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Illinois School Board Journal
January/February 2002

The 9-6-3 Solution: A call for no-fault termination clauses

by John B. Murphey

When school boards hire a superintendent, the process is not unlike a marriage that joins the two in a new life arrangement. The superintendent's contract, therefore, may be likened to a prenuptial agreement. No one likes to talk about divorce before the vows, just as no one likes to talk about terminating a superintendent's contract before it's inked. But an agreement on what will happen if things don't work out can be beneficial for both parties to the contract.

The School Code requirement that multi-year superintendents' contracts be performance-based (Sec. 10-23.8) has not altered the basic format of the termination language in most contracts. Generally speaking, multi-year contracts provide for termination upon mutual agreement, or the superintendent's death or incapacity for a period of time.

The contracts also provide for "termination for cause." But compare the following two termination provisions in actual superintendents' contracts:

Throughout the term of this Contract, the Superintendent shall be subject to discharge for just cause; provided, however, that the Board may not arbitrarily or capriciously call for dismissal. The Superintendent shall have the right to service of written charges, notice of hearing, and a hearing with allrights of due process under law before an independent hearing officer selected by the parties following the procedures provided for teachers under §24-12 of the Illinois School Code. The Superintendent may not be discharged for any cause, which would be considered remediable under the Illinois Teacher Tenure Law. The final decision shall be made by the Board, following the hearing and written report and recommendation of the hearing officer. This provision shall not be construed to limit in any way the Superintendent's right to review the Board's action in any applicable State or Federal Court or other administrative forum.

Discharge for cause shall be for any conduct, act or failure to act by the Superintendent, which the Board deems to be detrimental to the best interests of the District. Reasons for discharge for cause shall be given in writing to the Superintendent. The Superintendent shall be entitled to notice and a hearing before the Board in order to discuss such causes. If the Superintendent chooses to be accompanied by counsel at such hearing, all such personal expenses shall be paid by the Superintendent. The Board hearing shall be conducted in executive session and the decision of the Board is final.

Clause A is decidedly "pro-superintendent." It is the type of language negotiated by a superintendent who must have had an overwhelmingly positive relationship with the board of education. Clause B is just as decidedly pro-employer and reflects the language of a multi-year contract between a superintendent and a school board where the board has the advantageous negotiating position. In a typical first contract, no superintendent in his or her right mind wants to focus on the terms of the "divorce" while walking down the aisle to the employment altar.

Both provisions are troubling. Clause A makes termination difficult, time consuming and expensive for the board. It injects the presence of a third-party hearing officer whose job it is to assess a relationship, which at its heart is dependent on trust and mutual respect. It is difficult for an outsider to determine whether there is a basis for termination in the absence of a "smoking gun" act of misconduct. Injecting a third-party hearing officer should be unacceptable to any reasonable board of education.

On the other hand, Clause B provides minimal protection to a superintendent due to the loose definition of "cause." A board can argue that "cause," as defined in the contract, is little more than a requirement that the board of education only be subjectively dissatisfied with the superintendent's performance in order to terminate, without any objective indicia or measurement of dissatisfaction.

Then there is the issue of bias. At least one decision, Bakalis v. Golembeski (35 F.3d 318, 7^th Cir. 1994), has held that a board of education violates the due process rights of a superintendent by providing a termination hearing presided over by "biased" board members who have a personal animosity toward the superintendent unrelated to the performance of his duties. Faced with these allegations, board members can be expected to argue that they harbor no bias and that their decision to terminate the superintendent is based solely on failure to discharge obligations under the contract.

Add to this uncertainty the difficulties created and the expenses incurred by the board when it conducts a termination hearing involving numerous witnesses, examination and cross-examination of witnesses, and multiple layers of judicial review. The conclusion is inevitable that termination "for cause" provisions frequently create more problems and expenses for both sides than they are worth. And yet, these provisions still prevail in superintendents' contracts. Too often, when the relationship sours, the only winners are the attorneys.

This system should be changed. In order for both sides to understand the need for change, it is important that they frankly recognize the following realities:

• Superintendent of Schools is a "political" position. The term "political" is not being used here in a partisan or pejorative sense. The superintendent's job is political in the truest sense of the word. The job is to navigate the school district through a labyrinth of constituencies ranging from state and local government, individual schools, parent communities, unions and factions within a board of education. Superintendents frequently complain that too much of their time is devoted to the political aspects of the job rather than the purely educational and managerial ones. Politics is an immutable reality of a superintendent's life.
• Intangible elements of the relationship are extremely important to a board of education. Perhaps in no other area of government is a relationship of trust more important than that between the board of education and its superintendent. The superintendent is the filter through whom all information reaches the board members. In order for the board to discharge its policy-making functions, it must have absolute trust in the credibility, judgment and maturity of the superintendent. When that trust crumbles -- even in intangible ways -- the relationship is doomed to fail.
• A complete "buy-out" of a contract is a public relations impossibility. Some superintendents' contracts have language to the effect that the contract may be terminated "for the convenience of the board." This means the board can terminate the contract without cause but in order to do so it must pay the superintendent the entire value of the contract. If the contract has three years remaining, the board would have to pay the superintendent the equivalent of three years' salary and benefits. Unless the superintendent is in the last year of a contract, this type of language is prohibitively expensive to a board of education. As a result, a board would not invoke this language and would instead turn to termination for cause in the event it has become disaffected with the superintendent's performance.
• Both sides are better off severing the relationship without acrimonious hearings. Neither side benefits from termination hearings. Depending on the nature of the case, they are fraught with legal land mines. Both board members and employees of the district are on the spot at hearings. The atmosphere in the district becomes uncomfortable. The attention of educators is deflected away from educating. Termination hearings can be expensive for superintendents as well as school boards. They can destroy hard-earned reputations and careers of service in the education field.
• When the relationship turns bad, the board's attention and energies are much better directed toward the process of searching out and hiring a new superintendent. The search process frequently takes up to a year. Boards are much better served by focusing their time, effort and dollars on a new superintendent search rather than spending months or even years defending its decision to terminate the current superintendent.

All these factors argue for the elimination of the traditional "termination for cause" provisions in superintendents' contracts. They should be replaced with contractual language providing certainty to the district, fairness to the superintendent and a keen eye towards moving forward in the best interests of the students and the community. I call this concept "The 9-6-3 Solution."

Assume a five-year employment agreement. The agreement should provide that in the event the board terminates the agreement during years one or two, the superintendent will receive a salary and benefits severance equal to nine months at full pay. This is a substantial sum. It recognizes the superintendent likely gave up other job opportunities and has incurred time and expense in relocating to the district. It also recognizes the likelihood that a superintendent released during the early years of a multi-year contract may have more difficulty finding suitable substitute employment.

While some members of the community may object to "buying out" a superintendent's contract for what amounts to almost a full year's salary, the buy-out amount is always very small compared to the district's overall budget and is offset by savings in administrative time and legal fees that would be incurred in establishing a "termination for cause" case. Most importantly, this format purchases certainty for the district.

If the board decides to terminate the agreement in years three or four, then the superintendent would receive a severance equal to six months' pay and benefits. The severance should be correspondingly reduced for a third- or fourth-year termination because the superintendent's expectancy of continued employment has been reduced. If the superintendent has not received a new contract or rollover by the end of three years, then there is some indication the board is less than entirely satisfied with performance. It is likely the superintendent is considering other professional opportunities. Because the years remaining on the contract are reduced, the severance payment should be correspondingly reduced.

Finally, should the board decide to terminate the superintendent's agreement during the last year of the contract, the severance payment would be reduced to three months. By this time, it is fairly likely the relationship will be coming to an end in any event, and the superintendent has a diminished expectancy of continued employment. While it may be more likely the board may simply prefer to ride out the final year of the superintendent's contract while the search for a replacement is proceeding, this provision provides the board with some flexibility to terminate the contract if there are problems with the relationship and termination may facilitate transition.

The "9-6-3" proposal is not perfect. From the board's perspective, it may result in charges that the board is wasting taxpayers' money by providing a "bad" superintendent with a nine-month buy-out. This type of community oversight is a good thing, because it will serve as a disincentive for a board to terminate a superintendent's contract for less than well thought out reasons. But if the relationship is not a good fit and it is the considered judgment of the board that a change needs to be made, the nine-month severance is a small price to pay when measured against the lifetime of the district, and the importance of a functioning board-superintendent relationship.

A superintendent may view "9-6-3" as providing nothing more than at most a nine-month contract as opposed to a multi-year agreement. Such a view would be shortsighted. If a superintendent is performing well and if the relationship works, this termination provision will not be invoked. If the relationship sours, termination under this type of clause -- especially if this model becomes generally accepted -- will leave less of a cloud on anyone's professional future than would a termination for cause or a resignation under fire. Finally, any superintendent who has been subjected to a "termination for cause" proceeding can attest that the experience is gut wrenching, humiliating and extremely expensive. The certainty of the severance is preferable to the slow death of a "termination for cause" hearing.

Obviously, many variables can be added to the "9-6-3" provision. For example, the contract could stipulate that the superintendent would work for the district for three of the nine-month notice provision and then receive six months' severance in a lump sum. If a contract is for only three years, the "9-6-3" severance formula could apply during each of the three years of the contract.

Regardless of these variables, the replacement of termination for cause with a reasonable severance provision negotiated on a "prenuptial" basis will serve the best interests of the board, the superintendent and, most importantly, the students of the district.