A school district employee held the position of chief financial officer/business manager for approximately 10 years. Although this position is not one that required an employment contract, the district had a policy that required the CFO to have a term contract. Additionally, the position did not require SBEC certification, although it did require a master’s degree in a business-related field or educational administration. The employee held a master’s degree in business administration; therefore, she was employed by the district pursuant to a term contract. 

In July 2017, the district amended its policy and eliminated the requirement that the CFO/business manager hold a term contract. About one month later, without providing notice to the employee, the board applied the amended policy to the employee's contract and terminated her employment, declaring that it was void because she did not hold SBEC certification. The employee filed a grievance, arguing that she was entitled to receive due process as provided by her contract. The board of trustees denied her grievance and the employee appealed to the commissioner of education.

The commissioner granted the employee’s appeal, holding that she was entitled to back pay and wages and to reinstatement to her position. In doing so, he noted that school board policies that exist at the time an employee's contract is signed are incorporated into that contract. At the time the employee signed her contract, the district policy said she was entitled to a contract. The commissioner further held that the district could not declare the employee’s contract void for lack of certification, because there is no certificate or permit that was applicable to her position. The commissioner said the employee “cannot fail to meet non-existent requirements.”

The commissioner explained that, although a school district has the right to amend local policies and thereby modify a contract, it does not have the power to substitute something entirely different or destroy a contract. The modification cannot change the general purpose and effect of the contract. Therefore, the district’s attempt to declare the employee's contract void and terminate her on that basis was unlawful.