Exhaustion Was Required In Suit Alleging Breach Of The Administrator’s Non-Chapter 21 Employment Contract

In Shackelford v. Bonham Indep. Sch. Dist., No. 4:18-CV-00035 (E.D. Tex. July 31, 2018), a federal court dismissed a breach of contract action filed by a former employee of Bonham ISD for the employee’s failure to exhaust administrative remedies through the Commissioner of Education.  John Shackelford held a non-Chapter 21 contract and served as the district’s Director of Transportation/Maintenance when he was placed on leave without pay for allegedly mishandling district funds. In a meeting with the superintendent, Shackelford was told he was “relieved” of his duties.  The board later found good cause for the man’s termination and the board upheld the termination following an appeal.

Shackelford then filed suit against the district, alleging breach of contract and age discrimination. At the request of the school district, the court dismissed the breach of contract action.  According to the court, Shackelford was required to exhaust administrative remedies through the Commissioner of Education.

The trial court observed that when the legislature has granted the Commissioner authority to resolve a dispute, parties to such disputes must seek relief first from the Commissioner through an administrative appeal before resorting to the courts.  Under Texas Education Code § 7.057, a district employee claiming breach of a written employment contract may appeal to the Commissioner if the alleged breach causes or would cause monetary harm to the employee.

There are exceptions to the exhaustion requirement when (1) irreparable harm would result and the administrative agency is unable to provide relief; (2) the claims are for a violation of a constitutional or federal statutory right; (3) the cause of action involves pure questions of law and the facts are not disputed; (4) the Commissioner lacks jurisdiction over the dispute; (5) the administrative agency acts without authority; or (6) the claims involve parties acting outside the scope of employment.

The trial court concluded that none of the exceptions applied to Shackelford’s suit.  Under Education Code § 7.057, the Commissioner had authority to resolve the dispute and there were fact issues on whether Shackelford was terminated by the superintendent or the board of trustees.  Shackelford’s claims could have been considered by the Commissioner of Education and, as a result, his failure to exhaust administrative remedies deprived the trial court of jurisdiction over the lawsuit.

Keep in mind that this case involved a non-Chapter 21 contract because Shackelford’s position did not require certification.  Therefore, administrators holding these types of contract must be mindful of the exhaustion requirements before filing suit for breach of contract.

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