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June 3, 1998


The opinion of the court was delivered by: GETTLEMAN



 On March 30, 1998, plaintiff Lionel Bordelon filed a two count complaint against his employer, Chicago School Reform Board of Trustees, alleging that defendant deprived him of liberty and property rights without due process of law and breached his employment contract when it unilaterally, without prior notice or hearing, reassigned him from his position as principal of Kozminski Community Academy to an administrative position in the Central Office. On April 13, 1998, plaintiff moved for a temporary restraining order and a preliminary injunction seeking reinstatement as the principal at Kozminski, and an injunction preventing defendant from reassigning plaintiff without due process. On April 21, 1998, this court referred the motion to Magistrate Judge Ashman for a Report and Recommendation ("R&R") pursuant to Fed. R. Civ. P. 72(b) and Local General Rule 2.41B. On May 8, 1998, Judge Ashman issued an R&R, recommending that the court grant the motion for temporary restraining order and preliminary injunction, reinstate plaintiff to his position as principal of Kozminski, and enjoin defendant from removing plaintiff from that position without notice and an opportunity to be heard. Judge Ashman also recommended that plaintiff's motion for preliminary injunction be treated as a motion for permanent relief under Fed. R. Civ. P. 65 (a)(2). Defendant filed objections to Judge Ashman's R&R. Plaintiff responded to defendant's objections and also filed his own "limited objection" to the R&R. For the reasons set forth below, the court hereby denies both plaintiff's and defendant's objections, and approves and adopts Judge Ashman's comprehensive and well reasoned R&R, as modified herein.


 The facts of this case, which are essentially undisputed, are fully set forth in the R&R and will not be repeated here. *fn1" Defendant's objections to the R&R center on Judge Ashman's conclusion that plaintiff's employment contract gives plaintiff a property interest in the position of principal of Kozminski, and that defendant's action in transferring plaintiff to a position even defendant admits is nothing more than a "paper shuffler" at defendant's Central Office without notice or opportunity to be heard deprived plaintiff of that interest without due process of law.

 As noted by Judge Ashman and conceded by defendant, procedural due process claims encompass a two step analysis. Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir. 1996). The court must first determine whether plaintiff has been deprived of a protectible property or liberty interest. If plaintiff has been deprived of such an interest, the court must then determine what process is constitutionally due. Id.

 As Judge Ashman noted, citing Vail v. Board of Education of Paris Union School District. No. 95, 706 F.2d 1435, 1437 (7th Cir. 1983), "a term of employment set by contract gives rise to a property interest which the state cannot extinguish without conforming to the dictates of procedural due process." Defendant does not dispute that the employment contract gives plaintiff a property right to continued employment, but does dispute Judge Ashman's conclusion that plaintiff had a constitutionally protected interest in the position of principal at Kozminski. Because defendant continues to employ plaintiff at the same rate of pay, it argues that it has not deprived plaintiff of a constitutionally protected right.

 In reaching his conclusion, Judge Ashman correctly noted that the nature and boundaries of the property interest protected is defined by the instrument that creates the interest. See Vail, 706 F.2d at 1437. As stated by Justice Stewart in Perry v. Sindermann, 408 U.S. 593, 601, 33 L. Ed. 2d 570, 92 S. Ct. 2694 (1972),

... property interests subject to procedural due process protection are not limited by a few rigid, technical forms. Rather 'property' denotes a broad range of interests that are secured by existing 'rules or understandings.' A person's interest in a benefit is a 'property' interest for due process purposes if there are such rules or mutually explicit understandings that support his claim of entitlement to the benefit and that he may invoke at a hearing.

 In the instant case, the instrument creating plaintiff's claim of entitlement is his employment contract. That document, entitled "Uniform Principal Performance Contract," was entered into by the Kozminski Local School Council as agent for defendant for the purpose of the contract only, and by plaintiff, who is defined in the contract as "Principal." The term provision of the contract provides:

The term of employment shall be for four years and the Principal is hereby employed and agrees to serve as the Principal commencing July 1, 1995 and ending June 30, 1999 except as provided in Section V.

 As is readily apparent from the section quoted above, plaintiff was specifically "employed . . . as the Principal" of Kozminski for a period of four years, and thus has, at the very least, a legitimate contractual claim to that position. The contract goes on, as recognized in the R&R, to delineate plaintiff's duties, all of which pertain to acting as principal of Kozminski, and none of which pertain to any administrative function of the Central Office.

 Despite the language quoted above, defendant argues, relying on a statement in Swick v. City of Chicago, 11 F.3d 85, 87 (7th Cir. 1993), that in the employment context, property interests have been limited to clearly identifiable benefits, such as salary or other economic benefits. Swick, however, cannot be read so broadly. In Swick, a Chicago police officer was placed on involuntary sick leave for more than a year. He received no salary, but received the same amount of money he would have earned through sick pay. He argued that the defendant's action of placing him on sick leave without a hearing deprived him of a property right without due process. To create his property interest, he relied on a state law providing that nonprobationary police officers could not be removed, discharged, or suspended for more than 30 days except for cause. The Seventh Circuit rejected the plaintiff's claim, holding that being placed on sick leave was not the equivalent of suspension because the plaintiff did not suffer any pecuniary loss, either directly or indirectly. This was particularly true because the plaintiff retired shortly after reinstatement, thus negating any potential harm from the loss of sick leave. The court was careful to note, however, that it "could imagine a case in which a period of forced inactivity impeded promotional opportunities or had other indirect effects on post retirement income," neither of which was argued. The court noted that placing a person on sick leave is not a disciplinary measure, and that the plaintiff had not argued that the defendant had harmed his reputation by forcing him to take sick leave for psychological reasons.

 In the instant case, however, the contract itself provides the only method for termination: (1) by agreement of the parties; (2) discharge for cause; (3) closure of Kozminski; (4) death, resignation, or retirement of plaintiff; (5) or misrepresentation by plaintiff of his qualifications. None of these conditions for termination have been asserted by defendant. Moreover, unlike in Swick, plaintiff has specifically asserted that defendant's actions have injured his opportunity for future employment as a principal in any school district by damaging his name, reputation, honor and integrity. Additionally, "transferring" plaintiff to an administrative paper shuffler position, after defendants' investigation found no cause for removal, can only be interpreted as a disciplinary measure.

 It is true that as an alternate holding the Swick court stated that it did not think that property within the sense of the Fourteenth Amendment should be extended to purely dignitary or otherwise non-pecuniary dimensions of employment. Id. at 86. That holding is limited to its factual scenario. The court noted that the plaintiff could have taken another job while on sick leave and doubled his income. It also noted that the injury resulting from being temporarily deprived of the right to wear a uniform, carry a badge and gun, and to arrest people is de minimus. In the instant case, however, plaintiff has a relatively short-term contract and, unless defendant is enjoined, plaintiff will be totally deprived of his right to act as principal, which can affect his ability to so act in the future. *fn2" Being temporarily restricted from acting as a police officer while on sick leave is a far cry from being removed as a principal after being fully exonerated of highly publicized yet unsubstantiated charges. Moreover, unlike Swick, in order to receive compensation, plaintiff is required to work at the Central Office, in an essentially useless job, preventing him from employment elsewhere.

 Defendant also relies on Hardiman v. Jefferson County Board of Education, 709 F.2d 635 (11th Cir. 1983), in which a tenured high school teacher and coach who was suspended with pay for eight days argued that he had a property interest to not only the full pecuniary benefits of his position, but also to the right to teach and coach. The Eleventh Circuit did not reach the issue, concluding that even if the right to teach and coach standing alone could constitute a protected property interest, the plaintiff's eight day loss was de minimus. The court noted in dicta, however, that viewing plaintiff's contract in terms of traditional contract law, plaintiff's right to teach and coach was merely the consideration he gave for receiving salary and other benefits. As such, any rights concerning plaintiff's teaching and coaching belonged to the defendant. Id. at 638 n.2. As in Hardiman, defendant argues that any rights concerning plaintiff's acting as principal belong to it, and that it has waived any such rights.

 The Seventh Circuit has not squarely addressed the issue of whether a public employee with an admitted property interest in the term of his employment may also have a property right to the specific position or office. In Thornton v. Barnes, 890 F.2d 1380 (7th Cir. 1989), however, the court did hold that board members of a municipal corporation who had been appointed to serve four year terms might have property interests in their offices despite the fact that they served without compensation. The court based this decision on the "totality of circumstances" surrounding the plaintiff's appointment and the substance of plaintiff's rights as determined by state law. *fn3" Thus, the Seventh Circuit has clearly indicated that under the proper factual situation, a public employee may well be able to establish a property right to a particular position.

 In the instant case, the "substance of plaintiff's property right" is determined by his contract and the "totality of circumstances" surrounding its execution. Barnes, 890 F.2d at 1388 n.9. That contract, which is a Uniform Principal Performance Contract, was entered into by the Kozminski Local School Council acting as defendant's agent for the limited purpose of hiring a principal for Kozminski. The contract specifically provides that in the event it is terminated by non-renewal, plaintiff will not be reinstated to any former position he had held with defendant. Under these circumstances, where plaintiff was hired by a Local School Council to act as principal of a specific school, as opposed to being "assigned" to that school by defendant, plaintiff has a strong argument that he has a legitimate entitlement to the specific position.

 Defendant argues however, that such a conclusion is inconsistent with Section 10-23.8(b) of the Illinois School Code, 105 ILES 5/10-23.8(b), and renders the section ineffectual. That section, which is titled "Reclassification of Principals," sets forth the procedures for reclassification by demotion or reduction in rank for which a lower salary is paid. The final paragraph of the section provides:

Nothing in this Section prohibits a board from ordering lateral transfers of principals to positions of similar rank and equal salary. (Emphasis added).

 Because this issue was not raised before Judge Ashman, he had no reason to determine whether his conclusion was inconsistent with the act. Even accepting defendant's position that because the contract was made pursuant to Illinois law it must be read consistent therewith, the court concludes that at the very least plaintiff has a legitimate entitlement to a position as a principal. This conclusion does not change the outcome, however, because the section provides that principals may be transferred only to other positions of similar rank and equal salary, i.e. to another school as principal. See, e.g. Stevens v. Tillman, 661 F. Supp. 702 (N.D. Ill. 1986) (Board has statutory authority to transfer principal from one school to another). Nothing in Section 10-23.8(b) gives defendant the right to transfer plaintiff to a "paper shuffler" position in the Central Office. Judge Ashman held, and this court agrees, that the two positions are not similar for purposes of the act. Accordingly, the conclusion of the R&R is correct and both plaintiff's and defendant's objections thereto are denied.


 The court accepts and adopts Judge Ashman's May 8, 1998 Report and Recommendation as modified by this opinion. Although neither party has objected to Judge Ashman's recommendation that the preliminary and permanent injunction stages of the case be consolidated pursuant to Fed. R. Civ. P. 65(a)(2), it is unclear whether the parties had sufficient notice that consolidation would be ordered when they waived their right to present evidence to Judge Ashman. Moreover, plaintiff may wish to present his additional evidence of a liberty interest violation. Accordingly, the court elects not to consolidate the permanent and preliminary injunction stages of this case. The motion for a preliminary injunction is granted. ...

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