Negotiating Your Administrator Contract 

By Malina Piontek, AWSA Retained Attorney

Congratulations! You have a principal contract for next year! The administrator contract statute requires that your contract be in writing, approved by a majority of the full membership of the school board, and filed with the clerk of the school board. The goal of both parties entering into a contract is to have clear, understandable terms to guide the contractual relationship.  Here are some thoughts for you to consider as you plan for your next contract.

Contract Extended by Operation of Statute. The administrator contract statute requires school boards to give principals notice in writing of either renewal of the contract or refusal to renew the contract at least 4 months prior to the expiration of the employment contract. For contracts that expire on June 30, 2018, this must have been done by February 28. 2018. If the school board did not give you any notice by February 28, 2018, your current contract continues in force for two (2) years, ending on June 30, 2020. 

If you fall within this category, it is critical that you accept your contract in writing to the board by March 31, 2018. Since March 31 falls on a Saturday, to be safe, it is best to provide written notice to the board by Friday, March 30.  Here is sample language for you to use to provide written acceptance of your contract:

Dear_______________________:

My employment contract as (position title) expires on June 30, 2018.

Since I have not yet received a new contract, I am providing notice pursuant to section 118.24(6) of the Wisconsin Statutes that I accept an extension of my contract for an additional two years.

I would like to meet with the Board as soon as convenient to discuss the terms of my new contract as well as an adjustment of my compensation and benefits.

Thank you for your attention to this matter. I look forward to finalizing the terms of my new contract.

Technically, under the language of the statute your current contract remains in force until June 30, 2020. So, if the board didn’t realize that its failure to act would result in your contract extending for another two years by operation of the statute, it could decide not to negotiate any changes at all.

That being said, parties to contracts are free to modify their terms by mutual agreement. This is typically what occurs when a contract extends by operation of law and a school board offers the principal a salary increase for the next school year. Most commonly a new contract is then written, which includes the new salary, and is signed by both parties. This would also be a good time to ask the board for any other modifications to the contract.

New Contract Offered by School Board. If the board offered you a new contract, now is the time to carefully review it to determine whether its terms are acceptable, or if modifications should be sought. The administrator contract statute specifically contemplates modification of employment contracts by mutual agreement between the board and a principal.

Customary Administrator Contract Provisions. A contract between a school board and a principal sets forth the basic terms of the relationship, such as how much a school board will pay an individual for services provided over a set period of time, and the respective rights and responsibilities of the parties. The essence of the contractual relationship between school boards and its employees is stability for students, parents, teachers, principals, superintendents and the school board during a school term. 

Administrator contracts vary from school district to school district, and sometimes even within a school district. At a minimum, an employment contract should set forth the services to be provided, the salary to be paid for the services, and the duration of the employment relationship. The following is a partial list of customary administrator contract terms and their significance to the employment relationship between the board and the principal.

Position. Most administrator contracts specify the position that the employee has been hired to fill, for example, Principal of Waboo High school. However, some school boards prefer to maintain flexibility in staffing and have adopted more generic administrator contracts that do no set forth the exact position to be filled. This is based on a court decision which held that a school board breached the administrator contract when, during the term of the contract, it unilaterally transferred a principal to a different school than the one specifically referenced in the contract. If you applied for a particular position, and were hired for a particular position, it is in your interests to have that particular position set forth in your employment contract. If you are offered a generic administrator contract, understand that the board has the right to reassign you during the term of the contract unless there is specific language to the contrary. It is also common for boards to offer contracts that have reassignment clauses in them. Review these carefully to determine your rights to object to or challenge a reassignment.

Term or Duration of Employment. Principal contracts are usually for one-year or two-year terms (see below for a lengthier discussion of contract extensions). They usually run on a fiscal year basis from July 1 to June 30. An individual contract could also be for a term of more than one year but less than two years if, for example, a principal is hired after July 1. The contract also typically sets forth the number of working days required in a year, which can vary from 260 to 225 or less, depending on the position and the nature of the work.

Responsibilities. The administrator contract statute provides that the principal “shall perform such administrative and instructional leadership responsibilities as are assigned by the district administrator under the rules and regulations of the school board.” A typical administrator contract will codify the principal’s responsibility to perform at a professional level of competence the services, duties, and obligations required by the laws of the State of Wisconsin and the rules, regulations, employee handbook and policies of the board. The contract should state that its terms will prevail if there is a conflict between the contract and any board policies, rules, regulations or handbook provisions.

Salary. Salaries are negotiated with, and ultimately formally approved by, the board. To get an idea of what to propose for salary, you can consult AWSA’s Wisconsin Statewide Salary Report and check the going rate for principal salaries in your area. DPI also maintains a database of principal salaries.

Standard for Termination. One of the most important provisions of your employment contract is the standard to be met in order for the board to end the employment relationship prior to the contract’s expiration date.     Of course, the parties to a contract can always mutually agree to end the relationship prior to the contract’s expiration date, but this is the clause that controls the circumstances under which a board can unilaterally end the contract.

Although there are no cases directly on point for principals, in a case involving a teacher contract, the court adopted a cause standard in a contract in which the parties had not set forth a standard for mid-contract termination. It is best not to let a court decide the standard to be applied for mid-contract termination by your school board. Just cause is a standard that focuses on the conduct, qualifications and performance of the employee. A just cause, or cause, standard is advisable to be included in a principal’s contract.

Example just cause language: The Board may terminate this Contract and/or terminate Administrator’s employment for just cause, provided that Administrator has received prior notice in writing from the Board of its intent and the alleged reason or reasons for such termination.  Just cause is defined as serious misconduct or material performance problems that have not been corrected after Administrator has been given an opportunity to do so. Upon written request, a hearing shall be conducted with full regard for due process.         

Some boards offer an arbitrary and capricious standard, which means that the contract can be terminated prior to its expiration for reasons that are not arbitrary and capricious. The Wisconsin Supreme Court has determined that arbitrary and capricious action is the result of an unconsidered and irrational choice of conduct. In essence, the non-arbitrary and capricious standard boils down to the board having a non-discriminatory reason to terminate that is related to the business of the school district. Principals are advised to negotiate a higher standard.

Example of arbitrary and capricious language (not recommended for use): The Board may unilaterally terminate this contract during its term for non-arbitrary and capricious reasons, as determined by the Board, by giving written notice thirty calendar days in advance of such action.

Liquidated Damages. Liquidated damages is the amount of money the parties agree the principal will pay to get out of a contract prior to its expiration date. In most contracts, the board reserves the right to waive liquidated damages, as well as to pursue other monetary remedies in court. Liquidated damages are not meant to be punitive or to prevent a principal from resigning; they are meant to allow the district to recover the cost of finding a replacement principal. Along these lines, some principals believe that a school board can refuse to accept their resignation, and thereby refuse to allow them to leave before the expiration of the contract. This is not true. It is extremely unlikely that a court would enforce the contract by ordering specific performance, i.e., forcing the principal to continue to work for the district. In fact, a circuit court in Wisconsin held such a provision in a teacher’s contract was invalid.

Other Benefits. Most contracts list other benefits provided by the board including vacation, sick leave, continuing education, long-term disability, health and dental insurance and professional memberships. Pay particular attention to tuition reimbursement provisions so that you can make an informed decision about the impact a repayment policy may have on your decision to look for a new job.

Residency Requirements. Residency requirements may not be included in school employees’ contracts. The law provides that no local governmental unit (such as a school board) may require as a condition of employment that any employee reside within its jurisdictional limits. Residency requirements that are in contracts that have not been revised since the law change are not enforceable.

For a complete list of subjects that could be included in a contract, see AWSA’s sample contract.

Contract Extensions. Contract extensions deserve a more thorough discussion, as extension clauses can cause confusion for both the individual and the school board. Two-year contracts “may provide for “one or more extensions of one year each.”  Keep in mind that only two-year contracts can have extensions.

The law does not define what it means to “provide for” an “extension.” In general, a contract extension is the adding of one year to a principal’s two-year contract unless the school board takes whatever action is specified in the contract to prevent the extension. There is no just cause requirement for a board’s decision not to extend a principal’s contract. 

One-year contract extensions may be triggered, or not triggered, by an affirmative act of the board.  For example, a contract might contain a provision stating that the contract will extend for a one-year period only if the board gives the principal notice by a given date.   If a board in fact takes affirmative steps to notify the principal that it is permitting the contract to extend by the contractual deadline, then the contract will extend by its own terms for another year.  Likewise, if a school board takes affirmative steps to notify the principal that it will not allow the contract to extend by its own terms by the contractual deadline, the extension will not take effect. 

The flip side to a board taking affirmative steps to extend or not extend a contract is the situation where a board simply fails to address the extension situation by the contractual deadline.  In this example, a contract will automatically extend for one year if the board does not act by the deadline contained in the contract.

If the board votes not to permit a contract to extend, or fails to take action to extend a contract, the board must still comply with all of the statutory non-renewal requirements (and deadlines) for providing preliminary and final notices of contract non-renewal during the final year of the contract.  If it fails to do so, the contract will automatically extend for a period of two years pursuant to statute. 

The decision not to extend a contract is entirely at the discretion of the school board. There could be a variety of reasons that a board decides not to extend a contract, many of which are not performance related. There is no process to challenge a non-extension nor is a principal entitled to due process since there is still time left on the base contract and there is similarly no deprivation of the economic benefits of the contract. This means that you are not legally entitled to notice of the reasons for the non-extension, or an opportunity to challenge the reasons.

Conclusion. Negotiating a contract can be one of the most uncomfortable experiences you face as a principal. Rather than succumbing to the temptation of just taking what is offered and risking your financial and career health by agreeing to contract terms that are overly balanced in the board’s favor, take some time to educate yourself on terms that are favorable to you. AWSA provides several resources, including “Developing a Win-Win Administrator Contract,” and a sample contract. A solid contract will provide the foundation for a mutually respectful and beneficial relationship with the school board.

This article was written by Attorney Malina Piontek, AWSA’s Level I Legal Services Provider. Contract review is available under AWSA’s Level I benefits. You may direct your Level I questions to Malina at 608-497-3037, or you may email her at [email protected].  This article was designed to provide you with general authoritative information and with commentary as a service to AWSA members. It should not be relied upon as legal advice. 

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