Fining Teachers for Switching Schools

Originally published in The American Prospect on November 3, 2016.
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Last month, the Massachusetts Teachers Association reported on the story of Matthew Kowalski, a high school history and economics teacher who received a $6,087 bill over the summer from his former employer—a suburban charter school in Malden, Massachusetts. Kowalski had worked at the Mystic Valley Regional Charter School for seven years, but with three young children and another one on the way, he said he wanted to find a teaching job that would offer something more stable than at-will employment.

Mystic Valley now seeks to collect thousands of dollars in “liquidated damages” for Kowalski’s departure. Every spring, the charter school requires its employees to sign one-year contracts for the following school year, but since many new teaching positions don’t open up until May, June, and July, this puts teachers in a tough position if they want to consider looking for alternative jobs. Kowalski signed Mystic Valley’s 2016-2017 contract in April, got a job offer from a traditional public school in May, and gave the charter written and verbal notice by May 20. Mystic Valley then hired Kowalski’s replacement, whom Kowalski trained. Two months later, his $6,000 bill arrived. It didn’t take long for Kowalski to learn there were others who had faced a similar fate. MTA Today reported on another teacher who had worked at Mystic Valley for four years, who was billed $4,900 in “damages” for giving notice over the summer.

As MTA’s legal division worked to help the former Mystic Valley teacher fight these charges, Kowalski’s attorney stumbled upon something surprising: Mystic Valley employment contracts included non-compete provisions, prohibiting teachers from working in any public or private school in any of the six “sending districts” near the charter school. Though charters are often framed as a way to induce competition into American schools, non-compete agreements—which have grown increasingly common in the private sector—make clear that some charter employers don’t believe that schools should compete for teaching talent. Nor is it clear that the agreements are even legal, or enforceable.

Just how common contracts like these actually are remains a mystery, but they’re not just limited to Mystic Valley.In 2015, the Akron Beacon Journal found that Summit Academy Schools, the largest charter network in Ohio, sued nearly 50 former teachers in a three-year period for leaving for other jobs. Summit Academy schools have non-compete provisions in their employment contracts.

“Summit Academy’s legal team filed [lawsuits] against as many as eight [former teachers] at a time,” the Akron Beacon Journal reported. One such teacher was Joel Kovitch, who quit in 2013 to take a higher-paying position. He gave his notice one month into summer vacation, and thought there’d be plenty of time to replace him. He ended up paying Summit Academy $1,200 after growing tired of fighting the legal battle.

The American Prospect also reviewed an employment contract for a charter school within the Constellation Schools network, another Ohio charter chain with 17 campuses throughout the state. The contract requires teachers to work for one year, to have no expectation for employment beyond that, and to pay their school $2,000 in liquidated damages if they terminate their employment at any time before their contract expires. The Constellation contract says this is not a “penalty” for leaving, but an acknowledgment that the employer “has expended considerable time and effort recruiting and/or retaining and training you to ensure you are prepared for your position, and … that such a disruption to the educational process is difficult if not impossible to calculate.”

In other words, teachers can’t expect to stay more than one year, but if they leave before one year is over, then they will need to pay their school two grand. Constellation Schools did not return request for comment.

Teachers who work at Ozark Montessori Academy, a charter school in Arkansas, also have to sign non-competes, agreeing to not “directly or indirectly … solicit, induce, recruit, or cause another person in their employ of Employer to terminate his/her employment for the purpose of joining, associating, or becoming employed with any business or activity which is in competition with Ozark Education, Inc.” The agreement lasts for two years after the teacher leaves the school, and it applies “in any area in which Employer plans to solicit or conduct business.” Charter teachers at Ozark are also required to sign confidentiality agreements that they will not directly or indirectly disclose “trade secrets” which are “used by Employer and give it an opportunity to obtain an advantage over competitors who do not know those trade secrets.”

The American Prospect contacted Ozark to inquire about their employment contract, and in regards to their non-compete requirement, a school representative said, “We pay for our teachers’ Montessori training, and since that’s such a big expense for us, we wanted in [the contract] that we’re not going to pay for a teacher’s training and then they go quit and work for someone else.”

The American Prospect reviewed a contract for another charter school in Washington, D.C., that, in addition to having a one-year non-compete provision and requiring teachers to keep “trade secrets” confidential during and after employment—including information related to the school’s “academic policies and strategies”—also requires teachers to not “create, or appear to create, a conflict of interest with Employee’s loyalty to or duties for” the school, “including, but not limited to, providing any tutoring for hire.”

This charter school also requires teachers to agree to mandatory arbitration—a process that involves waiving away your right to sue for grievances, or to contest the terms of the contract itself. The provision requires teachers to waive their rights accorded them by worker protection, civil-rights, and anti-discrimination acts, as follows:

The parties agree that … any dispute (“Dispute”) between the parties arising out of or relating to the Employee’s employment, or to the negotiation, execution, performance or termination of this Agreement or the Employee’s employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine, whether that dispute arises during or after employment shall be resolved by final, binding, and non-appealable arbitration by one arbitrator in the Washington, D.C. metropolitan area, in accordance with the National Employment Arbitration Rules of the American Arbitration Association, as modified by the provisions of this Article.

The Covenant Keepers Charter School in Little Rock, Arkansas, requires its teachers to not disclose “trade secrets” and to agree to not work for any “business or activity in competition with the charter school” for two years after leaving, in “any area in which the Employer currently solicits or conducts business, and/or any area in which an Employer plans to solicit or conduct business.” The teacher also has to agree to pay liquidated damages in the amount of “$100,000 plus court costs, litigation expenses, and actual and reasonable attorneys’ fees” if the non-compete or confidentiality agreement is breached.

No one has sought to tally how many charter schools include non-compete agreements in their contracts. Schools certainly don’t publicize them; it often requires individual teachers coming forward to alert the public to their existence. A Gainesville, Florida, elementary school teacher wrote on a legal advice forum asking whether the non-compete agreement she signed at her charter school was enforceable. A teacher at the Pennsylvania Virtual Charter School confirmed to The American Prospect that they too must sign non-compete agreements.

The Prospect reached out to the National Association of Public Charter Schools to inquire if the group promoted any kind of model charter employment contract, or if there are any provisions they specifically discourage charter schools from adopting. Vanessa Descalzi, a senior communications manager, says her group had never heard of other charter schools with practices like suing departed teachers for liquidated damages, or including non-compete, or forced-arbitration clauses.

The revelation of such provisions in charter school contracts comes at a time when the Obama administration and the National Labor Relations Board have begun to crack down on overly broad confidentiality agreements, mandatory arbitrations, and non-compete clauses. The White House says 20 percent of American workers are bound by non-compete agreements, and just last week urged state legislatures and policymakers to ban them for certain categories of workers, particularly those unlikely to possess real trade secrets.

The Economic Policy Institute says survey evidence reveals that many workers have no idea they are bound by non-compete agreements, with fewer than one in five employees consulting an attorney before signing, and only about one in ten attempting to negotiate the terms of their agreement. And as Economic Policy Institute vice president Ross Eisenbrey notes, even when workers know about the clauses, it’s a choice “between taking a job and not taking it in a tough labor market that favors employers.”

Even if such provisions are one day banned by legislatures or nullified by the courts, their current inclusion within charter employment contracts may be enough to deter teachers from taking the legal risk of moving on to a different school. This may be what the employers are counting on.

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