Department of Public Safety & Correctional Services v. Beard

KRAUSER, Judge. The issue before us is whether the Department of Public Safety and Correctional Services, appellant, can terminate the employment of a Drinking Driver Monitor because he was convicted of driving while under the influence of alcohol. The answer to that question is neither as simple nor as predictable as it might appear at first blush. Our review of relevant law reveals, on the one hand, an Executive Order that imposes a progressive scheme of disciplinary action and appears to prohibit termination for a first offense of this nature, and, on the other, an administrative regulation that mandates automatic termination for such an offense.

The relationship between the two lies at the core of this appeal. It is our task to determine which governs appellant’s dismissal and to what effect. In the course of doing so, we hope to clarify the nature of executive orders and their relationship to regulations propounded by state agencies. The employee, whose misadventure gave rise to this case, was Jeffrey Beard.

Mr. Beard’s employment as a Drinking ²⁸⁸ Driver Monitor- with appellant was terminated when he was convicted of driving while under the influence of alcohol by the District Court for Allegany County. Beard appealed that termination to the Secretary of Budget and Management, who referred the matter to the Office of Administrative Hearings. A hearing was then held before an Administrative Law Judge (“ALJ”). Citing Executive Order 01.01.1991.16, containing Maryland’s Substance Abuse Policy for Executive Branch employees, the ALJ ordered, among other things, that Beard’s termination be reversed and that he be reinstated under certain conditions.

Following that decision, appellant filed a petition for judicial review in the Circuit Court for Baltimore City. That court, after conducting a hearing, affirmed the ALJ’s decision. Appellant then noted this appeal. While this appeal was pending, Mr. Beard passed away.

Thereafter, counsel for Mr. Beard filed a motion to substitute the estate of Mr. Beard as appellee. We granted that motion and ordered that Joseph William Beard and Mary W. Owens, personal representatives of the Estate of Jeffrey Beard, be substituted as appellees. Appellant presents three questions for our review. They are: I. Did the administrative law judge err in holding that the Substance Abuse Policy, contained in Executive Order 01.01.1991.16, applied to the • termination of appellee’s state employment as a Drinking Driver Monitor?

II

Did the administrative law judge err in holding that the Substance Abuse Policy prevented the termination of appellee’s employment?

III

Did the administrative law judge err by reinstating appellee under certain conditions with back pay rather than remanding the case to the Division of Parole and Probation for disposition? For the reasons that follow, we hold that the ALJ did not eiT in applying the disciplinary provisions of the Substance Abuse Policy to the case sub judice. That policy, promulgated ²⁸⁹ by Executive Order 01.01.1991.16, is applicable to an employee of the Executive Branch of State Government who is convicted 1 of an “off-the-workplace alcohol driving offense.” And it governs the disciplinary actions that may be taken against such an employee for that offense. We further hold that the ALJ correctly concluded that the Substance Abuse Policy prohibited appellant from terminating Beard’s employment for his first conviction of an “off-the-workplace alcohol driving offense.” Finally, we conclude that the ALJ did not exceed his authority by conditionally reinstating Beard with back-pay rather than remanding the matter to the appointing authority, 2 the Division of Parole and Probation, a unit within the Department of Public Safety and Correctional Services.

BACKGROUND The facts of this case are not in dispute. In 1994, Beard began working as a Drinking Driver Monitor for the Department of Public Safety and Correctional Services (“DPSCS”), Division of Parole and Probation (“DPP”). He was hired as a “Monitor II,” a position that is classified as “sensitive” 3 and ²⁹⁰ that falls within the “skilled and professional services.” 4 As a monitor, Beard was responsible for supervising “drinking driver offenders” assigned to him. His duties included ensuring that offenders complied with the conditions of their probation, making certain that they attended required treatment and counseling programs, and recognizing signs that the offender had resumed drinking so he or she could be placed in a treatment program.

Before becoming a monitor, Beard himself had had a history of alcohol abuse. In applying for that position, Beard disclosed that, on four occasions, he either had been either convicted of or had received probation before judgment for driving under the influence of alcohol or driving while intoxicated. That, however, was not a bar to his employment as a monitor. In fact, the Director of the DPP testified before the ALJ that the hiring of past offenders as monitors in the Drinking Driver Monitor Program is “encouraged.” Those with histories of alcohol abuse, the Director stated, are more likely to recognize when an offender has resumed drinking as well as serve as positive role models for the people that they monitor.

Beard had remained sober for the six years preceding his employment as a monitor. Four years later, however, in August of 1998, Beard experienced a relapse and was hospitalized. Beard reported his relapse to his supervisors at the DPP. No disciplinary action was taken.

After being discharged from the hospital, however, Beard relapsed again and between September and November of 1998 drank alcoholic beverages on at least six occasions. On the evening of November 8, 1998, after drinking beer at his home in Allegany County, Maryland, Beard drove to a fast food restaurant. While in the “drive-thru” lane of that restaurant, Beard’s car bumped into the car in front of him. The police were called, and Beard was arrested and charged with, ²⁹¹ among other things, driving under the influence of alcohol.

On March 18, 1999, Beard appeared before the District Court for Allegany County and pleaded guilty to driving under the influence of alcohol. The court accepted his plea and convicted him of that offense. Beard was sentenced to a term of one year imprisonment. That sentence was suspended, and he was placed on three years of unsupervised probation, and ordered to pay fines and court costs, attend counseling, and serve six months of home detention with permission to go to work.

Beard reported his arrest to the DPP and was thereafter placed on administrative leave. The DPP then sent a “notice of termination” to Beard. In that notice, the DPP charged Beard with violating Section II, paragraphs B.1 5 and B.10, 6 and Section IV, paragraphs H.1 7 and H.2 8 of the DPSCS Standards of Conduct Manual, (“DPSCS Manual”) as well as the following provisions of the Code of Maryland Regulations (“COMAR”): 17.04.05.04 B(3), 17.04.05.04 B(8), and 17.04.05.04 ²⁹² B(15). 9 At the hearing before the ALJ, appellant conceded that the DPSCS Manual contains disciplinary provisions pertaining to alcohol driving offenses that are virtually identical to the schedule of disciplinary measures contained in Executive Order 01.01.1991.16, which appellant now argues was erroneously applied by the ALJ to the case. In addition to listing the charges against Beard, the notice of termination explained why termination was appropriate, stressing Beard’s plea of guilty to driving under the influence of alcohol and noting that Beard “consciously attempted to calculate the amount of alcohol he had consumed and when he would be below the legal limit of intoxication.” It further noted that police found an open container of alcohol in his car at the time of his arrest.

It asserted that “Beard’s ability to effectively monitor the behavior of those that he is charged with is seriously questioned given the fact that he has to be similarly monitored.” Pursuant to State Personnel and Pensions (“SPP”)(1993, 1997 Repl.Vol., 2001 Cum.Supp.), § 11-110 of the Maryland Code Annotated, Beard appealed his termination to the Secretary of Budget and Management, who referred the matter to the Office of Administrative Hearings, and a hearing was held ²⁹³ before an ALJ. At that hearing, appellant stipulated that “the Executive Order ... Maryland Substance Abuse Policy 01.01.1991.16 has the effect of law ... [a]nd as such, outweighs any particular agency’s policies.” That stipulation, we note, is contrary to its present position. Following that hearing, the ALJ issued a decision reversing Beard’s termination.

In that decision, the ALJ determined that Beard’s “conduct constituted a violation of COMAR 17.04.05.04B(3) and CO-MAR 17.04.05.04B(8) or, in the alternative, the Standards of Conduct contained in the DPSCS Standards of Conduct Manual, Section II, Paragraphs B.l and B.10,” but concluded that termination was not an appropriate disciplinary action. The ALJ reasoned that “[although management can impose disciplinary action against an employee under other, more general, prohibitions against improper conduct ... the measure of that discipline is circumscribed by the specific pronouncements contained in the State of Maryland Substance Abuse Policy.” Under those provisions, he concluded, termination of state service was not an authorized sanction for Beard’s first conviction for an off-the-workplace alcohol driving offense while a state employee. Declaring the DPP’s termination of Beard to be “contrary to applicable State regulations and established agency policy” and thus “an abuse of discretion,” the ALJ ordered that Beard be “restored to a duty status as a Monitor II in the Drinking Driver Monitor Program,” that he “be awarded back pay retroactive from April 1, 1999, up to and including the date of [the] decision,” and that the DPP “immediately refer [Beard] to the Employee Assistance Program.” As the Substance Abuse Policy requires that “[a]ll employees in the workplace must be capable of performing their duties,” the ALJ also ordered that Beard’s reinstatement “as a Monitor II” was “condition[ed] upon him being able to demonstrate, to the satisfaction of the DPP, that he is abstaining from the use of any alcoholic beverages, his current participation in, or recent completion of, a certified alcoholic treatment program, his ongoing participation in Alcoholics Anonymous or another acceptable self-help group, and his compliance with any addi ²⁹⁴ tional recommendations made by the Employee Assistance Program.” Thereafter, appellant filed a petition for judicial review in the Circuit Court for Baltimore City. After a hearing on that petition, the circuit court issued an order affirming the decision of the ALJ.

In that order, the circuit court determined that in light of a “stipulation entered on the record before the ALJ ... the Executive Order has the effect of law and outweighs any particular agency’s policies,” the ALJ was “correct in holding that termination was not an appropriate disciplinary action under the facts of this case.” The court added that it did “not believe that the decision not to charge respondent under the Executive Order’s terms relieves the agency of its obligation to abide by clearly applicable limits on its disciplinary authority.” The circuit court concluded that “the ALJ was not merely substituting his judgment with respect to the appropriate sanction for that of the agency.” “Rather,” according to the court, the ALJ was “requiring the agency to comply [ ] with an overriding legal stricture, which the ALJ correctly found to be applicable to the agency’s disciplinary actions.” Dissatisfied with the circuit court’s af-firmance of the ALJ’s decision, appellant noted this appeal. DISCUSSION Appellant contends that the ALJ erred as a matter of law in three ways: first, by applying the Substance Abuse Policy, contained in Executive Order 01.01.1991.16, to the case sub juclice; second, by interpreting the provisions of that policy to preclude Beard’s termination; and third, by fashioning sanctions for Beard rather than remanding this case to allow the DPP, Beard’s appointing authority, to assess and impose appropriate sanctions. In addressing these claims, we review “the decision of the ALJ, not the decision of the trial court.” Abbey v. University of Maryland, 126 Md.App. 46, 53 , 727 A.2d 406 (1999) (citing Public Serv. Comm’n v. Baltimore Gas & Elec.

Co., 273. Md. 357, 362, 329 A.2d 691 (1974); Consumer Protec ²⁹⁵ tion Div. v. Luskin’s, Inc., 120 Md.App. 1, 22 , 706 A.2d 102 (1998), rev’d in part on other grounds, Luskin’s, Inc. v. Consumer Protection Div., 353 Md. 335 , 726 A.2d 702 (1999)). In reviewing that decision, we apply “the same statutory standards as the Circuit Court.” Gigeous v. Eastern Correctional Inst., 363 Md. 481, 495 , 769 A.2d 912 (2001). Accordingly, we may “reverse or modify the decision if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision: (i) is unconstitutional; (ii) exceeds the statutory authority or jurisdiction of the final decision maker; (iii) results from an unlawful procedure;(iv) is affected by any other error of law;(v) is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or (vi) is arbitrary or capricious.” Md.Code Ann. (1984, 1999 Repl.Vol., 2001 Cum.Supp.), § 10-222(h)(3) of the State Government Article (“SG”).

In brief, our role “is limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.” United Parcel Serv., Inc. v. People’s Counsel, 336 Md. 569, 577 , 650 A.2d 226 (1994). Because there is no dispute here as to the substantiality of the evidence, we review the ALJ’s decision only to determine if it is “premised upon an erroneous conclusion of law.” Applying that standard, we conclude that the ALJ’s decision is not so premised and shall affirm the judgment of the circuit court. We now turn to the three claims advanced by appellant. I. Appellant contends that the ALJ erred by applying the Substance Abuse Policy to the case sub judice.

According to appellant, the ALJ’s decision was based upon a “misconception” that the Substance Abuse Policy “preempts any other statute, regulation or policy under which Beard’s conduct may be subject to discipline.” The latter claim is more than a little ²⁹⁶ curious given that appellant' stipulated before the ALJ that Executive Order 01.01.1991.16, which embodies the Substance Abuse Policy, “has the effect of law ... [a]nd as such, outweighs any particular agency’s policies.” We shall nonetheless address this issue to clarify the nature of Executive Order 01.01.1991.16, its relationship to applicable statutes and CO-MAR regulations, and its effect upon disciplinary actions that may be imposed upon Executive Branch employees who are convicted of “off-the-workplace alcohol driving offenses.” “[T]he Governor, as the head of the Executive Branch, has broad powers with respect to Executive Branch State employees .... ” Maryland Classified Employees Assoc., v. Schaefer, 325 Md. 19, 34 , 599 A.2d 91 (1991); see also McCulloch v. Glendening, 347 Md. 272, 284 , 701 A.2d 99 (1997) (noting the Governor of Maryland “has a significant role in setting policies to govern the management and supervision of State employees”). The Governor’s authority over the Executive Branch and its employees is rooted in, Maryland’s Constitution and statutory law. McCulloch, 347 Md. at 284-85 , 701 A.2d 99 . Article II, § 9 of the Constitution of Maryland requires the Governor to “take care that the Laws are faithfully executed,” and Article II, § 1 of the Constitution of Maryland provides in part that “[t]he executive power of the State shall be vested in a Governor.” Md.Code Ann. (1981 Repl.Vol., 2001 Cum.Supp.) of the Const.

Article. See also McCulloch, 347 Md. at 282-83 , 701 A.2d 99 (stating that the Governor’s executive power can be found in two sections of the Maryland Constitution, “namely, Article II, § 1 ... and Article II, § 9”). “Entirely consistent with, and complementary of the Governor’s executive power under Article II, § 1, the General Assembly has, through enactment of Md.Code (1957, 1995 Repl.Vol.) § 3-302 of the State Govt. Article, entrusted to the Governor the power to establish personnel policies and to require executive agency heads to carry out those policies.” McCulloch, 347 Md. at 284-85 , 701 A.2d 99 . SG § 3-302 provides that “[t]he Governor is the head of the Executive Branch of the State government and, except as otherwise provided by law, shall supervise and direct the officers and units in that Branch.” ²⁹⁷ In the exercise of that authority, the Governor may issue executive orders.

The authority to issue those orders is found in both Maryland’s Constitution 10 and statutory law. Lomax v. Warden, 120 Md.App. 314, 331 , 707 A.2d 395 (1998) (citing Article II, § 24 of the Maryland Constitution and SG § 3-401). Constitutionally authorized executive orders have the force of law, but so may statutorily authorized executive orders, as we noted in Lomax v. Warden, 120 Md.App. 314 , 333 n. 8, 707 A.2d 395 . (1998), aff'd, 356 Md. 569 , 741 A.2d 476 (1999).

There, we observed that executive orders “promulgated pursuant to Article II, section 24 of the Maryland Constitution have the ‘force of law’ ” as well as statutorily authorized executive orders as long as “[u]pon issuance ..., the Governor [] deliver[s] the original or a certified copy of it to the Secretary of State,” SG § 3-404(a), and “ ‘as long as they are not inconsistent with existing statutes and are within the scope contemplated by the specific enabling legislation.’ ” Lomax, 120 Md.App. at 333 n. 8, 707 A.2d 395 . (quoting 64 Op. Att’y Gen. 180 (1979)). The Substance Abuse Policy is set forth in Executive Order 01.01.1991.16, which is printed in COMAR 01.01.1991.16. 11 The Order’s promulgation clause states that it is being issued “by virtue of the authority” vested in the Governor “by the Constitution and laws of Maryland.” The statutory authority for the Order lies within two provisions of the State Govern ²⁹⁸ ment Article of the Maryland Code Annotated: SG §§ 3-302 and 3-401.

SG § 3-302 states that “[t]he Governor is the head of the Executive Branch of State government and, except as otherwise provided by law, shall supervise and direct the officers and units in that Branch.” And SG § 3 — 401(2) states that executive orders may “adopt[] guidelines, rules of conduct, or rules of procedure for: (i) State employees; (ii) units of the State government; or (iii) persons who are under the jurisdiction of those employees or units or who deal with them.” Because Executive Order 01.01.1991.16 is authorized by statute, specifically SG § 3-302 and SG § 3-401(2), and because the Governor delivered it to the Secretary of State as required by SG § 3-404(a), it has the “ ‘force of law’ ” to the extent that it is not “ ‘inconsistent with existing statutes.’ ” Lomax , 120.Md.App. at 333 n. 8, 707 A.2d 395 (quoting 64 Op. Att’y Gen. 180 (1979)). We therefore now turn to the question of whether the Executive Order is inconsistent with any existing statutes. Executive Order 01.01.1991.16 became effective on April 1, 1991.

After the issuance of that Order, the State Personnel Management System was revised by the State Personnel Management System Reform Act of 1996 (“Act”). See Western Correctional Inst. v. Geiger, 130 Md.App. 562 , 747 A.2d 697 (2000) (chronicling the history of the Act). That Act, among other things, added several sections to Title 11 of the State Personnel and Pensions Article. Id.

Two of those sections, SPP § 11-104 and SPP § 11-105, specifically address employee termination. The former contains various disciplinary actions that may be taken with respect to a state employee. It provides that, “with prior approval of the head of the principal unit,” an appointing authority may “(i) terminate the employee’s employment.” SPP § 11-104(7). The latter covers automatic terminations of employment.

It states: The following actions are causes for automatic termination of employment: (1) intentional conduct, without justification, that: (i) seriously injures another person; ²⁹⁹ (ii) causes substantial damage to property; or (iii) seriously threatens the safety of the workplace; (2) theft of State property of a value greater than $300; (3) illegal sale, use, or possession of drugs on the job; (4) conviction of a controlled dangerous substance offense by an employee in a designated sensitive classification; (5) conviction of a felony; (6) accepting for personal use any fee, gift, or other valuable thing in connection with or during the course of State employment if given to the employee by any person with the hope or expectation of receiving a favor or better treatment than that accorded to other persons; or (7) (i) violation of the Fair Election Practices Act; or (ii) using, threatening, or attempting to use political influence or the influence of any State employee or officer in securing promotion, transfer, leave of absence, or increased pay; and (8) wantonly careless conduct or unwarrantable excessive force in the treatment or care of an individual who is a client, patient, prisoner, or any other individual who is in the care or custody of this State. SPP§ 11-105. While this list of acts warranting automatic termination is lengthy, it does not include a conviction for driving under the influence of alcohol. In 1997, however, the Secretary of Budget and Management adopted COMAR 17.04.05.04, entitled “Disciplinary Actions Relating to Employee Misconduct.” That Regulation expanded the list of “actions [that] are causes for automatic termination of employment” under SPP § 11-105. 12 It now includes, among other things, “conduct that has brought or, if publicized, would bring the State into disrepute” under COMAR 17.04.05.04(B)(3), “conduct involving dishones ³⁰⁰ ty, fraud, deceit, misrepresentation, or illegality” under CO-MAR 17.04.05.04(B)(8), and conduct involving “another act, not previously specified, when there is a connection between the employee’s activities and an identifiable detriment to the State.” COMAR 17.04.05.04(B)(15).

Appellant charged Beard with all three categories of prohibited conduct. Unlike COMAR 17.04.05.04, which mandates “automatic termination” for prohibited behavior, Executive Order 01.01.1991.16 prescribes a schedule of progressively severe disciplinary actions for sensitive employees based on the number of convictions they have for off-the-workplace alcohol driving offences. As we shall more fully discuss in part II of this opinion, under that schedule, termination of employment is not an available sanction for a first off-the-workplace alcohol driving offense. Consequently, we must examine the relationship between COMAR 17.04.05.04 and Executive Order 01.01.1991.16 to determine which applies to appellee’s conduct.

Our resolution of that question will determine whether the ALJ was correct in concluding that Executive Order 01.01.1991.16 “circumscribed” the “measure of ... discipline” that could be imposed on Beard, by eliminating the option of firing him. As previously discussed, a statutorily authorized executive order, such as the one before us, has the force of law to the extent that it is not inconsistent with any existing statute and is within the scope contemplated by the enabling legislation. But so does an administrative regulation have the force of law, under certain circumstances. Administrative regulations that are “legislative” rather than merely “interpretive” 13 have “ ‘statutory force upon going into effect.’ ” Waverly Press, Inc. v. State Dept. of Assessments and Taxation, 312 Md. 184, 191 , 539 A.2d 223 (1988) (quoting Comptroller v. ³⁰¹ Rockhill, Inc., 205 Md. 226, 234 , 107 A.2d 93 (1954)).

In our view, COMAR 17.04.05.04. is such a regulation. In determining whether an administrative regulation is “legislative,” we consider “whether it ‘affects individual rights and obligations’ and whether the agency intended the rule to be legislative as ‘evidenced by such circumstantial evidence as the formality that attended the making of the law, including rule making procedure and publication.’ ” Board of School Comm’rs. v. James, 96 Md.App. 401, 422 , 625 A.2d 361 (1993)(quoting Peter Raven Hansen, Regulatory Estoppel: When Agencies Break Their Own “Laws,” 64 Tex. Law Rev. 1, 16 (1985)). Because COMAR 17.04.05.04 specifies the conduct for which a state employee is subject to automatic termination, it does “affect individual rights and obligations” and thus meets the first requirement of a “legislative” regulation.

As to the second requirement — “whether the agency intended the rale to be legislative as ‘evidenced by such circumstantial evidence as the formality that attended the making of the law, including rule making procedure and publication’ ” —we note that COMAR 17.04.05.04 was adopted as an emergency provision pursuant to SG § 10 — 111(b), and was published in both its emergency and permanent forms in the Maryland Register. 14 Moreover, COMAR 17.04.05.04 was adopted pursuant to a specific legislative grant of authority to the Secretary of Budget and Management to “adopt regulations, guidelines, or policies” to “carry out those provisions of [ ] Division T that are subject to the authority of the Secretary.” SPP § 4-106(a); see also Davis, Administrative Law Treatise, Ch. 7, § 7.8 at 36 (1979) (“A legislative rule is the product of an exercise of delegated legislative power to make