Warner v. Graham

• Decision Date: 27 April 1988
• Docket Number: Nos. 87-5252,87-5391,s. 87-5252
• Citation: 845 F.2d 179
• Parties: 46 Empl. Prac. Dec. P 38,000 Frances A. WARNER, Appellant, v. John A. GRAHAM, Duainne S. Bourcy, Wayne J. Anderson and Weldee Baetsch, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 179

845 F.2d 179

46 Empl. Prac. Dec. P 38,000

Frances A. WARNER, Appellant, v. John A. GRAHAM, Duainne S. Bourcy, Wayne J. Anderson and Weldee Baetsch, Appellees.

Nos. 87-5252, 87-5391.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 17, 1987.

Decided April 27, 1988.

Dean A. Rindy, West Fargo, N.D., for appellant.

David C. Thompson, Fargo, N.D., for appellees.

Before JOHN R. GIBSON, BOWMAN and WOLLMAN, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Frances Warner, a program specialist employed by the Lake Region Human Services Center, provided preventive drug and education services to school and community groups. She was suspended and then discharged because of her admitted use of peyote and the adverse effect this use would have on her ability to effectively perform her job. She claims, as a member of the Native American Church, that her use of peyote was associated with religious practices and therefore entitled to first amendment protections. Warner brought this 42 U.S.C. Sec. 1983 action against four employees of the North Dakota Department of Human Services: John Graham, Executive Director; Wayne Anderson, Deputy Director; Weldee Baetsch, Director of Personnel; and Duainne Bourcy, Regional Director of the Lake Region Human Services Center, a branch of the Department of Human Services. The primary issue on appeal is whether the district court erred in denying the supervisors' claims that their acts were protected by qualified immunity. The supervisors also argue that the district court interpreted the findings of certain administrative agencies incorrectly and erred in concluding that the supervisors did not use the least restrictive means of achieving a compelling state interest and in granting Warner declaratory relief. Warner, on the other hand, argues that the district court erred in giving preclusive effect to certain administrative agencies' factual findings. We reverse the judgment of the district court, 675 F.Supp. 1171 (1987), and order that judgment be entered for the supervisors on the basis of qualified immunity.

In 1982, Warner became a full-time program specialist with the Lake Region Human Services Center. Her primary function was to provide alcohol and drug education services of a preventive nature to students in grades 5 to 12. This involved about 45 percent of her allocated time. In addition, about 25 percent of her time was alloted to conducting chemical abuse awareness sessions with adults and community groups, developing a "minor in possession" program, as well as assisting with sexual abuse treatment programs. Twenty percent of her time was to be spent assisting addiction counselors with case plans and treatment for addicted individuals and their families. The remainder of her efforts had to do with assessments and data collection regarding the effectiveness of these services.

On July 13, 1984 Warner and her husband were arrested and charged with distribution and possession with intent to distribute peyote in violation of 21 U.S.C. Sec. 841(a)(1) (1982) and 18 U.S.C. Sec. 2 (1982). On July 16, Warner informed Bourcy of her arrest, admitted that she used and would continue to use peyote and explained that it was associated with her religious practices in the Native American Church. Bourcy contacted Anderson and the two decided that based on previous practices in which other employees had been charged with felonies, Warner should be suspended for 30 days without pay, pending the outcome of the criminal charges. Bourcy wrote Warner informing her of this fact and also stated that if the charges were dropped or she was acquitted, she might be reinstated. Personnel guidelines only permitted 30-day suspensions and so on August 14, 1984, with the criminal charges still pending, Warner was suspended without pay for an indefinite period. On September 25, Bourcy met with Anderson, Graham and two assistant attorneys general. Bourcy informed them that Warner admitted using peyote and intended to continue to do so and that several school officials and community members were unwilling to allow her into their schools and community groups even if she were acquitted. Bourcy did not explain at that time that Warner's peyote use was connected with her practice of religion. It was agreed that she be fired.

On September 27, Bourcy sent Warner a letter informing her that she was fired because of her admitted use of peyote and the adverse effect this use would have on her working relationships with clients and addiction professionals.

On the same date, and the record in the district is not clear as to whether Bourcy or the state attorneys general knew of it, the district court in Warner's criminal case denied a motion for acquittal on a number of grounds, including the religious justification for the use of peyote. ¹ The district court determined that there was a question as to whether the Warners, who were not Indians, were properly members of the Native American Church in view of church requirements that such members be at least 25 percent Indian, and whether their religious beliefs were conscientiously held. The Warners subsequently were tried and were acquitted by a jury of the criminal charges on October 29, 1984.

Warner filed a personal grievance against Bourcy's decision to suspend and terminate her. On October 2, 1984, an internal grievance procedure hearing was held before a hearing officer, who recommended that Warner's termination be upheld. On November 8, 1984, Graham upheld Bourcy's termination decision, finding that Warner's use of peyote coupled with public knowledge of such use would have a direct adverse effect on her ability to carry out the duties and responsibilities of her job, and thus served as "cause" for her termination. Graham stated that he reached his decision after considering Warner's claimed constitutional privilege to use peyote, and he disclaimed any intention to deny those rights. He concluded that the termination was because of her use of peyote which was deemed inappropriate for her position and that reinstatement would harm the department's clients and other public agencies served by it. He recommended, however, that she be given priority consideration for other positions and directed that she be provided with weekly job opening announcements. Warner appealed to the State Personnel Board. There was a hearing and on January 28, 1985, the Board filed proposed findings of fact, conclusions of law and a recommendation stating that Warner's acquittal removed use and possession of peyote as a ground for dismissal and that the only "cause" remaining was her effectiveness as an alcohol and drug educator. Since the effect on her job duties was unknown, the State Personnel Board ordered reinstatement with full backpay and benefits.

Baetsch and Bourcy met with Warner on February 6, 1985, to discuss her reinstatement, and Warner signed in for work that afternoon. The following day, however, Warner told Baetsch that she wanted her reinstatement revoked. Over the next several days she met with Baetsch and Bourcy as well as other supervisors and staff members to discuss the terms of her reinstatement. Conversations continued over a few days but culminated with Warner submitting a written resignation on February 21, which was accepted on March 26, 1985.

Warner then applied for unemployment benefits, a number of hearings occurred, and on March 15, 1985, the Claims Deputy issued a determination disqualifying her from benefits because she voluntarily quit her job. An Appeals Referee affirmed this determination and on October 16, 1985, the Executive Director of Job Services affirmed the Appeals Referee's decision, finding that Warner's resignation in February, 1985, was without good cause attributed to her employer. Warner did not seek administrative or judicial appeal from the Director's decision. The latter two orders were considered by the district court and given preclusive effect.

Meanwhile, on September 23, 1985, Warner brought this 42 U.S.C. Sec. 1983 action alleging that the four supervisors violated the free exercise clause of the first amendment. The district court granted Warner's request for declaratory judgment. Applying the balancing test set forth in Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963), and subsequently applied in Thomas v. Review Bd., 450 U.S. 707, 101 S.Ct. 1425, 67 L.Ed.2d 624 (1980), and Hobbie v. Unemployment Comm'n, 480 U.S. 136, 107 S.Ct. 1046, 94 L.Ed.2d 190 (1987), the court concluded that although the supervisors had a compelling interest in controlling illegal drug abuse, the supervisors failed to demonstrate that Warner's termination was the least restrictive means that could have been employed "as is illustrated by her subsequent reinstatement to other duties," and therefore, the supervisors violated Warner's first amendment free exercise rights. It rejected the argument that Warner's termination was motivated by her loss of credibility through public knowledge and condemnation of her use of peyote, rather than disapproval of her religious practices, concluding that this was a subjective motivation, and not a proper consideration in free exercise analysis. It concluded, however, that her reinstatement on February 6, with full backpay and benefits, satisfied the least restrictive consideration and ended any constitutional violation. The supervisors were therefore liable only for the period from termination until reinstatement for which Warner had received backpay. The court reserved the issue of any remaining damages for future determination.

The court then denied the supervisors' motion for summary judgment based on qualified immunity concluding that Warner's right to use peyote was clearly established at the time of her termination and that the supervisors should have known that her use of peyote was entitled to free exercise protection.

This court has recently stated that qualified...