Maryland's largest state workers union will ask the General Assembly to undo a Court of Appeals ruling that would erode traditional seniority protections for thousands of public employees.

The state's highest court held last week that when jobs reopen after layoffs, agencies are not required to offer the positions to previous employees in order of seniority. Instead, the court said, agencies have the option of following seniority rules or recruiting employees.

Sue Esty, legislative affairs director for Council 3 of the American Federation of State, County and Municipal Employees, said Monday that the union will seek a legislative remedy to that decision. "We're very disappointed in the decision," Esty said. AFSCME represents about 25,000 state workers.

The layoffs at issue in the case took place during the budget crisis of 2009, when the state closed the Rosewood Center in Owings Mills, which treated the developmentally disabled. Some Rosewood employees were transferred to Spring Grove Hospital in Catonsville. But about 50 employees, including 17 who eventually joined in a union-backed lawsuit, were laid off in the consolidation of the two facilities.

Even before the layoffs became effective, the Department of Health and Mental Hygiene decided it could rehire about 22 of the caregivers. Instead of reinstating the most senior laid-off workers, the department invited them to reapply for jobs in a process that included new interviews and a review of past sick-leave use and disciplinary actions, the court found.

The department ultimately rehired some workers with less seniority than those who were rejected.

AFSCME filed a grievance on behalf of the rejected senior employees, seeking to uphold what it considers a core union principle.

"Seniority is an objective standard for determining who gets laid off and who gets restored to their job," Esty said. Other systems, she said, are open to favoritism.

The case was heard by an administrative law judge, who upheld management's decision to conduct a new hiring process. The employees appealed to the courts.

The Court of Special Appeals issued an opinion in 2012 that handed the O'Malley administration a victory on the broad issue of whether management could choose a recruitment process over reinstatement by seniority. But it gave the plaintiffs a ray of hope, telling the administrative judge to determine whether the department conducted a recruitment that was "nothing more than a pretext to disguise" Spring Grove's avoidance of the seniority system.

The intermediate appeals court pointed to several instances in which it found strong evidence that the department had circumvented state hiring rules, noting that management apparently used past sick-leave use and disciplinary actions as hiring criteria but did not spell that out in its hiring plan.

"If an agency wishes to forgo the recruitment process, it can reinstate from laid-off employees based on seniority," the court held. "What an agency cannot do is to pick and choose solely from among laid-off employees based upon the agency's assessment of their qualifications without conducting a valid recruiting process."

The Court of Appeals decided last week that the lower court was right on all counts, including its instructions to the administrative judge to re-examine the facts surrounding the rehiring.

Joel A. Smith, lawyer for the plaintiffs, said his clients are confident they will win at that level.

"We believe the administrative law judge will find the agency violated the law," he said.

Gov. Martin O'Malley's press office referred questions to the health department. Dori Henry, a department spokeswoman, said she couldn't answer questions about the matter because it is still the subject of legal proceedings.

While the former employees could still win their case, the broader implications of the ruling are significant for AFSCME. Esty said that in previous layoffs, the state respected the seniority of displaced workers when positions were restored.

"That's the common understanding of the term layoff," she said.

Esty said it was especially disturbing that the health department may have taken use of sick pay into account in passing over senior workers for rehiring.

"If you're sick, that should really not be the basis of hiring or not hiring somebody," she said.

michael.dresser@baltsun.com