McKey v. August

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

SUSAN DILLARD MCKEY CIVIL ACTION

VERSUS NO. 16-13642-WBV-MBN

ROBERTA ZENO AUGUST, ET AL. SECTION: D (5)

ORDER AND REASONS

Before the Court is a Motion For Summary Judgement to Dismiss Plaintiff’s

Breach of Contract Claim, filed by Roberto Zeno August and the St. John the Baptist

Parish Library Board (collectively, “Defendants”).1 Susan Dillard McKey opposes the

Motion,2 and Defendants have filed a Reply.3 After careful consideration of the

parties’ memoranda and the applicable law, the Motion is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND4

This case involves a civil rights lawsuit filed by Susan Dillard McKey, a former

employee of the St. John the Baptist Parish Library (the “Library”), who alleges

reverse racial discrimination and deprivation of continued family health insurance

coverage without due process of law.5 In her original Complaint, McKey asserts three

causes of action: (1) a claim under 42 U.S.C. § 1981(a) against August, in her

individual capacity, for hostile work environment and for discriminatory demotion

1 R. Doc. 146.

2 R. Doc. 154.

3 R. Doc. 171.

4 In the interest of judicial economy, and because the factual background of this case was extensively

detailed in the Court’s prior Orders (R. Docs. 40 & 63), the Court will limit its recitation of the

factual and procedural background to matters relevant to the instant Motion

5 See, R. Docs. 1 & 44.

and termination; (2) a claim for “breach of contract and denial of due process” against

the Library Board; and (3) a claim for false arrest/imprisonment against St. John the

Baptist Sheriff’s Office.6 McKey’s claim against the Sheriff’s Office was subsequently

dismissed by the Court on October 3, 2006.7 Thereafter, McKey amended her

Complaint to allege facts regarding her purported property interest in the retirement

benefits set forth in the Library Board’s Policies and Procedural Manual (the “Policy

Manual”) and to allege a breach of contract claim against August and the Library

Board based upon the divesture of her “vested rights” in the continued health

insurance benefits set forth in the Policy Manual, a claim that McKey had previously

abandoned.8

On January 7, 2020, Defendants filed the instant Motion, seeking summary

judgment regarding McKey’s breach of contract claims.9 Defendants assert that they

are entitled to dismissal because McKey did not have an employment contract with

either August or the Library Board and, even if she had an employment contract with

the Library Board, Defendants did not breach it based on the clear and unambiguous

terms of the Policy Manual.10 Defendants assert that at all material times, McKey’s

6 R. Doc. 1 at ¶¶ 54-77.

7 R. Doc. 23.

8 R. Doc. 44. This Court previously recognized the abandonment of these claims in its July 6, 2017

Order and Reasons. R. Doc. 63 at pp. 2-3 (“In her amended complaint, McKey made allegations against

Ms. August, in addition to the Library Board, for the denial of a right to continuing health insurance

benefits; she also asserted a claim against both defendants for violations of Louisiana state contracts

law (a claim she had previously abandoned).”) McKey acknowledges in her Opposition brief that the

state law breach of contract claims were previously abandoned. R. Doc. 154 at p. 11 (“she also asserted

a claim against both defendants for violations of Louisiana state contracts law (a claim she had

previously abandoned).”).

9 R. Doc. 146.

10 Id. at ¶ 14.

employment with the Library was at-will. Defendants claim that the source of

McKey’s claim for continuing family health insurance derives from the Policy Manual

which, at the time of her termination in 2015, provided the following:

6. The Library participates in the health, dental and life insurance

program offered by the Parish Government for all regular full time

employees and their dependents.

7. The Insurance benefit is paid at a rate of 100% by the Library for

regular full time employees and for retired employees who qualify for

retirement under the Parochial Employees Retirement System.

8. The retiring employee must notify the Administrative Librarian six

(6) weeks before the anticipated date of retirement if he/she elects to

retain the insurance offered by the Library.11

Defendants argue that the Policy Manual did not create an employment contract with

McKey, and that it expressly disclaimed that it was an employment contract,

providing that:

Not a Contract: This manual is designed to acquaint the employee with

working for the St. John the Baptist Parish Library and to provide

information on our current employment practices. Neither this manual

nor any of the policies and practices included is intended as an

employment contract (express or implied) and accordingly should not be

considered as such. Nothing in this manual should be relied upon as a

guarantee for certain privileges, working conditions or continued

employment.12

Defendants assert that McKey acknowledged that she signed an Acknowledgment of

the Policy Manual, had access to the Policy Manual, and familiarized herself with the

applicable policies.13 Defendants argue that Louisiana courts consistently reject the

notion that employee handbooks and policy manuals form employment contracts,

11 R. Doc. 146-2 at pp. 3-4 (quoting R. Doc. 146-1 at p. 12).

12 R. Doc. 146-2 at p. 4 (quoting R. Doc. 146-1 at p. 9).

13 R. Doc. 146-2 at p. 4 (citations omitted).

especially where, as in this case, they expressly state that they are not employment

contracts and are merely informational statements of current employment policies.14

McKey argues that she had a contractual entitlement to her continuing health

care coverage as a result of the Library’s Board’s Policy Manual, and that her

property interest in retirement benefits, including continued health care coverage,

originates from Louisiana Constitution Article 10, § 29(B).15 According to that

provision, “[m]embership in any retirement system of the state or of a political

subdivision thereof shall be a contractual relationship between employee and

employer, and the state shall guarantee benefits payable to a member of a state

retirement system or retiree or to his lawful beneficiary upon his death.”16 McKey

argues that she met all of the eligibility criteria for the vesting of retirement benefits

through the Deferred Retirement Option Plan (“DROP”) and, as such, had an

entitlement to the promised benefit of continued health care coverage.17 As such,

McKey claims her interest in continuing health care coverage “is clearly a sufficient

property interest to invoke due process protections.”18 McKey then recounts how the

Court previously granted Defendants’ motion to dismiss her amended claim based on

her purported Fourteenth Amendment right to continued health insurance benefits,19

but later rescinded the Order and denied Defendants’ motion to dismiss, concluding

that McKey had stated a plausible § 1983 claim to continuing health insurance

14 Id. at pp. 2, 8-11.

15 R. Doc. 154 at pp. 6-7 (citing authority).

16 Id. (quoting LA. CONST. Art. 10, § 29(B)) (emphasis added by McKey).

17 R. Doc. 154 at p. 8 (citing Smith v. Bd. of Trustees of Louisiana Sch. Emp. Ret. Sys., 398 So.2d

1045 (La. 1981)).

18 R. Doc. 154 at p. 9.

19 R. Doc. 154 at pp. 11-12; See, R. Doc. 49.

benefits as a retired employee.20 McKey argues that the “law of the case” doctrine

applies here, and that the instant Motion should be denied because this Court already

rejected the same arguments raised by Defendants, namely, that McKey is not retired

because she was terminated.21 McKey contends that because there is evidence that

she enrolled in the DROP retirement plan on September 23, 2013, there are genuine

issues of fact as to whether she was “retired,” thus precluding summary judgment.22

McKey further asserts that her claim against August for continued health insurance

coverage should not be dismissed because she has alleged that August terminated

her health insurance benefits and, therefore, violated her constitutional rights.23

In response, Defendants assert that McKey completely misunderstands the

arguments raised in their Motion, which seeks dismissal of her state law breach of

contract claim.24 Defendants argue that whether McKey had a vested property

interest in continuing health insurance is a separate claim and analysis from her

state law contract claims. Defendants point out that McKey failed to address a single

issue briefed in their Motion, and that the Court should grant summary judgment on

that basis alone. Defendants argue that McKey has presented no law or evidence to

demonstrate that she had a valid employment contract with either August or the

Library Board through the Policy Manual, or that the Policy Manual grants her a

contractual right to continuing health insurance.25 Defendants maintain that

20 R. Doc. 154 at p. 12 (citing R. Doc. 63).

21 R. Doc. 154 at pp. 12-13 (citing authority).

22 R. Doc. 154 at p. 13.

23 R. Doc. 154 at pp. 13-14.

24 R. Doc. 171 at p. 1.

25 R. Doc. 171 at pp. 2-4.

McKey’s entitlement to continuing health insurance benefits starts and ends with the

Policy Manual, and that she is not entitled to those benefits as a matter of Louisiana

contract law.26

II. LEGAL STANDARD

Summary judgment is appropriate where there is no genuine disputed issue as

to any material fact, and the moving party is entitled to judgment as a matter of

law.27 When assessing whether a dispute regarding any material fact exists, the

Court considers “all of the evidence in the record but refrain[s] from making

credibility determinations or weighing the evidence.”28 While all reasonable

inferences must be drawn in favor of the nonmoving party, a party cannot defeat

summary judgment with conclusory allegations, unsubstantiated assertions or “only

a scintilla of evidence.”29 Instead, summary judgment is appropriate if a reasonable

jury could not return a verdict for the nonmoving party.30

If the dispositive issue is one on which the moving party will bear the burden

of proof at trial, the moving party “must come forward with evidence which would

entitle it to a directed verdict if the evidence went uncontroverted at trial.”31 The

nonmoving party can then defeat summary judgment by either submitting evidence

26 Id. at p. 6 (footnote omitted).

27 Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265

(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202

(1986).

28 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008)

(citations omitted).

29 Id. (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)) (internal quotation marks

omitted).

30 Delta & Pine Land Co., 530 F.3d at 399 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

31 International Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991).

sufficient to demonstrate the existence of a genuine dispute of material fact, or by

“showing that the moving party’s evidence is so sheer that it may not persuade the

reasonable fact-finder to return a verdict in favor of the moving party.”32 If, however,

the nonmoving party will bear the burden of proof at trial on the dispositive issue,

the moving party may satisfy its burden by merely pointing out that the evidence in

the record is insufficient with respect to an essential element of the nonmoving

party’s claim.33 The burden then shifts to the nonmoving party who must go beyond

the pleadings and, “by her own affidavits, or by the ‘depositions, answers to

interrogatories, and admissions on file,’ designate ‘specific facts showing that there

is a genuine issue for trial.’”34

III. ANALYSIS

Contrary to McKey’s assertions, the issue before the Court is not whether she

has sufficiently alleged a property interest in the continued health insurance

coverage set forth in the Library’s Policy Manual. In fact, that question is before the

Court in another motion currently pending before the Court.35 Instead, as

Defendants aptly point out in their Reply brief, the sole issue before the Court is

whether Defendants are entitled to judgment as a matter of law on McKey’s breach

of contract claims that are based upon a purported breach of the Policy Manual

provisions.

32 Id. at 1265.

33 See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

34 Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553 (quoting Fed. R. Civ. P. 56(e)).

35 See, R. Doc. 71; R. Doc. 71-1 at pp. 18-24.

In her original claim for “breach of contract and denial of due process” against

the Library Board, McKey alleged that, “At all times relevant hereto, the Plaintiff

had a valid and enforceable employment contract with the St. John the Baptist Parish

Library,” and that, “Per the terms of the Plaintiff’s employment contract, she was

eligible for retirement and had fully vested in her retirement benefits from St. John

the Baptist Parish.”36 In her First Amended Complaint, McKey amended her

Complaint to include the following allegation:

However, based on their arbitrary and unlawful interpretation of the

Policies and Procedures Manual, the Defendants attempted to divest the

Plaintiff’s vested rights in the continued health insurance benefits

which had been contractually promised to the Plaintiff and other

employees, dependents and retirees by the St. John the Baptist Library

Board. This action by the Defendants violated Louisiana state contracts

law, the Due Process Clause of the Fourteenth Amendment to the

United States Constitution and Article I, § 2 of the Louisiana

Constitution.37

The First Amended Complaint also adds a claim for $200,000 in uncovered medical

expenses based upon McKey’s loss of her health insurance benefits.38

At the outset, the Court notes that McKey does not allege that she was

employed by the Library for a fixed term, or that she had a written employment

contract. Instead, Plaintiff specifies in her Response to Defendant’s [sic] Statement

of Undisputed Material Facts in Support of Motion for Summary Judgment that, “At

all times relevant hereto, Plaintiff had a valid contact of employment with Defendant

Board as a matter of law as the Board promised Plaintiff health insurance benefits

36 R. Doc. 1 at ¶¶ 70 & 71.

37 R. Doc. 44 at p. 3.

38 Id. at pp. 3-4.

and Plaintiff accepted these benefits.”39 The evidence before the Court shows that

McKey testified during a deposition that she was an at-will employee of the Library.40

McKey, however, seems to allege that Defendants breached the Library’s Policy

Manual by discontinuing her family health insurance when she was terminated from

employment. As Defendants point out, however, courts applying Louisiana law have

consistently held that employee manuals and handbooks do not create contractual

rights, especially where, as here, the Policy Manual contains a disclaimer that it is

not a contract. In Wallace v. Shreve Memorial Library, the Fifth Circuit, applying

Louisiana law, rejected the plaintiff’s argument that the library’s employment

manual created a contract that provided that she would only be fired for cause.41

Relying on Louisiana jurisprudence, the Fifth Circuit held that Louisiana courts

“have found that employment manuals are not agreements between two parties.”42

The Fifth Circuit pointed out that Louisiana courts have distinguished manuals on

the basis that their policies were not a bargained for condition of employment, but

merely a unilateral expression of company policies and procedures.43 The Wallace

court concluded that the employment manual at issue was insufficient to create

contractual rights even though it did not contain a disclaimer stating that it was not

a contract.44 In doing so, the Fifth Circuit noted that, “If there were such a disclaimer,

39 R. Doc. 154-1 at ¶ 4 (citing Knecht v. Bd. of Trustees For State Colleges & Univs. And Northwestern

State Univ., 591 So.2d 690, 695 (La. 1991)).

40 R. Doc. 146-6 at p. 2.

41 79 F.3d 427, 430-31 (5th Cir. 1996).

42 Id. (citing Keller v. Sisters of Charity, 597 So.2d 1113, 1116 (La. App. 2 Cir. 1992); Thebner v. Xerox

Corp. 480 So.2d 454, 457 (La. App. 3 Cir. 1985)).

43 Wallace, 79 F.3d at 430 (quoting Leger v. Tyson Foods, Inc., 670 So.2d 397, 401-02 (La. App. 3 Cir.

1996)) (quotation marks omitted).

44 79 F.3d at 431.

our job of course would be easier. However, Louisiana courts have found employment

manuals not to be contracts even without disclaimers (and we have found no cases

where the absence of a disclaimer made the manual a contract).”45

Other courts applying Louisiana law have reached the same conclusion. The

Middle District of Louisiana has held that an arbitration clause contained in an

employee handbook did not constitute a contract under Louisiana law, recognizing

that, “Louisiana state courts have overwhelmingly rejected employment manuals as

the source of contractual obligations,” and that, “Federal courts have followed the

same rule.”46 In Adams v. Autozoners, Inc., another Section of this Court similarly

rejected an employee’s breach of contract claim based upon the violation of the terms

of an employee handbook.47 In doing so, this Court found “no Louisiana jurisprudence

holding that an employee manual creates a contract which can modify an at-will

employment relationship,” and that, “a number of state and federal cases applying

Louisiana law have concluded that employment manuals, policies, and grievance

procedures did not confer contractual rights upon employees, nor did they create any

exceptions to the employment at-will doctrine.”48 Louisiana appellate courts have

reached the same conclusion.49 Louisiana courts have also found that manuals are

merely a unilateral expression of company policies and procedures, and that any

45 Wallace, 79 F.3d at 431 (citing Keller, 597 So.2d at 1116).

46 Walker v. Air Liquide America Corp., 113 F. Supp. 2d 983, 985 (M.D. La. 2000).

47 Adams v. Autozoners, Inc., Civ. A. No. 98-2336, 1999 WL 744039, at *5-6 (E.D. La. Sept. 23, 1999).

48 Id., Civ. A. No. 98-2336, 1999 WL 744039 at *6 (citing Wallace, 79 F.3d at 430).

49 See, Square v. Hampton, 2013-1680 (La. App. 4 Cir. 6/4/14), 144 So.3d 88, 98-99 (citing Mix v. The

Univ. of New Orleans, 609 So.2d 958, 964 (La. App. 4 Cir. 1992); Leger v. Tyson Foods, Inc., 95-1055

(La. App. 3 Cir. 1/31/96), 670 So.2d 397, 401-02; Wall v. Tulane University, 499 So.2d 375, 375-76 (La.

App. 4 Cir. 1986).

benefits conferred by such manuals are merely gratuitous and not binding on the

employer.50 As noted by one Louisiana court, “The contention that a handbook

creates a contract between an otherwise ‘at will’ employee and his employer is neither

novel nor, in this jurisdiction, meritorious.”51

McKey does not address any of the foregoing authority in her Opposition brief,

nor does she address any of the arguments raised by Defendants in their Motion for

Summary Judgment. Similar to the plaintiffs in the cases cited above, McKey has

not offered any evidence that she bargained for the provisions in the Policy Manual

as a condition of her employment with the Library.52 As such, the Court finds that

the Policy Manual is merely a unilateral statement by the Library Board of its policies

and procedures and does not does confer contractual rights upon McKey.53 Moreover,

the Policy Manual contains an explicit disclaimer stating that it is not a contract:

Not a Contract: This manual is designed to acquaint the employee with

working for the St. John the Baptist Parish Library and to provide

information on our current employment practices. Neither this manual

nor any of the policies and practices included is intended as an

employment contract (express or implied) and accordingly should not be

considered as such. Nothing in this manual should be relied upon as a

50 Leger, 95-1055, 670 So.2d at 401-02; Wall v. Tulane Univ., 499 So.2d 375, 375-76 (La. App. 4 Cir.

1986).

51 Stanton v. Tulane Univ. of Louisiana, 2000-0403 (La. App. 4 Cir. 1/10/01), 777 So.2d 1242, 1250;

Square, 2013-1680, 144 So.3d at 98 (quoting Stanton, supra).

52 Wallace, 79 F.3d at 430 (citing Leger v. Tyson Foods, Inc., 670 So.2d 397, 401-02 (La. Ct. App. 1996)).

See, Adams v. Autozoners, Inc., Civ. A. No. 98-2336, 1999 WL 744039, at *6 (E.D. La. Sept. 23, 1999).

53 Wallace, 79 F.3d at 430 (quoting Leger v. Tyson Foods, Inc., 670 So.2d 397, 401-02 (La. Ct. App.

1996)) (quotation marks omitted).

guarantee for certain privileges, working conditions or continued

employment.®4

Based upon this disclaimer, the Court finds that any violations of the Policy Manual

cannot serve as the basis for McKey’s breach of contract claim.55 Accordingly,

Defendants are entitled to judgment as a matter of law on McKey’s breach of contract

claims.

IV. CONCLUSION

IT IS HEREBY ORDERED that the Motion For Summary Judgement to

Dismiss Plaintiffs Breach of Contract Claim®*is GRANTED. Susan Dillard McKey’s

breach of contract claims asserted against Roberta Zeno August and the St. John the

Baptist Parish Library Board are DISMISSED WITH PREJUDICE.

New Orleans, Louisiana, August 16, 2021.

WENDY B. ee

United States District Judge

54 R. Doc. 146-2 at p. 4 (quoting R. Doc. 146-1 at p. 9).

55 Smith v. Bd. of Supervisors for the Univ. of Loutstana Sys., Civ. A. No. 13-5505, 2015 WL 10663156,

at *9 (E.D. La. Dec. 11, 2015) (citing Oller v. Roussel, Civ. A. No. 11-02207, 2014 WL 1789655, at *1

(W.D. La. May 5, 2014)). See, Wallace v. Shreve Mem. Library, 79 F.3d 427, 431 (5th Cir. 1996) (“Tf

there were such a disclaimer, our job of course would be easier.”).

56 R, Doc. 146.