This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1994).




Gerald E. Jacobs, et al.,



Crow Wing County,


Commissioner of Veterans Affairs,


Filed October 22, 1996


Schumacher, Judge

Department of Veterans Affairs

File No. 8-3100-9469-2

File No. 8-3100-9474-2

Gregg M. Corwin, 508 East Parkdale Plaza Building, 1660 South Highway 100, St. Louis Park, MN 55416-1534 (for Respondents Gerald E. Jacobs, et al.)

Thomas Fitzpatrick, Thomas Fitzpatrick Law Office, 220 Laurel Street, Brainerd, MN 56401 (for Relator)

Patricia A. Maloney, Jill E. Coyle, Ratwik, Roszak & Maloney, P.A., 300 Peavey Building, 730 Second Avenue South, Minneapolis, MN 55402 (for Relator)

Hubert H. Humphrey III, Attorney General, Donald E. Notvik, Assistant Attorney General, 525 Park Street, Suite 200, St. Paul, MN 55103-2106 (for Respondent Commissioner of Veterans Affairs)

Considered and decided by Short, Presiding Judge, Parker, Judge, and Schumacher, Judge.



Relator Crow Wing County (the county) challenges the decision by the Commissioner of Veterans Affairs (the commissioner) that respondents Gerald Jacobs and Siegfried Stier are protected by the Veterans Preference Act and that the county did not act in good faith when it eliminated their positions. We affirm.


Stier and Jacobs are veterans who were employed by the county. Stier was hired as personnel coordinator in 1989. The personnel coordinator deals with employment policies, labor agreements, compensation, training, employee benefits, and the budget. The county board of commissioners (the board) made final decisions on all personnel matters, although Stier assisted in hiring county employees by placing advertisements, drafting posting notices, screening applicants for minimal qualifications, performing initial interviews, scheduling further interviews with department heads, and ensuring compliance with affirmative action and anti-discrimination laws.

Jacobs was hired as insurance risk manager in 1987. The risk manager is responsible for planning and directing a risk management program, collaborating with department heads in implementing the program, researching risk liability and making recommendations to reduce exposure, and administering safety, employee benefit, and worker's compensation programs. Jacobs's job was part of the personnel department, although Stier never supervised Jacobs and Jacobs reported directly to the board and its building and insurance committees. Jacobs occasionally met with the board in closed session to discuss litigation and insurance matters, and he had access to confidential information including privileged attorney-client material.

In 1993, Jacobs also began serving as the county's maintenance manager when the board transferred management of the maintenance department from the auditor to the risk manager. Jacobs oversaw a maintenance and custodial crew of six people, prepared an annual budget, and was ultimately responsible for planning and scheduling maintenance and repairs, obtaining bids on construction contracts, and overseeing construction. A maintenance supervisor was responsible for day-to-day maintenance matters.

Neither Stier nor Jacobs had a deputy, but they shared a secretary. Both Stier and Jacobs interviewed the secretary, Sarah Carlson, and Stier made the decision to hire her, although it was subject to the board's approval. According to a pay equity report, which ranked county positions in order from the most responsible and independent to the least, the personnel coordinator was ranked third, and risk manager was sixth.

John Graham had been the county attorney until losing the 1994 election. While he was county attorney, a woman in his office filed sexual harassment charges against him. Stier investigated the claim and recommended that the woman be transferred to a different department, but the board rejected the recommendation. Stier then advised the woman to file a complaint with the Minnesota Department of Human Rights. Graham publicly called for Stier's termination. Commissioner Arthur Wagner publicly supported Graham in these statements, and Commissioner Mary Koep was Graham's political ally. Stier was excluded from closed sessions of the board held to consider the sexual harassment charges. In June 1994, Graham sued Stier, but the action was dismissed by summary judgment. In December 1994, Graham sought an indictment against Stier for destroying secret files, but the grand jury did not indict Stier.

In January 1995, the board faced a budget deficit and eliminated several positions, including personnel coordinator, risk manager, and personnel secretary. Koep and Wagner made the resolutions eliminating the positions.

Carlson testified that Wagner told her that he was sorry about her job but that "something had to be done about" Stier and Jacobs. Wagner told her he was "working on" a new position for her, but it could not be in the personnel department because otherwise it would appear that Stier and Jacobs had been fired. Carlson was then employed by the county in a clerical capacity.

Stier and Jacobs filed petitions with the Department of Veterans Affairs alleging their positions were not abolished in good faith and requesting a hearing under the Veterans Preference Act (VPA). The board denied the hearing requests. The board also voted, on Koep's motion, to secure Stier's and Jacobs's offices, and the locks were changed. Stier and Jacobs nonetheless gained access to the offices. (Jacobs was concerned about the confidential records in the office pertaining to the sexual harassment charges.) Wagner and Graham were at the offices and Wagner told Stier and Jacobs to get their belongings and get out.

A consolidated administrative hearing was held pursuant to Minn. Stat. § 197.481, subd. 4 (1994). An administrative law judge (ALJ) issued findings of fact, conclusions, and recommendations, which were adopted by the commissioner.[1] The county then brought this appeal through a writ of certiorari.


The county appealed the Commissioner's decision in accordance with Chapter 14. See Minn. State. SS197.481, subd. 6 (1994) (authorizing appeal pursuant to Chapter 14). This court may reverse or modify administrative agency decisions if the administrative findings and decisions are unsupported by substantial evidence, arbitrary and capricious, or in error as a matter of law. Minn. Stat. § 14.69 (1994). Agency decisions are presumed to be correct and the appealing party has the burden of proving that one or more of the provisions of section 14.69 were violated. See Crookston Cattle Co. v. Minnesota Dep't of Natural Resources, 300 N.W.2d 769, 777 (Minn. 1980). Whether the VPA applies is ultimately a question of law. Harr v. City of Edina, 541 N.W.2d 603, 605 (Minn. App. 1996).

1. The county argues the ALJ erred in concluding that neither Stier nor Jacobs was a department head within the meaning of the VPA. The burden of establishing that an employee is the head of a department is on the county board as the "appointing officer." See Holmes v. Board of Comm'rs, 402 N.W.2d 642, 644 (Minn. App. 1987).

The VPA prohibits public institutions from discharging a veteran "except for incompetency or misconduct shown after a hearing, upon due notice, upon stated charges, in writing." Minn. Stat. § 197.46 (1994). The VPA does not apply, however, to persons employed as a

private secretary, teacher, superintendent of schools, or one chief deputy of any elected official or head of a department, or to any person holding a strictly confidential relation to the appointing officer.

Id. The supreme court has construed the statute to exempt the head of a department as well as his or her chief deputy. State ex rel. Sprague v. Heise, 243 Minn. 367, 371, 67 N.W.2d 907, 911 (1954). There are eight factors to examine in determining if an employee is a department head:

(1) Does the alleged department head have charge of the work done by his department?

(2) Does his work require technical, professional training?

(3) Is he the highest authority at that level of government as to his official duties?

(4) Does he supervise all of the work in his department?

(5) Does the success of the department depend on his technique?

(6) Are the employees in the department under his direction?

(7) Are his duties more than merely different from other employees?

(8) Does he have power to hire and fire subordinates?

State ex rel. McGinnis v. Police Civil Serv. Comm'n, 253 Minn. 62, 75, 91 N.W.2d 154, 163 (1958). Ordinarily, a department must be sufficiently important enough to have more than one employee before anyone can be classified as a department head. Sprague, 243 Minn. at 374, 67 N.W.2d at 912.

With respect to the first, third, fifth, and eighth McGinnis factors, the ALJ found that although Stier and Jacobs (in his capacity as risk manager) were responsible for the work done by them and Carlson, they were not the highest authorities as to their official duties because they were subject to the board's control. The ALJ stated that the fourth, sixth, and seventh factors reflect the requirement that a worker must ordinarily work in a multi-employee office to be deemed a department head.

The pay equity report shows that Stier and Jacobs had important jobs in the county, but they were not in positions of sufficient authority to warrant the department head designation. This is not a case where a veteran controlled an entire operation. Cf. Granite Falls Mun. Hosp. & Manor Bd. v. State, Dep't of Veterans Affairs, 291 N.W.2d 683, 686 (Minn. 1980) (hospital administrator was department head where he had legal power to hire and fire employees and "all employees [were] subject to the administrator's overall supervision and direction in non-professional and purely administrative matters"); State ex rel. Stubben v. Board of County Comm'rs, 273 Minn. 361, 372, 141 N.W.2d 499, 506 (1966) (hospital administrator was department head where he had "almost complete control over administrative functions of the hospital"). Instead, the evidence taken as a whole supports the ALJ's conclusions. The county did not meet its burden of establishing that Stier and Jacobs were heads of departments. Neither Stier nor Jacobs had a deputy, their work was subject to the board's direct control, and they had no authority to hire and fire employees, even their own secretary. See State ex rel. Caffrey v. Metropolitan Airports Comm'n, 310 Minn. 480, 486-87, 246 N.W.2d 637, 641 (1976) (concluding that director of public affairs was not department head, and noting that except for his secretary, he was the only employee in his office and could not hire or fire employees); Holmes, 402 N.W.2d at 646-47 (veteran who served as county agricultural inspector, zoning administrator, and civil defense director was not department head because except for secretary, he constituted entire department in each of his three areas, he did not need deputy, his work was subject to control of board of commissioners, he could not hire or fire subordinates, and although he supervised his and his secretary's daily work, he had little real authority).

With respect to Jacobs's role as maintenance manager, the evidence supports the ALJ's conclusions that although Jacobs was ultimately responsible for the maintenance supervisor and personnel, he did not have any technical background in this area and delegated day-to-day responsibility to the maintenance supervisor. And, because the board and its building committee controlled long-range planning of maintenance functions, Jacobs was not the highest authority as to his official duties. Furthermore, Wagner testified that after Jacobs's position was eliminated, the maintenance supervisor took Jacobs's place on the building committee and began reporting directly to the board, but his duties essentially did not change. As the ALJ noted, for the most part Jacobs merely acted as a "conduit" between the building committee and the maintenance staff.

2. The county argues that Stier and Jacobs had confidential relationships with the board. The VPA does not apply to "any person holding a strictly confidential relation to the appointing officer." Minn. Stat. § 197.46. The county has the burden of proving such a relationship with the board. See State ex rel. Sawyer v. Mangni, 231 Minn. 457, 464, 43 N.W.2d 775, 779 (1950).

In deciding if a strictly confidential relationship exists, Minnesota courts have examined factors such as whether the veteran is a deputy, whether his authority is derived from a chief, and whether the veteran could act as the chief's "alter ego." See Sawyer, 231 Minn. at 466, 43 N.W.2d at 780 (first assistant city attorney was not deputy and did not have confidential relationship with city attorney); State ex rel. Blaski v. Fisher, 194 Minn. 75, 77, 259 N.W. 694, 695 (1935) (no confidential relation where assistant fire chief is not deputy chief and receives his authority not from chief but from rules); Ulmer v. City of Duluth, 428 N.W.2d 855, 857 (Minn. App. 1988), review denied (Minn. Oct. 26, 1988) (assistant city attorney, who had authority "to act in the city attorney's stead as his alter ego," was held to be in strictly confidential relationship with appointing officer). Courts have also examined whether veterans were attorneys and whether the employment was at-will. See State ex rel. Cassill v. Peterson, 194 Minn. 60, 65, 259 N.W. 696, 698 (1935) (accountant in attorney general's office was strictly confidential employee because nearly everything in law office between attorney and client is confidential, and attorney general should be free to choose subordinates and assistants); Ulmer, 428 N.W.2d at 856-57 (finding confidential relationship, court recognized "unique relationship between attorneys and assistants to attorneys which requires strict confidence in serving a common client"; court also noted that assistant attorney was at-will employee "whose position is retained at the pleasure of his appointive officer").

Neither Stier nor Jacobs had a "strictly confidential relation" to the board. Their authority was based on their own positions, not on the fact that they were deputies or could act for the board as its "alter ego." Moreover, the county's personnel manual indicates that Stier and Jacobs were not at-will employees, but could only be discharged for just cause. Finally, neither Stier nor Jacobs was an attorney, and their mere access to confidential information does not put them in confidential relation with the board. See Blaski, 194 Minn. at 78, 259 N.W. at 696 (no confidential relationship existed between assistant fire chief and chief, even though "a certain degree of confidence must be observed by all members of the department").

3. The VPA does not prevent public employers from terminating a veteran's employment by abolishing his or her position as long as it is done in good faith. Young v. City of Duluth, 386 N.W.2d 732, 737 (Minn. 1986); State ex rel. Boyd v. Matson, 155 Minn. 137, 141, 193 N.W. 30, 32 (1923).

While there is some evidence that Stier's and Jacobs's positions were eliminated strictly because of budget constraints, there is substantial evidence supporting the ALJ's conclusion that the board did not act in good faith. Carlson testified that Wagner said "something had to be done" about Stier and Jacobs and it could not appear that they were being fired. Wagner himself testified that the board would not have eliminated the personnel coordinator position if Stier had done his job well. Further, the county's animosity was demonstrated by the manner in which Stier and Jacobs were removed from their positions, including the changing of office locks, an angry confrontation at the office, and the presence of Graham and a newspaper reporter at the confrontation. Finally, Koep and Wagner--the driving forces behind the elimination of Stier's and Jacobs's positions--were political allies of Graham, did not believe the allegations of sexual harassment against Graham, and thought that Stier acted inappropriately by giving a statement about the alleged harassment without consulting the board or its attorney.


[ ]1 This appeal is from the commissioner's decision, but because the commissioner fully adopted the ALJ's recommendation, we discuss the case in terms of the ALJ's findings and conclusions.