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The Difference Between Contract Nonrenewal and Termination

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When it comes to separation from employment for Chapter 21 contract holders, it’s easy to get confused when trying to sort out the legal standards applicable to probationary, term, and continuing contracts.

Districts often inquire about the difference between nonrenewal and termination of a contract. Contract nonrenewal can only occur at the conclusion of the last year of a term contract. A good cause termination occurs mid-contract. A probationary contract may be terminated mid-contract for good cause, or at the end of the contract if the termination is in the best interest of the district.

Term Contracts

Educators employed under term contracts leave districts involuntarily by one of two ways—nonrenewal or termination. Nonrenewal is a decision not to renew an employee’s contract at the end of the term specified in the contract for reasons specified in policy. To nonrenew a term contract, the district must follow specific statutory procedures for providing notice and a hearing. If a district does not take appropriate action to nonrenew a contract at the end of the term, it must employ the individual in the same professional capacity for the next school year (TEC §21.206). In other words, unless the district takes affirmative action to nonrenew a term contract, the employee will be entitled to work at the district in the same professional capacity for the subsequent school year.

In contrast, termination occurs during the contract term and is essentially the same as discharge (i.e., being fired). A mid-contract termination of a term contract requires a showing of good cause as determined by the board. In the context of term contracts, the commissioner has stated that good cause is “the employee’s failure to perform the duties in the scope of employment that a person of ordinary prudence would have done under the same or similar circumstances.” The “good cause” required for a mid-contract termination is a higher standard than the pre-established reasons for nonrenewal set forth in the district’s local nonrenewal policy.

Probationary Contracts

Separation of employment at the end of a contract term involves different terminology for employees under probationary contracts. Unlike term contracts, probationary contracts can’t be nonrenewed at the end of contract term.

A probationary contract can be terminated at the end of the probationary period if the board finds that the best interests of the district will be served by terminating the employment. The board’s decision to terminate based on the best interest of the district is final and cannot be appealed (TEC § 21.103). If the district fails to provide notice of the termination of the probationary contract at least 10 days prior to the final day of instruction, the district must employ the employee under another probationary contract, if applicable, or under a continuing or term contract in accordance with policy. The type of contract required depends on the employee’s years of experience.

Similar to termination of term contracts, terminating a probationary contract in the middle of the contract year requires good cause as determined by the board. The standard for good cause in the context of probationary contracts is slightly different. Good cause is defined in statute as “the failure to meet the accepted standards of conduct for the profession as generally recognized and applied in similarly situated school districts in the state” (TEC § 21.104). As in all employment decisions involving Chapter 21 contracts, the district must follow statutory due process to terminate a probationary contract.

Continuing Contracts

Although much less common, continuing contracts are unique in that any separation from employment is considered a termination—regardless of when it occurs—because the contract never expires. Continuing contracts therefore are never subject to nonrenewal and educators employed under them are always able to appeal to the commissioner of education for an independent hearing.

For more information on terminations and nonrenewals, where you can find helpful guides including Termination of Contract Employees and the term contract renewal/nonrenewal cycle reference.

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Keith McLemore
Keith McLemore
HR and Compensation Consultant

Keith McLemore joined HR Services in 2015 and assists districts with compensation planning and development. He has 17 years of experience traveling the state supporting public education employees.

McLemore received a bachelor’s degree from Southwestern University and a master’s degree from Texas Tech University, both with a focus on research analysis and design. He is a SHRM-CP.

Leslie Story
Director of Legal Services

Leslie Story has been with TASB Legal Services since 2005. As director of Legal Services, she is a frequent presenter at regional and statewide training events on a variety of school law topics. 

Prior to coming to TASB, she worked in private practice in Dallas, representing a variety of clients, including governmental entities. Story is an officer of the School Law Section of the State Bar of Texas and a member of the Labor and Employment Section of the State Bar of Texas. She is also a member of the Texas Council of School Attorneys and the National School Attorneys Association.  

Story graduated magna cum laude from Baylor University with a bachelor’s in the University Scholars program. She received her law degree from The University of Texas School of Law.  

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