III. Public Employment Issues

• Library: Municipal Law Deskbook (ABA) (2015 Ed.)

III. PUBLIC EMPLOYMENT ISSUES

Employment decision making in the public sector differs fundamentally from employment decision making in the private sector because public employees are protected by the Constitution. Public employers act as an arm of the state in their capacity as an employer, so that their conduct is limited by the Constitution. As a result, public employee constitutional rights provide a fertile ground for 42 U.S.C. § 1983 litigation.¹

A. Due Process Rights of Public Employees

In order to bring a claim against a government employer alleging a due process violation, the plaintiff must establish that he or she has a constitutionally cognizable property or liberty interest. The existence of this interest is an important threshold question.

1. What Is a Property Interest?

Property interests are not created by the due process clause of the U.S. Constitution; instead, they arise from state law.² The independent source of a property right may be a statute, policy, practice, regulation, or guideline.³State law defines the expectation or entitlement, but federal law determines whether the practice rises to the level of a legitimate claim of entitlement protected by the due process clause.⁴ The rules or understanding need not be formal or explicit; agreements implied from words and conduct in the light of surrounding circumstances may be sufficient to invoke constitutional protections.⁵ A benefit is not a protected entitlement if officials have discretion to grant or deny it.⁶

To establish a protected interest in a government job, the employee must point to a statutory or contractual right that supports a legitimate claim to continued employment.⁷ Lesser rights, such as an interest in terms and conditions of employment, may not rise to the level of a constitutionally cognizable property interest.⁸

Provisions that merely establish disciplinary procedures are also distinguishable from those that create a right to continued employment.⁹ Such procedures do not ordinarily create a constitutionally protected property right. Instead, a deprivation of due process rights typically occurs when an employee is fired. Courts have been hostile to claims based on other lesser employment decisions.¹⁰

No new due process rights exist where the public employer can demonstrate that its employee voluntarily resigned. In Lenz v. Dewey,¹¹ the Tenth Circuit held that a bank president (operating a bank under the control of state regulators) relinquished any property interest he may have had in stock ownership and a directorship of the bank's holding company by voluntarily resigning from a holding company's board. Offered the choice between resignation from the holding company's board with payment of his stock or termination without stock payment, the bank president resigned. The economic compulsion inherent in the choice did not amount to a constructive discharge; the decision was voluntary and deprived the bank president of any actionable claim.

A cognizable property interest is usually found by pointing to a right created by a statute, ordinance, or contract. Courts scrutinize the terms of these measures to see whether they provide the employee with a right to continued employment. If state law prohibits firing a public employee except for cause, courts have generally recognized a protected property interest, which cannot be taken away without procedural due process.¹² In contrast, a unilateral expectancy of continued employment does not give rise to a constitutionally protected interest.¹³ Those who work at the will of their employers may be fired without notice under traditional contract law. Those who can be fired only for a just cause, however, have an enforceable contract under state law. At-will employees lack a right to continued employment that amounts to a protected property interest; however, if they have a right to their jobs under state law, then the government must provide due process before they may be terminated.

Property interests may also be created by formal contracts. Several types of contracts have been found to create property interests protected by the Fourteenth Amendment.¹⁴ The first is a contract that confers a protected status, such as a tenure contract providing for permanent employment. The second is a contract explicitly providing that the employee may be terminated only for cause. In Sanguigni v. Otisburg Board of Public Education,¹⁵ the plaintiff, a public high school teacher asserting a property interest in her coaching positions, argued that when she was removed from coaching, she was deprived of procedural due process. She claimed that the collective bargaining agreement gave her a protected property interest; the court found, however, that the collective bargaining contract was not a tenure contract or one for just cause employment. The court suggested that she might have fared better if she had alleged that she worked under an informal agreement providing her with tenure as a coach.

The third type of contract is a contract for a definite term.¹⁶ In Archer v. Sanchez,¹⁷ a university fired an employee without notice after only six months of a one-year term contract. Although the personnel manual provided that the employee served at the university president's pleasure, the employee argued that the university had to provide notice and a hearing before firing him during his term. The Tenth Circuit agreed with the employee because his employment contract for a specific term is recognized under New Mexico law as a property right that cannot be taken away without some procedural protection reflecting fundamental fairness.¹⁸

2. What Process Is Due?

Established principles of due process require, as a prerequisite to the intentional deprivation of a protected property interest, that the government provide notice and an opportunity for a hearing. In Cleveland Board of Education v. Loudermill,¹⁹ the Court summarized essential requirements for notice and an opportunity for a hearing as follows:

The opportunity to present reasons, either in person or in writing, why proposed action should not be taken is a fundamental due process requirement. The tenured public employee is entitled to oral or written notice of the charges against him, an explanation of the employer's evidence, and an opportunity to present his side of the story.²⁰

Emphasizing the importance of the employee's interest in retaining his or her job, the Loudermill Court stated that the opportunity for the employee to present his or her side of the case was of obvious value in reaching an accurate decision.²¹

What constitutes an adequate notice and an adequate opportunity to be heard will depend on the circumstances and applicable case law.²² A public employee who is given post-termination administrative procedures must be given only oral or written notice of the charges against him or her, an explanation of the employer's evidence, and an opportunity to present his or her side of the story.²³ When post-termination administrative procedures are available, pretermination procedures function only as an initial check against mistaken decisions to determine whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action. The pretermination process need not resolve the propriety of the discharge.²⁴ By recognizing that less than a full-blown pretermination hearing was adequate for due process purposes, the Supreme Court struck a balance between an employee's interest in retaining employment and presenting her side of the story, and the public employer's interest in quickly removing an unsatisfactory employee.²⁵

Since the pretermination hearing is not an adjudication, the decision maker need not be impartial.²⁶ A biased post-termination proceeding,

however, is not constitutionally adequate,²⁷ nor does subsequent review of post-termination proceedings cure the defect.²⁸ Post-termination adversary-trial-type hearings are available to determine bias, pretext, deception, or corruption that may have caused the complained-of decision. Post-termination hearings can be state judicial proceedings, collective bargaining grievance procedures, or arbitration hearings.²⁹

Although a minimal pretermination hearing is generally required, courts have occasionally approved discharges with no pretermination hearing. The Supreme Court has approved a suspension with no hearing in advance after criminal felony charges had been brought.³⁰ If an important governmental interest is at stake, a substantial assurance exists that the deprivation is not baseless or unwarranted, and a need for prompt action justifies postponing the hearing, a post-termination hearing may suffice. For example, Ambus v. Granite Bd. of Educ.,³¹ illustrates this point, wherein a tenured teacher at a high school was terminated with no notice or hearing after the school board became aware that the teacher had been arrested for distributing marijuana. The teacher claimed he was deprived of his right to procedural due process and argued that a post-termination procedure was insufficient. Relying upon F.D.I.C. v. Mellen,³² the Tenth Circuit approved the school board's procedure. The school board presented substantial evidence that, before suspending the teacher, the assistant superintendent had verified that the teacher had indeed been arrested on drug charges. Since an arrest and the filing of charges by the government requires probable cause, the school had a sufficient basis for a temporary deprivation of a property interest without a prior hearing. The Court held that the substantiated knowledge that the teacher had been arrested for drug sales raised a substantial government interest justifying immediate suspension without pay. The teacher had been notified before the suspension and was informally provided with an opportunity to correct any erroneous information on which the suspension and subsequent termination were based. While the...