State Personnel Act; Attorney’s Fees

Subject:

Requested By: Mr. Harold H. Webb Director Office of State Personnel

Question: In determining whether attorney’s fees may be awarded in a proceeding before the State Personnel Commission brought by an employee, a former employee, or an applicant for employment, should the Commission allow attorney’s fees permitted by changes in the State Personnel Act according to the date the cause of action arose, the date proceedings were instituted before the Commission, or the date of the Commission’s decision?

Conclusion: In determining whether attorney’s fees are allowable in a proceeding brought by an employee, a former employee, or an applicant for employment, the State Personnel Commission should apply statutory changes in circumstances in which attorney’s fees may be awarded according to the date the cause of action arose.

Chapter 126 of the General Statutes establishes and provides for the administration of the State Personnel System. Effective February 1, 1976, to July 1, 1977, this Act permitted the State Personnel Commission to award attorney’s fees in "cases where the Commission finds discrimination or orders reinstatement." S.S. 126-4(11) The 1977 General Assembly amended this provision to provide for the award of attorney’s fees in "cases where the Commission finds discrimination or orders reinstatement or back pay whether (i) heard by the Commission or (ii) appealed for limited review after settlement or (iii) resolved at the agency level." G.S. 126-4(12) It can be seen that the amended provision allows attorney’s fees in cases in which back pay is awarded even though there is no finding of discrimination or order or reinstatement and also permits the award of attorney’s fees in cases which were resolved as to all other aspects without a decision by the Commission. This amendment was made effective July 1, 1977.

The question is what stage of a grievance by an employee, a former employee, or an applicant for employment determines whether the amended provisions for attorney’s fees effective July 1, 1977, are applicable to a particular grievance. The general rule in North Carolina and in most other jurisdictions is that statutes are not generally construed to be retrospective or retroactive. Only if the General Assembly clearly indicates an intent for a statute to be applied retrospectively will it be interpreted to operate retrospectively. If there is any doubt, the doubt should be resolved against retrospective operation. In re Mitchell, 285 N.C. 77, 203 S.E. 2d 48 (1974); Smith v. Mercer, 276 N.C. 329, 172 S.E. 2d 489 (1970); Wilson v. Anderson, 232 N.C. 212, 59 S.E. 2d 836, 18 ALR 2d 951, Reh. Den. 232 N.C. 521, 168 S.E. 2d 672 (1950).

""Ordinarily, an intention to give a statute a retroactive operation will not be inferred. If it is doubtful whether the statute or amendment was intended to operate retrospectively, the doubt should be resolved against such operation. It is especially true that the statute or amendment will be regarded as operating prospectively only, where it is in derogation of a common-law right, or where the effect of giving it a retroactive operation would be to interfere with an existing contract, destroy a vested right, or create a new liability in connection with a past transaction, invalidate a defense which was good when the statute was passed, or, in general, render the statue or amendment unconstitutional." (Our) 50 Am. Jur. Statutes § 478. Accord: 82 CJS Statutes § 413; Ashley v. Brown, 198 N.C. 369, 372, 151 S.E. 725, 727; Waddill v. Masten, 172

N.C. 582, 584, 90 S.E. 694, 695; Hicks v. Kearney, 189 N.C. 316, 319, 127 S.E. 205, 207."

Smith v. Mercer, 276 N.C. 329, 172 S.E. 2d 489 (1970).

In Smith v. Mercer, supra, the question was whether the revised North Carolina Wrongful Death Act was available to persons who brought suit after the effective date of the Act upon a wrongful death which occurred before the effective date of the Act. The Court noted that the revised Act allowed suit for and recovery of greater and different types of damages from the damages recoverable under the previous version of the Act. The Court discussed cases from other jurisdictions which had held that, where a statute increased the amount of damages recoverable under a wrongful death act, a new cause of action was created for the additional damages allowable. The Court held in Smith v. Mercer, supra, that a new cause of action was created for the additional amounts and kinds of damages available under the amended wrongful death act.

Allowing attorney’s fees in cases in which they were not recoverable previously in effect creates a new cause of action for the attorney’s fees. If the cause of action arose before July 1, 1977, attorney’s fees were not available at the time the cause of action arose. Just as in cases where the amounts or kinds of damages available have been increased, a provision for attorney’s fees increases the liability of the employer in grievance proceedings before the State Personnel Commission. Therefore, under the well-settled principles of construing statutes against retroactivity and avoiding the creation of new liabilities for past transactions, the provisions in Chapter 126 for attorney’s fees should be applied only to causes of action which arose on or after the effective date of the particular provision for attorney’s fees.

Rufus L. Edmisten Attorney General

Norma S. Harrell Associate Attorney