Hospital board's action to cut some employees pay by 5% may have been illegal

    The Beaufort Regional Health System Board of Commissioners and Beaufort Regional Medical Center Board of Trustees (same membership) meeting in joint session on November 18, 2010 voted to impose a 5% pay reduction on all employees making less than $10 per hour and to ask that all contract employees (physicians etc.) voluntarily accept a 5% reduction in their pay, effective with the next payroll period.

    The boards had previously voted to impose a similar reduction except it had couched that action in terms of a "deferral" in that it "hoped" that the reduction would be restored at a future date. It has been reported that some employees of the system contacted the N. C. Department of Labor and the board was advised that the Labor Department had ruled that such action was illegal without due notice, which had not been given. So the previous action was rescinded by the motion to impose a straight reduction in pay, which does not require due notice in that no expectation of rescission at a future date is included in the latest action.

    But there is a problem with this.

    All of these decisions and discussions were obviously made in closed session and as the video exhibits, the decisions had already been made prior to the action seen in the video of the open session. In plain language, the board discussed the issue in closed session, came out into open session and took a vote and then went back into closed session to discuss another matter (negotiation on the RFP's.) The Observer was not present for the vote following the closed session so we could not protest the action. But we have been advised that the action to make a pay cut was done illegally in that such a policy decision is not one of the exceptions to the Open Meetings laws that is permitted to be done in closed session. The board's attorney was present at both the earlier meeting when the illegal action (rescission of pay without due notice) was made and also at this session when the subject was illegally discussed in closed session with the attorney present.

    Here's the video of what happened:

    Note that after the motion to affect the 5% pay cut the chair does not even call for discussion on the motion and there is none even by the member who votes in opposition to the motion.

    Moreover, the motion appears to have violated parliamentary procedure (motion to rescind must be made by one who voted in the affirmative on the action being rescinded).

    But the major issue here is the violation of the Open Meetings law. It is another example of foolish decisions the Hospital board has been making consistently since we have been covering these meetings. It consistently goes into closed session to ostensibly discuss a matter that is exempt from the Open Meetings law but while in that closed session they wonder into discussions that are not exempt. The 5% pay reduction is a perfect example.

    Our Court of Appeals has ruled that:

       "[T]he public officers and attorneys [can]not abuse their trust by extending the [attorney/client]        privilege as a mere conduit to suppress public observation of the decision-making process." Thus,        discussions regarding the drafting, phrasing, scope, and meaning of proposed enactments would be        permissible during a closed session. Discussions regarding their constitutionality and possible legal        challenges would likewise be so included. But as soon as discussions move beyond legal technicalities and        into the propriety and merits of proposed enactments, the legal justification for closing the session ends.

    Reducing payroll is a policy issue. There is nothing confidential about an across the board payroll reduction. (If they were discussing reducing specific people's salaries for disciplinary reasons that would possibly be excluded as "confidential personnel information" or at least the part dealing who the reason for the disciplinary action. And if they wanted to find out how to make a salary cut in a legally defensible manner, that would be confidential.) But an across the board reduction is not confidential personnel information. The public has a right to hear the discussion, including the arguments made during the consideration. Here, they did all that discussion in secret session and then came out with the outcome pre-ordained and simply ratified the decision in public.

    The same is true to meet with their attorney to consider confidential legal information. Not all legal advice between the attorney and the board is confidential. It depends on the circumstances in each case. But the courts have said that the burden is on the governing body to present enough information to establish the necessity of a closed session. (Multi Media v. Henderson County, 136 NC App 567, 2000). And the court said the reasons must be narrowly construed. Where a complaint has been filed (lawsuit or demand for arbitration or mediation or even where there has a public threat to do so) the consideration of that complaint and what the legal implications are and instructions to the attorney are confidential. But the law provides: "A motion based on subdivision (a)(3) of this section [the attorney-client exception] shall identify the parties in each existing lawsuit concerning which the public body expects to receive advice during the closed session. N.C. Gen. Stat. § 143-318.11 (1999) (emphasis added).

    So just because the attorney is present does not make it an exempt reason under the Open Meetings law to close the meeting.

    That is the mistake this board makes consistently. It does not draw what the courts have called a "bright line" between confidential information/discussions and non-confidential information/discussions. The reason we know that, is by simply reviewing their open actions (such as the video above) and the minutes of the closed sessions, which the law requires to be sufficient to show the general nature of the discussions and what constitutes confidentiality. And under the former chairman (who is an attorney) they even made such decisions in closed session without acting in public but then referred to those secret decisions at some later date. Clearly that is a violation of the prescription that the vote must be taken in open session.

    The problem is: What should be done about it. The Observer intends to contest this behavior in the future.

    In the instance of the 5% across the board salary reduction we would contend the action is illegal. It is null and void. This is because a general policy issue (reducing payroll by 5%) was discussed in closed session. But the remedy could be simple. That is, just go back and do it correctly. So employees who might want to contest the action will find that all the board has to do is go back and re-do its action and do it in open session.

    But the real problem comes if the board proceeds to cut employees pay and weeks or months later the employees file suit and demand reimbursement because the initial decision was made in an illegal session. The Hospital may then find itself owing thousands or even hundreds of thousands of dollars in back pay to employees, plus their attorney's fees to boot.

    Delma Blinson writes the "Teacher's Desk" column for our friend in the local publishing business: The Beaufort Observer. His concentration is in the area of his expertise - the education of our youth. He is a former teacher, principal, superintendent and university professor. In this case, we do appreciate his efforts on this most important issue - The Beaufort Regional Health System debacle.

BRHS posts $5.6 million loss, seeks loan on its receivables Regional Health System, Governing DareCounty Beaufort County Government's General Meeting Agenda: Monday, December 6, 2010

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