Secretary, Maryland Department of Personnel v. Bender

Lowe, J., delivered the opinion of the -Court. Over five years ago appellees filed this suit under the Declaratory Judgment Act challenging the legality of more than 350 positions in the Department of Transportation. Under Maryland statutory law, Md. Code, Art. 64A, § 1, unless specifically excepted, all positions of government employment are deemed to be in the classified service, considered as the merit system, under which each position is given a classification. One of its purposes is to provide standards of employment and advancement through testing, etc., intending to avoid problems inherent in political spoils systems such as nepotism and related abuses.

It follows that any position created within the State service which is not governed by the merit system is illegal, unless there can be found some statutory authority to create an exception justifying the position created. ⁷¹⁶ The thrust of this case, brought by appellees in the Circuit Court for Baltimore City, was that the merit system statute had been illegally avoided by an improper interpretation of the Secretary of Transportation’s statutory authority to create unclassified positions. In this appeal three statutory exceptions which interpretatively authorize creation of unclassified positions are involved. The "Staff Assistant Exception” in Md. Code, Trans. Art., § 2-102 (d); 1 the "Expert Training Exception” in Art. 64A, § 3 2 and the "Key Personnel Exception” in Trans.

Art., § 6-204 (n). 3 — standing to sue — The two appellees in this case are classified employees of Maryland working in the Department of Transportation and are officers and members of the Maryland Classified ⁷¹⁷ Employees Association. While it is apparent, and was implicitly admitted at oral argument, that the association is behind the suit, it was apparently necessary to sue in the names of the appellees in order to obtain the "citizen standing” necessary to obtain the desired declaratory judgment. Md. Code, Art. 64A, § 43 authorizes "[a]ny citizen of the State [to] maintain an action in any court of competent jurisdiction to recover, for the use of the State, any sums paid contrary to the provisions of this article or of the rules of the Secretary from the person or persons authorizing or making such payment to enjoin such person or persons from making such authorization, or to enjoin the Secretary from attaching his certificate to a payroll, if a certificate is provided for by rule, in violation of the provisions of this article.” They asked for a declaratory decree (under the Cts. & Jud. Proc.

Art. of the Md. Code, Title 3, Subtitle 4 Declaratory Judgments) that the defendants had unlawfully created certain unclassified positions; that they had systematically and purposely abolished classified positions; that they be mandatorily enjoined to abolish all unclassified positions unlawfully created and enjoined from creating others; and that appellant Bosz be enjoined from certifying payment to employees holding unclassified positions found to have been unlawfully created. The Circuit Court of Baltimore City ruled that some 321 positions excluded from classified service had been created improperly, "and, no legal authority thus existing for the creation of same outside the said 'classified service’, each of the following designated positions is hereby deemed to be established as a 'classified position’ within the said 'classified service’ as of the date of this Decree.” ⁷¹⁸ — necessary parties — Despite no claim having been made by the citizens to recover from the Secretaries the sums alleged to have been illegally paid in the past, the trial judge was concerned that the employees holding the contested positions had not been made parties to the suit. This concern was heightened when a preliminary motion by appellants Bosz and Hughes, raised the necessary party question. 4 The trial judge held that under the Declaratory Judgment Act, Cts. & Jud. Proc.

Art., § 3-405 (a), " 'a person who has or claims any interest which would be affected by the declaration, shall be made a party.’ ” He noted that " 'the general rule, in equity, is that all persons should be made parties who are legally or beneficially interested in the suit.’ Reddick v. State, 213 Md. 18, 29 (1957) [cert. denied, 355 U.S. 832 (1957)]”, and that he had the alternative of dismissing the suit or joining the defendants sua sponte, Trupp v. Wolff, 24 Md. App. 588, 593 (1975), cert. denied, 275 Md. 757 (1975). Relying on Reddick, supra, however, he selected a different course in light of the extraordinary number of employees concerned. He directed the parties to fashion a notice of the pending suit to apprise the employees of the litigation, its consequences, and their right to intervene under Md. Rule 208. 5 ⁷¹⁹ This was a practical application of the underlying purppse of the necessary party provision of the Declaratory Judgment Act in Cts. & Jud. Proc.

Art., § 3-405, since the purposes of that section would have been adhered to; i.e., to fully determine an action before the court and to provide interested parties their day in court, 6 and to avoid a multiplicity of suits. 7 See Martin v. United Slate Wkrs. Ass’n, 189 Md. 383, 387 (1947); U. Slate Wkrs. v. Carpenters, Etc., 185 Md. 32 (1945). This practical compromise procedure, i.e., notifying the employees of the litigation and of their right to intervene, has the apparent sanction of the Court of Appeals. "There is a well established principle of law that a person who has full knowledge of pending litigation and that it affects, and will determine, his rights, and, who is entitled to appear, but who makes no ⁷²⁰ effort to intervene as a party, and permits a conclusion thereof without objection, such party is concluded by the proceedings as effectually as if he were named on the record.” Reddick, supra at 30 . — the special law — While efforts were being made to fashion an adequate notice to the employees, the Maryland General Assembly convened for its 1978 session.

There was pending in the Senate, Senate Bill 216 which had been introduced by Senator James Clark (now President of the Senate), then Chairman of the Senate Finance Committee, at the behest of John F. X. O’Brien, Assistant Secretary of the Department of Personnel. In its original form, the bill, as described by Mr. O’Brien, contained certain "boiler plate” language for standardizing a procedure when transferring local or municipal government employees into State service — a recurring problem that had been unresolved "over the years”. 8 The language of the original bill is presently codified as Md. Code, Art. 64A, § 51A. It was enacted as "SECTION 1” of Chapter 440 of the Laws of Maryland, 1978: "SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, That section(s) of the Annotated Code of Maryland be repealed, amended, or enacted to read as follows: Article 64A — Merit System 56.[51A], (A) AN EMPLOYEE WHO IS TRANSFERRED TO THE STATE MERIT SYSTEM ACCORDING TO THIS SECTION, UNLESS OTHERWISE SPECIFIED IN THE ENABLING LEGISLATION TRANSFERRING SUCH EMPLOYEE TO THE STATE MERIT SYSTEM.

SHALL BE APPOINTED WITHOUT FURTHER EXAMINATION OR QUALIFICATION. THE EMPLOYEE SHALL BE PLACED IN THE STATE CLASSIFICATION THAT IS COMPARABLE IN DUTIES AND ⁷²¹ RESPONSIBILITIES TO THE EMPLOYEE’S FORMER POSITION. (B) THE EMPLOYEE MAY NOT SUFFER A DIMINUTION OF SALARY OR WAGES, ACCRUED LEAVE, WHETHER EARNED OR GRANTED, OR SENIORITY RIGHTS. ANY INCREASE IN SALARY OR WAGES GRANTED SUBSEQUENT TO PASSAGE OF THE LEGISLATION ENABLING THE TRANSFER, MAY BE RETAINED ON APPOINTMENT TO THE CLASSIFIED SERVICE ONLY IF THE SECRETARY APPROVES.

THE SECRETARY SHALL CONSIDER THE MONETARY VALUE OF ANY AND ALL OTHER BENEFITS, ENTITLEMENTS, SERVICES OR PREROGATIVES AND, AT HIS DISCRETION AND IN CONSIDERATION OF THE BEST INTERESTS OF THE CLASSIFIED SERVICE, MAY CONSIDER THESE VALUES OR A PORTION OF THEM WHEN ESTABLISHING THE RATE OF SALARY ON APPOINTMENT. AFTER APPOINTMENT, THE EMPLOYEE IS ENTITLED TO THE SAME BENEFITS PROVIDED TO CLASSIFIED EMPLOYEES ESTABLISHED BY THIS ARTICLE.” While the original bill was progressing through the legislative process, the employees whose jobs were jeopardized by the then pending litigation appear to have seen that bill as a conveyance for protecting themselves from the appellee’s assault on their positions. Thence came an epistolary deluge upon the House Committee on Appropriations. Itfound a procedural parliamentary solution for the employees, a procedural device little known beyond those hallowed halls, which permitted the new language to be added to the law carrying all of the force and effect of law, but ⁷²² not codified.

It amended the Senate Bill by adding a "SECTION 2”, which read: "SECTION 2. AND BE IT FURTHER ENACTED That the Secretary of Personnel shall transfer to the State merit system any key or unclassified employee of the Department of Transportation whose position is judicially determined in any action filed in any court of competent jurisdiction prior to January 1, 1978 to have been created unlawfully or otherwise be unlawful.” Only the original language appearing as SECTION 1 of the original bill would be printed in the Annotated Code of Maryland. When this device is used by one attempting to enact a self-interest "special law”, contrary to Md. Const., Art. Ill, § 33, it is in legislative jargon known as a "snake” or a "bell ringer”; but when properly used (e.g., to implement legislation requiring transitory provisions), it has the benefit of effecting a necessary purpose without cluttering legal codes already far too encumbered by unnecessary enactments. Even one who is aware of such legislation must seek these uncodified enactments either in the Session Laws of Maryland or in the journals.

The one in question appended to Senate Bill 216 appears with its more apparent benefactor (§ 51A) in Chapter 440, 1978 Laws of Md. We are compelled to digress a moment to discuss this law which was enacted as Chapter 440, Laws of Maryland 1978, effective July 1,1978. One is hard pressed to determine what was effected by its enactment. By researching the records and files of the General Assembly and its committees, we were able to discern that the original purpose of the original bill appeared to be to standardize a procedure as described in the original title which explained that it was: "FOR the purpose of providing for the appointment, salary or wages, leave, and seniority of employees transferred into the State merit system;”. ⁷²³ The body of the bill (original and as enacted) did not provide for that broad purpose. It restricted its protections in the very first sentence to "AN EMPLOYEE WHO IS TRANSFERRED TO THE STATE MERIT SYSTEM ACCORDING TO THIS SECTION____” (Emphasis added).

In its original form, 9 the protections would have applied to no one since that section in the law did not provide for any transferring employees directly or by reference. If enacted in its original form, the law would make no sense at all. Compare Md. Code, Art. 64A, §§ 2, 5 and 7-9Q which designated clearly the positions to be transferred to the classified service from time to time. 10 ⁷²⁴ When the Legislature added the aforementioned SECTION 2 which was never codified, it amended the title of the bill by adding new language presumably to describe that which the amendment encompassed. What was added to the title, however, appears to have changed the original purpose of the bill from establishing a general standard for an enigmatic source of transferees to apply as amended only to "certain” employees described so carefully as to be all but named.

Using italics to indicate the title’s new language amended as descriptive of the effect of adding the "SECTION 2” to the body of the bill, the title of the bill as enacted reflects the accuracy of this observation: "FOR the purpose of providing for the appointment, salary or wages, leave, and seniority of certain employees transferred into the State merit system; and providing that the Secretary of Personnel shall transfer to the State merit system certain employees whose positions are judicially determined in any action filed prior to January 1, 1978 to have been created unlawfully or to otherwise be unlawful.” As amended the bill makes some sense, since it tells us who are the particular employees to which the law will now restrictively apply, i.e., those described in the "SECTION 2” uncodified amendment. We are not called upon to decide the constitutionality of the legislation in question, nor was the trial judge; however, as so read, the facial validity of the bill as it appears finally enacted as Ch. 440, gives us pause, to say the least. ⁷²⁵ Md. Const., Art. Ill, § 33 says, among other things, "[ajnd the General Assembly shall pass no special Law, for any case, for which provision has been made, by an existing General Law.” A special law is defined as a special law for a special case. Potomac Sand & Gravel v. Governor, 266 Md. 358 (1972), cert. denied, 409 U.S. 1040 (1972); Beauchamp v. Somerset County, 256 Md. 541 (1970); Jones v. House of Reformation, 176 Md. 43 (1939). A special law is also defined as one that relates to particular persons or things of a class as distinguished from a general law which applies to all persons or things of a class.

Prince George’s Co. v. B. & O. R. Co., 113 Md. 179 (1910). The amendment adding the uncodified SECTION 2 gives the entire Act all of the appearances of a special law passed for a special case relating to particular persons within a class of State employees. The amendment in question and the entire law as described by the title (which Md. Const., Art. Ill, § 29 requires) so clearly addresses this problem then pending in this case, that it all but names the parties and the employees it intended to affect. While the constitutionality of the Act is not before us, we cannot disregard its questionable appearance in light of the "necessary party” question we must address. 11 Following the July 1, 1978 effective date of the job saving statute, presumably, the parties lost little time in prevailing upon the judge for a reprieve from the requirement of notifying the employees.

The record extract contains the following: "STIPULATION OF THE PARTIES At a court conference held in chambers on July 13, 1978, the court below determined that because of the ⁷²⁶ enactment into law of Chapter 440, Acts of 1978, the notice to affected employees called for by the Intervention Order of Court, dated December 19, 1977, was no longer necessary and that the case should proceed without the necessity of the sending of the notice required in said Order. Through inadvertence, this determination does not appear on the record of the case.” The job saving statute appears to have lulled the judge into a false sense of security that the employees no longer had "any interest which would be affected by the declaration”. — "any” interest — The necessary party provision (§ 3-405 (a)) of the Declaratory Judgment Act provides that (1) "[i]f declaratory relief is sought, a person who has or claims any interest which would be affected by the declaration, shall be made a party.” It. reemphasizes the importance of doing so by suggesting an alternative test by establishing the sanction that (2) "[ejxcept in a class action, the declaration may not prejudice the rights of any person not a party to the proceeding.” The Court of Appeals has interpreted what is now § 3-405 (a) of the Declaratory Judgment Act on "many occasions” as holding that "all persons interested in the declaration are necessary parties”. It has further held that "the presence of necessary parties is jurisdictional, and this is a matter which the parties present cannot waive.” Williams, supra at 185. The preliminary question on appeal, therefore, is whether the employees of the positions sought to be declared to have been illegally created had "any interest which would be affected by the declaration” remaining, despite the enactment of the codified § 51A and its SECTION 2 ⁷²⁷ statutory ghost.

Despite the enactment of the "saving statute” appended to Senate Bill 216, the obvious answer is in the affirmative. Although we are not able to find a precise definition of what constitutes the interest necessary to raise a nonparty to a necessary (as contrasted with proper) party, it is significant that Cts. Art., § 3-406, immediately following the necessary parties section, sets forth, as a proper party: "Any person interested .. . whose rights, status, or other legal relations are affected by a statute ... may have determined any question of construction or validity ... and obtain a declaration of rights, status, or other legal relation under it.” Since the very heart of the case is statutory constructions 12 which would vitally affect the status, if not the rights and other legal relations of the employees holding positions under the statutes, these employees would have been "proper” parties as "person[s] interested” under § 3-406 providing standing to bring an action for declaratory judgment. How can we say then that these people are not necessary as having "any interest which would be affected” (emphasis added) under § 3-405 (a) (1), or the rights of whom would not be prejudiced under (a) (2)? ⁷²⁸ The employees’ "interests” are'of real concern seriously prejudicing their rights (§ 3-405 (b)) even if the special amendment added to Senate Bill 216 to protect them is valid.

There are three very apparent areas of interest prejudiced by the adverse declaration: . 1. The interest in the job geographically. The saving statute provides transferees "comparable” duties, responsibilities, wages, benefits, entitlements, etc. It does not require that the comparable position be in the same geographic area wherein the transferee is presently located. Thus, if an employee in Baltimore City was given a comparable position in Oakland or Pocomoke, the Secretary of Personnel would have complied with the saving statute.

To avoid such uprooting of one’s domicile indeed amounts to "any interest. . . affected by the declaration”. 2. Their interest in preserving the job status outside the classified service. It is obviously difficult to argue to some that the benefits of a tenured type merit system do not outweigh the dangers of an untenured position sustained at the will of the employer and based entirely upon the employee’s satisfactory performance as judged by his superiors. Yet there are those who retain that self-satisfying spirit of professionalism that employment may be retained by one’s abilities and productivity, rather than by legislative fiat, or rule of law or contract.

Furthermore, an unclassified employee is not subject to the procedural strictures of the merit system in advancing himself financially or otherwise, and may be singled out for advancement for exceptionally good performance, as well as plucked out for exceptionally bad performance. For many there is also a grievance procedure established by executive order comparable to that provided in the classified system. See Md. Code, Vol. 9A p. 612, et seq. For others that inclusion — at the will