Teeter v. Shambaugh, 917 F.2d 28 (9th Cir. 1988)

MEMORANDUM^** 

Joseph M. Teeter ("Teeter") appeals the district court's grant of summary judgment in favor of Steven Shambaugh ("Shambaugh"), the acting director of the Oregon state agency which employed Teeter. Teeter brought a 42 U.S.C. § 1983 action because he was demoted from a management service position to a classified service position. Teeter argues that the district court erred because he had a property and liberty interest in his employment position and because he was demoted in violation of his first amendment free speech rights. We affirm.

BACKGROUND FACTS

Teeter was the Director of Fiscal Services at the State of Oregon Fairview Training Center ("Fairview") from mid-1985 to December 30, 1988 when he was removed from the management position. The events leading up to Teeter's demotion are as follows. In early 1987, Teeter received memos from his supervisor outlining what was expected from him and areas in which his job performance proved deficient. Soon after receiving those memos, Teeter wrote Governor Goldschmidt a letter complaining about the poor management he had been working under. He stated that he thought about filing a stress claim, and that he wanted a new position. In late 1987, frustrated that his requests had not been granted, Teeter wrote to Mr. Concannon, who was the director of the Department of Human Resources, the state agency responsible for Fairview. In his letter, Teeter asked to meet with the Director to discuss a change in his job. Teeter's letter also complained of management problems and that he "had [his] fill of frustration with the mismanagement and waste."

On October 14, 1988, Shambaugh wrote a memorandum in which he detailed specific complaints about Teeter's performance and requested Teeter's immediate removal from the management position. On December 29, 1988, Teeter was demoted from his management service position based on his "inability or unwillingness to fully and faithfully perform the duties of [his] position satisfactorily. [Or.Rev.Stat.] Sec. 240.570(3)."

JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291. We review the district court's grant of summary judgment de novo. Kruso v. Int'l Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989) cert. denied, --- U.S. ----, 110 S. Ct. 3217, 110 L. Ed. 2d 664 (1990).

DISCUSSION

Teeter argues that he has a property interest in his management service position and that he was entitled to a predemotion hearing. A constitutionally protected property interest in government employment exists if the employee has a "legitimate claim of entitlement" to it, rather than a mere "unilateral expectation." Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d 548 (1972). State law creates property interests subject to fourteenth amendment due process protection. Id.

If a law substantially restricts the basis on which an employer may discharge an employee (such as for "just cause"), the law establishes a property interest in the employment. Dorr v. County of Butte, 795 F.2d 875, 878 (9th Cir. 1986). See also Allen v. City of Beverly Hills, 911 F.2d 367, 370 (9th Cir. 1990). However, if the appointing authority may determine on a subjective basis whether the employee has performed satisfactorily, the employee has no expectation of continued employment. Under Oregon law, a "management service employee may be removed from the management service if the employee is unable or unwilling to fully and faithfully perform the duties of the position satisfactorily." Or.Rev.Stat. Sec. 240.570(3).

A Personnel Division Rule construes the already broad language of Sec. 240.570 to mean that the appointing authority has wide discretion to remove a management service employee. It declares that "satisfactory performance" is a matter for the judgment and discretion of the appointing authority and that a determination of inability or unwillingness need only have a reasonable basis in fact. Or.Admin.R. 105-80-001(3) (c) (C) (i). That is not much of a restriction. It indicates that Teeter did not have a property interest in his employment.

Once an employee is removed for unsatisfactory performance, Oregon law permits the employee to appeal the removal, and the employee shall be reinstated if the removal was not taken in good faith for cause. Or.Rev.Stat. Sec. 240.560(4). However, the good faith requirement does not create a property interest in the position because that requirement does not impose a significant limit on the state's discretion. See Allen, 911 F.2d at 371-72. Good faith merely requires that the basis for the removal be reasonable.

The Oregon statute also uses the words "for cause." However, in the context of management employees, that adds little when one considers the subjective grounds upon which removal can be predicated. That is particularly true when, as here, just cause only means that the appointing authority did not act arbitrarily. Civil Rights Div. of Bureau of Labor v. Williams, 280 Or. 595, 573 P.2d 270, 271-72 (1977).

In sum, the only restrictions on the board's decision to remove Teeter were that it act in a good faith and non-arbitrary manner. That did not confer upon Teeter a property interest in his management service position. Consequently, Teeter was not entitled to a pre-demotion hearing. See Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541, 105 S. Ct. 1487, 1493, 84 L. Ed. 2d 494 64, (1985).

Teeter's demotion did not deprive him of a liberty interest either. Dismissal from a government position implicates a liberty interest in reputation when the employee is dismissed for dishonesty, moral turpitude or other reasons leading to stigmata which may impair freedom to pursue future employment. Hayes v. Phoenix-Talent School Dist. No. 4, 893 F.2d 235, 237 (9th Cir. 1990). However, charges of incompetence do not implicate a liberty interest. Roley v. Pierce County Fire Protection Dist. No. 4, 869 F.2d 491, 495 (9th Cir. 1989). Since the charges against Teeter dealt with his incompetence as a manager, the demotion did not involve a liberty interest.

Also, before an employee can claim a violation of a liberty interest, the government must make public disclosure of the charges against him. Matthews v. Harney County, Or., School Dist. No. 4, 819 F.2d 889, 892 (9th Cir. 1987). Since the charges against Teeter were not made public, he has not satisfied this element. Therefore, his dismissal did not implicate a liberty interest.

For a government employee to claim that he was fired in retaliation for exercising his first amendment free speech rights, the employee's speech must involve a matter of public concern. Allen v. Scribner, 812 F.2d 426, 430, amended, 828 F.2d 1445 (9th Cir. 1987).

Neither Teeter's letter to Governor Goldschmidt nor to Mr. Concannon involved a matter of public concern. Rather, both letters asked for a job transfer. Although Teeter's letters complained about "mismanagement" and "waste of taxpayer dollars," taken in context, it is clear that Teeter wrote to the Governor and to Mr. Concannon to seek a new position. Further, both letters were directed internally, not to the public, and were little more than jeremiads by a disgruntled employee.

Also, to prove a first amendment violation, Teeter's letters must have been a "substantial" or "motivating" factor in his employer's decision to demote him. Allen, 812 F.2d 433. However, because Teeter's letters to the Governor and Mr. Concannon preceded his termination by a substantial amount of time, and Teeter received numerous criticisms about poor job performance, there is no reason to infer that those letters provided a "substantial" or "motivating" factor for his demotion--rather his poor job performance did. Therefore, Teeter was not fired in retaliation for exercising his first amendment free speech rights.

Teeter was not fired in violation of Oregon's whistleblower statute. Or.Rev.Stat. Sec. 240.740. To fall within the statute's protection, Teeter must prove that he knew of specific rule violations or gross waste of funds. Teeter has not met this burden. More importantly, there is no showing that he made any disclosures of that nature during any investigation. This claim falls for much the same reasons that his first amendment claim must fall.

Finally, Teeter is not entitled to attorney's fees on appeal since he is not the prevailing party in a 42 U.S.C. § 1983 action.

AFFIRMED.