Citation Numbers: 94 Op. Att'y Gen. 97
Judges: DOUGLAS F. GANSLER, Attorney General.
Filed Date: 6/1/2009
Status: Precedential
Modified Date: 7/5/2016
You have asked for our opinion on the legality of a longstanding practice under which the Maryland State Department of Education ("MSDE" or "Department") contracts with a local school system to "borrow" employees of the local system to work at the Department. The practice of entering into these agreements, known as "loaned educator" contracts, was questioned by the Legislative Auditor during a recent audit.
In our opinion, MSDE may enter into "loaned educator" contracts with local school systems to obtain the services of employees of those school systems on a temporary basis. If a loaned educator is to work for MSDE for more than a brief period of time, the individual should become a State employee in the State Personnel Management System.
We understand that, during recent years, approximately 60 to 80 individuals have worked at MSDE each year under loaned educator contracts. Some individuals have worked at MSDE for many years under a series of such contracts. Many of these individuals have performed administrative or managerial functions at MSDE. Indeed, we understand that loaned educators have filled key positions such as Assistant State Superintendent, Executive Director, and Director positions in recent years. The compensation of some of the loaned educators pursuant to the local system's pay scale exceeds what would be paid under State pay scales. MSDE's payments for loaned educators are reflected in the contractual services, rather than the personnel, section of the Department's budget.1
You state that the Legislative Auditor raised questions about the legality of MSDE's practice of entering into such contracts during a recent audit. Accordingly, you requested this opinion.
The use of loaned educator contracts to staff the Department would appear to be at odds with this general policy, particularly to the extent that loaned educators occupy virtually permanent positions at MSDE. The legality of the practice, however, must be measured against specific laws. As noted above, the loaned educator agreements are contracts for personal services. We have therefore considered the validity of loaned educator contracts in light of: (1) the State Procurement Law; (2) the State personnel law — in particular, the statute governing contractual employees; and (3) the laws that specifically relate to the staffing of the Department.
The governing statue defines a "contractual employee" as an individual:
(1) who, under a written agreement, provides temporary personal services to the State for pay;
(2) who is not employed in a budgeted position; and
(3) who has an employer-employee relationship with the State in which the State:
(i) furnishes necessary tools and a place to work;
(ii) has the right to control and direct the details, means, and results of the performance of the services; and
(iii) has the right to discharge the individual from employment.
SPP §
Loaned educators do not appear to fit this definition. As we understand it, a loaned educator does not have a contractual relationship with the State; rather, the contractual relationship is between MSDE and the local school system. If the State enters into a contract with a third party to provide services for the State and that contractor employs individuals to perform those services, those individuals remain employees of the contractor and are not transformed into contractual employees of the State. Moreover, while MSDE has the right to terminate the contract with the local *Page 101 school system, it does not have the right to discharge the individual from employment. If the contract were terminated, the individual would remain an employee of the local school system unless that system chose to discharge the individual.
Because loaned educators are not contractual employees, loaned educator contracts are not subject to the restrictions in SPP §
On the other hand, the statute concerning appointment of MSDE professional staff provides that, from nominees proposed by the State Superintendent, the State Board of Education "shall appoint all professional assistants to the Department, who shall be in the executive service, management service, or special appointments in the State Personnel Management System." Annotated Code of Maryland, Education Article ("ED"), § 2-104(b) (emphasis added). This statute appears to mandate that the Department's professional staff be State employees. This would appear to rule out the use of loaned educators who remain employees of a local school system.
We believe that these provisions may be harmonized when their historical development is considered.
1. Statute and Regulation Concerning Reciprocal Relationships
A longstanding Department regulation specifically authorizes intergovermental contracts with local school systems for the services of local school personnel. This regulation pre-dates the creation of the Code of Maryland Regulations ("COMAR") in the early 1970s, but has since been incorporated into COMAR.6 It states: *Page 102
02. Reciprocal Relationships with the State Department of Education.
A. Contracts and Agreements for the Release of Local School Personnel to the State Department of Education. All agreements shall be in writing and shall set forth the following:
(1) The period of time for the release of local school personnel to the State Department of Education;
(2) The terms of the financial reimbursement by the State to the local school system;
(3) The contract and tenure rights of the teacher may not be affected by the agreement;
(4) The agreement shall be signed by the local school superintendent and by the Secretary-Treasurer of the State Board of Education and when signed shall be filed by the Secretary in the office of the Board.
COMAR
In 1966, pursuant to a joint resolution of the Legislature, the Governor appointed a commission to review the laws governing schools in Maryland. The Commission was chaired by David W. Zimmerman, then Deputy State Superintendent of Schools, and it is sometimes referred to as the "Zimmerman Commission." Among its various recommendations, the Zimmerman Commission proposed that the Legislature enact a new provision, to be codified in the State education law at Article 77, § 45A, governing "reciprocal procedures *Page 103 for the transfer of professional personnel from the local school systems to the State Department of Education." Report of the School Law Revision Commission (1968) at p. 36. The Zimmerman Commission suggested the following language:
All administrative and supervisory personnel who shall transfer from local school systems in the State and who shall be appointed to comparable job classifications in the State Department of Education shall be given credit as employees of the State Department of Education for the years of service rendered as employees of the local school systems from which they shall have transferred, for the purposes of establishing compensation rates and basic rates for vacation and sick leave credit earnings. No such employee who has transferred from a local school system to the State Department of Education shall receive any diminution in compensation solely as a result of such transfer and appointment.
Id. at 58. The intent of this provision appears to have been to "hold harmless," in terms of pay and benefits, any professional employees of local school systems who transferred to MSDE. The premise appears to be that an employee of a local school system who transferred to MSDE would become an employee of MSDE.
A version of this proposal was enacted by the Legislature as part of a 1969 overhaul of the State school laws. Chapter 405, Laws of Maryland 1969. It was codified as Article 77, § 31 — between newly codified sections concerning appointment of deputy superintendents and other professional assistants (§§ 30, 32) — and gave any employees who transferred from local systems "credit" at MSDE for the years they spent in the local systems. (The guarantee against "diminution of compensation" was apparently dropped). Again, the premise appears to be that the former employees of local school systems would become employees of MSDE. A few minor changes were made to the statute in the mid-1970s. When the Education Article was created in 1978, this section was separated from the provisions concerning appointment of professional *Page 104
assistants8 and codified at ED §
At about the same time that the Zimmerman Commission made its recommendation concerning "reciprocal procedures" for the transfer of professional employees from local school systems to MSDE, the State Board of Education adopted what was then called a "bylaw" and what is now the regulation codified at COMAR
It is thus apparent that during the late 1960s considerable thought was given by policy makers to the placement at MSDE of local school personnel. Given the passage of time and the minimal *Page 105
legislative history preserved from that period, we have found no documentation of the purpose of such placements. Nor is the precise relationship between ED §
What is clear from the text of the regulation is that it contemplated a practice of temporary "detailing" of local employees to the MSDE. Presumably, those who stayed with MSDE and did not return to their local systems would become MSDE employees and would receive the employment credit conferred by ED §
The question remains whether the contracts authorized by COMAR
(a) The following professional assistants shall be appointed to the Department:
(1) No more than three Deputy State Superintendents of Schools.
(2) Any assistant State superintendents and directors authorized by the State Board and provided in the State budget; and
(3) Any other professional assistants and agents authorized by the State Board and provided in the State budget.
(b)(1) From the nominees proposed by the State Superintendent, the State Board shall appoint all professional assistants to the Department, who shall be in the executive service, management service, or special appointments in the State Personnel Management System.
(2) With the advice of the State Superintendent, the State Board shall set qualifications for each professional position.
(3) The State Superintendent may transfer professional assistants within the Department as necessary.
ED §
Whether Loaned Educators are "Provided in the State Budget"
As to the first question, one might read "provided in the State budget" to mean that the loaned educators are positions specifically authorized by PIN number in the budget materials submitted with the State budget bill. If so, loaned educators do not satisfy this criterion. *Page 107 On the other hand, there is provision for payment of these contracts in the portion of the State budget that appropriates funds to MSDE for contractual services. Accordingly, it is possible to conclude that loaned educator appointments satisfy this criterion.
Whether Loaned Educators Must be in the State Personnel ManagementSystem
With respect to the second question, a loaned educator remains an employee of a local school system and is not in the State Personnel Management System. While the verb "shall" ordinarily is presumed to express a mandate, 11 on occasion it does not.12 If the reference to the State Personnel Management System in ED §
The statement that professional personnel at MSDE "shall be in the State Personnel Management System" was not part of this statute when the provisions concerning reciprocal relationships were enacted in the late 1960s. See Annotated Code of Maryland, Article 77, §§ 30, 32 (1969 Repl. Vol.). Nor did the phrase appear in the statute when it was recodified as ED §
The phrase "shall be in . . . the State Personnel Management System" was added as part of code revision and was not intended to create a new mandate. It is likely that the revisors felt comfortable that this phrase did not effect a substantive change in the law because it simply reflects a general State policy expressed in the various statutes set forth in Part II.A. of this opinion. In addition, the statute otherwise appears to presume that the professional assistants listed in ED §
From the preceding discussion, it is evident that ED §
In our view, the apparently contradictory provisions may be harmonized if an individual works at the Department under a loaned educator contract only temporarily and either transfers to State service or returns to the local school system. The statute and related regulation concerning "reciprocal relationships" with local school *Page 109
systems, which were adopted in the late 1960s, appear to contemplate that local school personnel may perform professional functions at MSDE on a temporary basis under an intergovernmental contract before fully transferring to State service. In order to comply with the general State policy favoring the use of budgeted State employees to carry out State functions — reflected as well in the language of ED §
An analogous situation was addressed in a prior Attorney General opinion. 64 Opinions of the Attorney General 246 (1979). That opinion concerned the question of whether an individual who is nominated to a cabinet post at the beginning of a Governor's term could carry out the duties of that position prior to satisfying all the conditions for holding the office. Attorney General Sachs concluded that a nominee could serve in an "acting" capacity prior to confirmation.15 In a similar fashion, a loaned educator may fill a professional assistant position at MSDE for a temporary period. However, if such an individual were to perform professional functions at the Department on more than a short-term basis, the legal basis seems uncertain at best. Cf. Letter of Assistant Attorney General Robert A. Zarnoch to William S. Ratchford, II (February 23, 1994) (concluding that Baltimore City employee working at the State Department of Human Resources could not serve in high level position in that department under statutory language that distinguished between "assistants" and "professional consultants" and only provided for designation of "assistants" to be in charge of area of responsibility).
Douglas F. Gansler
Attorney General
Robert N. McDonald
Chief Counsel
Opinions and Advice
(a) For the purpose of establishing compensation rates and the basic rates for vacation and sick leave credit earnings, all professional personnel who previously were employed by a county school system or the public library system in this State and who are appointed to positions in the Department shall be given credit as employees of the Department for the years of service as employees of the county school system or public library system from which they transferred.
(b) For the purpose of establishing vacation and sick leave credit earnings, this section applies to all professional personnel employed by the Department before July 1, 1972.
Subsection (b) was added to the statute in 1974, presumably to ensure that a 1972 amendment that had broadened the description of applicable employees would apply retroactively. See Chapter 424, Laws of Maryland 1974; Chapter 551, Laws of Maryland 1972. See generally Letter from Special Assistant Attorney General Malcolm Kitt to Dr. Quentin L. Earhart, Deputy State Superintendent (April 20, 1976).
Maryland State Bar Ass'n v. Frank , 272 Md. 528 ( 1974 )
In Re Anthony R. , 362 Md. 51 ( 2000 )
Secretary, Maryland Department of Personnel v. Bender , 44 Md. App. 714 ( 1980 )
Reier v. State Department of Assessments & Taxation , 397 Md. 2 ( 2007 )
Cornfeld v. State Board of Physicians , 174 Md. App. 456 ( 2007 )