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MONTHLY NEWSLETTER: JANUARY 2006 ISSUE
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Indiana law requires that school corporations use written employment contracts for teachers on a form prescribed by the Indiana Department of Education. This requirement, however, does not apply to non-conversion charter schools. A non-conversion charter school is free to decide whether to use a written contract or simply to employ teachers on an "at-will" basis without a contract.
Any discussion of employment contracts requires an understanding of the at-will employment doctrine. The at-will doctrine provides that, absent an agreement to the contrary, an employment relationship may be terminated at any time and for any reason (or for no reason) by either the employer or the employee.
The at-will employment relationship can be altered in one of two ways. First, at-will employment may be altered by law (i.e., Title VII of the Civil Rights Act of 1964 prohibits an employer from terminating an employee based on race, color, religion, gender or national origin). Also by way of example, traditional school corporations in Indiana may not terminate a teacher's contract without just cause and an opportunity for a hearing (this provision does not apply to non-conversion charter schools).
The second way in which the normal at-will employment relationship can be altered is through an employment contract. An employment contract calling for a certain term of employment (i.e., one year), and that does not provide for termination otherwise, creates an employment relationship that cannot be terminated by the employer without consequence (i.e., payment of salary for the balance of the one-year period). However, an employment relationship under a written employment agreement may be established as an at-will relationship if the contract so provides.
Several factors weigh in favor of using written contracts for teachers. For example, written contracts minimize confusion and misunderstanding by specifying the terms of employment. The contract may also confirm that the employment relationship is at-will. Additionally, a written contract may be helpful in defending legal claims. Finally, because teachers in traditional public schools are accustomed to working under a written contract, they may serve as a recruiting tool for new teachers.
On the other hand, there are considerations that weigh against using written teachers contracts. For example, to the extent the contract sets out the salary and benefits provided, it will need to be amended or renewed from time to time to reflect changes. Additionally, to the extent the employer needs to change salaries or benefits due to economic forces beyond its control, it will be limited in doing so by the terms of the contract. An additional consideration, among others, is that any vague provisions of the contract will likely be construed against the employer.
In a perfect world, the employer would draft a precisely worded contract that anticipates every possible future contingency. Given that this is impossible, non-conversion charter schools are probably better off employing teachers on an at-will basis without a written contract. To the extent a written contract is used, certain provisions should be included and others should be avoided.
In order to provide the greatest flexibility, the contract should clearly provide that the employment relationship is at-will and permit termination at any time without cause. A provision establishing the term of the contract (i.e., one school year) is helpful to require ongoing review and renewal. The contract may also be set up to be automatically renewing. Other provisions that may be included are, salary and benefit levels, a non-exclusive list of job duties, and dispute resolution procedures.
The contract should not include a term (i.e., one school year) without providing for termination. The contract also should not include the school's policies and procedures (i.e., attendance and leave policies). Policies should be restricted to the school's employee handbook. To the extent they are included in the contract, they may not be revised without amending the contracts. The contract should not include an exclusive listing of job duties, as such a list restricts the school's ability to manage its employees. Finally, the contract should not include any other matters over which the school wishes to retain flexibility. ?
Mike Padget is an attorney with Bingham McHale LLP in Indianapolis and represents several Indiana charter schools.
Email-padgett@binghammchale.com
Phone-317-968-5402
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