We’ve seen power grabs like this before

Twenty years ago, an overhaul at DHHS flipped the agency upside down


In 1997, the legislature gave the commissioner of DHHS broad powers to reshape his agency. Part of that included targeted layoffs and demotions, which sparked the Reinstate the 58 movement. A week after layoffs were announced, 150 members rallied on the campus of the State Office Park South.

The news that the commissioner of the Department of Education is seeking broad powers to reshape the department as he sees fit should set off alarm bells for many reasons. Chief among them is that we’ve seen what the result can be if this happens.

It was nearly two decades ago, in 1997, that the legislature granted Health and Human Services Commissioner Terry Morton the ability to bypass state laws and personnel rules to reshape the department. The resulting 58 layoffs, and others who were demoted, set off a firestorm across the state, and led to a campaign to “Reinstate the 58” employees. All told, the mess took nearly eight years to clean up.

“It was huge,” said John Avlas, who was a steward and a supervisor at DHHS at the time. “It was all over the newspapers. I think it was a shock to the commissioner that it caused such a furor. I think to an extent he felt betrayed by the legislature. He didn’t know what he was getting into.”

The 58 layoffs represented a small fraction of the thousands of DHHS employees at the time, but the manner of the layoffs and the subsequent creation of high-salary management positions fueled the outrage. Newspapers in the state followed the issue closely, and the SEA newsletter ran headlines screaming “Local 1984 fights millionaire Morton’s layoffs.”

Targets for layoff

To DHHS employees at the time, the layoffs and demotions were clearly targeting certain individuals. The powers given to Morton made that targeting possible. Chapter 45 member and SEA Past President Diana Lacey said obvious examples were everywhere.

“In my division, my director was demoted in lieu of layoff and a new director was appointed,” she said.

The two had butted heads in the past, Lacey said, and the new director had a good relationship with Morton and his inner circle.

“From that perspective, the individuals that were demoted often disagreed — from a collegial standpoint — with the new director, so it seemed to be retaliatory,” she said. “We had a few people laid off from the field and those tended to be people who were in disagreement with the new director.”

In other cases, targeting of specific people was apparent for other reasons.

“In one part of the department, a husband and wife were both laid off, which seemed beyond chance, beyond reason, that they would both be laid off,” Lacey said.

‘People were crying’

The handling of layoffs was also questionable, with contractor Snowden Associates providing assistance to the department. Avlas said, as a supervisor, he sadly had a first-hand view.

“Employees were told to pack their things and leave immediately,” he said. “They sent security over. People were crying, because they’d known them for years.”

Ken Roos, now First Vice President of the union, wasn’t a member at the time, but that soon changed. When the layoffs were announced, Roos said his supervisor told him it was the task of the immediate supervisor to notify affected employees and escort them out of the building.

“Instead of the commissioner or upper management contacting the individuals, it was left to the immediate supervisors who didn’t really know what was going on,” Roos said. “I remember saying to my supervisor that this wasn’t my choice, why isn’t someone higher up doing this?”


Members rallied and signed petitions while the union pursued legal and legislative action. It took more than eight years, but much of the damage was eventually undone.

‘Reinstate the 58’

Within a week of the layoffs, SEA members took action. More than 150 rallied on the grounds of the State Office Park South, officially beginning the “Reinstate the 58” movement. The union was active on multiple fronts, petitioning Gov. Jeanne Shaheen to reinstate the employees and fighting the issue all the way to the Supreme Court.

In the midst of all of this, Morton stayed mum. That wasn’t the case for the commissioner’s boss, however.

“Gov. Shaheen come over to my building, and stood right in the middle of the cafeteria, telling employees that she was there and was available,” Avlas said.

Meanwhile, the commissioner was left fairly isolated.

“Not one legislator came to his defense because the outrage was so intense,” Avlas said. “That was the end of Morton. It was pretty amazing.”

Morton soon after received a vote of no confidence from DHHS employees, with a stunning 96 percent voting, “Commissioner Morton is NOT doing a good job and I wish to express my lack of confidence in his administration.”

The fight against Morton’s layoffs and demotions dragged on for years, and the toll was heavy. Nearly all laid off employees were hired back and the demotions were overturned, all with back pay. Tragically, one of the workers who was laid off, a hearings officer by the name of Peter Prescott, took his life by suicide.

“He’d been told he was safe as he was the only non-lawyer in his department,” Avlas said. “They found some way to isolate him and terminate him.”

Cleaning up the mess

The entire episode took years to clean up and caused more endless problems. The new high-level positions created at the agency were staffed mainly by workers with no public sector experience.

“The new people that were brought in didn’t want to deal with the constructs that had been put in place by the legislature, and that eventually hurt the organization,” Lacey said. “Much of that was undone, but it took close to eight years for everything to be resolved, and it cost a fortune.”

As for Morton, he stayed with the agency up until his term ended at the beginning of 1999 and Gov. Shaheen did not reappoint him. Avlas said he recalled Morton’s successor, Don Shumway, saying that on the day he reported for duty, he found Morton still in his office doing work.

“Here’s a guy who apparently really loved the job, but just had no sense of the political aspects,” Avlas said.

Roos said it ended up creating a lot of work for everyone involved.

“Those who were terminated got their jobs back eventually, but other people had to do the work they were doing,” Roos said. “And there was even more upheaval after people were brought back, and had to be trained on new jobs.”

Now, just as it was with DHHS in 1997, Roos said plans to reorganize the Department of Education are an attempt to fix a problem that doesn’t exist.

“This has all the earmarks of a power grab,” he said. “Government agencies may not be perfect, but they’re still working well. When things need fixing, we need to do so thoughtfully. Hopefully, this time we’ll be smart enough to make the right decision.”

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