Case Name: Kevin J. LAWSON, Plaintiff-Appellee, v. UMATILLA COUNTY, Umatilla County Board of Commissioners; William Hansell, Commissioner; Emile Holeman, Commissioner; Glenn Youngman; Bruce Kinsch, Defendants-Appellants
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1998-03-18
Citations: 139 F.3d 690
Docket Number: Nos. 96-36060, 97-35634
Parties: Kevin J. LAWSON, Plaintiff-Appellee, v. UMATILLA COUNTY, Umatilla County Board of Commissioners; William Hansell, Commissioner; Emile Holeman, Commissioner; Glenn Youngman; Bruce Kinsch, Defendants-Appellants.
Judges: Before: ALDISERT, PREGERSON and TROTT, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 139
Pages: 690–696

Head Matter:
Kevin J. LAWSON, Plaintiff-Appellee, v. UMATILLA COUNTY, Umatilla County Board of Commissioners; William Hansell, Commissioner; Emile Holeman, Commissioner; Glenn Youngman; Bruce Kinsch, Defendants-Appellants.
Nos. 96-36060, 97-35634.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Jan. 8, 1998.
Decided March 18, 1998.
Robert E. Franz, Jr., Springfield, Oregon, for the defendants-appellants.
Paul B. Meadowbrook, Salem, Oregon, for the plaintiff-appellee.
Before: ALDISERT, PREGERSON and TROTT, Circuit Judges.
Ruggero J. Aldisert, Senior Judge, United States Court of Appeals for the Third Circuit, sitting by designation.

Opinion:
ALDISERT, Circuit Judge:
This appeal by Umatilla County, Oregon from an adverse judgment in an action brought under 42 U.S.C. § 1983 by Kevin Lawson, a discharged County employee, requires us to decide if Lawson possessed a constitutionally-protected property interest that prevented the County from terminating him without providing the procedural due process guaranteed by the Fourteenth Amendment to the United States Constitution. We have jurisdiction under 28 U.S.C. § 1291, and we reverse.
I.
The County hired Lawson as coordinator of its Commission on Children and Families in February 1993. The Commission's main task was to apportion state grant money among providers of service to children and families in Umatilla County. At the time of his hire, Lawson was considered a probationary employee. After receiving a positive evaluation in 1993, Lawson became a permanent employee when his probationary period ended in January 1994. The Umatilla County Personnel Policies provided that permanent employees could be disciplined only for the causes set forth therein. However, the Personnel Policies also included the following disclaimer:
Under no circumstances shall these policies be construed to act as any type of employment contract with any employee of the County of Umatilla.
In addition, the County could deviate from the Policies upon written justification to avoid "practical difficulties or unnessary [sic] hardships."
On May 31, 1994, the County Commissioners discharged Lawson for unsatisfactory job performance. This decision was confirmed by a June 10, 1994 letter to Lawson's attorney, and upheld by the Commissioners after a July 11, 1994 hearing.
Lawson filed suit, and the district court determined that he had a constitutionally-protected property interest in his position. Thereafter, a jury found that at the time he was discharged he was not afforded appropriate due process protections and awarded him damages. After a subsequent hearing, the district court awarded Lawson attorney's fees. The County appeals both awards.
II.
The district court accepted Lawson's theory that he had a property right in his position which gave rise to a cause of action under 42 U.S.C. § 1983 against the County for deprivation of procedural due process, because he was allegedly discharged without' proper notice and an opportunity to be heard. It is important to emphasize that Lawson's claim was based not on a violation of state law, but on an averment that the County encroached upon his rights protected by the federal constitution. Under the fed eral constitution, at-will employees possess no protected property rights and therefore are not entitled to due process before being terminated. Portman v. County of Santa Clara, 995 F.2d 898, 904 (9th Cir.1993).
Lawson's argument begins with the premise that all county employees in Oregon are at-will, save those covered by two exceptions: (a) civil service laws and (b) county personnel policies creating a legitimate expectation of continued employment. Lawson claims that he was an employee shielded by the Umatilla County Personnel Policies, 'and that therefore he was not an at-will employee. From this he contends (1) that as a protected employee, as. distinguished from an at-will employee, he possessed a property right in his job, (2) that this right entitled him to federal due process procedures in his termination and (3) that his discharge by the County without being accorded such procedures gives him a cause of action under § 1983. A proper analysis requires us first to determine whether the district court properly held that-by virtue of the Umatilla County Personnel Policies-Lawson was not an at-will employee and that Lawson therefore had a constitutionally-protected property interest as a matter of law.
III.
We review de novo an order granting or denying judgment as a matter of law. Amarel v. Connell, 102 F.3d 1494, 1517 (9th Cir.1996). Judgment as a matter of law is proper when the evidence permits a reasonable jury to reach only one conclusion. Id.; see Rule 50(a), Federal Rules of Civil Procedure. We also review de novo the district court's interpretation of state statutes. A-1 Ambulance Serv., Inc. v. County of Monterey, 90 F.3d 333, 335 (9th Cir.1996).
IV.
State law, or some other independent source, establishes the parameters of an individual's substantive interest, Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972), but federal law determines whether that interest is a property right protected by the Due Process Clause of the Fourteenth Amendment. Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 9, 98 S.Ct. 1554, 1560, 56 L.Ed.2d 30 (1978); see 16B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4030, at 425.
Whether a property right exists depends on the facts of each case, but certain established rules provide a framework for our inquiry. Of particular relevance here, Lawson had no constitutionally-protected property right if his position was "at-will" under Oregon law. See Portman, 995 F.2d at 904. We therefore must decide whether the district court properly held as a matter of law that Lawson had a state-created interest in his position that "justified] his legitimate claim of entitlement to continued employment." Perry v. Sindermann, 408 U.S. 593, 602, 92 S.Ct. 2694, 2700, 33 L.Ed.2d 570 (1972); see Orloff v. Cleland, 708 F.2d 372, 377 (9th Cir.1983).
To determine the status of a county employee, the starting point is the Oregon statute describing county officers, deputies and other employees:
(1) The county court or board of county commissioners of each county shall fix the number of deputies and employees of county officers whose compensation is to be paid from county funds.
(2) All such deputies and employees shall be appointed by such county officer, and shall hold office during the pleasure of the appointing officer.
Or.Rev.Stat. § 204.601. Clearly, this statute sets forth the law of Oregon that county employees "hold office during the pleasure of the appointing officer" and is a manifestation of the general Oregon rule that "an employer may discharge an employee at any time and for any reason, absent a contractual, statutory or constitutional requirement." Patton v. J.C. Penney Co., 301 Or. 117, 719 P.2d 854, 856 (1986).
Exceptions to this general rule, however, have been established by statute and by Oregon case law. Thus, under the provisions of Or.Rev.Stat. § 204.121,
no provision of . 204.601 shall supersede any provision of the county civil service law, and when any conflict arises between any provision of . 204.601 and any provision of the county civil service law, then the county civil service law shall prevail.
County civil service is mandatory for counties with a population over 500,000, but smaller counties must elect into it. Or.Rev. Stat. § 241.020, 241.006. The parties agreed at oral argument that Umatilla County has not elected to establish civil service.
In addition to § 204.121's express civil service exception to the general at-will rule of § 204.601, case law has created an additional exception when employees in non-civil service counties become "permanent employees" pursuant to an employee handbook. See Maben v. Klamath County, 54 Or.App. 799, 686 P.2d 968, 969 (1981), amended by 57 Or.App. 730, 646 P.2d 35 (1982). Lawson argues that this second exception is applicable here.
The County argues that the Umatilla County Personnel Policies do not alter the at-will status of Lawson's employment because they include the following disclaimer:
Under no circumstances shall these policies be construed to act as any type of employment contract with any employee of the County of Umatilla.
Lawson contends that the Personnel Policies establish an exception to the general at-will rule for permanent employees. Specifically he cites § 3.2, which lists reasons for employee discipline, and § 3.3, which provides that "[n]o permanent employee shall be disciplined except for violation of established rules and regulations." It is precisely on this theory advanced by Lawson that the district court determined that Lawson's employment was an exception to the general Oregon rule that county employees are at-will employees.
The district court erred because it ignored the importance of the disclaimer in the Umatilla County Personnel Policies. Oregon courts have consistently held that a disclaimer in an employee handbook or personnel policies is sufficient to retain an employee's at-will status. See Mobley v. Manheim Servs. Corp., 133 Or.App. 89, 889 P.2d 1342, 1345 (1995) ("[T]he company may terminate [its employees] at any time for any reason."); Gilbert v. Tektronix, Inc., 112 Or.App. 34, 827 P.2d 919, 921 (1992) ("[The company] reserves the discretion to determine whether in [its] judgment the termination, or any other disciplinary action, was justified."). Furthermore, a disclaimer can retain the employee's at-will status even when the policies also provide specific reasons for termination and for an appeals process. Gilbert, 827 P.2d at 920-921.
In Mobley and Gilbert, the disclaimer constituted a retention of the at-will status. Similarly, in the case at bar, the disclaimer is an unambiguous statement that the general at-will status of County employees established by Or.Rev.Stat. § 204.601 shall not be altered by the provisions of Umatilla County Personnel Policies: "Under no circumstances shall these policies be construed to act as any type of employment contract...."
Lawson argues that his classification as a permanent employee, which the Umatilla County Personnel Policies distinguish from probationary employees, eviscerates the at-will status. We disagree. We recognize that some Oregon case law provides that a distinction between permanent and probationary employees may remove an employee from at-will status. See Maben, 636 P.2d at 969 ("If at the end of the six month period of probationary employment, the employee's work performance is satisfactory, employment shall be made permanent."); Gunsolley v. Bushby, 19 Or.App. 884, 529 P.2d 950, 953 (1974) ("All personnel are employed through the Administration Office. Unless otherwise specified, employment-is presumed to be full-time and permanent during satisfactory service."). The teachings of these cases are not pertinent, however, because in neither case did the employee handbook contain a clear disclaimer like the one in the Umatilla County Personnel Policies.
The expression "under no circumstances" speaks for itself and prevents us from accepting Lawson's argument that the distinction between probationary and permanent employees somehow indicates an intent to depart from the at-will status. Section 3.2, which provides for employee discipline, and § 3.3, which provides that "[n]o permanent employee shall be disciplined except for vio lation of established rules and regulations," must be construed in conjunction with the "under no circumstances" disclaimer. So construed, these regulations merely provide a framework for disciplining at-will employees which is not binding on the County. In this respect, the procedures may be analogized to the appeal rights in Gilbert, which did not interfere with the court's pronouncement that an "at will employment relationship" existed. See 827 P.2d at 921 (handbook provided that: "An employee who feels his or her involuntary termination is unwarranted can make use of the Review Process and ask that management review their decision."). Accordingly, we conclude that the proper analogy is to the cases holding that, because of a disclaimer, an at-will status prevailed and hold that the district court erred in concluding that Lawson was not an at-will employee.
Having concluded that Lawson was not an at-will employee, and therefore possessed no property right in his position, we need not proceed to a discussion of procedural due process. We reverse the district court's entry of judgment in Lawson's favor.
V.
Because we reverse the district court's judgment in favor of Lawson, he is no longer a "prevailing party" under 42 U.S.C. § 1988. Friend v. Kolodzieczak, 72 F.3d 1386, 1389 (9th Cir.1995). Therefore, we also reverse Lawson's attorney's fees award. We have considered all arguments advanced by the parties and have concluded that no further discussion is necessary. The district court's judgment and attorney's fees award are REVERSED and the proceedings REMANDED with a direction to enter judgment in favor of the Appellants.