Marcia Kelley v. Shelby Cty. Bd. of Education

• Court: Court of Appeals for the Sixth Circuit
• Decided: September 26, 2018
• Docket: 17-6152
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 18a0482n.06

Nos. 17-6070/6141/6152

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

MARCIA KELLEY; IDA STEINBERG; LAVERNE ) FILED JACKSON; PAUL BANKS; DALE THOMPSON, ) Sep 26, 2018 ) DEBORAH S. HUNT, Clerk Plaintiffs-Appellants/Cross-Appellees (17-6141/6152), ) Plaintiffs-Appellees (17-6070), ) ) MEMPHIS-SHELBY COUNTY EDUCATION ) ASSOCIATION, ON APPEAL FROM ) THE UNITED STATES Plaintiff-Appellant/Cross-Appellee (17-6141/6152), ) DISTRICT COURT FOR Plaintiff-Appellant (17-6070), ) THE WESTERN ) v. DISTRICT OF ) TENNESSEE SHELBY COUNTY BOARD OF EDUCATION; DORSEY ) E. HOPSON, II, ) ) Defendants-Appellees/Cross-Appellants (17-6141/6152), ) Defendants-Appellees (17-6070). )

BEFORE: BOGGS, CLAY, and ROGERS, Circuit Judges.

BOGGS, Circuit Judge. This § 1983 case arises from an employment dispute in the

Memphis, Tennessee area school system. The Memphis-Shelby County Education Association

(“M-SCEA”) and five tenured teachers who were excessed from their jobs as part of a reduction

in force (“RIF”) in June 2014 sued the Shelby County Board of Education (“the Board”) and

Superintendent Dorsey Hopson (“the Superintendent”). On cross-motions for summary

judgement, the district court held that the “excessing” process that implemented layoffs violated

Tennessee’s Teacher Tenure Act (the “Tenure Act”). Tenn. Code. § 49-5-511(b). However, the

court also held that these Tenure Act violations did not constitute a violation of the Due Process

Clause of the Fourteenth Amendment because the teachers did not have a reasonable expectation No. 17-6070/6141/6152, Kelley, et al. v. Shelby Cty. Bd. of Education, et al.

of continued employment during a RIF and therefore did not have a constitutionally protected

property interest. In a companion case, Memphis-Shelby County Education Association v. Shelby

County Board of Education, et al., No. 17-6070, M-SCEA filed a motion to join approximately

200 plaintiffs to this action. The district court denied the joinder motion, holding that it was

unreasonable and untimely. M-SCEA appealed. We affirm the district court’s rulings in both

cases.

I

In 2013, the Memphis City Schools merged with the Shelby County Schools (SCS). In

response, six municipalities within the merged school system formed their own independent school

districts, taking thousands of students and over 1,908 teaching positions away from SCS, resulting

in a considerable projected decline in SCS student enrollment after the 2013-14 school year. Due

to this projected shortfall, SCS needed to reduce the number of teachers on its payroll for 2014-

15. After retirements and the hiring of new teachers, ultimately only 232 teachers were laid off.

To reduce the number of teaching positions, SCS instituted an “excessing” process or RIF

that is being challenged in this case. The Board approved the general reduction in force, without

calculating any specific number of positions or specific positions to be eliminated. Instead, the

Board delegated those duties to the Superintendent and the school principals. The SCS Budget

Office provided system-wide enrollment numbers, calculated the number of teaching positions

allowed at each school, and gave that information to the school principals, who then recommended

which teaching positions should be eliminated.

The school principals’ decisions were submitted to the SCS Human Resources Department

for review and approval. Then the principals informed the affected teachers that their positions

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were being abolished. If the excessed teachers wanted to keep working for SCS, they had to

reapply for positions at any SCS schools that had vacancies. If excessed teachers could not find a

new SCS position by June 15, 2014, the Superintendent sent a letter informing them that they

would be officially laid off on June 30, 2014 and put on a preferred “list of reemployment” (“the

List”) pursuant to Tenn. Code § 49-5-511(b)(3). School principals were not required to prefer

tenured teachers over non-tenured teachers, or to afford special treatment to teachers on the List.

Instead, a teacher’s effectiveness and qualifications were the main factors used to determine

whether a teacher was re-employed. All five teachers in this case did not find a position before

June 15, 2014, were “excessed,” and were placed on the List. The following litigation ensued.

II

On August 4, 2014, Plaintiff Marcia Kelley, an excessed English teacher, filed a complaint

in Tennessee state court against the Board and the Superintendent. Kelley was joined by the

Memphis-Shelby County Education Association (“the M-SCEA”) “on behalf of and for the benefit

of its similarly situated professional employee members.” An amended complaint was filed August

18, 2014, adding individual plaintiffs Ida Steinberg, a French teacher; Laverne Jackson, a

cosmetology teacher; and Paul Banks, a history teacher, all of whom had been excessed. The

teachers and the M-SCEA (hereinafter jointly referred to as the “Teachers”) sought a declaratory

judgment under Tenn. Code §§ 29-14-101 et seq., which states the statutory rights of tenured

teachers and the corresponding statutory obligations of the Board governing assignment and

transfer of teachers, and the rights of tenured teachers. (R.1-2, ID# 10) The Teachers brought

statutory claims for wrongful deprivation of their legitimate expectation of continued employment

under tenure law (R.1-2, ID# 23). They also brought a claim under the Fourteenth Amendment

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for depriving them of their property interests in continued employment without due process. (R.1-

2, ID# 10).

Defendants (hereinafter jointly referred to as “the Board”) removed the case to federal

district court on August 14, 2014, based on federal-question jurisdiction under 28 U.S.C. § 1331.

On August 29, 2014, the district court issued a scheduling order setting November 28, 2014, as the

deadline to join parties or amend pleadings. No joinder motions were filed. The parties filed cross-

motions for summary judgment on August 31, 2015. By agreement of the parties, the case of Dale

Thompson, who was a guidance counselor at an underperforming high school where all faculty

positions were declared vacant while she was on paid medical leave under the Federal Medical

Leave Act, was consolidated with this case on November 25, 2015.

On August 3, 2016, the district court entered an order denying the Board’s motion for

summary judgment and granting the Teachers’ motion for summary judgment, holding that the

Board had improperly delegated its tenure authority under state law governing the excessing of

teachers. (R. 70, ID# 784). The district court also determined that the Board’s actions did not

violate the Due Process Clause of the Fourteenth Amendment or the FMLA. Immediately after

this order, the Board passed a resolution dated October 5, 2016, which ratified post hoc the 2014

excessing decisions made by the SCS Superintendent and the school principals. On October 13,

2016, nearly two years after the deadline to join parties and more than two months after the district

court rendered its final decision on liability, the M-SCEA moved to join approximately 200

plaintiffs to the action. Nowhere did the M-SCEA claim that any of the 200 individual members

of M-SCEA had assigned their claims to M-SCEA or granted M-SCEA a power of attorney.

On January 10, 2017, the district court denied the joinder motion, holding that it was unreasonable

and untimely. (R. 70, ID# 786)

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On August 24, 2017, the district court entered an order denying reconsideration of its

summary-judgment order and calculating damages. (R. 89) The district court held that each named

plaintiff was entitled to full back pay “without offset” for the period beginning on July 1, 2014 and

ending on the earlier of the date of the Board’s resolution or the date that a particular excessed

teacher obtained alternative employment within the school system. (R. 89, ID# 951) Plaintiffs

Kelly and Steinberg were rehired on October 13, 2014 and awarded back pay of $17,171. Plaintiff

Burks was re-hired at the beginning of the 2015-16 school year and awarded back pay of $75,457.

Plaintiff Jackson, who was never rehired, was awarded back pay of $112,719. Plaintiff

Thompson’s case is unique, as she was on approved FMLA leave when all the positions at her

school were abolished, requiring every teacher to reapply. She was added as a party to this case

with the consent of both parties. Thompson, who also was never rehired and elected to retire, was

awarded back pay of $174,582.

The court held the Teachers were not entitled to any relief beyond back pay because, based

on the plain language of the statute, a plaintiff “is not entitled to recover for career ladder benefits,

vacation days, sick days, retirement contribution, or social security contribution.” (R. 89, ID# 951)

Finally, the district court held that no plaintiff was entitled to reinstatement “at this time” because

the Board’s resolution foreclosed that avenue of relief. The Teachers appealed (No. 17-6141) and

the Board cross-appealed (No. 17-6152). The Teachers argue that the district court’s opinion

against the Board for violating the Tenure Act’s non-delegation principle should be upheld, but

that the case should be remanded as to damages because the district court erred in limiting the

scope of damages for back pay by accepting the Board’s post hoc 2016 resolution. They also argue

that the district court erred in holding that tenured teachers do not have a constitutionally protected

property interest in continued employment when jobs are eliminated through a RIF. On cross-

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appeal, the Board argues that the district court erred in holding a) that the Board’s RIF excessing

process violated the Tenure Act and b) that the Board’s post hoc ratification of SCS employment

decisions did not cure damages already caused by the Board’s illegal delegation of power.

III

The first issue the Board raises on appeal is whether the Board’s process for excessing

tenured teachers violated the Tenure Act. The district court held that the Board’s excessing process

violated the Tenure Act’s non-delegation principle, as decisions to hire and fire tenured teachers

require the kind of policy discretion and judgment that is nondelegable. The district court

determined that the Board improperly delegated that power to the SCS Superintendent and school

principals. We agree.

Under Tennessee law, school boards are responsible for conferring tenure and dismissing

tenured teachers. Tenn. Code § 49-2-203(a)(1); § 49-5-511. (R. 57, ID# 712) The legislature has

explicitly provided that superintendents have authority to hire, fire and transfer all personnel,

except for tenured teachers. Tenn. Code § 49-2-301(b)(1)(EE). Tenn. Code § 49-5-511 sets forth

the process for dismissing or suspending all teachers, including tenured teachers. Subsection (a)

covers dismissal for cause, Tenn. Code § 49-5-511(a), while subsection (b) covers dismissal based

on a reduction in force.1 Tenn. Code § 49-5-511(b)(1). When a RIF becomes necessary “because

of a decrease in enrollment or for other good reasons, the board shall be empowered to dismiss

such teachers . . . .” Tenn. Code § 49-5-511(b)(1). Further, “[t]he board shall give the teacher . .

. written notice of dismissal explaining fully the circumstances or conditions making the dismissal

necessary.” Tenn. Code § 49-5-511(b)(2). Here, it is undisputed that beyond authorizing the

1 The legislature amended Tenn. Code 49-5-511 (2012) effective July 1, 2014. The district court held the issue of non-delegation was not affected by these changes and that the analysis remained the same under either version.

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overall reduction in force in 2014, the Board took no further action in the excessing process. It

neither helped determine which teachers were to be dismissed, nor provided notice to the laid-off

teachers. (R.57, ID# 713)

In Tennessee, the general rule is that municipal authorities may delegate ministerial or

administrative duties, but they may not delegate their legislative duties, duties that require the

exercise of discretion and judgment. City of Rockwood v. Cincinnati, N.O. & T.P. Ry. Co., 22

S.W.2d 237, 240 (Tenn. 1929). Municipal bodies that make public policy have a nondelegable

duty to the public to make such policy. (R.57, ID# 714) Local elected bodies are “charged with a

public trust and the faithful performance of their duties; and the public is entitled to the judgment

and discretion . . .” exercised by their elected officials. Lotspeich v. Morristown, 207 S.W. 719,

722 (Tenn. 1918). In Tennessee, school boards are local, elected bodies. Tenn. Code § 49-2-201

(a)(1). A member of a county board of education holds a county office within the meaning of

Article VII, Section 2 of the Tennessee Constitution. Tenn. Op. Atty. Gen. No. 10-88 (2010 Tenn.

AG LEXIS 94).

Tenure is the public policy of the Tennessee legislature, designed to provide stability in

educational programs and teacher employment, and to protect teachers from being fired due to

malice or political differences. State v. Yoakum, 297 S.W.2d 635, 638 (Tenn. 1956). The

legislature expressly gave the power over tenure decisions to the local boards of education. The

legislature did not intend for these duties to be delegated and did not delegate these duties to

superintendents or school principals in any other legislation. In construing the 1987 version of the

Tenure Act, the Tennessee Supreme Court held that a Board of Education could not delegate

determinations of a tenured teacher’s fitness for reemployment to a superintendent. Randall v.

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Hankins, 733 S.W.2d 871, 875 (Tenn. 1987); see also Lee v. Franklin Special Sch. Dist. Bd. Of

Ed., 237 S.W.3d 322, 335-36 (Tenn. Ct. App. 2007).

For all these reasons, the Board violated the non-delegation principles of the Tenure Act

by having the Superintendent and school principals make excessing decisions. We recognize the

practical difficulties with applying this principle in a large school district such as SCS. At oral

argument, the Teachers took the non-delegation principle to an extreme, arguing that each

individual employee’s evaluation must be made by the Board before a decision as to that

employee’s fate. While the Board’s power to make tenure decisions is nondelegable, that is not

the same as requiring a system-wide assessment by the Board of each teacher to be excessed. It is

permissible for initial individual evaluations to be made at the school level, with the Board

approving the evaluation process and guidelines, making the ultimate employment determinations,

and providing notice of termination to the laid-off teachers.

Plaintiffs’ cross-appeal raises the question of whether the Board cured its Tenure Act

violation by passing a post hoc resolution approving the improperly delegated excessing decisions

made by the SCS Superintendent and the school principals. In the district court, the Teachers

argued that the Board’s October 2016 resolution ratifying the 2014 excessing decisions nunc pro

tunc was just a litigation tactic to try to limit damages, coming more than two years after the fact,

and immediately after the district court held that the Board had violated the nondelegable

provisions of the Tenure Act. The district court, while acknowledging that “the Board may not

now snap its fingers and make its unlawful conduct disappear” held that it was “entirely

appropriate for the Board to exercise its statutory authority by serving as the final decision maker

as to [the] Plaintiffs’ excessing.” (R. 89, ID# 949) The district court held that the October 2016

resolution limited the scope of damages by establishing the time period for which the Board would

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be held liable for the previously illegal actions--from the date of the illegal excessing (July 1, 2014)

to the date of the Board’s ratification (October 5, 2016).

The Board’s post hoc resolution, two years after the fact, cannot cure the harm caused by

the improper layoffs and loss of jobs for the individual teachers. However, once the district court

held that the Board had violated its nondelegable duties, the Board took immediate action to correct

its violation, creating a resolution to ratify the excessing decisions. In so doing, the Board was in

effect taking ultimate responsibility for the excessing decisions, bringing the previously unlawful

terminations into compliance with Tennessee law. The Board was no longer in violation of the

Act, and the resolution limited the scope of damages available to the Teachers. However, the

teachers were entitled to damages that occurred between the date of excessing and the resolution

(or the earlier obtaining of a new job), because as the district court recognized, that harm cannot

be cured.

IV

The Teachers argue that tenured teachers have a constitutionally protected property interest

in their continued employment under Cleveland Bd. of Educ. v Loudermill, 470 U.S. 532 (1985).

The question in Loudermill was “what pretermination process must be accorded a public employee

who can be discharged only for cause.” Id. at 535. The Loudermill court found a property interest

in Ohio’s “classified civil servant” statute, Ohio Rev. Code § 124.11, which provided that such

employees could only be terminated for cause. Ibid; see also Ohio Rev. Code § 124.34.

Recognizing that property interests in continued employment are created by state law, Loudermill

held that the federal “Due Process Clause provides that certain substantive rights – life, liberty,

and property – cannot be deprived except pursuant to constitutionally adequate procedures.” Id. at

541. The right to due process “is conferred, not by legislative grace, but by constitutional

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guarantee. While the legislature may elect not to confer a property interest in [public] employment,

it may not constitutionally authorize the deprivation of such an interest, once conferred, without

appropriate procedural safeguards.” Ibid.

Applying Loudermill, the question is whether, under the Tennessee Tenure Act, a tenured

teacher has a constitutionally protected property interest in continued employment when a teacher

is dismissed pursuant to a reduction in force. In Johnston-Taylor v. Gannon, 907 F. 2d 1577 (6th

Cir. 1990), two community college professors filed wrongful-discharge actions claiming that

their due-process rights (based on a collective-bargaining agreement and tenure) were violated

when they were denied a hearing on the necessity of the layoff under which they were terminated.

Johnston-Taylor held that “[p]ublic college professors have a constitutionally protected

property interest in their teaching positions when they have a legitimate expectation of continued

employment” created by their collective-bargaining contract and by the tenure status of one of

the professors. Id. at 1581. It also held that “[p]rofessors with tenure or with a continuing

contract may not be discharged without receiving a hearing in which they are informed of the

grounds for their dismissal and given the opportunity to challenge the sufficiency of those

grounds.” Ibid. Because the professors never had the opportunity to challenge the grounds for

their dismissal, the alleged financial exigency, the court held that there was “a sufficient question

of the validity of the procedural due process provided to them to warrant an evidentiary hearing.”

Id. at 1582.

Johnston-Taylor held that a constitutionally protected property interest in continued

employment exists for tenured college professors, notwithstanding their dismissal under a RIF

made necessary by a financial exigency, where the professors challenged not only the need for a

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RIF, but also whether the professors individually met whatever criteria were used to select them

and not others. Id. at 1581. The Teachers argue that Loudermill and Johnston-Taylor create a

property interest in employment in the school system, not just in a specific position. (Teacher Br.

27) This position does not comport with other Sixth Circuit cases which hold that state employees

have no protected property interest in their continued employment in the face of layoffs. Gragg

v. Somerset Tech. College, 373 F.3d 763 (6th Cir. 2004); Riggs v. Kentucky, 734 F.2d 262 (6th

Cir. 1984).

In Riggs, 42 laid-off Kentucky merit-system employees filed § 1983 claims for due-process

violations of constitutionally protected property rights. The Riggs court held that the claimed

statutory right to employment in Kentucky was specifically limited, allowing for layoffs for

reasons of lack of funds or work or abolition of a position. The statute governing layoffs

contained no requirement of individual cause. Riggs, 734 F.2d at 265. The court held that Riggs

failed to establish the deprivation of a constitutionally protected property interest in not being

subject to a reorganizational layoff without individual cause and distinguished discharges which

required such cause. Ibid. Citing Riggs, the Gragg Court likewise held that a laid-off government

employee has no constitutionally protected right in continued employment where an employee is

laid off because the position is abolished, and dismissal is not based on cause. Gragg, 373 F.3d

at 769.

A protected property interest is defined by the terms of the state document creating the

interest. Gragg, Riggs, and Johnston-Taylor are all consistent with this principle. The statute

defines the contour of the interest. Here, there are two competing versions of the Tenure Act, the

2012 version and the 2014 version, which went into effect on July 1, 2014. In its liability opinion,

the district court states that the teachers were laid off on June 30, 2014, a date covered by the

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2012 statute. (R.57 ID# 702) But in its damages opinion, the district court refers to July 1, 2014

as the start date for damage calculation. (R.89 ID# 940)

The 2012 version of the Tenure Act states:

(1) When it becomes necessary to reduce the number of teaching positions or nonlicensed positions in the system because of a decrease in enrollment or for other good reasons, the board shall be empowered to dismiss such teachers or nonlicensed employees as may be necessary. However, the director of schools and the board of education are expressly forbidden to use abolition of a position as a method of avoiding dismissal charges against a teacher and the accompanying due process rights attaching to the status of tenure.

(2) The board shall give the teacher or nonlicensed employee written notice of dismissal explaining fully the circumstances or conditions making the dismissal necessary.

(3) A tenured teacher who has been dismissed because of abolition of a position shall be placed on a list for reemployment in the first vacancy the teacher is qualified by training and experience to fill. Nothing in this subsection (b) shall be construed to deprive the director of schools of the power to determine the filling of such vacancy on the basis of the director of school's evaluation of the teacher's competence, compatibility and suitability to properly discharge the duties required for the vacant position considered in the light of the best interest of the students in the school where the vacancy exists. The teacher's most recent evaluations may be a factor in such determination.

...

(4) (B) The teacher receiving the notification shall retain the right to stay on the preferred list for reemployment by notifying the director of schools in writing by April 15 of each subsequent year of the desire to stay on the preferred list for reemployment. Tenn. Code § 49-5-511(b)(1-4) (2012) (emphasis added). This statutory language in no way

conditions the abolition of a position on the individual circumstances of the employee.

The 2014 version of the Tenure Act provides that the Board is empowered to dismiss

teachers when there is a decrease in enrollment “based on their level of effectiveness determined

by evaluation . . . .” Tenn. Code § 49-5-511(b)(1). The requirement in subsection (b)(2) of written

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notice explaining the circumstances of the dismissal is the same in the 2012 and 2014 versions.

See § 49-5-511(b)(2). But subsection (b)(3) is significantly different in the 2012 and 2014

versions. In 2012, (b)(3) applied only to tenured teachers, and provided that a tenured teacher who

has been dismissed “shall be placed on the list for reemployment.” In 2014, (b)(3) applies to any

teacher, tenured or not, and only allows teachers to be placed on the reemployment list if they

receive sufficiently high evaluations. Tenn. Code § 49-5-511(b)(3) (2014). It is at least arguable

that this provision triggers a property interest. Further, the right to remain on the List is limited,

ending after a “teacher rejects four (4) bona fide offers of reemployment for comparable positions

within the LEA.” § 49-5-511(b)(4) (2014).

The Teachers are not clear on appeal as to which version should apply. On the one hand,

the 2012 version is slightly more favorable to the Teachers in requiring that teachers “shall” be

placed on the List. On the other hand, the Teachers argue that under the 2014 version they had a

protected property interest in continued employment because that law provides that placement on

the List would turn on the kind of individualized merit evaluations that can trigger due-process

protections for tenured employees. In contrast, RIFs such as those in Gragg and Riggs create no

individual protected property interest.

The 2012 version of the Tenure Act applies in this case. All excessing decisions were

made prior to July 1, 2014. The Techers had no reasonable expectation to the 2014 statutory rights

because the excessing happened in early 2014 and those rights did not exist then. Under the 2012

version, the Teachers had no property interest or a reasonable expectation that they would not be

excessed based on their individual merits, qualities, circumstances, or performance. The 2012

version did not place any limits on how the layoffs in the event of a RIF should occur – only that

the decisions should be made by the Board. The teachers accordingly had no protected property

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interest. Because the 2012 version of the Act applies, we need not determine whether the language

in the 2014 Act requiring the Board to consider teacher evaluations created a “cause” requirement.

V

As to the question of joinder of 200 new individual plaintiff teachers, the district court did

not abuse its discretion in denying joinder based on untimely filing. And, for the reasons set forth

above, we AFFIRM the district court’s holdings in all cases consolidated on this appeal.

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