Tenure Commission Does Not Have Jurisdiction Over Layoff and Recall

In a case handled by Thrun Law Firm, the Court of Appeals held that the State Tenure Commission lacks jurisdiction to hear appeals involving teacher layoff and recall. In 2011, the Michigan Legislature passed a package of bills amending the Teachers’ Tenure Act, the Revised School Code, and the Public Employment Relations Act, making teacher layoff decisions the subject of Section 1248 of the Revised School Code.  Following those amendments, the MEA challenged the layoffs of three tenured teachers at the Perry Public Schools and two other districts by filing appeals with the State Tenure Commission, alleging that the layoffs were an unlawful subterfuge to remove the teachers in violation of the Teachers’ Tenure Act.

Under the subterfuge theory a district’s decision to lay off a teacher is challenged on grounds of bad faith, personal animus, or prejudice. Based on Section 1248 of the Revised School Code, the Administrative Law Judge dismissed the claims, concluding that the Tenure Commission lacked jurisdiction. Section 1248(3) states:

If a teacher brings an action against a school district or intermediate school district based on this section, the teacher’s sole and exclusive remedy shall be an order of reinstatement commencing 30 days after a decision by a court of competent jurisdiction. The remedy in an action brought by a teacher based on this section shall not include lost wages, lost benefits, or any other economic damages.

The Tenure Commission disagreed, finding that it had jurisdiction to review layoff and recall decisions when the teacher alleged that the layoff was a subterfuge to deny the teacher protec­tions under the Teachers’ Tenure Act. On behalf of the Perry Public Schools, this firm appealed the Tenure Commission’s decision to the Michigan Court of Appeals, arguing that the 2011 legislative action removed the topics of layoff and recall from the Tenure Commission’s jurisdiction.

The Michigan Court of Appeals reversed the Tenure Commission and held, in the three consolidated cases, that the Tenure Commission has no jurisdiction to hear layoff claims brought by tenured teachers. Baumgartner v Perry Pub Schs, Docket No. 313945 (March 12, 2015). The court summarized the 2011 Amendments to the Tenure Act, the Public Employment Relations Act, and the Revised School Code in the following terms:

In sum, the 2011 Amendments affected a massive redistribution of power in the realm of teacher layoffs—from teacher unions to the local school districts as decision-makers, and from administrative agencies to the courts as the only recourse to review challenged layoff decisions.

The court expressly rejected the argument that a layoff “equated” to a discharge action under the Tenure Act because the two terms are “separate and distinct.” Further, the court found that the 2011 Amendments “invalidated” the subterfuge doctrine relied upon by the Tenure Commission for its jurisdic­tion. The court found that the entire statutory frame­work under which the “subterfuge doctrine” was created was changed substantially by the 2011 Amendments and the general purpose of the Tenure Act no longer includes layoff-related claims. The court rendered the cases supporting the subterfuge doctrine “moot, null, and void.”

A laid-off teacher’s exclusive remedy now is to bring a claim in the local circuit court to challenge an employer’s layoff decision under Section 1248 of the Revised School Code. The remedy for a wrongful layoff is reinstatement commencing 30 days after the court’s decision. The teacher is not entitled to lost wages, lost benefits, or relief for any other economic damage.

The court concluded its decision by stating:

For the first time in Michigan’s history, the Legislature decided to exercise its constitu­tional authority in the field of teacher layoffs. The Legislature made merit, not seniority, the controlling factor in layoff decision making, to retain the best teachers in the classroom. It did so by removing teacher layoffs as a subject of collective bargaining and this in turn re­moved unions and administrative agencies from the dispute resolution process in this specific realm of public-sector labor law. To underscore that school boards, and not unions or administrative agencies, would make these decisions, the Legislature gave school boards thepower to make layoff decisions, and gave the courts the sole and exclusive power to review the school board’s decisions.

The Baumgartner decision is a positive result for school districts that need to make difficult financial decisions to potentially lay off teachers. We expect the teachers involved in this decision to file an application for leave to appeal to the Michigan Supreme Court and will keep our clients informed of future developments.