An Administrator's Guide to California Private School Law

Chapter 4 - Employment Contracts And Separation Of Employees

(1) willful breach of duty; (2) habitual neglect of duty; or (3) continued incapacity to perform his or her job duties. 408 Therefore, if a school wants to maintain the ability to end a contract for a specified term for other reasons, the school must expressly define those other reasons under a contractual definition of “cause” in the employment contract. Without such express provision, generally any reason beyond the three grounds stated in Labor Code section 2924 will be insufficient to terminate an employment contract. 409 Employment contracts for a specified term, such as annual faculty and staff contracts, are commonly used in private schools. The contracts are sometimes for 10-month or 12-month periods. Many schools utilize annual employment contracts that are renewed, or not, in the spring of each academic year. The annual employment contract works for schools for several reasons. First, breach of contract by employees is rare and a clear breach that is serious enough to cause the termination of an employee mid-contract and mid-school year is often not a legally risky separation. Legal risks can also be addressed through termination with a settlement agreement that contains protections for both the school and the former employee. Since an employee properly employed under an annual contract has no reasonable expectation of continued employment beyond the specified period, potential damages for breach of contract are limited to the balance of the annual term. Second, since so many schools utilize annual employment contracts, it is familiar and comfortable for employees and schools. The main legal issues for contracts for a term or annual contracts are: (1) differences between the school and the employee on how the term is defined; (2) differences between the school and the employee on whether the contract is for a term (since the contract may have been automatically renewed for many years); and (3) differences of opinion on whether a school has sufficient cause to end the contract during or at the end of the term. Unlike at-will employment, the issue of whether a school has sufficient cause to terminate a contract during the term may be a question for a jury to decide. Therefore, termination of a contract for a term may be more costly for a school. LCW Practice Advisor If a school and employee enter into an annual

employment contract, the school should understand that the employment relationship is not at-will. Setting a specified term of employment contradicts at-will employment.

Paris v. Faith Properties, Inc. 410 A female teacher sued a private school for, among other things, breach of contract after the school terminated her employment in the middle of the academic year. At the time of the teacher’s hire, the school completed a “Salary Information Sheet” to delineate salary and benefit information. The Salary Information Sheet stated that the teacher was a ten-month employee and provided that the teacher was required to teach 11 hours per week for 36 weeks. The school alleged that the employee was at-will and thus the school could terminate her employment at any time. The Court determined that the Salary Information Sheet contained a definite term of employment, as well as salary

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