#### DONALD E. TOLLIVER, Petitioner-Appellee v. EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Respondents-Appellant

No. 8610SC356

(Filed 4 November 1986)

Master and Servant §10— reversal of State Personnel Commission decision — remand for new hearing

The superior court did not err in reversing a decision of the State Personnel Commission and remanding the case for a new hearing where the court found that the employee’s rights may have been prejudiced by agency findings and conclusions made upon unlawful procedure, affected by error of law, unsupported by substantial evidence, and that were arbitrary or capricious. N.C.G.S. § 150A-51.

Appeal by respondent from Preston, Judge. Order entered 8 January 1986 in Superior Court, WAKE County. Heard in the Court of Appeals 17 September 1986.

Petitioner Donald Tolliver, a former permanent employee of the North Carolina Employment Security Commission, was terminated in August of 1981 due to a Reduction-In-Force. He filed a grievance, protesting his termination, with the North Carolina Personnel Commission and presented his case at an evidentiary hearing. The State Personnel Commission’s chief hearing officer reviewed the record and rendered a proposal for decision in favor of Tolliver’s former employer.

Petitioner then appealed to the full Commission. On appeal Tolliver argued that numerous procedural errors occurred during *241his hearing; that the State Personnel Commission improperly withdrew an order for rehearing after official tape recordings of the hearing were partially erased; and that the opinion of the hearing officer was prepared improperly by an officer who did not preside at the actual hearing. The full Commission issued an order upholding the conclusions of the hearing officer and denying petitioner’s motion for rehearing.

Petitioner further appealed to the superior court of Wake County. The superior court reversed the decision of the full Commission and remanded the case for a new hearing. From this decision defendant appeals.

Donald B. Hunt for petitioner appellee.

T. S. Whitaker, Chief Counsel and James A. Haney for defendant appellant.

ORR, Judge.

N.C. Gen. Stat. 126-43 (1981) provides that the Administrative Procedure Act applies to the State Personnel System and hearing and appeal matters before the Commission. Under the North Carolina Administrative Procedure Act, section 150A-51 governs scope of review. This statute in pertinent part reads:

> The court may affirm the decision of the agency or remand the case for further proceedings-, or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the agency findings, inferences, conclusions, or decisions are:

> (3) Made upon unlawful procedure; or

> (4) Affected by other error of law; or

> (5) Unsupported by substantial evidence admissible under G.S. 150A-29(a) or G.S. 150A-30 in view of the entire record submitted; or

> (6) Arbitrary or capricious.

N.C. Gen. Stat. 150A-51 (1983) (Although Chapter 150A has been rewritten and recodified, 1985 N.C. Sess. Laws, c. 746, s. 19 pro*242vides that the act shall not affect contested cases commenced before 1 January 1986.).

In the case at bar the superior court did find that Mr. Tolli-ver’s rights may have been prejudiced by agency findings, conclusions, and decisions made upon unlawful procedure, affected by error of law, unsupported by substantial evidence, and that were arbitrary or capricious. The court supported its conclusion with a list of eleven findings of procedural and substantive error. After thorough review of the record, we conclude that the agency’s finding was properly reversed and remanded for rehearing in accordance with the statute.

Affirmed.

Chief Judge Hedrick and Judge Arnold concur.