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Williams v. Department of Public Safety

Court of Appeals of Colorado, Third Division

December 31, 2015

Brett L. Williams, Petitioner-Appellee and Cross-Appellant,
Department of Public Safety, Colorado State Patrol, Respondent-Appellant and Cross-Appellee, and State Personnel Board, Appellee

          State Personnel Board No. 2011G028.

         Donachy Law Firm, LLC, Mary Donachy, Denver, Colorado; Scott Moss, Denver, Colorado, for Plaintiff-Appellee and Cross-Appellant.

         Cynthia H. Coffman, Attorney General, Stacy L. Worthington, Senior Assistant Attorney General, Denver, Colorado, for Defendant-Appellant and Cross-Appellee.

         Cynthia H. Coffman, Attorney General, Eric H. Maxfield, First Assistant Attorney General, Denver, Colorado, for Appellee.

         Opinion by JUDGE WEBB. Fox, J., concurs. Berger, J., concurs in part and dissents in part.


         WEBB, JUDGE.

          [¶1] Brett L. Williams spent twelve years as a Colorado State Patrol (CSP) employee, climbing the ranks from trooper to captain. In 2010, he resigned from CSP to start a new career as a helicopter pilot. But when Williams applied for reinstatement just three months later, his most closely-guarded secret -- he is gay -- was revealed. After Williams failed a polygraph examination and a swift investigation concerning some of his responses, CSP refused to reinstate him. But was that decision illegal discrimination based on Williams' sexual orientation?

         I. Background

         A. Procedure

          [¶2] Williams filed a complaint with the State Personnel Board (Board). The complaint alleged that CSP had acted arbitrarily or capriciously and that it had discriminated against him on the basis of sexual orientation in violation of the Colorado Anti-Discrimination Act (CADA), sections 24-34-401 to -406, C.R.S. 2015. The Board referred the complaint to an administrative law judge (ALJ) for hearing.

          [¶3] After a five-day evidentiary hearing, the ALJ issued an initial decision with detailed factual findings that concluded that CSP's actions were arbitrary, capricious, and constituted unlawful discrimination based on sexual orientation. She awarded Williams front pay in lieu of reinstatement, back pay, attorney fees, and costs in amounts to be determined following action by the Board.

          [¶4] CSP appealed the initial decision to the Board. It affirmed all of the ALJ's conclusions and findings except for one: that CSP's culture was anti-gay. The Board then remanded the case for the ALJ to determine remedies.

          [¶5] After another evidentiary hearing, the ALJ issued an amended order awarding Williams $172,742 in back pay and $595,526 in front pay. Both parties appealed and the Board affirmed. Then CSP appealed and Williams cross-appealed to this court.

         B. Facts

          [¶6] Williams began his career with CSP in 1998 as a trooper. His performance evaluations were consistently exceptional. He received several promotions over the next twelve years, ultimately becoming a captain. Throughout his tenure, Williams kept his sexual orientation secret, even to the point of displaying a photograph of a supposed girlfriend on his desk.

          [¶7] But after an involuntary transfer to a desk position that he did not " care for," Williams resigned in 2010. Before leaving, according to Williams, Major James Colley -- his then immediate supervisor -- assured him that if he returned to the force within a year, the reapplication process would be streamlined such that Williams would not have to undergo a polygraph examination and a full background check.

          [¶8] Three months later, Williams applied for reinstatement. James Wolfinbarger, the new chief, required Williams to complete a full background check and take a polygraph examination. This requirement was a change in policy from that of Wolfinbarger's predecessor.

          [¶9] During the pre-polygraph interview, Williams made two disclosures to examiner Sergeant Dean Paxton that became significant.

          [¶10] First, Williams described having once inadvertently viewed child pornography on an adult pornography website. When he realized that some of the actors were children, he explained that he had clicked out of the video and reported the video to the website administrator.

          [¶11] Second, Williams revealed that a massage in Thailand in 2006 " ended in sexual contact." Paxton asked Williams whether the " masseuse" was male or female; Williams responded male. CSP's polygraph policies prohibited asking questions to elicit an examinee's sexual orientation.

          [¶12] Williams testified that revealing information related to his sexual orientation during this interview heightened his anxiety during the examination. When Paxton asked whether Williams was concealing any unlawful sexual conduct, and he responded " no," the polygraph showed a " significant reaction," the highest Paxton had ever seen. Based on this reaction, Paxton concluded that Williams had failed the polygraph.

          [¶13] Wolfinbarger soon learned about Williams' admissions during the interview and failed examination. He instructed Captain Dan Elder to find out whether CSP could deny reinstatement based solely on the polygraph results. Elder delegated this assignment to Sergeant Tim Keeton. After doing some research, Keeton told Elder that CSP could deny reinstatement based only on the polygraph results, although he also knew that denying reinstatement on this basis was not the best practice.

          [¶14] Elder reported Keeton's conclusion to Wolfinbarger. Lieutenant Colonel Scott Hernandez, in consultation with Wolfinbarger, decided not to reinstate Williams. Colley then told Williams that he would not be reinstated. Due to an intervening holiday and a furlough day, the process from examination to decision took about three business days.

         II. Arbitrary or Capricious Claim

          [¶15] CSP first contends the Board did not have authority to review Williams' claim that CSP acted arbitrarily or capriciously in declining to reinstate him. Alternatively, CSP contends the record lacks sufficient evidence to support the ALJ's conclusion of an arbitrary or capricious hiring decision. Because we agree with CSP's first contention, its second contention is moot.

         A. Preservation and Standard of Review

          [¶16] The parties agree that this issue is preserved.

          [¶17] Appellate courts review an agency's determination of its own jurisdiction de novo. Hawes v. Colo. Div. of Ins., 65 P.3d 1008, 1015 (Colo. 2003). Still, they generally defer to the agency's reasonable interpretations of its own statutes. Gessler v. Colo. Common Cause, 2014 CO 44, ¶ 7, 327 P.3d 232. Specifically, if the statute is silent or ambiguous, " courts must consider whether the agency's regulation is based on a permissible construction of the statute." Xerox Corp. v. Bd. of Cty. Comm'rs, 87 P.3d 189, 192 (Colo.App. 2003). But an appellate court does not defer to an agency interpretation that violates the plain language of the statute or the General Assembly's intent. Youngs v. Indus. Claim Appeals Office, 2012 COA 85M, ¶ 22, 297 P.3d 964.

         B. Law

         1. Comparing Board and Director Authority

          [¶18] The Board has authority to review adverse actions involving state employees. See Colo. Const. art. XII, § 13(8) (" [p]ersons in the personnel system of the state" ). But its power to review nonemployee appointment decisions arises from a single statute: section 24-50-125.3, C.R.S. 2015 (" [a]n applicant or employee" ). This section permits the Board to review a " discriminatory or unfair employment practice[]" as defined in CADA. Id. But it does not empower the Board to consider a nonemployee's claim of arbitrary or capricious action. See id.

          [¶19] By contrast, the State Personnel Director (Director) has express statutory authority to review an appeal from " [a]ny person," which would include nonemployees. § 24-50-112.5(4)(a), C.R.S. 2015. And section 24-50-112.5(4)(b) grants the Director authority to overturn any action found to have been " arbitrary, capricious, or contrary to rule or law."

          [¶20] True enough, the Board has statutory authority to reverse or modify a determination by the Director should the Board conclude that either the action of the Director or that of the appointing authority whose action the Director reviewed was arbitrary or capricious. § 24-50-103(6), C.R.S. 2015.[1] But the claim must be " appealable to the [B]oard pursuant to this article or the state constitution" for the Board to review it under section 24-50-103(6). Id.

          [¶21] A close look at the statutory framework shows the possibility of two separate but parallel appeals -- one directly to the Board from an allegedly discriminatory action by an appointing authority and one to the Director from an allegedly arbitrary or capricious action by an appointing authority. See Ch. 351, sec. 15, § 24-50-112.5(4)(c) & (d), 2010 Colo. Sess. Laws 1626-27 (explaining that if any employee who has filed an appeal with the Director also files an appeal with the Board arising from the same action by an appointing authority, then the ninety-day period within which the Director must issue a written decision will be tolled until the Board's final decision, if both appeals arise from the same action). Thus, " all complaints about the selection . . . process not involving allegations of discrimination are to be filed with the director, while any claims of discrimination with respect to that process must be filed with the board or the civil rights division." Cunningham v. Dep't of Highways, 823 P.2d 1377, 1380 (Colo.App. 1991).

         2. Statutory Construction Principles

          [¶22] Appellate courts first look to the General Assembly's chosen language to discern the legislative intent. See Steedle v. Sereff, 167 P.3d 135, 140 (Colo. 2007). The court must " give effect to the General Assembly's choice of wording." Colo. Dep't of Pers. v. Alexander, 970 P.2d 459, 465 (Colo. 1998). When the language is plain, the court must apply the text as written and not force or strain its interpretation. Welby Gardens Co. v. Adams Cty. Bd. of Equalization, 56 P.3d 1121, 1123 (Colo.App. 2002), aff'd, 71 P.3d 992 (Colo. 2003).

         C. The ALJ's Determination

          [¶23] The ALJ concluded that she had authority to review Williams' claim that CSP had acted arbitrarily or capriciously.

          [¶24] In the initial order, she first explained that section 24-50-125.3 -- permitting a nonemployee, like Williams, to appeal a discriminatory action to the Board -- does not " place a limit on the Board's commensurate jurisdiction under § 24-50-103(6)." Thus, according to the ALJ, when the Board reviews allegedly discriminatory actions under section 24-50-125.3, " there is a rebuttable presumption that the Board may [also] reverse or modify the action if it finds it to have [also] been arbitrary [or] capricious[.]" Next, the ALJ interpreted the tolling provisions to permit applicants to select their appellate forum. Finally, the ALJ concluded that requiring a nonemployee to pursue two separate appeals -- an arbitrary or capricious claim to the Director and a discrimination claim to the Board -- produced an " untenable result" in terms of judicial economy.

          [¶25] The Board affirmed the ALJ's conclusion without additional analysis.

         D. Application

         1. Statutory Construction

          [¶26] Although the Board lacks express authority to review a nonemployee's claim that the appointing authority was arbitrary or capricious, it argues that reading the plain language of several provisions together at least implies this power. The applicable language of section 24-50-103(6) -- permitting the Board to reverse arbitrary or capricious actions if the claim was " appealable to the board" -- and section 24-50-125.3 -- permitting the Board to review nonemployee discrimination claims -- stems from the same bill. See Ch. 194, sec. 2, § 24-50-103(6), 1984 Colo. Sess. Laws 705 (amending section 24-50-103(6)); Ch. 194, sec. 11, § 24-50-125.3, 1984 Colo. Sess. Laws 712-13 (adding section 24-50-125.3). For this reason, the Board asserts that we should construe these provisions together. See Buck v. Dist. Court, 199 Colo. 344, 347-48, 608 P.2d 350, 352 (1980) (two statutes, enacted contemporaneously, should be construed together).

          [¶27] The result, according to the Board, is that because it may review appeals by nonemployees under section 24-50-125.3, those claims are " appealable to the board" as required by section 24-50-103(6), and thus they can be reviewed under the " arbitrary [or] capricious" language in the latter section. The Board also points out that when the General Assembly enacted section 24-50-125.3, it did not limit the Board's jurisdiction in section 24-50-103(6).

          [¶28] But this analysis ignores the difference in the scope of the Board's review between section 24-50-125.3 and section 24-50-103(6). On the one hand, section 24-50-125.3 empowers the Board to review appeals -- including those by nonemployees -- for allegedly discriminatory action. Thus, only discrimination claims are " appealable to the board" under section 24-50-103(6). On the other hand, section 24-50-103(6) empowers the Board to review such appealable claims for, as relevant here, action that is " arbitrary [or] capricious." But the Board does not explain, nor can we discern, how section 24-50-103(6) could expand its review for discriminatory action into a review for arbitrary or capricious action.

          [¶29] Although section 24-34-301, C.R.S. 2015, does not define discrimination, the term has a well-understood meaning in the employment context. See, e.g., Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 682 n.22, 103 S.Ct. 2622, 77 L.Ed.2d 89 (1983) (discrimination means " less favorable" treatment on a statutorily prohibited basis). In contrast, an administrative agency has acted arbitrarily or capriciously where " no substantial evidence exists in the record to support the agency's decision." Gessler v. Grossman, 2015 COA 62, ¶ 39.

          [¶30] The Board's interpretation would conflate these fundamentally different inquiries. This interpretation would leave one to wonder whether the Board could uphold an appointing authority's action for insufficient evidence of less favorable treatment, but then overturn the action because the evidence showed that the appointing authority had acted arbitrarily or capriciously.

          [¶31] No provision precludes Board review of a nonemployee's claim that the appointing authority acted arbitrarily or capriciously. But section 24-50-112.5(4)(a)-(b) grants the Director express authority to do just that. And " when the [General Assembly] includes a provision in one statute, but omits that provision from another similar statute, the omission is evidence of its intent." Deutsch v. Kalcevic, 140 P.3d 340, 342 (Colo.App. 2006). Thus, we should not infer that the General Assembly intended to implicitly provide the Board with the same authority that it expressly provided to the Director.

          [¶32] To be sure, where an appointing authority's action is challenged on multiple grounds, the Board and the Director may have overlapping appellate authority in some respects. See § 24-50-112.5(4)(c)-(d) (describing appellate process if complainant files appeals with both the Director and the Board). But the General Assembly did not merge the Director's authority into that of the Board. To do so -- as the Board urges -- would add words to these statutes. This an appellate court cannot do. See Bedee v. Am. Med. Response of Colo., 2015 COA 128, ¶ 39, 361 P.3d 1083.

          [¶32] As well, interpreting the statutory framework as the ALJ did -- permitting aggrieved nonemployees to select their forum for claims alleging arbitrary or capricious action -- impermissibly stretches the text in another way. Sections 24-50-112.5(4)(c) and (d) -- tolling the time in which the Director must issue a decision until the Board has reached a final decision -- assume that even if the aggrieved applicant appealed to the Board, the Director could still have a question to resolve. And as relevant here, that question could be the merits of a nonemployee's claim the appointing authority was arbitrary or capricious, because the Director has express authority to consider such a claim. See § 24-50-112.5(4)(b).

          [¶34] As for judicial economy, policy considerations are subordinate to giving effect to unambiguous statutory language. See Swieckowski by Swieckowski v. City of Ft. Collins, 934 P.2d 1380, 1387 (Colo. 1997) (" [W]e are constrained by limiting principles of judicial review to interpret statutory language consistently with the intent of the General Assembly and with the plain meaning of the words chosen by this body when it enacts a statute. We may not substitute our view of public policy for that of the General Assembly." ); People in the Interest of D.R.W., 91 P.3d 453, 458 (Colo.App. 2004) (" We reject policy considerations in favor of the plain language of the statute." ). And by tolling the Director's deadline until " final agency action" by the Board, the statute recognizes that a redundant decision by the Director might be avoidable if both appeals arose from the same appointing authority's action.

          [¶35] Undaunted, the Board points out that section 24-50-112.5(4)(e) permits " any person" to file an appeal to the Board after the Director's final decision. The Board argues that this section negates the Director's exclusive authority over claims alleging arbitrariness or capriciousness when discrimination is also alleged. But this section became effective after the ALJ had determined that she had authority to review Williams' claim CSP acted arbitrarily or capriciously. Ch. 260, sec. 9, § 24-50-112.5(4)(e), 2012 Colo. Sess. Laws 1350 (effective January 1, 2013). Thus, it does not illuminate interpretation of the statutes that existed during Williams' administrative proceedings. See Boulder Med. Ctr. v. Moore, 651 P.2d 464, 466 (Colo.App. 1982) (" [B]ecause this statute was not in effect at the time of Moore's termination and at the time of trial, and because retrospective application is forbidden in the absence of plain language, this section does not apply here." ).

         2. Deference

          [¶36] Recall that when a statute " is silent or ambiguous with respect to a specific issue, courts must consider whether the agency's regulation is based on a permissible construction of the statute." Xerox Corp., 87 P.3d at 192. An ambiguous statute is one " fairly susceptible of more than one interpretation." Miller v. Indus. Claim Appeals Office, 985 P.2d 94, 96 (Colo.App. 1999).

          [¶37] In contrast, here the statutory scheme unambiguously grants the Director authority over claims of an arbitrary or capricious action. It does not grant that same authority to the Board. As well, the statutes are not silent on the Board's authority to review nonemployee claims: the Board may review such claims alleging discrimination or other unfair employment practices " as defined in part 4 of article 34." § 24-50-125.3.

          [¶38] Finally, the Board's rules do not grant it authority to consider claims alleging arbitrary or capricious action. Rule 8-42 says that claims with no allegations of discrimination shall be filed with the Director. Dep't of Pers. & Admin. Rule 8-42, 4 Code Colo.Regs. § 801-1 (2011). But the then-applicable Rule 8-46(A) gave the Board discretion to grant a hearing in claims alleging discrimination " where there is no mandatory right to a hearing, including discrimination in the selection and examination process[.]" Dep't of Pers. & Admin. Rule 8-46(A), 4 Code Colo.Regs. § 801-1 (2011).

          [¶39] Given all this, we conclude that the Board lacked authority to review Williams' claim CSP acted arbitrarily or capriciously.

         E. Remand

          [¶40] Section 24-50-112.5(4)(a) grants an aggrieved applicant ten days to appeal an appointing authority's decision to the Director. But the Board points out -- and CSP does not dispute -- that this time " does not run if the notice did not properly advise the employee of his or her right to appeal." Renteria v. Colo. State Dep't of Pers., 811 P.2d 797, 802 (Colo. 1991); see also Cunningham, 823 P.2d at 1380.

          [¶41] CSP's letter notifying Williams that he would not be reinstated failed to explain Williams' right to appeal to the Director. Thus, we remand Williams' claim CSP acted arbitrarily or capriciously to the Board for referral to the Director, who may consider whether the claim has been tolled by lack of notice. If the Director so concludes, then the Director may consider the merits of the claim. However, because the Board set aside the refusal to reinstate as discriminatory and we are upholding its decision, the Director may instead conclude that Williams' claim that CSP acted arbitrarily or capriciously has become moot.

         III. Discrimination

          [¶42] CSP next contends the record lacks sufficient evidence to support the ALJ's conclusion that CSP discriminated against Williams based on his sexual orientation. We discern ample record support to affirm the ALJ's conclusion.

         A. Preservation and Standard of Review

          [¶43] Williams agrees that CSP preserved this contention.

          [¶44] A reviewing court will not reverse an administrative agency's decision " unless the agency acted in an arbitrary and capricious manner, made a determination that is unsupported by the evidence and the record, erroneously interpreted the law, or exceeded its constitutional or statutory authority." Colo. Citizens for Ethics in Gov't v. Comm. for the Am. Dream, 187 P.3d 1207, 1214 (Colo.App. 2008).

         B. Law

          [¶45] Under CADA, a prima facie discrimination case requires proof that (1) the employee belongs to a protected class; (2) the employee was qualified; (3) despite being qualified, the employee suffered adverse employment action; and (4) the circumstances give rise to an inference of discrimination based on membership in the protected class. St. Croix v. Univ. of Colo. Health Scis. Ctr., 166 P.3d 230, 236 (Colo.App. 2007); see also Colo. Civil Rights Comm'n v. Big O Tires, Inc., 940 P.2d 397, 400 (Colo. 1997).

          [¶46] If the employee establishes a prima facie case, the burden shifts to the employer to " articulate some legitimate, nondiscriminatory reason for the employment decision." St. Croix, 166 P.3d at 236; see alsoMcDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) (describing burden shifting analysis under Title VII).[2] Then if the employer provides a legitimate, nondiscriminatory reason for its actions, the employee must show that the ...

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