When the 1991 NC legislature rewrote the state personnel statutes to make career-employee status depend on job level rather than pay grade, and said the new rules applied to employees hired on or after July 1, 1993, did that leave employees hired before July 1, 1993 stuck under the old (slower) tenure rules?

Plain-English summary

North Carolina's State Personnel Director asked whether employees hired before July 1, 1993 would benefit from new, shorter requirements for career employee status, even though the act's effective-date section said it applied to employees hired on or after that date. The AG concluded that current employees and new hires should be subject to the same position-level classification system when the act took effect.

The opinion explains that the 1991 act replaced several references to pay-grade-dependent “permanent employee” status with level-dependent “career employee” status across the personnel statutes. Reading the effective-date clause to preserve the old system for current employees would create a dual system that disadvantaged them. The AG found no stated legislative reason for such a distinction, noted potential equal-protection concerns, and read the act as intending equal treatment.

The answer addresses which classification system applies. It does not decide the exact day on which an employee who had already accumulated substantial service became a career employee or specify how to calculate an individual's service credit.

Currency note

The opinion interprets the reform that took effect in 1993. Check current personnel statutes and an employee's actual classification record for a present tenure question.

Background and statutory framework

The Personnel Director's example compared two Attorney I employees in the same pay grade: one hired before the new system and one after. Under the old rule, the earlier hire would reach permanent status later than the new hire reached career status. The opinion treated that disparity as a reason to examine whether the legislature really intended a dual system.

The AG reviewed the act's revisions to G.S. 126-4, 126-5(c), 126-36.2, 126-39, and related terminology. It said the revisions eliminated pay-grade-based terms and favored one level-dependent system. A contrary reading, the opinion warned, could invite an equal-protection or class-legislation challenge. Its conclusion was an interpretation of legislative intent, not a court ruling on constitutionality.

Common questions

Were employees hired before July 1, 1993 kept under the old pay-grade system?

The AG said no. Current employees and new hires should be covered by the same level-dependent classification system when the act became effective.

Did the AG decide an existing employee's exact career-status date?

No. The opinion answers the system-wide interpretation question. It does not calculate how much prior service counts for a particular employee or whether someone already past a new threshold acquired status immediately on the effective date.

Why did the AG favor a single system?

The act removed old pay-grade-dependent terminology across multiple sections, and the AG found no clear indication that the legislature intended to disadvantage current employees. It also noted constitutional concerns that a dual system could raise.

Source

• Landing page: https://ncdoj.gov/opinions/career-state-employees/

Citations

• N.C.G.S. § 126-1A (career state employee definition)
• N.C.G.S. §§ 126-4, 126-5(c), 126-36.2, 126-39 (sections rewritten by Chapter 354)
• N.C.G.S. § 126-7.1 (priority consideration)
• 1991 Session Laws, Chapter 354, §§ 1-9
• Powe v. Odell, 312 N.C. 410, 322 S.E.2d 762 (1984)
• Swanson v. State of North Carolina, 330 N.C. 390, 410 S.E.2d 490 (1991)
• Harris v. Flaherty, 90 N.C. App. 110, 367 S.E.2d 364 (1988)
• Cheek v. City of Charlotte, 273 N.C. 293, 160 S.E.2d 18 (1968)

Original opinion text

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