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Sauk Centre Education Association v. Seagren: EMPLOYMENT | EDUCATION - Education Department authority to set conditions on salry-reform funding

Filed November 13, 2007
Crippen, Judge*
Minnesota Department of Education
Harley M. Ogata, Education Minnesota, 41 Sherburne Avenue, St. Paul, MN 55103 (for
Lori Swanson, Attorney General, Kathryn Morrell Woodruff, Assistant Attorney General,
445 Minnesota Street, Suite 1200, St. Paul, MN 55101-2134 (for respondent)
Considered and decided by Peterson, Presiding Judge; Klaphake, Judge; and
Crippen, Judge.
The decision of the commissioner of the Minnesota Department of Education is
within the scope of her authority and is neither arbitrary nor capricious when, interpreting
the relevant statute, she requires as a condition for salary-reform funding the alteration of
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, 10.
Sauk Centre Education Association, et al.,
Alice Seagren, Commissioner,
Minnesota Department of Education,
a school districts salary schedule in such a manner that no teacher is free to enjoy timein-
service or educational advancement without meeting performance standards.
Relators Sauk Centre Education Association and Independent School District No.
743 (Sauk Centre) challenge the decision of the commissioner of the Minnesota
Department of Education denying their application for alternative-teacher-professionalpay-
system funding under Minn. Stat. 122A.413-416 (Supp. 2005). Relators argue that
the commissioners denial of their proposal for failing to adequately reform the steps and
lanes salary schedule was arbitrary and capricious and unsupported by the evidence.
Because the commissioners interpretation of the statute is based on the clear
language of the statute and is supported by substantial evidence, we affirm.
The Minnesota Legislature enacted Minn. Stat. 122A.413-.416 in 20051 to
encourage development of educational improvement plans by offering the incentive of
additional teacher pay tied to measurable performance improvement. The state provides
additional funding to school districts that undertake the reforms necessary to qualify for
the program known as the Q Comp program. Relators were one of a number of school
districts and teacher organizations that applied for approval of their plan in order to
receive the funding, which is beyond the usual state aid to schools.
1 2005 Minn. Laws 1st Spec. Sess. Ch. 5, art 2, 39-44.
To qualify for funding, the Q Comp statute requires, among other things,
assessments, performance goals, accountability, professional staff development, and
mentoring. Minn. Stat. 122A.413, subd. 2. In addition, a school district must submit a
restructured teacher pay system that encourages teachers to improve their knowledge
and instructional skills in order to improve student learning; the restructured system
must also promote the training, recruitment, and professional advancement of highly
skilled teachers. Minn. Stat. 122A.414, subd. 1.
The statute also identifies specific components that must be a part of a school
districts alternative professional pay plan, including descriptions of career advancement
opportunities and the means to achieve advancement, and a description of the means to
obtain additional compensation. In addition, pertinent to the question in this case, the
plan must reform the usual steps and lanes salary schedule,2 without reducing any
teachers compensationbasing at least 60% of the compensation increase on
measurable improvements in student or teacher performance. Id. at subd. 2(b).
Drawing on the statute, the commissioner has identified five necessary elements to
the alternative pay system, including the demand that standards base at least 60% of any
compensation increase on measurable teacher/student performance and that an alternative
professional pay schedule unhooks teacher compensation from the traditional steps and
lanes progression.
2 The steps and lanes salary schedule is the norm for teacher pay in Minnesota. A
teacher advances through steps based on years of teaching, ultimately reaching the
highest level of pay in any one lane. In order to advance to a new lane, a teacher must
add training or education, such as receiving an advanced degree or specialized training in
a certain subject area.
Relators challenge the commissioners interpretation of the statutory requirements
as applied to their compensation plan. In this proposal, relators retained the basic steps
and lanes salary structure, but added a performance pay component. Every teacher in the
district would receive 0 if students increased their average proficiency on the MCA-II
standardized test in a given year. Every teacher at a school site would receive 0 if
district students at the site increased their proficiency by 2%. In addition, all teachers
were eligible to receive 0 if they participated in a professional learning community
(PLC), which essentially meant that they had to attend staff meetings. Teachers would
continue to move through the salary schedule based on years of service and the addition
of education and training credits.
The commissioner denied the proposal on the rationale that relators, rather than
proposing an alternative pay system, remained unduly tied to the steps and lanes
compensation system. The commissioner noted that progression on the salary schedule
was not changed by the addition of performance pay and that some reform to the salary
schedule itself is required to meet the requirement of Minn. Stat. 122A.414, subd. 2(b).
Demanding this reform in addition to meeting the 60% standard (the percent of
compensation based on performance), the commissioner concluded that relators were
unwilling to reform their salary schedule and denied the application.
Was the commissioners decision to reject relators application for alternative
teacher performance pay funding an error of law or arbitrary and capricious?
Standard of Review
Agency decisions enjoy a presumption of correctness, and a reviewing court defers
to the agencys expertise and special knowledge in its field of technical knowledge,
expertise, and training. In re Excess Surplus Status of Blue Cross and Blue Shield, 624
N.W.2d 264, 278 (Minn. 2001). An agency decision is sustained unless it violates
constitutional provisions, exceeds statutory authority, is based on an error of law, is
unsupported by substantial evidence, or is arbitrary and capricious. AFSCME, Council
No. 14 v. Scott County, 530 N.W.2d 218, 220 (Minn. App. 1995), review denied (Minn.
May 16, June 14, 1995). But construction of a statute is a question of law reviewed de
novo by this court. Id.
The object of all interpretation and construction of
laws is to ascertain and effectuate the intention of the
legislature. Every law shall be construed, if possible, to give
effect to all its provisions.
When the words of a law in their application to an
existing situation are clear and free from all ambiguity, the
letter of the law shall not be disregarded under the pretext of
pursuing the spirit.
Minn. Stat. 645.16 (2006). Relators here assert that the issue is strictly a question of
law entailing interpretation of Minn. Stat. 122A.414, subd. 2.
Administration of Plans
Relators argue that the commissioner approved twelve plans that do not
immediately modify steps and lanes salary schedules, including two that do not clearly
provide assurance that there will be a change in the future. Having examined those
twelve proposals, we are satisfied that the record does not show that any of the twelve
approvals are unconditional or that approval in the future can be expected without
modification. Therefore, we do not reach relators contention that the commissioners
decision is arbitrary because it is inconsistent with the approval of other plans.
Statutory Standard
In order to qualify for additional teacher compensation under the statute, a district
must adopt an alternative teacher professional pay system (ATPPS). Minn. Stat.
122A.414, subd. 2(a). The ATPPS must include reform [of] the steps and lane salary
schedule[.] Id. at subd. 2(b)(3). The legislative intent for establishing an ATPPS is
included in the statute:
A restructured alternative teacher professional pay
system is established . . . to provide incentives to encourage
teachers to improve their knowledge and instructional skills
in order to improve student learning and for school districts
. . . to recruit and retain highly qualified teachers, encourage
highly qualified teachers to undertake challenging
assignments, and support teachers roles in improving
students educational achievement.
Minn. Stat. 122A.414, subd. 1. Legislative intent is also discernible in the statutes
emphasis on rigorous professional development, teaching quality improvement, and
mentoring, and in the choice of alternative pay to encourage professional development.
Minn. Stat. 122A.413, subds. 1, 2; .414, subd. 1. In that context, reform [of] the
steps and lanes salary schedule is an important component of the legislative intent.
Relators argue that their proposal, which awards bonuses based on measurable
performance standards, completely alters the usual steps and lanes salary schedule,
pointing out that the plan meets the statutory standard that 60% of compensation
increases are premised on performance goals. But under relators plan, although a
teacher can earn a bonus by meeting certain performance standards, a teacher may also
avoid performance goals and continue to advance through the steps and lanes salary
schedule without change. Although relators plan changes the compensation system and
meets the 60% standard, this does not mean that the commissioner is arbitrary and
capricious when demanding reform of the steps and lanes structure that limits
advancements without performance improvements. The statute requires reform of the
salary schedule. Minn. Stat. 122A.414, subd. 2(b). The statute contemplates that all
teachers increase and improve their performance and instructional capabilities. Thus, the
commissioners interpretation of the statute to require real reform of the steps and lanes
salary schedule, rather than the mere addition of a bonus component, is not unreasonable.
The commissioners rejection of relators Q Comp proposal because the proposal
failed to reform relators steps and lanes salary schedule was neither arbitrary nor
capricious, nor an unreasonable interpretation of the statute.


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