Federal Appeals Court Permits Age Discrimination Claim of High School Principal to Proceed to Trial

In Scheick v Tecumseh Public Schools, Docket No. 13-1558, the Sixth Circuit Court of Appeals found that a nonrenewed high school principal offered sufficient evidence of age discrimination through alleged statements made to him by the school district's superintendent. The High School Principal, Robert Scheick, had previously retired from the District, but was later re-employed in that position pursuant to a three-year contract between the District and a third-party staffing firm, PESG.

On March 8, 2010, the District issued a notice to PESG advising that it would not renew the contract of Scheick, who was 56 at the time, once the school year ended on June 30, 2010. The Superintendent, who was about 10 years older than the Principal, made the decision to not renew Scheick's contract. The nonrenewal decision was made due to Scheick's perceived unsatisfactory performance and lack of leadership. 

The Superintendent claimed that he made the nonrenewal decision "well before" he met with Scheick to discuss his first performance evaluation on February 25, 2010. The Superintendent admitted that he prepared the evaluation with the intention of "laying the groundwork" to end Scheick's employment. The performance review listed a variety of concerns including: the high school failing to meet state-mandated yearly progress for two consecutive years due to clerical errors, failing to ensure that transcripts of college-bound students made it to the NCAA's eligibility center, failing to properly coordinate homebound-student services, mishandling a special education student's accommodations, failing to notify the parents of a student appearing at an expulsion hearing before the Board, deficient attendance at school functions, and delaying a graduation ceremony because Scheick forgot the speeches of the valedictorian and salutatorian in his office. Several of these areas were informally discussed with Scheick but no disciplinary action was issued. 

In addition to Scheick's noted performance problems, the District was experiencing substantial reductions in state funding that necessitated budget cuts and resulted in an anticipated budget deficit. As a result, on March 9, 2010, the Board Finance Committee had proposed significant cuts, such as closing an elementary school, selling the administration building, reducing transportation, and eliminating several positions, including consolidating the High School Principal and Superintendent positions.

However, upon learning during the Summer that state funding cuts were less than expected and student enrollment was higher than projected, the District restored a number of positions, including High School Principal. The District posted the position and ultimately hired a 44-year old to be the new High School Principal. The new Principal contracted directly with the District instead of through PESG. 

Scheick filed suit against the District claiming he was not renewed because of his age. The District, in turn, filed its own complaint against PESG seeking indemnification for the lawsuit. Scheick claimed that prior to his nonrenewal the Superintendent made comments showing an age bias by: (1) informing him during his performance review meeting on February 25, 2010, that "the Board wants you to retire" and it wanted someone as High School Principal who would take over as Superintendent in a few years; (2) telling him that "'they just want somebody younger" during an exchange on February 26, 2010; and (3) explaining to Scheick that "they wanted someone younger" during a follow-up conversation on March 15, 2010. The Superintendent denied making any such statements and disputed that the nonrenewal decision was age-based. 

The Sixth Circuit Court of Appeals found the latter two statements, "if believed, would require the conclusion that age was the but for cause of TPS's decision not to renew the contract." In doing so, the Court concluded that, "notwithstanding the evidence of dissatisfaction with Scheick's performance and the concurrent need to respond to the budget crisis, the evidence, taken as a whole and in the light most favorable to Scheick, is sufficient to permit a reasonable juror to conclude that Scheick's age was the but-for cause of TPS's decision not to renew the contract for his services. Although TPS or PESG may ultimately prove otherwise, Scheick has met his burden to come forward with evidence sufficient to establish that a genuine issue of material fact exists for trial."

The Scheick decision underscores the need for school districts to sufficiently document their reasons for nonrenewal. Any discussions about job performance concerns should not only be documented, but any meetings between an employee and administration to discuss performance concerns should have a witness. Administrators must also exercise caution when explaining the basis for layoff to ensure they remain consistent with legitimate, non-discriminatory reasons. To the extent an employee's performance problems are being documented, the educational needs of its students and how the employee's performance is not satisfying the district's expectations should be fully explained therein. A district should also issue disciplinary action when misconduct occurs instead of waiting to raise the issue well after-the-fact during the formal evaluation process so that employee misconduct is contemporaneously documented. Finally, the Scheick decision reaffirms that a school district contracting with an outside third-party needs to maintain a true "arms-length" relationship in order to avoid being found a joint employer of the contracted-for employee. That means the district should ensure the third-party vendor is bearing the contracted responsibilities of evaluating, disciplining, and compensating the contracted-for employee. As Scheick illustrates, a failure to maintain an "arms-length" relationship may subject the school district to a lawsuit as the contracted-for employee's "employer."

If you have any questions about the impact of the Scheickdecision on your district, please contact Kurt Graham at kgraham@clarkhill.com | (616) 608-1144, or your Clark Hill education law attorney.