Scheick v. Tecumseh Pub. Sch.

• Decision Date: 02 September 2014
• Docket Number: No. 13–1558.,13–1558.
• Citation: 766 F.3d 523
• Parties: Robert SCHEICK, Plaintiff–Appellant, v. TECUMSEH PUBLIC SCHOOLS; Professional Educational Services Group, LLC, Defendants–Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

766 F.3d 523

Robert SCHEICK, Plaintiff–Appellant,

v.TECUMSEH PUBLIC SCHOOLS; Professional Educational Services Group, LLC, Defendants–Appellees.

No. 13–1558.

United States Court of Appeals, Sixth Circuit.

Argued: May 1, 2014.

Decided and Filed: Sept. 2, 2014.

ARGUED:James M. Tucker, United States Equal Employment Opportunity Commission, Washington, D.C., for Amicus Curiae. Jeffrey S. Burg, Law Offices of, Jeffrey S. Burg, Southfield, Michigan, for Appellant. Kenneth B. Chapie, Giarmarco, Mullins & Horton, P.C., Troy, Michigan, for Appellee Tecumseh Public. Mark R. Smith, Rhoades McKee PC, Grand Rapids, Michigan, for Appellee Professional Educational Services. ON BRIEF:James M. Tucker, United States Equal Employment Opportunity Commission, Washington, D.C., for Amicus Curiae. Jeffrey S. Burg, Law Offices of, Jeffrey S. Burg, Southfield, Michigan, for Appellant. Kenneth B. Chapie, Timothy J. Mullins, Giarmarco, Mullins & Horton, P.C., Troy, Michigan, for Appellee Tecumseh Public. Mark R. Smith, Rhoades McKee PC, Grand Rapids, Michigan, for Appellee Professional Educational Services.

Before: GUY, GIBBONS, and GRIFFIN, Circuit Judges.

OPINION

RALPH B. GUY, JR, Circuit Judge.

Plaintiff Robert Scheick appeals from the judgment entered against him with respect to the claim that his contract was not renewed because of his age in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 623(a)(1), and Michigan's Elliott–Larsen Civil Rights Act (ELCRA), Mich. Comp. Laws Ann. § 37.2202(1)(a). Scheick argues that summary judgment should not have been granted in favor of defendant Tecumseh Public Schools (TPS) and third-party defendant Professional Educational Services Group, LLC (PESG). The EEOC has filed a brief as amicus curiae agreeing in part with Scheick's contentions. SeeFed. R.App. P. 29(a). Finding that the evidence, viewed in the light most favorable to Scheick, was sufficient to create a genuine issue of material fact for trial, we reverse and remand for further proceedings consistent with this opinion.

I.

Plaintiff Robert Scheick was hired as Principal of Tecumseh High School in July 2004, when he was 51 years of age, and continued in that position until July 2010. For the first three years, Scheick was employed directly by TPS. Then, by agreement, the 54–year–old Scheick formally retired from TPS and was hired by the staffing firm PESG to continue working as principal under a three-year contract between TPS and PESG through June 30, 2010. Under that arrangement, Scheick began receiving pension and health care benefits from the retirement system, and TPS avoided more than $29,000 in payroll and benefit costs per year. In fact, the next year, several other TPS employees entered into similar arrangements as cost-saving measures.

In early 2010, when Scheick was 56 (almost 57) years of age, TPS decided not to renew the contract for his services. Although PESG's contract was terminable upon 30–days written notice, there is no dispute that the nonrenewal was an adverse employment action with respect to Scheick. Scheick continued to be employed as principal until the contract expired at the end of June 2010, after which he was eligible for but did not seek another assignment through PESG. Scheick claimed that the contract was not renewed because of his age, and he filed this action against TPS after receiving a right-to-sue letter from the EEOC. TPS filed its own third-party complaint for indemnification against PESG, and PESG brought a counterclaim against TPS. The claims between TPS and PESG are not before the court—only their common position that their motions for summary judgment were properly granted with respect to Scheick's age discrimination claims.

Scheick reported directly to TPS Superintendent Michael McAran for the last four of his six years as principal (both before and after the change of employment to PESG). McAran—who is older than Scheick by about ten years—was the sole employee of TPS's seven-member Board of Education, attended meetings with the Board every two weeks, and had a practice of speaking to the board president every other day. McAran explained that he was responsible for overseeing the district, managing the budget, and making final personnel decisions.

McAran insisted that he alone made the decision not to renew Scheick's contract, but also testified that he discussed the nonrenewal with several board members individually and believed there was an informalconsensus among the board members in support of his decision. Without specifying when he made that decision, McAran said it was “well before” he met with Scheick to discuss what would be Scheick's first formal performance evaluation on February 25, 2010. McAran admitted that he prepared the performance evaluation with the intention of “lay[ing] the groundwork” to end Scheick's relationship with TPS.

There was evidence that McAran received complaints from several parents, staff, and board members reflecting growing dissatisfaction with Scheick's performance and a perceived lack of leadership on his part. Two board members—Jim Rice and Karen Januszek—stated by way of affidavit that they had been teachers in the high school and were of the opinion that Scheick was not an effective principal. Scheick countered with favorable opinions of his performance from Assistant Principal Dennis Niles and Human Resources Director Donna Elser.

The most significant failure identified in the performance evaluation was the fact that the high school did not meet the state-mandated adequate yearly progress (AYP) for two consecutive years due to clerical errors (albeit errors not made by Scheick personally). Board Member Jason Sines was particularly concerned about this failing. It resulted in negative publicity for TPS, as did an embarrassing delay of several minutes during the graduation ceremony the previous year when Scheick left the speeches of the valedictorian and salutatorian in his office. Scheick's attendance at school functions was also described as deficient, including an incident when he left a concert early and two teachers had to handle a predictably volatile parent in his absence.

The review identified other deficiencies that had occurred in recent years including: failing for a second time to ensure that transcripts of college-bound student athletes made it to the NCAA's eligibility center; failing to properly coordinate homebound-student services; mishandling an issue concerning a special education student's accommodations; and failing to notify the parents of a student appearing at an expulsion hearing before the Board. Several of these issues were raised informally with Scheick, but no further disciplinary action was taken at the time. Although the evaluation rated two areas in need of slight improvement, McAran testified that, overall, this was a “good, competent” evaluation. Without denying that these incidents had occurred, Scheick responded to each of the noted deficiencies in a letter dated March 8, 2010. On that same date, McAran sent written notice to PESG that Scheick's contract would not be renewed.

Scheick claims that McAran made statements to him suggesting age-based animus on three occasions: namely, (1) in informing Scheick that the Board wanted him to retire during the performance review on February 25; (2) in telling Scheick that “they just want somebody younger” in an exchange on February 26; and (3) in explaining to Scheick that “they wanted someone younger” in reference to both of their positions in a follow-up conversation on March 15. McAran disputed Scheick's accounts of their conversations, in part, and denied that he said the decision had anything to do with Scheick's age. Scheick and the EEOC contend that testimony concerning these statements constituted direct evidence of age discrimination.

Overlapping the reasons given by McAran, TPS also maintained that the nonrenewal was the result of budget cuts that were discussed and drafted by the board's finance committee during January and February 2010. The evidence included affidavitsby two board members—Rice and Kevin Packard—who explained that newly announced reductions in state funding had substantially worsened the anticipated budget deficit for the following year. The finance committee proposed significant cuts—including closing an elementary school, selling the administration building, reducing transportation, and eliminating several positions—as part of the budget that was presented to the Board on March 9, 2010. TPS maintained that this proposed budget contemplated elimination of the high school principal position (for an annual savings of more than $100,000).

Rice and Packard explained that consolidation of the principal and superintendent positions “made sense” since Scheick's contract was ending, the administrative offices were to be relocated to the high school building, and McAran had experience as a building principal. They both specifically denied that Scheick's age was a factor in those discussions, and emphasized that the Board had approved several other contracts with PESG for administrators who were the same age or older than Scheick had been when his contract was not renewed.¹

The Board approved the budget sometime in May 2010, and Scheick's contract expired at the end of June 2010. McAran, who was in his mid-sixties at the time, assumed the duties of both positions on July 1, 2010. McAran and TPS Finance Director William Wright testified that they expected the consolidation of these positions to last for one or two years. The situation changed unexpectedly, however, when the Board learned just before its July 19 meeting that the reductions in state funding would likely be smaller than anticipated.

With smaller than expected cuts in state funding (together with greater than expected enrollment), the Board decided to restore a number of the eliminated positions once the additional funding was approved. The position...