The City of New York appeals from an order entered in the United States District Court for the Eastern District of New York (Glasser, J.) which granted summary judgment to plaintiffs, three public school teachers, and upon declaring that § B20-38.0(2) of the New York City Administrative Code unconstitutionally chilled plaintiffs' rights to a hearing over the reasons for their dismissal enjoined the defendant City from implementing it. Plaintiffs cross-appeal from the trial court's rejection of the other constitutional grounds for relief.
Van Graafeiland and Cardamone, Circuit Judges and MacMahon, District Judge.*fn*
CARDAMONE, Circuit Judge:
The main issue on this appeal is whether New York City public school teachers have a property interest in their pension rights protected under the due process clause of the 14th Amendment to the United States Constitution. Plaintiffs challenge a provision of the New York City Administrative Code, which provides that public school teachers dismissed for cause automatically forfeit their right to City-funded retirement benefits. A second issue is whether this threat of pension loss unconstitutionally chills the teachers' rights to a hearing over the reasons for their dismissal. Under the present statutory scheme, teachers can either put their pensions at risk in an attempt to keep their jobs and vindicate their reputations, or they can resign and be presumed guilty of the charges made against them.
Plaintiffs, two present teachers and one former teacher in the New York City school system, sought declaratory and injunctive relief pursuant to 42 U.S.C. § 1983 to invalidate Section B20-38.0(2) of the New York City Administrative Code insofar as it deprives a city teacher dismissed from service of city-funded pension benefits and the right to collect a retirement allowance. The United States District Court for the Eastern District of New York (Glasser, J.) granted summary judgment in plaintiffs' favor and enjoined the City defendants from implementing § B20-38.0(2) on the grounds that the statute unconstitutionally chilled plaintiffs' rights to a hearing over loss of their employment. The court directed the City to reinstate plaintiff Vernon who had resigned, in order to afford her a predetermination hearing. 580 F. Supp. 1470 (E.D.N.Y. 1984). But the district court judge rejected the teachers' argument that they have a property interest in their pensions prior to retirement and are therefore being deprived of property without due process of law. He also dismissed their equal protection claims, dismissing one on the merits and finding the second claim better addressed in the analysis of whether plaintiffs' rights to a predismissal hearing are "chilled" by the Code provision. City defendants appeal, and plaintiffs cross-appeal form the trial court's rejection of the several other constitutional grounds upon which relief was sought.
We agree with the holding that the forfeiture provision in the Code unconstitutionally chills the exercise of teachers' due process rights to a predismissal hearing. We further conclude that under New York State's Constitution teachers have a property interest in their contractual right to a pension upon fulfilling the statutory conditions. This property interest, derived from the State Constitution, is protected by the due process clause of the 14th Amendment. Here, the forfeiture provision violates the teachers' due process rights because it fails to provide for a separate determination of whether a dismissed teacher has engaged in misconduct warranting pension forfeiture.
Tenured public school teachers in New York cannot be dismissed except for cause following a hearing under New York Education Law § 3020-a. Under the challenged provision, section B20-38.0(2), the City repays a dismissed teacher's own contributions to the Teacher's Retirement System,*fn1 but the teacher forfeits the contributions made by the City and School Board. Although a teacher may resign while under charges and still receive pension benefits, he is subject to a presumption of guilt that is used to deprive him of licensure and reemployment rights. The grounds for charges against tenured teachers that, if sustained, may lead to dismissal are very broad. The City dismisses some for serious misconduct, such as sexual molestation, but it dismisses many for reasons that would seem not to involve misconduct, such as inefficiency or inability to maintain discipline. The charges against the plaintiffs in this case are typical of the charges brought.
The school board charged plaintiff Helen Winston, a second grade teacher for 23 years, with incompetency and inefficiency based on allegations that she failed to plan and organize classroom activity properly, failed to maintain control of students in her class, and was absent for a total of 12 days during the school year. When plaintiffs moved for summary judgment, she was awaiting a decision by a section 3020-a hearing panel. The school board similarly charged plaintiff Harry Van Gorder, a high school biology teacher for 25 years, with incompetency and inefficiency based on allegations that he used ineffective teaching methods, had poor classroom control, used class time unproductively, taught lessons in an inappropriate sequence, planned class time poorly, and generally failed to provide proper instruction to his students. At the time of the summary judgment motion, Van Gorder was also awaiting a decision. Finally, the school board charge plaintiff Natalie Vernon, a special education teacher for 27 years, with recklessly injuring a student in her class. After a hearing, the panel found her innocent. The defendant Board of Education appealed the decision to the State Commissioner of Education, who, under the statute, can make an independent determination of just cause for discharge. Before the Commissioner heard the appeal, plaintiff Vernon submitted her resignation while protesting her innocence. The New York State Unemployment Board later found that she had resigned to protect her pension rights from the vicissitudes of litigation. Winston, Van Gorder and Vernon each have a present value of approximately $150,000 in pension reserves subject to forfeiture.
The automatic penalty of section B20-38.0(2) places an unconstitutional burden on a teacher's right to a hearing. Even assuming that the teachers have no property interest in their pension rights, the forfeiture provision chills the teachers' procedural due process right to a hearing over the reasons for their dismissal. As tenured public school teachers, plaintiffs have constitutionally protected property interests in their continued employment and in their right to a predismissal hearing under Education Law § 3020. See Board of Regents v. Roth, 408 U.S. 564, 577, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972). Clearly, parties have the "right to contest the validity of a legislative or administrative order affecting [their] affairs without necessarily having to face ruinous penalties if the suit is lost." See Brown & Williamson Tobacco Corp. v. Engman, 527 F.2d 1115, 1119 (2d Cir. 1975), cert. denied, 426 U.S. 911, 48 L. Ed. 2d 837, 96 S. Ct. 2237 (1976).
The City relies heavily on Brady v. United States, 397 U.S. 742, 25 L. Ed. 2d 747, 90 S. Ct. 1463 (1970), in arguing that the choice that teachers must make between resigning to keep their pensions and jeopardizing those pensions by defending against the charges is not an unconstitutional burden on a fundamental right. In Brady the Supreme Court upheld a defendant's guilty plea despite his contention that his plea was prompted by his fear of receiving the death penalty should he exercise his right to trial by jury. In so holding, the Court limited its previous decision in United States v. Jackson, 390 U.S. 570, 20 L. Ed. 2d 138, 88 S. Ct. 1209 (1968), in which it had invalidated a provision of the federal kidnapping law that permitted the death penalty only in cases where the defendant had elected a jury trial. The Court emphasized in Brady that it had not held in Jackson that all pleas of guilty encouraged by the fear of a possible death sentence were involuntary or that such pleas were invalid whether involuntary or not. Brady, 397 U.S. at 747. The Brady court explained that the holding in Jackson resulted instead from the finding that "the legitimate goal of limiting the death penalty to cases in which a jury recommends it could be achieved without penalizing those defendants who plead not guilty and elect a jury trial, so that the death penalty provision "'needlessly penalize[d] the assertion of a constitutional right.'" Id. at 746, quoting Jackson, 390 U.S. at 583 (emphasis added). We agree with the able judge below that these cases stand for the proposition that we must balance the need for the challenged statute against its chilling effect on the exercise of the parties' constitutional rights.*fn2
Turning first to the need for the forfeiture scheme, the City concedes the importance of economic security in old age, but contends that the State legislature has a legitimate interest in deeming those whose conduct warrants discharge -- regardless of whether the grounds constitute misconduct -- as undeserving of a pension. It is unnecessary to address whether this is a compelling interest because, as the district judge points out, the statute does not operate to further such an interest. Under the present scheme a teacher who sexually molests a child may resign and receive a pension, yet a teacher forfeits his pension after a quarter-century of faithful and competent service if a hearing panel finds that he can no longer maintain class discipline. The injustice of this is plain. All the guilty teachers can resign, take their money and run. Those believing themselves innocent of the charges must stake their economic future on a panel decision. Clearly, the scheme does not further the asserted state interest, much less a compelling one. Thus, the scheme's operation itself refutes the City's claim that the burden on a teacher's right to a hearing is justified.
Unquestionably, the scheme has a chilling effect. The City does not dispute that Vernon, after being exonerated at the hearing level and believing herself innocent, nonetheless resigned to protect herself from the vicissitudes of litigation on appeal, thereby casting herself falsely in the light of one condemned. See Matter of Marland v. Ambach, 79 A.D.2d 48, 50, 436 N.Y.S.2d 360 (3rd Dep't 1981), aff'd, 59 N.Y.2d 711, 463 N.Y.S.2d 422, 450 N.E.2d 228 (1983) (finding it "obvious" that a retirement made in the face of pension loss is involuntary and made under duress). The Brady majority emphasized that it "would have serious doubts about this case if the encouragement of guilty pleas by offers of leniency substantially increased the likelihood that defendants, advised by competent counsel, would falsely condemn themselves." Brady, 397 U.S. at 758. The difference in the reliability of the admissions of guilt of criminal defendants and of teachers facing discharge hearings is no doubt in part due to the difference between the standards of proof. Criminal defendants must be found guilty beyond a reasonable doubt; charges against teachers merely have to be proved by ...