Request By:
Mr. T. Steven Bland
Hardin County Attorney
#30 Public Square
P.O. Box 834
Elizabethtown, Kentucky 42701
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your request for an opinion involves the Hardin Memorial Hospital. In that regard, your letter reads in part:
"Hardin County owns a hospital known as Hardin Memorial Hospital. It was erected approximately 28 years ago through the use of Hill-Burton funds, and has been maintained by the county ever since. A few years ago, the county decided to lease the hospital to a not-for-profit corporation comprised of local citizens, for the purpose of having the hospital operated outside of the political climate of Fiscal Court. During the time that the hospital was leased and operated by this nonprofit corporation, various employee benefit packages came into existence at the hospital.
"A few months ago, Fiscal Court of Hardin County voted to dissolve the lease with this nonprofit corporation and take over control of the Hardin Memorial Hospital. It was further decided by the Court that all employees currently employed at Hardin Memorial Hospital would be employed by the county, and as such are considered county employees. Subsequently, Fiscal Court entered into a management contract with Hospital Corporation of America to manage the hospital. However, under the contract the employees at the hospital are considered county employees. "
Your question reads:
"Assuming that the employees of Hardin Memorial Hospital are now county employees, and further assuming that the benefits which they are receiving by virtue of their employment at the hospital (retirement, medical insurance, vacation benefits, etc.) are far superior to those received by the remainder of the county employees, does the county have any legal basis for providing one level of benefits to some county employees and a different level of benefits to the hospital employees?"
We assume from the facts given that the hospital is actually under the control of the fiscal court. See KRS 216.040 (repealed by Acts 1978, Ch. 118, § 19, eff. June 17, 1978). See the present KRS 67.083(3)(d) (Fiscal court may provide a county hospital) . Thus you are writing about a "county hospital" in the fullest legal sense of a county institution. See Booth v. City of Owensboro, 274 Ky. 325, 118 S.W.2d 684 (1938); and Knox Cty. Fiscal Court v. Knox Cty. Gen. Hops., Inc., Ky., 528 S.W.2d Hosp., Inc., Ky., 528 S.W.2d 672 (1975) 674.
Now as to your question as to whether the fiscal court can provide the county employees who are working in the hospital with greater employee benefits than other county employees, it is possible that the courts might hold that the hospital employees involve a different classification in terms of constitutional consideration. Working as a hospital employee would apparently present something distinctly different from other county employment. It calls for a certain efficiency as well as a dedication and compassion for sick or injured people. Section 3 of the Kentucky Constitution provides in part that:
"All men, when they form a social compact, are equal; and no grant of exclusive, separate public emoluments or privileges shall be made to any man or set of men, except in consideration of public services; * * *" (Emphasis added).
As relates to the General Assembly, § 59 of the Kentucky Constitution prohibits local and special legislation. On the question of equality, this was written in Markendorf v. Friedman, 280 Ky. 484, 133 S.W.2d 516 (1939) 519:
"Section 3 of the Constitution provides that no grant of exclusive privileges shall be made to any man or set of men, except in consideration of public services, and section 59 prohibits special or local legislation. In addition to these provisions the Fourteenth Amendment to the Federal Constitution declares that no state shall deny to any person within its jurisdiction the equal protection of the laws. The purpose of these provisions was to place all persons similarly situated upon a plane of equality and to render it impossible for any class to obtain preferred treatment, or for those in power to grant favors for political support. However, it has been uniformly recognized that the foregoing provisions do not forbid a classification based on reasonable and natural distinctions, and an Act making a classification will only be voided where the classification is manifestly arbitrary and unreasonable so as to exclude one or more of a class without reasonable basis in fact."
In Commonwealth v. Griffen, 268 Ky. 830, 105 S.W.2d 1063 (1937) 1065, the court observed that "The General Assembly may for legislative purposes indulge in class legislation, subject always to the strict rule that such must be based on some difference which appears natural and reasonable. This is permitted to meet contingencies; to meet the needs of the people; to promote worthy public objects or the welfare or best interest of the people as a whole." Elsewhere therein the court wrote that "Such classification will not be disturbed by the court unless manifestly so arbitrary or unjust as to impose a burden upon, or exclude one or more of a class without a reasonable basis in fact. . . . No general rule can be stated upon which a reasonable basis of legislative classification may be predicated, nor can it always be determined by analogy. The basis of classification of every act must be considered singly in the light of certain fundamental principles which are generally accepted by the courts."
Also note § 2, Kentucky Constitution, prohibiting the exercise of arbitrary power. Judge Palmore, in Pritchett v. Marshall, Ky., 375 S.W.2d 253 (1964) 258, wrote that the prohibition of § 2 against arbitrariness involves "a concept we consider broad enough to embrace both due process and equal protection of the laws, both fundamental fairness and impartiality."
CONCLUSION
In considering the court holdings and the precise nature of determining whether the subject fiscal court classification for the hospital employees, as compared with the general fiscal court classification of county employees, is valid under the constitution is a matter for the courts to determine. In OAG 81-188, to which you referred, there was no mention nor treatment of the "county hospital employee" situation. Question No. 2 therein merely related to all county employees generally. In that general context we said that hospitalization insurance, if it is to be afforded to county employees, should be afforded to all county employees alike. See Markendorf v. Friedman, above.