The Colorado State Personnel
System - A Legal Overview
Jeremy Hueth
Office of University Counsel
June 26, 2012
Pendleton Civil Service Act
• Adopted in 1883 after
Garfield assassination to
address spoils system
• Federal employees to be
hired on merit and
competitive examination
Colorado Civil Service System
• First Act adopted in 1907Colorado was the 5th
state
• Legislature refused to
provide funding for
salaries or system
• Citizen initiated statute
adopted in 1912 reformed
system and mandated
funding levels
Legislative Hostility
• In 1915, legislature
repealed 1912 citizen
initiated act
• Voters initiated
constitutional
amendment in 1916 failed
• Second attempt 1918 was
adopted (Civil Service
Amendment of 1918)
Legislative Hostility
Colorado Supreme Court has
recognized that the
Amendment embodies the
strong disposition of the
people to protect the civil
service system from
"destruction or emasculation
of the law in the future by
some possible hostile general
assembly.”
Purpose of First Civil Service System
• Original purpose was to
address public perception
of political patronage
system (rather than to
protect labor rights)
• That has changed over
time
Structure of Original Amendment
• Section 13 required civil servants to be appointed
and promoted on merit and competitive
examination
• Civil Service Commission created to: administer
system; establish rules for recruiting, testing,
appointments and discipline; and to hear
appeals.
• Veteran's preference adopted in 1944
1970 Reform
• Legislatively referred amendments
• Split Section 13 into existing 13 and 14; veterans
preference now in Section 15
• DPA and Personnel Director created to
administer system
• Personnel Board retains rule-making and quasijudicial authority of Commission
Merit-Based Selection
“Appointments and promotions
to offices and employments in the
personnel system of the state
shall be made according to merit
and fitness, to be ascertained by
competitive tests of competence
without regard to race, creed, or
color, or political affiliation.”
 Art. 12, § 13(1)
 24-50-112.5(1)
Rule of Three
• “The person to be appointed to any position under the
personnel system shall be one of the three persons
ranking highest on the eligible list for such position, or
such lesser number as qualify, as determined from
competitive tests of competence, subject to limitations
set forth in rules of the state personnel board applicable
to multiple appointments from any such list.”


Art. 12, § 13(5)
24-50-112.5(2)
Colorado Residency Requirement
• “All appointees shall reside in
the state, [except where] the
state personnel board [finds a
position] to require special
education or training or
special professional or
technical qualifications and
which cannot be readily filled
from among residents of this
state.”
 Article 12, § 13(6)
Veterans
• Veteran’s preference in
examinations and
reduction in force
determinations including
the point system
allocation in the
competitive examination
 Art. 12, § 15
 24-50-112.5(2)(b)
Six Month Temporaries
• “The state personnel director
may authorize the temporary
employment of persons, not to
exceed six months, during
which time an eligible list shall
be provided for permanent
positions. No other temporary
or emergency employment
shall be permitted under the
personnel system.”
 Art. 12, § 13(9)
 C.R.S. 24-50-114
Tenure and Equal Pay
• Persons in the personnel
system of the state shall hold
their respective positions
during efficient service or until
reaching retirement age, as
provided by law. They shall be
graded and compensated
according to standards of
efficient service which shall be
the same for all persons having
like duties.”
 Art. 12, § 13(8)
 24-50-104
Discipline and Dismissal: Cause
• “A person certified to any class or position in the personnel system
may be dismissed, suspended, or otherwise disciplined by the
appointing authority upon written findings of failure to comply with
standards of efficient service or competence, or for willful misconduct,
willful failure or inability to perform his duties, or final conviction of a
felony or any other offense which involves moral turpitude…”
 Art. 12, § 13(8)
 24-50-125(1)
Discipline and Dismissal: Cause
• “A person certified to any class or position in the personnel system
may be dismissed, suspended, or otherwise disciplined by the
appointing authority upon written findings of failure to comply with
standards of efficient service or competence, or for willful misconduct,
willful failure or inability to perform his duties, or final conviction of a
felony or any other offense which involves moral turpitude…”
 Art. 12, § 13(8)
 24-50-125(1)
Discipline and Dismissal:
Appeal Rights
• “…written charges thereof may
be filed by any person with the
appointing authority, which
shall be promptly determined.
Any action of the appointing
authority taken under this
subsection shall be subject to
appeal to the state personnel
board, with the right to be
heard thereby in person or by
counsel, or both.”
 Art. 12, § 13(8)
 24-50-125(1)
Probationary Periods and
Certification
• “The state personnel board shall establish probationary periods for all
persons initially appointed, but not to exceed twelve months for any
class or position. After satisfactory completion of any such period, the
person shall be certified to such class or position within the personnel
system, but unsatisfactory performance shall be grounds for dismissal
by the appointing authority during such period without right of appeal.”
 Art. 12, s13(10)
 24-50-112.5(5)
 24-50-125(5)
State Personnel Board
• “The state personnel board
shall adopt, and may from
time to time amend or repeal,
rules to implement [these
provisions] … and laws
enacted pursuant thereto...”
 Art. 12, § 14(3)
 24-50-101(2)
State Personnel Director
• “There is hereby created the department of personnel, which shall be
one of the principal departments of the executive department, the head
of which shall be the state personnel director, who shall be appointed
under qualifications established by law. The state personnel director
shall be responsible for the administration of the personnel system of
the state under this constitution and laws enacted pursuant thereto and
the rules adopted thereunder by the state personnel board.”
 Art. 12, § 14(4)
 24-50-101(3)(c)
Appointing Authorities
• “The head of each principal department shall be the
appointing authority for the employees of his office and for
heads of divisions, within the personnel system, ranking next
below the head of such department. Heads of such divisions
shall be the appointing authorities for all positions in the
personnel system within their respective divisions.”
 Art 12, s13 (7)
 24-50-101(d)
Exemptions
• “The personnel system of the state shall comprise all
appointive public officers and employees of the state,
except the following . . . .”
 Art. 12, § 13(2)
 24-50-135
Exemptions
• attorneys serving as assistant attorneys general
Exemptions
• students and inmates in state educational or
other institutions
Exemptions
• faculty members of educational institutions and
departments not reformatory or charitable in character,
and such administrators thereof as may be
exempt by law;
For Faculty Members and Other Administrators as may be
Exempt by Law
Board of Ed. v. Spurlin, (Colo. 1960)
• Following creation of an elected state board of
education, legislature enacted a statute
providing:
all positions in the department classified as
assistant commissioners, supervisors or instructors
[and teaching positions] are hereby declared, as a
matter of legislative determination, to be
educational in nature, and, not under the classified
civil service of the state
Board of Ed. v. Spurlin, (Colo. 1960)
• Held: the term “educational institution” was not
so limited as to exclude the department of
education.
• “[t]hese positions are all administrative in
nature and require the exercise of judgment and
discretion.”
Board of Ed. v. Spurlin, (Colo. 1960)
“plaintiffs are trained educators [who] do not
practice their profession in classrooms but are
for the most part engaged in research, planning
and promulgation of plans . . . it is impossible to
draw a distinction between them and teachers
whose activities are devoted directly to the
classroom.”
Board of Ed. v. Spurlin, (Colo. 1960)
Salas v. State (Colo. App. 1988)
• June 30, 1978 – Salas
hired as graphic artist at
UCD (not on June 2
exemption list)
• August 8, 1978, revised
exemption list
• 1982 – Salas appeals
discharge
Salas v. State (Colo. App. 1988)
• ‘Right to appeal the
exemption of a position is
individual to the
employee, and is not
meaningful unless the
employee is notified of
the exemption and right
to appeal.’
2003 AG Opinion (Salazar)
• DPA question: Can legislature decide whether
positions at state IHEs, not otherwise exempt,
may be excluded from the classified system.
• “Consistent with prior formal opinions,
[legislature] may direct by statute whether the
employees of state colleges and universities not
otherwise exempt are included in the state
personnel system”
2003 AG Opinion
(Salazar)
• 24-50-135, exemptions
(1963 – 2004)
• SB 04-007
• HB 11-1301
24-50-135 C.R.S. (2011)
• Struck descriptors and clarified that exemption
applies to all “employees in professional
positions”
• Clarified that employees in positions funded by
grants, gifts, or auxiliary revenues
▫ activities managed and accounted for as selfsupporting
• President may decide not to exempt an auxiliary
position if not in the best interests of the
institution.”
24-50-135 C.R.S. (2011)
Professional position: “involves the exercise of discretion,
analytical skill, judgment, personal accountability, and
responsibility for creating, developing, integrating, applying,
or sharing an organized body of knowledge that
characteristically is:
• “Acquired through education or training that meets the
requirements for a bachelor’s or graduate degree or equivalent
specialized experience; and
• “Continuously studied to explore, extend, and use additional
discoveries, interpretations, and applications and to improve
data, materials, equipment, applications, and methods.”
24-50-135 C.R.S. (2011)
• “[A] position shall not
be determined to be
exempt while it is
held by an existing
employee in the state
personnel system.”
AND THE TOTAL COMPENSATION SALARY SURVEY
Salary Survey
• 24-50-104. Director
conducts surveys of public
and private sector
employers and jobs inside
and outside Denver metro
area
• “to determine necessary
adjustments to state
employee salaries, state
contributions for group
benefit plans, and
performance awards
Salary Survey
Budgeting Process
JBC
OSPB
DPA
Long
Bill
Equal Pay Challenges
• Dempsey v. Romer
(1992); Vivian v. Bloom
(1947)
• Legislature has authority
to set salaries across pay
grades, even if different
from DPA
recommendations
• But, no authority to set
individual salaries
Equal Pay
• Constitution requires
equality in core
compensation for core
job duties across a pay
class
• BUT, does not proscribe
payment for employment
conditions beyond core
job duties
CAPE v. Regents (Colo. 1990)
• Effort to reorganize the
university hospital by creating
private corporation
• 2,000 university employees
would have the choice to join
the hospital corporation or
stay in the personnel system
for two years only.
CAPE v. Regents (Colo. 1990)
CAPE claims violation of:
• Civil Service Amendment; and
• Art. XI, § 3 (prohibits indebtedness through
bonding)
• CAPE argued that the attempt to create a private
corporation failed because the hospital was a
public entity
CAPE v. Regents (Colo. 1990)
• Court drew a distinction between public and
private corporations:
Private nonprofit corporations are
corporations formed by private individuals for a
public purpose in which no part of the income or
profit of which is distributable to its members,
directors or officers. . . .
CAPE v. Regents (Colo. 1990)
In contrast, public corporations are created
as subdivisions of the state as an expedient
device to carry out the functions of government.
Public corporations are all those created
specially for public purposes as instruments or
agencies to increase the efficiency of
government, supply public wants, and promote
the public welfare.
CAPE v. Regents (Colo. 1990)
• Even though the hospital would be public, it
would be a political subdivision
• Court acknowledged that political subdivision is
not subject to the Civil Service
• However, Amendment was still violated for two
reasons
CAPE v. Regents (Colo. 1990)
(1) elimination of 2,000 jobs in 2 years is hostile:
‘Statute does not “grandfather” incumbent
classified employees who hold classified
positions. (comparing Compensation Ins.
Auth., where existing employees were
permitted to choose to remain in the personnel
system indefinitely)’
CAPE v. Regents (Colo. 1990)
(2) Because the operations of the hospital
remained the same and subject to continuing
control by the Regents, there was no change to
the nature of the jobs held by classified
employees: “a mere change in the nomenclature
of the hospital does not change the essence of
the employee’s position for purposes of civil
service.”
CAPE v. Dept of Highways, (Colo.
1991)
CAPE v. Dept of Highways, (Colo.
1991)
• Dept announced intent to
“contract out” for
custodial, maintenance
and utility workers.
• 35 employees would be
terminated.
• CAPE and employees
sued
CAPE v. Dept of Highways, (Colo.
1991)
• Court was befuddled
• Amendment did not
specify the services that
must be performed by
state employees
• No guidance re criteria or
mechanisms for
delineating or reducing
the personnel system
CAPE v. Dept of Highways, (Colo.
1991)
But, court is extremely leery of
privatization efforts
CAPE v. Dept of Highways, (Colo.
1991)
“Civil service laws protect public workers from
arbitrary and oppressive treatment, and require
due process protections before disciplinary action
or termination; private employees lack these
protections. These constraints are necessary in
government employment to carry out the
functions of the civil service, promote
competence in government, and ensure a
politically independent civil service.”
CAPE v. Dept of Highways, (Colo.
1991)
System was not
designed to respond to
outsourcing needs
But Civil Service
Amendment
contemplates the
elaboration of system
through laws enacted by
the legislature and Board
. . . Director administers,
guided and constrained
by constitutional,
statutory and regulatory
provisions.
CAPE v. Dept of Highways, (Colo.
1991)
Held : Contracting for services performed by
classified employees violates the Amendment
absent legislation, rules, or some combination
thereof establishing standards to ensure that
privatization does not subvert the policies
underlying the state personnel system.
CAPE v. Dept of Highways, (Colo.
1991)
Held: Any such standards require evaluation of
the effects of the concept of privatization on the
state personnel system as a whole, rather than a
case specific consideration of the effect of a
particular privatization plan of a single state
agency on individual employees.
Horrell v. Dept. of Admin., (Colo.
1993)
• Nearly identical to Hwys
• Long bill requested DPA
to contract for custodial
services from community
programs (private sector)
• DPA entered contracts
and terminated/demoted
7 DPA employees.
Horrell v. Dept. of Admin., (Colo.
1993)
• “the Department, without
specific legislative
direction and in the
absence of applicable
regulations, elected to
obtain services previously
performed by classified
state employees from
private sector entities,”
§ 24-50-503. Personal services contracts implicating state
personnel system--no separation of existing classified employees
(1) Contracts for personal services with independent contractors not
allowed by -504 are nevertheless permissible if personnel director
determines that:
(a) overall cost savings to state, not offset by contractor rate increases
(b) same quality of services
(c) contract includes specific provisions pertaining to qualifications
(d) contract contains nondiscrimination provisions
(e) contract contains provisions for termination by the state
(f) potential economic advantage not outweighed public interest in
government function
§ 24-50-503
(2) The state personnel director shall not approve a
personal services contract under this section if
the contract would result directly or indirectly
in the separation of certified employees from
state service.
However, nothing contained in this section shall be
construed to prevent the separation of certified
employees from state service pursuant to any other
provision of law, including but not limited to the
provisions of section 24-50-124, for reasons other
than privatization.
§ 24-50-504
• (3) Contracts for purchased services, as determined
by the state personnel director, that create an
independent contractor relationship are permissible.
▫ “Personal services” means services acquired for the state's
direct benefit in its operations.
▫ “Purchased services” means the acquisition of services
which directly benefit specific groups or individuals in the
public at large as defined by law, from public or private
entities licensed, certified, or otherwise authorized by
statute to provide such services.
 § 24-50-502 (2)-(3)
Dept of Human Serv. v. May (Colo.
2000)
• Creation of a “Lab
School” at the Lookout
Mountain Youth Services
Center
• Partnership between the
DHS and Metro
• Metro provides
educational
programming
(teachers/studentteachers) at the facility
Dept of Human Serv. v. May (Colo.
2000)
• Lab School teachers
could apply to Metro or
transfer to positions
within DHS
• Metro teachers were
exempt
• Four unhappy DHS
transfers and CAPE sued
Dept of Human Serv. v. May (Colo.
2000)
• Art. XII, Section 13 exempts “faculty at
educational institutions not reformatory or
charitable in character and such
administrators thereof as may be exempt
by law . . . .” (Emphasis added.)
Dept of Human Serv. v. May (Colo.
2000)
Court upheld transfer agreement for two reasons;
(1) Lab School teachers are fundamentally
employees of Metro, not DHS. Therefore, they
are employees of an educational institution in
positions constitutionally exempt from the
personnel system.
(2) No classified employees were separated
involuntarily from their protected positions.
Dept of Human Serv. v. May (Colo.
2000)
“We recognize that the driving purpose of civil
service system laws is the protection of state
employees from involuntary termination, and
under the facts presented to us, no state
employee was forced to leave the personnel
system.”
“Talent Agenda”
• HB 12-1321 & HCR 121001
• statutory changes
effective Sept. 1, 2012
• constitutional changes
effective upon voter
approval
Governor John Hickenlooper
Talent Agenda
Eliminate bumping
• Doesn’t apply to employees within 5 years of full
retirement
• Expanded separation incentives for all others
▫ e.g., hiring preference, continuation of health benefits,
educational training vouchers, or placement on a
reemployment list
▫ may not exceed one week of salary per year of service
Talent Agenda
Merit Pay System
• replace current “pay for performance”
program with a merit pay system that rewards
employees based on performance and
placement within the salary range
• IHEs may determine their own performance
categories
Talent Agenda - Constitutional
• Competitive examinations to be replaced with a more
versatile “comparative analysis” process - may include
written examination, oral board, search committee, or
other processes to be established by rule.
• Rule of 3changed to 6
• Temporary Positions change from 6 to 9 months - but
must wait 4 months between appointments
• Residency Requirement removed for positions within 30
miles of state border
Talent Agenda - Constitutional
• Personnel Board - change to 3 year terms,
2-term limit; 2 appointed members serve at
the pleasure of the governor
• Veteran’s Preference modified process
makes comparative analysis superior
• Allows approximately 300 senior service
employees and executive level positions to be
exempted from system
Other recent changes
Personal services contracts.
• HB 11-1301 amended section 24-5-508,
C.R.S., to exempt higher education contracts
from Part 5 (including -503 and -504) where
“the chief executive officer of the institution,
or his designee, has determined that the
conditions set forth in section 24-50-503 are
met for those contracts that implicate the
state personnel system.”
Other recent changes
Classified employee incentive program
(HB 04-1020).
• HB 11-1301 added section 24-50-805., C.R.S.,
which allows institutions of higher education to
establish and implement their own incentive
programs, provided that the plan includes the
elements described in section 24-50-804(2)
(a)-(e)
Other recent changes
Air Force IDEA program (HB10-1264)
• HB 11-1301 amended the definition of “employee” in
24-50-902(1), C.R.S., to exempt institutions of
higher education from the program.
State Benefits Plans
• HB 10-1427, HB 10-1181, and HB 11-1301 all
clarified that state institutions of higher education
may offer their own health plans to their own
classified employees and, further, that we may elect
to cease offering state plans altogether if we can
avoid disruption to the state plans. CU has done so.
Other recent changes
Post-Employment Compensation
• SB 10-003 amended section 24-19-103(2)(a), C.R.S.,
to allow institutions of higher education to provide
up to three months of salary as severance pay to
exempt professionals regardless of length of
employment (i.e., eliminated limitation to those
employed less than 5 years).
• Tenure and tenure track faculty were not affected
and were subject to different rules.
Other recent changes
Fiscal Rule Exemption.
• Although not directly relevant to the State Personnel
System, SB 10-003 allowed institutions of higher
education to exempt themselves from most of the
authority of the State Controller in section 24-20-202,
C.R.S., giving us flexibility over matters ranging from use
of perquisites to delegations to approve contracts such as
voluntary separation incentive agreements and personal
services contracts, etc. W
• e must still regulate these items at the system level, but
we have significant additional freedom.