
USCA1 Opinion

	




          January 21, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-1611                                  GLENN A. CUMMINGS,                                Plaintiff, Appellant,                                          v.                      SOUTH PORTLAND HOUSING AUTHORITY, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                     [Hon. D. Brock Hornby, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                              Torruella, Circuit Judge,                                         _____________                            Brown,* Senior Circuit Judge,                                    ____________________                              and Stahl, Circuit Judge.                                         _____________                                _____________________               John J. Finn for appellant.               ____________               Terry  A. Fralich, with whom Peter J. DeTroy III and Norman,               _________________            ___________________     _______          Hanson & DeTroy, were on brief for appellees.          _______________                                 ____________________                                 ____________________                                        ____________________          *  Of the Fifth Circuit, sitting by designation.                    TORRUELLA,  Circuit  Judge.   Appellant  Glenn Cummings                                ______________          brought suit  against appellee  South Portland  Housing Authority          ("SPHA") for:  (1) the unconstitutional deprivation of a property          interest in  continued employment  pursuant to  42 U.S.C.    1983          ("  1983"); (2) breach of contract; (3) intentional  interference          with  prospective  employment; and  (4)  negligent infliction  of          emotional distress.   The  district court adopted  a magistrate's          recommendation that appellant lacked a constitutionally protected          property  interest  in  continued employment,  and  thus  granted          summary judgment for the SPHA on the   1983 claim.   The district          court  also   dismissed  the  three  state   law  claims  because          supplemental  jurisdiction  was   inappropriate  once  the  court          dismissed the only federal  claim.  The judgment dismissed  the            1983  claim  with  prejudice  and the  state  law  claims without          prejudice.  Because we find that appellant had a constitutionally          protected  property  interest  in his  continued  employment,  we          reverse and remand  the case  to the district  court for  further          proceedings.                                      BACKGROUND                                      BACKGROUND                                      __________                    The SPHA  is a  municipal authority authorized  under a          state  enabling statute.  See Maine  Housing Authorities Act, Me.                                    ___          Rev. Stat. Ann.  tit. 30,   4701  (West 1991).  Appellant  worked          for the SPHA as a  department head in charge of maintenance.   On          May 30, 1988, when the SPHA hired appellant, it informed him that          he would have  to serve  a probationary period  during which  the          SPHA could  fire him  at any  time.   The  SPHA further  informed          appellant that  after the probationary  period he would  become a          permanent employee,  and that  the SPHA's personnel  policy would          govern his employment.                    Sometime during  appellant's first year  of employment,          he  gave the executive director  of the SPHA  an undated, written          letter of resignation, and told  him to use it if he  ever failed          to  fulfill his responsibilities at the  SPHA.  On July 13, 1990,          well after the probationary  period ended, the executive director          presented  appellant with this letter, stating that they had come          to a "parting of  ways."  Appellant then requested  a termination          hearing, and the SPHA rejected that request.                                      DISCUSSION                                      DISCUSSION                                      __________          I.  Section 1983 claim          I.  Section 1983 claim                    The central issue  on appeal is whether appellant had a          constitutionally protected  property  interest in  his  continued          employment.    A public  employee has  such  an interest  when he          reasonably expects that his employment will continue.  Perkins v.                                                                 _______          Board of  Directors, 686 F.2d  49, 51  (1st Cir. 1982).   An  "at          ___________________          will"  employment contract creates  no reasonable  expectation of          continued employment, while an employment agreement that  permits          termination only "for cause" does create that expectation.  Id.                                                                      __                    Whether an employment contract permits dismissal solely          "for cause" is a  matter of state law.   Id. at 52.   In general,                                                   __          under Maine law, "a contract of employment for an indefinite time          is terminable  at the  will of  either party."   Libby v.  Calais                                                           _____     ______          Regional  Hospital,  554 A.2d  1181, 1182  (Me. 1989).   However,          __________________          parties  may restrict  the  employer's ability  to terminate  the                                         -3-          employment contract  to occasions when "cause"  exists by clearly          and expressly stating that intention.  Id.  That intention can be                                                 __          expressed  in an employment  manual.  Id. at  1183.  However, the                                                __          manual must  use  clear  and express  language  to  restrict  the          employer's  ability to discharge employees.   Id.   Language in a                                                        __          manual  merely implying a "for cause" limitation will not bind an          employer.  Id.                       __                    There are two relevant sections in the employee manual.          Section 1(a) reads:                      Merit   System.      The  employment   of                      ______________                      personnel and all actions effecting (sic)                      employees shall be based solely on merit,                      ability (performance), and justice.          Section 7(b) reads:                      Dismissals.    An  employee who  provides                      __________                      unsatisfactory service or  who is  guilty                      of   substantial   (sic)   violation   of                      regulations shall be subject to dismissal                      without prior notice.  In such cases, the                      employee   shall  have  the  right  to  a                      hearing  before  the Executive  Director.                      The  employee may appeal  the decision of                      the  Executive  Director to  the existing                      Personnel Committee.                    Appellee argues that the SPHA manual does not provide a          clear  and specific  restriction  on termination  as required  by          Libby.   Appellee apparently takes  the position that  the manual          _____          would have to specifically use the words  "for cause" in order to          limit an  employer's ability to terminate  employees to occasions          where cause exists.   However,  Maine law does  not support  that          position.                      In Durepos v. Town of Van Buren, 516 A.2d 565, 566 (Me.                       _______    _________________                                         -4-          1986),  the Maine  Supreme Court stated  that "[t]he  phrase 'for          cause' . . .  refers to conduct affecting the ability and fitness          of  the employee to  perform his  duties."   Thus, language  in a          manual that permits dismissal based only on an employee's ability          to do his job constitutes a "for cause" limitation.                      Similarly,   in  Lovejoy  v.  Grant  and  Maine  School                                     _______      _________________________          Administrative District No. 37, 434 A.2d 45, 50 (1981), the Maine          ______________________________          Supreme  Court found that Maine law provides that "certain public          school teachers may  be discharged  only for cause."   The  court          based its  conclusion on a statute entitling  tenured teachers to          substantive and procedural protections from non-renewal  of their          contracts  and a  statute  permitting the  dismissal of  unfit or          unprofitable teachers.  Id.                                  __                    Against  the  backdrop  of these  precedents,  the SPHA          employment  manual  clearly  restricts   the  SPHA's  ability  to          terminate  employees.   It specifically  states that  all actions                                                                ___          affecting  employees   will  be  based  on   merit  and  ability.          Accordingly, the SPHA manual created a constitutionally protected          property interest in appellant's  continued employment.  Thus, we          reverse  the   district  court's   judgment  and  remand   for  a          determination of  whether appellant  received due process  in his          dismissal.          II.  State Law Claims          II.  State Law Claims                    Because appellant has stated a federal cause of action,          we reverse the dismissal of the state law  claims and remand them          to  the   district  court  to   determine  whether   supplemental                                         -5-          jurisdiction is appropriate.                    Reversed and remanded.                    _____________________                                         -6-
