by Robert W. Steele, Jr.  (Fall 2018)

Two recent decisions by the United Stated Court of Appeals for the Seventh Circuit provide additional guidance to school districts on when public employers must provide public employees with a pre-termination hearing prior to dismissal. In the first case, Breuder v. Board of Trustees of Community College District No. 502, et al., 888 F.3d 266 (7th Cir. 2018), the Appellate Court recognized a public employee’s federal right to a name-clearing hearing when accusations of misconduct accompany termination.

The College of DuPage hired Robert Breuder as president in 2008. Breuder’s contract was extended several times over the years, with the last extension approved by the Board in late 2014, extending Breuder’s term of employment with the College through 2019. In early 2015, the Board approved an addendum to Breuder’s contract that provided for early termination “in exchange for certain retirement benefits,” with his tenure to conclude in March 2016. This contract provided Breuder with the right to appear before the Board, and required a supermajority vote of five of the seven members prior to termination for cause.

In April 2015, three new board members were elected to the Board. The newly elected board members released a joint statement claiming they had a “mandate to clean up” the college and “stop the waste, fraud, and abuse.” According to Breuder, individual board-members made allegedly defamatory remarks against him at Board meetings and to media outlets over the next six months. In September 2015, the Board declared Breuder’s contract void ab initio (or “from the beginning”), sent Breuder notice of charges alleging misconduct, and, in October 2015, voted to terminate Breuder without a hearing.

Breuder filed suit in the United States District Court of Illinois, Northern District, asserting several federal and state claims such as breach of contract and defamation. In a federal §1983 claim, Breuder argued that defamatory and stigmatizing remarks made by board members, coupled with his termination, had deprived him of a “liberty interest” in violation of his Due Process rights under the United States Constitution. Namely, Breuder was provided neither a pre- nor post-termination hearing concerning defamatory remarks and cause for discharge.

The Board moved to dismiss all claims, asserting among several arguments that Breuder’s contract was void ab initio. Citing a “norm” of Illinois law – the Millikin rule – the defendants argued that Breuder’s contract was void from the beginning because its extension (in 2014 and prior years) went beyond the terms of the elected board members at the time. After the trial court ruled in Breuder’s favor, the Board appealed to the Seventh Circuit.

The Appellate Court held that the Milikin rule had been superseded by legislation. Under the applicable Public Community College Act (PCCA), community college boards are authorized to establish policies governing the employment and dismissal of employees. Later amendments to the PCCA, which limit employment contracts to four years, did not apply to the current circumstances. The Court further reasoned that an Illinois college would have “considerable difficulty in hiring a quality president” if it were handcuffed to offering employment contracts that could not exceed two years due to staggered board member terms.

The Court also rejected the Board members’ argument that, as public officials, they should receive “qualified immunity” from damages under §1983. The Board members’ downfall was their issuance of a statement declaring that Breuder committed misconduct. The Board members asserted that, because they believed the contract was void ab initio, Breuder had no property right in continued employment and could be dismissed as an at-will employee. Yet, because the Board members maligned his character with their statements supporting his termination, Breuder was entitled to a hearing before “being defamed as part of discharge, or at a minimum to a name clearing hearing after the discharge.” Whether Breuder had a property interest in continued employment or was an ‘at will’ employee was irrelevant. To the Court, the contract was valid and Breuder was entitled to a constitutional opportunity for a hearing.

Notably, the same day that it released the Breuder decision, the Court released a second decision on a public employee who asserted a right to a hearing before discharge. Lafayette Linear v. Village of University Park, 887 F.3d 842 (7th Cir. 2018). In Linear, the Seventh Circuit upheld the trial court’s ruling that a village manager’s contract extension was void and ultra vires because it extended beyond the term of the mayor. Under the Illinois Municipal Code, a municipality is prohibited from entering into a contract with an employee for a “term of office [that exceeds] . . . the mayor or president of the municipality.” Because Linear’s extension contract was void and not enforceable, the trial court held that Linear had no protectable property interest in continued employment with the Village. Without a protectable property interest, Linear could not invoke the requirement to provide him with due process under the United States Constitution.

In upholding the trial court’s ruling, the Seventh Circuit distinguished Linear from Breuder. The Court noted that Breuder – unlike Linear – had a contractual right to “keep his job unless he committed misconduct,” that the “accusations of misconduct” accompanying Breuder’s termination gave him a right to a name-clearing hearing, and that his right was based in federal law.

Breuder serves as a reminder to school boards of the following lessons: even an employee who is at-will is entitled to due process prior to termination if they are accused of misconduct. School boards must enter employment contracts with care, and might be able to exit such contracts before their expiration date, but only with the same degree of care. Ever-changing legislation and constitutional issues may impact a school board’s powers to set the length of an employment contract and the need to provide due process when terminating the contract. Long before a school board considers terminating a public employee, it should consult legal counsel to ensure that the board’s proposed actions are lawful and constitutional.