Cheli v. Taylorville Cmty. Sch. Dist.

• Decision Date: 03 February 2021
• Docket Number: No. 20-2033,20-2033
• Citation: 986 F.3d 1035
• Court: U.S. Court of Appeals — Seventh Circuit
• Parties: Joshua L. CHELI, Plaintiff-Appellant, v. TAYLORVILLE COMMUNITY SCHOOL DISTRICT, et al., Defendants-Appellees.

986 F.3d 1035

Joshua L. CHELI, Plaintiff-Appellant,

v.TAYLORVILLE COMMUNITY SCHOOL DISTRICT, et al., Defendants-Appellees.

No. 20-2033

United States Court of Appeals, Seventh Circuit.

Decided February 3, 2021

Submitted December 10, 2020^*

James Albert Devine, Attorney, James A. Devine, Attorney At Law, Springfield, IL, John A. Baker, Attorney, Baker, Baker & Krajewski, Springfield, IL, for Plaintiff - Appellant.

Betsy Wirth, Attorney, Quinn Johnston, Springfield, IL, for Defendants - Appellees.

Before Sykes, Chief Judge, and Flaum and Kanne, Circuit Judges.

Flaum, Circuit Judge.

Taylorville Community School District #3 (the "District") terminated plaintiff Joshua Cheli. A collective bargaining agreement between the District and its employees provided, among other things, that an "employee may be ... discharged for reasonable cause." Cheli sued the District and others for violating his procedural due process rights under the Fourteenth Amendment. The district court dismissed his case because it found that he lacked a protected property interest in his continued employment. We disagree. The collective bargaining agreement established that Cheli could not be terminated except "for reasonable cause," which created a protected property interest for which he was entitled to due process. We accordingly reverse the district court.

I. Background

Cheli worked as a computer systems administrative assistant for the District from 2014 until 2018. He reported to the District's superintendent Gregg Fuerstenau, Director of Computer Services Chris Kuntzman, and Board of Education of Taylorville CUSD #3 (the "Board"), also defendants in this case. On September 28, 2018, with about twenty-five minutes’ notice, Fuerstenau and Kuntzman ushered Cheli to a meeting. At the meeting, which lasted only a few minutes, Fuerstenau and Kuntzman terminated Cheli because a female student had alleged that Cheli had sexually harassed her three weeks prior. Cheli denied the allegations, but Fuerstenau and Kuntzman told him the decision was a foregone conclusion.

The Board memorialized Cheli's termination by entering a resolution on October 9, 2018, which retroactively took effect on September 28. Cheli never received notice of the October 9 Board meeting at which the Board passed the resolution, nor did Cheli receive written notice of the charges or the evidence against him considered by the Board. Based on the resolution, the Board sent Cheli a notice of termination via certified mail stating that "[t]he basis or grounds for discharge include incompetence." That notice informed Cheli that he could request the written report submitted by Fuerstenau stating the reasons for his discharge. However, the District did not provide the report upon Cheli's request.

Central to this dispute is the collective bargaining agreement that governed Cheli's employment with the District. Taylorville's Educational Support Personnel, Cheli's bargaining unit, had entered into a collective bargaining agreement, the Master Agreement, with the District for the 2017–2018 and 2018–2019 school years. Article VII of the Master Agreement, titled "Discipline or Dismissal," provides in full:

8.1 An employee may be disciplined, suspended, and/or discharged for reasonable cause. Grounds for discharge and/or suspension shall include, but not be limited to, drunkenness or drinking or carrying intoxicating beverages on the job, possession or use of any controlled and/or illegal drug, dishonesty, insubordination, incompetency, or negligence in the performance of duties.

8.2 A conference with the employee shall be held prior to any suspension and/or discharge.

8.3 An employee shall have the right to a representative of his/her choice in any meeting which may result in suspension and/or discharge.

8.4 A written explanation for the suspension and/or discharge shall be given the employee so affected.

8.5 Upon initial employment with Taylorville Community Unit School District #3, non-certified employees will serve a one hundred twenty (120) day probationary period. During the period, the probationary non-certified employee will be an at-will employee. If the employee's work is deemed unsatisfactory by the Administration and the Board during this period, the Board, at its discretion, may terminate the employment.

Another document, the District's Policy Manual (the "Manual"), incorporated the Master Agreement and further elaborated on employee termination policies within the District. That Manual contains a provision titled "Employment At-Will," providing that:

Unless otherwise specifically provided, District employment is at-will, meaning that employment may be terminated by the District or employee at any time for any reason, other than a reason prohibited by law, or no reason at all. Nothing in School Board policy is intended or should be construed as altering the employment at-will relationship.

Exceptions to employment at-will may include employees who are employed annually, have an employment contract, or are otherwise granted a legitimate interest in continued employment. The Superintendent is authorized to make exceptions to employing non-licensed employees at-will but shall maintain a record of positions or employees who are not at-will.

Based on his view that the Master Agreement gave him a protected property interest in his employment, Cheli sued the defendants under 42 U.S.C. § 1983, claiming the defendants violated his right to procedural due process under the Fourteenth Amendment. His suit included two counts, alleging he had a protected property interest in his employment and defendants violated his procedural due process rights by terminating him without (1) a predeprivation and (2) a postdeprivation hearing. The defendants filed a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The district court granted defendants’ motion, finding that the facts Cheli alleged were "insufficient to permit a reasonable inference that [Cheli] ha[d] a constitutionally protected property interest in his continued employment with [the District]."

II. Discussion

"We review a district court's grant of a 12(b)(6) motion to dismiss de novo." Roberts v. City of Chicago , 817 F.3d 561, 564 (7th Cir. 2016). We also review a district court's interpretation of state law de novo. McCammon v. Ind. Dep't of Fin . Insts. , 973 F.2d 1348, 1350 (7th Cir. 1992) (citing Salve Regina Coll. v. Russell , 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991) ). To survive a motion to dismiss, Cheli must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). We must "construe the complaint in the light most favorable to the plaintiff, accepting as true all well-pleaded facts alleged, and drawing all possible inferences in [his] favor." Tamayo v. Blagojevich , 526 F.3d 1074, 1081 (7th Cir. 2008).

The Due Process Clause of the Fourteenth Amendment provides that "[n]o state shall ... deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. Relevant to this case, "[t]o demonstrate a procedural due process violation of a property right, the plaintiff must establish that there is ‘(1) a cognizable property interest; (2) a deprivation of that property interest; and (3) a denial of due process.’ " Khan v. Bland , 630 F.3d 519, 527 (7th Cir. 2010) (quoting Hudson v. City of Chicago , 374 F.3d 554, 559 (7th Cir. 2004) ).

Cheli "cannot under Section 1983 complain of procedural due process violations unless the state has first deprived him ... of such a constitutionally protected [property] interest." See Lekas v. Briley , 405 F.3d 602, 607 (7th Cir. 2005).

Therefore, "the threshold question is whether a protected property interest actually exists." Cole v. Milwaukee Area Tech. Coll. Dist. , 634 F.3d 901, 904 (7th Cir. 2011). Cheli and the defendants agree that the only issue on appeal is whether the Master Agreement gave Cheli a protected property interest in his employment.

Property interests are not inherent in the Constitution; "[r]ather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law." Bd. of Regents of State Colls. v. Roth , 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) ; see also Bishop v. Wood , 426 U.S. 341, 344, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976) ("[T]he sufficiency of the claim of entitlement must be decided by reference to state law."). We therefore determine whether Cheli had a protected property interest in his employment with reference to Illinois law, the law of the state where Cheli was employed. See Moss v. Martin , 473 F.3d 694, 700 (7th Cir. 2007).

"Under Illinois law, a person has a property interest in his job only where he has a legitimate expectation of continued employment based on a legitimate claim of entitlement." Id. Accordingly, "[t]o show a legitimate expectation of continued employment, a plaintiff must show a specific ordinance, state law, contract or understanding limiting the ability of the state or state entity to discharge him." Id. (quoting Krecek v. Bd. of Police Comm'rs of La Grange Park , 271 Ill.App.3d 418, 207 Ill.Dec. 227, 646 N.E.2d 1314, 1318–19 (1995) ). Illinois law presumes "an employment relationship without a fixed duration is terminable at will." See Duldulao v. Saint Mary of Nazareth Hosp. Ctr. , 115 Ill.2d 482, 106 Ill.Dec. 8, 505 N.E.2d 314, 317–18 (1987). However, that presumption "can be overcome by demonstrating that the parties contracted otherwise." Id. 106 Ill.Dec. 8, 505 N.E.2d at 318. "Property interests in employment may be created by express or implied contracts ...." Farmer v. Lane , 864 F.2d 473, 478 (7th Cir. 1988).

Turning to the facts at hand, Cheli points to the Master Agreement as the contract establishing that he had a legitimate expectation of...