Masters v. School Dist. No.1, No. 14CA1348 (Colo. App. Nov. 5, 2015)
Abstract: A Colorado Court of Appeals three-judge panel has ruled that amendments to Colorado’s Teacher Employment, Compensation, and Dismissal Act (TECDA), which eliminate the guarantee to any displaced nonprobationary teacher of a new position (i.e. the “forced placement” system) and replaces it with the “mutual consent “procedure, thereby authorizing local school districts to place any displaced nonprobationary teacher who fails to secure a “mutual consent” position within 12 months or two hiring cycles, whichever is longer, on unpaid leave, violates the Colorado Constitution’s contract clause and due process clause. It concluded that the TECDA, like its predecessor the Teacher Employment, Dismissal, and Tenure Act (TEDTA), created a contractual relationship between local school districts and their nonprobationary/tenured teachers. It, thus, concluded nonprobationary teachers had a valid contracts clause claim.
The intermediate appellate court likewise found that under the TECDA, like its predecessor TEDTA, a nonprobationary/tenure teacher is entitled to a hearing before being placed on unpaid leave. It determined that although not dismissed for cause, nonprobationary teachers placed on unpaid leave have their expectation of continued employment disappointed because they are not working and do not collect their salaries during the indefinite period of leave. As a result, it concluded that nonprobationary teachers placed on unpaid leave without being afforded a hearing had stated a valid due process claim.
Facts/Issues: In 2010, the Colorado General Assembly amended the TECDA via Senate Bill 10-191 (SB 191). SB 191 maintained TECDA’s provisions that nonprobationary teachers may only be dismissed for specified reasons and only after an opportunity to be heard. Before SB 191 was passed, TECDA required a school district to find a new position for a displaced nonprobationary teacher, and the receiving school was required to accept the teacher. This was known as “forced placement.”
Through SB 191, the legislature replaced this procedure with a “mutual consent” procedure whereby a displaced nonprobationary teacher may be assigned to a position at another school only with the receiving principal’s consent and input from at least two teachers at the school. SB 191 authorized the school district to place on unpaid leave any displaced nonprobationary teacher who has not secured a mutual consent position in the district within twelve months or two hiring cycles, whichever is longer.
The plaintiffs, nonprobationary teachers, filed suit in state district court alleging a violation of the Colorado Constitution’s contract clause, art. II, § 11. Specifically, they argued that TECDA created contracts between nonprobationary teachers and their employing school districts, and such teachers therefore have vested rights to TECDA’s employment protections. Plaintiffs claimed that TECDA’s challenged mutual consent provisions substantially impair those contractual rights insofar as they allow school districts to place nonprobationary teachers on unpaid leave without cause or a hearing.
The plaintiffs also alleged a violation of the Colorado Constitution’s due process clause, art. II, § 25. Specifically, they claimed that TECDA’s for-cause dismissal protections create a protected property interest in nonprobationary teachers’ continued employment. From this, plaintiffs alleged that the challenged mutual consent provisions deprive such teachers of this property interest insofar as they permit school districts to place them on unpaid leave without a hearing, which, plaintiffs claimed, amounts to an effective discharge.
The district court granted the defendants’ motion to dismiss both claims. It concluded that TECDA confers no contractual rights. Regarding the due process clause claim, it concluded that the mutual consent provisions, insofar as they allow school districts to place nonprobationary teachers on indefinite unpaid leave without a hearing, were neither unconstitutional on their face nor as applied.
Ruling/Rationale: The Court of Appeals panel reversed the district court’s decision dismissing the contract clause and due process clause claims. Noting that there was no Colorado caselaw holding TECDA creates any contractual rights, it pointed out the Colorado Supreme Court has repeatedly stated that TEDTA created contracts between school districts and their teachers.
The panel found that even though “TEDTA and TECDA are not identical, both protect nonprobationary, or tenured, teachers from dismissal without cause.” It stated that it could not discern any “differences between them sufficient to render the Marzec line of cases inapplicable to the determination in this case of whether TECDA creates a contractual relationship.” It, therefore, concluded that the “plaintiffs have, in this case, overcome the presumption that statutes do not create contracts.”
The panel rejected the defendants’ argument that enactment of the TECDA demonstrated that the legislature was moving away from the creation of contractual rights to continuous employment. It pointed out that the term tenure is not “legally distinguishable” from nonprobationary in regard to a contractual relationship. According to the panel: “In our view, the Marzec line of cases compels the conclusion that such a relationship exists, which satisfies this first inquiry.”
The panel next addressed the plaintiffs’ due process challenge to SB 191’s mutual consent provision. It agreed with “the plaintiffs that the legislature left unaltered TECDA’s for-cause dismissal provisions, which give rise to a protected property interest in continued employment.” However, it found that being placed on unpaid leave is not the same as being dismissed. It said, “Unpaid leave is distinct from dismissal, and TECDA treats the two categories differently.” As a result, the panel concluded that “teachers who have been placed on unpaid leave have not effectively been discharged or dismissed from their teaching positions.”
The panel then turned to the remaining question of whether there is any source of Colorado law under which a nonprobationary teacher is entitled to a hearing before being placed on unpaid leave. It concluded that the Colorado Supreme Court decision in Howell v. Woodlin Sch. Dist. R-104, 596 P.2d 56, 60 (1979), provided that source. In Howell, “The supreme court determined that TEDTA’s provisions allowing a tenured teacher to be dismissed “when there is a justifiable decrease in the number of teaching positions” was unconstitutional as applied absent a hearing.”
Based on the reasoning in Howell, the panel held that “before being placed on unpaid leave, nonprobationary teachers have a due process right to a hearing in which the teacher may attempt to show that the purported reason for which he or she was placed on unpaid leave was not the actual reason or that the placement was effected in an arbitrary or unreasonable fashion.” It reversed the district court’s ruling, and remanded the case with the following instructions:
These proceedings include deciding, in an appropriate procedural context, (1) whether the previously unaddressed elements of a contract clause claim have been met by the plaintiffs, and (2) the ultimate question of whether a valid contract clause claim has been stated or has been proved under the rules set forth in Justus.
Masters v. School Dist. No.1, No. 14CA1348 (Colo. App. Nov. 5, 2015)
[Editor’s Note: In January 2014, Legal Clips summarized an article in The Gazette reporting the Colorado Education Association (CEA) had announced that it was filing a lawsuit challenging the validity of parts of the state’s education reform law, specifically “proven flaws in the mutual consent provision of Senate Bill 191 that allows school districts to remove qualified teachers from the classroom.” Among other things, SB191 implements a new high-stakes teacher evaluation system that is based in part on student performance and test scores. The evaluation system allows for the dismissal of a tenured teacher when performance is low and for other reasons. The teacher can only be placed in a new school if there is mutual consent between the school principal and the teacher.]