Sheila Schulz v. Green County, State of Wisconsin

The Honorable Richard L. Young, Chief Judge of the United å
States District Court for the Southern District of Indiana, sitting
by designation.
In the
United States Court of Appeals
For the Seventh Circuit
No. 10-2481
SHEILA SCHULZ,
Plaintiff-Appellant,
v.
GREEN COUNTY, STATE OF WISCONSIN,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 09 C 00298—William M. Conley, Chief Judge.
ARGUED APRIL 5, 2011—DECIDED JULY 20, 2011
Before EASTERBROOK, Chief Judge, and BAUER, Circuit
Judge, and YOUNG, District Judge.å
BAUER, Circuit Judge. Sheila Schulz alleges that Green
County deprived her of a property interest in her job

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2 No. 10-2481
without due process, in violation of 42 U.S.C. § 1983.
The district court granted summary judgment in favor
of Green County. We affirm.
I. BACKGROUND
Pursuant to Chapters 48 and 938 of the Wisconsin
statutes, Green County must employ at least one juvenile-
intake worker who provides statutorily defined services
related to juveniles. Because of its small size, Green
County has the option to provide these services through
the circuit court, the Human Services Department, or both.
From 1997 to 2008, Schulz served as Green County’s
chief juvenile-intake worker. Her position was “court-
attached,” meaning that it was under the supervision
and control of the Green County Circuit Court. Her
duties included supervising the work of part-time
workers, and she was paid $26.99 per hour.
In December 2008, the Green County Board of Supervi-
sors passed a resolution eliminating the court-attached
juvenile-intake position (effective January 1, 2009) and
created a “social worker I/II” position within the County’s
Human Services Department. In other words, the Board
removed the juvenile-intake position from the auspices
of the circuit court and created a new juvenile-intake
position within the Human Services Department. The
Board did so in order to save costs—in the form of less
overtime, fewer part-time juvenile-intake workers, and
fewer on-call employees—and to ensure that a juvenile-
intake worker was available twenty-four hours a day,
as required by statute.

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No. 10-2481 3
Although the Board was not required to make the
juvenile-intake position part of a collective bargaining
unit, it chose to make the social worker I/II position part
of FSCME Local 1162-A. Under the bargaining agree-
ment between this union and Green County, “[a]ll unit
vacancies shall be posted within five (5) working days
after the Employer determines that a vacancy exists
which it intends to fill,” and it shall remain posted for
five working days. In accordance with this agreement,
the County posted the vacancy of the social worker I/II
position for five days, starting on December 10, 2008.
After no union employees applied for the new position,
Green County’s Corporation Counsel sent Schulz an
application and encouraged her to apply. Schulz applied,
and the County immediately offered her the position.
While this new position required the performance of
many of the same duties, it no longer required Schulz
to supervise others. Therefore, when Schulz’s court-
attached juvenile-intake position expired on January 1,
2009, she immediately started working in her new
position with the Human Services Department, at a loss
of seniority and a lower hourly rate of $19.28.
II. ANALYSIS
The district court granted summary judgment in favor
of Green County because it eliminated Schulz’s court-
attached position in connection with a legitimate gov-
ernmental reorganization. We review the grant of sum-
mary judgment de novo, considering the evidence in a
light most favorable to Schulz. Gunville v. Walker, 583
F.3d 979, 985 (7th Cir. 2009).

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4 No. 10-2481
We ordinarily begin our analysis by determining whether the 1
plaintiff had a protected property interest in her job. See, e.g.,
Lalvani v. Cook County, 269 F.3d 785, 791 (7th Cir. 2001). Because
Green County concedes that she did, we need not address
this issue.
See, e.g., Upshaw v. Metropolitan Nashville Airport Authority, 2
207 Fed. Appx. 516, 519 (6th Cir. 2006); Theis v. Denver Board of
Water Commissioners, 149 F.3d 1191 (10th Cir. 1998); Bleser v.
Loble, 86 F.3d 1161 (9th Cir. 1996); Duffy v. Sarault, 892 F.2d 139
(1st Cir. 1989); Misek, 783 F.2d at 100-01; Dane County
v. McCartney, N.W. 2d 830 (App. Ct. 1992). See also Hartman
v. City of Providence, 636 F. Supp. 1395 (D.R.I. 1986) (collecting
cases).
As a general rule, a government employee who may
be discharged only for cause has a constitutionally pro-
tected property interest in her position and may not
be removed from it without due process. Gilbert v.1
Homar, 520 U.S. 924, 928 (1997). When a government
eliminates an employee’s position in connection with a
“legitimate governmental reorganization,” however, the
employee is not entitled to notice or a hearing. Misek v.
City of Chicago, 783 F.2d 98, 100-01 (7th Cir. 1986). This
has been called the reorganization “exception,” but it2
is more aptly described as the reorganization “rule.”
We prefer this term because an employee has a constitu-
tionally protected property interest in a given position—not
in her employment or a particular wage—and once the
government abolishes the position, the employee has
nothing in which she can claim an entitlement. A reorgani-
zation thus does not “exempt” a government from con-

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No. 10-2481 5
stitutional due process requirements; it simply eliminates
the employee’s property interest. See Mandel v. Allen,
889 F. Supp. 857, 866 (E.D. Va. 1995) (citing Misek, 783
F.2d at 100-01).
The reorganization rule reflects the difference be-
tween legislative and adjudicative decisions. For ex-
ample, welfare recipients have property rights in their
benefits, but only in the sense that they may have legi-
timate claims of entitlement to whatever benefits
the legislature creates. If Congress changes the rules,
there is no right to notice and a hearing because there is
no property right in the structure of the program. See
Bowen v. Gilliard, 483 U.S. 587 (1987); Atkins v. Parker,
472 U.S. 115 (1985); Mandel, 889 F. Supp. at 866 (citing
Goldsmith v. Baltimore, 845 F.2d 61, 65 (4th Cir. 1988));
Hartman v. City of Providence, 636 F. Supp. 1395, 1410 (D.R.I.
1986) (stating that “[t]his distinction . . . preserves to
government the right flexibility to address systemic
needs while preserving to the employee meaningful
protection against job actions directed specifically
against him or her) (collecting cases). Similarly, a
Medicare patient in a nursing home has a legitimate claim
of entitlement (and thus a property right) in continuing
care, but not in a substandard home. If the Medicare
program cuts off the entire nursing home, individual
patients do not get separate hearings. See O’Bannon v.
Town Court Nursing Center, 447 U.S. 773 (1980).
A governmental reorganization, however, does not
always avoid the need for due process. When a purport-
edly legislative decision affects one person (or a small
number of people, as in Misek), it is possible that the

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6 No. 10-2481
Our cases uses the terms “pretext” and “sham” interchange- 3
ably. See, e.g., Misek, 783 F.2d at 100-01; Dudas v. Snider, 1990 U.S.
App. LEXIS 20978 (7th Cir. 1998); Doe v. Cook County, 2010 U.S.
Dist. LEXIS 63153 (N.D. Ill 2010). For clarity, we will only use
the term “pretext.”
effect of the reorganization on a single person is the
object of the exercise rather than the byproduct. See West
v. Grand County, 967 F.2d 362, 367-68 (10th Cir. 1992)
(discussing the effect of a large number of plaintiffs).
In those cases, it is possible to ask whether the reorgani-
zation was pretextual, designed to harm a specific em-
ployee rather than in spite of her or with indifference to
its effects on her. See e.g., Misek, 783 F.2d at 100-01. We3
have previously referred to this as “challenging the
legitimacy of the reorganization.” See e.g., Campana v.
City of Greenfield, 38 Fed. Appx. 339, 341 (7th Cir. 2002);
Gunville, 583 F.3d at 989; Cromley v. Board of Education,
17 F.3d 1059, 1068 (7th Cir. 1994). We note, however, that
in this context the term “legitimacy” derives only from
the longer phrase “legitimate governmental reorganiza-
tion” and does not suggest that an employee may argue
that the legislative decision to reorganize was not in
compliance with federal regulation.
In this case, Schulz argues that her juvenile-intake
position was not “abolished in fact” because the court-
attached juvenile-intake position is very similar to the
new social worker I/II position. Citing Misek and other
similar cases, Schulz contends that the similarity be-
tween the two positions entitled her to due process.
Giving Schulz the benefit of the doubt, it appears that

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No. 10-2481 7
she is arguing that the County’s reorganization was
a pretext for removing her from the court-attached
juvenile-intake position. We disagree.
Although Schulz would have us focus on the simi-
larities between the court-attached and social worker I/II
positions, this focus is misplaced. The relevant ques-
tion is whether the governmental reorganization was a
pretext for harming Schulz; in this respect the
similarities between the old and new positions may be
relevant, but it is not controlling. See e.g., Misek, 783 F.2d at
100-01; West v. Grand County, 976 F.2d 362, 368 (10th Cir.
1992) (relying on Misek); Felde v. Town of Brookfield, 570
F. Supp. 2d 1070, 1074-75 (E.D. Wis. 2008); Campana v.
City of Greenfield, 164 F. Supp. 2d 1078, 1092-94 (E.D. Wis.
2001). Here, the evidence before us indicates that the
County reorganized to save costs, not to rid itself of
Schulz; had the County reorganized merely to terminate
Schulz’s employment, its decision to rehire Schulz for
the social worker I/II position would be inexplicable.
Because nothing in the record suggests that saving
money was a pretext for something else, we affirm the
district court’s holding that the County eliminated
Schulz’s court-attached juvenile-intake position in con-
junction with a legitimate governmental reorganization
and that Schulz was thus not entitled to due process.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of
the district court.
7-20-11

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