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Appeals Court Backs Laid-Off Tenured Teacher Over Indiana Reform Law

A federal appeals court has ruled that a 2012 Indiana law that curtailed the rights of tenured teachers during layoffs violates their rights under the contracts clause of the U.S. Constitution. 

A three-judge panel of the U.S. Court of Appeals for the 7th Circuit, in Chicago, unanimously upheld a federal district court's decision in favor of Joseph R. Elliott, an elementary school teacher with 14 years of tenure in the Madison Consolidated Schools. 

In 2012, the Indiana legislature passed a law that established a mandatory teacher-evaluation system and removed protection for tenured teacher during layoffs. Schools laying off teachers were required to cancel contracts on the basis of performance rather than seniority.

Later in 2012, the Madison district faced declining enrollment and a reduction in state funds, and it made the decision to lay off several teachers. The school district cited some negative comments about Ellliott in evaulations going back as far as 2002 in laying off Elliott, who was the president of the local teachers' union that year and had just received a positive evaluation. The district retained six non-tenured teachers in positions that Elliott was licensed to teach.

Elliott sued on several state-law grounds, but also under the provision of Article I of the U.S. Constitution that prohibits states from passing laws "impairing the Obligation of Contracts."

The 7th Circuit court noted that the U.S. Supreme Court had ruled in 1938, in Indiana v. Brand, that the state's 1927 teacher tenure law created contractual rights protected by the federal constitution's contracts clause.

In its Dec. 4 decision in Elliott v. Board of School Trustees of Madison Consolidated Schools, the 7th Circuit court said that since the state's 1927 law and until the 2012 change, "Indiana teachers ... benefitted from enforceable contractual rights when they became tenured. These contractual rights included job security rights in a layoff."

"Indiana itself created the binding obligation on which tenured teachers have relied for decades—and from which the state itself has benefitted," Judge David Hamilton wrote for the court.

The panel, which ruled solely on the federal contracts clause question, rejected the state's multiple arguments why the 2012 law should supersede the older tenure law.

"The Constitution does not prevent the state from changing the promises it makes on a prospective basis to new teachers," Hamilton said. "Having restricted tenure for new teachers, the state and its school districts were and are free to buy out the tenure rights of more senior ones."

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