Montgomery County Public Schools v. Donlon

Leahy, J. This case concerns the interpretation of the Maryland Whistleblower Protection Law, Maryland Code (1993, 2015 Repl. Vol., 2016 Supp.), State Personnel and Pensions Article (“SPP”), § 5-301, et seq. (the “WBL”), and whether it applies to employees of county boards of education. 1 A high school teacher in the Montgomery County Public School system, Appellee Brian Donlon (“Donlon” or “Appel-lee”), informed the press that he had discovered that Richard Montgomery High School (“RMHS”) was inflating its Advanced Placement (“AP”) statistics. Donlon then filed a whis-tleblower complaint against Montgomery County Public Schools (“MCPS” or “Appellant” or the “County Board”) with the Maryland Department of Budget and Management (“DBM”).

He alleged that after he disclosed the statistics ⁶⁵⁰ inflation, his superiors retaliated against him by, among other things, assigning him undesirable courses to teach. DBM dismissed his complaint, finding that it did not have jurisdiction because Donlon is not an employee of the Executive Branch of State government. Donlon appealed this decision, and an administrative law judge (“ALJ”) in the Office of Administrative Hearings (“OAH”) affirmed. Donlon then filed a petition for judicial review in the Circuit Court for Montgomery County.

After argument, the circuit court reversed the administrative decision. MCPS appealed, presenting the following question for our review: “Did the Circuit Court err[] in finding, contrary to the determinations of the DBM and the ALJ, that Donlon is an employee in the Executive Branch of State government within the scope of the WBL?” MCPS has also filed a motion, requesting that we take judicial notice of a bill passed during the 2017 legislative session, H.B. 1145—the Public School Employee Whistleblower Protection Act. 2 We hold that the WBL does not apply to public school teachers employed by county boards of education because they are not employees of the Executive Branch of State government. We conclude that Donlon does not qualify as an employee of the Executive Branch of State government under any common law test. We also determine that MCPS is not judicially estopped from arguing that MCPS is not a State agency.

Accordingly, we reverse the decision of the circuit court and remand with instructions to reinstate the decision and order of the OAH. BACKGROUND A. The Whistleblower Complaint Donlon filed his whistleblower complaint against MCPS 3 with DBM on December 10, 2014. In the complaint, Donlon ⁶⁵¹ charges that RMHS was inflating its AP statistics by awarding credit to students for AP classes on report cards and transcripts when those students were instead enrolled in the Middle Years Program (“MYP”). 4 Donlon alleged that after discovering this in early 2012, he spoke to Senator Paul Pinsky, a state legislator involved with educational issues, who brought the issue to Donna Hollingshead, the Community Superintendent. After Hollingshead failed to address the issue, Donlon contacted Jay Matthews, a reporter at the Washington Post, who then contacted MCPS.

Kim Lansell, the chair of Donlon’s department, allegedly stopped speaking to Donlon when she learned that Donlon contacted Matthews. Donlon further alleged that Lansell and Josh Neuman-Sunshine, the assistant principal, falsely accused him of not preparing a substitute teacher properly. Donlon also related in his complaint that in April 2012, he contacted the Maryland Gazette about the AP statistics inflation, and that the Maryland Gazette published a story on the issue. Donlon alleged the school retaliated against him for speaking to the newspaper about the story when in the fall semester he was assigned no AP courses.

In June 2013, Donlon was assigned to teach AP Psychology, a course that he had requested not to teach because he believed that he did not have the requisite background to teach it. The next year, in June 2014, MCPS reassigned Donlon as a floating teacher. 5 Later in October 2014, Donlon inquired of Lansell why he was teaching a large class without a paraeducator, and Lansell responded very rudely to him. On October 24, 2014, Damon Monteleone (the school’s new principal), and Lansell called Donlon to a meeting to speak to ⁶⁵² him about how he had been absent from work 42 times during the 2012-13 school year. Donlon responded that most of those absences were due to union meetings, teacher trainings, and the like.

The complaint alleged that these incidents constituted illegal retaliation against him under the WBL, SPP § 5-301, et seq. Donlon requested compensatory damages, punitive damages, costs and attorney’s fees, and equitable relief. B. Administrative Proceedings On January 27, 2015, the Office of the Statewide Equal Employment Opportunity Coordinator (“OSEEOC”), as the designee of the Secretary of DBM, sent a letter to Donlon dismissing his complaint, stating: The Office conducted a thorough review of your complaint and the response and documents submitted by the Respondent. Your complaint does not meet the jurisdictional requirements of the Maryland Whistleblower Law.

In accordance with SPP § 5-301, the Maryland Whistleblower Law applies to employees and State employees who are applicants for position in the Executive Branch of State government. ... MCPS [ ] is not an Executive Branch agency of State government, and therefore your complaint is not subject to investigation by this office. Accordingly, your complaint is dismissed. Donlon appealed this decision to the OAH on February 6, 2015, challenging DBM’s determination that MCPS is not an executive branch agency of the State government.

MCPS filed a motion to dismiss arguing, inter alia, that Donlon was not an employee of the Executive Branch of State government and, as a result, Donlon did not fall under the purview of the WBL. An ALJ held a motions hearing on August 3, 2015. At the hearing, MCPS called Donlon as its first witness. He testified that MCPS was his employer.

MCPS entered Don-lon’s teaching contract into evidence, noting that the State of Maryland was not a signatory to the contract. MCPS also offered Donlon’s W-2—which listed MCPS as his employer. ⁶⁵³ MCPS then presented the affidavit of Dhiren Shah, the Deputy Director of the central payroll bureau for the Comptroller of Maryland, swearing that there were no current or former State employees with the name of Brian J. Donlon. Nonetheless, Donlon testified: “I believe I’m a certified teacher by the State of Maryland and that the Montgomery County Public Schools is an extension of the State Board, so that would make me a Maryland employee of the Executive Branch in that regard.” MCPS then entered into evidence the affidavit of Steven Serra, director of the Office of Human Resources for the Maryland State Department of Education (“MSDE”), swearing that Donlon had never been employed by MSDE. MCPS also entered into evidence the collective bargaining agreement between MCPS and its teachers, to which the State was not a party, as well as a document demonstrating that State holidays and MCPS holidays do not correspond.

MCPS then listed all of the principal departments of the Executive Branch of the State government, one-by-one, and asked Donlon whether he was employed by each. Donlon responded “no” to each question. Donlon testified, however, that it was his belief that because all MCPS employees were ultimately answerable to MSDE, that all MCPS employees were State employees. MCPS then called Jeffrey Martinez, the director of recruitment and staffing in the Office of Human Resources and Development for MCPS.

Martinez testified that he (Martinez) was an employee of the Board of Education for MCPS and that attending State training sessions did not convert him into a State employee. He testified that only the Board of Directors for MCPS, not the State Board of Education (the “State Board”), has the authority to hire teachers for MCPS. He added that the County Board, not the State Board, has the authority to fire teachers, although a teacher could appeal that termination to the State Board. MCPS then moved into evidence an article from the Baltimore Sun that listed the salaries of all State employees.

This list did not include Donlon. Martinez explained that the superintendent and the County Board, not the State Board, were responsible for ⁶⁵⁴ overseeing the day-to-day operations of MCPS and for preparing the curriculum. Neither MSDE nor the State Board controlled the curriculum for MCPS. Stanislaw Damas, the director of association relations for MCPS, testified next.

Damas related that he coordinates collective bargaining and negotiations between MCPS and the three unions representing MCPS employees, and that he handles grievances and complaints through the contract grievance and administrative complaint procedures. He testified that the parties to the MCPS teachers’ agreement are the County Board and the Montgomery County Education Association (the Montgomery County teachers’ union). Donlon then testified on his own behalf. In support of his view that he actually worked for the State, he stated that, after MCPS terminates a person, that person may eventually appeal his termination to the State Board and that MCPS receives funding from the State to start new schools.

Donlon also offered that the State Board sets general voluntary standards on which most county educational curricula are based; that students have statewide testing; and that the State issues high school diplomas. Finally, Donlon testified that he participates in the statewide retirement system for teachers, which is administered by the State of Maryland. In closing, MCPS argued that the WBL applied only to State employees of the executive branch and that Donlon was not a State employee. MCPS contended that the mere fact that the State issued Donlon a license to teach did not resolve this inquiry because the State regulates many professions, such as nursing, and no one would contend that all nurses were State employees.

MCPS further maintained that Donlon, by his own admission, did not fall under any of the principal departments of the Executive Branch of the State government. MCPS asserted that the county boards of education are not divisions or units within MSDE. However, MCPS also noted that Court of Appeals precedent recognizes that county boards of education can be considered State agencies for some purposes and local government units for other purposes. ⁶⁵⁵ During closing, Donlon argued that the County Board was a State agency because the State Board exercises such a high level of control over the County Board. Donlon further argued that MCPS should be judicially estopped from arguing that it was not a State agency when it had previously asserted sovereign immunity pursuant to the Eleventh Amendment in federal court in other cases.

Finally, Donlon argued that good policy mandated that public school teachers be covered by the WBL. On September 1, 2015, the ALJ issued his decision, finding that there was no jurisdiction to hear the whistleblower claim because Donlon was not an employee of the Executive Branch of State government. The ALJ noted that the State government’s executive branch contains 19 principal departments, each of which contain subordinate units, and that MCPS is not among them. The ALJ also observed that the State Board establishes policies and guidelines throughout the State, but that it is the county boards of education that employ principals and teachers.

The ALJ found that Donlon submitted no evidence that he was an employee of the executive branch and that there was no employer/employee relationship between Donlon and the executive branch. Accordingly, the ALJ concluded that Donlon was not an executive branch employee, that he could not bring a whistleblower complaint pursuant to the WBL, and that DBM and the OAH did not have jurisdiction to hear the case. Thus, the ALJ granted MCPS’s motion for summary decision and dismissed Donloris complaint. 6 C. Review in the Circuit Court Donlon then filed a petition for judicial review in the Circuit Court for Montgomery County. At a hearing on the petition on April 26, 2016, Donlon refined his argument, asserting that he was simultaneously an employee of both MCPS and the State government—that there was a dual employment relationship. ⁶⁵⁶ Donlon further argued that MCPS should be estopped from arguing it was not an agency of the State government because MCPS routinely asserts sovereign immunity pursuant to the Eleventh Amendment in federal courts.

MCPS responded that there were no facts in the record to support the proposition that Donlon was a State employee. MCPS further argued that an entity may qualify as a State agency for some purposes, while being a local agency for other purposes. The circuit court, expressing some consternation with MCPS, questioned MCPS on whether a teacher could be an employee of the State government because MCPS had an independent personnel system, relying on SPP § 5-301. 7 MCPS responded that this argument was not raised below. The court also found it “deeply troubling” that MCPS could qualify as a State entity for Eleventh Amendment immunity purposes, but not for WBL purposes.

The court then reversed the ALJ’s decision in an order entered on May 5, 2016. On May 24, 2016, MCPS timely appealed the circuit court’s order. DISCUSSION I. The Maryland Whistleblower Protection Law On appeal, MCPS presents most of the same arguments that it had throughout the proceedings below. MCPS contends that Donlon is an employee of the County Board and is not a State employee, and that the WBL applies only to State employees of the Executive Branch of the State government. ⁶⁵⁷ MCPS points out that the facts adduced at the ALJ hearing concerning Donlon’s employment relationship demonstrate that Donlon is not a State employee.

MCPS argues that, pursuant to the employment factors the Court of Appeals set out in Whitehead v. Safway Steel Products, Inc., 304 Md. 67 , 497 A.2d 803 (1985), Donlon is not an employee of the State. MCPS asserts that there are nineteen principal departments of the Executive Branch of State government and that county boards of education are not included among these departments, nor any subsidiary thereof. MCPS further contends that, pursuant to precedent from the Court of Appeals, county boards of education are not divisions or units within MSDE. 8 Finally, MCPS maintains that the DBM’s determina ⁶⁵⁸ tion that the County Board was not within the executive branch is entitled to substantial weight because it is the agency responsible for overseeing the WBL. Donlon responds that a plain reading of the statutory language of SPP § 5-301 demonstrates that he is protected under the WBL, although he does not precisely explain how the statutory language demands this result.

Donlon argues that he is an employee of the State government because the State Board of Education has broad authority and supervisory control over local school boards. Donlon contends that the State Board’s authority over appeals of county board termination decisions supports his argument that public school teachers are State employees for purposes of the WBL. Donlon then argues that the ALJ’s analysis of the Whitehead factors was incorrect because of the State’s broad control over local board issues, contending that the State Board is the “ultimate arbiter of any decision regarding the suspension or termination of Donlon’s employment, and should the situation warrant, any other decision made by MCPS.” Donlon next asserts that he is a dual employee of MCPS and the State Board, working for the MCPS on a day-to-day-basis, but ultimately controlled by the State Board and MSDE. Donlon urges that local boards of education have long been considered by Maryland courts to be agents of the State.

He insists that an entity cannot be an agent of the State for some purposes, but not a State agent for other purposes. From the premise that county boards of education are agents of the State, Donlon pivots, contending that they must be agents of the executive branch because they are not part of the judicial or legislative branches. In reviewing an administrative agency’s decision, we “must look past the circuit court’s decision to review the agency’s decision.” Sizemore v. Town of Chesapeake Beach, 225 Md.App. 631, 647 , 126 A.3d 225 (2015) (citing Halici v. City of Gaithersburg, 180 Md.App. 238, 248 , 949 A.2d 85 (2008)); see also White v. Register of Wills of Anne Arundel Cnty., 217 Md.App. 187, 190 , 90 A.3d 1213 (2014) (citing Motor Vehicle Admin. v. Shea, 415 Md. 1, 15 , 997 A.2d 768 (2010)). In ⁶⁵⁹ general, we are limited to determining whether substantial record evidence supports the agency’s findings and conclusions “ ‘and to determine if the administrative decision is premised upon an erroneous conclusion of law.’ ” Montgomery v. E. Corr.

Inst., 377 Md. 615, 625 , 835 A.2d 169 (2003) (quoting United Parcel v. People’s Counsel, 336 Md. 569, 577 , 650 A.2d 226 (1994)). Maryland appellate courts “ordinarily give considerable weight to the administrative agency’s interpretation and application of the statute that the agency administers.” Id. (citations omitted); see also Bd. of Liquor License Comm’rs for Baltimore City v. Kougl, 451 Md. 507, 514 , 154 A.3d 640 (2017); White, 217 Md.App. at 193 , 90 A.3d 1213 (citing Bowen v. City of Annapolis, 402 Md. 587, 612 , 937 A.2d 242 (2007)) (specifically giving considerable weight to DBM’s classification of an employee). A. Government Structure We begin our analysis by examining the structure of the Executive Branch of State government and its relationship to county boards of education.

Maryland Code (1984, 2014 Repl. Vol,), State Government Article (“SG”), § 8-201 lists nineteen principal departments of the executive branch. County boards of education generally, and the Montgomery County Board of Education specifically, are not listed amongst the departments. Id.

Interestingly, MSDE is not listed as a principal department of the Executive Branch of State government in SG § 8-201. Maryland Code (1978, 2014 Repl. Vol.), Education Article (“EA”), § 2-101 does, however, establish MSDE “as a principal department of the State Government.” As Donlon argues supra, it is true that the State Board of Education exercises broad authority and supervision over the administration of public schools in the State. 9 As the Court of Appeals has explained, the State Board has very broad statutory authority over the administration of the public school system in this State, that the totality of ⁶⁶⁰ its statutory authority constitutes a visitatorial power of such comprehensive character as to invest the State Board with the last word on any matter concerning educational policy or the administration of the system of public education, that this power is one of general control and supervision, that it authorizes the State Board to superintend the activities of the local boards of education to keep them within the legitimate sphere of their operations, and that whenever a controversy or dispute arises involving the educational policy or proper administration of the public school system of the State, the State Board’s visitatorial power authorizes it to correct all abuses of authority and to nullify all irregular proceedings. Baltimore City Bd. of Sch.

Comm’rs v. City Neighbors Charter Sch., 400 Md. 324, 342-43 , 929 A.2d 113 (2007) (internal quotation marks and footnotes omitted) (quoting Bd. of Educ. of Prince George’s Cnty. v. Waeldner, 298 Md. 354, 359-62 , 470 A.2d 332 (1984)). Thus, the State Board indisputably exercises a great deal of control over public education in the State. Whether Donlon is an employee of the executive branch, however, is a different question than whether the State Board has control over county boards. In Chesapeake Charter, Inc. v. Anne Arundel County Board of Education, 358 Md. 129 , 747 A.2d 625 (2000), the Court of Appeals was called upon to determine whether county boards of education were divisions or units of MSDE for purposes of the General Procurement Law, Division II of the State Finance and Procurement Article, as it existed at that time.

The Court explained that the Education Article of the Maryland Code creates a county board of education for each county, “with limited authority to control educational matters that affect the county.” Id. at 135-36 , 747 A.2d 625 . The Court clarified that county boards of education are State agencies for some purposes and local agencies for other purposes: 10 ⁶⁶¹ Although in terms of their composition, jurisdiction, funding, and focus, they clearly have a local flavor, the county school boards have consistently been regarded as State, rather than county, agencies. County school boards are considered generally to be State agencies because (1) the public school system in Maryland is a comprehensive Statewide system, created by the General Assembly in conformance with the mandate in Article VIII, § 1 of the Maryland Constitution to establish throughout the State a thorough and efficient system of free public schools, (2) the county boards were created by the General Assembly as an integral part of that State system, (3) their mission is therefore to carry out a State, not a county, function, and (4) they are subject to extensive supervision by the State Board of Education in virtually every aspect of their operations that affects educational policy or the administration of the public schools in the county. Although legally State agencies for those reasons, they are not normally regarded, for structural or budgetary purposes, as units within the Executive Branch of the State government.

Id. at 136-37, 747 A.2d 625 (emphasis added) (internal citations omitted). ⁶⁶² The Court clarified that the General Assembly created a balance “between State government structures and State-based but predominantly local structures.” Id. at 137 , 747 A.2d 625 . The Court set out the structure of MSDE, which consists of (1) the State Board (the head of MSDE, “vested with ultimate supervisory authority for determining educational policy in Maryland and administering the public school system”), (2) the State Superintendent, and (3) “the other professional, administrative, and clerical ... employees for budgetary and personnel purposes.” Id. (citation omitted). The Court then summarized the powers of the State Board; The authority of the State Board of Education, codified in part in [EA] § 2-205, has been described as “a visitatorial power of the most comprehensive character,” one that is “in its nature, summary and exclusive.” Wiley v. Allegany County School Comm’rs, 51 Md. 401, 405-06 (1879); Zantzinger v. Manning, 123 Md. 169, 178 , 90 A. 839, 842 (1914); Wilson v. Board of Education, 234 Md. 561, 565 , 200 A.2d 67, 69 (1964).

It includes (1) determining the primary and secondary educational policies of the State, (2) explaining the true intent and meaning, causing to be eairied out, and deciding all controversies and disputes arising under the provisions of the Education Article that are within its jurisdiction, (3) adopting by-laws, having the force of law, for the administration of the public schools, (4) through the State Superintendent of Schools, exercising general control and supervision over the public schools and educational interests of the State, (5) preparing the annual State public school budget, including appropriations for State aid to the counties for current expenses, student transportation, and public school construction, and (6) specifying the information each county board is required to record and the form in which it is to be recorded, Id. at 137-38, 747 A.2d 625 (footnote omitted). Pertinent to the present situation, the Court then went on to explain the structures of county boards of education: [F]or each county, the Legislature has created a county department of education that, in structure, generally mir ⁶⁶³ rors that of the State Department of Education. The county school board is the head of the county department and is responsible for administering, in the county, the supervening State policy determined by the State Board of Education, in accordance with State Board’s directives. See [EA] § 4-108.

There is, as well, a county superintendent, who is the executive officer of the county board and, in essence, the chief executive officer of the county department. Finally, there are the teachers, principals, and other professional, administrative, clerical, security, transportation, and maintenance staff hired by the county school board to work in or service the schools in the county. Unlike the situation at the State level, the county superintendent and the employees of the county department of education are appointed and their salaries are set by the county school board upon recommendation of the county superintendent, § 4-103(a), in accordance with a personnel system established by the county board. Id. at 138-39, 747 A.2d 625 (emphasis added; footnote omitted).

After analyzing these State and local structures, the Court of Appeals observed that less than half of the funding of the county boards came from the State and that the county boards submit their own budget. Id. at 139 , 747 A.2d 625 . The Court then concluded that county boards of education are not divisions or units within MSDE for purposes of the General Procurement Law: What this statutory scheme reveals is that, although the county boards are generally regarded as State agencies because they are part of the State public education system, are subject to extensive supervision and control by the State Board of Education, and exercise a State function, from a budgetary and structural perspective, they are local in character. They are not divisions of or units within the State Department of Education.

They are subject to the county, not the State, budget process and must justify their budget requests to the county government. Most of their operational funding comes from the county, not the State, government. When these factors are taken into account, ⁶⁶⁴ it is clear that the general characterization of county boards of education as State agencies does not require a finding that they are entities “in the Executive Branch of the State government” for purposes of SFP § 11-101(x). Id. at 139-40, 747 A.2d 625 (bold emphasis added).

After further analysis of the procurement laws of Maryland, the Court held that “a county school board is not a ‘unit’ within the meaning of [the General Procurement Law], and, accordingly that [the Maryland State Board of Contract Appeals] has no jurisdiction over disputes arising from procurement decisions made by those boards.” Id. at 145-46 , 747 A.2d 625 . Therefore, for purposes of procurement law, county school boards are not units of the Executive Branch of State government. Id. In BEKA Industries, Inc. v. Worcester County Board of Education, 419 Md. 194 , 18 A.3d 890 (2011), the Court of Appeals clarified the scope of Chesapeake Charter.

One issue presented in that case was whether sovereign immunity was a defense available to a county board of education in a suit for breach of contract. BEKA, 419 Md. at 203 , 18 A.3d 890 . The Court stated that, for sovereign immunity purposes, a county board of education is a State agency, and thus, subject to governmental immunity. Id. at 210 , 18 A.3d 890 (citations omitted).

The Court explained that Chesapeake Charter did not hold that county boards of education are never to be considered units of the State Government. Instead, the Court cited favorably to the County Board’s argument that Chesapeake Charter stands for the proposition that a local school board is not a “unit” of State Government for purposes of the General Procurement Law because the “procurement of supplies and services by the county boards of education” in contrast to school construction, has never been subject to the general authority of the Board of Public Works, or the Department of General Services. Id. at 213 , 18 A.3d 890 (footnote omitted). The Court continued, instructing that ⁶⁶⁵ the fine distinction drawn in Chesapeake Charter for the purposes of determining whether a school bus contract (a local, operational expense) was governed by the State’s General Procurement Law, as highlighted by the County Board ... in this case, does not proscribe the application of [SG] § 12-201(a)’s waiver of sovereign immunity to the County Board in the present contract action.

Id. at 214, 18 A.3d 890 (footnote omitted). Later, in recapitulating that Chesapeake Charter held that a county board of education’s contracts were not subject to the General Procurement Law because the county board was not a unit of the executive branch for purposes of the General Procurement Law, the Court stated that its holding in that case “was a narrow one.” Id. at 216-17 , 18 A.3d 890 . Applying the principles and analyses of Chesapeake Charter and BEKA to the case before us, we conclude that public school teachers employed by county boards of education are not employees of the Executive Branch of State government. B. Statutory Construction Broadly speaking, the WBL protects a State employee from reprisal after he or she makes a protected disclosure of information evidencing, inter alia, abuses of authority, gross mismanagement, gross wastes of money, dangers to public safety, or violations of law.

SPP § 5-305; Montgomery, 377 Md. at 625 , 835 A.2d 169 . Specifically, the WBL prohibits “a supervisor, appointing authority, or the head of a principal unit” from “tak[ing] or refusing]