Maggie Williams v. Commonwealth of Kentucky Cabinet for Human Resources John Hodgkin Ronald Holland Frank J. Willey Lynne McWilliams P. Kenneth Cox Margaret Whittet Darvin Allen
Docket: 93-5222
Court: Court of Appeals for the Sixth Circuit; May 26, 1994; Federal Appellate Court
Maggie Williams, a tenured employee with over twenty years in Kentucky's Cabinet for Human Resources, served as Field Office Manager from February 1985 until her demotion on May 3, 1990, to Senior Unemployment Insurance Examiner. Williams filed a lawsuit under 42 U.S.C. § 1983, claiming her demotion violated her procedural due process rights due to a lack of prior notice and hearing, and her First Amendment rights for engaging in protected speech. She also alleged violations of state law. The district court denied the defendants' motion for summary judgment based on qualified immunity and granted Williams partial summary judgment on her procedural due process claim.
Key issues on appeal include whether the defendants are entitled to qualified immunity regarding Williams' free speech and procedural due process claims, whether the district court erred in granting partial summary judgment, and whether the Eleventh Amendment bars claims for injunctive relief. Williams' complaints indicate her conflicts with supervisors began in November 1988, tied to a directive to hire politically connected individuals, which she opposed. She informed her staff she would not assist in hiring political appointees, and later raised concerns about a political appointee under her supervision engaging in political activities during work hours.
Williams reported to the defendants that Gibson did not account for his work and travel, submitted a falsified travel voucher, and recommended in June 1989 that Gibson not be retained due to his political activities. The defendants did not act on this recommendation. Williams subsequently informed the Kentucky Attorney General's office of Gibson's falsified voucher and alterations approved by defendant Cox, along with her suspicions of Gibson's unauthorized phone calls. Following her refusal to change her unfavorable recommendation of Gibson, Cox allegedly gave Williams a negative job performance rating. An administrative review hearing in August 1989 resulted in a formal reprimand added to Williams' personnel record.
In October 1989, an investigation into Williams' management of the Winchester DES office was initiated by defendant Allen, which led to a memorandum directing office employees to avoid derogatory remarks about others. Despite this, Williams continued to report political misconduct among DES employees, including her suspicion that James B. Little had engaged in political patronage and misconduct in job referrals. After formally reprimanding Little for partisan activities on April 6, 1990, he filed a grievance against her. On April 26, 1990, another investigation was requested by defendant Allen regarding Williams' management.
On May 3, 1990, Williams was temporarily reassigned to a different position during the ongoing investigation, which was later extended. In February 1991, she reported threats and vandalism against her to law enforcement, alongside allegations of political violations at DES. The completed investigation led defendant Holland to recommend Williams' termination or demotion based on findings that she had shown favoritism, verbally abused employees, and threatened retaliation against those associated with Little.
James Thompson, the DES Regional Supervisor, recommended the termination of Williams for insubordination and potential criminal conduct linked to her management of the Winchester office. However, defendant Allen opted for a demotion instead. On May 30, 1991, Thompson and defendant Hodgkin delivered an eighteen-page demotion letter from defendant McWilliams to Williams, outlining the reasons for her demotion and informing her of her right to appeal to the Personnel Board within thirty days. Williams subsequently filed a lawsuit against the Commonwealth of Kentucky, the Cabinet for Human Resources, and several individual supervisors and administrators, alleging five counts: (1) violation of due process under the Fourteenth Amendment, (2) violation of free speech rights under the First Amendment, (3) retaliation for reporting legal violations, (4) demotion without just cause, and (5) wrongful discharge. She sought reinstatement, expungement of her personnel record, damages, attorney's fees, and a declaratory judgment regarding the violation of her rights.
The defendants moved for summary judgment, claiming that the Eleventh Amendment barred Williams' claims and that the individual defendants were entitled to qualified immunity. Williams sought partial summary judgment on her due process claim. On January 22, 1993, the district court issued a ruling that (1) dismissed all claims against the Commonwealth of Kentucky and the Cabinet for Human Resources, as well as claims for monetary relief against state officials in their official capacities, due to Eleventh Amendment immunity; (2) allowed claims for injunctive relief against state officials in their official capacities and claims against them in their individual capacities; (3) determined that the defendants were not entitled to qualified immunity on federal claims; and (4) granted partial summary judgment to Williams on her due process claim. The court concluded that Williams had a protected property interest in her job and that she was entitled to notice and a hearing before her demotion, as established in Cleveland Board of Education v. Loudermill. The district court ruled that Williams was demoted without proper notice and hearing. An appeal followed.
On February 1, 1993, defendants requested the district court to modify its January 22 ruling, claiming entitlement to qualified immunity, asserting that Loudermill does not clearly establish a state employee's right to predeprivation notice and hearing. On April 20, 1993, they filed a supplemental motion to vacate based on newly discovered evidence—a tape recording of a conversation regarding Williams' demotion. Defendants contended this evidence demonstrated compliance with Loudermill’s requirements. On April 28, the district court reaffirmed its prior decision, denying qualified immunity on the due process claim and granting Williams partial summary judgment on that claim. The court also noted that factual disputes regarding the reasons for Williams’ demotion prevented summary judgment for defendants on the First Amendment claim.
Defendants subsequently appealed, challenging the district court's denial of qualified immunity on both due process and free speech claims, the granting of partial summary judgment to Williams, and the dismissal of Eleventh Amendment defenses against injunctive relief claims. They argued that, at the time of the demotion, it was not clearly established that the Due Process Clause required notice and hearing for public employee demotions, nor that the First Amendment prohibited adverse employment actions based on the statements cited by Williams. The court found that the denial of qualified immunity was immediately appealable as a final judgment under the collateral order doctrine, allowing for jurisdiction over these issues. The review of qualified immunity determinations is conducted de novo. Qualified immunity protects government officials from personal liability for actions taken in discretionary functions unless their conduct violates clearly established statutory or constitutional rights. The clarity of the right must be sufficient that a reasonable official would recognize the violation, which does not require a previous ruling on the exact action in question but must make the unlawfulness apparent in light of existing law.
Determining whether a constitutional right is clearly established involves reviewing Supreme Court decisions first, followed by those from the relevant appellate court and other circuits. Typically, a district court must identify binding precedent to establish a constitutional right clearly. In unique situations, decisions from other courts may suffice if they unequivocally indicate the unconstitutionality of the conduct in question, providing clear guidance to a reasonable officer.
In this case, Williams alleges her removal and demotion were retaliatory actions linked to her criticism of political patronage practices and her reports of suspected illegal activity within her office. Conversely, the defendants assert that her removal was necessary for an investigation, and her demotion was due to her poor management.
The district court denied the defendants' motion for summary judgment based on qualified immunity due to conflicting narratives that raised genuine factual disputes about the motives behind the actions against Williams. While the causation analysis is pertinent to the merits of the First Amendment claim, it does not address the qualified immunity defense.
The defendants maintain that they are entitled to qualified immunity because it was not clearly established that Williams' speech was protected under the First Amendment. However, it is firmly established that a state cannot terminate an employee for exercising their right to free speech. The critical question remains whether the boundaries of this right were sufficiently clear for a reasonable official to recognize that demoting Williams for her protected speech would constitute a violation.
Qualified immunity in public employee free speech cases hinges on whether the rights of the employee were sufficiently clear at the time of the discharge to prevent reasonable disagreement about its constitutionality, as established in Guercio v. Brody. The Supreme Court has created a balancing test to evaluate if a public employer's actions infringe on an employee's free speech rights, weighing the employee's interest in commenting on public matters against the employer's interest in maintaining efficient public service operations. Public employers must not misuse their authority to suppress speech merely due to disagreement with its content.
In assessing whether adverse employment action against an employee, such as Williams, is justified based on speech, a two-step process is employed. First, it must be determined if the speech in question constitutes a matter of public concern, following the guidance of Connick v. Myers. The content, form, and context of the speech are considered in this determination. In Connick, questions about office policies that did not pertain to public concerns were deemed internal matters, while inquiries about political pressures did relate to public interest. The outcome of this analysis informs whether the employee's right to free expression outweighs the employer's operational efficiency needs.
Williams' statements regarding political patronage employment practices and her claims of political activities among state employees at the DES office are categorized as matters of public concern, aligning with the Supreme Court's perspective in Connick that government service should prioritize merit over political affiliation. This viewpoint is reinforced by Sixth Circuit precedents indicating that public interest peaks when ensuring lawful operations within public organizations, particularly regarding the exposure of public corruption.
Defendants' assertion that the ruling in Thomson v. Scheid mandates a different interpretation is incorrect. In Thomson, the discussions pertained to internal departmental policy, lacking the broader public significance that Williams' criticisms and reports possess. Furthermore, the defendants challenged the factual basis of Williams' allegations regarding political patronage practices and corruption, referencing the Pickering case which does not protect knowingly or recklessly false statements. However, while Gossman highlighted that inconsistencies in an employee's statements could justify qualified immunity for officials, the defendants failed to demonstrate that Williams' criticisms of political patronage were false or made recklessly. Thus, Williams' general criticisms cannot be deemed false at this stage, nor is there evidence suggesting her specific allegations about corrupt activities were untrue.
Defendants failed to provide evidence contradicting Williams' statements regarding political patronage and corruption, which are deemed matters of public concern. The evaluation of whether Williams could be removed or demoted for her speech requires balancing her interests against the state's interest in public service efficiency. Courts may consider factors such as the impact of the employee's comments on their duties, workplace harmony, discipline, and trust. Defendants argued that Williams' alleged verbal abuse and misconduct harmed office authority and relationships, leading to improved efficiency after her departure. However, this argument does not address the specific state interests affected by Williams' speech. The focus must be on the disruption caused by her statements, not her alleged misconduct. Williams' criticisms of political patronage did not reasonably undermine workplace efficiency or relationships. While her reports created tension with certain colleagues, the public interest in exposing misconduct outweighs this concern, as both Williams and her employer benefit from a properly functioning organization.
Defendants claim entitlement to qualified immunity, arguing that the specific balancing required under Pickering regarding public employee free speech rights is unclear. They reference precedent indicating that the Pickering test is "somewhat imprecise." However, the court finds that in cases involving significant public concern, the implications of this imprecision do not apply. Williams’ statements regarding political patronage and corruption were protected under the First Amendment, and a reasonable official would understand that adverse employment actions based on such speech were unlawful as of May 1990 and May 1991. The court concludes that the state’s interest in maintaining workplace harmony does not outweigh Williams’ right to free speech, thereby denying the defendants’ motion for summary judgment based on qualified immunity.
Additionally, the court examines whether Williams had a clearly established right to notice and a hearing prior to her demotion under the Fourteenth Amendment’s Due Process Clause. Property interests, defined by state law, must grant a legitimate claim to a benefit. Kentucky law provides that classified employees, like Williams, cannot be demoted or dismissed without cause, establishing her protected property interest in her role as Field Office Manager. Therefore, her demotion without due process violated her rights.
The Kentucky statutory framework establishes that employees, like Williams, possess property interests in their employment, which are protected by the Fourteenth Amendment. Therefore, Williams could not be deprived of her job without due process. While Kentucky law mandates that employees be notified of their demotion, it does not require a hearing prior to such action. Williams received an eighteen-page letter fulfilling the notice requirement under Ky.Rev.Stat. Ann. Sec. 18A.095. The central issue is whether, at the time of her demotion, it was clearly established that Williams had a federal right to additional due process, including a pre-demotion hearing. The Supreme Court case Cleveland Board of Education v. Loudermill provides relevant precedent, affirming that public employees with a property interest in their job cannot be terminated without an opportunity for a hearing. The Loudermill Court emphasized that due process requires some form of hearing prior to discharge, balancing the private interest in job retention against the government's need for efficient employee management and the risk of wrongful termination. The Court recognized the profound impact of employment loss on individuals, highlighting the significant private interest at stake.
Opportunity for employees to present their case is crucial in ensuring accurate decisions regarding dismissals for cause, which often involve factual disputes. Even with clear facts, the necessity of a discharge may be ambiguous, underscoring the value of allowing the employee to respond before termination. The governmental interest in immediate termination does not outweigh the benefits of this opportunity, as it imposes minimal administrative burden and avoids delays. Both the employer and employee benefit from preventing erroneous terminations, with employers preferring to retain qualified staff rather than incur training costs for new hires. Additionally, retaining employees helps avoid social welfare implications. If an employer perceives a significant risk in retaining an employee, they may opt for a paid suspension instead of immediate termination.
While the Court in Loudermill recognized the need for some pretermination hearing, it clarified that such hearings need not be formal or elaborate, requiring only that the employee receive notice of charges, an explanation of the evidence, and a chance to respond. The principle established in Loudermill is applicable beyond terminations, as it pertains to any significant property interest deprivation by the state. However, the defendants argue that Loudermill's application to demotions is not straightforward, as the balancing of interests was specific to terminations. The court agrees that Loudermill cannot be applied rigidly to demotions, acknowledging that not all deprivations of rights necessitate a predeprivation hearing. The Loudermill Court itself noted that some cases may satisfy due process with a postdeprivation hearing.
Determining the due process required in employment cases involves balancing various interests, particularly concerning the property interest at stake. The applicability of the Loudermill case's requirement for notice and a hearing prior to termination was questioned in relation to employee demotions. The court must investigate whether existing precedents clearly establish that these pre-deprivation requirements extend to demotions.
Williams cites two Sixth Circuit cases to support the argument that Loudermill is relevant to demotions. In *Sewell v. Jefferson County Fiscal Court*, a prison guard claimed her due process rights were violated when she was demoted without a pre-deprivation hearing. However, the court found that a prior meeting with her supervisor sufficiently satisfied Loudermill's requirements, as it provided her an opportunity to respond to her impending demotion.
Similarly, in *Hawks v. City of Pontiac*, a police officer claimed a violation of due process rights after being demoted for breaching a residency requirement. The court noted that the officer's pretermination conference with the chief of police constituted compliance with Loudermill's requirements, affirming that the officer had a property interest in his job.
Both cases may suggest that a pre-demotion hearing is necessary for employees with property interests. They imply that a demotion could be regarded as equivalent to termination from a higher position, as the language in both cases framed demotion in terms of termination. The *Sewell* court explicitly referred to the plaintiff's claim as a failure to provide a hearing before her "termination," despite her actual demotion.
The Hawks court determined that the requirements for a pretermination hearing, as outlined in Loudermill, were satisfied; however, the interpretation of Loudermill in relation to demotions remains ambiguous. The court noted that neither Hawks nor Sewell explicitly established a right to pre-demotion notice and hearing, as both cases only addressed compliance with Loudermill in the context of termination, without affirmatively applying it to demotions. Williams failed to cite any cases that clearly recognized such a right. While the First and Fifth Circuits hinted, in dicta, at the applicability of Loudermill to demotions, the defendants did not dispute the district court's finding that Mangaroo was denied due process due to the absence of a prior hearing before demotion. Two district court opinions from Washington and Rhode Island recognized a tenured employee's right to a Loudermill hearing before demotion, but these decisions do not sufficiently clarify the constitutional requirement for reasonable officials. The ambiguity in Hawks and Sewell leaves uncertainty about whether a pre-demotion hearing is constitutionally mandated. Consequently, the unlawfulness of not providing such a hearing was not apparent to a reasonable official at the time of Williams' demotion. The principle of qualified immunity allows government officials to perform their duties without fear of litigation, provided they can reasonably predict when their actions might lead to liability.
Defendants are entitled to qualified immunity regarding Williams' procedural due process claim, as they could not have reasonably anticipated liability for not providing a pre-demotion hearing in accordance with Kentucky law. The court's determination of qualified immunity does not moot the defendants' challenge to the district court's partial summary judgment in favor of Williams, which also seeks injunctive relief. The court must first ascertain jurisdiction for the appeal, which is governed by 28 U.S.C. § 1291 concerning "final decisions" or by interlocutory orders under § 1292. The appeal does not involve an order appealable under § 1292, leading to the examination of whether the district court's ruling constituted a "final decision." Federal Rule of Civil Procedure 54(b) allows for appeals of individual claims in multi-party actions but does not relax the finality requirement. The district court certified the judgment on the due process claim as final; however, since the issue of relief for the violation was unresolved, the judgment was not "final" under § 1291. Consequently, the certification under Rule 54(b) does not confer jurisdiction for the appeal of the partial summary judgment.
Defendants contend that the procedural due process issue is closely linked to the qualified immunity issue, warranting "pendent appellate jurisdiction" over the partial summary judgment on the due process claim. However, the Sixth Circuit has not formally recognized this doctrine and has established that only the qualified immunity aspect is immediately appealable. The court concluded that "pendent appellate jurisdiction" is inappropriate here, as the grant of summary judgment is not inextricably tied to the qualified immunity question. It was determined that Williams could not seek monetary damages against defendants due to a lack of clear legal precedent at the time of her demotion regarding her due process rights.
The court further noted uncertainties surrounding the district court's ruling, particularly whether new evidence—specifically a recording of a conversation on the day of Williams' demotion—was considered. By not exercising jurisdiction, the appellate court allows the district court to assess the significance of this evidence first.
Additionally, the district court ruled that Williams' requests for prospective injunctive and declaratory relief against the defendants in their official capacities were not barred by the Eleventh Amendment. This ruling indicated that her claims for reinstatement and record expungement were prospective and thus permissible under Section 1983. Defendants challenged this ruling and claimed that the Eleventh Amendment barred Williams' state claims. The appellate court acknowledged that the district court's decision on Eleventh Amendment immunity is immediately appealable as a "final judgment" and will be reviewed de novo, citing relevant case law. Defendants referenced precedent to support their argument that Williams' claims for relief in their official capacities were indeed barred by the Eleventh Amendment.
The Supreme Court's ruling in Pennhurst establishes that the Eleventh Amendment prohibits federal courts from issuing injunctions against state institutions and officials based on state law, a principle that is not overridden by the doctrine of pendent jurisdiction. Following this precedent, Williams' state law claims seeking injunctive relief are dismissed due to Eleventh Amendment restrictions, but her claims for damages against state officials in their individual capacities remain intact.
Defendants argue that Williams' due process and free speech claims for prospective injunctive relief are also barred by the Eleventh Amendment since the property interest in question stems from state law. However, although an analysis of state law is necessary to determine Williams' property rights related to her job, this does not convert her constitutional claims into state claims. Williams' action under 42 U.S.C. Sec. 1983 for alleged violations of her constitutional rights is not considered a state law claim and therefore is not barred by the Eleventh Amendment.
Consequently, her Sec. 1983 claims against state officials for declaratory and prospective injunctive relief will not be dismissed. Additionally, the court finds that defendants are not entitled to qualified immunity regarding Williams' First Amendment claim, as her speech involved matters of public concern. The balance of interests favors Williams' right to speak freely over the state's interest in preventing potential conflicts. Therefore, the district court's decision to deny defendants' summary judgment motion based on qualified immunity is affirmed, with no opinion on the ultimate resolution of Williams' First Amendment claim.
Defendants are granted qualified immunity regarding Williams' procedural due process claim due to the lack of a clearly established right for tenured public employees to receive a predemotion hearing at the time of her demotion. Consequently, the district court's denial of the defendants' summary judgment motion is reversed, preventing Williams from pursuing monetary damages against the defendants in their individual capacities. The court lacks jurisdiction over the defendants' appeal concerning the district court’s partial summary judgment in favor of Williams, as it is not deemed a "final decision," leading to the dismissal of this appeal. Additionally, the Eleventh Amendment bars the state law claims for injunctive relief, which are dismissed. However, Williams' Section 1983 claims for declaratory and prospective injunctive relief against the defendants in their official capacities remain intact. The excerpt emphasizes that the right to a predemotion hearing was not clearly established in the Sixth Circuit at the time of the events, and the significance of property interests in such cases will be assessed on a case-by-case basis.
