely

filed a petition in opposition to the rules within 21 days after the notice and

conducted negotiations with the Department, with the result that a written

stipulation was entered providing for certain changes to the rules, mentioned

above, which would placate the Petitioner's substantial interests.

15. The evidence adduced by the Department, to the extent it was not

predicated on hearsay, does not establish that any "public comment" was received

which supports the most recent changes. Because the agency changed its intent,

negated its own stipulation and put the objectionable language in the rules at a

different place, so as to reinstitute its original intent in the language of the

rule, despite its written agreement with the Petitioners, it cannot be said that

the changes were in response to any "written material" relating to the rule

received within 21 days after the notice.

16. Thus, the agency has not been able to show that the changes in the

rule, resulting in the language most recently proposed for adoption, were the

result of any circumstances countenanced by Section 120.54(13)(b), Florida

Statutes. Because the changes do not comply with that subsection, the agency

has no authority to make the changes which were made, after the time for

challenging them had expired, unless new notice is published and a new point of

entry to challenge them is afforded.

17. When the agency unilaterally abrogated its own stipulation with the

Petitioners, and put its desired language in a different place in the proposed

rules, while appearing to adopt the stipulated language, the agency, in fact,

chanced its intent, contrary to the Petitioner's substantial interests which had

been expressed to the agency by the original petition filed, and voluntarily

dismissed in reliance on the stipulation. This action, in effect, constituted

the substitution of a whole new agency intended action, which, not comporting

with Section 120.54(13)(b), Florida Statutes, amounted to a withdrawal of the

agency "intent" and proposed rules emanating from she stipulation and the

substitution of a whole new agency intent and proposed rule, with an entirely

different and adverse effect on the Petitioner's interests. This being the

case, the agency should have complied, once again, with the notice requirements

of Section 120.54(1) and allowed the Petitioner a new point of entry to file a

Section 120.54(4)(a) challenge to the proposed rules, as changed.

18. Due process requirements preclude the Department from proposing rules,

and, if a challenge results, agreeing to changes which satisfy that challenger,

and induce it to dismiss its petition, and then capriciously reintroducing its

original intent and language into effect in the proposed rules, after having

agreed otherwise with the erstwhile Petitioner. If such were allowed to occur

in this instance, it would be an for agencies to propose as innocuous a rule as

possible, allow the 21 day challenge period to expire, and then change the rule

substantially to accomplish an agency's heretofore concealed "true intent." It

could thus avoid according any putative Petitioner a point of entry to assert

its substantial interests, adverse to the agency, in the promulgation process.

Such would be a manner in which agencies could almost guarantee that their rules

would go into effect unchallenged, since they could thus capriciously propose

rules and then change them without adequate justification and notice to affected

persons.

19. The agency, by following such a course in its promulgation process,

thus departed from the essential requirements of law in that it acted

arbitrarily and capriciously in changing the language of the proposed rules in a

manner detrimental to the Petitioner's interests after its had led the

Petitioner to believe, through its written word embodied in the stipulation,

that it would enact the rules in a manner consistent with them. Since the

agency departed from the essential requirements of law through its capricious

method of promulgation, it thus has departed from the delegation of authority

accorded it by the legislature in Section 120.54, Florida Statutes. See also

Subsection 120.52(8)(a), Florida Statutes.

20. The Petitioner has also alternatively challenged Rules 22VP-1.009 and

1.016 pursuant to Section 120.56(1), Florida Statutes (1987), to the extent that

they might be deemed enacted rules. The Department's Rule 22VP-1.009 requires

job applicants eligible for veteran's preference in hiring to elect an option as

to "whether the applicant is claiming veteran's preference and whether the

applicant has claimed preference since October 1, 1987." In effect, this rule

seems to accord the applicant veteran the option of using that preference or

deciding not to use it in seeking a particular employment position. The

Petitioner contends that the legislature did not intend that the veteran's

preference should be that broad, that it did not intend that the veteran could

keep the preference intact after being hired, simply by electing not to "claim"

the preference with relation to that hiring. The Petitioner thus contends that

the legislature, in enacting Section 295.101, Florida Statutes, the putative

authority for the subject rules, intended rather that the veteran's preference

could be exercised one time and that once a qualified veteran, with a

preference, applied for employment and was hired, that the preference then

expired.

21. The Respondent contends that that statutory language should be

interpreted to mean a veteran must apply for or claim the preference actively

before it can expire, even though the language in the various provisions of

Chapter 295, defining the veteran's employment preference and the conditions

under which it obtains, does not expressly require that a veteran apply for it

or claim it in order to be clothed with it, in seeing a particular employment

position, provided his military service history comports with the statutory

definition for veteran's preference status.

22. The operative language of Section 295.101, Florida statutes, quoted

fully above, provides that:

A veteran's employment preference shall be

deemed to have expired after a

eligible pursuant to Section 295.07 has

applied and been employed..."

23. A literal reading of this statute, and plain meaning of its language,

clearly shows that the manner by which a veteran's preference expires involves

the application for a covered employment position, to which a veteran's

preference in hiring applies, and being hired. The clause "...has applied and

been employed..." does not mean "applied" for the preference, and then employed;

it means applied for the job at issue and been employed in that job, after

which, under the statutory provision, the veteran's employment preference would

automatically expire.

24. The Department's rule thus arguably attempts to enlarge upon the

statutory grant of authority concerning the manner in which a veteran's

preference terminates, by not requiring termination of preference eligibility

until the preference-eligible veteran has actually affirmatively claimed the

preference, thereby according the veteran the option of picking and choosing

when to exercise his preference. The rule might thus allow the veteran to

continue seeking appointments to positions and promotions without losing his

veteran's preference eligibility, and advantage over other applicants, until he

is hired for a position or obtains a promotion where he actually claimed the

preference. This is an overly broad interpretation of how the veteran's

preference should be used and exceeds the purview of the statute, as interpreted

above. The Department, in an enactment of rules, must comport with the

stature's plain and obvious meaning. The rule as written appears to result in

the rule enlarging upon the authority granted by the statute, which is

prohibited. See State Department of Insurance vs. Insurance Services, Inc., 454

So.2d 908 (Fla. 1st DCA 1983); Holly vs. Auld, 450 So.2d 217 (Fla. 1981).

25. If, on the other hand, the rule is interpreted to mean that employment

application forms should contain an inquiry concerning whether an applicant is

claiming veteran preference status merely as a means of bringing that status

information to the prospective employer's attention, for purposes of his hiring

decision, such a construction of the rule would appear to be within the

permissible bounds of the statutory authority. This is true, however, only if

the rule is not construed to allow the preference to be preserved in the

situation where he applicant informs the employer he is a veteran, but does not

claim preference rights, and is hired anyway.

26. Those conflicting interpretations on the "merits" of the rule aside,

however, the fact remains that the rule is flawed in its enactment, for the

reasons discussed above in relation to the Section 120.54 challenge. In that

regard, all issues, save constitutional frailty, remain available to a

petitioner in a Section 120.56 challenge to an "adopted" rule, as are relevant

to a Section 120.54 attack. See State Department of Health and Rehabilitative

Services vs. Alice P., 367 So.2d 1045 (Fla. 1st DCA 1979). Thus, in this

context, the rule represents a departure from the limits of delegated

legislative authority because its promulgation was effected in an arbitrary and

capricious way.

27. The Department has also exceeded the legislative grant of authority by

its adoption of Rule 22VP-1.016(1) which states that:

When notice of a hiring decision is not

given by the covered employer, a

may be filed at anytime by the applicant.

28. The Department cites as authority for this rule, Section 295.085,

Florida Statutes, which provides as follows:

(1) In all positions in which the

appointment or employment of persons is not

subject to a written examination, with the

exception of those positions included under

s. 110.205(2) and with the exception of

comparable positions in the political

subdivisions of the state, preference in

appointment and employment shall be given by

the state and its political subdivisions

first to those persons included under s.

295.07(1) and (2) and second to those persons

included under s. 295.07(3) and 4), provided

such persons possess the minimum

qualifications necessary to the discharge of

the duties involved.

(2) The Department of Administration shall be

responsible for promulgating such rules or

procedures as to ensure that those persons

defined in s. 295.07 are given special

consideration in the employing agency's

selection and retention processes. These

procedures shall include the award of point

values as articulated s. 295.08 if

applicable, or where such point values re

not relevant, shall include procedures to

ensure those persons defined in s. 295.07 are

given special consideration at each step of

the employment selection process and are

given special consideration in the retention

of employees where layoffs are necessitated.

29. As can be seen, the above section really is general authority provided

by the legislature to the Department to allow it to adopt rules to insure that

special consideration is given, generally, in the selection and retention of

preference-eligible veterans. It might be argued, as Petitioner does, that it

is not a sufficiently specific grant of power to encompass the authority to make

detailed rules concerning how and when notices of hiring decisions should be

promulgated by covered employers and given to job applicants, nor can its

general grant of authority be stretched sufficiently to legitimize a rule by

which a job applicant may file a complaint "at any time" so as to trigger an

investigation under the rule, concerning the hiring decision. Such a general

grant of authority indeed should not be used as "catch all" to support adoption

of any rule the Department wishes to adopt concerning all the specific subject

matters possible, involving how a veteran's preference is defined and exercised

in different situations.

30. Once again, however, it is not necessary to resolve that question, as

to whether that rule enlarges the substantive jurisdiction of the Department

beyond the limits sat by the legislature. This is so because, as found and

discussed above, the rule is fatally flawed because of the agency's

arbitrariness and caprice in the promulgation process. It has been enacted in a

way which departs from the bounds of the legislative charge and is therefore

invalid. See Section 120.52(8)(a) Florida Statutes. In short, it must be

concluded that Rule 22VP-1.016(1) is invalid because the manner of its enactment

exceeded the authority delegated by the legislature in Sections 295.085,

120.54(1), 120.57(13)(b) and 120.52(8)(a), Florida Statues, (1987).

Accordingly, it is, therefore,

ORDERED:

1. That Rules 22VP-1.009 and 22VP-1.016 are an invalid exercise of

delegated legislative authority as they were adopted by the Department of

Administration without adhering to proper procedures for adoption as delineated

in Section 120.54, Florida Statutes.

2. That Rules 22VP-1.009 and 22VP-1.016 are an invalid exercise of

delegated legislative authority, pursuant to Section 120.56(1), Florida

Statutes.

3. That the Petitioner's challenge to Rules 22VP-1.011 and 22VP-1.015 is

moot, as all parties have agreed that both rules shall be read and interpreted

in accordance with Attorney General Opinion 88-24, to wit:

That although veteran's preference provides

special consideration for eligible veterans

at each step of the employment selection and

retention process, it does not require the

selection or retention of a preferred veteran

over a non-veteran who is `the most

qualified.'

DONE AND ORDERED this 20th day of October, 1988, in Tallahassee, Leon

County, Florida.

_________________________________

P. MICHAEL RUFF, Hearing Officer

Division of Administrative Hearings

The Oakland Building

2900 Apalachee Parkway

Tallahassee, FL 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of October, 1988.

COPIES FURNISHED:

Adis Vila, Secretary

Department of Administration

435 Carlton Building

Tallahassee, FL 32399-1550

Cecil E. Howard, Esquire

Assistant General Counsel

Florida League of Cities

Post Office Box 1757

Tallahassee, Florida 32302

Andrea R. Bateman, Esquire

Senior Attorney

Department of Administration

435 Carlton Building

Tallahassee, Florida 32399-1550

Liz Cloud, Chief

Bureau of Administrative Code

Room 1802, The Capitol

Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director

Administrative Procedures Committee

Room 120, Holland Building

Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING

FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR

WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY

RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE

ORDER TO BE REVIEWED.