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Federal Court Declares School Administrator Contract Void
August 4, 2010

By D&K's School and Higher Education Law Team

On June 18, 2010, the United States District Court for the Western District of Wisconsin ruled that a school administrator’s employment contract was not enforceable under Wis. Stat. § 118.24(1).1 The court held that the enforcement of a 2009-2011 contract that had been signed at the same time as a 2007-2009 contract would violate the statutory requirement under Wis. Stat. § 118.24(1), which limits administrator contracts to two years in length. Therefore, the 2009-2011 contract was void.

In the Klaus case, the Eau Claire Area School District Board of Education investigated an allegation that an administrator in the district (Klaus) had attempted to access early retirement benefits provided by the district through improper means. However, during the course of the investigation, the board of education also determined that Klaus had entered into two consecutive, two-year employment contracts with previous school boards. The board of education ultimately suspended Klaus without pay for approximately ten months. As part of its suspension order, the board also notified Klaus that it questioned the validity of the 2009-2011 administrator contract, the second of the two, two-year administrator contracts that Klaus had secured.

Klaus later filed a lawsuit pursuant to 42 U.S.C. § 1983, alleging violations of his due process rights, as well as violations of state and common law for breach of contract and defamation. In response, the school district sought a declaratory judgment that the 2009-2011 contract was void and unenforceable on grounds that it exceeded the limits established by Wis. Stat. § 118.24(1).

Wis. Stat. § 118.24(1) provides:

A school board may employ a school district administrator, a business manager and school principals and assistants to such persons. The term of each employment contract may not exceed 2 years. A contract for a term of 2 years may provide for one or more extensions of one year each.

Klaus argued that the statute only limits the term of any single employment contract to two years, but still permits an administrator to enter into multiple, consecutive, two-year contracts at the same time.

The court, however, rejected this contention, stating that:

[A] plain reading of § 118.24(1) limits a school administrator’s employment contract to a single two-year term, with the possibility of rolling, one-year extensions. Stated another way, the statute’s plain meaning prohibits employment contracts that explicitly or, as is the case here, implicitly lock-in an administrator to a term of employment of more than two years with the possibility of additional one-year extensions.

As a result, the court ruled that permitting school boards and administrators to enter into multiple, consecutive, two-year contracts at the same time would be inconsistent with the plain meaning of the statute and would defeat the legislature’s purpose of limiting the length of administrator contracts. The court noted that, while the statute does not create an outright bar to administrators being employed by the same district for more than two years, the statute does require action or inaction by a school board to have an administrator’s employment contract extended or renewed.

The court also found this interpretation to be consistent with state statutes concerning school district governance. In this regard, state law provides for three-year terms for school board members and, the court concluded, enforcing the two-year limit on administrator contracts gives each newly-elected board the opportunity to evaluate administrators without being indefinitely bound by previous school boards’ commitments to administrative personnel. Consequently, the court found the 2009-2011 administrator contract to be void and unenforceable.

In light of this decision, school boards and administrators should be wary of entering into multiple contracts at the same time that purport to bind the parties for more than two years. School boards and administrators should be equally cautious about including automatic extensions in administrators’ contracts that purport to bind the parties for more than two years at the time the contracts are consummated.

If you have any questions or would like additional information on this topic, please contact your Davis & Kuelthau attorney.

1Klaus v. Eau Claire Area School District, 09-cv-497-wmc (W.D. Wis. 2010)

 

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