Vinyard v. King, 82-1521

Decision Date16 February 1984
Docket NumberNo. 82-1521,82-1521
Parties115 L.R.R.M. (BNA) 3563, 105 Lab.Cas. P 55,603 Edaleen VINYARD, Appellant, v. Robert J. KING, in his individual capacity and as Administrator of the Clinton Regional Hospital, EPH Monroe, Charles E. Engleman, Bud Miskel, Romney M. Chaffin, David Stratton, individually and in their official capacities as members of the Board of Directors of the Clinton Regional Hospital, State of Oklahoma, their servants, agents, representatives, assigns and successors, Appellees.
CourtU.S. Court of Appeals — Tenth Circuit

Mary Helm, Enid, Okl. (James Craig Dodd and Stephen Jones, Enid, Okl., with her on briefs), for appellant.

H. Leonard Court, Oklahoma City, Okl. (Gary L. Betow, Oklahoma City, Okl., with him on brief), of Crowe & Dunlevy, Oklahoma City, Okl., for appellees.

Before McWILLIAMS, McKAY and SEYMOUR, Circuit Judges.

McKAY, Circuit Judge.

We are asked to decide whether the district court properly granted summary judgment on the issue of whether plaintiff, Edaleen Vinyard, had a property interest in her continued employment with a municipal hospital.

I. Background

Mrs. Vinyard was hired as the hospital's Director of Volunteer Services in 1972. She served in that capacity until 1978, when Robert J. King, the hospital's administrator, fired her for allegedly violating his policy concerning the confidentiality of personnel communications. Mrs. Vinyard has consistently denied that allegation. Both parties stipulate, however, that plaintiff was given no hearing prior to being fired. Record, vol. 2, at 201. At the time she was hired, there was no formal employees' manual in effect. However, in 1976, Mrs. Vinyard was given a copy of the hospital's Employee Handbook ("handbook") which provided information concerning the policies and benefits applicable to hospital employees. Record, vol. 2, at 282.

Mrs. Vinyard filed this suit under 42 U.S.C. Sec. 1983 1 against Mr. King and the members of the hospital's board of directors, in their official and individual capacities. She sought, inter alia, reinstatement, compensatory damages, punitive damages against Mr. King, costs and attorney's fees. She alleged that her termination was state action depriving her of a property interest in her continued employment without due process of the law, in violation of the fourteenth amendment. 2 U.S. Const. amend. XIV, Sec. 1. The district court in Vinyard I invoked the Pullman 3 abstention doctrine. We reversed 4 and remanded for the district court to decide whether the facts surrounding Mrs. Vinyard's employment gave rise to a property interest under Oklahoma law. 5 On remand, defendant filed a motion for summary judgment. Mrs. Vinyard appeals the district court's grant of defendants' motion for summary judgment, holding that under Oklahoma law, she does not have a property interest in her continued employment. She claims that there are genuine issues of material fact surrounding her employment contract with the hospital, precluding an award of summary judgment. Fed.R.Civ.P. 56(c).

As we must do, we have considered all factual inferences in the light most favorable to the existence of issues of material fact, and in the light most favorable to the plaintiff, Mrs. Vinyard--the party opposing the summary judgment motion. Exnicious v. United States, 563 F.2d 418, 423 (10th Cir.1977). We reverse the decision of the district court on the ground that as a matter of Oklahoma law, Mrs. Vinyard has a constitutionally protected property interest in her employment with the hospital. We remand for the district court to determine the appropriate award of damages, costs and attorney's fees.

II. Section 1983 Claim

When bringing a section 1983 action, a public employee must show that she possesses a property or liberty interest in her employment in order to trigger the due process protections afforded by the fourteenth amendment. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). In the case before us, Mrs. Vinyard advances two theories in an attempt to support the sufficiency of her property interest claim. First, despite the fact that she had no written employment contract, Mrs. Vinyard alleges that there were special circumstances and considerations giving rise to an implied employment contract with the hospital. Mutually explicit understandings can create a property interest in continued employment by means of an implied contract. Bishop v. Wood, 426 U.S. 341, 344 & n. 6, 96 S.Ct. 2074, 2077 & n. 6, 48 L.Ed.2d 684 (1975) (citing with approval Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 2699, 33 L.Ed.2d 570 (1972)). If we thought that plaintiff's property interest existed by means of an implied annual contract with her employer, we would remand for a factual determination of whether the facts and special circumstances alleged by plaintiff do indeed give rise to such a contract. 6 However, the existence and sufficiency of Mrs. Vinyard's property interest is governed by the terms set forth in the hospital's handbook.

Mrs. Vinyard's second theory is that a property interest in her continued employment was created when the hospital issued its employee handbook in 1976. 7 Record, vol. 2, at 211-82. She argues that the handbook creates a property interest because it provides that permanent employees, such as herself, could only be discharged for cause. 8 See Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974).

Defendants would like us to believe, however, that the hospital was not restricted to dismissing its employees solely for cause. They argue that classification as a "permanent" employee does not give rise to a contract other than one for an indefinite period of time--terminable at will. The district court, citing to Edwards v. Kentucky Utilities Co., 286 Ky. 341, 150 S.W.2d 916 (1941), and Garza v. United Child Care, Inc., 88 N.M. 30, 536 P.2d 1086 (App.1975), cases cited by the Oklahoma Supreme Court in Singh v. Cities Service Oil Co., 9 554 P.2d 1367, 1369 n. 3 (Okl.1976), concluded that under Oklahoma law the parties' employment relationship was terminable-at-will and that the handbook did not restrict the hospital to discharge its permanent employees only for cause. Vinyard v. King, No. C-79-185-W, slip op. at 4-5 (W.D.Okla. January 27, 1982). We disagree.

Both the district court's decision and defendants' argument place unnecessary reliance on the significance of whether Mrs. Vinyard had an at-will or definite duration employment contract. They ignore the importance of the employee handbook 10--the pivotal point in Mrs. Vinyard's section 1983 claim--which is determinative of a property interest under Oklahoma law. See Langdon v. Saga Corp., 569 P.2d 524, 526-28 (Okl.Ct.App.1976). Whether Mrs. Vinyard has a property interest under Oklahoma law sufficient to trigger the protections of the fourteenth amendment is not necessarily determined by what type of contract she was employed under. Rather her property interest is determined by whether the terms of employment created by contract, federal statute, 11 city charter, 12 or an employee manual 13 "create a sufficient expectancy of continued employment to constitute a property interest, which must be afforded constitutionally guaranteed due process." Hall v. O'Keefe, 617 P.2d 196, 200 (Okl.1980). Therefore, we turn to Oklahoma law, Bishop, 426 U.S. at 344, 96 S.Ct. at 2077, to determine whether Mrs. Vinyard had a "legitimate claim of entitlement" to her job rather than a mere "unilateral expectation" of continuing in her position. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972).

III. Existence of Property Interest

In Oklahoma the provisions of an employee handbook can constitute a contract between the employer and employee and define the employer-employee relationship for as long as those provisions are in effect and the employee provides consideration for the benefits provided by the handbook. The consideration can be quite small and can even consist of the employee continuing to work and foregoing the option of quitting. Langdon v. Saga Corp., 569 P.2d 524, 526-28 (Okl.App.1976). In Langdon, the employee handbook provided for severance and vacation pay upon termination. In holding that those provisions constituted part of the employment contract, the court held that "the [p]ersonnel [m]anual ... became a ... contract which defined the employer-employee relationship during the period the policy was in effect and the employee performed." Langdon, 569 P.2d at 528. See also Smith v. Kerrville Bus Co., 709 F.2d 914, 919-20 (5th Cir.1983) (reasons for discharge enumerated in employee handbook restricted employer to discharge only for cause). The Oklahoma Supreme Court has since recognized that "the terms of employment established with an employer ... may create a sufficient expectancy of continued employment to constitute a property interest, which must be afforded constitutionally guaranteed due process." Hall v. O'Keefe, 617 P.2d 196, 200 (Okl.1980).

Here both parties stipulate that there is no written employment contract. The only writing evidencing an agreement is the employee handbook, signed by both Mrs. Vinyard and the hospital's personnel assistant. The handbook was designed "to acquaint [the employee] with the policies and benefits which apply to ... employee[s]". Record, vol. 2, at 211. It specifically states that a permanent employee may not be discharged without cause. 14 The fact that the handbook does not provide for review procedures 15 is no bar to our holding that under these circumstances we believe the Oklahoma Supreme Court would find a property interest in continued employment protected by the fourteenth amendment. See Perry v. Sindermann, 408 U.S. 593, 601-03, 92 S.Ct. 2694, 2699-2700, 33 L.Ed.2d 570 (1972); Poolaw v. City of Anadarko, 660 F.2d 459 (10th Cir.1981). As a public employee, Mrs. Vinyard retained the...

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