Force Majeure Presentation to the School Board July 23, 2020
What is Force Majeure? Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, epidemic, pandemic, or an event described by the legal term act of God , prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party's non-performance entirely, but only suspend it for the duration of the force majeure.
Why was the force majeure clause added in teacher and administrator contracts this year? Due to the COVID-19 pandemic, the continuity of instruction to ● students and the manner in which operations of the Danville Public Schools would continue was uncertain. In the event that federal, state, or local decisions are made to ● cancel school altogether, which is highly unlikely, the Danville Public Schools can assert relief under the force majeure clause to suspend our obligations under contracts with employees to ensure minimal impacts to the Division’s budget.
Will employees be paid if force majeure is invoked? If the Danville School Board were to invoke force majeure for a reason in the clause, such as a pandemic, our obligations would end for paying some employees who may not able to fulfill the duties of their position. Example: If schools are closed, but student remote learning is still occurring and being developed, taught, facilitated, and directed by employees who are working their contracted work days and work hours, these employees will continue to be paid as normal. Employees whose position duties can only be fulfilled in person, when students are at school, may not receive pay.
How long does the force majeure remain in effect? The period of time that the force majeure clause would be in effect is based on the reason it was invoked. Example : If the COVID-19 pandemic causes a delayed start to the opening of schools for the 2020-2021 school year, wherein continuity of instruction or operations ceased with no alternatives for continuing either, for the period of time that employees are unable to perform the duties of their contracted position, pay would discontinue temporarily for the period of the force majeure event.
When does a force majeure declaration end? The Danville School Board would have to declare the force majeure, citing the circumstance that led to the declaration. Once the circumstance(s) that led to the declaration ends, the force majeure also ends, and everything goes back to the way it was prior to the declaration.
Can employees file for unemployment? Employees can apply for unemployment benefits if they are unable ● to work or have a reduction of work hours during a force majeure event. DPS has an obligation to report the status of employees who apply ● for unemployment benefits (i.e., lack of work, work refusal, etc.). The Virginia Employment Commission has the ultimate decision as ● to whether unemployment benefits would be paid and the amount to be paid.
What happens to employees’ health insurance during force majeure event? If an employee has health insurance through DPS and is not being paid during the force majeure event, DPS will continue to pay the employer portion of the health insurance plan. Example: If an employee normally pays $75 per month for “employee only” health insurance, he or she would continue to pay that amount, but it will not be payroll deducted. For affected employees, arrangements would be made for them to pay premiums out-of-pocket.
Considerations The Department of Human Resources distributed 457 teacher ● contracts and 51 administrator contracts. Except for those employees who subsequently resigned or retired, 100% were returned. Danville Public Schools has proven the ability to deliver services in ● these very difficult circumstances, including leveraging remote learning and continuing the delivery of instruction. In addition, we have continued human resources and payroll ● functions, as well as feeding our students and cleaning and sanitizing for the safe return of students and staff.
Considerations, cont. A precedent by staff has been set in its collective response to the ● COVID-19 pandemic, and we are very proud of the DPS Strong efforts and sacrifices that everyone has made. We are confident that the new clause will have no impact on staff, ● unless there is an incident that completely dismantles DPS’s ability to serve the community. In our District’s history, no such event has ever occurred. ●
Force Majeure Contact Information: Juliet C. Jennings, Ed.D. Chief Human Resources Officer Email: jjenning@mail.dps.k12.va.us
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