James W. Miller v. Crystal Lake Park District

EASTERBROOK, Circuit Judge.

Crystal Lake Park District, a municipal body of Illinois, issued a personnel manual informing its employees that “Department Heads, with the approval of the Director, may dismiss any employee for just cause.” We may assume that this language, although cast as a grant of power to department heads, implies that the Director will not dismiss employees on whim. Language at the top of the manual’s first page also informs employees that “[t]he contents of this manual are intended to provide a guide for employees and management of the District; however, these contents should not be construed by any individual as being an employment contract.” James Miller, fired from his position, as the District’s superintendent of recreation, asks us to hold that the “just cause” language creates a “property” interest in employment under the due process clause of the fourteenth amendment. He concedes, however, that the manual’s introductory language means that state courts would not enforce the “just cause” clause as a term in a contract of employment. Like the district court, which dismissed the complaint under Fed.R.Civ.P. 12(b)(6), we think that this concession ends the litigation. Claims that lack a foundation in state law are too evanescent to count as “property” interests under the Constitution.

“To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.” Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). A “legitimate claim of entitlement” is one that is legally enforceable — one based on statutes or regulations containing “explicitly mandatory language” that links “specified substantive predicates” to prescribed outcomes. Kentucky Department of Corrections v. Thompson, 490 U.S. 454, 463, 109 S.Ct. 1904, 1910, 104 L.Ed.2d 506 (1989). See also Wallace v. Robinson, 940 F.2d 243 (7th Cir.1991) (en banc); Miller v. Henman, 804 F.2d 421 (7th Cir.1986). Statutes and regulations are not the only sources of property, but when they are missing the claimant must supply some equivalent “expectancy ... that was legally enforceable”, O’Bannon v. Town Court Nursing Center, 447 U.S. 773, 788 n. 21, 100 S.Ct. 2467, 2477 n. 21, 65 L.Ed.2d 506 (1980), such as a mutually binding obligation, Jago v. Van Curen, 454 U.S. 14, 18-20, 102 S.Ct. 31, 34-35, 70 L.Ed.2d 13 (1981). “Mutually binding obligation” is just fancy language for “contract,” which returns us to the starting point.

The point of the introductory language to the Park District’s manual is that its contents are not “mutually binding.” Miller does not contest the district judge’s conclusion that this language deprives the manual of force under Illinois law. It is not as if Miller, having seen at last the significance of this issue, has changed his mind and argued on appeal that the district judge’s appreciation of state law is plain error. Compare Amcast Industrial Corp. v. Detrex Corp., 2 F.3d 746, 749-50 (7th Cir.1993), with Deppe v. Tripp, 863 F.2d 1356, 1361-62 (7th Cir.1988). He is quite content with the conclusion that the manual is inoperative under state law. His brief does not cite a single state case. Like Miller himself, we therefore accept the district court’s treatment of 'state law. Hartmann v. Prudential Insurance Co., 9 F.3d 1207, 1213-15 (7th Cir.1993) (a court must respect a concession of a state-law ground even if independent research could lead to a different conclusion); Bonds v. Coca-Cola Co., 806 F.2d 1324, 1328-29 (7th Cir.1986).

Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972), a companion to Roth, is the only time the Court has dealt with a claim based on a personnel manual. Sindermann taught at a junior college in Texas. Its personnel manual disavowed the existence of a formal tenure system but promised that faculty members would be retained as long as their teaching and attitude were satisfactory. Guidelines of the Texas College and University System provided that a person who had taught for more than seven years (as Sindermann had) possessed “some form of job tenure.” Id. at 600, 92 S.Ct. at 2699 (footnote omitted). The Court concluded that the combination of manual, guidelines, and practices might add up to a legitimate claim of entitlement, and thus to property, even if none alone was an enforceable promise. But in a footnote with implications for Miller’s claim, the Court added: “If it is the law of Texas that a teacher in [Sindermann’s] position has no contractual or other claim to job tenure, [Sindermann’s] claim would be defeated.” Id. at 602 n. 7, 92 S.Ct. at 2700 n. 7.

Like Sindermann, our eases have equated “property” with the set of claims that state law recognizes. For example, Upadhya v. Langenberg, 834 F.2d 661 (7th Cir.1987), considered a claim that senior faculty members had promised a new recruit to the engineering faculty a five-year minimum term of employment. The written statutes of the university promised only year-to-year employment; we held that the oral promises, if made, were not enforceable under state law and therefore did not constitute “property.” Similarly, Wright v. Associated Insurance Companies, Inc., 29 F.3d 1244, 1249 (7th Cir.1994), holds that a promise not enforceable because of the statute of frauds does not create a “property” interest. See also, e.g., Szabo Food Service, Inc. v. Canteen Corp., 823 F.2d 1073, 1080-81 (7th Cir.1987).

Miller pins his hopes on Lawshe v. Simpson, 16 F.3d 1475 (7th Cir.1994), which dealt with the effect of a personnel manual issued by the City of Gary, Indiana. The district court had put the handbook aside, looking instead for statutes and regulations; we said, id. at 1480-82, that an employment handbook may establish a legitimate claim of entitlement if it satisfies Sindemann’s essential requirement, which we took to be the existence of a “mutually explicit understanding.” 16 F.3d at 1482, quoting from Hermes v. Hein, 742 F.2d 350, 355 (7th Cir.1984). Lawshe lost his case, however, because he did not show that Gary’s personnel manual had been properly adopted. 16 F.3d at 1482-83. It was therefore not legally effective, and the lack of legal effect caused it to flunk Sindermann’s test of property. Crystal Lake Park District does not seek to undermine the authority of its manual; instead it says that the manual itself undercuts any claim that its promises have legal status. And Miller has no answer to this point. Whether the manual is unenforceable because improperly adopted (as in Lawshe) or because it so provides (as the Park District’s does), the effect is the same: no legally enforceable interest, no legitimate claim of entitlement, no property.

All of this may leave the reader wondering why the Park District would issue a manual with “just cause” language only to take back the promise. Is it trying to fool prospective employees? The prominence of the disclaimer on page 1 makes fraud an unlikely explanation. The manual itself offers a better explanation. Recall the language: “Department Heads, with the approval of the Director, may dismiss any employee for just cause.” The governing board of the Park District retains ultimate authority. It has delegated some managerial powers to Department Heads and the Director, and it wants to ensure that they use these powers for the good of the Park District. A desire to rein in the discretion of one’s subordinates is common in bureaucracies, but efforts to do so need not imply the creation of “rights” enforceable by employees and other persons. Instead the top managers (here, the political officials) may establish standards for their subordinates without constraining their own discretion. We held in Miller v. Henman that such systems do not create “liberty” or “property” interests, because the existence of discretion at the apex of the bureaucracy defeats any legitimate claim of entitlement. A portion of the manual that we have not mentioned so far shows that the “just cause” language, coupled with the disclaimer, serves this function. Part VII of the manual describes a four-step grievance procedure, which Miller did not bother to use. An employee who disputes an adverse action may file a grievance, which is heard first by his supervisor, next by a Department Head, then by the Director, and finally by the Board of Commissioners of the Park District. Notice the ultimate decisionmaker: not the Director, and not an arbitrator, but the elected political officials. And the grievance policy does not suggest that the Commissioners must apply any particular substantive standard. They may make whatever decision their political instincts tell them is best.

Affirmed.