Engquist v. Oregon Dept. of Agriculture, No. 07-474 (U.S. Jun. 9, 2008)

The U.S. Supreme Court has ruled, 6-3, that the “class-of-one” theory of equal protection does not apply in the public employment context. When Anup Engquist’s position with the Oregon Department of Agriculture (ODA) was eliminated amid budget cuts, she effectively was laid off. During her tenure with ODA, Ms. Engquist had complained to her supervisor of harassment by a male coworker. The coworker was ordered to attend diversity and anger management training. Subsequently, John Szczepanski assumed responsibility for supervising the coworker and Ms. Engquist. Mr. Szczepanski told a client that he could not “control” Engquist, and that she “would be gotten rid of.” When Ms. Engquist and the coworker both applied for a vacant managerial post, Mr. Szczepanski chose the coworker, despite Ms. Engquist’s greater experience. Ms. Engquist sued ODA, Mr. Szczepanski, and her coworker, alleging violations of federal antidiscrimination statutes, the Equal Protection and Due Process Clauses of the Fourteenth Amendment, and state law. Regarding the equal protection claim, she alleged that the defendants discriminated against her on the basis of her race, sex, and national origin. She also brought what is known as a “class-of-one” equal protection claim, alleging that she was fired simply for “arbitrary, vindictive, and malicious reasons.” The district court dismissed some of her claims but allowed others to go forward, including both of the equal protection claims. The jury rejected Ms. Engquist’s claims of discrimination but found in her favor on her class-of-one claim. Specifically, the jury found that she had been treated “differently than others similarly situated with respect to the denial of her promotion, termination of her employment, or denial of bumping rights without any rational basis and solely for arbitrary, vindictive or malicious reasons.” The jury also found for Ms. Engquist on several of her other claims and awarded her $175,000 in compensatory damages and $250,000 in punitive damages.

The U.S. Court of Appeals for the Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA, GU, MP) reversed the district court on the class-of-one claim. Although it acknowledged that the U.S. Supreme Court had upheld a class-of-one equal protection challenge to state legislative and regulatory action in Village of Willowbrook v. Olech, 528 U. S. 562 (2000) (per curiam), and that most other federal circuits had extended Olech to public employment cases, the Ninth Circuit disagreed with the other circuits, noting that Supreme Court has routinely afforded government greater leeway when it acts as employer rather than regulator. The court held that the class-of-one theory is “inapplicable to decisions made by public employers with regard to their employees.” Ms. Enguist appealed to the U.S. Supreme Court.

Writing for the Court, Chief Justice Roberts, joined by Justices Scalia, Kennedy, Thomas, Breyer, and Alito, agreed with the premises of Ms. Engquist’s argument that although Olech only dealt with the class-of-one theory in the regulatory context, the case emphasized that: (1) the Equal Protection Clause protects individuals, not classes; (2) the Clause prohibits “discrimination arising not only from a legislative act but also from the conduct of an administrative official;” and (3) the U.S. Constitution applies to the state not only when it acts as regulator, but also when it acts as employer. However, the Court rejected the conclusion flowing from these premises that the class-of-one theory applies in the public employment context. There is “a crucial difference,” the Court observed, “between the government exercising ‘the power to regulate or license, as lawmaker,’ and the government acting ‘as proprietor, to manage [its] internal operation.’” The Court has “often recognized that government has significantly greater leeway in its dealings with citizen employees than it does when it brings its sovereign power to bear on citizens at large.” The Court’s precedent in the public employment context yielded two main principles: (1) “although government employees do not lose their constitutional rights when they accept their positions, those rights must be balanced against the realities of the employment context;” and (2) “in striking the appropriate balance, we consider whether the asserted employee right implicates the basic concerns of the relevant constitutional provision, or whether the claimed right can more readily give way to the requirements of the government as employer.”

Applying these principles in this case, the Court found that recognition of the class-of-one theory in Olech “was not so much a departure from the principle that the Equal Protection Clause is concerned with arbitrary government classification, as it was an application of that principle.” When the government appears to be singling out an individual, the issue of arbitrary classification is “fairly raised, and the Equal Protection Clause requires a ‘rational basis for the difference in treatment.’” However, the Court continued, there are circumstances where state action involves “discretionary decisionmaking based on a vast array of subjective, individualized assessments,” and “allowing a challenge [in those situations] based on the arbitrary singling out of a particular person would undermine the very discretion that such state officials are entrusted to exercise.” This principle “applies most clearly in the employment context, for employment decisions are quite often subjective and individualized, resting on a wide array of factors that are difficult to articulate and quantify.” As a result, the class-of-one theory “is simply a poor fit in the public employment context.” While cautioning that the decision should not be read to prohibit the application of the Equal Protection Clause to public employees, the Court the very nature of government is that it is “at-will,” and that a basic principle of such employment is that an employee is subject to termination for “good reason, bad reason, or no reason at all.” The Court has “never held that it is a violation of the Constitution for a government employer to discharge an employee based on substantively incorrect information.” The decision was guided by the “common-sense realization that government offices could not function if every employment decision became a constitutional matter.” The danger in recognizing the class-of-one theory in the public employment context was not that it would be too easy for plaintiffs to prevail, but rather “that governments will be forced to defend a multitude of such claims in the first place, and courts will be obliged to sort through them in a search for the proverbial needle in a haystack.”

Justice Stevens’ dissent, joined by Justices Souter and Ginsburg, attacked the majority’s decision for creating “a new substantive rule excepting state employees from the Fourteenth Amendment’s protection against unequal and irrational treatment at the hands of the State.” While employers need to be free to exercise discretion authority, the dissent argued, “there is a clear distinction between an exercise of discretion and an arbitrary decision,” and a discretionary decision with any “reasonably conceivable rational justification will not support an equal protection claim; only a truly arbitrary one will.” There is no need, the dissent concluded, “to create an exception for the public employment context in order to prevent these discretionary decisions from giving rise equal protection claims.”

[Editor’s Note: NSBA had filed an amicus brief by in support of the public employer’s position. For background on the case, including a report on the oral arguments and links to NSBA’s and to the National Education Association’s brief supporting the employee, see below. Lead authors on NSBA’s brief were Elizabeth Eynon-Kokrda and Kenneth W. Hartman of Baird Holm LLP in Omaha, Nebraska, whose services were pro bono.]
NSBA School Law pages on Engquist v. Oregon Dept. of Agriculture

From:
Email:
To:
Email:
Subject:
Message: