The man who heads the state’s Public Utilities Commission, and has presided over a number of decisions needed to implement competition in the energy industry, filed suit in Providence Superior Court demanding that his salary be reinstated and that he receive back pay.
About 18 months after filing the first of two administrative appeals of his highly publicized pay cut, Rhode Island Public Utilities Commission Chairman James Malachowski received word that neither the state’s Unclassified Pay Plan Board nor the Personnel Appeal Board had jurisdiction over his fight. So on Thursday, Oct. 29, he filed a civil suit in Providence Superior Court seeking compensation.
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The paperwork was filed 23 days after he received word from the Personnel Appeal Board, according to his attorney Holly R. Rao, a partner at Olenn & Penza in Warwick. It also came five days before Gov. Lincoln Almond, who as governor of the state is named as a defendant in the suit, faced voters at the polls.
Rao said she only had 30 days after the Personnel Appeal Board’s decision to file a suit and that “there is no political motivation on our part” in the timing of the lawsuit. “There really was no choice. The matter had been pending with the appeal board they issued their decision, I believe, on Oct. 6,” Rao said.
And it doesn’t seem publicity the suit received before election day impacted Almond’s chances, since he defeated opponent Myrth York with a 9 percent margin.
Also named as defendants in the suit are the state itself; Robert Carl, who is chairman of the Unclassified Pay Plan Board; the Unclassified Pay Plan Board; the Personnel Appeal Board; the Department of Administration; and the Personnel Administrator.
Malachowski said he hadn’t even hired an attorney until after the Personnel Appeal Board, the second board to review his request, issued its decision indicating it does not have jurisdiction over the ruling. His salary was cut by more than $12,000 shortly after the General Assembly passed the Utility Restructuring Act in 1996. Rao said they are appealing the pay cut under two separate state laws, one that declares department directors and judges’ salaries cannot be cut and a second that states unclassified state workers cannot be downgraded more than two pay levels.
“There was legislation that took a part of his duties and created a new position of administrator, so in that sense there was a division of what he had as his entire responsibility. But under the same act of legislation that created this new job, other things were going on that would increase (his) other job responsibilities,” Rao said. But the two salary statutes “would really lock him into a pay and grade regardless” of what happened to his job description, she added.
Malachowski was bumped down four pay grades. “Our argument is, at the most, you can only reduce by two pay grades,” Rao said.
Lisa Pelosi, a spokesman for the governor, said “we are confident that Mr. Malachowski’s lawsuit will be rejected by the Superior Court.” Administration officials believe the Personnel Appeal Board rejected Malachowski’s appeal, because he would have “to show there was political motivation” for his pay cut, Pelosi explained. “We interpret it (the board’s decision) to mean there was no political motivation.”
Malachowski had publicly disagreed with Almond and former House Speaker George Caruolo, who was a primary author of the URA legislation, before the law was passed. Almond said he thought the pay cut was justified, because the PUC chairman’s duties were split up and a second administrator’s position was created in 1996 when the General Assembly passed a law restructuring the electric industry. The governor’s lawyers will argue in court “that the law applies to current jobs. This job is new the responsibilities are lesser,” Pelosi said.
The URA ordered that retail-style competition become available in the electricity industry and also reorganized the PUC. Two separate entities were created with the reorganization: the PUC and the Division of Public Utilities and Carriers. The PUC is the rule making body and reviews rate proposals from regulated utilities, such as Providence Gas Co. and Narragansett Electric Co. The DPUC acts as a public advocate and holds hearings when there are allegations that regulated utilities have violated rules set forth by the PUC. This eliminates possible conflict that could be created if the same people set the rules and were responsible for enforcing them as well.
