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Simmons v. Chicago Board of Education

May 10, 2002


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 CV 5451--John W. Darrah, Judge.

Before Rovner, Diane P. Wood, and Evans, Circuit Judges.

The opinion of the court was delivered by: Diane P. Wood, Circuit Judge

Argued September 25, 2001

Joseph Simmons became the first African-American treasurer of the Chicago Board of Education in October 1995, shortly after his unsuccessful run for city alderman. Less than nine months later he was demoted. He sued the Board claiming that his demotion was illegally based on his race and political activities. The Board counters that it terminated Simmons essentially for micromanaging his office, in direct contravention of the orders of his supervisor. The district court found that Simmons had produced no evidence that the Board's stated reason was pretextual and therefore granted its motion for summary judgment. We agree that Simmons has not produced enough to demonstrate a genuine issue of fact about pretext and therefore affirm.


Simmons was hired as treasurer in October 1995. His immediate supervisor was the Board controller, Andrew Gilchrist. Above Gilchrist in the chain of command were chief fiscal officer Ken Gotsch and chief executive officer Paul Vallas. As treasurer, Simmons supervised five separate divisions, including the Investments Division, which was responsible for investing Board funds. Actual trades were normally made by the lead trader, Pam Jurgensen, who reported directly to Simmons. On any given day, Board traders conducted between five and 100 transactions.

Earlier in 1995, Simmons had mounted an unsuccessful race for Chicago alderman against 18th Ward incumbent Thomas Murphy. A week after Simmons was hired, Murphy called Vallas to complain about the selection. The gist of Murphy's complaint was that Simmons had illegally posted signs throughout the 18th Ward during the period leading up to the election and then had not removed them afterwards. This oversight cost the taxpayers money, since city workers had to devote time to taking down those signs. Murphy thought this indicated that Simmons would not make a fiscally responsible treasurer. Vallas informed Murphy that he was unaware of Simmons's campaign and expressed surprise that he had not learned of this fact during the interview and application process. In fact, Simmons had disclosed his aldermanic campaign to Gotsch and hisdeputy, Charles Burbridge, but that information apparently was not passed along to Vallas. Vallas later informed Simmons at a public meeting of the Board that "Alderman Murphy is not a big fan of yours." In addition, sometime after Simmons was demoted, Vallas bumped into Murphy at City Hall and mentioned that Murphy had been correct about Simmons.

Frictions developed within the treasurer's office soon after Simmons was hired. Jurgensen at times refused to cooperate with Simmons and told him that she had never worked for an African-American before. Simmons complained to his superiors that Jurgensen was initiating trades that contradicted Board policy and his weekly planning directives. Gotsch did not respond to these complaints with any action against Jurgensen. Simmons also hosted an off-site office Christmas party, leaving only one worker to cover phones. This infuriated City Treasurer Miriam Santos, who used the incident as an excuse to argue that she (as ex officio treasurer of the Board) needed more direct supervision of the Board Treasury Department. Vallas agreed to move Jurgensen and two other white employees from the Board's Pershing Road facility to City Hall.

One of Simmons's primary responsibilities was to help implement the trading and investment portions of a new Investment Policy that Vallas had pushed through soon after taking the helm at the Board. Under the policy, the treasurer is "responsible for all transactions undertaken and shall establish a system of controls." The policy lists specific investments and trades that require advance approval from the chief fiscal officer and also states that "the investment authority rests with the Chicago Public Schools as delegated by the Chief Fiscal Officer."

In order to carry out that task, Simmons developed a new system of controls for trades, under which he demanded that treasury staff receive pre-approval for all transactions either at regular strategy meetings or by telephone prior to consummating an individual trade. For the traders, this meant the onerous task of notifying Simmons prior to the execution of any of the up to 100 trades each day. This in turn put the Board at the risk of losing money when the market moved during the often lengthy delays.

On April 8, 1996, Burbridge wrote a memo clarifying Simmons's role in approving trades. The memo stated that "The investment policy does not require the Treasurer to approve each individual trade in a security prior to its execution. Subordinate employees are expected to execute trades in accordance with strategies. The Treasurer is expected to monitor their activity retrospectively as part of the system of controls regulating investments to insure compliance with the strategy and policy . . . . The Treasurer is not involved in actual trading." The memo also warned that failure to comply would result in disciplinary action.

Simmons responded with a memorandum to Gotsch, Burbridge, and Gilchrist that laid out his concerns with the "interpretation of the Investment Policy, the recent investment approval pattern and practice, and the [April 8] memo." Simmons indicated that he understood the authority Gotsch had delegated to him, basically reciting from the April 8 memo, but he also sought to justify his system of prior controls. He expressed confusion about how his system could have contributed to the alleged problems in the timely execution of trades and noted that he had at times denied approval for trades he viewed as inconsistent with the Investment Policy. He alluded to the need for his tight controls to prevent possible bankruptcy, although he neverexplicitly stated that he would not comply with Burbridge's directive.

Notwithstanding his opinion that the criticism of his system was ill-advised or ill-informed, Simmons claimed that after he received Burbridge's memo, he took a completely hands-off approach to trading. Gotsch, Burbridge, and Gilchrist remembered things differently; they claimed that Simmons ignored the memo and continued to delay and prevent trades, resulting in further loss of funds to the Board. Effective June 20, 1996, Simmons was demoted to a policy analyst position; he was replaced by ...

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