Gary Teachers Union, Local No. 4 v. School City of Gary

Dissenting Opinion

Staton, P.J.

Tankersley’s teaching contract was terminated. Later, he received a written statement of the charges against him which were the basis of his termination. Two and a half months later, he received a hearing on the written charges. Before his termination, he had executed a teaching contract on April 25, 1972 for the school year beginning September 25, 1972. This contract was a general nontenured contract, but under the collective bargaining contract which had been previously negotiated, Tankersley contended that he was entitled to tenure and the procedural safeguards provided by the Teacher Tenure Act. Tankersley was terminated on June 30, 1972 and received his hearing on September 14, 1972. The majority opinion concluded that the collective bargaining contract provision, Article X, was invalid since the . . Teacher Tenure Act controls and prohibits according tenure status to teachers before the statutory requirements are met.”

I dissent from the majority opinion, and I would remand this cause to the trial court for these reasons:

1. The Teacher Tenure Act does not manifest a legislative intent to establish a uniform minimum trial period of employment for non-tenured teachers. The “trial period” rationale suggested by the majority is illusory *328and insubstantial when examined in light of the procedural and substantive rights which have recently been accorded to non-tenured teachers. The only substantial legislative policy underlying the Tenure Act is to provide limited job security after a uniform maximum period of teaching service. The Tenure Act should not be interpreted to bar a school corporation from contractually establishing more advantageous tenure arrangements which tend to further the Act’s fundamental “job security” purpose.
2. Since the legislative policy underlying the Tenure Act is not offended by Article X of the collective bargaining agreement, the General School Powers Act authorizes the School City to contractually establish minimum procedural safeguards governing the dismissal of nontenured teachers.
3. The majority fails to confront the issue of whether Tankersley’s personal contract was breached.
4. I would remand this cause to the trial court for a construction of Article X of the collective bargaining agreement, and for a determination of whether the School City’s failure to provide a formal evidentiary hearing prior to Tankersley’s dismissal constituted a breach of Article X. I would also require the trial court to consider whether the School City’s failure to afford Tankersley a hearing prior to his dismissal constituted a breach of his personal contract of employment.

I.

Contractual Tenure

The majority concludes that the legislative purpose underlying the Teacher Tenure Act is jeopardized by the procedural safeguards afforded to non-tenured teachers under Article X of the collective bargaining agreement. It is contended that the Tenure Act reflects a legislative judgment “. . . that the *329public interest . . . demands some reasonable period of time within which a school system may seek to improve the quality of its teachers, even though those replaced may meet minimal standards of competence and behavior.” While the Supreme Court’s opinions in School City of Lafayette v. Highley (1938), 213 Ind. 369, 12 N.E.2d 927 and Miller v. Barton School Twp. (1939), 215 Ind. 510, 20 N.E.2d 967 do indicate that the state has an interest in establishing a uniform system of teacher tenure, neither Highley nor Miller articulate the nature and content of the state’s interest in uniformity. I reject the majority’s conclusion that the Tenure Act functions to promote educational quality by establishing a minimum trial period during which heightened standards of professional competence may be applied in evaluating the performance of novice teachers. The job security afforded to a teacher who attains statutory tenured status offers no protection from a dismissal caused by that teacher’s failure to perform at a higher level of teaching competence, even if the higher standard is imposed after the teacher has attained statutory tenure. The Tenure Act provides that a tenured teacher may be dismissed “. . . for incompetency, insubordination . . ., neglect of duty, immorality, justifiable decrease in the number of teaching positions or other good and, just cause, but may not be [dismissed] for political or personal reasons; . . .” IC 1971, 20-6-12-2 (Burns Code Ed.). The Indiana Supreme Court has consistently interpreted the Act’s “good and just cause” provision to authorize a tenured teacher’s dismissal upon “. . . any ground which is put forward in good faith, and which is not arbitrary, irrational, unreasonable, or irrelevant to the school board’s task of building up and maintaining an efficient school system.” Board of School Trustees v. Moore (1941), 218 Ind. 386, 393; 33 N.E.2d 114, 116; McQuaid v. State ex rel. Sigler (1937), 211 Ind. 595, 6 N.E.2d 547. Thus, there can be little doubt that a tenured teacher’s failure to satisfy a standard of performance more demanding than the standard which existed during his *330first five years of teaching would constitute “good and just cause” for dismissal.

I also reject the majority’s suggestion that the Tenure Act’s minimum trial period provides school authorities with the unbridled discretion to dismiss non-tenured teachers for any reason which appeals to their whim or caprice. In Tilton v. Southwest School Corp. (1972), 151 Ind. App. 608, 281 N.E.2d 117, this Court held that a non-tenured teacher cannot be dismissed for a cause which has no rational relation to the school corporation’s business or educational interests. Moreover, IC 1971, 20-6-13-1 (Burns Code Ed.) provides that a non-tenured teacher has the right to demand “. . . a written statement showing [the] reason for such dismissal.”

I agree with the majority’s observation that “. . . there can be little doubt of the service to the public interest in education which the security of the tenure system provides in attracting and keeping capable teachers. ...” The Tenure Act’s purpose of promoting job security is not impaired by Article X of the collective bargaining agreement. To the extent that Article X embodies the procedural protections extended by the Tenure Act, it promotes the retention of qualified teaching personnel. Since the legislative policy underlying the Tenure Act is not offended by Article X of the collective bargaining agreement, the General School Powers Act clearly authorizes the School City to contractually establish minimum procedural safeguards governing the dismissal of non-tenured teachers.

The General School Powers Act expressly confers broad authority on local school corporations to establish the terms and conditions of employment applicable to all school personnel. IC 1971, 20-5-2-2 (Burns Code Ed.), which enumerates the specific powers of school corporations, provides in part:

“In carrying out the school purposes of each school corporation, its governing body acting on its behalf shall have the following specific powers:
*331(7) To employ, contract for and discharge superintendents, supervisors, principals, teachers, . . .; to fix and pay the salaries and compensation of such persons and such services; to classify such persons or services and to adopt schedules of salaries or compensation; to determine the number of such persons or the amount of services thus employed or contracted for; and to determine the nature and extent of. their duties.
The compensation, terms of employment and discharge of teachers shall, however, be subject to and governed by the laws relating to employment, contracting, compensation and discharge of teachers; . . .”

IC 1971, 20-5-1-3 (Burns Code Ed.), the general definitional section of the Act, expressly defines “ [1] aws relating to the employment, contracting, compensation and discharge of teachers” to encompass the provisions of the Indiana Teacher’s Tenure Act. In addition, certain provisions of the General School Powers Act provide interpretative guidance. IC 1971, 20-5-2-2, supra, the “specific powers” section of the Act, includes an implied powers provision which states:

“(19) To exercise any other power and make any expenditure in carrying out its general powers and purposes provided in sec. 201 [20-5-2-1] or in carrying out the powers delineated in this sec. 202 which is reasonable from a business or educational standpoint in carrying out school purposes of the school corporation, including but not limited to the acquisition of property or the employment or contracting for services, even though such power or expenditure shall not be specifically set out herein; and the specific powers set out in this section shall not be construed to limit the general grant of powers provided in sec. 201 [20-5-2-1] except where a limitation is set out in this act by specific language or by reference to other law.”

Finally, IC 1971, 20-5-6-3 (Burns Code Ed.), establishes a general tenet of construction:

“This act [20-5-1-1 — 20-5-6-7] shall be liberally construed to permit the governing body of school corporations to conduct its affairs in a manner consistent with sound business practice to the ends that the authority of the governing body shall be clarified and that it shall be permitted to operate with the maximum efficiency consistent with accountability.”

*332The central unifying principle of the General School Powers Act is that local school corporations, while wholly legislative creatures, are statutorily invested with broad mánagerial autonomy to formulate and implement educational policies tailored to the needs of their respective communities. In Salem Community School Corp. v. Easterly (1971), 149 Ind. App. 11, 275 N.E.2d 317, 322, this court recognized that the Act manifests a legislative intent to accord substantial implied authority to locally elected school officials:

“The General School Powers Act is the broad grant of authority to the public school authorities in the State of Indiana ‘to prepare, make and enforce . . .’ (our emphasis) rules and regulations pertaining to the operation of the public schools in the State of Indiana. . . .”

Thus, the trial court and majority’s conclusion that a specific enabling provision would be required to empower school corporations to contract for any terms of employment differing from those provided by the Tenure statute is at odds with the legislative policy underlying the Act. In Gary Teachers Union, Local No. 4, AFT v. School City of Gary (1972), 152 Ind. App. 591, 284 N.E.2d 108, this court held that the General School Powers Act provided local school corporations with the implied authority to bargain collectively with teacher representatives. Moreover, it has been held that the Act provides school corporations with sufficient authority to contract for compulsory arbitration of disputes arising under collective bargaining agreements. East Chicago Teachers Union, Local No. 511, AFT v. Board of Trustees (1972), 153 Ind. App. 463, 287 N.E.2d 891. The interpretive approach adopted in these cases supports and demands a construction of the Act which invests Indiana’s school corporations with all implied authority “. . . reasonable from a business or educational standpoint. . . IG 1971, 20-5-2-2, supra.

The General School Powers Act does, however, impose some limits on a school corporation’s implied power to either unilaterally or contractually establish the terms and conditions of employment for its personnel. While sub-section 7 *333of IC 1971, 20-5-2-2, supra, confers broad authority “[t]o employ, contract for and discharge. . . .” school personnel, sub-section 7 also provides that “[t]he compensation, terms of employment and discharge of teachers shall, however, be subject to and governed by the laws relating to employment, contracting, compensation and discharge of teachers; . . .” In Weest v. Board of School Comm’rs of City of Indianapolis (1974), 162 Ind. App. 614, 320 N.E.2d 748, this proviso to sub-section 7 was construed as a limitation on the authority of a school corporation “to enter into any agreement which operates in derogation of the laws governing compensation of teachers.” (Our emphasis), Id. at 752. Although the Weest court determined that the plaintiff-teacher had not been deprived of her statutory right to accumulated sick pay by the collective bargaining agreement under consideration, Judge Lybrook construed the proviso to sub-section 7 as a general limitation of the authority of a school corporation to adopt teacher employment terms which are less advantageous than those provided by statute. The state has a legitimate interest in prescribing certain minimum terms of employment in order to assure that qualified personnel will be attracted to serve in Indiana’s primary and secondary schools. The proviso to sub-section 7 cannot be construed to impinge on the broad authority of local school corporations to adopt terms of employment which are more advantageous to school personnel than those provided by statute.

The only limitation imposed by the General School Powers Act is that the more advantageous terms of employment adopted be “. . . reasonable from a business or educational standpoint. . . .” IC 1971, 20-5-2-2, supra. In order for this court to determine whether the “Gary tenure” plan under consideration is rationally related to some legitimate “business or educational” purpose, the distinction between statutory tenure and non-tenure status must be examined.

*334II.

Tenure Status

Tankersley and the Union contend that Article X of the collective bargaining agreement provides all the rights and benefits of statutory tenure to qualified teachers in the Gary school system. Assuming arguendo that this is an accurate construction of Article X, a careful examination of the Indiana Teacher’s Tenure Act discloses that the sole advantage of statutory tenure status is the right to a hearing prior to dismissal with certain attendant procedural safeguards. IC 1971, 20-6-12-2 (Burns Code Ed.). While the Act also provides that a tenure teacher’s dismissal must be predicated on some “good or just cause,” this court has held that a non-tenure teacher cannot be dismissed in the absence of some reason that is rationally related to a school corporation’s educational and business concerns. Tilton v. Southwest School Corp., supra. Thus, Article X of the collective bargaining agreement, assuming that it does incorporate the benefits of statutory tenure, merely provides certain formal hearing rights not otherwise available to teachers who have not satisfied the six year prerequisite of the Indiana Teacher’s Tenure Act.

There is no evidence of a legislative intent, either in the Indiana Teacher’s Tenure Act or the General School Powers Act, to limit the implied authority of a school corporation to contractually extend the hearing rights afforded statutorily tenured teachers to other teaching personnel. The general limitation on the implied authority of school corporations requiring that the action be “. . . reasonable from a business or educational standpoint . . .,” is not offended. The trial court and majority’s holding that the School City of Gary lacked the statutory authority to contractually implement the “Gary tenure” plan is erroneous.

*335III.

Breach of Personal Contract

Tankersley and the Union consistently asserted that the School City’s failure to provide a formal evidentiary hearing-prior to the effective date of Tankersley’s dismissal constituted a breach of Tankersley’s personal contract of employment. Tankersley’s individual contract contained the following provision concerning dismissal:

“It is agreed by the parties hereto that in case the said teacher should, after opportunity for hearing with benefit of legal counsel, be held by said employer to be guilty of incompetency, immorality, insubordination or other offense recognized as just cause according to law for cancellation of contract, such teacher, subject to proper appeal, shall be deemed to be dismissed and shall thereafter hold no claim for further compensation, subject, however, to the provisions of law concerning the employment and dismissal of teachers which are in force and effect. Revocation of license by the State Department of Education for any statutory reason shall be deemed to constitute incompetency under this contract.” (Emphasis added).

In response to this assertion of contractual breach, the School City contended that the four-stage grievance procedure established by the collective bargaining agreement was intended to supplant any procedural rights provided by Tankersley’s individual contract. The School City also argued, in the alternative, that if the individual contract were construed to require a hearing prior to dismissal, the informal second-stage meeting provided by the grievance procedure should be deemed sufficient to satisfy a “prior hearing” requirement.

The trial court’s judgment and decree wholly failed to discuss whether Tankersley’s individual contract provided any right to a formal hearing prior to his termination. The majority opinion expressly recognizes “. . . that the grievance procedure outlined in the collective bargaining agreement is mechanically somewhat at odds with the prior hearing procedures required under the individual contract . . .,” but concludes that there was no violation of Tankersley’s contractual *336right to a prior hearing. The majority’s avoidance of this difficult question of contract construction would appear to be premised on three distinct grounds: (1) the collective bargaining agreement’s grievance procedure provided Tankersley with the right to a formal evidentiary hearing before the school board; (2) Tankersley and the school board agreed that the fourth stage hearing constituted the “hearing” required by Tankersley’s individual contract; and (3) the formal hearing on September 14, 1972 “. . . was conducted during a period of time before the contract [Tankersley’s 1972-73 contract] was to go into effect.” None of these grounds furnish any adequate justification for the majority’s failure to resolve the clear procedural conflict between the School City’s reliance on the grievance procedure and Tankersley’s claim that his contractual right to a “prior hearing” was abridged.

While it is true that “[t]he grievance procedure clearly preserves the Teacher’s right to proceed through the Stage 4 meeting with the school board,” the grievance procedure contains no provision governing when the School City’s unilateral right to terminate a teacher’s contract accrues. The majority’s ambiguous rationalization overlooks the real dispute between the parties — what is the content of Tankersley’s contractual right to a “prior hearing” in the context of the collective bargaining agreement’s grievance procedure? If the majority’s reticence to grapple with this fundamental issue is due to the inadequacy of the trial record, it should remand the cause for a clear construction of these conflicting contract provisions.

The majority underscores the stipulation that “. . . Tankersley and the school board agreed that the hearing to be held would constitute both the Stage 4 hearing and the hearing referred to in Tankersley’s individual contract.” This statement suggests that the parties’ informal stipulation constitutes an express waiver of Tankersley’s contractual right to a hearing prior to his dismissal. The majority’s *337inference of waiver is negated by the record. It is undisputed that Tankersley’s contract was formally terminated almost two and one-half months prior to the school board hearing. At both the hearing and the trial, Tankersley contended that the School City’s failure to provide a hearing prior to dismissal constituted a breach of his individual contract. Under Tankersley’s theory, a clear breach of his contract had already occurred at the time when the school board hearing was convened. It should also be noted that the School City’s characterization of the fourth stage hearing as “. . . the hearing referred to in Tankersley’s individual contract” is inconsistent with the construction of the individual contract it advanced at trial. At trial, the School City contended that the “prior hearing” referred to in Tankersley’s individual contract contemplated an informal second-stage meeting under the grievance procedure.

As a third ground in support of its conclusion, the majority asserts that the hearing before the school board “. . . was conducted during a period of time before the contract was to go into effect.” This assertion is not supported by the record. Tankersley’s personal contract for the 1972-73 academic year was executed on April 25, 1972. While the agreement does state that the parties’ respective duties of performance would not arise until the commencement of the academic year on September 25,1972, it contains no provision which postpones its effective date until September 25, 1972. In the absence of some contrary expression of intent, it is a well-established principle of contract formation that an agreement is legally effective on the date of its execution. See, e.g., Cal Hirsch & Sons Iron & Rail Co. v. Peru Steel Casting Co. (1911), 50 Ind. App. 59, 96 N.E. 807; Haskell & Barker Car Co. v. Allegheny Forging Co. (1910), 47 Ind. App. 392; 91 N.E. 975. Since the contract was clearly in effect when the School City’s alleged breach occurred, I fail to appreciate the relevance of the majority’s assertion that the contract was merely executory at the time of Tankersley’s dismissal.

*338I would remand this cause to the trial court for further proceeding consistent with this dissenting opinion and as more specifically outlined in reason “4” above.

Note. — Reported at 332 N.E.2d 256.