Client Alert--7th Circuit Holds Indiana Reduction in Force Law Unconstitutional
The 7th Circuit Federal Court has upheld a lower court opinion finding that an Indiana law which is very similar to Illinois' law on reductions in force (known as "SB7" or "Public Act 97-8") is unconstitutional. In Elliott v. Board of School Trustees of Madison Consolidated Schools, No. 16-4168 (7th Cir. 2017), the court examined a case in which a long-term, consistently "satisfactory" rated tenured teacher was reduced in force after receiving a needs improvement on a component of a prior evaluation. Although the fact was disputed, the court ruled on the basis of the conclusion that the school district had complied with the law requiring a school district to reduce in force on the basis of performance evaluations rather than on the basis of seniority.
The court held that the 2011 law change in Indiana which tied teacher layoff ("reduction in force") to performance evaluations was unconstitutional because the law change substantially impaired the contract expectations of teachers who had already earned tenure because the teachers reasonably relied on the guarantees of tenure when they began employment as teachers, and the law change substantially disrupts those rights so as to fundamentally change the nature of the bargain.
In other words, teachers entered into teaching presuming they would have the benefit of tenure, once earned, and the change to the law requiring reduction in force without regard to tenure rights was unfair because it could not be foreseen at the time teachers entered into the contract. Therefore, the law, held the court, is unconstitutional.
Although the case addressed the Indiana law, the similarity to the law in Illinois is striking, and because the 7th Circuit Court issues binding precedent over Illinois federal courts, the case should give Illinois schools pause before determining how best to comply with Illinois law while respecting the Constitutional rights of teachers to tenure already achieved.
The case can be reviewed in its entirety here: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2017/D12-04/C:16-4168:J:Hamilton:aut:T:fnOp:N:2071617:S:0
