United States Court of Appeals
For the First Circuit
No. 07-2501
EDWIN OTERO-BURGOS, NIEVELYN MARRERO-PEÑA,
CONJUGAL PARTNERSHIP OTERO-MARRERO,
Plaintiffs, Appellants,
v.
INTER AMERICAN UNIVERSITY, IRENE FERNÁNDEZ-APONTE,
JUAN NEGRÓN-BERRÍOS, A-Z INSURANCE COMPANIES,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Lynch, Chief Judge,
Lipez and Howard, Circuit Judges.
Charles S. Hey-Maestre, with whom Manuel Moraza-Choisne,
Adalina de Jesús Morales, and Manuel Moraza-Ortiz were on brief,
for appellants.
Seth A. Tucker, John E. Bies, and M. Ryan Calo on brief for
American Association of University Professors, amicus curiae.
Raul S. Mariani-Franco and Guillermo J. Ramos Luiña on brief
for Asociación de Profesores y Profesoras del Recinto Universitario
de Mayagüez (APRUM) and the Former President of Inter American
University, Ramón A. Cruz, Ph.D., amici curiae.
Amancio Arias-Guardiola for appellees.
Arturo Díaz Angueira, Lillian T. De La Cruz-Torres, Roberto
Feliberti, and Victoria D. Pierce-King on brief for Ana G. Méndez
University System, amicus curiae.
February 19, 2009
LIPEZ, Circuit Judge. This case requires us to decide
whether Puerto Rico Law 80, which provides a severance pay remedy
for an employee "contracted without a fixed term, who is discharged
from his/her employment without just cause," applies to a
university professor who claims to have been terminated in
violation of his tenure contract. Appellee Inter American
University ("IAU" or "the University"), a private educational
institution, argues that the tenure contract at issue here is a
contract "without a fixed term," and is subject to Law 80 and its
exclusive severance pay remedy. Appellants Professor Edwin Otero-
Burgos and his wife, Nievelyn Marrero-Peña, contend that the tenure
contract does have a fixed term. Therefore, Law 80 does not apply
and does not bar their claim for breach of contract.
The appellants filed suit against IAU and several
University officials, alleging, inter alia, breach of contract and
employment discrimination.1 After initially denying appellees'
motion for summary judgment on the breach of contract claim, the
district court granted their request to reconsider the matter and
issued an Amended Partial Judgment which set aside its earlier
ruling and dismissed the claim with prejudice on the basis of Law
80. For the reasons set forth below, we vacate the district
court's order dismissing Otero-Burgos's breach of contract claim.
1
Because Marrero-Peña's claims are derivative of her
husband's, we will refer solely to Otero-Burgos as the
plaintiff/appellant.
-2-
I.
A. Factual Background
Although we are not ruling on the merits of Otero-
Burgos's claim, we provide the background to this dispute for
context. At the time of his termination in 2003, Otero-Burgos had
worked at IAU for nearly three decades, most of them in the
Business Department. He was first employed by the University in an
administrative capacity in 1974. Over a period of twenty years, he
occupied various teaching and administrative positions, until he
was awarded tenure effective August 1, 1994. As a professor,
Otero-Burgos consistently enjoyed positive evaluations from
students and faculty alike, and he received numerous awards and
honors for his contributions to the University, including the award
of "Distinguished Professor" in 1996.2
In the fall of 1999, Otero-Burgos taught a course on
business theory at the Barranquitas campus of IAU. One student
enrolled in the class, Gilberto Berríos-Blanco, received a "D" as
his final grade for the semester. Unhappy with this result, the
student met with Otero-Burgos and asked for an opportunity to
improve his grade. The professor denied this request.
2
According to section 2.3.3 of the IAU Faculty Handbook, this
title is "usually assigned to faculty members who have rendered
outstanding and widely recognized service at the University or at
another institution of higher education and have served with
distinction in other areas of society." These individuals must
"clearly indicate an ability to contribute significantly to the
academic progress of the University." Id.
-3-
On March 28, 2000, the student filed a complaint with the
Dean of Academic Affairs,3 Juan A. Negrón-Berríos, accusing Otero-
Burgos of a number of unfair grading practices and alleging other
irregularities in the way the course had been taught and
administered. The student's chief complaint was that Otero-Burgos
had inappropriately changed the course syllabus mid-semester by
eliminating one of the previously scheduled exams and instead
giving more weight to the students' grades on a group project.
Berríos-Blanco argued that he had been unfairly prejudiced in two
ways: first, because he did not participate in the group project,
which turned out to have unexpected significance for his grade in
the course, and second, because the cancellation of the exam
deprived him of an opportunity to improve his performance.
On April 5, 2000, Otero-Burgos discussed the situation
with Negrón-Berríos. After this meeting, Otero-Burgos wrote a
detailed letter to Negrón-Berríos, rebutting the aggrieved
student's allegations of impropriety and unfairness and setting
forth his own position on the matter. The dean rejected the
professor's explanations and instead sent Otero-Burgos written
instructions to devise a supplemental exam or project that would
enable the student to make up the missing points. When Otero-
Burgos once again refused, Negrón-Berríos referred the matter to
3
The Faculty Handbook and the parties use the terms "Dean of
Studies" and "Dean of Academic Affairs" interchangeably. For
consistency, we will use the latter.
-4-
María H. Ramos, Director of the Department of Business
Administration, the department to which Otero-Burgos belonged.
Professor Ramos, in turn, involved IAU's attorney,
Vladimir Román. After her consultation with the attorney, Ramos
sent Otero-Burgos a letter offering him two options. Otero-Burgos
could either prepare a supplemental "evaluation instrument" which
would allow the student to earn the missing points, or the
department would appoint another professor to prepare a similar
instrument. Otero-Burgos refused to devise the supplemental
evaluation. On the advice of IAU's attorney, Negrón-Berríos
selected another professor to design and administer a supplemental
evaluation. The student's grade was subsequently changed to a "C"
at the direction of Negrón-Berríos and appellee Irene Fernández-
Aponte, chancellor of IAU's Barranquitas campus.
On May 29, 2000, Otero-Burgos filed a complaint with the
Faculty Appeals Committee4 for the academic year 1999-2000,
4
The Faculty Handbook Provides:
At each instructional unit the Committee on Faculty
Appeals consists of five (5) members. Two (2) are
appointed by the chief executive officer, two (2) by the
faculty of the instructional unit and the fifth (5th) is
chosen by these four (4) from among the faculty members.
Once constituted, the Committee elects its president.
Members selected cannot belong concurrently to another
committee related to contractual procedures for teaching
personnel. One term of appointment or election is for two
(2) years. . . . The Committee hears appeals after all
resources in the administrative process have been
exhausted. Appeals include the violations to the rights
and prerogatives recognized in this Handbook, as set
-5-
claiming that the University administration had violated his
academic freedom.5 The professor's letter recounted the relevant
events and included both a general exposition of the teaching
methodology he had employed in the business theory course and a
specific defense of his actions in connection with the student
complaint. Because the academic year was at an end, the Committee
deferred consideration of the matter to the 2000-2001 Faculty
Appeals Committee.6
During the fall of 2000, the Faculty Appeals Committee
held a series of "extraordinary meetings" to consider Otero-
Burgos's grievance. Both Ramos and Negrón-Berríos spoke to the
Committee, which ultimately concluded, in a 3-1 opinion dated May
4, 2001, that the "imposition of the suggested alternatives made by
the Legal Division and put into practice by these [sic] would pose
forth in Part IV, section Grievance Procedure.
IAU Faculty Handbook, § 1.9.2.5.
5
The rules governing the Committee's consideration of such
complaints are set forth in section 4.2 of the IAU Faculty
Handbook, entitled "Grievance Procedure."
6
Otero-Burgos was a member of the Faculty Appeals Committee
for both the 1999-2000 and 2000-2001 academic years. This prompted
Hilda Ortiz, President of the 1999-2000 Faculty Appeals Committee,
to write a letter to the other members, instructing them that
Otero-Burgos should not be permitted to intervene in the evaluation
of his own complaint. Otero-Burgos did not vote on his claim, and
the University's allegations -- disputed by Otero-Burgos -- that
his participation in the Committee's business was improper are
irrelevant for present purposes.
-6-
a violation to Prof. Edwin Otero Burgos' right to academic freedom
to lecture and teach."
On June 15, 2001, Chancellor Fernández-Aponte wrote a
letter to the Faculty Appeals Committee, stating that she
considered Otero-Burgos's academic freedom claim to be meritless.
She added, "I understand that the claim of a violation to his
academic freedom does not proceed. I hope this matter is
considered a finished matter."7
Upon learning of the chancellor's letter, Otero-Burgos,
invoking section 4.2 of the Faculty Handbook, responded by
appealing to IAU President Manuel J. Fernós, in a letter dated
November 8, 2001. Otero-Burgos once again accused IAU of violating
his right to academic freedom under the Handbook and described
several ways in which the chancellor's intervention was
inappropriate in light of the grievance procedure set forth in the
Handbook. Finally, the professor requested several specific
"remedies" in connection with his grievance, including the
reinstatement of Berríos-Blanco's original "D" grade, a letter
7
Under the Grievance Procedure outlined in the Faculty
Handbook, the aggrieved faculty member and the Dean of Academic
Affairs each have fifteen days in which to appeal a decision of the
Faculty Appeals Committee to the chief executive officer of the
relevant campus (here, Chancellor Fernández-Aponte). See Handbook
§§ 4.2, 1.8.3.1. "The chief executive officer of the unit may
uphold or modify the decision of the Faculty Appeals Committee or
make the decision that, according to his judgment, is appropriate.
. . . This decision may only be revised by the President of the
University." Id. at § 4.2.
-7-
ratifying the decision of the Faculty Appeals Committee, a warning
letter to Dean Negrón-Berríos for his alleged "defamation" of
Otero-Burgos, and a warning letter to Chancellor Fernández-Aponte
for her failure to follow the procedures in the Faculty Handbook.
In response, Fernández-Aponte wrote her own December 5, 2001 letter
to President Fernós, rebutting these charges and asking him to take
the necessary "relevant action."8
Meanwhile, in a separate proceeding pursuant to section
5.9.9 of the Handbook, Dean Negrón-Berríos selected three
professors who would comprise an Ad Hoc Committee charged with
reviewing the performance of the Faculty Appeals Committee and,
more generally, the performance of Professor Otero-Burgos.9
Chancellor Fernández-Aponte sent a letter to Otero-Burgos,
8
In fact, Fernós took no action until months later - after
Otero-Burgos had already been terminated as a result of the
proceeding initiated by the Ad Hoc Committee. See infra.
9
This section provides:
When there are sufficient reasons to suspect that a
faculty member has incurred in [sic] any of the behaviors
specified above or if, on the other hand, there are
reasons that may justify dismissal or the imposition of
disciplinary sanctions, the academic officer with highest
rank under the chief executive officer of the academic
unit will appoint an ad hoc inquiry committee that will
include faculty and administrative representatives who
will conduct the investigation and advise him. If the
committee finds adequate cause for dismissal or the
imposition of other disciplinary measures, the committee
will prepare a written statement of reasons for dismissal
that, in its judgment, justify dismissal or the
imposition of any other disciplinary sanction.
-8-
notifying him that an Ad Hoc Committee had been appointed to
commence an investigation because "it ha[d] been determined, in a
preliminary manner, that [Otero-Burgos's] action probably
constituted a violation" of numerous provisions of the Handbook.
After an inquiry that lasted several months, the Ad Hoc
Committee issued its Final Report in June 2002. The Committee
found, inter alia, that Otero-Burgos had been insubordinate;
violated faculty rules, institutional policies, or operational
norms of the University; violated the rights of his faculty
colleagues, the administration, and his students; and breached the
contract between the University and a student. Citing these
infractions (most of which constitute "just cause" for the
dismissal of tenured faculty under the Handbook), the Ad Hoc
Committee recommended the "permanent and definite" termination of
Otero-Burgos's contract with IAU.10
10
Section 5.9.9 of the Faculty Manual provides, in relevant
part:
Dismissal is the severance action by which Inter American
University ends its contractual relationship with a
tenured faculty member, or a faculty member with a
probationary, temporary, or substitute appointment,
before the expiration of his contract.
The cause that justifies dismissal must be directly and
substantially related to the fitness of the faculty
member to continue in his professional capacity as
teacher. Dismissal proceedings may be instituted for any
action that affects the proper and normal operation of
the University. Although not limited to these, the
following actions may be considered as affecting the
proper and normal operation of the University . . . .
-9-
On August 16, 2002, in a letter from Dean Negrón-Berríos,
IAU formally notified Otero-Burgos that his employment had been
terminated. The letter informed the professor that, in accordance
with section 5.9.9 of the Handbook, his termination was primarily
due to "Inappropriate conduct" and "Non-compliance or violation of
the Faculty Regulations, the Institutional Policies or the
Operational Norms of the Institution."11
On August 30, 2002, in a meeting with Dean
Negrón-Berríos, Otero-Burgos continued to insist that he had not
violated IAU's rules and regulations and therefore that he was
unjustly dismissed. Unable to persuade the dean, Otero-Burgos
appealed his dismissal to the Faculty Appeals Committee for
2002-2003, which was now comprised of five entirely different
members than the 2001-2002 Committee that had reviewed his first
grievance.12 The new Committee held hearings on the matter in
The manual proceeds to list eight grounds for dismissal.
11
Days later, in a letter dated August 27, 2002 (more than
nine months after Otero-Burgos had originally contacted him), IAU
President Fernós wrote a letter informing appellant's counsel of
his decision to sustain the chancellor's decision on Otero-Burgos's
earlier grievance. Fernós had determined that "Otero-Burgos's
academic freedom ha[d] not been violated."
12
Pursuant to section 5.9.9 of the Handbook, if a faculty
member is dismissed or subjected to any other disciplinary action,
he may petition the Faculty Appeals Committee in writing,
requesting review of the decision and setting forth the reasons for
which the adverse action against him must be revoked. The
Committee "may decide that the disciplinary action be sustained,
that it be modified, or that it be dropped."
-10-
October 2002, once again following the procedure outlined in
section 4.2 of the Handbook. After completing its investigation,
the Faculty Appeals Committee issued a written decision stating
that, because the Committee "did not find a cause to justify a
termination," it had concluded that "Professor Edwin Otero-Burgos
must be reinstated in his position as [a] member of the faculty of
the Barranquitas Campus with his respective salary and vested
benefits he had as of August 17, 2002."
On February 23, 2003, Chancellor Fernández-Aponte again
overruled the Committee and sustained Otero-Burgos's dismissal.13
Finally, in response to another appeal from Otero-Burgos, IAU
President Fernós ratified the professor's termination. After his
dismissal, Otero-Burgos moved to Ohio, where he had found a new
job. Therefore, diversity is the basis for our jurisdiction.
B. Procedural History
Otero-Burgos first brought suit in June 2004, alleging
breach of contract and age discrimination by IAU. The breach of
contract claim, based on various provisions of the Puerto Rico
Civil Code, sought both damages and specific performance - i.e.,
reinstatement. Otero-Burgos brought his age discrimination claim
under Puerto Rico Law 100, P.R. Laws Ann. tit. 29, § 146,
13
Section 5.9.9 of the Faculty Handbook provides that "[t]he
chief executive officer of the unit may sustain the decision of the
Committee on Faculty Appeals or modify it by taking the decision he
may deem appropriate."
-11-
accompanied by two derivative tort claims under Puerto Rico Civil
Code §§ 1802 and 1803.
Defendants filed a motion for summary judgment on all
counts. After initially denying summary judgment on the breach of
contract claim and dismissing the age discrimination claim, the
court agreed to reconsider its ruling on the contract claim in
response to a motion filed by IAU. In its second opinion, the
court adopted an argument that IAU had advanced for the first time
in its motion for reconsideration: that Otero-Burgos's exclusive
remedy for unjust dismissal was the severance pay provided by
Puerto Rico Law 80.14 Accordingly, the court held that Otero-
Burgos's contract claim was precluded,15 and ordered him to file an
amended complaint framing the allegations of unjust dismissal as a
Law 80 claim. Otero-Burgos initially refused to dismiss the breach
of contract claim. Eventually, however, he filed a Third Amended
Complaint that contained a Law 80 count but omitted the breach of
contract allegations. Pursuant to an agreement between the parties
anticipating this appeal, the district court entered final judgment
14
Law 80, P.R. Laws Ann. tit. 29, §§ 185a-185m, discussed in
greater detail infra, provides compensation for covered employees
who have been dismissed without "just cause" within the meaning of
the statute. The amount an employee may recover is determined by
a formula set forth in the statute.
15
The district court also reinstated the age discrimination
claim but dismissed causes of action for unjust discharge against
the individual defendants, holding that Law 80 did not allow for
such liability.
-12-
dismissing Otero-Burgos's age discrimination and tort claims with
prejudice and the Law 80 claim without prejudice. This appeal
followed.
II.
Otero-Burgos challenges the district court's holding that
Law 80 severance pay is his exclusive remedy for wrongful
termination, regardless of the terms of his contract with the
University. He argues that the district court improperly relied on
cases involving non-tenured, private sector employees and ignored
the special nature of the employment relationship described in his
contract. Instead, citing the terms of his tenure contract, he
asserts that he "is not in the same position [as] an employee of a
supermarket, a bank, or a fast-food restaurant" for the purposes of
Law 80. He claims that Law 80, in the absence of an employment
contract, allows an employer to buy with severance payments the
right to dismiss an employee for any reason. However, where an
employer "voluntarily agrees to confer remedies and rights to its
employees," there is a "contract by which it is bound [and] the
employer cannot ignore its consequences." Appellant claims that,
in this case, IAU voluntarily bound itself to provide the
additional remedies explicitly or implicitly contained in the
Faculty Handbook. Otero-Burgos relies heavily on a decision of the
Puerto Rico Supreme Court, Selosse v. Fundación Educativa Ana G.
Méndez, 22 P.R. Offic. Trans. 498 (1988), which he claims
-13-
establishes the availability of a breach of contract action for a
professor terminated in violation of an employment contract.16
Appellees counter that IAU, a private employer, did not
hire Otero-Burgos for a "fixed term," and therefore that Law 80 is
his exclusive remedy. They insist that to treat Otero-Burgos,
despite his tenured status, differently than other private sector
employees would belie the plain meaning of the statute. For the
purposes of Law 80, a tenured professor is in the same position as
any other employee "who has successfully completed a probationary
employment contract" because "[t]he professor's continued
employment would be contingent upon his/her continued satisfactory
performance and compliance with the employer's rules and
regulations." Finally, they argue that Selosse is inapplicable
here because Selosse involved the denial of tenure, not the
termination of a tenured professor.
We review de novo the district court's determination that
Law 80 barred Otero-Burgos's breach of contract claim. Montfort-
Rodríguez v. Rey-Hernández, 504 F.3d 221, 224 (1st Cir. 2007). In
reviewing this legal conclusion, we must ask whether Law 80 even
applies to Otero-Burgos's tenure contract. To answer this
16
Appellant's brief also argues that the University violated
Otero-Burgos's right to "academic freedom." However, this claim
goes to the merits of a potential breach of contract claim, not to
the threshold question of its availability, which is the only issue
before us.
-14-
question, we begin by examining the statute and the tenure
contract.
A. Law 80
Law 80 imposes a monetary penalty on employers who
dismiss employees without just cause. Hoyos v. Telecorp Commc'ns,
Inc., 488 F.3d 1, 6 (1st Cir. 2007). In this way, Law 80 modifies
the concept of at-will employment, Hernandez Barreto v. ITT World
Directories, Inc., 62 F. Supp. 2d 387, 394 (1999), which
traditionally permits the employment relationship to be severed at
any time, and for any reason, see Black's Law Dictionary 566 (8th
ed. 2004). Because the doctrine of employment at will dictates
that "an employee without a contract for a fixed term [may] be
hired or fired for any reason or no reason at all," it follows that
"employees categorized as 'at will' [have] no legal interest in
continuing job security." Mark A. Rothstein et al., Employment Law
§ 1.4, at 9-10 (1994) (emphasis added). For this reason, a
terminated at-will employee is typically not entitled to
compensation.
Law 80 changes this situation for those employees to whom
it applies. By its terms, Law 80 offers relief for "[e]very
employee in commerce, industry, or any other business or work place
. . . in which he/she works for compensation of any kind,
contracted without a fixed term, who is discharged from his/her
employment without just cause." P.R. Laws Ann. tit. 29, § 185a.
-15-
"A discharge made by mere whim or fancy of the employer or without
cause related to the proper and normal operation of the
establishment shall not be considered as a discharge for [just]
cause." Id. at § 185b. In such cases, the law requires the
employer to pay the discharged employee a form of severance pay
known as a "mesada," which is calculated using a formula provided
by the statute. Id. at § 185a.17 If an employee is terminated for
a reason that constitutes "just cause" under the statute, the
employer will not be liable under Law 80. See P.R. Laws. Ann. tit.
29, §§ 185a, b.
Puerto Rico courts have held that, for covered employees,
Law 80 is the exclusive remedy for unjust dismissal unless another
law specifically applies by its terms. See, e.g., Hernandez
Barreto, 62 F. Supp. 2d at 394 ("[T]he only remedy available to an
17
The discharged employee is entitled to:
(a) The salary corresponding to two (2) months, as
indemnity, if discharged within the first five (5) years
of service; the salary corresponding to three (3) months
if discharged after five (5) years and up to fifteen (15)
years of service; the salary corresponding to six (6)
months if discharged after (15) years of service.
(b) An additional progressive compensation equal to one
(1) week for each year of service, if discharged within
the first five (5) years of service; to two (2) weeks for
each year of service, if discharged after five (5) years
and up to fifteen (15) years of service; to three (3)
weeks for each year of service if discharged after
fifteen (15) years of service.
Id.
-16-
employee hired for an indefinite period of time for termination
without just cause and absent discriminatory motive, is the relief
provided for in Act 80."); Biver v. Cooperativa Federal de
Empleados Telefónicos, 145 P.R. Dec. 165, 168 (1998); Velez
Rodriguez v. Pueblo Internacional, 135 P.R. Dec. 500, 1994
P.R.-Eng. 909,576 (1994)18. See also Vargas v. Royal Bank of
Canada, 604 F. Supp. 1036, 1040 (D.P.R. 1985). In contrast, "the
remedy available to an employee hired for a fixed term or for the
performance of a particular work [and therefore not within Law 80's
reach] . . . , when he is dismissed from his employment before the
expiration of the contract and in contravention of the terms of the
same, is a damage action for breach of contract." Nazario v. Velez
& Asociados, 145 P.R. Dec. 508, 1998 P.R.-Eng. 313060 (1998).
Thus, the applicability of Law 80 turns on whether the
individual has "contracted without a fixed term" within the meaning
of the statute. "Instead of culling selected words from a
statute's text and inspecting them in an antiseptic laboratory
setting, a court engaged in the task of statutory interpretation
must examine the statute as a whole, giving due weight to design,
structure, and purpose as well as to aggregate language."
O'Connell v. Shalala, 79 F.3d 170, 176 (1st Cir. 1996). This is
18
The official translations of many of the Puerto Rico cases
cited herein do not contain internal page numbers. Accordingly, we
cannot include pin-point citation references for those cases.
-17-
the approach that Puerto Rico's highest court has taken when
interpreting Law 80 specifically:
Each legislative action has a purpose. It
aims to right a wrong, change an existing
situation, complement already-enacted
regulations, promote a specific good or the
general well-being [of the population],
recognize or protect a right, create public
policy, or formulate a plan of government.
There must always be a reason for a law to
exist, and situations that do not fit within
that reason should not be considered included
within its scope, even though they might
appear to be so from the letter of the law.
Secretario del Trabajo v. G.P. Indus., Inc., 2001 TSPR 4, 2001 WL
58005, at *6 (2001) (translation ours).
The Puerto Rico Legislature conceived of Law 80 as a
remedial measure that would provide employees with a baseline level
of economic protection from the consequences of arbitrary
dismissals. The legislation's Statement of Motives "asserts the
right of Puerto Rican workers to more effective protection of their
employment through a law which 'affords more just remedies
commensurate with the damages caused by an unjustified discharge
and at the same time discourages the incidence of this sort of
discharge.'" Rodriguez v. E. Air Lines, Inc., 816 F.2d 24, 27 (1st
Cir. 1987).
In 1979, less than three years after Law 80 was enacted,
the Puerto Rico Department of Labor and Human Resources published
a document entitled "Guías Para la Aplicación y Interpretación de
la Ley 80" - Guidelines for the Application and Interpretation of
-18-
Law 80 ("Guidelines"). This publication was revised and reissued
in 2005, and has been treated by numerous courts, including ours,
as informative. See, e.g., Hosp. Cristo Redentor, Inc. v. NLRB,
488 F.3d 513, 524 (1st Cir. 2007) (citing Guidelines for the
proposition that Law 80 was not meant to interfere with the NLRA);
Quiñones Irizarry v. TLD de P.R., 217 F. Supp. 2d 194, 198 (D.P.R.
2002) (using Guidelines to support its holding that changes in
technology or design in the employer's products or services may
constitute just cause for dismissal).19
The Introduction to the 2005 edition of the Guidelines
emphasizes that Law 80's principal objective was to discourage
wrongful terminations by requiring mandatory severance payments for
such dismissals. The Guidelines note that until 1930,20 "an
employee contracted without a fixed term lacked any protection in
the law, under which the employer could fire him on a whim" without
incurring any liability. Accord Vargas, 604 F. Supp. at 1039 (Law
80 sought to "strike a balance between the freedom of choice
inherent to an employer and the social need to do away with
19
See also I.T.T. W. Hemisphere Directories, 8 P.R. Offic.
Trans. 564 (citing earlier version of Guidelines); Coca-Cola
Bottling Co. of P.R., Inc. v. Unión de Tronquistas, 109 D.P.R. 834,
1980 WL 138534, 9 P.R. Offic. Trans. 1123 (P.R. 1980) (same).
20
On April 28, 1930, the Puerto Rico Legislature passed Law
43, the first in a series of legislative initiatives that preceded
- and were later replaced by - Law 80. Law 43 allowed an unjustly
terminated employee to recover compensation equivalent to the
salary he would have received in a week, fifteen days, or a month,
depending on the frequency with which he was paid. Id.
-19-
arbitrary terminations of employment"). Finally, the Guidelines
also discuss the relationship between Law 80 and collective
bargaining, stating that, although Law 80 represents a minimum
remedy for wrongful termination, the parties have the power to
contract for any remedy above and beyond Law 80's protections.21
The Puerto Rico Supreme Court has also discussed the
purposes of Law 80, opining that Law 80's statement of purposes as
well as its legislative history reflect the legislature's interest
in "discouraging unjust discharges." Velez Rodriguez, 1994
P.R.-Eng. 909,576. Specifically, that court has quoted a joint
report of the Senate Standing Committees on Labor and Civil Rights,
issued just before Law 80's passage, as evidence that one of the
legislation's primary purposes was "to give more protection to
workmen whenever they confront a situation of dismissal." I.T.T.
W. Hemisphere Directories, Inc., 8 P.R. Offic. Trans. 564 (internal
quotations marks and citation omitted). This legislative history
suggests that Law 80 was meant to apply to - and most importantly,
to provide a remedy for – those employees who would otherwise be
unprotected against the whim of their employers.
21
To further guard against the effects of the inequality of
bargaining power between employer and employee, and to prevent the
latter from being mistreated, the Puerto Rico legislature
specifically provided that an employee may not waive his rights
under Law 80. See 29 P. R. Laws Ann. tit. 29, § 185i.
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B. The Tenure Contract
The parties agree that IAU's Faculty Handbook sets forth
the terms of Otero-Burgos's tenure contract. It provides that "a
tenured appointment is normally for the rest of the appointee's
working years or until resignation, except in cases of bona fide
institutional financial stress, program changes, or termination,
according to the provisions in this handbook." Handbook § 5.3.5.
Absent adequate cause for termination (such as "prolonged mental or
physical incapacity") or "changes in educational programs that make
his service unnecessary," the conferral of tenure at IAU
"guarantee[s] the continuation of [the professor's] full-time
employment" until he resigns or retires. § 5.8. Section 5.9.9 of
the Handbook defines "dismissal" as "the severance action by which
Inter American University ends its contractual relationship with a
tenured faculty member. . . before the expiration of his contract"
(emphasis added).
In 1940, a joint statement issued by the American
Association of University Professors (amicus curiae AAUP), and what
is now the Association of American Colleges and Universities,
described the nature and aims of tenure in a formulation that has
since been endorsed by numerous courts22 and universities, including
22
See, e.g., Hulen v. Yates, 322 F.3d 1229, 1239 (10th Cir.
2003); Browzin v. Catholic Univ. of America, 527 F.2d 843, 847 n.8
(D.C. Cir. 1975).
-21-
IAU.23 See 1940 Statement of Principles on Academic Freedom and
Tenure with 1970 Interpretive Comments, in AAUP Policy Documents
and Reports 3-11 (10th ed. 2006), available at
http://www.aaup.org/AAUP/pubres/policydocs/contents/1940statement
.htm. It notes that tenure is intended to foster academic freedom
and to offer the kind of "economic security" that would make the
profession attractive to "men and women of ability." Id. at 3.
Indeed, the IAU Handbook itself expresses this idea almost
verbatim, stating that tenure contributes to the University's
ability to fulfill its obligations to its students and to society
by offering "economic security" and "professional satisfaction" to
"men and women of ability and learning." § 5.8.2.24
23
See, e.g., Handbook at § 4.1 (incorporating portions of the
1940 Statement into its discussion of academic freedom).
24
The AAUP Statement defines tenure more specifically as
"permanent or continuous" employment after "the expiration of a
probationary period," which should be terminated "only for adequate
cause, except in the case of retirement for age, or under
extraordinary circumstances because of financial exigencies." Id.
at 4. Appellants and amici similarly characterize tenure as a
promise of job "permanence." Courts have also stated that the type
of tenure contract at issue here provides "permanent or continuous"
employment. See, e.g., Collins v. Parsons Coll., 203 N.W.2d 594,
598 (Iowa 1973) (concluding that a tenured professor who was
terminable only for just cause "had an agreement for a permanent
position," and thus that his case was not governed by "decisions
involving indefinite agreements"). Before this court, Otero-Burgos
and amici argue that we should conceive of tenure as a type of
"permanent" employment, and therefore as employment with a "fixed
term" that is not subject to Law 80. However, we need not address
the issue of whether all tenured positions are outside the scope of
Law 80, since we conclude infra that the specific language of the
contract between Otero-Burgos and the University demonstrates that
he was not employed "without a fixed term."
-22-
III.
We have established that the tenure contract between
Otero-Burgos and IAU is not remotely the at-will employment
arrangement to which Law 80 is addressed. The question we must
answer now is whether, despite this fact, Otero-Burgos should still
be considered as employed "without a fixed term" within the meaning
of the statute as appellees assert. P.R. Laws Ann. tit. 29, § 185a
(emphasis added).25 Otero-Burgos argues that his tenure contract
should be considered to last for "the professional lifetime of a
professor," and that such a term places his employment relationship
with the University beyond Law 80's reach. In response, IAU argues
that because the tenure contract provides for termination in
certain enumerated circumstances (such as financial exigency or
gross misconduct), Otero-Burgos is still hired for an "indefinite"
period of time, and hence is an employee "without a fixed term"
under Law 80.
There is a clear difference between a worker whose
employment is not subject to a specific temporal limitation, but
who may be fired for any reason, and Otero-Burgos, who, under the
terms of his tenure contract, presumptively retains his job until
retirement, absent the occurrence of specific events described in
the tenure contract. A tenured appointment at IAU "is normally for
25
The original Spanish for "contracted without a fixed term"
is "contratado sin tiempo determinado."
-23-
the rest of the appointee's working years or until resignation."
Handbook § 5.3.5. Otero-Burgos is "guaranteed the continuation of
full-time employment" until he either chooses to retire or is
properly dismissed for cause in accordance with the terms of his
contract. Examining these contractual provisions in light of Law
80's legislative history, we conclude that Otero-Burgos is not an
employee hired "without a fixed term" within the meaning of Law
80.26 Indeed, a legal regime that did not grant Otero-Burgos any
remedies beyond those provided by Law 80 would render the concept
of tenure embodied in the Handbook meaningless. See McConnell v.
Howard Univ., 818 F.2d 58, 67 (D.C. Cir. 1987) (refusing to
interpret a tenured professor's employment contract in a way that
would "render[] tenure a virtual nullity").
As Otero-Burgos observes, tenure as described in the
Handbook is inherently incompatible with allowing a university to
simply "buy" the right to dismiss a tenured instructor for Law 80's
modest severance payment. Indeed, that approach would mean that
despite his tenured status, Otero-Burgos would, as a matter of law,
have only the remedy he would be entitled to if he were an at-will
employee serving at the university's pleasure. See Rodriguez, 816
F.2d at 28 ("Law 80 apparently was passed with the hope that
26
See also Norfolk S. Ry. Co. v. Harris, 59 S.E. 2d 110, 114
(Va. 1950) (finding that presumption of at-will employment did not
apply because contract providing that employment would continue
"until the plaintiff gave to the defendant just cause to end it"
represented a fixed term contract).
-24-
increasing the penalty would discourage unjustified discharges, but
an employer willing to pay the price is free to discharge whomever
he or she pleases."). Such an approach would ignore what we have
described as the "substantial commitment" that universities make to
their tenured faculty, and that IAU made to Otero-Burgos by
granting him tenure. Lovelace v. Se. Mass. Univ., 793 F.2d 419,
422 (1st Cir. 1986). Amicus AAUP warns persuasively that affirming
the district court's decision would "subvert the time-honored
consensus as to the nature of tenure, undoing a careful balance
between the respective interests of professors and universities,"
effectively "convert[ing] tenured professors into at-will employees
. . . to the detriment of society and, indeed, of institutions of
higher education."
Puerto Rico courts have recognized the importance of
tenure and the uniqueness of the employment relationship between a
university and a tenured faculty member. In Selosse, a professor
who had been denied tenure sued her former employer, a private
university, for breach of the employment contract. 22 P.R. Offic.
Trans. at 513. The Supreme Court of Puerto Rico explained that
"the rules and regulations governing the rights and obligations of
faculty members are part of the contract" between a university and
its faculty. 22 P.R. Offic. Trans. at 513-14. The court further
invoked Puerto Rico Civil Code article 1044 (P.R. Laws Ann. tit.
31, § 2994), which provides that "[o]bligations arising from
-25-
contracts have legal force between the contracting parties, and
must be fulfilled in accordance with their stipulations," stating
that courts were empowered to enforce these obligations. Id. at
514. After affirming a finding that the university had not
complied with its own regulations in conducting Selosse's tenure
evaluation, the court concluded that she had been denied tenure in
a manner that "violated the spirit of the contractual procedure."
Id. Thus, Selosse was entitled to lost wages, reinstatement, and
"[a] new, objective evaluation" that would comport with the
procedures set forth in the employment contract. Id. at 517-18.
While they do not dispute the premise that the Faculty
Handbook was part of the employment contract between IAU and Otero-
Burgos, appellees argue that Selosse is inapposite. They contend
that Selosse concerned a denial of tenure, not a claim for wrongful
dismissal, and that only the latter falls within the ambit of Law
80, which precludes a breach-of-contract claim like Selosse's. In
effect, appellees' argument, taken together with the holding of
Selosse, contemplates a particular moment in time -- ironically,
the granting of tenure -- when the tenure contract would cease to
be enforceable. This argument has the counterintuitive effect of
affording more rights to professors before they achieve tenure than
after.
The Puerto Rico Supreme Court has, in fact, addressed the
merits of a tenured professor's claim for breach of contract
-26-
stemming from an allegedly unjustified dismissal. See Mercado
Rivera v. Catholic Univ. of P.R., 143 P.R. Dec. 610, 1997 P.R.-Eng.
878,471 (1997). While the court in Mercado Rivera held that the
university had not breached its contract with the professor, the
opinion reaches the merits of the claim, discussing at length the
binding nature of the faculty manual, a freely negotiated contract.
The opinion does not mention Law 80.
Indeed, in a decision that appellees characterize as
"implying that Law 80 squarely applies in private higher education
institutions [sic] settings [such as IAU]," the Puerto Rico Supreme
Court itself focused on the special features of the tenure
relationship in a case involving a public university. See
Universidad de P.R. v. Asociación Puertorriqueña de Profesores
Universitarios, 136 P.R. Dec. 335 (1994).27 In ruling that
university professors were "managerial employees," and therefore
not covered by the Labor Relations of Puerto Rico Act, the court
was categorical in distinguishing the status of tenured faculty
from that of other employees, declaring that "it does not make
judicial sense to pretend to put on the same level the professors
with the office clerks, the maintenance workers and the security
guards of the institution who scarcely exert any discretion in the
direction of the [university]." Id. The court mentioned tenure as
27
At oral argument, counsel for the University referred to
this untranslated case. At the panel's request, appellees
submitted a certified translation.
-27-
one of several factors "that distinguish the condition of the
[university] professors from the workers of a private corporation,
like the ones traditionally considered by the labor relations
laws." Id. (emphasis added). The court observed that, under Law
80, "private employers may terminate an employee without previous
determination of fair cause without any other responsibility" than
paying the statutory severance. In contrast, because of tenure,
"[n]obody can terminate a regular professor unilaterally," giving
him "continuance and job security."
IAU interprets these passages as drawing a distinction
between Law 80's applicability at public and private universities.
However, we read the opinion as contrasting the singular
relationship between a university and its tenured faculty, such as
the one between Otero-Burgos and IAU, with the status of employees
at a typical for-profit business enterprise. This precedent, though
marshaled by IAU, actually supports appellant's position.28
The IAU Faculty Handbook confirms that the University
itself understands tenure as a "substantial commitment," and, more
generally, that it affords the concept of tenure its traditional
28
Cf. McConnell, 818 F.2d at 64 n.7 ("Contracts are written,
and are to be read, by reference to the norms of conduct and
expectations founded upon them. This is especially true of
contracts in and among a community of scholars, which is what a
university is. The readings of the market place are not invariably
apt in this non-commercial context." (citation omitted)).
-28-
meaning. Section 5.8 of the Handbook provides that a tenured
professor is
guaranteed the continuation of his full-time
appointment, unless there is proof of adequate
cause for termination of his services, such as
prolonged mental or physical incapacity, or of
changes in educational programs that make his
service unnecessary, or that the ranked
faculty member resigns or retires.
See also Handbook § 5.3.5 ("[A] tenured appointment is normally for
the rest of the appointee's working years or until resignation,
except in cases of bona fide institutional financial stress,
program changes, or termination, according to the provisions in
this handbook.").
Elaborating on the functions served by tenure, the
Handbook asserts that the common good, which the University is
intended to serve, depends largely upon the "free search for truth
and its free exposition," and that "[t]enure is one means of
insuring such freedom to the faculty members of the Institution."
Id. at § 5.8.2. The Handbook continues:
To serve the common good effectively, the role
of a faculty member at the University must be
sufficiently attractive to appeal to men and
women of ability and learning. This, in part,
is achieved through the economic security and
the professional satisfaction felt by the
faculty member who is offered tenure. Thus,
tenure contributes effectively to the success
of the University in fulfilling its
obligations to its students and to the society
that it serves. In addition, it protects
faculty members against undue pressures, from
both inside and outside the academic
-29-
community; it safeguards academic freedom,
which is essential to the institution.
Id. Contrary to the provisions of the Handbook, Otero-Burgos's
tenure contract simply could not fulfill its function of
safeguarding academic freedom and providing economic security if
the severance payment were the only consequence faced by the
university for firing him in violation of that contract.
IV.
We summarize our conclusions. Appellees do not dispute
-- nor could they -- plaintiff's assertion that the Faculty
Handbook constitutes a binding contract between IAU and its
faculty. The Puerto Rico Legislature did not intend to write a
"remedial" statute that, while purporting to provide relief for at-
will employees lacking any other legal recourse, would limit the
remedies of a tenured professor where, as here, his contract
"guaranteed the continuation" of his full-time employment for the
"rest of his working years." This is not an employment contract
"without a fixed term," and hence it is not subject to Law 80.
Indeed, to rule otherwise and apply Law 80 in this case would
fundamentally undermine not only the institution of tenure as
envisioned by the Handbook, but also the conceptual basis of Law 80
itself.29
29
Although this decision is grounded in our conclusion that
Law 80 does not apply to Otero-Burgos based on the terms of his
tenure contract, we note that several cases suggest that even if
Law 80 did apply, it would not necessarily limit Otero-Burgos's
-30-
Accordingly, Otero-Burgos's breach of contract claim
should not have been dismissed. He is entitled to the opportunity
to prove his claim that the University dismissed him in violation
of the terms of his tenure contract. If he establishes that he was
fired without "adequate cause" within the meaning of the tenure
contract, he will be eligible for the panoply of generally
available contract remedies. His breach of contract claim should
go forward.
Vacated and remanded for further proceedings consistent
with this opinion. Costs to appellant.
contractual remedies. These cases arise primarily in the
collective bargaining context. See, e.g., Santoni Roig v. Iberia
Líneas Aéreas de Espana, 688 F. Supp. 810, 817 (D.P.R. 1988);
Challenger Carribean Corp. v. Union General de Trabajadores de P.
R., 903 F.2d 857, 869 (1st Cir. 1990). There is even a recent case
from Puerto Rico's intermediate appellate court that suggests that
Law 80 would not limit the contractual rights of individuals
employed without a definite term. See Díaz Laboy v. Asociación de
Empleados del Estado Libre Asociado de P.R., Case No. KPE2001-0997,
2005 WL 2917486 (P.R. Cir. 2005) (certified translation provided by
the parties). Nevertheless, given our conclusion that Law 80 does
not apply to the tenure contract of Otero-Burgos, we need not
explore this line of cases.
-31-