Having worked with thousands of independent and international school boards on the topic of head compensation, Littleford & Associates (always retained by boards, not heads) has learned this: Unfortunately, most heads either do not carefully read the contract language that calls for termination “with cause” and termination “without cause”, or they are not aware of the language that should protect them (and the school).

Most independent and international schools typically offer either a three-year rolling contract, also known as an evergreen contract, or a three-year contract that abruptly ends and must be renegotiated. A few independent and international school heads have a contract of 5 years, but a longer term than that is rare and, in the US, can be risky if an audit of the head’s compensation package occurs. That is because long term contracts may convey a sense that the head governs the board rather than vice versa.

For example, a school head has a 5-year contract and thinks that means having a guaranteed 5-year payout should he/she be fired earlier. That is probably a misinterpretation of the contract. On the other hand, if the head is correct, that is a potentially dangerous situation for the school. A board that is forced to pay out 2 or 3 years of salary and benefits in a termination situation might come under legal fire from school stakeholders and might jeopardize the school’s financial stability.

The common practice is to have at least an 18-month commitment by both parties to notify each other of the intention not to renew.  If the board terminates the contract “without cause”, then the board has (or should have) an 18-month requirement of remaining employment or 18 months of salary and benefits.

The standard practice used to be 12 months, but today a search process that is not rushed takes 18 months. More and more of these contracts put in 18 months as the severance for termination “not for cause.”

Some schools use the word “cause” in very broad terms that are both unfair to the head and dangerous for the school in the long run. The definition of “cause” in a head’s contract should be narrowly defined as dismissal for illegal behavior, gross misconduct, or moral turpitude.

If a contract says that the head can be dismissed for cause for not following the board’s orders, insubordination, or not meeting the board’s goals, a head should be very wary. These are examples of soft definitions of “cause” that are open to interpretation. They may provide the board with political cover to fire the head on short notice without any commitment to pay out any substantial funds that they would have had to do under “not for cause” circumstances. Sometimes if a board really has a need to terminate the head soon, and feels cornered by the contract language, the board may become unpleasant and even threaten to withhold references to force the head to overlook a mistake that the board itself made in the contract language.

The key message to heads of schools is to examine carefully the “cause” and “not for cause” termination definitions within your contract. While it may not always be a good idea or even appropriate to have your lawyer or counselor be negotiating with the board on your behalf about compensation, as that may sometimes alienate the board, it IS appropriate for all heads to have an attorney examine the language in their contract that relates to termination.