Friday, June 24, 2011

Indiana State Employees: Welcome To The Rules Governing Private Sector Employees

A little-noticed change in the state's civil service code will dramatically alter the relationship state employees have with the agency that employs them beginning July 1.  Under current Indiana law, about 80% of state employees are classified as merit employees, a classification system that governs the way hirings, firings, promotions, disciplinary and layoff procedures are carried out by state agency supervisors. When the new law takes effect next month, nearly all but a small number of state employees will be categorized as "unclassified" employees. Only state employees whose positions are dictated by federal law, for example those administering unemployment claims or the state's Medicaid program, will be categorized as "classified" employees with similar protections merit employees currently enjoy under existing law.

As a merit employee, state agency supervisors may terminate a worker only for just cause and after the employee has been afforded a pre-deprivation hearing process. Merit employees that will become unclassified employees beginning next month will become at-will employees, which allows a supervisor to fire an employee for any reason or no reason at all, provided the basis for the termination is not otherwise prohibited by law, such as proscribed forms of discrimination, exercising a statutory right to make a claim for worker's compensation, or refusal to violate a law or policy.

The switch from merit employees to unclassified employees will substantially alter the hiring and promotion system. Merit employment and promotion is based on meeting a strict minimum set of qualifications and seniority. Unclassified workers will be evaluated based on knowledge, skills and abilities. In the event of layoffs, those with the most seniority will no longer be afforded the greatest protection as they are under the merit system. Instead, employees will be assigned a service rating that takes into account a number of factors, including performance, disciplinary history and seniority.  As the new system is being explained on a new instructional video prepared by the state's Department of Personnel, seniority will merely become a tie-breaker as a factor in determining layoffs.

The new civil service code will streamline and shorten the complaint process considerably from the current multi-step process for merit employees. An unclassified employee will be required to demonstrate that an action taken against the employee by a supervisor violated a law, rule or policy. The complaint must be filed within 30 days of the alleged violation, and then the agency will have 15 days to respond to the complaint. The state's personnel department will have 30 days to review the complaint. The employee will have 15 days to file an appeal with the state employee's appeal commission after receiving a written response from the personnel department. The burden is on the unclassified employee in this complaint process to prove the violation. Classified employees will still be protected by the just cause standard, and the burden of proof will be on management in any challenged suspension, demotion or dismissal action.

The Daniels' administration touts the new civil service service system law as codifying the performance-based system it first implemented in 2006, which it says rewards the highest performing state employees. The current civil service system has been in place since 1941 in response to federal New Deal laws that required states to implement personnel systems. The new law has some significant exemptions, including all legislative and judicial branch employees, as well as statewide elected officials and their personal staffs. Also, political subdivisions and quasi-governmental bodies are excluded from the law as are Indiana State Police employees and offenders working within the state correctional system.

Critics will no doubt contend the new system will allow political favoritism to creep into the state personnel system more than it already does. Clearly, the new system will untie the hands of supervisors to pick and choose and exercise more freely decisions over hiring, firing, promotion, suspension and demotion. In that sense, Indiana most state employees will begin to experience the same workplace rules that generally govern most private sector employees.

UPDATE: It looks like WTHR is keeping close tabs on what this blog publishes. This evening's lead off story at the 6:00 p.m. broadcast? See Sandra Chapman's story here entitled "State workers seeing changes to promotion policy." That headline is misleading as it suggest promotion is the only policy that is changing. At-will employment status will apply to any current merit employee converted to "unclassified" status, which encompasses most state agency employees, except those noted above that are exempt due to federal laws and regulations, employees of the judicial and executive branch, the personal staff of statewide officials and State Police employees. Denny Darrow of the state's Personnel Department says only 10% of state employees will be impacted. I would like to see more specific data on how the shake-out happens between the classification of "classified" and "unclassified employees. That 10% figure seems too low if you consider that the vast majority of state employees are currently classified as merit employees. Chapman also indicates there are presently only 2,800 full-time state employees. Again, that number seems low, although the number of state employees has shrunk dramatically during the Daniels administration to levels not seen since the 1970s.


Concerned Taxpayer said...

Wow! I'm saying this has been needed for a WAY long time! No more, 5 guys leaning on shovels, watching one guy dig!
The only problem will be the spate of lawsuits for "discrimination" that will come flying when people get fired.

Paul K. Ogden said...

Actually under Executive Order 05-14 signed by Daniels, non-merit employees with more than six months experience get due process protection like merit employees, including the requirement of a pre-deprivation meeting, the right to know the allegations, the right to see and present evidence, and the requirement that "just cause" exist for any disciplinary action.

When I wrote the memo to Jim Atterholt outlining legal violations at the Department Insurance, Atterholt immediately called me into a pre-dep meeting. They told me it was required because I had more than six months experience. But they didn't tell me what I did wrong, didn't provide me with any evidence, didn't allow me to introduce evidence or witnesses. They didn't provide any justification for the threat to fire me if I didn't resign. Of course a forced resignation is equivalent to a termination, a fact they apparently didn't understand at the time.

The Attorney General's Office admits I wasn't given due process required under EO 05-14. They took the position instead that I wasn't entitled to it. They said I was an ESM at-will employee and ESM is an exempted job category in EO 05-14.

Every personnel document I received classified me in the EXBB job category. The AG responded that EXBB is a subset of ESM. I went to state personnel and got a listing of job categories which showed EXBB as a separate and distinct job category apart from ESM. I should also point out that I was told by state personnel that as an EXBB employee I had due process rights after six months pursuant to EO 05-14.

So you know what the AG's office did in the middle of my lawsuit? They went in and changed the state personnel job categories document so EXBB was made a subset of ESM, the ONLY job category that is now a subset of another job category. The AG's office claimed State Personnel had made simply made a mistake. They submitted the newly altered document to the court to oppose my summary judgment.

To this day the AG's office has yet to produce a single document showing EXBB is a subcategory of ESM (and thus I wasn't entitled to due process) other than the document they altered. It just blows my mind that they have been able to get away with this far. I should have won summary judgment and hopefully still will.

I bring this up because at-will EXBB state employees probably don't realize that they lost their due process rights as a result of what the AG's office did. Of course it doesn't matter any more apparently given the change in rules. I regret that they did this. There is a middle ground between unionization and scrapping rules that protect state employees from doing things like I did which was whistleblowing.

rohshack147 said...


I hope you continue to press your fight against the state! For the sake of the people of Indiana we need more good men and women like you out their fighting! I can just see an explosion of litigation emerging over these new civil service rules. One thing is strange though is they have not yet written the new administrative rules yet. I hope you post about the new civil service system on your blog and outline potential affects it could have on politics her in the hoosier state.


If it helps productivity...I say "go for it."

Bradley said...

Under Daniels, the "pay for performance" and "civil service"/pre-deprivation laws have been an absolute joke. He has massively increased the size of upper-level positions in more than one state agency with cronies/loyalists who have never worked at the agencies before and appeared to have failed in the private sector (if I had to guess, those agencies that were increased were not outliers, either). He has decreased the number of employees, but he's increased the upper management levels (who make really good money), sacked/forced retirement on long-term people (I'm talking about good employees here) with YEARS of knowledge on the job that will never be seen again, not focused on training in many places, and the turnover is rampant (low pay many places, culture of incompetency and fear). Those ingredients, I believe, negate any monetary gains from "shrinking the state workforce", and I think I could make a helluva good argument it has damaged this state far greater than The Blade's "cost savings" have supposedly saved us.

Trust me, there are some low-functioning/low-intelligence people hired since 2005 who will stay there as long as the Administration wants them to because those employees are brainless and clueless (or a close friend/family member who's brainless) who do every little corrupt, money-wasting thing the Administration wants them to do without doing anything about it or trying to stop it. If the Administration wants anybody who speaks-out about their corruption gone, though, they get them gone and gone fast while trying every trick in the book (including by illegal means) to make their target pay.

DWD never liked me or my friends because we were mainly young and not sycophants (there's many young asskissers working there, though, trust me), and we constantly challenged (and are still challenging) DWD because they have destroyed our state's unemployment system (which has devastated businesses and deserving claimants as well as taxpayers who don't know they are paying for a lot of unemployment they shouldn't be paying). In many ways my friends and I were whistleblowers (first internally, and then externally) of DWD, and they tried to destroy us. Oddly, some upper level people at DWD have publically accused me of being a Democrat because I expose how bad they're doing (with factual evidence). What's that say about them and the job they've done, and what are they then saying about Republicans?

I completely sympathize with what people like Paul have gone through (and what they did to you is crap, Paul, and they know it) -- and he's absolutely right that there needs to be a middle ground. I, too, regret this change in civil service laws, and I think it will backfire.

Those who passed this law might take heed: Republicans won't always be in the Governor's Mansion (or pretending to live there, at least), and when the Democrats next occupy the office, they can, by these laws, vindictively control state employees the way this Administration has done. It will be a Reign of Terror and a Reign of Error as much as it is now under Mitch. Past administrations have been rightfully scorned for keeping "worthless employees" or those five of six workers watching the sixth dig, but how is what's happened under Daniels better? Well, it ain't.

rohshack147 said...

I know one thing if I were Mike Pence or Jim Wallace I would be mad as hell about the change to the merit system. I can just see John Gregg and the democrats going after them for all of Daniels misteps! Also I find it interesting that even alot of people at SPD dont seem to have a clue about what the new system will do! In this case I think the Republicans in the legislature did what Obama and the Democrips did in congrees. They signed laws without reading them! I am sure alot of republicans will regret that these changes were approved! Oh by the way their are alot of republicans who are merit workers! And they like Paul Ogden, and Gary Welsh, and the late Carl Moldthan have been sounding off about the ineptness and utter incompentance that has gone on in this state since 2005! One last thing to remeber is that Paul Ogden's lawsuit involves misconduct committed by an ardent liberal democrat whoose conduct was allowed to go on by the current administration according to him!