Update: On May 2, 2013, the Supreme Court handed down a merit decision in this case.  Read the analysis here.

Read the analysis of the oral argument here.

On January 9, 2013, the Supreme Court of Ohio will hear oral argument in the case of State of Ohio ex rel. John Nese, Donald Williams, and Catherine Miles v. State Teachers Retirement System Board of Ohio and Jefferson County Educational Service Center Governing Board, 2012-0251.  Justice French wrote the court of appeals decision in this case, so she has recused herself, and Judge Robert Ringland of the Twelfth District Court of Appeals will sit in her stead.

Hey-I’m a teacher, so this one naturally got my attention!

Issue

The issue is whether instructors of an online educational system are considered “teachers” and are therefore entitled to participate in the State Teachers Retirement System.

Background

In 2001, the Jefferson County Educational Service Center Governing Board (ESC) approved the development of a Virtual Learning Academy (VLA) as an internet-based educational delivery system designed to provide alternative educational options for students. The VLA is not a school, but a curriculum option that school districts might utilize to help their own students.  Participating districts may either use their own teachers or can elect to utilize teachers hired directly by the ESC to serve as instructors for the enrolled students. The State Teachers Retirement Board (STRB) concluded that VLA instructors did not constitute “teachers” as defined in R.C. 3307.01(B), and therefore were not eligible to participate in the Retirement System.

Nese, Williams, and Miles, three VLA instructors, filed an original action in the Court of Appeals for Franklin County seeking a writ of mandamus to compel the Retirement Board to accept their contributions to the Retirement System, and to compel ESC to make employer contributions to the system. ESC was joined as a party defendant in an amended complaint, but philosophically their interests are aligned with the three instructors. (According to its brief, ESC has continued to withhold and set aside both employee and employer STRS contributions on behalf of the VLA teachers.)

The case was assigned to a magistrate, who determined that STRB had abused its discretion in finding that the VLA instructors were independent contractors, and recommended that a writ of mandamus be issued. STRB filed objections to the Magistrate’s conclusions of law.

Appellate Decision

The Tenth District Court of Appeals, by a split decision, denied the writ. Finding that the Retirement Board did not abuse its discretion by determining that the instructors were independent contractors, as there was some evidence to support this decision, the Court of Appeals deferred to the administrative decision of STRB. The instructors and the ESC both appealed to the Ohio Supreme Court.

Appellants’ Argument

The ESC and the instructors filed separate briefs, asserting similar arguments on appeal.

The ESC begins argument on appeal with a nod to public policy: the changing world of public education in light of technological advances necessitates the designation of instructors of internet-based curricula as “teachers” for the purpose of enrolling in the State Teachers Retirement System. Further, Appellants argue that pension provisions for public employees are to be liberally construed and should not be interpreted adversely to the interests of public employees and their dependents that the statutes were designed to protect.

The instructors argue that even if the Court should find that they were independent contractors, they were still members of STRS because they were performing the same services as teachers under contract.

Appellee’s Argument

In response to Appellants’ arguments, STRB urges the court to find that the appeals court did not abuse its discretion when it found that there was evidence to support its determination that the instructors were not teachers for the purposes of participation in the state teachers’ retirement system.  Rather, STRB argues that the instructors worked for the VLA as independent contractors. For this proposition, the STRB relies on a narrow interpretation of the statute defining “teacher” as any person employed by the district, and leaving such a determination to the Retirement Board.

E.S.C.’s Proposed Proposition of Law

Individuals hired by the governing board of an educational service center as instructors for a virtual learning academy are “teachers” as defined in R.C. 3307.01(B)(4) and not independent contractors; therefore, they are eligible to participate in the State Teachers Retirement System of Ohio.

Instructors’ Proposed Propositions of Law

Proposition of Law 1: Relators were “teachers” as defined in R.C. 3307.01(B)(4) while performing services for ESC.

Proposition of Law 2: Relators were employees, not independent contractors.

Proposition of Law 3: Even if Relators were independent contractors, they were still members of STRS because they were performing the same services as teachers under contract.

STRB’s Proposed Counter Proposition of Law

The Court did not abuse its discretion when it found that there was some evidence to support the Board’s determination that Relators were not teachers for purposes of STRS membership for independent contractor work they performed through the Virtual Learning Academy.

Bobik v. Industrial Commission 146 Ohio St. 187, 64 N.E.2d 829 (1946)

Paragraph one of the syllabus

“[t]he chief test in determining whether one is an employee or an independent contractor is the right to control the manner or means of performing the work.”

State ex rel. Moss v. Ohio State Highway Patrol Retirement System, 97 Ohio St.3d 198 (2002)

Ambiguous statutory provisions in pension statutes must be construed liberally in favor of the interests of public employees and their dependents that the pension statutes were designed to protect. Decisions of the STRSB to determine whether a person is a teacher under the statute shall be final.

Student Contributor: Elizabeth Chesnut