Short v. Kiamichi Area Vocational-Technical School District No. 7 , 761 P.2d 472 ( 1988 )

KAUGER, Justice.

The four questions presented concerning the nonrenewal of a tenured teacher’s contract are: (1) whether the school district/appellee failed to follow the Oklahoma School Code, 70 O.S. 1981 § 6-103.4(A), (B), (D) in its action for nonrenewal; (2) whether the decisions of the hearing panel and of the district court upholding the teacher’s dismissal were based upon insufficient evidence, and thus clearly erroneous under 70 O.S. 1981 § 6-103.9(A); (3) whether the hearing panel’s decision conformed with 70 O.S. 1981 § (¡-103.11(B) by outlining the scope of the hearing and making findings of fact and conclusions of law directing nonrenewal; and (4) whether procedural due process requires that a tenured teacher be afforded a pretermination hearing before his teaching contract is either terminated or nonrenewed under Cleveland Bd of Educ. v. Loudermill, 470 U.S. 532, 545, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494, 503-04 (1985).

We find that: (1) the prescribed prerequisites for nonrenewal under 70 O.S. 1981 § 6-103.4(A), (B), (D) were met by the Board; (2) the decision of the hearing panel which was based upon a preponderence of the evidence pursuant to 70 O.S. 1981 § 6-103.9 (A) was not clearly erroneous; (3) the Panel’s decision followed the statutory requirements of 70 O.S. 1981 § (¡-103.11(B). The dispositive question presented is whether procedural due process requires that a tenured teacher be afforded a pretermination hearing before his teaching contract is either terminated or nonrenewed. We find that pretermination hearings for tenured teachers are constitutionally mandated under Cleveland Bd. of Educ. v. Loudermill, supra.

FACTS

In 1974, Johnny M. Short, appellant/teacher, was employed by the Kiami-chi Area Vocational-Technical School District, appellee, to teach a residential wiring course. After a decline of enrollment in the course, coupled with an increased demand for skilled electronics students, the residential wiring course was converted to an industrial electricity/electronics course.

On April 2, 1985, the School board advised the teacher by certified mail that his teaching contract was being nonrenewed. The Board found that the teacher’s failure to secure certification as an electronics instructor constituted wilful neglect of duty. The teacher admits that he knew of the planned transition in the course as early as 1982. Nevertheless, he disputes the date upon which he was notified that his continued employment hinged upon his certification in electronics. The teacher contends that he was first informed on January 28, 1985, that the certification in electronics was a prerequisite to teaching the industrial electricity/electronics course. However, the school district presented evidence in posttermination proceedings that the teacher knew as early as August of 1982, that a major transition was occurring in the residential wiring course and that proficiency in electronics would be required.

In accordance with 70 O.S. 1981 § b-lOS^D),¹ the teacher sought review of the Board’s action before an administrative hearing panel (Panel). The Panel voted 2-1 to uphold the Board’s decision. Its decision was affirmed by the district court, and the teacher appealed.

I

THE RIGHT TO A PRETERMINATION HEARING FOR TENURED TEACHERS IS MANDATED BY BOTH THE STATE AND FEDERAL CONSTITUTIONS.

The teacher argues that he has been deprived of procedural due process under both the United States and Oklahoma Constitutions. Although the teacher asserts other allegations of error in the nonrenewal of his contract, the question of whether a tenured teacher must be afforded a pre-termination hearing before dismissal or nonreemployment is one of first impression in Oklahoma.

On March 19, 1985,² the United States Supreme Court promulgated Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 105 S.Ct. 1487, 87 L.Ed.2d 494 (1985). The Loudermill Court, echoing Justice Powell’s concurrence in Arnett v. Kennedy, 416 U.S. 134, 167, 94 S.Ct. 1633, 1650, 40 L.Ed. 2d 15, 40 (1974), reh. den. 417 U.S. 977, 94 S.Ct. 3187, 41 L.Ed.2d 1148 (1974), that “the right to due process is conferred not by legislative grace but by constitutional guarantees”³ held: 1) due process requires that tenured public employees must be afforded some form of pretermination opportunity to respond to charges leading to dismissal; and 2) if the termination involves arguable issues, the right to a hearing does not depend on a demonstration of certain success.

Nevertheless, before a pretermination hearing is required, it must be demonstrated that there is an existing right in continued employment.⁴ This right must arise from some independent source, e.g. state law, sufficient to create a legitimate claim of entitlement.⁵ In Loudermill, the Supreme Court found that the Ohio Legislature had created a property interest in continued employment for tenured public employees.⁶

It is undisputed that the teacher is a tenured teacher within the meaning of 70 O.S. 1981 § 6-102.1(6).⁷ A tenured teacher’s right to continued employment may be construed as a property interest subject to due process protection if the Legislature has created the right through statutory enactment.⁸ Title 70 O.S. 1981 § 6-103.4(A)⁹ provides that a tenured teacher may be removed for one or more of the statutory grounds set forth in § 6-103(A).¹⁰ Section 6-103(A) provides that a teacher may be dismissed for cause based on specifically delineated grounds. Pursuant to 70 O.S. 1981 § 6-101(E) unless a school board contacts a regularly employed teacher prior to April 10th or unless by April 25th the teacher notifies the board that he/she has no interest in reemployment, the teacher is considered to be employed on a continuing contract basis for the next year.¹¹

Under these statutes, a tenured teacher has more than an abstract need, desire, or unilateral expection in continued employment.¹² Instead, the teacher has a legitimate claim of entitlement created by legislative enactment. We have previously recognized that although a teacher has no right to be employed in a particular position, a tenured teacher does have a right to continuing employment.¹³

The school district argues that Loudermill should be distinguished based primarily on economic concerns. It argues that tenured teachers, who face dismissal or nonreemployment, have not been deprived of any property right because they continue to draw wages during the penden-cy of the hearing before the review panel. They point out that public employees in Loudermill lost wages immediately upon dismissal. Not only is an argument that constitutional rights may be purchased in exchange for wages untenable, the record shows that the teacher did not draw a salary for at least a short time before the Panel’s decision was rendered, and that the facts were disputed concerning when the teacher learned of the need to secure additional training. The ratio decidendi in Loudermill is not deprivation of wages, but interference with the legitimate expectation of continued employment — that constitutional guarantees of due process prevail over statutory procedures.¹⁴

Although Harrah Indep. School Dist. v. Martin, 440 U.S., 194, 197, 99 S.Ct. 1062, 1064, 59 L.Ed.2d 248, 253 (1979), did not specifically involve the right to a preter-mination hearing, it is instructive. Martin held that a tenured teacher had no color-able claim of a denial of due process where the teacher was advised of the decision not to renew her contract and of her right to a hearing before the school board, but that her failure to exhaust state administrative remedies did not defeat her right to prosecute a civil rights action under ⅛2 U.S. C. § 1983. The procedure reviewed in Martin was outlined by 70 O.S.Supp. 1976 § 6—122,¹⁵ the forerunner to the statute at issue here, 70 O.S. 1981 § 6-103.4(B).¹⁶ However, the two statutes differ in one material respect — the statute construed by the Martin Court provided a pretermination opportunity to be heard before the school board’s decision became final. This is the precise fashion in which § 6-103.4(B) falls short of the Loudermill standard.

The Legislature’s recent enactment of 70 O.S.Supp. 1987 § 6-102.4¹⁷ providing for the necessary procedural steps a board of education or school district must follow prior to the dismissal or nonreemployment of a full-time school administrator is also illuminating. Subsection (1) of § 6-102.4 provides that the administrator shall have the opportunity to a hearing before the local board of education prior to its decision becoming final. It is incongruous that the Legislature intended to afford procedural due process to school administrators, but not to school teachers.¹⁸

Here, the teacher’s interest is clearly sufficient to warrant pretermination procedural safeguards. It is apparent that this claim, like the one of tenured public employees in Loudermill, arises to the status of a property interest. Once this interest is established, Loudermill requires that some form of pretermination hearing be provided. In the absence of a constitutionally adequate pretermination procedure, the nonrenewal failed to pass constitutional muster. The statute, 70 O.S. 1981 § &-10S.4(B), insofar as it fails to provide a Loudermill pretermination hearing, is unconstitutional Post-termination remedies however elaborate, are insufficient; some form of pre-termination hearing is required. Contrary to the implication in the dissent, we do not strike down § 6-103.4(B) post-termination proceedings. We simply hold that its procedures must be supplemented by a pretermination opportunity to be heard before the board of education reaches a final decision. A preter-mination hearing provides additional protection — not less. (It should be noted that the pretermination hearing should be held before the local school board, and that one of the crucial reasons for the hearing is to avoid mistaken employment decisions by affording the teacher a pretermination opportunity to be heard. After the board resolves the issue, the post-termination hearing is before a different tribunal, the hearing panel.)

The fact that a pretermination hearing must be offered to a tenured teacher does not mean that the hearing must be elaborate. A full evidentiary proceeding is not required. The hearing serves as an initial check against erroneous decisions but it need not definitely resolve the propriety of the discharge. The determination should serve to resolve whether reasonable grounds exist to believe that the charges against the employee are true, and whether the grounds support the proposed action.¹⁹ Procedural due process is provided by a pretermination opportunity to respond, coupled with the elaborate post-termination procedures provided by § 6-103.4.

The United States Supreme Court has established a four-part balancing test to determine whether due process requires a particular procedure:²⁰ (1) the private interest affected by official action; (2) the risk of an erroneous deprivation of the interest through the process provided; (3) the probable value of any additional or substitute procedural safeguards; and (4) the government’s interests including any burden additional procedures may impose.

In Wood v. Ind. School Dist. No. 141 of Pottawatomie County, 661 P.2d 892, 896 (Okla.1983), we weighed these same factors in determining whether hearsay evidence should be excluded from nontenured teachers’ due process hearings. Although the balance was struck on the side of the school district in that instance, the existence of a tenured teacher’s property interest in continued employment requires a different result — a pretermination hearing must be afforded.²¹

II

THE OPINION OF THE COURT SHALL BE GIVEN PROSPECTIVE EFFECT

We have determined that due process requires that tenured teachers facing either termination or nonrenewal must be afforded a pretermination opportunity to be heard. It remains for us to determine whether a Loudermill hearing should be afforded full retroactive effect, purely prospective effect, or retroactivity limited to this case. Procedural due process requires notice and an opportunity to be heard before a decision is made to terminate or to nonrenew a tenured teacher’s contract. However, neither the United States Constitution nor the Oklahoma Constitution mandate that judicial decisions be retrospectively operative. Rather, state courts are free to determine, as a matter of policy, the effective date of new rulings.²²

In making such a determination, we must consider: (1) the purpose of the new rule; (2) the extent of reliance on old doctrines; and (3) the burden likely to be imposed on administering legal process due to additional litigation or curative actions.²³ The constitutionally defective procedure which has been in effect since 1977, provided a full panoply of protection after the decision to terminate or nonrenew a tenured teacher.

At the time Short’s contract was nonre-newed, Loudermill had been promulgated for only two weeks. Therefore, the school board may not have known that a preter-mination hearing was required to comport with procedural due process, and we find no other error in the proceedings. The new ruling corrects a prior defect caused by reliance on a constitutionally infirm statute.²⁴ Were we to apply our holding retroactively to all previous termination or non-renewal proceedings, the holding would adversely effect and increase the workload of school boards, the first arbitrators of termination and nonrenewal decisions; administrative hearing panels; and the final reviewing bodies, the appellate courts.

Generally, determinations of this nature turn upon considerations of fairness and public policy.²⁵ A careful weighing of the three applicable factors — purpose, reliance, and burden — ²⁶ requires that our pronouncement be given purely prospective effect. This opinion shall be applicable prospectively to all termination or nonrewenal cases involving tenured teachers occurring after the mandate herein is issued.²⁷

REVERSED.

DOOLIN, C.J., and HARGRAVE, V.C.J., and HODGES, LAVENDER and ALMA WILSON, JJ., concur. OPALA, J., concurs in part, dissents in part. SUMMERS, J., concurs in Part I, dissents from Part II. SIMMS, J., dissents.

1 .Title 70 O.S. 1981 § 6-103.4(D) provides:

“If a tenured teacher fails to notify the clerk of the local hoard of education within the ten-day period of his or her desire to have a hearing on his or her dismissal or nonreem-ployment conducted by a hearing panel, the teacher shall be deemed to have waived his or her right to a hearing and the initial determination of his or her dismissal or nonreem-ployment by the board of education shall become final and nonappealable. If, within the ten-day period, the tenured teacher notifies the clerk of the local school board of his or her desire for a hearing conducted by a hearing panel, the clerk shall, not later than the end of said period of time, notify the State Superintendent of Public Instruction of such request.”

2 . We note that the School Board sent its letter on April 2, 1985.

3 . See also, L. Tribe, "American Constitutional Law", p. 709, § 10-12 (2nd Ed. 1988).

4 . Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538, 105 S.Ct. 1487, 1491, 84 L.Ed.2d 494, 501 (1985); Bd. of Regents v. Roth, 408 U.S. 564, 576-78, 92 S.Ct. 2701, 2708-10, 33 L.Ed.2d 548, 560-62 (1972).

5 . Cleveland Bd. of Educ. v. Loudermill, see note 4, supra; Bd. of Regents v. Roth, see note 4, supra. See also, Paul v. Davis, 424 U.S. 693, 709, 96 S.Ct. 1155, 1164, 47 L.Ed.2d 405, 418-19 (1976); Wood v. Indep. School Dist. No 141, 661 P.2d 892, 894 (Okla.1983).

6 . Cleveland Bd. of Educ. v. Loudermill, see supra note 4, 470 U.S. at 538, 105 S.Ct. at 1491. See also, Ohio Rev. Code Ann. § 124.34 (Supp.1986) providing that classified civil servants may be removed for acts of "misfeasance, malfeasance, or nonfeasance in office.”

7 . Title 70 O.S.1981 § 6-102.1(6) provides:

'"Tenured teacher’ or ‘probationary teacher’ means a duly certificated teacher who has completed three (3) or more consecutive complete school years of teaching service in one school district under a written teaching contract, as provided by law. Provided, however, that a school district employing a teacher who has previously held tenure within the state may grant tenure to said teacher upon renewal of said teacher’s contract for the second year in the district.”

8 . Wood v. Ind. School Dist. No. 141, see note 5, supra.

9 . Title 70 O.S.1981 § 6-103.4(A) provides in pertinent part:

"Whenever a superintendent of a school district determines that cause exists for the dismissal or nonreemployment of a teacher employed within the school district, he or she shall submit a recommendation in writing to the board of education for such school district. In the case of a tenured teacher, the recommendation shall contain the one or more statutory grounds for the potential dismissal or nonreemployment...."

10 . Title 70 O.S.1981 § 6-103(A) provides in pertinent part:

”... any teacher may be dismissed at any time or not reemployed for immorality, willful neglect of duty, cruelty, incompetency, teaching disloyalty to the American Constitutional system of government, or any reason involving moral turpitude and any teacher shall be dismissed at any time or not reemployed if convicted of a felony, or if convicted of a felony resulting from a felony violation of the narcotic laws ..."

11 . Title 70 O.S.1981 § 6-101(E) provides:

"A board of education shall have authority to enter into written contracts with teachers for the ensuing fiscal year prior to the beginning of such year. If, prior to April 10, a board of education has not entered into a written contract with a regularly employed teacher or notified him in writing by registered or certified mail that he will not be employed for the ensuing fiscal year, and if, by April 25, such teacher has not notified the board of education in writing by registered or certified mail that he does not desire to be reemployed in such school district for the ensuing year, such teacher shall be considered as employed on a continuing contract basis and on the same salary schedule used for other teachers in the school district for the ensuing fiscal year, and such employment and continuing contract shall be binding on the teacher and on the school district. Provided that no district or any member of the board of education of a district shall be liable for the payment of compensation to a teacher under the provisions of the teacher’s contract for the ensuing year, if it becomes ’necessary to close the school because of insufficient attendance, disorganization, annexation, consolidation, or by dispensing with the school according to law, provided, such cause is known or action is taken prior to July 1 of such ensuing year.”

12 . This is not a situation where a teacher has absolutely no interest in reemployment for the next year as the teacher did in Bd. of Regents v. Roth, see note 4 supra; nor is it a situation where the teacher must come within an implied tenure definition as in Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 2699, 33 L.Ed.2d 570, 579-80 (1972), in order for the property interest to attach.

13 . Maupin v. Ind. School Dist. No. 26, 632 P.2d 396, 399 (Okla.1981).

14 . Although the hearing was conducted on June 24-25, 1985, no decision was rendered until August 1, 1985. Short’s contract expired on June 30, 1985. It appears no salary was paid from June 30 to August 1. Additionally, Delaware St. College v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 504, 66 L.Ed.2d 431, 439-40 (1980), indicates that a deprivation can occur at the time the tenure decision is made and communicated even though one of the effects of denial of tenure, loss of a teaching position, does not occur until later.

15 . Title 70 O.S.Supp.1976 § 6-122 (which was repealed in 1977) provides in pertinent part:

"The failure by the board of education to renew the contract of any teacher who has completed three (3) years shall not be effective, and the contract shall be renewed unless the board causes to be served on the teacher a written statment of the causes for such action, which must include one of the following: immorality, wilful neglect of duty, cruelty, incompetency, teaching disloyalty to the American Constitutional system of government, or any reason involving moral turpitude. The teacher shall be afforded an opportunity to appear before the board and confront his accusers, having the right to cross-examine all witnesses and offer any evidence to refute the statements and a reconsideration of the action theretofore made by the board.”

16 .Title 70 O.S.1981 § 6-103.4(B), provides:

“If the local board of education approves the recommendation of the superintendent, or determines on its own volition that a teacher should be dismissed or nonreemployed, the board shall cuse written notice of the dismissal or nonreemployment to be mailed by certified mail, restricted delivery, with return receipt requested, to the teacher who is the subject of the action. In the case of a tenured teacher, the notice shall state the one or more statutory grounds for the dismissal or non-reemployment and the right of the teacher to have a hearing conducted by a hearing panel. In the case of a probationary teacher whose contract is not being renewed, the notice shall state the cause for nonrenewal and the right of the teacher to have a due process hearing conducted by the board of education. Pending final determination of a tenured or probationary teacher’s dismissal or nonreemployment, the local board may have the teacher suspended if the board determines that the best interests and welfare of the students in the school district require such action. Such suspension shall not deprive the teacher of any compensation or other teaching benefits to which he or she would otherwise be entitled by law or pursuant to his or her teaching contract.”

17 .Title 70 O.S.Supp.1987 § 6-102.4 provides in pertinent part:

"Whenever the local board of education or the administration of a school district shall determine that the dismissal or nonreemployment of a full-time certified administrator from his administrative position within the school district should be effected, the administrator shall be entitled to the following due process procedures:

(1) A statement shall be submitted to the administrator in writing prior to the dismissal or nonreemployment which states the proposed action, lists the reasons for effecting the action, and notifies the administrator of his right to a hearing before the local board of education prior to the action; ...”

18 . We express no opinion as to whether the provision of the opportunity for a pretermination hearing to a school administrator and the denial of the same type hearing to a tenured teacher presents a denial of equal protection.

19 . Cleveland Bd. of Educ. v. Loudermill, see note 4, 470 U.S. at 545-46, 105 S.Ct. at 1493-94, supra; see also, Bell v. Burson, 402 U.S. 535, 540, 91 S.Ct. 1586, 1590, 29 L.Ed.2d 90, 95 (1971).

20 . Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18, 33 (1976).

21 . See also, Walters v. Oklahoma Ethics Comm., 746 P.2d 172, 176 (Okla.1987).

22 . Linkletter v. Walker, 381 U.S. 618, 628-29, 85 S.Ct. 1731, 1737, 14 L.Ed.2d, 601, 608 (1965); Great N. Ry. Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 364-65, 53 S.Ct. 145, 148, 77 L.Ed. 360, 366 (1932); Carlile Trust v. Cotton Petroleum Corp., 732 P.2d 438, 445 (Okla.1986); Cox v. Broadway, 708 P.2d 1085, 1088 (Okla.1985); Griggs v. State ex rel. Oklahoma Dept. of Transp., 702 P.2d 1017, 1020 (Okla.1985); Thompson v. Presbyterian Hosp., Inc., 652 P.2d 260, 268 (Okla.1982).

23 . Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355, 30 L.Ed.2d 296, 306 (1971); Linkletter v. Walker, see note 22, 381 U.S. at 629, 85 S.Ct. at 1737, supra; Carlile Trust v. Cotton Petroleum, see note 22, 732 P.2d at 445, supra; Thompson v. Presbyterian Hosp., see note 22, 652 P.2d at 268, supra.

24 . Title 70 O.S.1981 § 6-103.4, see note 16, supra.

25 . See, Chevron Oil Co. v. Huson, note 23, 404 U.S. at 106-07, 92 S.Ct. at 355, supra; Carlile Trust v. Cotton Petroleum Corp., note 22, 732 P.2d at 448, supra.

26 . Linkletter v. Walker, see note 22, 381 U.S. at 629, 85 S.Ct. at 1737, supra; Carlile Trust v. Cotton Petroleum, see note 22, 732 P.2d at 445, supra; Thompson v. Presbyterian Hosp., see note 22, 652 P.2d at 268, supra.

27 . See, Chevron Oil Co. v. Huson, note 23, 404 U.S. at 106-07, 92 S.Ct. at 355, supra; Carlile Trust v. Cotton Petroleum Corp., note 22, 732 P.2d at 448, supra.