December 7, 2017
Yesterday, the U.S. Seventh Circuit Court of Appeals, whose jurisdiction includes Indiana, upheld a district court’s decision allowing certain teachers to retain seniority tenure rights. In Elliott v. Madison Consolidated Schools, the appellate court held that teachers who gained tenure rights under prior Indiana statutes, retained those rights despite significant statutory changes that became effective in 2012. Before then, permanent teachers earned tenure rights after six consecutive years at the school and those rights can only be curtailed in extreme and very limited circumstances. The court found that any RIF involving teachers who had achieved permanent teacher status before 2012, must be based on the traditional seniority methodology.
In this litigation, the Madison Schools employed Elliott for 20 years and accordingly, he became a permanent teacher in the late 1990s. In 2012, the local teachers association elected him its president and his building principal also recommended him for contract renewal as part of the evaluation process. During that summer, the school corporation decided to close several buildings and reduce staff because of declining enrollment. At the same time, changes to RIF statute came into effect. One statutory change specifically prohibited factoring a teacher’s seniority into any reduction in force decision. Madison Schools moved ahead with its RIF, eliminating Elliot while retaining less senior, non-tenured teachers who scored higher on their annual evaluations.
The Court of Appeals’ written decision contains a thorough discourse of both the Indiana teacher tenure statute and the federal Constitution’s Contract Clause, which prohibits states from passing laws that impair existing contractual obligations. The Court decided that the 2012 statute, which prohibited consideration of seniority in RIF situations, impaired the teachers contractual tenure rights. Consequently, Madison Schools violated Elliott’s rights when it refused to consider his seniority when reducing its teaching staff.
The Court’s decision requires that your school corporation undertake RIFs with a thorough analysis. Clearly, teachers who had six consecutive years of service to your school corporation before July 1, 2012 are deemed permanent teachers and possess tenure/seniority rights when a RIF becomes necessary. Teachers hired before 2012, but who were not permanent teachers by July 1, 2012, and teachers hired in or after 2012 do not possess any tenure rights. For those teachers, any RIF decision must be based on performance, and not seniority. One can imagine complex RIF situations involving both multiple tenured staff members and non-tenured staff members. Such a situation necessitates using two methods of deciding which teachers are reduced.
The Court’s decision also shines light on the judicial thought process and what factors are important in teacher termination litigation. While the school corporation argued that Elliott was a sub-par performer, the Court highlighted that his most recent evaluation recommended his contract renewal. Additionally, the only significant performance deficiency noted on any evaluation, was Elliott’s interpersonal relationship skills, which had only been noted once, ten years earlier. One also senses that the Court believed the school corporation’s RIF decision may have been strategic or possibly retaliatory for Elliott’s successful election as the teacher association president. When making difficult employment decisions, be certain to understand both what elements that can be legally considered, as well as the optics of your decision: how will the public, school staff, and a judge or jury view that decision.
Finally, the Court of Appeals reiterated at several points that Indiana statute still permits the removal of a poor performing teacher, suggesting that using the RIF process to do so is not proper. Candid, timely and thorough evaluations are paramount, as well as promptly addressing instructional deficiencies and poor performing employees status.
Have a question about this decision or a similar situation in your organization?Contact Tim Shelly or Matt Schram
Warrick & Boyn, LLP, is a full-service law firm in Elkhart, Ind., that practices in all areas of business and corporate law. Areas of practice include commercial litigation, creditors’ rights and bankruptcy law, labor and employment law, defense litigation, securities law and regulation, worker’s compensation defense, education and school law, EEOC law, employee benefits law and pension plans, environmental law and regulation, tax and estate planning, municipal law, and property and real estate law. The firm’s clients are located primarily in northern Indiana and southwestern Michigan, and most of the attorneys are licensed to practice in both Indiana and Michigan.