The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Jonathan E. Jaffe ("Jaffe") has filed an amended complaint
(the "Complaint") against the Federal Reserve Bank of Chicago
("Bank") and its alleged agents R.M. Scheider ("Scheider"),
R.P. Bush ("Bush") and Andrew M. Cook ("Cook") in connection
with Bank's termination of Jaffe's employment. Jaffe, a white
man, alleges he was terminated as a direct result of a
complaint by a black co-worker that he had made racist remarks
in her presence. Defendants now move pursuant to Fed.R.Civ.P.
("Rule") 12(b)(6) to dismiss each of the Complaint's four
counts for various reasons. For the reasons stated in this
memorandum opinion and order, defendants' motion is granted as
to Count I and III and denied as to Counts II and IV.
Count I alleges defendants deprived Jaffe of his property
interest in continued employment without due process of
law.*fn1 Existence of such a property interest often is an
inappropriate issue for resolution on a motion to dismiss.
See, e.g., Folak v. Sheriff's Office, 579 F. Supp. 1338, 1340-41
(N.D.Ill. 1984). Contracts, statutes or the type of established
grievance procedure on which Jaffe relies may constitute "rules
or understandings that secure certain benefits and that support
claims of entitlement to those benefits" (Board of Regents v.
Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548
Count II alleges defendants, acting without due process of
law, deprived Jaffe of his liberty interest in seeking other
employment. As is required on motions to dismiss (Wolfolk v.
Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984)), the following
allegations are taken as true and considered in the light most
favorable to Jaffe:
1. Bank's personnel files pertaining to Jaffe
state he was terminated because of a "racial
incident" and his "inability to get along with
others" (Count II ¶ 29).
2. That information is false (id. ¶ 30).
3. That information has been released to
Illinois' Division of Unemployment Compensation
(id. ¶ 29).
4. United States Naval Reserve Intelligence
Program (the "Naval Reserve"), a prospective
employer, desires to obtain the contents of
Jaffe's file. Unless Bank is enjoined from
maintaining or releasing that information, the
Naval Reserve will obtain that information and
deny Jaffe employment on that basis (id. ¶¶ 25-28).
Defendants argue those allegations do not indicate the
presence of sufficient stigma, publication or tangible harm to
support the existence of a liberty interest.
On the issues of publication and tangible harm this case is
controlled by the same analysis as in Zurek v. Hasten,
553 F. Supp. 745, 746-48 (N.D.Ill. 1982). In Zurek the existence of
stigmatizing information in plaintiff's government personnel
file, coupled with the prospect of dissemination of that
information to all government agencies requesting it, was
sufficient to establish both publication and tangible harm on a
motion to dismiss. Rule 12(b)(6) principles require this Court
to draw the inference Jaffe has been similarly foreclosed from
all federal government employment opportunities, and that is
sufficient to implicate constitutionally protected liberty
interests under Larry v. Lawler, 605 F.2d 954, 958 (7th Cir.
1978). If anything Jaffe's position is stronger than that of
the plaintiff in Zurek, because Jaffe actually alleges
imminent publication to a prospective employer and foreclosure
of employment,*fn2 while publication to a particular
prospective employer had to be inferred from the allegations in
Smith v. Board of Education, 708 F.2d 258 (7th Cir. 1983),
decided after Zurek, controls whether the adverse publicity
Jaffe alleges is sufficiently stigmatizing to implicate
protected liberty interests. Under Smith, 708 F.2d at 265 the
statements must be "so critical" Jaffe either is foreclosed
from "new employment in similar . . . positions" or becomes an
outcast in his community. If the publicity is no worse than the
fact of his discharge it cannot rise to ...