In the matter of Department of Labor and Industry Case Numbers 5129 and 5133

Hearing Date: February 28, 2001
Decision Issued: March 8, 2001

On October 20, 2000, Grievant was issued a Group II Written Notice of disciplinary action with a ten day suspension for:

On November 20, 2000, Grievant timely filed a grievance to challenge the disciplinary action. The outcome of the Third Resolution Step was not satisfactory to the Grievant and he requested a hearing.

Grievant received his evaluation on October 20, 2000. He filed a grievance on November 20, 2000 claiming the evaluation was arbitrary and capricious. The outcome of the Third Resolution Step was not satisfactory to the Grievant and he requested a hearing. The Agency Head qualified the grievance for a hearing.

On February 2, 2001, the Department of Employment Dispute Resolution assigned these appeals to the Hearing Officer. The appeals were consolidated at the request of the parties with authorization from the Director of the Department of Employment Dispute Resolution. On February 28, 2001, a hearing was held at the Agency’s regional office. Upon motion of a party, the Hearing Officer found just cause to grant an extension of the 30 day time frame for issuing the decision because of the conflicting schedules of the parties. GPM § 5.1.

Grievant
Commissioner
Chief Deputy Commissioner (did not testify)
Regional Director
Supervisor
MIS Supervisor

1. Whether Grievant should receive a Group II Written Notice of disciplinary action with suspension.
   
2. Whether Grievant’s October 2000 Performance Evaluation was arbitrary or capricious.

With respect to the first issue, the burden of proof is on the Agency to show by a preponderance of the evidence that its disciplinary action against the Grievant was warranted and appropriate under the circumstances. Grievance Procedure Manual ("GPM") § 5.8.

With respect to the second issue, the burden of proof is on the Grievant to show by a preponderance of the evidence that his evaluation was arbitrary or capricious. GPM §§ 4.1(b)(3); 5.8.

A preponderance of the evidence is evidence which shows that what is sought to be proved is more probable than not. GPM § 9.

After reviewing the evidence presented and observing the demeanor of each witness, the Hearing Officer makes the following findings of fact:

The Agency’s Compliance Program conducts inspections of private and public sector employers to assure compliance with the laws, standards, and regulations of the Commonwealth. The Program issues citations listing violations of the standards and regulations governing employers, determines dates by which violations must be abated, and proposes civil monetary penalties for certain types of violations (Public Sector employers do not receive such penalties). The Agency has a delicate working relationship with the Federal Government. In order to maintain a tolerable degree of independence, the Agency must satisfy certain federal guidelines regarding the number, type, and quality of its inspections. A satisfactory number of inspections completed by the Agency is a factor enabling it to maintain its current autonomy level. In addition, the Agency is able to protect the public through a vigorous and comprehensive inspection program.

Approximately 53 health and safety inspectors work for the Agency throughout five regions of the Commonwealth. Inspectors are evaluated based on a formula which considers the number of available hours for inspections, the type of employer being inspected, and an inspector’s level of experience. For example, an entry level safety inspector should be able to complete 8.1 Construction inspections for every 100 hours of available time and 3.0 General Industry inspections for every 100 hours of available time. Averaging these numbers results in an inspector being required to conduct 5.55 inspections per 100 hours for inspectors who conduct both Construction and General Industry inspections. The effect of this averaging is that an inspector who is assigned a high volume of Construction inspections can more easily reach his 5.55 per 100 hour goal than an inspector who is assigned a high volume of General Industry inspections.

Grievant is a safety inspector for the Agency. He goes to employer work sites to determine their compliance with various safety statutes and regulations. Although Grievant has worked for the Agency for many years, his performance expectations are those of an entry level inspector.

Grievant received an evaluation in October 1997 showing his performance as ‘DOES NOT MEET MINIMUM EXPECTATIONS." (Agency Exhibit 4). He was re-evaluated three months later and his performance met expectations thereby preventing termination. (Agency Exhibit 9).

In October 1998, Grievant received an evaluation indicting his performance was "FAIR BUT NEEDS IMPROVEMENT". (Agency Exhibit 7). Grievant’s supervisor asked the Agency to terminate Grievant. Rather than beginning the process to terminate Grievant, the Agency began a process to help Grievant improve his performance. The Agency established "Performance Guidelines for FY99 and Y2K" ("Guidelines") for the Grievant . (Agency Exhibit 8).

The Guidelines require Grievant to complete 8.1 Construction inspections per 100 hours of available time and 3.0 General Industry inspections per 100 hours of available time. They also require Grievant to spend 70 percent of his time engaged in inspection activity and specify the average time he should spend to complete an inspection. At the beginning of each month (over a two year period), Grievant and his supervisor were to meet to determine whether Grievant had met his expectations under the Guidelines. If Grievant failed to meet his monthly expectations, he would be disciplined as follows:

In August 2000, Grievant failed to meet his monthly goal because he conducted only 6 inspections when he was required to conduct 7.6 inspections. This was the fourth offense and the Agency issued a Group II Written Notice with suspension in accordance with the Guidelines. (Agency Exhibit 11).

Throughout the two year period, Grievant’s supervisor assigned to Grievant a greater number of Construction inspections than General Industry inspections in order to help him meet his monthly goal.

Grievant has prior active disciplinary action against him consisting of a Group I Written Notice received in August 1999 and a Group I Written Notice with 3 day suspension received in September 1999.

In December 1999, Grievant, Grievant’s supervisor, and a reviewer signed a Performance Plan outlining Grievant’s performance expectations for the performance cycle ending October 1, 2000. The Performance Plan specifies Grievant’s Job Elements and Expectations for each element. The Performance Plan is similar to the plans of other Agency inspectors. (Agency Exhibit 19).

Agency inspectors, other than the Grievant, are evaluated using a cumulative quarter system. In other words, at the conclusion of each quarter, the Agency reviews the performance of an inspector for the period from the beginning of the performance cycle to the end of the current quarter. For example, at the end of the third quarter, the Agency reviews the inspector’s performance for the prior three quarters. At the end of the fourth quarter, the Agency reviews an inspector’s performance for the entire year. Included in that analysis is a comparison of the number of inspections conducted with the minimum number expected.

Grievant’s October 2000 Performance Evaluation was based on the 1998 Performance Guidelines and not on the Performance Plan he and his supervisor signed. He received an overall rating of "DOES NOT MEET MINIMUM EXPECTATIONS". Grievant received individual ratings of "DOES NOT MEET EXPECTATION" for the top three job elements. The descriptive explanation for the first two job elements states:

(Agency Exhibit 19).

The Agency has taken extraordinary and remarkable steps to salvage an employee who was performing poorly. Rather than trying to terminate Grievant in 1998, the Agency created a detailed two-year plan with monthly reviews. Although the Agency has established that the Grievant’s behavior justifies disciplinary action, the level of discipline must be reduced because of mitigating factors.

Management reserves the exclusive right to manage the affairs and operations of State government. Va. Code § 2.1-116.06. This right includes the ability to set the duties and responsibilities of State employees. When the Agency drafted the 1998 Performance Guidelines for the Grievant, it set Grievant’s duties and responsibilities. Grievant was obligated to meet his monthly inspection goal. In August 2000, Grievant failed to meet that goal and, therefore, he is subject to disciplinary action.

The level of disciplinary action to be taken against an employee is determined by the Commonwealth’s Policies and Procedure Manual ("P&PM"), Standards of Conduct, Policy 1.60. Although the Agency may set forth in the Guidelines the discipline it expects to take in event of certain behavior by the Grievant, it may not take disciplinary action without first considering the State’s policy at the time of the offense. The Guidelines may serve as a warning to Grievant, but they do not form the basis of a contract and may not serve as the sole authority upon which the Agency disciplines Grievant.

Agencies should consider mitigating circumstances before implementing disciplinary action. Mitigating circumstances include "otherwise satisfactory work performance." P&PM § 1.60(VII)(C). Before issuing Grievant a Group II Written Notice, the Agency did not consider Grievant’s cumulative performance. In other words, the Agency did not examine whether Grievant was meeting his performance standards as measured from the beginning of the 1998 Performance Guidelines or from the beginning of the performance cycle. Measuring from the beginning of the 1998 Performance Guidelines, Grievant was expected to conduct 100.51 inspections, yet he conducted 118. Measuring from the beginning of the performance cycle, Grievant was expected to conduct 57.67 inspections and he actually conducted 72. Grievant exceeded his expectations by 17 and 25 percent respectively depending on the time period selected. When Grievant’s performance is measured using this greater length of time, he shows an "otherwise satisfactory work performance." Consequently, Grievant’s Group II Written Notice with suspension must be reduced to a Group I Written Notice for Inadequate or unsatisfactory work performance.¹ P&PM § 1.60(V)(B)(1)(d).

State employees are evaluated using a Performance Planning and Evaluation Form. This form consists of a Performance Plan which is completed at the beginning of the performance cycle and the Performance Evaluation which is completed at the end of the performance cycle. P&PM § 1.40(II)(A).

The Performance Plan "sets forth general expectations, and contains the following sections: Job Elements, Performance Expectations, Performance Factors, and the Development Plan." P&PM § 1.40(II)(I). A supervisor should develop a Performance Plan by identifying job elements, establishing performance expectations, establishing a development plan and obtaining approval from the reviewer who is usually the supervisor’s superior. P&PM § 1.40(III)(A). A supervisor should discuss the Performance Plan with the employee and provide the employee with a copy of the plan. P&PM § 1.40(III)(B). An employee who disagrees with the Performance Plan may discuss his or her concerns with the supervisor. If the employee and the supervisor cannot resolve their disagreement, the employee may appeal the dispute to the reviewer. The appeal must be in writing and within 10 working days of the employee’s receipt of the Performance Plan. The reviewer may concur with the proposed Performance Plan or require the supervisor to make changes. The reviewer’s decision is final except that an agency head or designee may modify a reviewer’s decision. P&PM § 1.40(III)(D).

Changes to the Performance Plan during the performance cycle must be noted on the official Performance Plan and Evaluation form and initialed by the supervisor, reviewer, and employee. P&PM § 1.40(III)(E).

A Performance Evaluation is the "official determination of the degree to which an employee has met his or her performance expectations, as indicated in the [Performance Planning and Evaluation] form." P&PM § 1.40(II)(F).

"All ratings and written remarks in the [Performance Evaluation] must relate to the Performance Plan." P&PM § 1.40(V)(B)(2). Grievant’s Performance Evaluation is based on his 1998 Performance Guidelines and not on his Performance Plan that he signed in December 1999. The Agency’s evaluation of the Grievant is contrary to State policy. If the Agency wished to evaluate Grievant based on the 1998 Performance Guidelines, it should have revised his Performance Plan to incorporate the 1998 Performance Guidelines.

Arbitrary or capricious is defined as "Unreasonable action in disregard of the facts or without a determining principle." GPM § 9. The Agency’s evaluation of Grievant is arbitrary or capricious because it disregards the fact that he signed a Performance Plan upon which he was not evaluated.

The Agency contends that the December 1998 Performance Guidelines do not materially differ from the December 1999 Performance Plan and, thus, the Agency did not act arbitrarily. The Hearing Officer disagrees. The December 1998 Performance Guidelines are based on a monthly non-cumulative review of Grievant’s performance. The December 1999 Performance Plan, however, is similar to the plan of other inspectors and is based on a cumulative period of four quarters.

When a performance evaluation is arbitrary or capricious, the Hearing Officer’s authority is limited to ordering the agency to repeat the employee’s evaluation. After the Agency considers the Grievant’s performance as measured by the Performance Plan, it may be the case that the Grievant’s performance ratings remain the same. It may also be the case, that his performance ratings change. In any event, it is within the Agency’s authority to assign the appropriate rating to each of Grievant’s job expectations and assess his overall performance level for the performance cycle.

For the reasons stated herein, the Agency’s issuance to the Grievant of a Group II Written Notice of disciplinary action with suspension is reduced to a Group I. The disciplinary action for a Group I offense when the employee has two prior active Group I Written Notices is the issuance of a Written Notice with suspension for up to five workdays. The Hearing Officer will reduce the suspension to five days instead of ten days. GPM § 5.9(a)(2). P&PM § 1.60(D)(1)(a). The Agency is directed to provide the Grievant with back pay for five workdays less any interim earnings that the employee received during the period of suspension and credit for annual and sick leave that the employee did not otherwise accrue. GPM § 5.9(a)(3). P&PM § 1.60(IX)(B)(2).

The Agency is ordered to repeat its October 2000 evaluation of the Grievant in accordance with State policy.

As Sections 7.1 through 7.3 of the Grievance Procedure Manual set forth in more detail, this hearing decision is subject to administrative and judicial review. Once the administrative review phase has concluded, the hearing decision becomes final and is subject to judicial review.

Administrative Review – This decision is subject to four types of administrative review, depending upon the nature of the alleged defect of the decision:

1. A request to reconsider a decision or reopen a hearing is made to the hearing officer. This request must state the basis for such request; generally, newly discovered evidence or evidence of incorrect legal conclusions is the basis for such a request.
2. A challenge that the hearing decision is inconsistent with state or agency policy is made to the Director of the Department of Human Resources Management. This request must cite to a particular mandate in state or agency policy. The Director’s authority is limited to ordering the hearing officer to revise the decision to conform it to written policy.
3. A challenge that the hearing decision does not comply with grievance procedure is made to the Director of EDR. This request must state the specific requirement of the grievance procedure with which the decision is not in compliance. The Director’s authority is limited to ordering the hearing officer to revise the decision so that it complies with the grievance procedure.
4. In grievances arising out of the Department of Mental Health, Mental Retardation and Substance Abuse Services which challenge allegations of patient abuse, a challenge that a hearing decision is inconsistent with law may be made to the Director of EDR. The party challenging the hearing decision must cite to the specific error of law in the hearing decision. The Director’s authority is limited to ordering the hearing officer to revise the decision so that it is consistent with law.

A party may make more than one type of request for review. All requests for review must be made in writing, and received by the administrative reviewer, within 10 calendar days of the date of the original hearing decision. (Note: the 10-day period, in which the appeal must occur, begins with the date of issuance of the decision, not receipt of the decision. However, the date the decision is rendered does not count as one of the 10 days; the day following the issuance of the decision is the first of the 10 days). A copy of each appeal must be provided to the other party.

A hearing officer’s original decision becomes a final hearing decision, with no further possibility of an administrative review, when:

1. The 10 calendar day period for filing requests for administrative review has expired and neither party has filed such a request; or,
2. All timely requests for administrative review have been decided and, if ordered by EDR or HRM, the hearing officer has issued a revised decision.

Within thirty days of a final decision, a party may appeal on the grounds that the determination is contradictory to law by filing a notice of appeal with the clerk of the circuit court in the jurisdiction in which the grievance arose. The agency shall request and receive prior approval of the Director before filing a notice of appeal.

Carl Wilson Schmidt, Esq.
Hearing Officer