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Administrator Contracts

Due Process
Leak v. Board of Educ. of Rich Tp. High School Dist. 227, --- N.E.3d ----2015 IL App (1st) 1143202, 2015 WL 5274262
The court at the Board’s request dismissed this case. The superintendent brought claims for declaratory judgment, which alleged that the Board improperly dismissed her. She also brought a claim for breach of contract. The Board had good cause for the dismissal of the superintendent because she acted outside the scope of her authority by transferring “disruptive” students to alternative schools without board hearings for extended periods of time. These students were not given any other form of a meaningful opportunity to be heard. Even if the practice of transferring students to alternative schools without a hearing was routinely done for years in the school district, this did not negate the superintendent’s responsibility to know the law and follow the School Code. If the Board had ulterior motives in terminating the superintendent, this did not negate the reasonable basis that existed for the superintendent’s dismissal.

The superintendent’s due process rights were not violated because there was no evidence to suggest that she did not receive an impartial hearing.

Shanell M. Bowden, IASB Law Clerk

Whistleblower Actions - statutory construction
Taylor v. The Board of Education of the City of Chicago, 2014 IL App (1st) 123744 (May 6, 2014)
An assistant principal (AP) sued the school board for (a) retaliatory discharge, and (b) violation of the Illinois Whistleblower Act. The AP claimed that the board discharged her and retaliated against her exercising her mandatory child abuse reporting duties. After a trial, the jury awarded her $1,000,500.00 for her “retaliatory discharge” claim. However, this verdict was overturned on appeal because the AP was not an at-will employee but instead under contract. Retaliatory discharge actions are only available to at-will employees - not to employees whose contractual term of employment is not renewed. Here, the school board chose not to renew the contract. The court sent the case back to the trial court to assess damages under the Whistleblower Act claim, which the AP also claimed.

Voluntary loss of tenure and dismissal rights
Medina v. Board of Education of the City of Chicago, 2014 IL App (1st) 130588 (June 11, 2014).
This decision addresses whether an administrator who is dismissed for failure to have the appropriate license has the right to “bump back” to a tenured teacher position. No, held the Court under the facts presented in this case. The school board dismissed the assistant principal for failure to have a Type-75 certificate. The facts demonstrated that the assistant principal knew she was relinquishing her tenure when she accepted the promotion to assistant principal. The assistant principal claimed that she was still a tenured teacher and could not be terminated except for cause related to her performance as a teacher. The Court found nothing in the statute or board rule that supported these claims. The Court upheld the dismissal concluding that her loss of tenure resulted from her voluntary decision to seek and accept a promotion to a nontenured assistant principal position.

Pension Reform Litigation
In Re: Pension Reform Litigation, Order Granting Motion for Temporary Restraining Order and Preliminary Injunction.
P.A. 98-599 (Pension Reform) has temporarily been stayed in its entirety. That means that for now the State of Illinois cannot implement P.A. 98-599 until Illinois courts make a decision about whether the new Pension Reform law is unconstitutional.

For readers who want more analysis, the following excerpt is from a recent article by by David T. Zafiratos and Ashley Folk, Ottosen Britz Kelly Cooper Gilbert & DiNolfo, Ltd. It discusses how some states in the nation are coming to opposite conclusions on the pension reform issue.

Constitutional challenges to pension benefit cuts met with mixed results

Legal Insights for Pension Boards (Spring 2014)

Although, it had traditionally been assumed that public pensions enjoyed a heightened protection from reduction, suspension or elimination for current public employees and retirees, recent cuts by many state legislatures have tested that assumption. Two recent cases from the New Mexico and Arizona Supreme Courts have rendered opposite conclusions.

In Bartlett v. Cameron, 316 P.3d 889 (2013), the Supreme Court of New Mexico held that the cost-of-living adjustment (COLA) paid out to retirees is not a vested property right. The New Mexico Constitution provides that public employees acquire vested property rights with due process protections in their retirement plans. The court labeled COLA as a legislative tool used to implement current public policy, as opposed to a vested property right. COLA is provided independently from the obligation to pay retirement benefits. Thus, reducing the COLA does not also reduce the retirees’ underlying substantive retirement benefits.

Conversely, in the case of Fields v. The Elected Officials’ Retirement Plan, 680 Ariz. Adv. Rep. 15 (2014), the Arizona Supreme Court held that modification of a statutory formula for calculating pension benefit increases violated the Pension Clause of the Arizona Constitution. The Arizona Constitution states that pension benefits shall not be diminished or impaired. The Supreme Court of Arizona came out opposite on this issue than the Supreme Court of New Mexico had in Bartlett. In Fields the court held that the term “benefit” encompasses benefit increases under the Pension Clause. The court relied on the history of the statute and Arizona precedent to reach this conclusion. Second, the court determined that changing the benefit increase formula diminished and impaired the benefits.

Illinois courts are not bound by or required to find either the Arizona or New Mexico decisions persuasive when deciding whether P.A. 98-599 is unconstitutional. However, in Fields, the Arizona Supreme Court specifically stated that Illinois had previously determined that benefit calculation formulas are entitled to constitutional protection. This could indicate that Illinois may hold itself in the minority with Arizona when the recent challenges are decided, and strike down the reform.

Of the seventeen states that have changed their COLAs, twelve have been challenged in court. In the nine states where the courts have ruled, eight have upheld the cut to COLAs. As the Bartlett court pointed out, the recent wave of COLA legislation can be attributed to the economic downturn that is affecting the fiscal viability of public funds. Illinois courts are being faced with identical arguments relating to the current reform —specifically that there is a constitutionally protected contractual right to the COLA calculation. Illinois has traditionally been considered one of the states with the greatest constitutional protection of public pension benefits. If Illinois courts decide to consider the current judicial thinking on the matter, it will be interesting to see if the reform is upheld in light of this strong constitutional protection.

Reprinted and Adapted with permission from Legal Insights for Pension Boards

© 2014 Ottosen Britz Kelly Cooper Gilber & DiNolfo, Ltd.

Contract in violation of the Illinois School Code
Wynn v. Bd. of Educ. of School Dist. No. 159 (N.D. Ill. 2011).
District 159. The contract contained plans to formulate performance goals. After the superintendent’s first year, the Board of Education opted not to renew his employment contract. The superintendent filed suit against the Board, seeking to enforce the employment contract and retain his position. The superintendent also stated he had a property interest in his employment and termination without a hearing was a violation of his due process rights. The Board claimed that the employment contract was void because it did not include performance goals as required by the Illinois School Code, only plans to formulate goals. When a contract violates the law, it is rendered void. The Court found the employment contract was in violation of the Illinois School Code, and therefore void and unenforceable. Because the contract was void, the superintendent did not have a protectable property interest in continued employment. Consequently, the Court dismissed the superintendent’s due process claim.

Superintendent Dismissal - Procedural Due Process and Qualified Immunity for Board Members
Baird v. Warren Community Unit School District No. 205, No. 03-3630 (7th Cir., 11-12-04).
IASB filed a friend-of-the-court brief supporting the district to no avail – the Seventh Circuit Court of Appeals refused to reconsider its decision that a dismissed superintendent was denied procedural due process rights and that the school board members were not entitled to qualified immunity.

The school board dismissed the superintendent for cause before his contract expired. In the pre-termination hearing, it provided him an opportunity to address the board. The superintendent, believing the process was unfair, refused to participate in the hearing. The Seventh Circuit Court rejected the district’s argument that the superintendent waived his due process rights and held that the board should have given him full trial-type procedural due process. The availability of a post-termination lawsuit for breach of contract was insufficient, according to the Seventh Circuit, to protect his “present entitlement” to his contractual interests.

Most surprisingly, however, was the Seventh Circuit’s opinion that a reasonable board member would have known his or her conduct was unlawful because the superintendent’s procedural due process rights were clearly established. This finding precipitated the court’s denial of qualified immunity to the individual board members.

Civil Rights - School administrator's liberty interest in good name
Castillo v. Hobbs Mun. School Bd., (C.A.10 (N.M.) 4/8/09).
[Note: The following case has no precedential value in Illinois but is posted because it is a topic of interest to school officials.]

An assistant principal's liberty interest in his good name and reputation, as related to his employment, was not infringed when a tape-recorded sexually-explicit telephone conversation he had with his secretary was disseminated.

The assistant principal's employment was not terminated, and he was allowed to fulfill his one-year contract. He was later offered a position as a first-grade teacher, but then he secured a position as an administrator in a different district.

Removal of a principal prior to the expiration of his/her four-year contract
Young-Gibson v. The Board of Education of the City of Chicago, 2011 IL App (1st) 103,804, --- N.E.2d ----, 2011 WL 4579597 (Ill.App. 1 Dist., 9/30/2011).
The school board properly followed procedural requirements of Sections 34-8.3(a), (b), and (c) of School Code (Section 34 applies to Chicago Public Schools). Those sections apply to the removal of principals for schools on probation. The school board's decision to remove the Plaintiff as a principal was not against manifest weight of evidence.

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