Arbitration Decision With Important Lessons For School Districts

In a case handled by our office, an Arbitrator issued an opinion which is important for School Boards and School Administrators alike. In this case, a fired Superintendent exercised his contractual right to arbitration by challenging the Board of Education’s decision to terminate his contract. The School District requested Keller Thoma’s services for legal representation in the case. The former Superintendent took the position that his contract could only be terminated mid-term for just cause, that he could not be held responsible because the Board approved much of the alleged misconduct, and that the Board lacked just cause for the termination.

Numerous issues arose during the 12 contentious days of hearing, but the primary charges which led to the termination of the contract were:

  • The Superintendent’s personal involvement in obtaining a salary step increase for his wife, who taught in the same District;
  • The purchase of life insurance for the Superintendent which was different in kind than that authorized by the Board of Education, and the Superintendent’s failure to report this benefit as income on his taxes;
  • The Superintendent’s involvement in the purchase of two school buses without competitive bids; and
  • The Superintendent’s knowing failure to stop cash payments to an individual who worked for the School District at sporting events.

Based on the proofs presented, the Arbitrator issued an 88-page opinion in which he found that the School District had just cause to terminate the Superintendent’s contract. The Arbitrator found that the former Superintendent’s conduct violated both his contract and several Board Policies. The Arbitrator also noted that the Superintendent’s failure to disclose pertinent facts to the Board before asking them to take action precluded any defense that the Board had approved the misconduct. The case highlights the importance of a “full disclosure” relationship between a Superintendent and his/her Board of Education and of knowing the applicable law before recommending or taking action.