Not for the first time and probably not for the last time, Governor Terry Branstad dropped a lot of line-item vetoes late in the afternoon before a holiday weekend. Early news reports are understandably focusing on the vetoes of one-time funding for K-12 education and state universities, as well as language that would have kept mental health institutions in Clarinda and Mount Pleasant open. Bleeding Heartland has a post in progress about the fallout from those actions and others, including Branstad’s decision to strike language that would have expanded child care assistance.

Democratic State Representative Sharon Steckman called attention to several other line-item vetoes that flew below the radar yesterday. One of them seems particularly important, as it could put the State of Iowa at odds with U.S. Department of Labor demands to “strengthen Iowa’s compliance with Federal law” and keep administrative law judges “free from actual or perceived intimidation.”

JULY 6 UPDATE: The vetoed language pertained to administrative law judges working for the Public Employment Relations Board, not Iowa Workforce Development; see further details below.

Steckman noted that Branstad vetoed language in Senate File 499 (the Economic Development budget) “to ensure administrative law judges can operate free from political influence.” Alleged interference with administrative law judges by Iowa Workforce Development leadership made news last year, prompting former Chief Administrative Law Judge Joseph Walsh to sue the state and federal officials to demand changes to “ensure that ALJs are free from actual or perceived intimidation.”

Last fall, Democratic state senators rolled out a government reform package including a section on taking “political influence out of the judicial process.”

FINDING:  The U.S. Department of Labor (DOL) had to intervene when Iowa Workforce Development Director tried to reclassify a merit judicial position to an at-will position.  The DOL noted this violated established legal principles that say judges must be insulated from political influence.

FINDING:  The Iowa Workforce Development Director, a political appointee, is currently the direct supervisor of the unemployment appeals Administrative Law Judges.

FINDING: The former Public Employment Relations Board chair testified that Governor Branstad’s office pressured the Board to hire an unnamed administrative law judge.

RECOMMENDATION:  Review existing Iowa law regarding the adjudicative process to ensure Iowans receive a fair and impartial hearing.

RECOMMENDATION: Prohibit all political appointees and/or an at-will employees from supervising or evaluating administrative law judges to preserve their integrity and independence in decision making.

In January, Branstad appointed Beth Townsend to serve as director for Iowa Workforce Development, without acknowledging any wrongdoing by Teresa Wahlert in that position. The U.S. Department of Labor’s Unemployment Insurance Administrator Gay Gilbert sent Townsend a list of tasks in March in order to “strengthen Iowa’s compliance with Federal law.” Excerpt:

• Immediately fill the Chief [Administrative Law Judge] position on a merit staffing basis.

• Ensure that the [unemployment claims] appeals process is insulated from outside pressures that might compromise the process’s fairness and impartiality or the appearance of fairness and impartiality

• Ensure that ALJs are free from actual or perceived intimidation.

• Review any negative personnel actions received by ALJs during the period the ALJs were supervised by Teresa Wahlert to determine if the action was appropriately taken and take any necessary remedial action to reverse the action if not appropriately taken.

• Not take any personnel action against individual ALJs related to their possible participation in the review of this matter moving forward.

In April, an Iowa Workforce Development official told me Townsend “will be following the recommendations in the letter” regarding administrative law judges. I was unable to check this morning on the status of those recommendations, because state offices are closed for the July 4 holiday.

I was not aware that language regarding the independence of administrative law judges made it into Senate File 499. At the end of this post, I enclose the relevant text.

The language on making judges merit employees didn’t escape the attention of the governor’s staff. From Branstad’s veto message released yesterday:

Senate File 499 is approved on this date with the following exceptions, which I hereby disapprove.

I am unable to approve the item designated Division IV in its entirety. This item is related to state employee classifications. Under current Iowa Code, administrators are classified as at-will employees. The at-will designation allows for greater accountability for these managers. Subjecting administrators to the merit system would decrease accountability to taxpayers and hinder the effective management of important government functions.

Even in the absence of federal guidelines, common sense suggests it should be more difficult to fire administrative law judges than other state government administrators. What the governor spins as “greater accountability” can lead to political repercussions for judges perceived to decide cases the “wrong” way.

Speaking to the Des Moines Register’s William Petroski in March, Wahlert claimed

that she had sought late last year to make a position merit-based to replace the chief administrative law judge, but she was overruled by Iowa Department of Administrative Services Director Janet Phipps, Iowa Department of Management Director David Roederer, and Branstad chief of staff Matt Hinch.

“I knew quite clearly how disappointed the Department of Labor was,” Wahlert said. “But I was certainly not the one – and I can prove it by the paperwork – that made it an at-will position. I tried to explain to all the other folks involved with this about how important it was that this be a merit-based position.”

After the holiday weekend, I will try to find out whether Iowa Workforce Development is committed to making administrative law judges merit-based employees, despite the governor’s veto of language that would have put that policy in state code.

Any relevant comments are welcome in this thread.

JULY 6 UPDATE: The language Branstad vetoed as part of Senate File 499 did not pertain to Iowa Workforce Development, according to that agency’s communications director Ed Wallace.

In fact, Iowa Workforce Development announced today, “Emily Chafa has been promoted to UI Appeals Division Manager with IWD, Unemployment Insurance Appeals Bureau. In her position, Ms. Chafa will oversee 15 administrative law judges, who hear and decide administrative appeals regarding unemployment insurance benefits, along with their support staff.” Scroll to the end of this post to read the full statement. Wallace confirmed by telephone that Chafa’s position is merit-based.

The arguments for making Iowa Workforce Development’s administrative law judges merit-based employees apply equally to other state agencies. Administrative law judges under the Public Employment Relations Board should be insulated from political interference. Unfortunately, those judges will remain “at-will,” thanks to Branstad’s veto.

Full text of Division IV of Senate File 499 (the bolded sections below are underlined in the bill text):

DIVISION IV

MISCELLANEOUS PROVISIONS–

MERIT SYSTEM STATUS AND APPEALS

Sec.38. Section 8A.412, subsection 11, Code 2015, is amended to read as follows:

11. Professional employees under the supervision of the attorney general, the state public defender, the secretary of state, the auditor of state, the treasurer of state, and the public employment relations board. However, employees of the consumer advocate division of the department of justice, other than the consumer advocate, and administrative law judges appointed or employed by the public employment relations board, are subject to the merit system.

Sec. 39. Section 8A.415, subsection 1, paragraph b, Code 2015, is amended to read as follows:

b. If not satisfied, the employee may, within thirty calendar days following the director’s response, file an appeal with the public employment relations board. The hearing shall be conducted in accordance with the rules of the public employment relations board and the Iowa administrative procedure Act, chapter 17A. Decisions rendered shall be based upon a standard of substantial compliance with this subchapter and the rules of the department. Decisions by the public employment relations board constitute final agency action. However, if the employee is an administrative law judge appointed or employed by the public employment relations board, the employee’s appeal shall be heard by an administrative law judge employed by the administrative hearings division of the department of inspections and appeals in accordance with the provisions of section 10A.801, whose decision shall constitute final agency action.

Sec. 40. Section 8A.415, subsection 2, paragraph b, Code 2015, is amended to read as follows:

b. If not satisfied, the employee may, within thirty calendar days following the director’s response, file an appeal with the public employment relations board. The employee has the right to a hearing closed to the public, unless a public hearing is requested by the employee. The hearing shall otherwise be conducted in accordance with the rules of the public employment relations board and the Iowa administrative procedure Act, chapter17A. If the public employment relations board finds that the action taken by the appointing authority was for political, religious, racial, national origin, sex, age, or other reasons not constituting just cause, the employee may be reinstated without loss of pay or benefits for the elapsed period, or the public employment relations board may provide other appropriate remedies. Decisions by the public employment relations board constitute final agency action. However, if the employee is an administrative law judge appointed or employed by the public employment relations board, the employee’s appeal shall be heard by an administrative law judge employed by the administrative hearings division of the department of inspections and appeals in accordance with the provisions of section 10A.801, whose decision shall constitute final agency action.

Sec. 41. Section 10A.801, subsection 3, paragraph a, Code 2015, is amended to read as follows:

a. The department shall employ a sufficient number of administrative law judges to conduct proceedings for which agencies are required, by section 17A.11 or any other provision of law, to use an administrative law judge employed by the division. An administrative law judge employed by the division shall not perform duties inconsistent with the judge’s duties and responsibilities as an administrative law judge and shall be located in an office that is separated from the offices of the agencies for which that person acts as a presiding officer. Administrative The administrator and all administrative law judges shall be covered by the merit system provisions of chapter 8A, subchapter IV.

Sec. 42. Section 86.2, subsection 1, paragraph b, Code2015, is amended to read as follows:

b. Deputy workers’ compensation commissioners for whose acts the commissioner is responsible and who shall serve at the pleasure of the commissioner be appointed and serve pursuant to the merit system provisions of chapter 8A, subchapter IV, unless the commissioners are otherwise covered by a collective bargaining agreement.

Sec. 43. Section 96.6, subsection 3, paragraph b, Code 2015, is amended to read as follows:

b. Appeals from the initial determination shall be heard by an administrative law judge employed by the department who shall be covered by the merit system provisions of chapter 8A, subchapter IV, unless the administrative law judge is otherwise covered by a collective bargaining agreement. An administrative law judge’s decision may be appealed by any party to the employment appeal board created in section 10A.601. The decision of the appeal board is final agency action and an appeal of the decision shall be made directly to the district court.

July 6 press release from Iowa Workforce development:

Iowa Workforce Development Announces Emily Chafa Promoted to Appeals Division Manager

DES MOINES, IA – Iowa Workforce Development (IWD) announced today that Emily Chafa has been promoted to UI Appeals Division Manager with IWD, Unemployment Insurance Appeals Bureau. In her position, Ms. Chafa will oversee 15 administrative law judges, who hear and decide administrative appeals regarding unemployment insurance benefits, along with their support staff.

IWD Director Beth Townsend said, “Emily Gould Chafa has the right experience, the right demeanor and the legal acumen to provide leadership and direction to this division.  Emily is a very experienced administrative law judge who can provide training, guidance and support to our UI Appeals judges, who have demanding caseloads.  I am thrilled to be able to hire an attorney of this caliber who has always demonstrated the highest level of integrity for this incredibly important position.”

Ms. Chafa is a graduate of the Loyola School of Law in Chicago, Illinois. She also graduated magna cum laude with a Bachelor of Arts degree from Drake University. She has been with the State of Iowa since 2009 when she began as an attorney for IWD, providing legal support to the newly established Misclassification Unit. In 2010, she moved to the Department of Inspections and Appeals, Division of Administrative Hearings, where she heard and decided administrative appeals from state agency decisions as part of a central panel. Her docket included appeals from the Department of Human Services, the Department of Transportation, and Iowa Workforce Development. She also reviewed Iowa Civil Rights Commission investigation reports and issued orders in those cases. Since April of 2015, she has worked as an administrative law judge at IWD, hearing and deciding administrative appeals regarding UI benefits. She has also worked with Iowa Legal Aid, as an assistant city attorney with the City of Des Moines and as an assistant state’s attorney with Cook County State’s Attorney’s Office in Chicago.

Ms. Chafa says, “I look forward to serving the people of Iowa. We recognize that the administrative hearing process impacts the day to day lives of many individual Iowans and Iowa employers. We will maximize our resources and increase efficiencies to meet our mandate, to conduct fair and impartial hearings and promptly issue decisions.”

Ms. Chafa is past president of the Polk County Bar Association, an active board member of the Iowa Organization of Women Attorneys and a member of the Iowa State Bar Association Board of Governors.  She volunteers to judge middle and high school participants in Mock Trial Programs. She is active with the Des Moines Vocal Arts Ensemble and Plymouth Congregational Church. She and her husband live in Johnston, and enjoy watching their son’s college baseball games and cheering on the Iowa Cubs and the Iowa State Cyclones.