Maryland Classified Employees Ass'n v. Schaefer

ORDER PER CURIAM. For reasons to be stated in an opinion later to be filed, it is this 17th day of July, 1991 ORDERED, by the Court of Appeals of Maryland, that the judgment of the Circuit Court for Anne Arundel County be, and it is hereby, affirmed. Costs in this Court and in the Circuit Court for Anne Arundel County to be paid by the Petitioners. Mandate to issue forthwith.

MURPHY, Chief Judge. This case involves the validity of an Executive Order promulgated by the Governor of Maryland, which increased the work week for substantial numbers of State Executive Branch employees from 35V2 hours per week to 40 hours, without additional compensation. I. Governor William Donald Schaefer, by Executive Order dated February 27, 1991, decreed that “[t]he normal work week for State employees [in the Executive Branch of Government] shall be 40 hours effective July 1, 1991.” 1 The Executive Order directed the Secretary of Personnel and the appointing authorities to “take all actions necessary or desirable to implement this directive.” In his order, the Governor stated that “[t]he federal government, most pri ²² vate and public sector employees, and one-third of State employees presently work 40 hours a week”; that it was prudent “[djuring these difficult fiscal times ... to search for savings for the taxpayers of this State”; and that a standardized “40 hour work week for State government will achieve cost containment through increased productivity and employee development.” Two separate declaratory judgment actions were thereafter instituted in the Circuit Court for Anne Arundel County to declare the Governor’s Executive Order void ab initio. The first action was filed by the Maryland Classified Employees Association, Inc., and various of its employee members; the second action was filed by the American Federation of State, County and Municipal Employees and a number of classified employees.

Named as defendants were the Governor, the State of Maryland, the Secretary of Personnel, and the Board of Regents of the University of Maryland. The plaintiffs in each suit (hereinafter collectively the plaintiffs) averred that the Code of Maryland Regulations (COMAR) 06.01.01.42A(1)(a) defined a full-time work week as “5 work days, and at least 35V2 hours up to a maximum of 40 hours”; that the appointing authorities are authorized by law to designate the work week for all positions under their control; that for many years the appointing authorities have designated 35V2 hours as the normal work week for Executive Branch employees; and that, as the Governor is not the appointing authority, his Executive Order cannot lawfully change the work week hours. The plaintiffs further alleged that Maryland Code (1985 Repl.Vol., 1990 Cum. Supp.), Article 100, § 76 provides that “every State employee who works in excess of the normal work week ... shall receive extra compensation for such hours worked in excess of that time”; that the Governor’s order violates this law and requires Executive Branch employees to work an additional 4.5 hours without paying the additional compensation mandated by § 76; and that the Governor is not empow ²³ ered, absent legislative authorization, to make changes that are inconsistent with the existing law. 2 In their suits, the plaintiffs claimed that, as classified State employees, they have “a property right in their employment [which] cannot be taken from them without due process of law”; and that the Governor’s order deprives them of their wages by requiring that they work greater hours without additional pay or benefits.

In this regard, the plaintiffs asserted that the Governor and the other defendants, through their actions, violated the “separation of powers” provisions of Article 8 of the Maryland Declaration of Rights by attempting to execute a legislative function, specifically the regulation of overtime pay in conflict with the provisions of § 76. The plaintiffs claimed that because they “accepted jobs with compensation established on a 35V2 hour work week, ... worked at those jobs for many years, ... made child care, home and family commitments based on the State’s promise of a 35V2 hour work week, [they] have acquired a vested right ... in the continuation of a 35V2 hour work week, and compensation for hours worked in excess of 35V2 hours.” Moreover, based upon these alleged facts, the plaintiffs averred that they have an express or implied contract with the State to work a 35V2-hour work week, with overtime or compensatory time for all hours worked in excess of 35V2 hours; and that as a result of the Governor’s order, their contract with the State has been breached and will cause them monetary and nonmonetary damages. The plaintiffs also asserted that the Governor’s order violated provisions of Code (1988 RepLVol., 1991 Cum. Supp.), Article 64A (the State’s Merit System Law), pursuant to which the Secretary of Personnel promulgated the State’s “Salary Plan.” As to this, the plaintiffs stated that, ²⁴ under § 27 of Article 64A, the Secretary must recommend to the Governor a pay plan for State employees “to the end that all positions in the service involving comparable skills, knowledge, effort, responsibility, and working conditions shall be paid comparable salaries in accordance with the relative value of the services to be performed.” The plaintiffs alleged that the Secretary’s Salary Plan has the force of law and includes a rule that the rate of pay for any employment classification cannot be changed except as authorized by the Legislature; and when the salary plan became effective, the duties and classifications of the plaintiffs were those performed within a 35V2-hour work week.

Consequently, they averred that “the salaries and compensation for the classifications in the salary plan were established by the Secretary and approved by the Governor fully recognizing that the compensation rates were a 35y2 hour work week and that the employees would receive additional overtime compensation for all hours worked in excess of 35*/2 hours per week.” According to the plaintiffs’ suits, to increase the hours of the work week results in lowering the rate of pay for positions within the salary plan, an action that cannot lawfully be initiated except by the Secretary in accordance with the provisions of § 27 of Article 64A; that the pay plan cannot otherwise lawfully be amended; but that “the Secretary and Governor failed to act as required by said section which requires that the amended pay plan be reported to the General Assembly by the 15th day of a regular session which was not done.” Because of this failure, the plaintiffs asserted that the Governor’s Executive Order, which in effect altered the salary plan, was not within his lawful authority and was therefore invalid. The parties entered into a detailed stipulation of facts which, inter alia, stated that the Governor’s order was actually implemented by the appointing authorities; and that 33,438 State employees in the Executive Branch, who work 35:/2 hours per week, were thereby affected. It was further stipulated that the regular work week of 21,175 State Executive Branch employees is 40 hours; that in the ²⁵ University of Maryland System, 5,083 employees presently work 40 hours per week and 5,262 employees work fewer than 40 hours per week; and that those employees whose work week has been 35V2 hours earn cash overtime or compensatory leave for hours worked in excess of 35V2 hours per week. It was also stipulated that there are 442 employment classifications in the State merit system; that merit system employees are paid on an annual basis; that in establishing the rates of pay for the classifications in the State Salary Plan, the hours worked by employees are not taken into consideration; and that consequently 40-hour employees receive the same salaries as 35V2-hour employees working in the same classification.

Finally, it was stipulated that the Secretary of Personnel reported no amendments to the salary plan to the General Assembly in January of 1991. The cases were consolidated and cross-motions for summary judgment were filed by the parties upon the further stipulation that the exhibits in support of the defendants’ motion for summary judgment were genuine, authentic, and admissible, if relevant. The circuit court (Thieme, J.) granted summary judgment for the defendants on July 9, 1991. It found no dispute as to any material fact and concluded in a detailed opinion that, as a matter of law, there was no merit in any of the plaintiffs’ allegations.

Claiming that the case was one of “monumental significance,” the plaintiffs appealed to the Court of Special Appeals. They simultaneously petitioned this Court for a writ of certiorari to bypass the intermediate appellate court, as authorized by Code (1989 Repl.Vol., 1991 Cum.Supp.), § 12-201 of the Courts and Judicial Proceedings Article. In their petitions, the plaintiffs presented these issues for our review: “1. Whether the Governor’s Executive Order requiring the Plaintiffs to work a 40 hour work week without additional compensation violates the doctrine of Separation of Powers. ²⁶ “2.

Whether the Governor’s Executive Order requiring the Plaintiffs to work a 40 hour work week without additional compensation violates the Plaintiffs’ contract rights. “3. Whether the Governor’s Executive Order requiring Plaintiffs to work a 40 hour work week without additional compensation violates the Plaintiffs’ procedural due process rights. “4. Whether the Governor’s Executive Order requiring Plaintiffs to work a 40 hour work week without additional compensation violates the State’s Pay Plan Law.” We granted certiorari and advanced the matter on the docket to promptly resolve the important issues raised in the case. By per curiam order dated July 17, 1991, we affirmed the judgment of the Circuit Court for Anne Arundel County “for reasons to be stated in an opinion later to be filed.” We now give our reasons for that determination.

II

The executive power of the State is vested in the Governor of Maryland by Article II, § 1 of the Constitution of Maryland. Maryland Code (1984, 1991 Cum.Supp.), § 3-302 of the State Government Article provides that the Governor, unless otherwise provided by law, “shall supervise and direct the officers and units” in the Executive Branch of government. Section 3-401 of this Article defines an Executive Order of the Governor, inter alia, as one which adopts “guidelines, rules of conduct, or rules of procedure for: (i) State employees; (ii) units of the State government; or ²⁷ (iii) persons who are under the jurisdiction of those employees or units or who deal with them.” 3 Code (1990 Repl.Vol.), Article 41, § 9-101 creates the Department of Personnel as a principal department of State government. Its head, appointed by the Governor, is the Secretary of Personnel, who is charged with responsibility for the operation of the department.

The Secretary is directed to establish guidelines and procedures to promote the orderly and efficient administration of the department. Section 9-105 authorizes the Secretary of Personnel to promulgate rules and regulations for the governance of the Department. Code (1988 Repl.Vol., 1991 Cum.Supp.), Article 64A, § 11 also authorizes the Secretary of Personnel, in the administration of the State’s merit system law, to make rules and regulations as may be deemed necessary. Section 27 of this Article empowers the Secretary to recommend to the Governor “a pay plan for all classified and unclassified positions for which the Secretary has authority to administer pay.” This section outlines various criteria to be considered by the Secretary in his salary plan recommendations to the Governor.

It also provides that the pay plan take effect when funds for that purpose are available within the State Budget. Code (1988), § 7-108(b) of the State Finance and Procurement Article requires the Governor to include in each Budget Bill “the current salary plan of the Secretary of Personnel as the basis for the appropriations to pay those salaries to which the plan applies.” COMAR 06.01.01.42A(1), the applicable personnel rule promulgated by the Secretary of Personnel, provides that the “full-time work week consists of 5 work days, and at least 35V2 hours up to a maximum of 40 hours.” It also provides that “[t]he appointing authority shall designate the work week for all positions under the appointing authority’s control, and shall file the designation with the Secretary [, which] is effective until the appointing authority changes ²⁸ it.” Subsection (f) provides that work in excess of a position’s normal work week shall be compensated by overtime payments or by compensatory leave. In its present form, § 76(a) specifies that, unless otherwise provided, “every State employee [in the Executive Branch] who works in excess of the normal work week ... shall receive extra compensation for such hours worked in excess of that time.” This section also provided, inter alia, that “[p]ayment for time worked in excess of the position’s normal work week but not in excess of 40 hours shall be made at the employee’s usual hourly rate or rates.” III. Separation of Powers We first consider the plaintiffs’ contention that the Governor, by his Executive Order, contravened the legislative mandate of a 35V2-hour work week contained in Article 100, § 76.

They claim that, in doing so, the Governor usurped the plenary power of the General Assembly and exercised a legislative function, thereby unlawfully denying State employees the overtime compensation required by § 76 for work in excess of 35V2 hours per week. In the circuit court, Judge Thieme concluded that the Governor was “specifically authorized, through the legislative grant of authority to the Secretary of Personnel, to control virtually all aspects of employment including the work week for State employees in the Executive branch.” He further said that, as head of the Executive Branch of government, the Governor was authorized to direct and supervise the officers of that branch, including the Secretary of Personnel who serves at his pleasure. Judge Thieme noted that the Secretary has been given extremely broad power by the Legislature in matters concerning State personnel, including rule-making authority to carry out the provisions of the merit system law. The authority vested in the Secretary, Judge Thieme observed, encompassed establishing “the number of hours in a work week,” and as the ²⁹ Secretary was the Governor’s appointee and subject to his direction, the Governor’s Executive Order was within his authority to promulgate.

Specifically, Judge Thieme said that the definition of an Executive Order in § 3-401 of the State Government Article was sufficiently broad “to allow the Governor to control and direct the officers over whom he is statutorily given control ... [including] the essential aspects of state employment such as hours in a work week.” In reaching this determination, Judge Thieme recognized that the Governor cannot by Executive Order “undo what the legislature has done by statute.” He said, however, that the Governor, in promulgating his Executive Order, did not attempt to override § 76, because that statute deals with overtime compensation and simply directs “that employees who work in excess of their normal work week, but less than 40 hours, will be compensated at the usual hourly rate.” Section 76, Judge Thieme said, does not establish that the normal work week is 35% hours, and that work in excess of those hours is compensable. In support of his conclusion, Judge Thieme reviewed the history underlying the provision of a “normal work week” and the meaning of § 76. He said that Personnel Rule 42E (now set forth in COMAR as 06.01.01.42A) established the normal work week “to be not less than 35% hours and not more than 40 hours”; that had the Legislature intended to mandate a 35%-hour work week contrary to the Secretary’s regulation, it would have expressly so provided; and that the Governor’s action did not therefore contravene the doctrine of separation of powers. Judge Thieme observed: “[T]he Governor’s action does not render the statute a nullity, for the statute remains perfectly valid unless the designation of the work week has been changed to 40 hours, as was done in this instance.

The simple fact that the employees will not be able to take advantage of the statute does not render it a nullity since its usefulness was predicated upon the flexibility of the work week. In the future if the work week is reduced the