June 4, 1993
Mr. Ronald G. Penny State Personnel Director Office of State Personnel Administration Building Raleigh, North Carolina 27602
RE: Request for Opinion – Career State Employees
Dear Mr. Penny:
This letter is in response to your letter dated May 17, 1993, and a follow-up to my letter dated May 20th. In your letter, you noted that G.S. 126-1A defines the term "career state employee". An employee’s status as a tenured public employee, under G.S. 126-1A, is linked to the level of his position. The terms "primary", "secondary", "professional", "management" and "consultant" are defined in G.S. 126-1A. The definitions parallel the classification of positions for Fair Labor Standards purposes. You point out in your letter that the 1991 Session Laws, C. 354, s .9, indicate that "[t]his act becomes effective July 1, 1993, and applies to all State employees hired on or after that date.
Your specific question is whether State employees hired prior to July 1, 1993, benefit by the legislative reduction in the time it takes to achieve tenured public employee status. Alternatively, you ask whether current employees will continue to be subject to the more stringent tenure standards linked to an employee’s paygrade after the new statute becomes effective. You recognize in your letter the constitutional problem apparent in treating public employees with greater state service less favorably than newer hires. For example, a paygrade 75 Attorney I hired July 1, 1991, will not become permanent until July 1, 1996, under the present law; whereas, if that same Attorney I were hired July 1, 1993, under the new system, he would attain tenured public employee status on July 1, 1995. The question thus becomes: Does the fact the legislature specifically indicated that G.S. 126-1A applies to employees hired after July 1, 1993, preclude application of the new tenure tracking to employees hired prior to July 1, 1993?
In examining any legislation, an overriding principle is to construe it in a manner that makes it constitutional. The constitutionality of this statute would be tested against the dictates of the equal protection clause. The equal protection clause requires "the legislative classification in the statute [to] provide a reasonable means to a legitimate state objective." Powe v. Odell, 312 N.C. 410, 412, 322 S.E.2d 762, 763 (1984). "The question is whether [the classification is] reasonable and not arbitrary . . . . [T]he test as to arbitrariness is whether the distinctions drawn . . . bear some relationship to a conceivable legitimate governmental interest." Swanson v. State of North Carolina, 330 N.C. 390, 396, 410 S.E.2d 490, 494 (1991).
No legislative history articulates why the State would have a legitimate interest in treating current employees less favorably than new hires. Frankly, it is hard to articulate such a reason. In fact, other personnel statutes favor existing employees over new hires. [E.g., G.S. 126-7.1, gives State employees priority consideration for positions; North Carolina Office of State Personnel Manual §7, page 41, provides longevity pay, §7, page 44.1, provides priority retention rights and §7, page 44.4, avoids pay inequities and paygrade references.] Several sections of Chapter 354 of the 1991 Session Laws (hereinafter Chapter 354) indicates an intent to eliminate the term "permanent employee" where tenured status is based on paygrade, and substitute in its place the term "career employee" where tenure is level dependent. Section 2 of Chapter 354 rewrites G.S. 126-4 by removing the paygrade designations and substituting in their place level dependent designations. Section 3 of Chapter 354 rewrites G.S. 126-5(c) to incorporate the same paygrade to level dependent change. Sections 4 and 5 of Chapter 354 eliminate the paygrade dependent term "permanent employee" and use instead the level dependent term "career employee". Section 6 of Chapter 354 rewrites G.S. 126-36.2 by including the term "career", with its level dependent implication, to modify the term "state employee". Finally, Section 7 of Chapter 354 rewrites G.S. 126-39 to eliminate the definition of State employee based on paygrade. The scope of Article 8 of Chapter 126, concerning employee appeals, was pegged to career employee status, and the terms "permanent State employee", "permanent employee", "State employee" and "former State employee", all of which referred to paygrade status, were eliminated. An employee’s right to appeal under Article 8, after July 1, 1993, is linked to career status, which is level dependent.
Section 9 of Chapter 354 indicates that the changes become effective July 1, 1993, and that the act applies to all state employees hired on or after that date. However, the fact that Chapter 354 adds one new section defining "career employee" and rewrites the rest of Chapter 126 eliminating the term "permanent employee" indicates that the legislature intended for all employees to be treated alike. If the legislature had intended a dual personnel system, disadvantaging current employees, it presumably would have done so specifically.
By rewriting Chapter 126 and eliminating the old paygrade dependent terms, the legislature has indicated that it prefers a unified system. A unified system is not subject to attack under the equal protection clause. If Chapter 354 is used to create a dual personnel system that disadvantages current employees, it could come under attack as class legislation. Under the State and federal equal protection clauses, whenever a state statute has the effect of creating separate classifications, preferring one group over another, the statute must be related to a legitimate state interest. Harris v. Flaherty, 90 N.C. App. 110, 367 S.E.2d 364 (1988). The leading North Carolina case challenging a statute as class legislation is Cheek v. City of Charlotte, 273 N.C. 293, 160 S.E.2d 18 (1968). The Cheek court held that statutes are generally voided as class legislation whenever persons engaged in the same business are subject to different restrictions or are given different privileges under the same conditions. See, id. at 298-99. If Chapter 354 is interpreted to treat the current state employees less favorably than new hires, the statute may be attacked as class legislation and subjected to a higher standard of equal protection analysis. A potential litigant disadvantaged by a dual personnel system may also attempt to argue that the legislation benefits the new hires who were brought in by a new administration. The current employee, subjected to a dual personnel system, may attach significance to the fact Chapter 354 was ratified in June 1991, but delayed until July 1993, after a new administration had been inaugurated.
In summary, it is our opinion that in enacting Chapter 354 the General Assembly intended to equally benefit all employees. Otherwise, any intent to create a dual personnel system would have been specifically articulated. The legislature is presumed to have intended a fair, even
handed treatment of all its employees. The fact that Chapter 354 had a delayed effective date
does not indicate a desire to create a dual personnel system that may be challenged as
impermissible class legislation. Current employees and new hires should therefore be subject to
the same level dependent classification system, with reduced tenure requirements, when Chapter
354 becomes effective on July 1, 1993.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
Lars F. Nance
Special Deputy Attorney General