SENATE BILL NO. 292                                                                                                        
     "An Act making supplemental and other appropriations; amending                                                             
     appropriations; making appropriations to capitalize funds; and                                                             
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the fourth  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley  stated the Committee would hear from  Department of                                                            
Corrections  and Department  of Law staff  directly involved  in the                                                            
Dr. Harold claims case  against the State. Co-Chair Donley noted the                                                            
Governor's  FY 02 Supplemental Budget  contains a request  to fund a                                                            
settlement of  Harold vs. State. He announced that  the Committee is                                                            
developing a policy requiring  staff directly involved in cases such                                                            
as  this be  available  to  answer  questions,  in addition  to  the                                                            
traditional presentation by the Department of Law.                                                                              
                                                                                                                                
BARBARA   RITCHIE,   Deputy  Attorney   General,   Civil   Division,                                                            
Department  of  Law,  noted she  is  involved  in  the case  at  the                                                            
Department of Law level.                                                                                                        
                                                                                                                                
DWAYNE  PEEPLES,  Director,  Division  of Administrative   Services,                                                            
Department of Corrections;  stated he is the supervisor of the human                                                            
resource   labor  relations   operations  for   the  Department   of                                                            
Corrections, where  the termination of Doctor Harold  was processed.                                                            
                                                                                                                                
Senator Ward  requested the Department  supply the Committee  with a                                                            
copy of the newsletter that Dr. Harold distributed to nurses.                                                                   
                                                                                                                                
DAVID  JONES;  Assistant  Attorney  General,  Governmental   Affairs                                                            
Section,  Civil  Division,   Department  of  Law  and  the  attorney                                                            
directly  involved in the  case, testified  via teleconference  from                                                            
Anchorage, and  stated he would provide a copy of  the letter to the                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Donley inquired  as to why the State should pay this claim.                                                            
                                                                                                                                
Mr. Jones responded  this was a very difficult case  and voiced that                                                            
the Department  acted appropriately.  He informed the Committee  the                                                            
Department  was  restructuring  its  health care  programs  for  the                                                            
institutions and had hired  Dr. Harold to implement the new program;                                                            
however,  Dr.  Harold  was  proving  "resistant"   to  the  proposed                                                            
changes. Mr. Jones stated  that although "it was clear that this was                                                            
not an  employment relationship  that  was going  to work out,"  the                                                            
Department  was  operating  under  significant  time  and  financial                                                            
restraints in accomplishing the restructuring.                                                                                  
                                                                                                                                
Mr. Jones  stated that one  of Dr. Harold's  lawsuits cites  being a                                                            
"whistle  blower" as a reason  for his dismissal.  Mr. Jones  stated                                                            
this and other claims have not been proven to be factual.                                                                       
                                                                                                                                
Mr. Jones  informed the  Committee that "whistle  blower" cases  are                                                            
difficult to  defend as they require  analysis of managers  involved                                                            
in  the case,  and  that it  "is hard  to  convince someone  who  is                                                            
convinced that  they are being retaliated  against" that  is not the                                                            
case. He stressed there  is always the chance that the judge or jury                                                            
may  side with  the employee.  He  declared  these are  some of  the                                                            
reasons the Department recommends settling with Dr. Harold.                                                                     
                                                                                                                                
Co-Chair Donley  asked why progressive  discipline actions  were not                                                            
taken.                                                                                                                          
                                                                                                                                
Mr.  Peeples  informed   the  Committee  that  specific   plans  and                                                            
instructions  were provided to Dr.  Harold during several  meetings.                                                            
Mr. Peeples  stated the  Department discussed  the direction  of the                                                            
program  with Dr.  Harold and  instructed  him not  to continue  his                                                            
resistance to  the plan. He was put on notice several  times and had                                                            
several   discussions   with   the   Commissioner    regarding   the                                                            
Department's "displeasure" with his behavior and actions.                                                                       
                                                                                                                                
Mr. Peeples  continued  that  in dealing  with an  employee at  this                                                            
level, " …a doctor  in a highly paid, exempt position…"  progressive                                                            
disciplinary  actions  involving conducting  multiple  hearings  and                                                            
discussions were not deemed necessary.                                                                                          
                                                                                                                                
Co-Chair  Donley  inquired  as to  who was  Dr.  Harold's  immediate                                                            
supervisor.                                                                                                                     
                                                                                                                                
Mr.  Peeples stated  that  Dr. Harold's  supervisor  was Mel  Henry,                                                            
Health Care  Administrator, Office  of the Commissioner,  Department                                                            
of Corrections.                                                                                                                 
                                                                                                                                
Co-Chair  Donley inquired  who made  the decision  to terminate  Dr.                                                            
Harold.                                                                                                                         
                                                                                                                                
Mr. Peeples  stated that  after consultation  with himself,  and the                                                            
Human   Resource   Labor   Relations   Operations    Division,   the                                                            
commissioner made the decision.                                                                                                 
                                                                                                                                
Co-Chair  Donley   voiced  support  for  the  goal   of  making  the                                                            
Department  more efficient  and  cost effective;  however,  stressed                                                            
that  progressive  disciplinary  actions  are important,  "even  for                                                            
upper  level positions,"  as  it might  help  avoid  these types  of                                                            
scenarios.                                                                                                                      
                                                                                                                                
Senator  Green asked if  Co-Chair Donley  considers the progressive                                                             
disciplinary process applicable to all fully exempt personnel.                                                                  
                                                                                                                                
Co-Chair  Donley  remarked  it would  be  "wise to  use progressive                                                             
discipline in the process."                                                                                                     
                                                                                                                                
Senator  Green  respectfully  disagreed,  and  stated she  does  not                                                            
support any  change in employment  law for exempt status  employees.                                                            
                                                                                                                                
Co-Chair  Donley concurred  with Senator  Green's comments;  however                                                            
reiterated,  at times,  a record in  the file  might save the  state                                                            
some money.                                                                                                                     
                                                                                                                                
Senator Green stated that  even if a specified process was followed,                                                            
when it gets into a court situation, conditions differ.                                                                         
                                                                                                                                
Co-Chair Donley  re-stated to the  Department of Law that  it is the                                                            
intent  of the  Committee  to have  personnel directly  involved  in                                                            
issues, testify before the Committee.                                                                                           
                                                                                                                                
The bill was HELD in Committee.                                                                                                 
                                                                                                                                
AT EASE: 9:22 AM / 9:23 AM