Burke v. Bd. of Trs. of the Neb. State Colls.

• Decision Date: 15 March 2019
• Docket Number: No. S-17-1167.,S-17-1167.
• Citation: 302 Neb. 494,924 N.W.2d 304
• Parties: Melissa BURKE, appellant and cross-appellee, v. BOARD OF TRUSTEES OF the NEBRASKA STATE COLLEGES, appellee and cross-appellant.
• Court: Nebraska Supreme Court

302 Neb. 494

924 N.W.2d 304

Melissa BURKE, appellant and cross-appellee,

v.BOARD OF TRUSTEES OF the NEBRASKA STATE COLLEGES, appellee and cross-appellant.

No. S-17-1167.

Supreme Court of Nebraska.

Filed March 15, 2019.

Nicholas J. Welding, of Norby & Welding, L.L.P., Lincoln, for appellant.

George E. Martin III, of Baird Holm, L.L.P., Omaha, for appellee.

Heavican, C.J., Cassel, Stacy, Funke, Papik, and Freudenberg JJ.

Stacy, J.Melissa Burke began working at Chadron State College in 2007. In April 2016, she was notified her employment contract would not be renewed for the upcoming contract year. Burke filed a declaratory judgment action in district court against the governing body of Chadron State College, alleging she had not been notified of the nonrenewal within the timeframe required by a collective bargaining agreement. The district court dismissed the action on summary judgment, and Burke appeals. We find Burke’s action is barred by the doctrine of sovereign immunity, and therefore, we vacate the district court’s judgment and dismiss this appeal for lack of subject matter jurisdiction.

I. FACTS

The underlying facts are largely undisputed, and most have been stipulated by the parties. Burke brought this action against the Board of Trustees of the Nebraska State Colleges (the Board). The Board is the governing body of Chadron State College, Wayne State College, and Peru State College.¹ The Board was created by article VII, § 13, of the Nebraska Constitution, and its duties and powers are prescribed by the Legislature.² The Legislature describes the Board as "a body corporate"³ and as a "representative" of the State.⁴

In 2007, Burke was hired to work at Chadron State College. At all relevant times, she was a member of a bargaining unit represented by the Nebraska State College System Professional Association. As such, the terms and conditions of her employment were provided in collective bargaining agreements between the association and the Board.

1. BURKE’S EMPLOYMENT

Burke entered into yearly employment contracts with the Board for specific positions at Chadron State College. The term of each contract was from July 1 to June 30. As relevant to this case, the collective bargaining agreement requires that association members in their first year of employment must be given notice that their contract will not be renewed 30 days prior to its expiration. Association members in their second year of employment must be given notice 120 days prior to contract expiration, and members in their third and subsequent years of employment must be given notice 180 days prior to contract expiration.

From 2007 to 2011, Burke was an athletic administrative assistant at Chadron State College. From 2011 to 2015, Burke was a compliance coordinator at Chadron State College. In early 2015, Burke requested a review of her job duties, and in March 2015, her job was changed and she began working as an associate athletic director. The parties generally dispute whether this change was a reclassification or a transfer. If it was a reclassification, then under the collective bargaining agreement, Burke kept her prior years of service for purposes of notice of nonrenewal. If it was a transfer, then Burke’s years of service started over for purposes of notice of nonrenewal. The parties do not dispute the meaning of the terms "reclassification" and "transfer" in the collective bargaining agreement; rather, the dispute is over the underlying facts of Burke’s change in employment and whether it amounted to a "reclassification" or a "transfer" under that agreement.

On April 8, 2016, Burke was notified via letter from the president of Chadron State College that her employment contract would not be renewed for the 2016-17 contract year. Her 2015 contract was due to expire on June 30, 2016. Burke believed this notice was untimely, because she understood that her job had been reclassified and that she retained her prior years of service and, per the collective bargaining agreement, was entitled to 180 days' notice that her contract would not be renewed. The Board, however, reasoned that Burke had been transferred in 2015, and not reclassified, and that her years of service for computing notice of nonrenewal started over and she was entitled to only 30 days' notice of nonrenewal.

2. GRIEVANCE PROCEDURE

The collective bargaining agreement contains a grievance procedure designated as "the exclusive method for resolving grievances concerning the administration of this Agreement." It defines a grievance as a "dispute ... concerning the interpretation or application of this Agreement." The grievance procedure has several steps, one of which involves an evidentiary hearing before a committee. The grievance procedure culminates with an appeal to the chancellor. Thereafter, any party who is dissatisfied with the chancellor’s decision "may seek relief under applicable State or Federal laws" or, if the parties agree, through binding arbitration. The parties agree Burke did not initiate or exhaust the grievance procedure before filing this declaratory judgment action in district court.

3. DECLARATORY JUDGMENT ACTION

On June 8, 2016, a few weeks before her 2015 employment contract was to expire, Burke filed what she styled as a declaratory judgment action in the district court for Dawes County, Nebraska. Her complaint alleged the Board had breached the collective bargaining agreement by failing to timely notify her in writing of its intent not to renew her employment contract. The complaint sought a declaration that as a result of the breach, Burke was entitled to an employment contract for the 2016-17 contract year. The complaint also sought a declaration that Burke was entitled to "all salary and fringe benefits associated with her employment," as well as back pay and consequential damages.

After Burke filed her complaint, the Board moved to dismiss. It argued the court lacked subject matter jurisdiction, because Burke’s action was not really seeking a declaration regarding construction of a contract, but, rather, was seeking relief for breach of contract. The Board also argued that to the extent the complaint sought declaratory relief, Burke had another equally serviceable remedy, namely, an action for breach of contract. The district court overruled the motion to dismiss, reasoning it had subject matter jurisdiction over the declaratory judgment action and had the discretion to entertain it.

While Burke’s declaratory judgment action was pending, we issued our opinion in Armstrong v. Clarkson College .⁵ In that case, we held that the "exhaustion of a mandatory grievance procedure in a contract is a condition precedent to enforcing the rights under that contract."⁶ In response to Armstrong , the Board moved for summary judgment, arguing Burke’s action was barred because she failed to exhaust the mandatory grievance procedure in the collective bargaining agreement before filing suit.

The district court granted summary judgment in favor of the Board and dismissed Burke’s complaint. Burke filed this timely appeal, and the Board cross-appealed. We granted the Board’s petition to bypass.

II. ASSIGNMENTS OF ERROR

All four of Burke’s assigned errors challenge the district court’s application of Armstrong to this case. Burke assigns, reordered and restated, that the district court erred in (1) granting summary judgment in favor of the Board on the basis that Burke failed to exhaust the grievance procedure in the collective bargaining agreement; (2) interpreting Armstrong to require, as a matter of law, the exhaustion of a grievance procedure contained in a contract as a condition precedent to bringing an action to enforce the contract; (3) rejecting her argument that requiring exhaustion of a grievance procedure violates the constitutional right to access the courts without delay; and (4) rejecting her argument that requiring exhaustion of the grievance procedure unlawfully infringes on the court’s original equity jurisdiction.

On cross-appeal, the Board assigns, restated, that the district court erred in overruling its motion to dismiss, because (1) the court lacked subject matter jurisdiction over the declaratory action and (2) the complaint failed to state a claim upon which relief could be granted.

III. STANDARD OF REVIEW

Sovereign immunity is jurisdictional in nature, and courts have a duty to determine whether they have subject matter jurisdiction over a matter.⁷ Subject matter jurisdiction is a question of law.⁸ When a jurisdictional question does not involve a factual dispute, the issue is a matter of law. An appellate court reviews questions of law independently of the lower court’s conclusion.⁹

IV. ANALYSIS

After oral argument, the parties were ordered to file supplemental briefs addressing (1) whether Burke’s action is an action against the State and (2) if so, whether the Legislature has enacted any statute waiving the State’s sovereign immunity for this action. In their responsive briefs, the parties agree Burke’s action against the Board is an action against the State. They disagree, however, as to whether the doctrine of sovereign immunity applies or has been waived by the Legislature.

As a threshold matter, we agree with the parties that Burke’s action is one against the State of Nebraska. Her operative complaint names the Board as the only defendant. The Board was created by article VII, § 13, of the Nebraska Constitution, and its duties and powers are prescribed by the Legislature.¹⁰ The Legislature describes the Board as "a body corporate"¹¹ and as a "representative" of the State.¹² The Nebraska State Treasurer serves as treasurer of the Board,¹³ and the Board must report all expenditures to the Governor annually.¹⁴

We have at times, perhaps imprecisely, characterized the Board as a political subdivision of the State.¹⁵ We also have compared the Board to the Board of Regents of the University of Nebraska.¹⁶ Most recently, in Thomas v. Board of Trustees ,¹⁷ we...