Chicago's Board of Education operates the city's public school system and employs more than 20,000 teachers. In the summer of 2010, the Board laid off almost 1300 of them. The Board received an increase in federal funding toward the end of that summer and was able to recall over 700 teachers who had been given the layoff notices. The Board used no particular procedure or policy in the recall. The Board has also continued to fill vacancies as they open up in the system naturally, again without any particular policy with respect to laid off teachers. The Chicago Teachers Union filed suit complaining that the Board was filling many of those vacancies with new hires instead of recalls. They sought injunctive relief. Judge Coar (N.D. Ill.) concluded that the laid-off teachers had a property interest emanating from state law that entitled them to some retention procedures. The court also found that the Union met the other elements of injunctive relief and therefore entered an injunction ordering the Board to rescind the discharges of (although not reinstate) tenured teachers and to promulgate a set of recall rules in conjunction with the Union. The court enjoined further layoffs until such rules had been promulgated. The Board appeals.

In their opinion, Circuit Judges Manion (concurring in part and dissenting in part) and Williams and District Judge Clevert affirmed, with modifications to the injunction. In order to be entitled to Fourteenth Amendment due process protection, one must first establish the existence of a protected property (or liberty) interest. Property interest themselves are not created by the Constitution but come from independent sources, frequently state law. In the employment context, a property interest only arises when an employer's discretion to deny employment is limited. Under Illinois law, tenured teachers enjoy permanent employment, subject only to removal for clause. The Court concluded, therefore, that an Illinois tenured teacher has a property interest in continued employment. But establishing the property interest only takes us to the next question -- what process is due. Hearings are generally not necessary when the deprivation of the property interest is caused by a good faith economic layoff. Here, the Union does not challenge the good faith of the layoffs nor does it ask for hearings. Instead, it seeks opportunities for its members to compete for vacancies as they arise. The Court looked to state law prior to 1995, when Illinois had "reserve teachers." Basically, reserve teachers were competent teachers who were laid off but who had significant opportunities with respect to vacant positions. When the Legislature eliminated reserve teachers in 1995, it authorized the Board to establish procedures for layoffs and recall rights. Relying in large part on Illinois law interpreting the new provision, the Court concluded that the Board must use the "authority" given it by the Legislature to formulate layoff and recall procedures. Applying the Mathews weighing analysis, the Court noted an employee has a substantial interest in retaining her job and a significant risk of deprivation without any procedures at all. It concluded that the teachers were entitled to a recall procedure that would allow them a meaningful opportunity to demonstrate their qualifications for open positions for a reasonable period of time. With respect to the content of the injunction, however, the Court had two comments. First, it removed the requirement that the Board promulgate rules in conjunction with the Union. Nothing in the statute requires consultation with the Union -- although nothing prohibits it, either. Second, the Court emphasized that the district court's order requiring that the discharges be rescinded did not result in the recall of any teachers. The teachers are still laid-off.

Judge Manion dissented in part and concurred in part, although his concurrence was limited to the majority’s modification of the injunction. First, Judge Manion disagreed with the conclusion that the Illinois statute required the Board to enact recall procedures in the event of the layoff. He pointed out that the Board has established recall procedures in other circumstances, such as a school closing. Second, although teachers have a property interest in their employment, he noted that the Board terminated their employment and honored all process to which they were entitled. No case holds that an employee in that situation has some residual property rights. Third, Judge Manion disagreed with the majority's identification of recall rights as property rights. He pointed out the circularity of the logic. The majority concluded that the recall procedures were the property rights. In order to protect those rights, the Court ordered the Board to develop the procedures. Simply put, even if the statute and other circumstances created a property interest, the property interest cannot be the procedures themselves.