Steps to Consider Now, Before a RIF
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- Magdalene Willis
- 6 years ago
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1 Steps to Consider Now, Before a RIF With the state s budget crisis looming and many local school districts operating budgets already running as lean as possible, districts across the state are thinking now about the painful possibility of reductions in force (RIFs). Personnel costs make up the lion s share of local school district budgets. In most cases, the only way to balance a local school district budget that is being cut by more than a couple of percentage points is to cut staff. Facing that hard truth, there are a number of concrete steps local districts can take now, during contract renewal season, to lessen the administrative expense and legal complexity of a future RIF. Consider taking these steps right away if your district can foresee the possibility of a RIF following the legislative session. 1. Stop offering contract rights that are more generous than the rights required by law. 2. Do not extend multiple-year contracts for positions that are likely to be affected by a RIF. 3. Document performance issues and be sure that shortcomings are reflected in evaluation ratings. 4. Involve legal counsel earlier rather than later. 5. Review your local policy on RIFs to be sure it reflects the desired approach. 6. Consider seeking early notice of resignations or an early exit incentive plan. 7. Advocate for change from the Legislature. 1. Limit Contract Rights to Legal Requirements Ideally, preparation for a RIF should begin more than one school year in advance. Early preparation allows the district not only to communicate with staff and the public about the district s financial situation, but also to adjust the district s employment relationships with current staff in preparation for the potential reduction. Why is this important? Because declaring a financial exigency and the need for a RIF does not dissolve employees contract rights. A RIF is a process, defined by local policy, that allows the district to identify positions to be eliminated. The process is specifically designed to avoid identifying individual people. Individuals are not identified until the end of the RIF process, and then those affected individuals still have the full opportunity for due process as required by law to end their employment contracts. In other words, a RIF is not an alternative to the existing methods of ending educator contracts termination or nonrenewal. Rather, a RIF is an additional step in the process that applies only when an employment position is being eliminated. The complexity and expense of the process to end an individual contract, such as a nonrenewal or a termination, depends on the type of contract and the timing of the RIF. 1
2 As a result, the goal during the current contract season for a district anticipating a RIF should be to clean house on current employment contracts, to be sure that the district is not offering more legal protections than those required by law. Offering more generous contracts now will mean higher costs later when, after the RIF, the district has to conduct contract nonrenewals or terminations for affected employees. School districts tend to be unnecessarily generous with their employment contracts in a number of different ways. Before your district offers new contracts for next school year, consider doing an inventory of your local policies and practices to spot the ways in which your district may be offering more than the law requires. Generous choices that made sense several years ago may no longer make sense in the current economic climate. Common practices include: Offering the same kind of contracts to individuals in noncertified positions as are given to certified educators. Many districts offer educator contracts to persons employed in positions that do not require certification, such as an IT director or a transportation supervisor. If neither state law nor your local district requires certification for a position, the individual in that position is not required to be employed by a written contract, even if the person happens to hold a certificate. Instead, consider using a written contract that offers less legal protection, often called an employment agreement or noncertified contract, or offering no contract at all. At-will employment can be ended at any time and typical noncertified contracts simply expire at the end of a school year, thus avoiding the expensive due process requirements for educator contracts. Moving inexperienced teachers to a term contract after only one or two years of teaching. Districts often offer term contracts to new teachers after only one or two years of employment under a probationary contract. State law permits school districts to keep teachers who are new to the profession on probationary contracts for up to three and, in some cases, four years. Consider keeping inexperienced educators on probationary contracts for as long as the law allows. Probationary contracts are easy to terminate at the end of a school year, saving the district a great deal of money during an end-of-year RIF. Using multiple-year term contracts indiscriminately. Some districts employ classroom teachers and other certified employees under two-, three-, and even four-year term contracts. These contracts are one-sided commitments. State law requires term contracts to last from one to five years. A district cannot nonrenew a term contract until the end of the contract period. However, the employee has a unilateral right to resign every summer. Consider employing classroom teachers, nurses, counselors, librarians, and even principals under one-year term contracts. One-year contracts permit the district to pursue nonrenewal, rather than costly mid-contract termination, if a RIF becomes necessary. Offering written contracts to part time employees. Many districts are in the habit of giving contracts to all employees in instructional positions, even those who teach only part time. State law requires written employment contracts only for certain full-time employees. For teachers, this means teaching an average of at least four hours per day. Offering employment contracts to part-time staff is not legally required and will greatly inflate the cost of eliminating those positions. Consider employing part-time educators on an at-will basis. 2
3 If your district has extended these or other contract rights beyond the requirements of Texas Education Code chapter 21 and your district is now headed toward a potential RIF, seek legal counsel about your options for altering current employment arrangements. 2. Avoid Extending Multiple-year Contracts In order to reduce the cost and complication of ending employment contracts following a RIF, most districts plan to conduct RIFs through contract nonrenewals in the spring. Nonrenewal is the process for ending a term contract at the end of the contract term. The nonrenewal process is substantially less burdensome than the termination process required to end an educator s contract during the contract term. For one-year term contracts, this opportunity is presented each March, with nonrenewal notice due before the 45th day before the last day of instruction. For multiple-year contracts, however, the opportunity to nonrenew will not arrive unless the contract is allowed to run to the end of its term, e.g., the end of the second year of a two-year contract. Districts traditionally extend (i.e., restart) multiple-year term contracts each year as a vote of confidence. Perpetual extension prevents a district from using a nonrenewal process at the conclusion of a RIF. The district will be forced to resort to the more elaborate and costly contract termination procedure. Contract extensions for administrators may be a welcome practice under most circumstances, but they are not legally required. Given the current economic reality, extensions for employees other than the superintendent may be a luxury that districts cannot afford this year. Consider foregoing contract extensions, at least until financial circumstances improve. If your district elects this option, early and open communication may head off concerns from employees, who traditionally view a failure to extend as a vote of no confidence. 3. Document Performance Issues School districts local RIF policies for term contracts are found at TASB Policy DFF(LOCAL). The TASB model policy for DFF(LOCAL) requires the board to declare the need for a RIF due to a financial exigency or program change, then the board to determine affected employment areas, and finally the administration to apply pre-set criteria to the employees in the employment area. The criteria for deciding which employees will ultimately be affected by the RIF include performance. Performance is measured by the ratings in written employment evaluations. Why does this matter? This matters because often school administrators hesitate to document performance issues, preferring instead to work with a struggling employee to improve performance. Again, this common practice may need to be set aside on the eve of a RIF. If performance issues are not documented and specifically reflected in annual appraisal ratings, a good teacher will look the same on paper as a poor teacher when the time comes to make use of the performance criteria in the RIF. If so, the district may be forced to dismiss a top performer and keep a less outstanding individual. 3
4 Another important performance evaluation issue is the fact that many districts do not prioritize the appraisal of probationary contract teachers. Even if an appraisal is conducted, problems may not be noted in detail, given how easy it is to terminate a probationary contract at the end of the school year. In the context of an overall effort to reduce school district staff, decision makers will need documented data about the performance of all, not just term contract, teachers. 4. Involve Your Attorney offers a number of free, online resources about reducing personnel costs and RIFs. TASB attorneys are also available to consult by telephone. Our general advice is no substitute, however, for the specific advice of your school attorney. When districts know that money is tight, many try to avoid legal fees by delaying contact with their school attorney. Research by the Texas Comptroller demonstrates that delaying legal advice actually has the reverse effect acting in the dark or with only general advice actually increases overall costs. i In RIFs, as in other aspects of school law, an ounce of prevention is worth a pound of cure. Work closely with your school attorney to assess current contract obligations and plan a possible RIF calendar. 5. Review Local Policy The process for a reduction in force is governed by local school district policy. That means local school boards are the architects for the process for deciding which positions, and ultimately which people, will be affected by a RIF. Once a RIF is underway, the school board cannot change its policy midstream. That means confirming or updating the content of your local policy, in consultation with your school attorney, is an essential first step in any RIF. 6. Consider Seeking Early Notice Many districts hope to avoid the need for a RIF by relying on natural attrition or even offering employees an incentive to leave the district. Districts are currently discussing two approaches that are sometimes confused with each other. These two approaches have very different legal consequences. Offering an incentive for early resignation notice: State law gives each educator an annual opportunity to resign his or her contract without penalty as long as the educator gives the district notice of the resignation before the 45th day before the first day of instruction of the next school year. This date, known as the penalty-free resignation date, typically falls in mid-july. In order to RIF employees using contract nonrenewals, rather than expensive mid-contract terminations, districts must notify affected educators by the 45th day before the last day of instruction of the preceding school year. This date, known as the nonrenewal notice deadline, typically falls in mid-april. In order to rely on attrition to reduce or eliminate the need for a RIF, districts need notice of future resignations by March, not July. Many districts are considering offering employees who already know they plan to resign after the current school year (due to retirement or other causes) a financial incentive to give the district notice in March, not in July, that they will not return next year. This relatively small financial incentive is intended to encourage early notice of a planned departure; it is not intended to buy out an educator s contract or encourage an educator to leave the district if the educator was not already planning to depart. 4
5 Offering an incentive for resignation: In contrast, some districts are considering offering more substantial financial incentives to encourage current employees to depart voluntarily. In these cases, a financial incentive is offered as part of a severance agreement, which is a legal agreement between an employer and an employee that specifies the terms of an employment separation. Typically, a severance agreement asks the employee for a waiver of legal claims against the employer. A severance agreement must be approached with caution. Elaborate rules overseen by the Equal Employment Opportunity Commission (EEOC) govern the waiver of age discrimination claims in severance agreements. 29 U.S.C. 626(f). In addition, Texas Education Code section prohibits districts from offering or providing a financial or other incentive to encourage the employee to retire from TRS. Finally, the way in which severance payments are structured may impact both TRS retirement benefits and the employee s right to unemployment compensation. To avoid these legal stumbling blocks, a school district must seek legal advice before offering a resignation incentive. 7. Advocate for Legislative Change Certainly, our first priority in the legislative session will be to advocate for the importance of school funding. We recognize that most school districts are already operating with lean budgets, and cuts to overall school funding would have an immediate and detrimental effect on classroom instruction. That said, if cuts are inevitable, school officials also need to advocate for legislative changes to simplify the procedure for ending contracts due to a RIF. If funding cuts threaten to create financial exigency in school districts across the state, the Legislature should respond by lightening the administrative burden of cutting personnel. For instance, lifting the statutory mandate requiring hearings in front of TEA hearing officers for mid-contract RIF terminations could greatly reduce the difficulty and expense of the RIF process. Consider this issue when you communicate with your elected representatives. Conclusion Unfortunately, this is a time of uncertainty and anxiety in public education. Many Texas school districts are searching for solutions before we even fully understand the challenges ahead. We hope that by offering these concrete steps to prepare for the future, we can help your district avoid or at least be ready for a necessary reduction in force. Please feel free to view our free, online resources at schoollawesource.tasb.org or contact us with questions at A version of this article was first published in the January/February 2011 edition of the Texas Lone Star magazine. This document is provided for educational purposes only and contains information to facilitate a general understanding of the law. It is neither an exhaustive treatment of the law on this subject nor is it intended to substitute for the advice of an attorney. It is important for the recipient to consult with the district s own attorney in order to apply these legal principles to specific fat situations. i See the Texas Comptroller of Public Accounts March 2003 Report, Navigating the Legal Maze: A Practical Guide for Controlling the Cost of School District Legal Services, at 5
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