In re Foglio

Justice LONG

delivered the opinion of the Court.

The New Jersey Constitution prescribes that Civil Service appointments “shall be made according to merit and fitness to be ascertained, as far as practicable, by examination, which, as far as practicable, shall be competitive.” N.J. Const, art. YII, § 1, 112. The Civil Service Act, N.J.S.A 11A:1-1 to 12-6, and the regulations promulgated thereunder, N.J.AC. 4A-.4-1.1 to 7.12, in turn, implement those merit and fitness principles. In furtherance of that goal, when an appointing authority1 chooses, under N.J.S.A. llA:4-8, the so-called Rule of Three, to bypass a candidate who ranked higher on a competitive examination, it must report to the Department of Personnel (DOP) why it did so. N.J.AC. 4A:4-4.8(b)(4). The purpose for the report is to assure that the appointing power was not exercised arbitrarily and to provide a basis for review.

*41In this case, a candidate for the position of firefighter was bypassed for appointment in favor of two lower-ranked candidates. The reason advanced by the appointing authority was that the lower-ranked eligibles “best meet[ ] needs of Department.” The candidate challenged the sufficiency of the reason, which was upheld both administratively and by the Appellate Division, a conclusion with which we disagree.

The required statement of reasons is the appointing authority’s explanation why the higher-ranked candidate was passed over and why that decision did not violate merit and fitness principles. Where, as here, the reason advanced was boilerplate, equally applicable to any bypass case and utterly lacking in specific explanatory language, it was not sufficient to satisfy the appointing authority’s reporting obligation. We therefore reverse and remand the case to the appointing authority for the issuance of a proper statement of reasons.

I.

In 2007, the City of Ocean City (the City) sought to fill three vacant firefighter positions. On May 24, 2007, a list of eligible candidates for the positions was certified2 by the Civil Service Commission (Commission) to the City, the appointing authority. Each candidate on the eligible list was ranked according to scores obtained on a competitive examination. Nicholas Foglio ranked second on that list.

At the time the list was certified, Foglio had served for eight years as a fireman/emergency medical technician (EMT) in multiple volunteer fire departments, logging over one-thousand total hours. He was licensed by the state as an EMT and received a number of state and county certifications in relevant skill sets, including confined space awareness, confined space operations, rope rescue, fire fighting, fire attack, and truck operations. Fog-*42lio was the only candidate on the eligible list with any prior firefighting experience and training.

On June 15, 2007, the City conducted interviews of Foglio and the other candidates. On July 11, 2007, the City appointed eligible candidates ranked first (a student-teacher), third (a bartender), and fourth (a lifeguard), bypassing Foglio.

In accordance with the provisions of N.J. AC. 4A:4-4.8(b)(4), the City reported to the DOP that it had bypassed Foglio, a higher-ranked candidate, because the two lower-ranked eligible candidates “best meet[ ] needs of Department.”3

Foglio appealed to the Division of Local Human Resources Management (LHRM), which determined that the City properly disposed of the certification pursuant to the Rule of Three articulated in N.J AC. 4A:4-4.8(a)(3), and provided a proper statement of reasons in compliance with N.J.AC. 4A:4-4.8(b). In its letter, LHRM cited the statement to the DOP that the lower-ranked eligible candidates were appointed because they “best met the needs of the Appointing Authority.”

Dissatisfied, Foglio sought review by the Commission. The Commission requested that the City submit a response. In its March 26, 2008, letter, the City asserted that Foglio “failed to offer any evidence to demonstrate that [the City] failed to properly exercise the ‘[R]ule of [T]hree.’ ” The City also asserted that it had exercised the discretion vested in it to bypass Foglio.

The Commission concluded that Foglio had failed to satisfy his burden to show by a preponderance of the evidence that the appointing authority’s decision to bypass him was improper. In ruling, it observed that the appointing authority selected two lower-ranked eligibles because “they best met the needs” of the fire department. Because Foglio did not assert, much less prove, an unlawful motive, such as discrimination or political influence, *43the Commission held that “the appointing authority’s bypass of [Foglio’s] name on the Fire Fighter (M2246D), Ocean City, eligible list was proper.”

Foglio appealed, and the Appellate Division affirmed. The panel explained that, “[i]n the absence of a discriminatory motive, the appointing authority has the discretion to appoint any one of the top three candidates whom the public employer considers best suited to fill the position.” A higher-ranked candidate may be bypassed “for any legitimate reason based upon the candidate’s merit.” Ultimately, a candidate who challenges the decision of an appointing authority bears the burden of submitting facts tending to show “improper motives,” like “age or gender discrimination or anti-union animus.” Because the instant record “contain[ed] no evidence of unlawful motive,” the panel upheld the Commission’s determination.

We granted Foglio’s petition for certification. In re Foglio, 204 N.J. 39, 6 A.3d 441 (2010).

II.

Foglio’s essential argument is that the statement of reasons advanced by the City was inadequate and inconsistent with the New Jersey Constitution and the relevant Civil Service statutes and regulations. The Commission counters that the City complied with all required procedures, acted within its discretion in bypassing Foglio, gave a sufficient reason therefor, and that Foglio failed to sustain his burden of proving the Commission’s actions were arbitrary or discriminatory.

III.

The New Jersey Constitution prescribes that, “Appointments and promotions in the civil service of the State, and of such political subdivisions as may be provided by law, shall be made according to merit and fitness to be ascertained, as far as practicable, by examination, which, as far as practicable, shall be competí-*44five.” N.J. Const, art. VII, § 1, If 2; see also N.J.S.A llA:l-2(a) (“It is the public policy of this State to select and advance employees on the basis of their relative knowledge, skills and abilities.”).

The merit and fitness principles underlying that constitutional provision are implemented by the Civil Service Act and the regulations promulgated thereunder. See N.J.S.A llA:2-6(d) (granting Merit System Board power to “[a]dopt and enforce rules to carry out this title and to effectively implement a comprehensive personnel management system”). Those statutory and regulatory provisions establish the procedures by which merit-based appointments are to be made.

In the case of a vacancy, the Civil Service Act provides for an examination process. N.J.S.A. llA:4-2. When an examination is announced, minimum qualifications for the position must be posted. N.J AC. 4A:4-2.1. After the examination, an eligible list is published ranking all passing candidates by score, with special ranking rules for veterans and for tie scores. N.J.AC. 4A:4-3.2. That list remains in force for three years, although the Commission may extend or delay the date of its expiration. N.J.AC. 4A:4-3.3(b). When an appointing authority requests a list of candidates for a vacant position, the Commission will issue a certification “containing the names and addresses of the eligibles with the highest rankings on the appropriate list.” N.J.AC. 4A:4-4.2(a). A complete certification consists of “three interested eligi-bles for the first permanent appointment, and the name of one additional interested eligible for each additional permanent appointment.” N.J.AC. 4A:4-4.2(e)(2).

No right accrues to a candidate whose name is placed on an eligible list. In re Crowley, 193 N.J.Super. 197, 210, 473 A.2d 90 (App.Div.1984) (“[A] person who successfully passes an examination and is placed on an eligible list does not thereby gain a vested right to appointment.”). “The only benefit inuring to such a person is that so long as that list remains in force, no appointment can be made except from that list.” Ibid. “[T]he best that can be *45said” of a candidate on an eligible list is that he has “a right to be considered for appointment.” Nunan v. N.J. Dep’t of Pers., 244 N.J.Super. 494, 497, 582 A.2d 1266 (App.Div.1990), certif. denied, 126 N.J. 335, 598 A.2d 892 (1991).

The Rule of Three, which governs the hiring discretion of the appointing authority, “permits an appointing authority to select one of the three highest scoring candidates from an open competitive examination.” Local 518, N.J. State Motor Vehicle Emps. Union v. Div. of Motor Vehicles, 262 N.J.Super. 598, 603, 621 A.2d 549 (App.Div.1993). The Rule of Three has governed the certification of candidates to the appointing body as well as the appointing body’s hiring discretion for over a century. See L. 1908, c. 156, § 21. In its current form, the Rule of Three states:

The commissioner shall certify the three eligibles who have received the highest ranking on an open competitive or promotional list against the first provisional or vacancy. For each additional provisional or vacancy against whom a certification is issued at that time, the commissioner shall certify the next ranked eligible. If more than one eligible has the same score, the tie shall not be broken and they shall have the same rank. If three or more eligibles can be certified as the result of the ranking without resorting to all three highest scores, only those eligibles shall be so certified.
A certification that contains the names of at least three interested eligibles shall be complete and a regular appointment shall be made from among those eligibles. An eligible on an incomplete list shall be entitled to a provisional appointment if a permanent appointment is not made.
Eligibles on any type of reemployment list shall be certified and appointed in the order of their ranking and the certification shall not be considered incomplete.
[N.J.S.A. 11A:4-8]

Under the Rule of Three, after a list of at least three candidates is certified, the appointing authority has the discretion to select from among the top three candidates in filling a vacancy. N.J.S.A. llA:4-8; see also N.J.A.C. 4A:4-4.8(a)(3) (“Upon receipt of a certification, an appointing authority shall ... [a]ppoint one of the top three interested eligibles ([R]ule of [T]hree)____”); In re Martinez, 403 N.J.Super. 58, 72, 956 A.2d 386 (App.Div.2008) (“In essence, the appointing authority must select from one of the top three candidates ranked on the list.”).

*46“The [R]ule of [Tjhree recognizes employment discretion and seeks to ensure that such discretion is not exercised in a way inconsistent with ‘merit’ considerations.” Terry v. Mercer Cnty. Bd. of Chosen Freeholders, 86 N.J. 141, 149-50, 430 A.2d 194 (1981); see also Martinez, supra, 403 N.J.Super. at 72, 956 A.2d 386 (“The dual legislative objectives served by the Rule are to ensure appointments based on merit as determined by competitive examinations while [still] affording the appointing authority some discretion to accommodate other merit criteria.” (quoting Gallagher v. Mayor & Council of the Town of Irvington, 190 N.J.Super. 394, 399, 463 A.2d 969 (App.Div.1983) (emphasis omitted) (internal quotation marks omitted))). The purpose of the Rule of Three is to limit, but not to eliminate, discretion in hiring. Commc’ns Workers of Am. v. N.J. Dep’t of Pers., 154 N.J. 121, 129, 711 A.2d 890 (1998); Terry, supra, 86 N.J. at 149, 430 A.2d 194. While ensuring that competitive examinations winnow the field of candidates, the Rule of Three does not stand as “an immutable or total bar to the application of other important criteria” by a government employer. Terry, supra, 86 N.J. at 150, 430 A.2d 194.

Once the appointing authority exercises its discretion and selects the candidate(s), the regulations promulgated by the Commission require that it file a report with the DOP. N.J.AC. 4A:4-4.8(b). If the appointing authority chooses to bypass a higher-ranked candidate, it “remains bound,” Commc’ns Workers, supra, 154 N.J. at 129, 711 A.2d 890, to provide a “statement of the reasons why the appointee was selected instead of a higher ranked eligible,” N.J AC. 4A:4-4.8(b)(4). The purpose of that regulation is to guard “against favoritism and arbitrary actions by an appointing authority and facilitate[] administrative review by the DOP.” Local 518, supra, 262 N.J.Super. at 605, 621 A.2d 549; 20 N.J.R. 1189 (June 6,1988) (“The provision ensures that only merit and fitness are factors in appointments, and that no impermissible reason is used for bypassing an eligible on a list.”).

The statement of reasons requirement has been embedded in the civil service selection process for over seventy years and is *47now codified at N.J.AC. 4A:4-4.8(b)(4).4 Under that scheme, the appointing authority retains discretion to bypass a higher-ranked candidate “for any legitimate reason based upon the candidate’s merit.” 5 In re Hruska, 375 N.J.Super. 202, 210, 867 A.2d 479 (App.Div.2005); see also Crowley, supra, 193 N.J.Super. at 214, 473 A.2d 90 (appointing authority can bypass higher-ranked candidate for any “legitimate reason”). It is the required statement of reasons “why the appointee was selected instead of a higher ranked eligible” in N.J.A.C. 4A:4-4.8(b)(4) that assures that the appointment process was not exercised arbitrarily and that provides some basis for review.

A candidate who is bypassed has standing to challenge the hiring decision of the appointing authority, and may appeal to the Commission. N.J.A.C. 4A:2-1.1. The burden of proving unlawful, arbitrary, or capricious action is on the appellant. N.J.A.C. 4A:2-1.4(c).

Where a candidate is improperly removed from a list, or an appointing authority fails to consider a candidate as required under the Rule of Three, “[t]he appropriate remedy” is not appointment, but rather a direction to “the Commissioner of Personnel to add appellant’s name to the certified list of eligibles *48or to order [the Commissioner] to revive an expired list and add appellant’s name.” Nunan, supra, 244 N.J.Super. at 498, 582 A.2d 1266 (citations omitted).

However, where a candidate has proved actual discrimination on the basis of membership in a protected class, courts have imposed individualized, retroactive remedies such as mandatory appointments and back-pay. E.g., Terry, supra, 86 N.J. at 151-52, 430 A.2d 194 (remedial provisions of Law Against Discrimination constitute exception to appointing body’s discretion under Rule of Three). In other words, the remedy is directly related to the nature of the impropriety. That is the backdrop for our inquiry.

IV.

At issue here is not whether the appointing authority has the power to choose a lower-ranked candidate. Foglio properly concedes that that is permissible under the Rule of Three. Nor are we confronted with a specific claim of improper or discriminatory motive. Foglio also concedes that he does not know what precipitated the bypass. What is before us is the narrow question of whether the statement of reasons issued pursuant to N.J.A.C. 4A:4 — 4.8(b)(4) was adequate. We think it was not.

Our Constitution requires all appointment or promotion decisions be “merit and fitness” based, “as far as practicable” on competitive examination. N.J. Const, art. VII, § 1, 112. The competitive examination is the favored model because it provides an objective measure of the candidates’ abilities. Where an appointing body chooses to bypass a candidate that ranked higher on a test, that decision is facially inconsistent with merit and fitness principles unless the appointing authority provides a statement of “legitimate” reasons for the bypass. Hruska, supra, 375 N.J.Super. at 210, 867 A.2d 479. Without those reasons, the DOP can have no certainty that the appointment process was not exercised arbitrarily and would have no basis for review.

*49That said, it is clear that the boilerplate advanced by the City as an explanation for the bypass here was inadequate insofar as it failed to provide any real enlightenment whatsoever as to why the bypass occurred. That is not to suggest that the statement of reasons need be lengthy or multifaceted to pass muster. What is wrong with “best meets needs of Department” is not its brevity, but its failure to reveal anything about the bypass decision. The City might just as well have stated: “we liked them better,” an equally unrevealing explanation.

The required statement needs to address the reasons why a higher ranked candidate was bypassed. For example, the City might have relied on a preference for a college degree; or the performance of the applicants in the give-and-take of an interview; or on extraordinary character and employment references. Had Foglio been chosen over a higher-ranked eligible, the City could have pointed to his vast firefighting experience and training. Each of those reasons would have satisfied N.J.AC. 4A:4-4.8(b)(4). The possibilities are endless — as varied as the candidates themselves. What is not permitted is the kind of concluso-ry, unrevealing statement issued in this case that did not explain the selection process or otherwise assure that the bypass of a higher-ranked candidate was not arbitrary.

In that respect, the Commission has expended much time and effort on the notion that Foglio has not borne his burden of proving that the bypass decision was arbitrary or discriminatory. That is putting the proverbial cart before the horse. It is the City that was obliged to provide a statement of legitimate “reasons why the appointee was selected instead of a higher ranked eligible.” N.J.AC. 4A:4-4.8(b)(4). In the absence of such reasons, the appointment is presumably in violation of the principles of merit and fitness, and it is the City that bears the burden of justifying its action.

We therefore reverse and remand the matter to the City for the production of a proper statement of reasons why the lower-ranked candidates were appointed instead of Foglio. See Crowley, supra, *50193 N.J.Super. at 213, 473 A.2d 90 (ordering as remedy remand for plenary hearing). Thereafter, Foglio may pursue his appeal before the Commission and seek to prove that the appointing body acted arbitrarily.

V.

The judgment of the Appellate Division is reversed. The matter is remanded to the City for proceedings consistent with the principles to which we have adverted.

An appointing authority is "a person or group of persons having power of appointment or removal.” N.J.A.C. 4A: 1-1.3.

A list is certified when it is "presented to an appointing authority for regular appointment.” N.J.A.C. 4A:1-1.3.

Foglio subsequently met with the Ocean City Business Administrator who told him that he did not have the education for the position and his interview was "weak.”

The "statement of reasons" requirement first appeared in 1939. See L. 1939, c. 322, § 1. At that time, the statute was codified at N.J.S.A. 11:10-6.1. The requirement remained a part of the statute through the next two revisions. L. 1974, c. 160, § 3; L. 1947, c. 123, § 1. The statute was moved from Title 11 to Title 11A in 1986, and has not changed since. See N.J.S.A. 11A:4-11; L, 1986, c. 112, § 11A:4-11. The current version of the statute does not mention any requirement for a statement of reasons for bypassing a candidate. However, the statement of reasons requirement is now codified as part of the administrative code, N.J.A.C. 4A:4-4.8(b)(4).

Bypassing a higher-ranked candidate for an improper motive is not a "legitimate reason." E.g., Crowley, supra, 193 N.J.Super. at 214, 473 A.2d 90. Examples of such motives include anti-union animus or discrimination based on characteristics like race, ancestry, or gender. Terry, supra, 86 N.J. at 147, 152, 430 A.2d 194 (discrimination on basis of sex prohibited); Crowley, supra, 193 N.J.Super. at 211-13, 473 A.2d 90 (discrimination on basis of anti-union animus prohibited). Such discriminatoiy motives have not been alleged in this case.