Appeal of New Hampshire Department of Administrative Services

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2024-0717, Appeal of New Hampshire Department of Administrative Services, the court on March 18, 2026, issued the following order:

The court has reviewed the written arguments and the record submitted on appeal, has considered the oral arguments of the parties, and has determined to resolve the case by way of this order. See Sup. Ct. R. 20(3). The New Hampshire Department of Administrative Services (DAS) appeals an order of the Personnel Appeals Board (PAB) that overturned the employee's termination and reinstated him with back pay and benefits, less mitigating income. See RSA 273-D:3, VI (Supp. 2025); RSA 21-I:58, I (repealed 2024). On appeal, DAS argues that RSA 273-D:3, V unconstitutionally delegates authority to the PAB to reinstate an employee whenever the PAB deems reinstatement

"just."¹DAS also asserts that the PAB erred by: (1) reinstating the employee, despite declining to overturn DAS's conclusion that he committed sexual harassment; and (2) reversing termination without specifying an appropriate method of alternative discipline. We affirm.

The following facts were found by the PAB or are otherwise derived from the record. The employee, who had worked for the State for approximately nineteen years, was a maintenance mechanic in the same building where the complainant worked as a lab scientist. The complainant alleged that the employee physically touched her on two occasions. On one occasion, he put his hands on her shoulders, pressed his torso against hers, and whispered in her ear. On another, he placed his hand on her lower back and guided her into an elevator. The complainant also stated that the employee commonly used

"pet names" to refer to her and other female employees. The employee admitted his use of "terms of endearment" but denied both instances of intentional physical touching.

DAS's investigation found that the employee had violated: (1) the State's Sexual Harassment Policy, by twice "engag[ing] in inappropriate touching"; and

(2) the State's Respect and Civility in the Workplace Policy, by addressing female employees with pet names. DAS terminated the employee, who appealed the decision to the PAB. See RSA 273-D:3, II (Supp. 2025); RSA 21- I:58, I (repealed 2024). Following a hearing in which the employee, the

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complainant's supervisor, and other witnesses testified, the PAB unanimously voted to reverse the employee's termination. In a subsequent written order, the PAB found "that this would be a case where progressive discipline would make a difference in employee behavior" and "that the [employee's] termination for his behavior was unjust and unwarranted." The PAB therefore granted the employee's appeal and reinstated his employment with back pay and benefits, less mitigating income. See RSA 273-D:3, V. DAS moved for a rehearing, which the PAB denied. This appeal followed.

We first address DAS's claim that RSA 273-D:3, V is an unconstitutional delegation of legislative authority. The constitutionality of a statute is a question of law, which we review de novo. Polonsky v. Town of Bedford, 173 N.H. 226, 230 (2020). In reviewing a legislative act, "we presume it to be constitutional and will not declare it invalid except upon inescapable grounds."

Id. at 231. Thus, we resolve any doubts in favor of the statute's constitutionality and uphold the statute "unless a clear and substantial conflict exists between it and the constitution." Id. "The party challenging a statute's constitutionality bears the burden of proof." Id. We interpret a statute's language according to its plain and ordinary meaning, construing all parts of the statute together to effectuate its overall purpose. State v. Levier, 177 N.H. ___, ___ (2026), 2026 N.H. 7, ¶11.

RSA 273-D:3, V provides, in relevant part: "In all cases, the [PAB] may reinstate an employee or otherwise change or modify any order of the appointing authority, or make such order as it may deem just." DAS contends that the portion of this statutory language permitting the PAB to issue any order it deems "just" provides an insufficiently defined standard to guide the PAB, thereby violating the separation of powers article of the New Hampshire Constitution. See Appeal of Blizzard, 163 N.H. 326, 331-32 (2012). Part I, Article 37 of the State Constitution sets forth the separation of powers for the three branches. We have construed that provision as requiring that "the General Court may not create and delegate duties to an administrative agency if its commands are in such broad terms as to leave the agency with unguided and unrestricted discretion in the assigned field of its activity." Id. "[A]lthough some delegation of lawmaking authority is necessary,

. . . the scope of delegations to administrative agencies should be limited to permitting the agency to fill in the details in order to effectuate the legislative purpose." Guillou v. State, 127 N.H. 579, 582 (1986). Thus, "[t]o avoid the charge of unlawfully delegated legislative power, a statute must lay down basic standards and a reasonably definite policy for the administration of the law."

Appeal of Blizzard, 163 N.H. at 332. When evaluating whether a statute impermissibly delegates legislative power, we construe the statute "to incorporate, by implication, the standards and policies" in surrounding statutory provisions. Id. We consider whether the statute includes "express or

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implied qualifications" to guide the agency and whether it limits "the potential for arbitrary and unprincipled decisions." Guillou, 127 N.H. at 581. In Appeal of New Hampshire Division of State Police, we interpreted a predecessor statute containing the same statutory language that is at issue in this case. Appeal of N.H. Div. of State Police, 171 N.H. 262, 267 (2018) (interpreting RSA 21-I:58, I (2012) (repealed 2024)). We explained that this language "vest[s the PAB] with discretion to determine whether to grant relief and how to craft that relief." Id. In addition, it "does not require the PAB to impose discipline for every violation of the administrative rules or standards of professional conduct." Id. at 270. DAS asserts that our discussion in Appeal of New Hampshire Division of State Police illustrates that RSA 273-D:3, V leaves the PAB "entirely without direction."

Contrary to DAS's contention, however, the term "just" conveys a specific meaning: "[l]egally right; lawful; equitable." Black's Law Dictionary 1030 (12th ed. 2024); cf. Black's Law Dictionary 1856 (12th ed. 2024) (defining "unjust" as

"[c]ontrary to justice; not fair or reasonable"). In support of its argument, DAS points to the statutory delegation we struck down as unconstitutionally broad in Guillou. Guillou, 127 N.H. at 581. That provision permitted an agency official to suspend or revoke a driver's license "for any cause which he may deem sufficient." Id. at 580. We agree with the employee that unlike the language at issue in Guillou — which lacked "any express or implied qualifications" to guide the agency, id. at 581 — the term "just" "imposes well- known legal principles of fairness and equity" that confine the PAB's discretion. We note that other New Hampshire statutes delegating authority also use the term "just" to demarcate standards. See, e.g., RSA 4:40-a (2020) (authorizing Governor and Executive Council to convey land underlying a body of water for

"just" consideration); RSA 374:2 (2009) (requiring that service charges levied by a public utility "be just and reasonable").²

Further, RSA 273-D:3, V sits within the broader framework of RSA 273- D:3 (Supp. 2025), which governs appeals of employment decisions before the PAB. The statutory scheme provides the PAB with additional guidance when determining whether a disciplinary order is "just." For example, RSA 273-D:3, III tasks the PAB with determining whether, in an appeal from a termination or other disciplinary action, sufficient proof demonstrates that:

(a) The disciplinary action was unlawful;

(b) The appointing authority violated the rules of the division of personnel by imposing the disciplinary action under appeal;

(c) The disciplinary action was unwarranted by the alleged conduct

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or failure to meet the work standard in light of the facts in evidence; or

(d) The disciplinary action was unjust in light of the facts in evidence.³

Although RSA 273-D:3, V permits the PAB to reverse a termination order for a reason not listed in RSA 273-D:3, III, the latter provision nonetheless limits

"the potential for arbitrary and unprincipled decisions" that we found unconstitutional in Guillou by illustrating the types of circumstances under which reinstatement would be proper. Guillou, 127 N.H. at 581. For example, reinstatement would be appropriate when the employee's termination was unlawful, violated the applicable administrative rules, or "was unwarranted by the alleged conduct." See RSA 273-D:3, III. We therefore reject DAS's argument that the use of "just" in RSA 273-D:3, V unconstitutionally delegates legislative authority to the PAB.

DAS additionally posits that, because RSA 273-D:3, V inadequately guides the PAB's exercise of discretion, the PAB in this case "made a decision based on personal judgments and experiences of the Board members." To the contrary, the PAB's order indicates that, after crediting the employee's long and largely positive employment history, the PAB reversed his termination because it believed "progressive discipline" would curb his behavior. See N.H. Admin. R., Per-A 207.12(b)(3), (4); RSA 273-D:3, III(c), (d). Thus, although the record of the PAB's post-hearing deliberations reflects extraneous discussion of the PAB members' personal experiences, the PAB's decision to reinstate the employee nonetheless fell within the scope of the discretion that the statute contemplates. Accordingly, we reject DAS's argument that the PAB's decision to reinstate the employee was based on the PAB members' personal experiences.

Next, DAS argues that the PAB erred, under both the statutory language now in RSA 273-D:3, V and the Personnel Rules, by reinstating the employee. Our review of the PAB's decision is governed by RSA 541:13 (2021). See RSA 273-D:3, VI. DAS, "as the appealing party, has the burden to show that the PAB's decision 'is clearly unreasonable or unlawful.'" Appeal of Cass, 177 N.H. ___, ___ (2025), 2025 N.H. 51, ¶7 (quoting RSA 541:13). "The PAB's findings of fact 'shall be deemed to be prima facie lawful and reasonable.'" Id. (quoting RSA 541:13). "We will not vacate or set aside the PAB's decision except for errors of law, unless we are satisfied, by a clear preponderance of the evidence, that its order is unjust or unreasonable." Id. "However, we review the PAB's interpretations of statutes and administrative rules de novo." Id. "When interpreting both statutes and administrative rules, we ascribe the plain and

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ordinary meanings to the words used, looking at the rule or statutory scheme as a whole." Id.

DAS contends that the PAB erroneously concluded that the employee's

"termination for his behavior was unjust and unwarranted," because the PAB did not overturn DAS's conclusion that the employee committed sexual harassment. DAS observes that even if the PAB questioned whether the alleged

"intentionally inappropriate" physical touching occurred, it declined to determine that the employee did not violate State policy. Rather, during their deliberations, the PAB members agreed that "even if the incidents did happen, [the employee's conduct] does not rise to a level of termination." The PAB then unanimously voted — consistent with its subsequent written order — to find termination inappropriate while declining to overturn DAS's factual findings. We have explained that neither the language now in RSA 273-D:3, V "nor the applicable administrative rules limit the authority of the PAB to reinstate only in situations in which the employee did not commit a terminable offense."

Appeal of N.H. Div. of State Police, 171 N.H. at 268. The pertinent administrative rules also do not "require[] that the PAB consider specific evidence or factors as a precondition for modifying the order of the appointing authority." Id. at 269; see N.H. Admin. R., Per 1003.03 (providing only that "an appointing authority may consider" certain listed factors "[i]n determining the appropriate form of discipline" (emphasis added)). Accordingly, even if the PAB found that the employee committed a terminable infraction of State policy, it could properly reverse his termination if it concluded that to do so would be

"just." See RSA 273-D:3, V. The PAB's order establishes that it found relevant: (1) the employee's long history of State employment and respect from his supervisors; (2) his lack of prior reported violations of the State policies at issue; (3) his lack of

"aware[ness] that his social behaviors were offensive"; and (4) the likelihood that "progressive discipline" would effectively address his conduct. Although the Personnel Rules do not place compulsory constraints on the PAB's disciplinary determination, these considerations reflect factors listed in New Hampshire Administrative Rule Per 1003.03. See N.H. Admin. R., Per 1003.03(b), (c) (stating that a disciplinary authority may consider "[t]he nature and severity of the conduct or offense in relation to the employee's position classification" and "[t]he employee's past record of performance and discipline"). We therefore conclude that DAS has not met its burden to show that the PAB's reinstatement of the employee was clearly unreasonable or unjust. See RSA 541:13; Appeal of Cass, 177 N.H. at ___, 2025 N.H. 51, ¶7. Finally, DAS argues that even if the PAB correctly reversed the employee's termination, it erred by declining to prescribe a specific mode of alternative discipline. DAS did not raise this argument in its motion for rehearing before the PAB, and advances it for the first time on appeal. "In an

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administrative appeal pursuant to RSA chapter 541, the appealing party must first file a motion for rehearing . . . . Any ground not set forth in the motion for rehearing is not reviewable on appeal, absent good cause shown to specify additional grounds." Appeal of Walsh, 156 N.H. 347, 351 (2007); see RSA 273- D:3, VI (providing that RSA chapter 541 (2021) governs PAB appeals); RSA 541:4. "The reason for these requirements is obvious: administrative agencies should have a chance to correct their own alleged mistakes before time is spent appealing from them." Appeal of Walsh, 156 N.H. at 351. "When a record does not demonstrate that the appealing party has met the requirements of RSA 541:4 we will refuse the appeal or dismiss it on our own motion." Id. DAS has not preserved this argument by raising it in its motion for rehearing, nor has it shown good cause justifying its failure to do so. We therefore decline to address this argument.

Affirmed.

MACDONALD, C.J., and DONOVAN, COUNTWAY, and GOULD, JJ.,

concurred.

Timothy A. Gudas, Clerk