7th Circuit affirms ruling for laid off tenured teacher

The 7^th Circuit Court of Appeals has struck down the retroactive application of an Indiana law that removed job security protections for tenured teachers, finding the application to teachers who were tenured before the law took effect is a substantial impairment to their constitutional contractual rights.

Indiana first passed its teacher tenure law in 1927, allowing teachers to earn tenure after working in a school corporation for five or more successive years. Indiana courts have interpreted that law to mean school districts must retain qualified tenured teachers over non-tenured teachers if layoffs are necessary.

However, after the Indiana General Assembly passed Senate Bill 1 in 2011, the state established a teacher-evaluation regime that stripped tenured teachers of their protections during layoffs. Beginning with the 2012-2013 academic year, SB 1 required schools to select which teachers to lay off based on performance rather than seniority.

Because of the law change, the Madison Consolidated School Board decided in 2012 to terminate Joseph Elliott, a 19-year veteran teacher at Dupont Elementary School, where he was tenured. Elliott’s termination came as part of the school district’s decision to lay off six teachers due to declining enrollment.

However, the board chose to retain six non-tenured teachers for positions for which Elliott was qualified. He sued the school district in January 2013, and the Indiana Southern District Court granted his motion for summary judgment, finding the layoff provisions of SB 1 violated the constitutional contract clause when applied retroactively to teachers who were tenured before the law took effect. Further, the district court determined SB 1 was a substantial impairment under the contract clause and awarded Elliott back pay and attorney fees.

The 7^th Circuit Court of Appeals upheld the district court’s ruling on appeal in a Monday decision, with Judge David Hamilton agreeing that retroactive application of SB 1 to teachers who were tenured before its passage impaired their contractual job security rights, as well as their tenure contracts. He pointed to precedent from cases such as Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 104 (1938) and Watson v. Burnett, 23 N.E.2d 420, 423 (Ind. 1939) as support for that ruling.

Further, the job security that accompanied Elliott’s tenure was a “central term” to induce him, and other tenured teachers, to teach in Indiana, Hamilton said. That reality, coupled with the fact that the change in law brought about by SB 1 was unforeseeable to tenured teachers, makes the retroactive application of the 2011 law a substantial impairment to their constitutional contractual rights, the judge said.

Finally, Hamilton wrote applying the layoff provisions of SB 1 to teachers such as Elliott was not reasonable and necessary to serve a public purpose, considering SB 1 “does not change the state’s power to fire ineffective teachers.”

“The Contract Clause does not saddle the State forever with a teacher-tenure system that its policymakers have come to think is bad for public education,” the judge wrote. “The Constitution does not prevent the state from changing the promises it makes on a prospective basis to new teachers. … Having restricted tenure for new teachers, the State and its school districts were and are free to buy out the tenure rights of more senior ones.”

The case is Joseph R. Elliott v. Board of School Trustees of Madison Consolidated Schools, 16-4168.