Blankenbaker v. McCook Public Power District

940 F.2d 384
Court of Appeals for the Eighth Circuit·Decided August 6, 1991·No. No. 90-2994·Published·Cited by 2 cases

Opinion

HEANEY, Senior Circuit Judge.

A jury found that McCook Public Power District (McCook) violated 42 U.S.C. § 1983 by discharging David Blankenbaker without providing him the due process required under the governing “Employee Agreement” and the Constitution and awarded Blankenbaker $50,000 in damages. The district court ordered judgment notwithstanding the verdict, and Blankenbaker ap[385] peals from that order. We reverse and reinstate the jury verdict.1

BACKGROUND

McCook, a public employer, employed Blankenbaker as a director of operations. An Employee Agreement, effective from October 14, 1988 through October 31, 1989, and signed by McCook’s president and the Employees Group chairman, governed their employment relationship. After an executive committee decided to terminate Blank-enbaker, McCook notified Blankenbaker in writing that his termination was effective December 1, 1988. The record does not indicate that Blankenbaker was provided any pre-termination warning or probationary period nor any post-termination grievance hearing.2 In August 1989, Blanken-baker brought this suit against McCook, alleging that McCook deprived Blankenbaker of his property interest in his employment without due process of law.

At trial, McCook moved to dismiss the suit after Blankenbaker presented his case, claiming that Blankenbaker had failed to show a property interest in his job. Despite expressing its inclination that Blank-enbaker was an “at will” employee with no property interest in his employment, the district court denied the motion. After presenting its evidence, McCook again moved the court to dismiss the case or direct the jury to return a verdict for McCook. The court did not rule on these motions. Instead, it instructed the jury to decide whether Blankenbaker was afforded due process and whether he suffered damage as a result of his discharge.3 The jury found for Blankenbaker, awarding $50,000 in damages. McCook filed its motion for judgment notwithstanding the verdict, which the court granted on the basis that Blankenbaker was employed at will.

DISCUSSION

Because McCook employed Blankenbaker in Nebraska, both parties agree that Nebraska law controls this case. See Bishop v. Wood, 426 U.S. 341, 344, 96 S.Ct. 2074, 2077, 48 L.Ed.2d 684 (1976) (“A property interest in employment can, of course, be created by ordinance, or by an implied contract. In either case, however, the sufficiency of the claim of entitlement must be decided by reference to state law.”); see also Weeks v. Board of Educ., 204 Neb. 659, 663, 284 N.W.2d 843, 846 (1979) (Supreme Court of Nebraska stating this rule of law). In addition, under Salve Regina College v. Russell, — U.S. -, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991), we must review de novo the district court’s state law determinations.

The United States Supreme Court has recognized, and the Supreme Court of Nebraska has concurred, that “[t]o have a property interest in employment, a person must have a legitimate claim of entitlement to it.” Johnston v. Panhandle Coop. Assoc., 225 Neb. 732, 408 N.W.2d 261, 269 (1987) (citing Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). Typically, this property interest arises from regulatory or contractual limitations on the employer’s ability to terminate an employee. Id. 408 N.W.2d at 265. When such a property interest exists, the employee is entitled to a hearing or some related form of due process prior to termination. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985).

Blankenbaker contends that a property interest in his employment was created by Article 2, section 2 of the Employee Agreement, which reads:

[386] The EMPLOYER reserves the ... right to hire, promote or not promote, suspend, discharge for cause, transfer, relieve employees from duty because of lack of work or other legitimate reasons;

(emphasis added). Later in the same paragraph the Agreement repeats the “discharge for cause” phrase.

The only question before us is whether the “discharge for cause” language in the Employee Agreement prohibits McCook from firing Blankenbaker without cause.4 Relying on Johnston v. Panhandle Cooperative Association, 225 Neb. 732, 408 N.W.2d 261 (1987), the district court ruled that the contractual language did not prevent McCook from discharging Blankenbaker without cause. In Johnston, the Supreme Court of Nebraska held that language in the employee handbook was not definite enough to constitute an offer of a unilateral contract governing job termination.5 225 Neb. at 741, 408 N.W.2d at 267-68. The Nebraska court noted that the handbook in question provided no disciplinary proceedings short of termination, did not provide a post-termination grievance procedure, and did not state any restrictions on the employer’s right to discharge. 225 Neb. at 741, 408 N.W.2d at 268. The employee handbook did list six specific rules, which, if violated, would provoke “dismissals for cause.” Nowhere in the handbook, however, was there an implication that an employee could be discharged only for cause. Instead, the six specific rules were aimed at particularly egregious conduct, which the employer wanted to highlight and thereby emphasize through reverse illustration the sort of employee conduct that it desired.

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Blankenbaker v. McCook Public Power District, 940 F.2d 384 (8th Cir. 1991).

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David Blankenbaker v. Mccook Public Power District
940 F.2d 384 (Eighth Circuit, 1991)