Gosney v. Sonora Independent School Dist., 77-1810

Decision Date28 September 1979
Docket NumberNo. 77-1810,77-1810
Citation603 F.2d 522
PartiesBilly C. GOSNEY and Mary Lynn Gosney, Plaintiffs-Appellants, v. SONORA INDEPENDENT SCHOOL DISTRICT et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Larry Watts, Houston, Tex., for plaintiffs-appellants.

George S. Finley, San Angelo, Tex., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Texas.

Before WISDOM, CLARK and GEE, Circuit Judges.

GEE, Circuit Judge:

This section 1983 civil rights action 1 arose from the refusal of the Sonora Independent School District to renew teaching contracts of appellants Billy C. Gosney and his wife Mary Lynn Gosney. Billy C. Gosney was hired as a junior high school principal by the Sonora Independent School District in 1962. Mary Lynn Gosney was hired as an elementary school teacher in the same district in 1963. The Gosneys held their respective positions with untarnished records until 1974, when the school district's board of trustees declined to renew their one-year contracts because it found them in violation of its policy against outside employment by school district personnel. 2 Over their years in Sonora, the Gosneys had acquired a substantial cattle ranching enterprise. In May 1974, they added a retail dry goods store to their holdings. The Sonora Independent School District's Board of Trustees, which hired the district's personnel, knew of the Gosneys' cattle ranching interests but did not base its nonrenewal decision on that activity. Rather, it was concerned only with their retailing venture.

The board learned of the Gosneys' acquisition of the dry goods store after it had adopted and entered in its official minutes motions to rehire Mr. and Mrs. Gosney for the 1974-75 academic year and after they had been informed of its action but before the contracts were issued. 3 It responded to the new information by holding meetings on May 6 and 13, 1974, reopening discussion of the Gosneys' contract renewals. The board orally invited Mr. Gosney to attend a meeting on May 20 to address the matter. At this meeting, Mr. Gosney informed the board that neither he nor Mrs. Gosney intended to resign to manage the store and that they had retained the store's long-time business manager to run it. Gosney argued that because the store would be operated through employed personnel the business would not interfere with his duties as principal. Unpersuaded, the board of trustees voted four to three at the May 20 meeting not to renew the contracts of either Mr. or Mrs. Gosney because of their growing involvement in outside businesses.

The Gosneys hired an attorney and requested another hearing, which was granted and held on June 24, 1974. Before this meeting, Mr. Gosney was given a copy of the minutes of the May 20, 1974, meeting that set forth the board's reasons for not renewing the contracts. At the June 24 meeting, Mr. Gosney stressed again that he intended to hold the store only as an investment and that it would be managed by someone without the active participation of himself or his wife. The board adhered to its decision not to renew Mr. Gosney's contract but relented as to Mrs. Gosney and offered her a teaching contract, which she refused. 4

Mr. and Mrs. Gosney then brought suit for reinstatement, for back pay, and for declaratory and injunctive relief against the Sonora Independent School District, its superintendent of schools in his official capacity, and, again in their official capacities, against the four members of the board of trustees who had voted against their contract renewals. The Gosneys alleged that the defendants violated their fourteenth amendment rights to procedural due process by depriving them of a property interest in continued employment without affording them adequate notice and hearing; to substantive due process by enforcing a rule against outside employment that bore no rational relation to any legitimate state interest in the educational system; and to equal protection by arbitrarily and selectively enforcing the outside employment rule against them.

The district court, in an unpublished opinion, held that the Gosneys had a protected property interest in their continued employment by virtue of the board's vote to grant them one-year contracts for 1974-75 but that they were afforded procedural due process because they received both notice that their purchase of the dry goods store was problematic under district policy and an opportunity to appear before the school board and present their case in impartial hearings. The court also held that the board's policy against outside employment did not violate the Gosneys' substantive due process rights because the rule was a rational and proper means for assuring a well-functioning school system. And the trial judge, construing the rule as forbidding only "substantial outside (business) involvement," held that it was not arbitrary in application or violative of the Gosneys' equal protection rights. Finally, he found that the record of the school board hearings furnished substantial evidence to support the nonrenewal action and that Mrs. Gosney's rejection of an unconditional offer to give her a contract for the 1974-75 academic year provided the school board with an absolute defense against her claims. While we agree with much of the analysis of the court below, we reverse because we find that the enforcement of the rule was arbitrarily and discriminatorily selective in violation of the equal protection clause of the fourteenth amendment.

Preliminarily, we find that because she received a good-faith, unconditional offer of an employment contract from the school district, Mrs. Gosney suffered no injury from its policy against outside employment or from its procedures for contract nonrenewal decisions and, consequently, lacked standing to bring this case. We therefore confine our review to the question of whether the school district denied Mr. Gosney procedural or substantive due process or equal protection and whether its action was supported by substantial evidence.

It is now well established that the constitution requires an opportunity for a hearing before the nonrenewal of a public school employee if the decision deprives the employee of a protected liberty or property interest. See, e. g., Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Perry v. Sindermann, 408 U.S. 593, 599, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Stapp v. Avoyelles Parish School Board,545 F.2d 527, 532-35 (5th Cir. 1977). Mr. Gosney asserted that his nonrenewal deprived him of a protected property interest in continued employment for the 1974-75 academic year. He based this claimed property interest on the school board's February 11, 1974, adoption of a motion to rehire him and the entry of this motion in the official board minutes. 5 Under "School Board Policies and Administrative Procedures 1.7 Authority of the Board," the "Board minutes constitute legal, binding action and policy procedure." The February 11 minutes establish that Mr. Gosney had more than a unilateral expectation of continued employment. In light of the expressed binding nature of the minutes, they secured to him a legitimate, nonsubjective claim of entitlement to renewal for purposes of due process protection. See Board of Regents v. Roth, supra, 408 U.S. at 577, 92 S.Ct. 2701. Indeed, in a similar case, this court held that a letter of intent to rehire from a school superintendent to a principal 6 created a due process property interest in continued employment after the principal expressed interest in renewal and emphasized that "a non-subjective expectancy of continued employment" and "not an iron clad contract capable of enforcement" was the key to triggering due process protection. Stapp v. Avoyelles Parish School Board,supra at 533 & n.15.

Although we find that Mr. Gosney had a protected property interest in his employment as a principal, we also find that the school district's procedures fully satisfied constitutional requirements for notice and hearing. Mr. Gosney was provided verbal notice of the May 20, 1974, meeting and told that it would address the problem of contract renewal caused by his purchase of the dry goods store. At that meeting and before the board made its decision, he was permitted to present to the board his arguments for renewal of his contract. Prior to the June 24 board hearing, he was provided written notice of the charge against him in the form of minutes from the May 20 meeting, disclosing the board's reason for his nonrenewal. And at the June 24 hearing, he was again allowed to present his case orally, as well as to have his lawyer question witnesses on his behalf and cross-examine board members as to the basis of their action. Moreover, the trial judge found upon substantial evidence that the school board was an impartial tribunal. Cf. Ferguson v. Thomas, 430 F.2d 852, 856 (5th Cir. 1970) (outlining minimum requirements of due process for termination of teacher for cause).

Mr. Gosney fares no better with his challenge to the school district's action as violative of substantive due process. The district court rejected this claim by interpreting the Sonora Independent School District's no-outside-employment rule as forbidding only Substantial outside business involvement. We read school district policy 11.4 and the contract clause 7 as not so limited and as proscribing all "outside employment" and efforts to "engage in any other business or professions directly or indirectly." However, we find that such a rule, tested by the standard of rationality, Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 487-88, 75 S.Ct. 461, 99 L.Ed. 563 (1955), 8 is reasonably related to the legitimate state interest in assuring that public school employees devote their professional energies to the education of children. The policy takes steps to effectively remove from school...

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    ...of a public school employee if the decision deprives the employee of a protected liberty or property interest. Gosney v. Sonora ISD, 603 F.2d 522, 525 (5th Cir. 1979). The minimum procedural requirements in the case sub judice have also been delineated by the Fifth Circuit in Ferguson v. Th......
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