Authority of Local Board of Trustees to Adopt and Repeal a Tenure System

Subject:

Requested By: Mr. Kenneth R. Wooten Ward and Smith, P.A. Counsel for the Craven Community College New Bern, North Carolina

Question: Is it statutorily and constitutionally permissible for a community college to eliminate its continuing contract (tenure) policy for its employees and place them on annual contracts with a due process policy to apply during the contract year and a non-reappointment policy to apply at the end of each contract year?

Conclusion: Yes. Chapter 115D of the General Statutes does not give the board of trustees of a community college authority to enact a tenure policy. An ultra vires policy does not confer any rights protected by Article I, Section 10 of the United States Constitution. Assuming arguendo that the Board of Trustees of Craven Community College did have authority to adopt such a policy, the policy adopted did not grant any contract rights against the college. Absent the conferral of contract rights, the Board of Trustees remains free to change the policy without violating Article I, Section 10 of the Constitution.

On January 17, 1979, the Board of Trustees of Craven Community College adopted certain personnel policies memorialized in a document entitled "The Craven Community College Due Process Policy" (The Policy). This Policy purports to establish a relationship between the college and its employees whereby certain employees do not serve at the will of the college, but rather have a right to continued employment as long as they remain willing and able to perform their obligations competently. In other words, this policy embodies a system of tenure. The initial issue is whether the trustees have the authority to adopt this Policy.

An analysis of the provisions of Chapter 115D of the General Statutes, in light of relevant principles of statutory construction, leads this Office to conclude that the Board of Trustees of Craven Community College did not have authority to adopt this Policy. N.C.G.S. 115D-5 prescribes the authority of the State Board of Community Colleges over the individual institutions within the Community College System. It provides in pertinent part:

"The Board shall have authority with respect to individual institutions: . . . to establish and administer standards for professional personnel. . . ."

N.C.G.S. 115D-20 delegates specific powers and duties to the boards of trustees of community colleges. Those powers do not include the authority to adopt a tenure system. To be sure, the powers and duties of the trustees include the power to elect or employ personnel for the institution upon nomination by the president or chief administrative officer. N.C.G.S. 115D20(2). Moreover, the trustees are empowered to perform such other acts and do such other things as may be necessary or proper for the exercise of their power of employment. N.C.G.S. 115D20(7). But simple power to employ, in the opinion of this Office, does not include the power to establish a system of tenure. That power does not exist by implication.

Tenure systems are in derogation of the common law. Marzee v. Fremong County School District, 142 Col. 83, 349 P. 2d, 699, 701 (1960); Anderson v. Goard of Education, 390 Ill. 412, 61 N.E. 2d 562, 567 (1945); O’Conner v. Emerson, 188 N.Y.S. 236, 341 (1921). A governmental unit does not have the power to act in derogation of the common law unless that power is expressly conferred. See Ellington v. Bradford, 242 N.C. 159, 86 S.E. 2d 925 (1955); Grimes v. Grimes, 207 N.C. 778, 178 S.E. 573 (1935). Tenure systems represent a far reaching extension of normal employment practices, grant public employees significant new rights otherwise unavailable and sharply restrict the usual powers of governmental agencies to dismiss and discipline employees. See Still v. Lance, 279 N.C. 254, 182 S.E. 2d 403 (1971). Therefore, in our opinion the decision to establish a tenure system is a matter of public policy. Questions of public policy are the sole province of the General Assembly. Furthermore, acts of the General Assembly will not be construed to alter established legal principles unless such an intention is clearly and unequivocably expressed in the statute. Brown v. Brown, 213 N.C. 347, 196 S.E. 333 (1938). See also "Enforcing Academic Tenure", 1961 Wis. L. Rev. 200 where the author states: "Classic political theory (assigns) responsibility for enacting a system of academic tenure to the legislature rather than an administrative agency."

Additionally and of equal importance, the power of a board of trustees under N.C.G.S. 115D20(2) "to elect or employ" personnel is specifically "subject to standards established by the State Board of Community Colleges." The State Board has not adopted any regulations establishing a system of tenure for employees of institutions within the Community College System nor has it delegated such authority to local boards of trustees. *

* Indeed, this Office has advised the State Board, upon the basis of the principles referenced above, that it is doubtful that the State Board itself has the authority to adopt or authorize the establishment of a tenure system or systems for employees of institutions within the Community College System.

Article I, Section 10 of the United States Constitution forbids the impairment of the obligation of contract and circumscribes the power of governmental agencies to unilaterally alter the terms of a contractual relationship. this Section of the Constitution, however, does not protect contracts which are invalid, illegal or ultra vires. New Orleans v. New Orleans Waterworks Co., 142 U.S. 79, 35 L.Ed. 943, 12 S.Ct. 142 (1891); Griffith v. Connecticut, 218 U.S. 563, 54 L.Ed. 1151, 31 S.Ct. 132 (1910); Glidden Co. v. Zdanak, 370 U.S. 580, 8 L.Ed. 2d 671, 82 S.Ct. 1459 (1962). As noted above, it is our opinion that the Board of Trustees of Craven Community College acted ultra vires when it adopted the Policy. Consequently, the elimination of the tenure system described in the Policy does not constitute an impairment of the obligation of contract under Article I, Section 10.

Even if it be assumed arguendo that the Board of Trustees of Craven Community College had the authority to enact this Policy, it is nevertheless the opinion of this Office that the Board may repeal the Policy without violating the provisions of Article 1, Section 10. The prohibition against impairment of the obligation of contract "is not an absolute one and is not to be read with literal exactness like a mathematical formula." Home Building and Loan Association v. Blaidsell, 290 U.S. 398, 435, 78 L.Ed. 413, 427 91934). See also, El Paso v. Simons, 397 U.S. 497, 13 L.Ed. 2d 446, 85 S.Ct. 557 (1975). A long line of cases has established that Article I, Section 10 is not to be read as restricting or limiting the exercise of the "essential attributes of sovereign power." Home Building and Loan Association v. Glaidsell, supra. See also, Butler v. Pennsylvania, 51 U.S. 402, 13 L.Ed. 472 (1850); Kingston v. McLaughlin, 359 F.Supp. 25 (D.C. Mass. 1973) (Three Judge Court), aff", 411 U.S. 923, 36 L.Ed. 2d 388, 93 S.Ct. 1900 (1973); and Koch v. Yunick, 533 F. 2d 80 (2nd. Cir. 1976).

Among the "essential attributes of sovereign power" which may be exercised without impairing the obligation of contract, is the power of a governmental agency to prescribe and after the terms and conditions of employment. In Butler v. Pennsylvania, supra, the Supreme Court considered the issue of whether an action of the Pennsylvania Legislature reducing the compensation paid certain public employees during the term of their employment violated Article 1, Section 10. In holding that legislative act to be constitutional, the Court said:

"The appointment to and the tenure of an office created for the public use and the regulation of the salary affixed to such an office, do not fall within the meaning of (Article I, Section 10). They are functions appropriate to that class of powers and obligations by which governments are enabled, and called upon, to foster and promote and general good; functions, therefore, which governments cannot be presumed to have surrendered, if indeed they can under any circumstances be justified in surrendering them." 51 U.S. at 417.

The principle laid down in Butler has recently been reaffirmed. In Koch v. Yunick, supra, the Court relied upon Butler to reject a challenge to amendments to the New York Civil Service Law which changed the method of determining layoffs and demotions. Similarly, in Kingston v. McLaughlin, supra, the Court, quoting Butler at length, rejected an argument that an amendment to the Massachusetts Constitution requiring judges to retire at 70 was contrary to Article I, Section 10.

A further basis for the authority of the Board of Trustees to unilaterally repeal this Policy without infringing the rights of its employees is found in the Policy itself. Statutes or regulations which establish tenure systems for public employees can be separated into two legally distinct classes. The first class includes those statutes or regulations which establish systems of tenure based upon a contractual relation between the individual teacher and the state. See Indiana Ex Rel. Anderson

v. Brand, 303 U.S. 95, 105, 82 L.Ed. 685, 58 S.Ct. 443 (1937); Minnesota-Association of Public Schools v. Hanson, 287 Minn. 415, 178 N.W. 2d 846, 852, (1970). The second class includes those statutes which establish a system of tenure based upon a status which entitles qualified teachers to certain rights not available to other teachers. See Phelps v. Board of Education, 300

U.S.

319, 81 L.Ed. 675, 51 S.Ct. 483 (1936); Cipu v. Board of Education, 351 A. 2d 76, 80 (Conn. 1974); Gibson v. Butler, 484 S.W. 2d 356 (Tenn. 1972); Gullett v. Sparks, 444 S.W. 2d 901, 903 (Ky. 1969); Kapera v. Board of Education, 158 A. 2d 842, 847 (N.J. 1960); Crawford

v.

Sadler, 160 Fla. 182, 34 So. 2d 38 (1948); Taylor v. Board of Education, 89 P. 2d 148, 154 (Cal. 1939).

The distinction between these two classes of tenure statutes produces significant legal consequences under Article I, Section 10 of the Constitution.

Any tenure system which establishes a qualified teacher’s right to continued employment by virtue of an indefinite contract, comes within the protection of Article I, Section 10. Consequently, a tenure system based on contractual rights to indefinite employment may be altered to impair a teacher’s contractual right only if the impairment is both reasonable and necessary to serve an important state purpose. Cf. United States Trust Company v. New Jersey, 431 U.S. 1, 29, 52 L.Ed. 2d 92, 97 S.Ct. 1505 (1977).

If, on the other hand, the tenure system does not create a contractual right in the individual teacher, but rather confers a special status on qualified teachers, then there is no contractual obligation to the individual teacher and the tenure system may be altered without regard for the strictures of Article I, Section 10. Dodge v. Board of Education, supra, 302 U.S. at 78-79 (1937); Phelps v. Board of Education, supra, 300 U.S. at 322-323 (3936); Cf. United States Trust Company v. New Jersey, supra, 431 U.S. at 17.

It is our opinion that the Craven Community College Due Process Procedure is an attempt to establish a system of tenure based upon status rather than contract. Therefore, the College is free to alter the Policy without fear of violating Article I, Section 10.

Evidence in support of this construction can be found throughout the Policy. "Continuing contract," for example, is a defined term in the Policy. Further evidence that the Board intended to use it as a term of art can be found in the fact that the phrase is set off with quotation marks in the definition. In light of these facts it is evident that "continuing contract" is a special statutory term to which the accepted, common law definition of contract does not apply. Vogel v. Reed Supply Co., 277 N.C. 119, 130-131, 177 S.E. 2d 273, (1970).

More explicit support for our construction of the Policy can be found in the Board’s use of the phrase "continuing contract status" throughout the definitions in Section I, para. 2, 6, and 7. Finally, the Policy pointedly defines "dismissal" as "the termination of an employee during a contract period or after continuing contract status has been attained." See Section I, para. 7. The fact that this definition distinguishes between a "contract period" and "continuing contract status" is particularly noteworthy. If "continuing contract status" were equivalent to a contract for life or any other extended period, there would be no need to define "dismissal" in terms of "contract period" and "continuing contract status" because the termination of any employee under "continuing contract" would necessarily occur during a contract period. Inasmuch as words in a

statute are not to be deemed redundant if they can be reasonably construed so as to add meaning to the statute harmonious with its purpose, it is our opinion that "continuing contract status" is not equivalent to a life long contract. In Re Watson, 273 N.C. 629, 634, 161 S.E. 2d 1, (1968).

For all these reasons it is our opinion that the Policy is an attempt to establish a system of tenure based on statutory status rather than contractual rights and obligations. Consistent with this construction of the Policy, it is our opinion that any changes in the Policy would not run afoul of Article I, Section 10 of the United States Constitution.

See Phelps v. Board of Education, supra. Therefore, the Board is free to alter the Policy without the prior approval of the affected employees.

In conclusion, it is our opinion that the board of trustees of a community college lacks the authority to enact an employment system which grants lifetime contracts to its employees. Therefore, the Policy of Craven Community College was void ab initio, created no enforceable right to continued employment, and may now be altered without incurring any legal liabilities. Even if one assumes the Board of Trustees of Craven Community college had the authority to establish a tenure system, the Board retained the power to alter or repeal that system and may exercise those powers without impairing the obligation of contract. Finally, the system established in this case simply conferred a special status upon qualified employees. That status did not create any contract rights which would be subject to the protections of Article 1, Section 10 of the United States Constitution.

Rufus L. Edmisten Attorney General

Edwin M. Speas, Jr. Special Deputy Attorney General

Thomas J. Ziko Assistant Attorney General