February 2015

Common contract myths

Myth 1: The exact amount of salary must be specified in the contract.

While this is true in the private sector, this is not true for educator contracts. In school districts, compensation for the upcoming year cannot be determined until the budget is adopted, which typically occurs after the first duty day of the next school year and after employees have signed and returned their contracts. Accordingly, most boards leave the exact amount of the salary unspecified in educator contracts, a practice that has been upheld by the commissioner. Contracts simply state that employees will be paid according to the compensation plan adopted by the board.
 
This practice results in employees agreeing to the salary terms in advance of knowing the particulars. After the budget is adopted, districts issue employee pay notices that provide specific salary information for the upcoming year. A Sample Compensation Letter to Employees is on file in the HR Library.
 
If the district determines that there will be a reduction in pay, notice must be provided to employees before their penalty-free resignation deadline (i.e., 45 days before the first day of instruction for the next school year). If the terms of compensation are unacceptable to the employee, he or she may resign without penalty. If a district fails to provide notice by this deadline, the district is committed to pay no less than the employee was paid in the prior school year. 

Myth 2: Statute specifies the amount of time an employee has to sign and return the contract.

This is true, but only in very limited circumstances that rarely occur. First, a probationary employee who is offered a continuing contract has 30 days to accept the contract. Second, a superintendent must provide a term or continuing contract employee at least three business days to consider an offer to return to probationary contract status.
 
The much more common situation is that the district is extending a contract for an employee who will have the same contract status in the following year (probationary-to-probationary or term-to-term), or will move from probationary to term status. Because statute does not set forth a deadline for contract return for employees in these situations, most districts will specify a deadline in the contract itself. That brings us to our last myth.

Myth 3: If a teacher doesn’t sign and return his or her contract by the specified date, the district may withdraw the offer of employment.

This is true. TASB’s model contracts include the provision “Expiration of Offer,” which specifies the date the contract must be returned and notifies the employee of the consequences for failure to return a signed contract. If the employee does not sign and return the contract within the time period specified, the offer is automatically withdrawn. Moreover, the employee’s failure to sign and return the contract by the date specified is treated as a resignation from employment at the end of the employee’s existing contract term.