In the
United States Court of Appeals
For the Seventh Circuit
No. 06-3183
G AIL K AY,
Plaintiff-Appellant,
v.
B OARD OF E DUCATION OF THE C ITY OF C HICAGO,
Defendant-Appellee.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 06 C 368—Charles R. Norgle, Judge.
A RGUED S EPTEMBER 18, 2008—D ECIDED O CTOBER 27, 2008
Before E ASTERBROOK, Chief Judge, and SYKES and
T INDER, Circuit Judges.
E ASTERBROOK , Chief Judge. After Gail Kay retired in
1994 from her position as a teacher at Walt Disney
Magnet School in Chicago, she filed a suit under 42 U.S.C.
§1983 accusing the Board of Education of violating the
Constitution by penalizing her on account of her speech
at a local school council. She contended that her retire-
ment had been involuntary and should be treated as a
constructive discharge. The litigation was settled and
2 No. 06-3183
dismissed in 1996. As part of the settlement the Board of
Education offered to rehire Kay for an available vacancy.
In 1997 a new principal arrived at Disney School and
invited Kay to rejoin the teaching staff, which she did.
According to her complaint, the Board’s general counsel
approved her posting—but from 1997 through 2004,
when Kay retired a second time, she received only the
retirement benefits that began in 1994. The Board insists
that the principal did not have a vacancy to offer Kay
and that the school system therefore did not have to pay
her a salary or contribute to her retirement account.
The normal remedy for a failure to abide by a settle-
ment of federal litigation is a suit on the settlement con-
tract. Such a claim arises under state law and must
proceed in state court unless the parties are of diverse
citizenship and the injury exceeds $75,000. See 28 U.S.C.
§1332; Kokkonen v. Guardian Life Insurance Co. of America,
511 U.S. 375 (1994). The normal remedy for failure to pay
due-and-owing wages arises under the state’s wage-
payment statute. The Illinois Wage Payment and Collec-
tion Act covers teachers in public schools, see 820 ILCS
115/1, and requires prompt payment of anyone
“permitted to work by an employer in an occupation”.
820 ILCS 115/2. Kay was “permitted to work” by the
Board of Education, whose central staff knew that she
expected compensation for her services.
Instead of filing suit in state court under the contract and
the statute, however, Kay returned to federal court. Her
lawyer supposed that any dispute about the settlement of
a federal suit must arise under federal law. The district
No. 06-3183 3
judge did not mention Kokkonen. Instead he dismissed the
suit spontaneously for what he termed “lack of venue.”
The judge stated that all teachers in Chicago’s public
schools are covered by a collective bargaining agreement
that contains an arbitration clause and that Kay there-
fore must present her demands to an arbitrator.
After the district judge dismissed Kay’s suit, we twice
held that federal judges must not invoke arbitration
agreements on their own motion. See CPL, Inc. v. Fragchem
Corp., 512 F.3d 389 (7th Cir. 2008); Automobile Mechanics
Pension Fund v. Vanguard Car Rental USA, Inc., 502 F.3d 740
(7th Cir. 2007). And there are other problems with the
district judge’s decision.
First, only the union and employer may use this col-
lective bargaining agreement’s arbitration clause. Kay
cannot arbitrate at her own behest.
Second, a settlement contract is distinct from the col-
lective bargaining agreement and not covered by its
arbitration clause, which deals with claims arising
under the CBA.
Third, an agreement between a union and an employer
cannot require individual workers’ civil-rights claims to
be arbitrated. See Alexander v. Gardner-Denver Co., 415 U.S.
36 (1974); Pryner v. Tractor Supply Co., 109 F.3d 354 (7th
Cir. 1997). Arbitration depends on the consent of the
worker whose rights are at issue. The Supreme Court may
revisit that subject in 14 Penn Plaza LLC v. Pyett, No. 07-581
(to be argued December 1, 2008). Unless the Court over-
rules Alexander, however, Kay is entitled to litigate any
4 No. 06-3183
claim that does not depend on the collective bargaining
agreement.
Fourth, if as the Board contends Kay was a volunteer
rather than an employee, then she is not a member of the
bargaining unit and cannot be required to arbitrate no
matter what happens in 14 Penn Plaza.
The district judge did not mention any of these problems.
As the judge acted sua sponte, the parties were unable to
provide their views and supply legal authorities. The
benefit of adversarial presentation is a major reason why
judges should respond to the parties’ arguments rather
than going off independently.
The order dismissing this suit in favor of arbitration
is erroneous for the reasons we have given. It does not
follow, however, that the suit should be reinstated. At
oral argument, we directed the parties to file supple-
mental memoranda discussing subject-matter jurisdic-
tion. Kay concedes that Kokkonen blocks her attempt to
enforce the contract in federal court. (The district court
did not incorporate the settlement into a judgment and
reserve authority to enforce that judgment.) Kay also
concedes that it is not possible to amend the complaint to
state a claim under the Fair Labor Standards Act, because
the FLSA does not cover teachers in public schools. 29
U.S.C. §213(a)(1). But she maintains that there is none-
theless subject-matter jurisdiction under 28 U.S.C. §§ 1331
and 1343 because the Board’s failure to pay for her
services amounts to “retaliation” for her assertion of
constitutional rights.
No. 06-3183 5
This is an argument that we have considered, and
rejected, before, because it is nothing but an effort to
avoid Kokkonen by a turn of phrase. “Failure to pay a
judgment or comply with an injunction entered by a
court or agency cannot usefully be called ‘retaliation for
filing the complaint’; nor is slow payment or even non-
payment a separate violation of federal law. See Evans
v. Chicago, 10 F.3d 474 (7th Cir. 1993) (en banc). It is just
a reason to enforce the judgment in supplemental pro-
ceedings.” McGuire v. Springfield, 280 F.3d 794, 797 (7th
Cir. 2002). “An employer’s action can be called ‘retaliation’
only if it makes the employee worse off on account of
the protected activity.” Ibid.
Did failure to pay Kay the wages to which she says
she is entitled since 1997 make her “worse off on account
of [a] protected activity”? The answer could be yes, if she
were arguing that her speech since her re-employment
has angered the Board, and that it is withholding her
pay in an effort to force her into line. That would be a
new violation of the Constitution, and it would be an
irrelevant detail that the claim for compensation rests on
a settlement contract as well as the state-law obligation to
pay for services rendered. But Kay does not argue that
she has engaged in new public speech that the Board of
Education is trying to stifle or penalize. (Any speech
within the bureaucracy, and related to her claim to be
paid, is outside the first amendment’s scope. See Garcetti v.
Ceballos, 547 U.S. 410 (2006).) Kay’s “retaliation” argument
rests on her pre-settlement speech. That claim was extin-
guished by the settlement and converted, as Kokkonen
holds, into a claim under a contract. There are post-settle-
6 No. 06-3183
ment acts by the Board that injured Kay—the Board hasn’t
paid what Kay says is her due—but failure to abide by
a settlement could not be treated as a fresh claim
under federal law without contradicting Kokkonen.
There remains the possibility that Kokkonen is inap-
plicable because the defendant is a public rather than a
private actor. But the Constitution does not require state
actors to keep their promises. It requires process before
any state may finally deprive a person of liberty or prop-
erty (including rights under a contract), but the opportu-
nity to litigate in state court supplies all the process that
is due for claims of breach. See, e.g., Taake v. Monroe
County, 530 F.3d 538 (7th Cir. 2008); Goros v. Cook County,
489 F.3d 857 (7th Cir. 2007); Mid-American Waste Systems,
Inc. v. Gary, 49 F.3d 286 (7th Cir. 1995). These decisions
hold that an attempt to enforce a contract substantively
against a state actor in federal court does not come
within federal subject-matter jurisdiction.
The courts of Illinois have jurisdiction to enforce both
the settlement contract and the Wage Payment and Col-
lection Act. The period of limitations for claims that rest on
a written contract is ten years. 735 ILCS 5/13-206. (Employ-
ees have five years for claims on oral agreements. 735
ILCS 5/13-205.) Because this suit is being dismissed for
jurisdictional reasons, and thus without prejudice to
refiling in state court, Illinois may well treat a state suit
as if it had been filed on the same day as the federal suit.
735 ILCS 5/13-217 (provided that the suit is refiled in
state court within one year after its dismissal in federal
court). That could bring all of Kay’s work within the ten-
No. 06-3183 7
year window. But this is a subject for the state court
to consider, if Kay files an action there.
The judgment of the district court is vacated, and the
case is remanded with instructions to dismiss for lack
of subject-matter jurisdiction.
10-27-08