Kramer v. Southern Oregon University et al

Filing 129

ORDER: Granting in Part Motion for Partial Summary Judgment 87 ); Granting in Part Motion for Partial Summary Judgment 91 ). (See attached PDF for complete details). Signed on 12/1/2014 by Judge Owen M. Panner. (jkm)

j

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION
RONALD H. KRAMER,
Plaintiff,

No. 1:13-cv-00340-PA

v.

ORDER

SOUTHERN OREGON UNIVERSITY, a
public university, OREGON UNIVERSITY SYSTEM, a ~ublic
university system, MARY CULLINAN,
GEORGE PERNSTEINER,
Defendants.

PANNER, District Judge:

This matter comes before me on Defendants' Motion for Partial
Summary Judgment
Judgment

(#87),

Plaintiff's Motion for Partial Summary

(#91), and Defendants' Motion for Leave to File an

Amended Answer (#84).

Defendants' Motion for Partial Summary

Judgment is GRANTED as to all claims except Plaintiff's due
1 - ORDER

process claim for violation of a liberty interest.
Motion for Partial Summary Judgment is DENIED.

Plaintiff's

Defendants' Motion

for Leave to File an Amended Answer is MOOT as to the proposed
eighteenth affirmative defense and GRANTED as to all other
proposed amendments.
Background

Plaintiff Ronald Kramer ("Kramer") was a longtime employee of
Defendant Southern Oregon University ("SOU").
university based in Ashland, Oregon.

SOU is an public

During the relevant period

of this case, SOU's President was Defendant Dr. Mary Cullinan
("Cullinan").

SOU is part of Defendant Oregon University System

("OUS"), a public entitY comprised of the Oregon public
universities.

During the relevant period of this case, Defendant

George Pernsteiner ("Pernsteiner")

served as OUS Chancellor.

SOU runs a network of public radio station known as Jefferson
Public Radio ("JPR").

SOU is assisted in its running of JPR by

the Jefferson Public Radio Foundation ("JPRF").

SOU and JPRF

share ownership and control of the stations, licenses, equipment,
and facilities of the JPR network.
Kr~mer

served as the Executive Director ("ED") of JPR.

that capacity, he was an employee of SOU.

In

As part of the

contractual arrangement between SOU and JPRF, the Executive
Director of JPR also served as the Executive Director of JPRF.
Accordingly,
years.

Kr~mer

was ED of both organizations for a number of

This dual role was incorporated into Kramer's job

2 - ORDER

description at SOU.
In 2011, SOU President Cullinan became concerned about new
projects being undertaken by JPRF,

including the renovation of the

Holly Theater in Medford, Oregon ("the Medford Projects").
Cullinan expressed her concerns to OUS Chancellor Pernsteiner.

In

response to those concerns, Pernsteiner directed the Internal
Audit Division of OUS to peiform an Asset & Liability Review of
JPR beginning in March 2011.
After conducting the Asset & Liability Review, the Internal
Audit Division issued an Internal Audit Report on September 22,
2011

("the OUS Report").

The OUS Report concluded that JPRF's

Medford Projects "may not align with
may,

in fact,

poli~y

interests of SOU and

harm SOU by limiting the fundraising ability of the

SOU Foundation related to their own fundraising priorities." Rubin
Decl. Ex. 1, at 10.

The OUS Report also concluded that having a

single individual serving as the ED of both JPR and JPRF
represented a structural problem in the relationship between SOU
and JPRF, resulting in "recurring actual or apparent conflicts of
interest."

Id. at 11.

The OUS Report recommended that SOU

eliminate the conflict.of interest by not allowing Kramer to serve
as ED of both organizations.

Id.

Cullinan accepted the

recommendations in the OUS Report and commissioned a task force to
resolve the issues identified in the OUS Report.

In early 2012,

Kramer came to believe that he was going to be terminated as a
consequence of the OUS Report.

3 - ORDER

On March 21, 2012, Kramer filed a

grievance with SOU.

The SOU grievance committee rejected Kramer's

complaint on the basis that there had been no grievable employment
action.

In the meantime, Kramer remained in his position as ED of

both JPR and JPRF.
On March 16, 2012, Kramer prepared and distributed a series
of proposed resolutions for the JRPF Board which would have
fundamentally altered JPRF's relationship with SOU.

The JPRF

Board was scheduled to consider and vote on those resolutions at a
meeting on March 22, 2012.

As SOU President, Cullinan also

received a copy of the proposed resolutions._
SOU and OUS viewed the proposed resolutions as detrimental to
SOU and retained'the Miller Nash law firm to prevent the proposed
resolutions from being ad~pted.

On March 22, 2012, counsel from

Miller Nash prepared a letter addressed to JPRF counsel Jerry
Jacobson ("the Miller Nash Letter").

The Miller Nash Letter set

forth SOU's opposition to the proposed-resolutions and advised
that SOU would proceed with litigation if the resolutions were
adopted.

Rubin Decl. Ex 1, at 2.

The threat of litigation

included claims against JPRF, the JPRF Board members personally,
and Kramer in particular.

Id. at 3-5.

Claims against Kramer were

to include breaches of fiduciary duties to SOU,
contract,

interference with

impermissible direct and indirect conflicts of interest

without the required disclosures, and violations of the standards
of conduct for officers of nonprofit corporations.

Id. at 4-5.

The Miller Nash Letter also notes that Kramer and the JPRF Board

4 - ORDER

may be.denied indemnity by JPRF's insurance company if it is found
that their actions were taken in bad faith or through willful
misconduct.

Id. at 5-6.

Jacobson was asked to provide copies of

the Miller Nash Letter to the JPRF Board in advance of the March
22 meeting.
The JPRF Board met as scheduled on March 22, 2012.
of the local media attended the open session.

Members

Cullinan gave a

speech urging the board to reject the resolutions and consider
mediation.

Moore Decl. Ex. 7.

Cullinan referred to the Miller

Nash Letter, although she did not go into
contents of the letter.

Id.

detail about the

The JPRF Board went into executive

session, during which it rejected the proposed resolutions.
On March 23, 2012, Cullinan sent Kramer a letter informing
him that his appointment as ED of JPR "may not be renewed for the
upcoming 2012-2013 fiscal year," and that "[a]s a result, your
employment with Southern Oregon University may terminate on June
30, 2012."

Moore Decl. Ex. 9.

The dispute between SOU and JPRF was covered in local
newspapers and generated considerable interest.

On June 8 and 9,

2012, SOU and JPRF engaged in mediation, to which Kramer was not a
party, and reached an agreement, subject to the to approval by the
JPRF Board ("the Lukens Agreement").

After considering the

matter, the JPRF Board rejected the Lukens Agreement.
On June 13, 2012, SOU adopted an amendment to its personnel
policies;

5 - ORDER

The new policy permitted SOU to terminate

administrative appointments without cause at any time during the
appointment by providing the employee with ninety days notice
prior to termination.

Stephens Decl. Ex. 1.

On June 25, 2012, Kramer received a letter from Cullinan
informing him that his employment was terminated effective June
30.

Stephens Decl. Ex. 8.

June 25, 2012.

Kramer performed no work for SOU after

On or about June 30, 2012, Kramer also stepped

down from his position a~ ED of JPRF.

Moore Decl. Ex 11, at 15.

On July 2, 2012, Kramer submitted a written grievance to SOU.
Kramer grieved the sufficiency of his notice of termination and
the allegations contained in the OUS Report and the Miller Nash
Letter.

Kramer also alleged that he had been terminated in

retaliation for his earlier grievance.

Stephens Decl. Ex.

9, at

2.
On August 17, 2012, the SOU Grievance Committee issued its
findings.

The Grievance Committee determined that Kramer did not

receive proper notice of non-renewal until June 25, 2012, because
the March 23 letter used conditional language.

The Grievance

Committee determined that Kramer had not 'been terminated for a
retaliatory reason.

The Grievance Committee also determined that,

although the OUS Repoit and Miller Nash Letter were public
documents, they were not placed in Kramer's personnel file and
that disclosure would not violate SOU policy.
9.

Stephens Decl. Ex.

The Grievance Committee concluded Kramer was entitled to

ninety ?ays of pay and benefits beginning on June 25, 2012.

6 - ORDER

Following a "cooling off" period after the failure of the
Lukens Agreement, SOU and JPRF engaged in a second round of
mediation on August 21 and 22, 2012, conducted by a, new mediator,
Susan Hammer.

At the conclusion of the second round of mediation,

SOU and JPRF entered into a binding settlement agreement ("the
Hammer Agreement").

One of the terms of.the Hammer Agreement was

that "Ron Kramer may serve as a volunteer consultant or
independent contractor consultant to [JPRF] or its affiliates but
is not eligible to be an officer, director, advisory board member,
or employee of [JPRF] or its affiliates."
1.

Moore Decl. Ex. 17., at

As part of the Hammer Agreement, SOU and JPRF extended their

contract for exchange of services without modification.

JPR

employee Paul Westehelle was appointed to serve as the interim ED
of both JPR and JPRF in the same dual capacity previously occupied
by Kramer.
On September 11; 2012, Cullinan accepted the SOU Grievance
Committee's determination and Kramer received the recommended
ninety days of pay and benefits in a lump sum on October 22, 2012.
Kramer then filed this action.
Legal Standard

I. Summary Judgment
Summary judgment is appropriate "if the movant shows that
there is no genuine dispute as to any material fact and the movant
is entitled t6 judgment as a matter of law." Fed. R. Civ. P.
56(a). Whether or not a fact is material is determined by the

7 - ORDER

substantive law on the issue. T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass'n, 809 F.2d 626,

630

(9th Cir. 1987). There is a

genuine dispute if the evidence is such that a reasonable jury
would return a verdict for the nonmoving party. Anderson v.
Liberty Lobby,

Inc.,

477 U.S. 242, 248

(1986). The moving party

has the burden of establishing the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Special rules of construction apply to evaluating summary
judgment motions:

(1) all reasonable doubts as to the existence of

genuine issues of material facts should be resolved against the
moving party; and (2) all inferences must be drawn in the light
most favorable to the nonmoving party. T.W. Elec., 809 F.2d at
630-31._
II. Qualified Immunity
Qualified immunity protects government officials from
"liability for civil

dam~ges

insofar as their conduct does not

violate clearly established statutory or constitutional rights of
which a

re~sonable

person would have known."

Fitzgerald, 457 U.S. 800, 818

(1982).

Harlow v.

Defendants are entitled to

qualified immunity where they "reasonably could have believed that
their conduct was lawful 'in light of clearly established law an,d
the information [that they] possessed.'" Cohen v. San Bernadino
Valley Coll.,

92 F.3d 968,

Racansky, 887 F.2d 183, 187

973 (9th Cir. 1996) (quoting Baker v.
(9th Cir. 1989)).

The Supreme Court has established a two-part analysis for

8 - ORDER

determining whether qualified immunity is appropriate in a suit
against an official for an alleged violation of a constitutional
right.

Saucier v. Katz, 533 U.S. 194, 201 (2001).

The court must

determine whether the official violated the plaintiff's
constitutional rights on the facts alleged and whether the
constitutional rights were clearly established.

Id.

The Supreme

Court has since explained that a court can proceed through these
steps in any order.

Pearson v. Callahan, 555 U.S. 223, 242

( 2009) .
In order for a right to be "clearly established," its
"contours must be sufficiently definite that any reasonable
official in the defendant's shoes would have understood that he
was violating it."
(2014) .

Plumhoff v. Rickard, 134 S .. ct.

2012~

2023

"'Existing precedent must have placed the statutory or

constitutional question' confronted by the official 'beyond
debate.'" Id.

(quoting Ashcroft v. al-Ki-dd, 131 S. Ct. 2074, 2083

(2011)) .
Discussion

I. Defendants' Motion for Partial Summary Judgment
Defendants move for summary judgment on all claims against
Cullinan and Pernsteiner.

Defendants also move for summary

judgment on Kramer's state law claims for blacklisting, breach of
contract, and statutory wage and hour violations.
A. Due Process Liberty Interest

Kramer's third claim alleges that Cullinan deprived him of

9 - ORDER

the freedom to engage in/his chosen occupation without due process
when she failed to provide him with a name clearing hearing before
the release of stigmatizing information contained in the OUS
Report and the Miller.Nash Letter.
The Fourteenth Amendment's guarantee of due process applies
when a constitutionally protected liberty or property intereit is
at stake.
569 (1972)

Bd. of Regents of State Calls. v. Roth,

408 U.S. 564,

A liberty interest is implicated in the employment

termination context if 1) the employer makes a charge that impairs
the employee's reputation for honesty or morality; 2) the accuracy
of the charge is contested; 3) there is some public disclosure of
the charge; and 4) the charge is made in connection with
termination of employment.

Matthews v. Harney Cnty., Or., Sch.

Dist. No. 4, 819 F.2d 889, 891-92

(9th Cir. 1987).

Defendants

concede that, to the extent any charges were made, Kramer
contested their accuracy. , Defendants contest all of the other
elements and assert that, even if Cullinan Violated Kramer's due
process rights, those rights were not clearly established.
1. Stigmatizing Charge

To implicate a liberty interest, the charge "must be
sufficiently serious to 'stigmatize' or otherwise burden the
individual so that he is not able to take advantage of other
·employment opportunities."
Francisco,

Ballow v. Fed. Reserve Bank of San

650 F.2d 1093, 1101 (9th Cir. 1981).

The charge must

be one of moral turpitude, such as dishonesty or immorality, and

. 10-. ORDER

not merely incompetence or a difficult personality.
Wadsworth Veterans Hosp.,

Stretten v.

537 F.2d 361, 366 (9th Cir. 1976).

Courts must also "distinguish between allegations that may reduce
economic rewards and diminish prestige from those that may exclude
one permanently from the profession or trade or interrupt
employment for a protracted period of time."
Cnty. Fire Prot. Dist. No.

Roley v.

Pierce

4, 869 F.2d 491, 496 (9th Cir. 1989)

In this case, Kramer contends that the OUS Report and the
Miller Nash Letter contain-stigmatizing charges against him.

I

cannot conclude that the OUS Report makes any allegations about
Kramer that implicate moral turpitude.

There is no accusation of

improper motive or dishonest behavior.

The OUS Report simply

identifies Kramer's dual role as a structural defect in the SOUJPRF relationship at the time of Asset & Liability Review and
presents recommendations for correcting that issue.
The Miller Nash Letter, by contrast, alleges Kramer engaged
in impermissible direct and indirect conflicts of interest,
particularly in proposing a resolution which would have resulted
in his full-time employment by JPRF.
charges Kramer with breaches of his

The Miller Nash Letter also
fiduci~ry

duties to SOU and

violations of the standards of conduct for officers of Oregon
nonprofit corporations.

Rubin Decl. Ex. 1, at 5.

I am not persuaded by Defendants' argument that the Miller
Nash Letter's allegations are softened by being conditioried on the
passage of the proposed resolutions.

11- ORDER

In discussing possible

indemnification for Kramer or the directors under JPRF's insurance
policy, the letter says:
Nor do we see a clear path to indemnity.
Article X of
the bylaws forbids indemnification for actions taken in
bad faith or through willful misconduct.
If any actions
of Kramer or the Foundation's directors (including past
actions and the adoption of the Proposed Resolutions)
are determined to have been made in bad faith or through
willful misconduct, neither Mr. Kramer nor the
Foundation's directors will be entitled to
indemnification .
Rubin Decl. Ex. 1, at 5-6.
The clear implication of this passage is that SOU believed
that Kramer had engaged in willful misconduct or acted in bad
faith and that, as a consequence, he had no "clear path" to
indemnity.

Read in the light most favorable to the non-moving

party, a reasonable jury could conclude that the Miller Nash
Letter contained charges that impaired Kramer's reputation for
honesty or morality and that such charges that would exclude
Kramer from his chosen profession. 1
As discussed above, it is well established that charges that
impair a plaintiff's reputation for honesty or morality, as
opposed to allegations of professional incompetence, will
implicate the plaintiff's due process rights.
v. Kulongoski,

1

567 F. 3d 529, 537

See,

~,

(9th Cir. 2009); Bollow,

Tibbets
650 F.2d

The parties dispute both the scope of Kramer's chosen
profession and the degree to which he has been excluded from it .
.Even accepting a definition of. Kramer's chosen profession broad
enough to encompass radio or media, as opposed to the narrower
"public radio in southern Oregon," the record supports Kramerjs
contention that he has been unable to find employment.
12- ORDER

at 1101; Roley, 869 F.2d at 495-96; Stretten, 537 F.2d at 365-66.
Because I have concluded that, for the purposes of summary
judgment, the charges contained in the Miller Nash Letter
implicate Kramer's reputation for honesty, I also conclude that
the matter was clearly established at the time of the violation.
2.

Publication

For a stigmatizing charge to implicate a constitutional
right, there must be "some public disclosure" of the stigmatizing
charges.
78

Vanelli v. Reynolds Sch. Dist. No. 7,

(9th Cir. 1982).

667 F.2d 773, 777-

Although the publication requirement of a

due process claim does not explicitly require that the employer
make the di.sclosure, "allow[ing] the potentially stigmatized party
to satisfy the publication prong by disseminating the details
surrounding his termination would contradict the purposes of the
publication requirement."

Llamas v. Butte Cmty. Coll. Dist., 238

F.3d 1123, 1131 (9th Cir. 2001).
The exact contours of what constitutes publication aFe
somewhat indefinite.
F.3d 1169, 1179 n.lO

See Mustafa v. Clark Cnty. Sch. Dist., 157 ·
(9th Cir. 1998).

Obviously, an overt

disclosure of stigmatizing information to the media constitutes
publication.

See Tibbetts, 567 F.3d at 536.

Placement of

stigmatizing information in a personnel file can also constitute
publication when state law classifies an employee's personnel file
as a public r_ecord that must be produced on request.
Roskelley, 359 F.3d 1105, 1112

13- ORDER

(9th Cir. 2004).

Cox v.

In Cox, the Ninth Circuit adopted the Eleventh Circuit
standard of publication, holding that "'the presence of
stigmatizing information

place~

into the public record by a state

entity, pursuant to a state statute or otherwise, constitutes
sufficient publication to implicate the liberty interest under the
due process clause of the fourteenth amendment,to the United
States Constitution.'"

Id. at 1111,

(quoting Buxton v. City of

Plani City, 871 F.2d 1037, 1046 (11th Cir. 1989)).

"'[B]ecause

the information in the file may be reviewed years after it is
filed, its publication, for due process purposes, must be held to
occur at the time of filing.'"

Id.

The record supports Plaintiff's contention that both the OUS
Report and the Miller Nash Letter were public documents.

The SOU

Grievance Committee concluded as much, saying "SOU and the Oregon
University System were and remain obligated to provide these
documents upon request to any member of the public."
Ex. 15, at 5.

Moore Decl.

Cullinan herself concurred with the Grievance

.Committee's findings on this point.

Moore Decl. Ex. 16.

Under Cox, therefore, the inclusion of stigmatizing charges
in the Miller Nash Letter was sufficient to meet the publication
requirement of Kramer's due process claim.

This conclusion is

bolstered by Cullinan's reference to the Miller Nash Letter in her
March 22, 2012, speech to the JPRF Board.

Not only was a

stigmatizing public document created, but the media was
affirmatively notif{ed of that document's existence.

14- ORDER

I muit arso conclude that the right was clearly established
at the time of the violation.

Cox stands for the proposition that

placement of stigmatizing information in a publicly available
~

document constitutes publication.

The fact that the Miller Nash

Letter was not placed in Kramer's personnel file,

as were the

stigmatizing charges in Cox, does not alter this analysis.

2

3. Connection to Termination

Defendants argue that the Miller Nash Letter was unrelated to
Kramer's termination and that it was too temporally distant from
Kramer's ultimate termination on June 25, 2012 to support a due
process violation.
A stigmatizing charge is connected to the termination "when
defamatory statements are so closely related to discharge from
employment that the discharge itself may become stigmatizing in
the public eye."
Cir. 1996)

Campanelli v. Bockrath, 100 F.3d 1476, 1482 (9th

Although the Ninth Circuit has declined to establish a

bright-line rule, there must be "some temporal nexus" between the
stigmatizing charges and the termination.
567 F.3d at 537.

Id. at 1483; Tibbets,

In Campanelli, a seven-to-nine day interval

between termination and the publication of stigmatizing charges
was found to be sufficient to establish a connection.

2

Campanelli,

Conversely, courts have found that placement of
stigmatizing information in a personnel file does not constitute
publication under Cox when the laws of the state do not require
public disclosure of the personnel file upon request.
Boggs v.
Hoover, Civil No. 09-116-ST, 2009 WL 2447553 at *8 (D. Or. Aug.
6, 2009).
15- ORDER

100 F.3d at 1483.
In this case, the Miller Nash Letter was delivered to the
JPRF Board on March 22, 2012.

On March 23, 2012, Cullinan

informed Kramer by letter that he "may" be terminated, effective
June 30, 2012.

Moore Decl. Ex. 9.

The record supports that

Cullinan believed.that the March 23 letter was effective notice of
termination.

Her June 25 letter, which was later determined to

have actually been effective notice of termination, was sent to
"confirm" the March 23 letter.

Moore Decl. Ex 14.

Cullinan also

disputed the SOU Grievance Committee's determination that notice
provided by the March 23 letter was defective.

Moore Ex. 16.

Given that Cullinan initiated, or at least attempted to
~nitiate,

Kramer's termination only one day after publication of

the Miller Nash Letter,

I conclude that there is sufficient

evidence that the stigmatizing charges were made in connection
with Kramer's termination.

Because Cullinan's actions were taken

within the time frame established in Campanelli, I conclude that
the matter was "clearly established" at the time of the violation.
I conclude there is sufficient evidence on each of the
elements to sustain this claim.

I also conclude Kramer's rights

were clearly established at the time of the violation.
Accordingly, Defendants' Motion for Summary Judgment on this claim
is DENIED.
B. Due Process Property Interest

Kramer's third claim alleges that Cullinan deprived him of

16- ORDER

his property interest in a subsequent year of employment when he
was terminated without proper notice.

Kramer contends that,

absent ninety days notice, he was entitled to a full year of
renewed employment with SOU.
Property interests do not arise from the Constitution, but
are created and their dimensions defined by existing rules or
understandings that stem from an independent source, such as state
law.

Roth, 408 U.S. at 577.

Federal constitutional law, however,

determines whether that interest rises to the level of a
legitimate claim to entitlement protected by the Due Process
Clause.

Memphis Light, Gas

( 1978) .

&

Water Div. v-. Craft, 436 U.S. 1, 9

While property rights can be created and defined by

state law, the claimant must demonstrate that he has a legitimate
entitlement to the claimed right and not merely a unilateral
expectation.
Cir. 1990).

Sanchez v. City of Santa Ana,

915 F.2d 424,

428

(9th

"'Although procedural requirements ordinarily do not

transform a unilateral expectation into a protected property
interest, such an interest is created if the procedural
requirements

ar~

restriction on .

intended to be a significant substantive
. decision making.'"

Stiesberg v. State of

Cal., 80 F. 3d 353, 356 (9th Cir. 1996) (quoting Wedges/Ledges of
Cal., Inc. v. City of Phoenix, 24 F. 3d 56,

62

(9th Cir. 1994)).

Under Oregon law, a non-tenured employee's right to continued
employment is derived from contract and not the Constitution.
Papadopoulos v. Or. State Bd. Of Higher Educ., 14 Or. App. 130,

17- ORDER

169 (1973).
In this case, Kramer was a non-tenured university employee.
Und~r

Papadopoulos, his rights would be contractual, rather than

constitutional.

The Ninth Circuit has held, however, that

deprivation of contractual rights can give rise to a due process
violation, subject to the terms of the contract.
Cnty. Cmty. Coll. Dist., 743 F.2d 1310, 1314

Loehr v. Ventura

(9th Cir. 1984); San

Bernadino Physicians Serv. Med. Grp. v. San Bernadino Cnty., 825
F.2d 1404, 1407-09 (9th Cir. 1987).
Kramer's appointment was classified as "renewable." Stephens
Decl. Ex. 3.

Under SOU's 2005 policy "Types of Appointment Notice

of Non-Renewal and Resignation," renewable appointments "are
considered 'renewed' for continuing employment in a subsequent
fiscal or academic year for the same appointment term as the
previous appointment unless the employee receives .
non-renewal."

Moore Decl. Ex. 20, at 2.

. notice of

"A ninety (90) day

notice of non-renewal is given to employees on renewable
appointments with termination being effective at the end of the
notice period."

Id.

In Loehr, the Ninth Circuit determined that. a statutory
provisio0 which provided for automatic renewal absent six month's
notice of non-renewal did not create a protected property interest
because the statute did not create a "significant substantive
restriction" on the defendant's decision-making power in
employment matters. Loehr, 743 F.2d at 1315.

18- ORDER

In addition, the

Ninth Circuit noted that the statute failed to provide an
"articulable standard" that would define such a restriction.

Id.

The facts of this case are closely analogous to those of
Loehr~

The terms of SOO's renewable appointment policy do not

significantly restrict SOO's ability to make decisions on renewal
of appointments like Kramer's.

Nor do the policies articulate any

standard that would define a restriction.

I must conclude,

therefore, that Plaintiff had no protecled property interest inr
his continued employment with sou.
To the extent that a protected property interest may have
existed, I also conclude that the contours of the right were not
sufficiently definite in 2012.

Defendants are entitled to summary

judgment on this claim.
C. Equal Protection

Kramer's fourth claim alleges that Pernsteiner violated
Kramer's right to equal protection when he endorsed a provision of
the Hammer Agreement that prohibited Kramer from being employed by
JPRF.
Kramer's claim relies on a "class of one" theory of equal
protection.

To prevail on an equal protection claim under the

"class of one" theory, a

pl~intiff

must show that the official 1)

intentionally 2) treated the plaintiff differently than other
similarly situated individuals, 3) without a rational basis for
the difference in treatment.
U.S. 562, 564

19- ORDER

Village of Willowrook v. Olech, 528

(2000); Gerhart v. Lake Cnty.,

637 F.3d 1013, 1022

(9th Cir. 2011) . 3

To prevail on the rational basis element of a

"class of one" claim, "the burden is on the challenging party to
negative 'any reasonably conceivable state of facts that could
provide a rational basis for the classification.'"
Univ. Ala. v. Garrett, 531 U.S. 356, 367

Bd. of Trs. of

(2001) (quoting Heller v.

Doe, 509 U.S. 312, 320 (1993)).
In this case, Kramer contends he was treated differently from
Paul Westhelle, who was appointed to replace him in the same dual
role that gave rise to the conflicts of interest identified in the
OUS Report and the Miller Nash Letter.

As a

p~eliminary

matter,

there is no evidence that Pernsteiner was directly involved with
any of the terms of the Hammer Agreement.

On the contrary, the

record suggests that he took a "hands off" approach to the second
round of mediation, allowing the local representatives of SOU to
resolve the issue.

Based on the record, it appears that

Pernsteiner learned Kramer was barred from employment by JPRF only
when the Hammer Agreement was made public.

Rubin De,cl. Ex. 5, at

7-10.
In any event, Pernsteiner is entitled to summary judgment on
the rational basis element of Kramer's equal protection claim.
The record shows that Kramer's relationship with SOU had severely

3

The Supreme Court has held that the "class of one" theory
of equal protection does not apply in the public employment
context.
Engquist v. Or. Dep't of Agric., 553 b.s. 591, 607
(2008).
It is not necessary for me to resolve whether
Pernsteiner's actions in this case were taken as a public
employer or as a regulator.
20- ORDER

deteriorated in the months leading up to the Hammer Agreement.
JPRF's mission, in the view of OUS and SOU, was to support SOU's
JPR enterprise.

It is reasonable that, in the interest of

returning to a smooth working partnership, SOU or OUS would have
insisted on the exclusion bf the person perceived to be at the
center of the SOU-JPRF conflict.

Kramer has produced no specific

evidence to contradict this rationale.

I conclude, therefore,

that a rational basis existed for excluding Kramer from employment
with JPRF.

4

Pernsteiner is entitled to summary judgment on

Kramer's claim against him.
Because Pernsteiner's actions did not constitute a violation
of Kramer's right to equal protection, I need not address whether
Defendants' motion for

that right was clearly established.

summary judgment on this claim is GRANTED.
D. Blacklisting

Kramer's first claim for relief alleges a common-law claim
for blacklisting based on ORS 659.805.

Kramer alleges that

\

Defendants blacklisted him by adopting and publishing the Hammer
Agreement, which prevented him from being employed by JPRF.
Kramer alleges that this

4

a~t

shut him out of all prospect of

At orai argument, Plaintiff's counsel argued that the term
prohibiting Kramer from being employed by JPRF was overbroad and
that SOU's concerns might have been addressed by limiting
Kramer's potential JPRF employment to the Medford Projects.
While counsel's suggestion is probably a more elegant solution
than what was included in the Hammer Settlement, the Constitution
does not require perfection. Vance v. Bradley, 440 U.S. 93, 108
( 197 9) .

21- ORDER

employment as an Executive Director for a public radio
organization in the southern Oregon media market 5 •
Defendants move for summary judgment on this claim,
essentially reiterating their argument that no common-law claim
for blacklisting exists under Oregon law.

This Court previously

rejected this argument at the motion to dismiss stage (#25), based
on the Oregon Supreme Court's decision in Johnson v. Oregon
Stevedoring Co., 128 Or. 121 (1928).

Nor is this the first time

that a federal court in Oregon has recognized the existence of a
common-law claim for blacklisting based on the Johnson decision.
Mink v. Marion Cnty. Juvenile Dept., Civ. No. 08-6298-AA, 2009 WL
5173513, *12-13 (D. Or. Dec. 18, 2009).
Oregon law prohibits an employer from "blacklisting" a
terminated employee.

ORS 659.805.

Blacklisting involves the

intent to injure a person by preventing future employment.
2009 WL 5173513 at *12-13.

Mink,

"[I]f one is prevented by the wrongful

act of a third party from securing some employment that he has
sought, he suffers a legal wrong, provided he can show that the
failure to employ him was the direct and natural consequence of
the wrongful act."

Johnson 128 Or. At 135.

In Mink, the court

granted summary judgment on the plaintiff's blacklisting claim
after determining that there was no evidence of a "wrongful act"
or malicious intent.

5

Mink, 2009 WL 5173513 at *12-13.

Based on the record, it is clear that JPR and JPRF are the
only public radio entities in southern Oregon.
22- ORDER

In this case, I have reviewed the entire record carefully.
As in Mink, there is no evidence in this case that Defendants
acted with the malicious intent to injure Kramer.

The record

shows Kramer voluntarily stepped down from his position as ED of
JPRF before adoption of the Hammer Agreement.

Moore Decl. Ex. 11,

Furthermore, contrary to the allegations in the Amended

at 15.

Complaint, the Hammer Agreement does not completely prohibit
/

Kramer from working for JPRF.

The Hammer Agreement permits JPRF
~oore

to employ Kramer as an "independent contractor consultant."
Decl. Ex. 17, at 1.
Accordingly, based on the record,

I must conclude that

Defendants are entitled to summary judgment on this claim.
E. Breach of Contract

Kramer's fifth claim for relief alleges that Defendants
breached their contract with Kramer by terminating him without the
required notice.

Defendants contend that on June 13, 2012,

6

SOU

adopted an amendment to their employment policies which provided
that administrative appointments could be terminated without cause.
at any time during the appointment period with ninety days written
notice prior to the termination of employment.

Under that policy,

the only remedy to which Kramer would be entitled is the ninety

6

The policy amendment, entitled "Administrator Appointment,
Non-renewal, Resignation" and identified as Policy Number FAD
0.18, was approved on June 13, 2012.
Stephens Decl. Ex 1, at 1.
For the sake of clarity and consistency, I will refer to it as
"the June 13 amendment."

23- ORDER

days of pay and benefits already awarded by the SOU Grievance
Committee and paid by SOU.
Defendants argue that, under Kramer's contract, any amendment
to the SOU employment policies immediately amended the terms of
Kramer's employment.

Kramer would, therefore, have been subject

to the June 13 amendment when he was terminated on June 25.
Kramer contends that it is ambiguous whether the June 13 amendment
was effective at the time of his termination because SOU failed to
electronically circulate the policy, as Kramer contends it was
required to do.

Kramer argues that, absent that amendment, he

would be entitled to the benefit of a subsequent year of
employment.
When a contract is ambiguous, ascertaining its meaning is a
question of fact and inappropriate for summary judgment.

See

Madison v. W. Or. Conference Ass'n of Seventh-Day Adventists, 209
Or. App. 380, 389 (2006).
Based on the record, I conclude Kramer received effective
notice of his termination on June 25, 2012.

I also conclude that

the June 13 amendment applied to Kramer's appointment at the time
of his termination.

Although Kramer argues SOU was required to

electronically circulate any amendments to its employment policies
prior to their.adoption, he is able to provide only his own
declaration and deposition testimony that such a requirement was
his understanding.
86.

Kramer Decl., at 2; Moore Decl. Ex. 1, at 185-

Kramer's understanding is not supported by the express terms

24- ORDER

of SOU's employment policies.

Trie 2005 policy "Types of

Appointment Notice of Non-Renewal and Resignation," which Kramer
contends was effective at the time of his termination,

~xplicitly

says "[t]his policy may be revised at any time without prior
notice.

All revisions supercede prior policy and are effective.

upon approval."

Moore Decl. Ex. 20, at 2.

Kramer's employment contract also supports Defendants'
contention that the June 13 amendment was effective at the time of
Kramer's termination.

On December 2, 2004, Kramer received an

appointment to an unclassified administrative position.
Decl. Ex. 2.

Stephens

That appointment was renewed annually through the

2011-2012 fiscal year.

The contract states that it may be

"amended by any changes in the

SOU Personnel Policies as may

apply to the general terms and conditions of employment for
employees in this class of employment with the University.
such changes to the .

Any

. SOU Personnel Policie.s immediately amend·

this contract upon the effective date of adoption of the .
Policy."

Id. at 2.

I conclude, therefore, that the terms of Kramer's appointment
were immediately amended by the adoption of the June 13 amendment.
The June 13 amendment provides that an administrative appointment
such as Kramer's could be terminated without cause on ninety days
notice.

It is undisputed that Kramer received ninety days of pay

arid benefits dated from June 25.
further remedy under his contract.

25- ORDER

Kramer is not entitled to any

Nor would Kramer be entitled to any further remedy, even if
the June 13 amendment were not effective at the time of his
termination.

Under the superseded 2005 policy, a renewable

appointment was "considered renewed" unless the

employe~

received

a notice of non-renewal as described in a subsequent section of
the policy: "A ninety (90) day notice of non-renewal is given to
employees on renewable appointments with termination being
effective at the end of the notice period."
at 2.

Moore Decl. Ex. 20,

The plain language of the policy does not require that the

notice of non-renewal actually come ninety days before the end of
the employee's term. 7

On the contrary, so long as the notice o£

non-renewal is given prior to the end of the employee's term, the
employee is entitled to ninety days of employment from the date of
the notice and not, as Kramer contends, automatic renewal for a
full year of employment. 8
Accordingly, I conclude that Kramer has already received any
benefit to which he was entitled under his contract.

Defendants

7

Kram~r's contract states that notice of non-renewal must be
given at least two months before the expiration of the existing
contract.
Stephens Decl. Ex. 2, at 2. As noted, ·however,
Kramer's contract is immediately amended by changes to the SOU
employment policies.
Id.
Kramer's contract was signed on
January 15, 2005.
Id. at 1. The 2005 employment policy
describing notice of non-renewal was approved on September 17,
2005, and would have effectively amended the ter~s of Kramer's
employment on that date.
Moore Decl. Ex. 20, at 1.
8

This interpretation is consistent with the findings of the
SOU Grievance Committee, which considered Kramer's grievance·
under the terms of the 2005 policy, qS opposed to the June 13
amendment.
Stephens Decl. ~x. 9, at 3-4.
26- ORDER

are entitled to summary judgment on this claim.

!·

Statutory Wage and Hour Violations

Kramer's sixth claim for relief alleges that SOU failed to
pay all wages earned and unpaid at the time of his discharge as
required by Oregon's wage collection statutes, ORS 652.140 et seq.
Specifically, Kramer contends that the SOU Grievance Committee
award constituted wages or compensation earned and unpaid.
ORS 652.150 provides that "if an employer willfully fails to
pay any wages or compensation of any employee whose employment
ceases .

then, as a penalty for the nonpayment, the wages or

compensation of the employee shall continue from the due date
thereof at the same hourly rate for eight hours per day until paid
or until action therefor is commenced."

Compensation under ORS

652.140 et seq. refers to a claim for remuneration for services
previously rendered.

Perri v. Certified Languages Int'l, LLC, 187

Or. App. 76, 88-91 (2003),
Commercial Interiors,

overruled on other grounds by, Cejas

Inc. v. Torres-Lizama, 260 Or. App. 87

(2013); Javansalehi v. BF & Assocs.,
2012 WL 1566184, at *4

Inc., No. 3:10-CV-850-PK,

(D. Or. May 2, 2012).

Payments made to

satisfy contractual obligations, but not for services actually
rendered, are not subject to Oregon's wage collection statutes.
Bruce v. S.M. Motor Co.,

Inc.,

81 Or. App. 227, 229-230

Jones v. Northwest Telemarketing,

(1986);

Inc., No. 99-990-JO, 2000 WL

568352, at *3 (D. Or. Apr. 7, 2001).
In this case, it is undisputed that Kramer did no work for

27- ORDER

SOU after June 25, 2012.

The pay and benefits awarded by the SOU

Grievance Committee are not, therefore, wages or compensation for
services actually performed.

Rather, the SOU Grievance Committee

award was a payment made pursuant tb contractual obligations.
Such awards are not subject to Oregon's wage collection statute.
Defendants are entitled to summary judgment on this claim.
II. Kramer's Motion for Partial Sununary Judgment

Kramer moves for partial summary judgment on Defendants'
second, fourth,

sixth, eighth, fifteenth, and seventeenth

affirmative defenses.

At oral argument, Defendants conceded and

withdrew the fifteenth and seventeenth affirmative defenses.

I

accept those concessions.
Defendants' second affirmative defense asserts that the
Amended Complaint fails to state a claim for which relief can be
granted. This motion is moot as to all claims disposed of in this
Order.

As to all remaining claims, this motion is denied.

Defendants' sixth affirmative defense is for breach of
Kramer's duty of loyalty.

Although Kramer argues that public

employees do not owe a duty of loyalty, Oregon courts have
concluded that every employee owes his or her employer a duty of
loyalty.
(1983).

Garvin v. Timber Cutters, Inc., 61 Or. App. 497, 502
Kramer's argument that breach of a duty of loyalty is not

a recognized affirmative defense is also unavailing.
v. Berkheimers, Inc., 48 Or. App. 901,

903-07

(1980)

See Taylor
(discussing

the implications of an affirmative defense of breach of duty of

28- ORDER

loyalty).

As to Kramer's factual arguments,

I conclude that

genuine issues of material fact remain as to this defense and I
decline to grant summary judgment.

Similarly, I conclude that

there are genuine issues of material fact with regard to
Defendant's affirmative defenses of estoppel and unclean hands.
III. Defendants' Motion for Leave to File an Amended Answer

Defendants move for leave t'o file an Amended Answer.

Kramer

opposes only one of the proposed changes, which would incorporate
an eighteenth affirmative defense to Kramer's common-law claim for
blacklisting.

Because I have granted summary judgment on Kramer's

blacklisting claim, Defendants' motion for leave to amend is MOOT
with respect to the eighteenth affirmative defense.

Because

Kramer does not oppose any of the other proposed amendments,
Defendants' motion is GRANTED with respect to those amendments.
Conclusion

Defendants' Motion for Partial Summary Judgment(#87)

is

GRANTED in part.

Plaintiff's Motion for Partial Summary Judgment

(#91)

Defendants' Motion for Leave to File an Amended

is DENIED.

Answer (#84)

is GRANTED in part.

IT IS ·SO ORDERED.
DATED this

/

day of December, 2014.

OWEN M. PANNER
U.S. DISTRICT JUDGE

29- ORDER