STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOE BERNARD,

Petitioner,

vs.

JIM PAUL, SUPERINTENDENT OF SCHOOLS OF ESCAMBIA COUNTY,

Respondent.

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) Case No. 03-3167

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RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal proceeding and hearing before P. Michael Ruff, a duly-designated Administrative Law Judge of the Division of Administrative Hearings on January 29, 2004, in Pensacola, Florida.

APPEARANCES

For Petitioner: Michael J. DeMarko, Esquire

Post Office Box 12721 Pensacola, Florida 32502

and

Todd M. LaDouceur, Esquire King & LaDouceur, P.A.

1622 North 9th Avenue Pensacola, Florida 32503

For Respondent: R. John Westberry, Esquire

Holt & Westberry

1108 North 12th Avenue, Suite A Pensacola, Florida 32503

STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding concerns whether the Petitioner has suffered an injury protected by the provisions of Chapter 120, Florida Statutes, when the Respondent, the superintendent of education of Escambia County, acting pursuant to his statutory authority, Section 1012.22(1)(a)(3), Florida Statutes, refused to re-nominate the Petitioner for employment.1/

PRELIMINARY STATEMENT

This cause arose when Superintendent Paul failed to re- nominate Mr. Bernard, the Petitioner, for a contract of employment for the 2003-2004 school year. He informed

Mr. Bernard of that decision by letter of May 9, 2003. The Petitioner, Joe Bernard, had been employed by the Escambia County School Board (School Board) as the Risk Management Director, pursuant to a 12-month, non-instructional contract. That contract expired on June 30, 2003. Near the end of each year, the superintendent is required to nominate or re-nominate employees who possess contracts of employment with definite durations (a/k/a annual contracts). The nomination or re- nomination is made to the School Board, which by statute must accept or reject the nomination or re-nomination for cause.

Superintendent Paul failed to re-nominate Bernard for a new contract for employment. Thus, there was no decision for the

School Board to make with regard to Mr. Bernard, as to his position as the school district's risk manager. The School Board had no occasion to decide whether Bernard should be re- employed for the 2003-2004 school year. The petition filed by Bernard initiating this proceeding alleged that the School Board and the superintendent failed to renew his employment contract "primarily on a false and libelous investigative report published by the superintendent on April 30, 2003."

On November 4, 2003, the Administrative Law Judge entered an Order dismissing the petition as to the School Board because it had taken no action which affected Bernard's substantial interests for purposes of Sections 120.57 and 12.569, Florida Statutes, jurisdiction.

Thereafter, the superintendent filed a Motion to Dismiss Bernard's Petition alleging that Bernard did not have a protected property interest in continued employment. The response to the motion, filed by Bernard, relied on the authority of Davis v. The School Board of Gadsden County, 646 So. 2d 766 (Fla. 1st DCA 1994) and Yunker v. University of Florida, 602 So. 2d 557 (Fla. 1st DCA 1992). The arguments on the Motion to Dismiss and the response hereto were heard at the outset of the hearing on the merits. The Motion to Dismiss was denied without prejudice to its being addressed in post-hearing submittals and in the Recommended Order.

This cause came on for hearing as noticed. The Petitioner, Mr. Bernard, presented seven witnesses and Petitioner's exhibits 1, 2, 4, 6, 7, 9, 11-14, and 17, were admitted into evidence.

The Respondent cross-examined the witnesses and had two exhibits admitted into evidence. Upon concluding the proceeding, a transcript thereof was obtained and the parties submitted Proposed Recommended Orders which are being considered in the rendition of this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Jim Paul served as the superintendent of Schools for Escambia County. Joe Bernard was the director of risk management for Escambia County Schools, supervised by Superintendent Paul. Mr. Bernard began working for the school district in 1986. In January 2000, he began serving as the risk manager.

2. AON Consulting is a firm involved in arranging for and inaugurating employee benefit plans, such as medical and dental benefits. It consulted in such an effort for the School Board and had a contract with the Escambia County School District designed to help the district contract with various health care insurers concerning medical and dental benefits for district employees.

3. Under its arrangement with the Escambia County School District, AON Consulting (AON) would bill the school district by

   the hour for its consulting services and additionally would charge for costs involved for travel, food, and lodging. The bills were submitted in total amounts without being itemized.

4. When Mr. Bernard became the risk manager for the School Board and the superintendent, the AON contract was under his budgetary supervision. He was the administrator of that contract and was charged with ensuring that bills were authorized when submitted by AON and that services performed by AON and paid for by the school district were within budgetary requirements and guidelines. Mr. Bernard did not request or require that AON bills be itemized.

5. When Mr. Bernard became the director of risk management, AON already had the consulting contract with the school district. For the fiscal year 2002-2003, the contract was awarded through a bidding process. Several vendors bid on securing the contract. Mr. Bernard served on the evaluation committee that reviewed all bids. Other members of the committee were Dr. Garber, Barbara Luker, and Gary Moyer.

6. The evaluation committee interviewed the final two vendors/bidders and then recommended that the superintendent award the contract to AON. Mr. Bernard was the superintendent's expert with regard to insurance matters and the superintendent relied on him a great deal in determining who would be awarded

   the contract. Mr. Bernard recommended AON and the contract was awarded to AON.

7. Thereafter, in February 2003, at a School Board meeting, Mr. Bernard arranged for an agenda item for the Board to consider regarding an increase he proposed to AON's "purchase order" so as to provide AON an additional $25,000. Ms. Stidham, an Escambia County School Board member had questions and concerns about the non-itemized billing received from AON. She wanted a detailed itemization on all AON invoices. Because of her concern, the issue she raised was referred to Sam Scallan, the Board's Director of Internal Auditing.

8. Mr. Scallan conducted an analysis of invoices for AON Consulting and sent his findings to Superintendent Paul. The Scallan analysis indicated that AON was not billing for reimbursements in accordance with Florida Statutes. It indicated that expenses reimbursed by the district included some exorbitant meal expenses for district employees and their guests. It also indicated that the director of risk management (Mr. Bernard) and his guest, had been furnished with substantial meals on three different occasions and that other expenses reimbursed by the district to AON, included business dinners, a retirement gift, and cigars.

9. Superintendent Paul ordered an investigation of the matter because of Mr. Scallan's analysis. Dr. Doug Garber, the

   assistant superintendent of Human Resources was appointed to conduct the investigation.

10. Dr. Garber interviewed Mr. Bernard and took a recorded statement from him during his investigation. Mr. Bernard stated that he was familiar with the Florida Statute regarding gifts and gratuities, as well as the School Board policy and knew that "[Y]ou're not supposed to [accept gifts]."

11. Mr. Bernard had developed a business and personal relationship with Chris Clark, the AON consultant, whereby each would purportedly take turns paying for each other's meals. When Mr. Clark was in town, he and Mr. Bernard would sometimes have breakfast, lunch or dinner together. They would take turns buying meals at McGuire's Restaurant and the Pensacola Yacht Club. They had a $400.00 meal expense at Sandor's Restaurant in South Walton County (for four people). Mr. Bernard maintains that he paid his share of that bill by giving Mr. Clark $200.00 in cash on that occasion. They also attended Atlanta Braves baseball games in Atlanta and three NASCAR races. Mr. Bernard maintains he paid Mr. Clark for the NASCAR racing tickets in cash. When on the Atlanta trips, they would have dinner at Bones Steakhouse in Atlanta. Mr. Clark would typically pick up the tab for the meal and Mr. Bernard and his guest would pay the tab for the remainder of the weekend (lodging, cab fare, drinks, etc.).

12. Mr. Bernard stated that he did not know that Mr. Clark was billing improperly because the bills were never itemized. Mr. Bernard contends that Mr. Clark charged the school district for bills that Mr. Bernard had already paid for himself.

    Mr. Bernard testified that he always reciprocated when dealing with vendors. The reason he states he reciprocated or took turns in paying the restaurant and other bills is that he did not want to create the appearance of an impropriety.

13. Cynthia Craig is an Escambia County school district vendor. She testified that she and Mr. Bernard would take turns buying lunches for each other but they would occasionally lose track of who's turn it was to pay. She also stated that she and Mr. Bernard would sometimes consume alcohol during business lunches.

14. Dr. Garber provided Mr. Bernard with a number of opportunities to clear the matter up concerning the allegations. Mr. Bernard provided Dr. Garber with the names of two witnesses that he wanted to be contacted and interviewed who he felt had information favorable to him. Dr. Garber attempted multiple times to contact those witnesses but was unable to reach them. Dr. Garber told Mr. Bernard on two or three occasions that he had not been able to reach the witnesses and requested that

    Mr. Bernard get verification from his witnesses so their information could be included in Dr. Garber's report.

    Dr. Garber was prepared to give credence to the witnesses identified by Mr. Bernard and attempted to contact them, but was unable to subpoena them or otherwise force them to testify.

15. Dr. Garber completed his investigation and issued a report on April 30, 2003. The report to the superintendent concluded that Mr. Bernard had not violated the Code of Ethics provided in Section 112.314(h), Florida Statutes, but that he did violate School Board Rule 3.08, which essentially prohibits employees from taking anything of value from vendors of the school district.

16. As a result of the investigation AON reimbursed the school district $5,700.00, for expenses improperly billed by Mr. Clark. Mr. Bernard only provided receipts for $900.00 of such expenses. Mr. Bernard had not provided any additional receipts as of the time of the hearing, although he possibly could have obtained receipts from his credit card company or through cancelled checks obtained from his bank. Dr. Garber stated that he was prepared to consider any additional information shedding light on the subject matter of the investigation that Mr. Bernard could have provided, and gave him an opportunity to do so.

17. Before taking any action regarding Mr. Bernard's future with the School Board and the superintendent's office, Superintendent Paul waited for the investigation to be

    completed. After the investigation was completed the superintendent decided not to re-new Mr. Bernard's contract.

18. Superintendent Paul decided not to renew the contract because he believed that Mr. Bernard's effectiveness in negotiating future health insurance rates and plans for 10,000 employees, dependents, and retirees had been damaged. The superintendent had lost confidence in Mr. Bernard's judgment.

19. On May 9, 2003, the superintendent sent Mr. Bernard a letter advising him that his employment contract would not be re-newed. He was allowed to serve-out the end of his existing contract, however, and then left the school district in May 2003 on administrative leave. His contract actually expired June 30, 2003. It was an annual employment contract. He had received all the pay he was entitled to under the contract and according to the terms of the contract, Mr. Bernard did not possess any expectancy of continued employment beyond the end of the 12- month term of the contract.

20. Paragraph 9 of Mr. Bernard's contract of employment provided as follows:

    "It is expressly understood and agreed by and between the parties hereto that neither the Employee nor the School Board owes any further contractual obligation to the other after June 30, 2003, and that no expectancy of re-employment may be derived from the execution or performance of this agreement."

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. §§ 120.569 and 120.57, Fla. Stat. (2003).

22. Florida law does not establish a protected property interest for employees in non-tenured, year-to-year positions which are subject to an annual re-appointment. See Sullivan v. School Bd. of Pinellas County, 773 F.2d 1182, 1186 (11th Cir. 1985). It has been held in Board of Regents v. Roth, 408 U.S.

    564 (1972), that in order to have a constitutionally protected property interest in continued employment, a non-tenured school district employee must have more than an unilateral expectation of continued employment. He must have a legitimate claim of entitlement. See also Fertally v. Miami-Dade Community College, 651 So. 2d 1283 (Fla. 3d DCA 1995)(holding that non-renewal of a community college professor's annual contract did not affect her substantial interest for purposes of Section 120.57, Florida Statutes). See also Herold v. University of South Florida, 806 So. 2d 638 (Fla. 2d DCA 2002). In this connection, as quoted above, Mr. Bernard's employment contract provided that neither he nor the School Board had any further contractual obligation, each to the other, after the expiration of the contract on

    June 30, 2003, and that "no expectancy of re-employment may be derived from the execution or performance of this agreement."

23. The contract was completed for the 2002-2003 school year as of June 30, 2003. The plain language of that contract indicated that there was no entitlement to continued employment beyond that contract year. This was not a situation where

    Mr. Bernard was discharged prior to the expiration of his annual contract, in which event he would be entitled to a proceeding and hearing to determine whether there was good cause to discharge him prior to the end of the contract period. In

    Mr. Bernard's case, the contract period ended under the contract's terms. Thus, Mr. Bernard could not really show that he had a substantial interest in his employment as the district's risk manager that was adversely affected by the non- renewal of his contract because his substantial interest in that employment ended when the contract ended, under the above- referenced facts and legal authority.

24. There is, thus, no dispute that Mr. Bernard's contract was allowed to reach its conclusion and that the contract by its very terms precluded any entitlement to re-appointment. Rather, Mr. Bernard in essence contends that, as the superintendent admitted, the failure to re-nominate him was due to the facts the superintendent maintains he learned through Dr. Garber's investigation and the investigative report. Mr. Bernard maintains that the report is "inaccurate or libelous" and in essence put forward false facts upon which the superintendent

    based his decision. He thus maintains that he is entitled to a hearing to, in effect, "clear his name" relying on Davis v. The

    School Board of Gadsden County, supra, and Yunker v. University of Florida, supra. Mr. Bernard maintains that this authority indicates that a hearing is required before an Administrative Law Judge where the failure to renew a year-to-year contract for a long-term employee, is based on inaccurate and libelous statements, articulated and published by the agency head where the action of the agency head, would have a stigmatizing effect on the employee's employment history and opportunity to secure new employment after such a failure to re-nominate. He maintains that these cases are authority for the remedy of re- instatement if it is proven that such a long-term employee is not re-hired based upon "inaccurate and libelous" statements upon which the agency head relied in his decision.

25. In the Davis case, an employee, a school custodian, was terminated after a group of students accused him of speaking inappropriately to them. Because of his dismissal, he was deprived of the opportunity to finish out his employment contract for that school year. The hearing officer in that case entered a recommended order crediting the employee, Mr. Davis's account of the facts and rejecting the students' version as not credible, concluding that the evidence was insufficient to meet the School Board's burden of proving by a preponderance of

    evidence that the recommendation for termination was for just cause. The board and hearing officer in that case found that Davis would have been re-appointed if he had not been named in the accusations which were ultimately found to have been false. In the Yunker case, the court determined that the employee should have an opportunity to present proof that allegations of misconduct, dishonesty, etc., were not true if the decision not to re-appoint would have a stigmatizing effect on his employment history and opportunity for new employment.

26. In the case at hand, however, Mr. Bernard was not terminated for cause or otherwise. His contract was simply allowed to expire by its own terms. Based upon the finding of the investigation conducted by Dr. Garber and Mr. Bernard's quality of response to that investigation and investigative report, the superintendent determined that he no longer had trust and confidence in Mr. Bernard, given all the facts found herein concerning his relationship with Mr. Clark, AON and the quality of his response to the allegations and investigatory facts. Superintendent Paul simply decided that he no longer had trust and confidence in Mr. Bernard sufficient to re-new his contract.

27. Mr. Bernard was given ample opportunity to demonstrate that he had paid his half of the improperly billed expenses and failed to do so, that is, assuming that a showing that he had

    paid one-half of the relevant entertainment expenses would be exculpatory. That, in fact, has not been shown. Rule 3.08 seems to implicate that accepting gifts or premiums must be for the benefit of the schools or that an employee accepting such a gift or premium must use the gift for the benefit of the entire school. That was not shown to have been the purpose or use of the gifts or premiums involved, i.e., the food, drinks, and entertainment opportunities. Mr. Bernard did not prove that he had paid his entire share of those expenses.

28. In the Davis case, the allegations against the employee were proven to be false. In the instant case,

    Mr. Bernard has not established that the allegations, findings, and conclusions in Dr. Garber's investigation were false.

    Irrespective of the issue of the gifts themselves, the superintendent lost confidence in Mr. Bernard and his objectivity when it came to Mr. Bernard's consideration of any issues regarding a major vendor for the School Board, such as AON. The facts found reveal that he believed in good faith, at least, that Mr. Bernard could no longer be objective in his decision-making because of his relationship with Mr. Clark and AON, including, but not limited to the fact that Mr. Bernard personally agendaed and propounded an item on the School Board's agenda whereby AON was apparently given a $25,000

    increase in fees above those due under its then-current contract, which occurred after Mr. Bernard assumed his position.

29. To the extent that Mr. Bernard is claiming that non- renewal of his contract implicated a protected liberty interest warranting a "name clearing hearing," even though his contract expired under its own terms, a claimant, in proving deprivation of a constitutionally-protected liberty interest, must establish that the determination "was attended by stigmatizing charges which 'might seriously damage his standing and associations in his community' or foreclose 'his freedom to take advantage of other employment opportunities.'" Sullivan, supra; Yunker, supra.

30. Factually, Mr. Bernard's non-renewal of his contract does not implicate a protected liberty interest. The superintendent's letter, whereby he informed Mr. Bernard that his contract would not be renewed (Exhibit 14 in evidence), does not contain publication of information that would place

Mr. Bernard's name, reputation, honor, or integrity in issue, or that would reasonably foreclose his opportunity to take advantage of other employment opportunities, by the terms and language of the letter. Accordingly, given the above Findings of Fact based upon evidence of record, it is determined that the

superintendent's decision was appropriately within his discretion, in deciding not to enter into a new contract with

Mr. Bernard.

RECOMMENDATION

Having consideration the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore,

RECOMMENDED that the petition of Joseph Bernard be denied. DONE AND ENTERED this 9th day of June, 2004, in

Tallahassee, Leon County, Florida.

S

P. MICHAEL RUFF Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 2004.

ENDNOTE

1/ The case has been re-styled by the undersigned to reflect that Joe Bernard filed the petition and has the burden of proof.

COPIES FURNISHED:

Michael J. DeMarko, Esquire Post Office Box 12721 Pensacola, Florida 32591-2721

Todd M. LaDouceur, Esquire King & LaDouceur, P.A.

1622 North 9th Avenue Pensacola, Florida 32503

Robert J. Sniffen, Esquire Moyle, Flanigan, Katz, Raymond

& Sheehan, P.A. The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

R. John Westberry, Esquire Holt & Westberry, P.L. 1108-A North 12th Avenue Pensacola, Florida 32501

Superintendent Jim Paul Escambia County School Board

215 West Garden Street Pensacola, Florida 32597

Daniel J. Woodring, General Counsel Department of Education

325 West Gaines Street, Room 1244 Tallahassee, Florida 32399-0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 03-003167

Orders for Case No: 03-003167