Cyneth K. Dahm v. William F. Flynn, Jr., in Both His Individual and Official Capacities

60 F.3d 253

• Court: Court of Appeals for the Seventh Circuit
• Decided: July 24, 1995
• Docket: 93-2614
• Status: Published

Opinions

ROVNER, Circuit Judge.

Cyneth Dahm, the personnel director of the Wisconsin Lottery from 1988 through 1992, brought this action against William F. Flynn, Jr., the Executive Director of the Wisconsin Lottery, for money damages, in-junctive relief, and declaratory relief pursuant to 42 U.S.C. § 1983. Dahm claims that Flynn took a series of retaliatory steps against Dahm because Dahm was critical of Flynn when she testified before the Joint Audit Committee of the Wisconsin legislature regarding low employee morale within the Lottery. The district court granted summary judgment in favor of Flynn, holding that Dahm was insufficiently specific in identifying how Flynn retaliated against her and that Flynn’s actions were not materially adverse as a matter of law, 825 F.Supp. 224.

I. Background

We accept the following facts as true for purposes of our discussion, setting aside certain factual disputes and construing the record in a light favorable to Dahm.

In January of 1988, defendant William F. Flynn, Jr. began employment as Executive Director of the newly-created Wisconsin Lottery. A month thereafter, the Lottery hired Bernard Mrazik as Director of the Administration & Operations Division. Mrazik, who was to work with Flynn in creating an organizational plan for the Lottery, hired plaintiff Cyneth Dahm as the personnel director for the Lottery effective April 5, 1988, with the approval of Flynn.

As the personnel director, Dahm initially spent half of her time administering the personnel program of the Lottery, splitting her remaining time between the following activities: 1) performing affirmative action duties; 2) assisting in employee relations, including involvement in grievance meetings and settlements; 3) assisting in employee training and evaluation; 4) coordinating the employee assistance program; 5) developing policy and procedure, including the creation of an employee handbook; 6) supervising two personnel assistants; and 7) performing as directed special assignments relating to personnel. An important part of Dahm’s duties included the processing of employee reclassification requests, which in essence are requests for promotion and back pay. Dahm directly reported to Mrazik regarding all of these duties except affirmative action, for which she reported directly to Flynn. In performing this broad range of duties, Dahm’s performance never was rated as less than satisfactory, and once during her tenure she received an Exceptional Performance Award from Flynn.

As part of her employee relations duties, employees often would ask Dahm questions related to personnel issues. In mid-1989, the frequency and intensity of Dahm’s meetings with employees increased substantially. On a daily basis, employees expressed their frustrations to Dahm regarding management at the Lottery. Those meetings were endemic of an agency-wide employee morale problem that continued to worsen through mid-1990.

In mid-1990, pursuant to state statute the Legislative Audit Bureau (the LAB), a nonpartisan investigatory arm of the Joint Legislative Audit Committee of the Wisconsin legislature, began conducting a program audit of the Lottery. Investigations by the LAB uncovered the morale problems at the Lottery, and the LAB contacted Dahm to obtain more information regarding employee morale. The LAB interviewed Dahm, and she provided information regarding the Lottery’s ability to meet its statutory goals. In January of 1991 the LAB issued a written report which included a section detailing employee morale problems in the Lottery.

After the LAB issued its written report, Dahm agreed to testify at a February 26, 1991 hearing on the report before the Joint Audit Committee (JAC) of the Wisconsin legislature. Dahm testified at the JAC hearing that low employee morale remained a large problem at the Lottery, and she attributed those difficulties to management, including Flynn. Specifically, Dahm stated that “Bill Flynn is aware that fear and intimidation are widespread in our agency and that much of it can be traced to management style.”

After this testimony, the nature of Dahm’s duties began to change. Among other areas, Dahm’s involvement in position staffing, the personnel management program, employee relations, exam development and administration, and the processing of sexual harassment claims was reduced. Certain tasks formerly within her purview were, according to Dahm, delegated by her superiors to Dahm’s assistants. Correspondingly, Dahm was given increased responsibility for the processing of pending reclassification requests. Over the course of time, a backlog of reclassification requests had built up, and Dahm was asked to expedite the processing of those requests. Dahm was also required to begin documenting her daily telephone calls and her meetings with Lottery employees. Dahm attributes each of these actions to Flynn. Although the parties dispute the extent to which Flynn had a hand in the assignment of tasks to Dahm, we find the record sufficient to support the inference that Flynn, through Mrazik and Mrazik’s successor, Maureen Hlavaeek, did involve himself in the restructuring of Dahm’s activities, and for present purposes we shall assume that he did.¹

Dahm perceived Flynn’s actions as a deskilling of her position, culminating in the proposed elimination of her position under a legislative proposal for the creation of the new Wisconsin Gaming Commission. Although Flynn opposed the elimination of Dahm’s position (as well as his own), Dahm left the Lottery and sought other employment. Dahm filed suit against Flynn under 42 U.S.C. § 1983, claiming that Flynn deskilled her position in retaliation for the exercise of her First Amendment right to testify before the JAC. The district court granted summary judgment in favor of Flynn because Dahm had not been sufficiently specific in detailing the adverse actions Flynn took against her, and because the changes in Dahm’s responsibilities did not connote demotion or punishment. Dahm now appeals from the district court decision granting summary judgment against her.

II. Analysis

We review the decision of the district court to grant summary judgment in favor of Flynn to determine whether, “after drawing all reasonable inferences in favor of the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Konowitz v. Schnadig Corp., 965 F.2d 280, 232 (7th Cir.1992); see Fed.R.Civ.P. 56(c). One basis for the decision of the district court was Dahm’s lack of specificity in identifying how Flynn retaliated against her. The district court’s opinion, however, provides an excellent summary of what we believe to be reasonably specific allegations of retaliation:

After her testimony of February 26, plaintiff accompanied Mrazik to only one personnel meeting with Flynn, whereas prior to her testimony she did so once a month; she never met with Flynn alone concerning affirmative action issues, whereas she had met with him once before her testimony; she was excluded from personnel issues involved in the reorganization of the sales division in July 1991 and from involvement with the defense of a pending Fair Labor Standards Act lawsuit; she was removed from the process of filling an attorney position at the lottery; she was prohibited from contacting district sales managers directly concerning the interpretation of work rules, which she had done prior to her testimony; and her roles in handling employee grievances and affirmative action issues were diminished. In addition, Flynn ceased consideration and implementation of a proposed employee handbook in part because Dahm was its author; Mrazik wrote plaintiff memoranda criticizing her performance; and certain personnel work was delegated directly to Dahm’s assistant, undermining plaintiffs supervisory role.

The district court reasonably found a few of these actions to be trivial, such as not meeting with Flynn regarding affirmative action issues, Dahm having only met with Flynn one time prior to her testimony. Nevertheless, a fairly lengthy list that evidences an erosion of many of Dahm’s work responsibilities remains. In fact, with the exception of the processing of reclassification requests, Flynn reassigned nearly all of Dahm’s duties. We believe that for the purposes of a motion for summary judgment, one reasonably can infer that there exists a genuine issue of material fact regarding whether Flynn’s actions were more than trivial.

The district court also expressed a more fundamental difficulty with Dahm’s claim, namely that the shifting nature of Dahm’s responsibilities within the confines of her job description cannot be characterized as “a materially adverse change in the terms and conditions of employment_” Crady v. Liberty Nat. Bank and Trust Co. of Indiana, 993 F.2d 132, 136 (7th Cir.1993). On one level, we agree with the district court, as this was not an obviously adverse action, such as termination, demotion, or a loss in benefits or salary. See id. at 136. Nor did Flynn strip Dahm of all of her duties, leaving her with nothing to do but read a good book — doing so would be adverse for all but those completely devoid of ambition or the need to be challenged. See id. at 136 (“significantly diminished material responsibilities” actionable). Rather, Flynn reduced many of Dahm’s responsibilities while at the same time greatly increasing her duties regarding the processing of reclassification requests, a qualitative rather than quantitative change.

On a deeper level, however, we cannot agree that whether a change in the terms and conditions of employment is materially adverse must be analyzed solely quantitatively. Sometimes job responsibilities can be quite intellectually stimulating, but other duties can be routine at best. Dahm contends that before she testified before the JAC, her job contained a healthy mix of both the former and latter. After she testified, however, Flynn required Dahm to focus exclusively on reclassification requests, which Dahm contended effectively constituted a demotion. We agree that such a dramatic downward shift in skill level required to perform job responsibilities can rise to the level of an adverse employment action, even if the time required to perform the duties remains constant. See Pieczynski v. Duffy, 875 F.2d 1331, 1335 (7th Cir.1989) (addressing, among other forms of harassment, “confining [the plaintiffs] duties to monotonous paper work”); see also Crady, 993 F.2d at 135 (“A materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation.”) (emphasis added);² Smith v. Fruin, 28 F.3d 646, 649 n. 3 (7th Cir.1994) (“even minor forms of retaliation can support a First Amendment claim, for they may have just as much of a chilling effect on speech as more drastic measures”). Because there is a question of fact as to whether Flynn’s decision to have Dahm exclusively process reclassification requests constituted such a shift in skill level, summary judgment based on the second of the district court’s proffered rationales was inappropriate.

Nevertheless, we must discuss an issue not reached by the district court, that being whether Flynn enjoys qualified immunity for his actions. Government officials who, acting under color of state law, deprive another of a right, privilege, or immunity secured by the United States Constitution are subject to personal liability for the deprivation. 42 U.S.C. § 1983; Supreme Video, Inc. v. Schauz, 15 F.3d 1435, 1438 (7th Cir.1994). Officials are immune from civil damages, however, if their actions were “objee-tively reasonable, meaning that [if] ‘their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known,’ ” they are immune from actions for civil damages. Id. at 1438-39 (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982)). We must examine whether it was clearly established that Dahm’s testimony before the LAB was protected by the First Amendment guarantee of freedom of speech. U.S. Const, amend. I.

Public employees who speak on issues of public concern are protected from their employer taking adverse employment actions against them if the employees’ interest in speaking outweighs the government’s interest in efficient operations. Waters v. Churchill, — U.S. -, -, 114 S.Ct. 1878, 1884, 128 L.Ed.2d 686 (1994); Connick v. Myers, 461 U.S. 138, 142, 103 S.Ct. 1684, 1687, 75 L.Ed.2d 708 (1983). Dahm testified before a legislative body, at its request, regarding employee morale at the Lottery, speech that on its face clearly appears to be on a matter of public concern. Although Flynn contends that Dahm’s speech was motivated purely by self-interest, see Yoggerst v. Hedges, 739 F.2d 293, 295 (7th Cir.1984) (speech not on issue of public concern if motivated by private interests), and was not truthful, see Pickering v. Board of Educ. of Township High Sch. Dist. 205, 391 U.S. 563, 574, 88 S.Ct. 1731, 1737-38, 20 L.Ed.2d 811 (1968) (plaintiff’s false statements protected absent proof that inaccuracies were knowing or reckless), there exists a genuine issue of material fact as to those points. Flynn is not entitled to qualified immunity at this point in the litigation based on the argument that Dahm’s speech did not address an issue of public concern.

Flynn also argues that the government interest in efficient operations outweighed Dahm’s interest in speaking. See Pickering, 391 U.S. at 572-73, 88 S.Ct. at 1736-37. That argument finds little support in the record before us, however. Not only did Flynn fail to identify how Dahm’s testimony impeded the efficient operations of the Lottery, but the precise opposite would seem to have motivated the Wisconsin legislature to invite Dahm to testify — the JAC wanted to hear Dahm’s testimony to determine how best to improve efficient operations at the Lottery. The Pickering balance would appear to favor Dahm.³

What is less clear, however, is the extent to which Flynn should have known that his retaliation against Dahm constituted adverse employment action. Although we in this case hold that decreasing some job responsibilities while increasing other duties can, under limited circumstances, constitute an adverse employment action, no case in our circuit previously had addressed that precise issue. A few of our eases hinted that gutting central job functions may constitute an adverse action, but these cases addressed quantitative rather than qualitative reductions in responsibilities. Crady, 993 F.2d at 136; Pieczynski, 875 F.2d at 1335. Because it was not clearly established at the relevant time that qualitative reductions in job responsibilities, without discharge, transfer, demotion, or salary loss, could constitute an adverse employment action, Flynn is immune from civil damages regarding his rearrangement of Dahm’s duties. See Greenberg v. Kmetko, 922 F.2d 382, 385 (7th Cir.1991) (public officials “need not predict [the law’s] evolution, need not know that in the fight between broad and narrow readings of a precedent the broad reading will become ascendant.”).

Nevertheless, we cannot yet hold that Flynn is completely immune from damages. The district court noted that Flynn began requiring Dahm to document her daily phone calls and meetings, and delegated “certain personnel work ... directly to Dahm’s assistant, undermining plaintiffs supervisory role.” We have indicated both that subjecting employees to harassment, Bart v. Telford, 677 F.2d 622, 625 (7th Cir.1982), and terminating supervisory authority over other employees, Pieczynski, 875 F.2d at 1335-36, are adverse employment actions. Because factual issues remain as to whether Flynn’s decision to have Dahm document her phone calls and meetings and his undermining of Dahm’s supervisory role fit into either of these categories, the district court is better suited to determine whether Flynn is entitled to qualified immunity for those actions.

III. Conclusion

Flynn enjoys qualified immunity for his decision to reorganize Dahm’s job responsibilities. However, the existence of genuine issues of material fact regarding the undermining of Dahm’s supervisory role and making Dahm log her daily activities precludes a finding of immunity at this stage of the litigation. The district court is the appropriate forum for resolving the factual questions concerning these acts and assessing whether Flynn is entitled to qualified immunity for them.

AFFIRMED IN PART, REVERSED IN PART, AND Remanded.

1 . The changes in Dahm’s portfolio of responsibilities began to take place following Dahm’s appearance before the Joint Audit Committee of the Wisconsin legislature. Mrazik testified that Dahm's testimony had “an obvious impact” on Flynn (Mrazik Dep. at 192), who found it "disturbing” (id.) and was "not pleased” (id. at 117). Mrazik recalled two subsequent conversations taking place in the Spring and Summer of 1991 in which Flynn urged him to supervise Dahm more closely. During one of these conversations, Flynn inquired of Mrazik what he was doing to “control” Dahm. Id. at 196. When Mrazik sought guidance as to what he should be doing, Flynn told him: "Well, she works for you. You hired her. It’s up to you to control her.” Id. at 196-97. Later, in the Fall of 1991, Mrazik indicated that Flynn told him, "We have to get rid of Cyneth.” Mrazik Dep. at 122; see also id. at 120. When Mrazik said he didn’t think they had grounds to fire Dahm, Flynn suggested that she might be discharged for the pending backlog of reclassification requests or, alternatively, for insubordination. Mrazik balked, which allegedly prompted Flynn to add that "I can't continue to go up to the legislature and have her be there, too.” Id. at 123. Flynn was concerned, according to Mrazik, that both of them might lose their jobs as a result of Dahm's testimony. Id. at 127-28. Flynn vigorously denies having such a conversation with Mrazik; he also denies having instigated any talk of “controlling” Dahm. But according to Dahm, Mrazik’s successor as the director of the operations and administration division (and Dahm's supervisor), Maureen Hlava-cek, informed Dahm in 1992 that she was perceived as "damaged” (or words to that effect) by her testimony before the legislature. Dahm Dep. at 135; Ex. 49. Hlavacek is the individual that Dahm asserts took steps to circumvent Dahm and delegate authority to Dahm's assistants. See id. at 110-12.

Dahm argues that in light of these conversations, it is reasonable to infer that Flynn was, ultimately, the individual behind the diminution in her responsibilities and the order that she begin to document her phone calls and meetings. We agree that if the conversations following Dahm's legislative testimony took place as Mra-zik and Dahm have described them, the factfin-der might reasonably conclude that Flynn was responsible for the ensuing changes in Dahm's work assignments. Indeed, Mrazik directed Dahm to begin logging her telephone calls and meetings with other Lottery employees after discussing the need to control Dahm with Flynn, and Mrazik acknowledged that he directed Dahm to do so as a means of "better managing access" to her and “controlling the situation” (albeit for the ostensibly benevolent reason of freeing up more time for her to work on the reclassification requests). Mrazik Dep. at 234, 236. Mrazik also indicated that he informed Flynn he had taken this step. Id. at 236.

2 . Although Crady contains the dicta that a materially adverse change in the terms and conditions of employment must be more than "an alteration of job responsibilities," that cannot be taken literally to apply to any alteration, no matter how severe. For example, if the duties of an assistant prosecutor were changed from trying cases to sharpening pencils, that change would be materially adverse even if sharpening pencils took as much time as prosecuting cases.

3 . In August 1991, Dahm wrote a memorandum to Flynn and the JAC asserting that the Lottery had not acted to correct the morale problem and that employee spirit continued to decline. We leave it to the district court on remand to consider, if need be, whether the government's interest in efficient administration outweighed Dahm's First Amendment interest in voicing the opinions expressed in that memorandum.