Proposal for Decision Shell .tx.us



DOCKET NO. 095-R3-197

SHEILA MILLS § BEFORE THE

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V. § COMMISSIONER OF EDUCATION

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WILMER-HUTCHINS §

INDEPENDENT SCHOOL DISTRICT § THE STATE OF TEXAS

DECISION OF THE COMMISSIONER

Statement of the Case

Petitioner, Sheila Mills, appeals Respondent’s, Wilmer-Hutchins Independent School District’s, decision to reduce her salary during the year due to financial exigency.

Christopher Maska was appointed Administrative Law Judge by the Commissioner of Education to preside over this case. Petitioner is represented by Mr. Richard G. Mills, Attorney at Law, Dallas, Texas. Respondent is represented by Ms. Thelma Sanders Clardy, Attorney at Law, Dallas, Texas.

On November 17, 1997, the Administrative Law Judge issued a Proposal for Decision recommending that Petitioner’s appeal be granted except as specified in Conclusion of Law Number 9. Exceptions and replies were timely filed and considered.

Findings and Discussion

Petitioner contends that Respondent did not have the authority to reduce her compensation during the school year and that all well-pled factual allegations should be deemed because Respondent did not file a timely answer. Respondent contends that the reduction in salary was properly done and even if it was not properly done, the Texas Education Agency management team would be the entity at fault. This appeal is decided using the substantial evidence rule to review the local record. However, the facts are not in dispute.

Timelines of Answer

Respondent’s Answer was not timely filed. Respondent’s thirty calendar days to file an answer expired on February 26, 1997. Respondent mailed the answer on February 25, 1997. The Answer was filed on March 3, 1997. The mailbox rule used by the Texas Education Agency differs from that found in the Texas Rules of Civil Procedure:

A document shall be deemed timely filed if it is mailed on the filing deadline as evidenced by a legible postmark placed on the envelope by the United States Postal Service and the document was received by the director of hearings, the hearing examiner, or the designated docket clerk by the close of business on the third calendar day following the filing deadline.

19 TAC §157.1050 (b). Hence, the Answer had to be received by March 1, 1997. While Respondent contends that it filed within three business days, the rule specifies three calendar days.

Fortunately for Respondent, there is no consequence for late filing. The rule concerning well-pled factual allegations being deemed when an answer is untimely filed does not apply in this case. 19 TAC §157.1052 (d). This is a case brought against the district under Texas Education Code §7.057. As such, the standard of review is substantial evidence based on the local record. The Commissioner is not empowered to make findings of fact in such a case. The Commissioner cannot deem facts to true, he can only determine whether substantial evidence supports the district’s decision.

Merits

Petitioner contends that there is no provision to reduce a teacher’s salary during the term of a contract. Respondent counters that there is a provision that allows a district to terminate a teacher’s contract during the term if there is a financial exigency. Texas Education Code §21.211(a)(2). Respondent contends that a financial exigency existed and that if a district may terminate a contract in such a case, it surely can reduce a teacher’s salary. There is no doubt that Respondent was experiencing serious financial difficulties. The real question is can a district reduce a teacher’s salary during the term of the contract for financial exigency?

Under Texas Education Code §21.211(a)(2), a district may terminate a teacher’s contract for financial exigency, but a number of procedures must be followed. The teacher has the right to receive notice of the proposed action and may request a hearing. Texas Education Code §21.251 Any termination of a contact is to be heard by a certified hearing examiner appointed by the Commissioner unless the parties agree on another hearing examiner. The teacher is entitled to subpoena witnesses, present evidence, and cross-examine witnesses. Texas Education Code §21.256. The school district is limited in its ability to the hearing examiner’s recommendation. Texas Education Code §21.259. The hearing procedure is formal and the fact findings are normally made by a third party.

It cannot be concluded that because a district may terminate a teacher’s contract during the contract term for financial exigency by following a formal process, that a district may reduce a teacher’s salary for a financial exigency without following a formal procedure. A district could notice a teacher for proposed contract termination for financial exigency, go through the procedure, terminate the contract, and then offer the teacher a new contract for a reduced salary. This was not done here. Respondent improperly reduced Petitioner’s salary during the term of the contract. Because Respondent improperly reduced Petitioner’s contract during the term, Petitioner is entitled to full compensation for the term of the contract. There is, however, no provision forbidding a district from reducing compensation for a new contract term. Petitioner is only entitled to additional compensation for the 1996-1997 school year.

Management Team

Respondent points out that a Texas Education Agency management team, not the board of trustees, made the decision to reduce Petitioner’s salary. Under Texas Education Code §39.131, the Commissioner may appoint a management team to direct the operations of the district. In fact, the board of trustees voted not to reduce salaries during the term of the contracts. In such a situation, the board of trustees is not the authority directing the district’s actions. The management team was the entity authorized to make the decision for the district. Petitioner filed her Petition for Review which named the Wilmer-Hutchins Independent School District as the Respondent. The Petition for Review properly made the Wilmer-Hutchins Independent School District a party to this cause. There was no need to specifically name the management team. Further, since Respondent’s board of trustees voted not to reduce salaries, how can the board now claim that it should not have to pay Petitioner the salary that the board contracted with Petitioner? Wilmer-Hutchins Independent School District is responsible for improperly reducing Petitioner’s salary.

Novation Clause

Respondent points to the novation clause in Petitioner’s contract:

Any change in state and federal law, District policies, rules, regulations, and administrative directives shall act, to the extent necessary, as a novation to this contract. Continued performance under this contract shall constitute acceptance of the novation by the Employee.

Respondent contends that because Petitioner continued to come to work after salaries were changed that Petitioner accepted the change. This novation clause may be challenged as a whole for the reasons specified in Anna de la Rosa v Harlandale Independent School District, Docket No. 045-R10-1196, (Comm’r Educ. 1997). But even if this novation clause were generally valid, it would not be valid in this case. Novation is the process by which an old contractual obligation is discharged and a new contractual obligation is created. Chastain v Cooper & Reed, 257 S.W.2d 422, 152 Tex. 322 (Tex. 1953). All novations are subject to the general rules of contract law. Money v. Dameron, 70 S.W.2d 291, 293 (Tex. Civ. App.--Amarillo 1933, writ ref’d.). For example, there must be consideration to support a novation. A purported novation that requires the same work from an employee but reduces the employee’s compensation is not supported by consideration. In that case, the old contract remains in force because the new agreement is not a contract. Here, Respondent tried to do precisely that, reduce compensation without reducing work. This attempt fails for lack of consideration.

Conclusion

Petitioner is entitled to compensation that she originally bargained for concerning the 1996-1997 school year. A school district does not have the right to reduce a teacher’s compensation during the term of the contract. There was no valid novation of Petitioner’s contract. Respondent did not pay Petitioner the amount Respondent contracted to pay. Petitioner’s appeal should be granted.

Reply to Exceptions to the Proposal for Decision

Respondent contends that since the management team put in place by Texas Education Agency made the decision to reduce salaries, the Texas Education Agency should “shoulder some, if not all of the blame.” Exceptions, p. 3. When the decision was made, the management team was the lawful authority to direct the affairs of Wilmer-Hutchins Independent School District. Contrary to Respondent’s contention, the management team did not usurp the board’s authority. Wilmer-Hutchins Independent School District is liable for the actions it has taken, whether those actions were taken by a board of trustees or a management team.

Conclusions of Law

After due consideration of the record, matters officially noticed, and the foregoing Findings, in my capacity as Commissioner of Education, I make the following Conclusions of Law:

1. The Commissioner of Education has jurisdiction over this case under Texas Education Code §7.057.

1. A school district does not have the authority to reduce a teacher’s salary during the contract term for reasons of financial exigency.

1. Respondent’s attempt to reduce Petitioner’s salary during the term of the contract is invalid.

1. A novation must be supported by consideration.

1. Because the purported novation is not supported by consideration, it is not valid.

1. The novation provision of Petitioner’s contract is invalid.

1. This case was properly brought against the Wilmer-Hutchins Independent School District.

1. Petitioner is entitled to receive from Respondent the full compensation that she bargained for with Respondent for 1996-1997 school year.

1. The Commissioner lacks jurisdiction to award attorney’s fees or interest.

1. Except as specified in Conclusion of Law Number 9, Petitioner’s appeal is granted.

O R D E R

After due consideration of the record, matters officially noticed, and the foregoing Findings and Conclusions of Law, in my capacity as Commissioner of Education, it is hereby

ORDERED that Petitioner’s appeal be, and is hereby, GRANTED, except as specified in Conclusion of Law Number 9.

SIGNED AND ISSUED this ______ day of ___________________________, 1998.

______________________________

MIKE MOSES

COMMISSIONER OF EDUCATION

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