OEDEL: Dallemand’s severance

March 3, 2013 

Given the Promise Center scandal and the red ink projected to bleed from the school system next year, Bibb’s former school superintendent, Romain Dallemand, left under a cloud last week. So I was surprised that Dallemand hauled in $350,000 plus other eye-opening benefits to quit.

At first I surmised that it must have been smart for Bibb’s Board of Education to pay Dallemand to go quick. So I got copies of the two employment contracts between the board and Dallemand to compare with the severance deal, expecting they’d show it made sense just to pay Dallemand big to leave now.

What I learned changed my mind. Dallemand parted company with Bibb on terms that were no quicker and lots more expensive and contingent than the board’s more obvious options.

The board had two employment contracts with Dallemand, the first one ending June 30, 2013, and another to run three years beginning July 1. The second one was executed by the lame-duck board in December and is legally suspect, among other reasons, for violating Georgia’s constitutional rule against multi-year contracts.

The severance agreement specifies that Dallemand is resigning without cause, but if so, there’s no need for a severance agreement, because it’s specified in the second contract (assuming it’s valid) that if Dallemand resigns, he’s only to get $70,000 for each year of service ($140,000 total) and no extra benefits.

On the other hand, if the board were to have fired him without cause (and assuming the second contract is valid), Dallemand would have gotten the $140,000 plus one year of salary, $198,000, for a total cash payout of $338,000, not including benefits -- less than the severance agreement’s $350,000 cash, not including benefits.

There were other possible scenarios. Dallemand could have been fired for cause, in which case he would have gotten nothing. Dallemand could have served out the first contract, and the second contract been held invalid, in which case Dallemand would have gotten compensated only through June. And as Dallemand may have threatened, he might theoretically have stayed three years more if the court just ignored the facial unconstitutionality of Dallemand’s second contract. But with both parties pressing toward ending the relationship, that prospect was remote.

In short, even generously accepting the second contract’s termination provisions, Bibb’s immediate liabilities to Dallemand at severance ranged from zero to $338,000. So where did $350,000 come from, not splitting the difference, but going over the top? Why were eye-popping extra benefits added? And why try to gag knowledgeable officials?

Dallemand’s new benefits in the severance agreement really make you wonder. Both employment contracts explicitly exclude public payment for things like attorneys’ fees in any criminal proceeding against Dallemand.

Why should the public now agree to pay Dallemand’s fees if he’s criminally prosecuted, after the Promise Center matter had already been referred to the prosecutor? And why pay for any civil judgments against Dallemand, in addition to fees? The state’s school board overseers should and probably will ask about all this.

Even though it made sense to see Dallemand depart, you begin to wonder if some players harbored dubious reasons for over paying Dallemand. So far, board members aren’t talking much.

Aside from anybody who bizarrely wanted to award Dallemand a bonus, it’s conceivable that some may have wanted to protect those involved in the Promise Center scandal, wary of what damage a mad Dallemand might do.

When Judge Ed Ennis ruled that former schools CFO Ron Collier couldn’t collaterally attack the Promise Center lease, Ennis didn’t suggest that the lease was lawful as signed.

The lease appears to me to have been unlawfully signed through authorization rather than by board action; unconstitutional as a multi-year contract; and flawed contractually with bargaining process and consideration defects.

Those core problems didn’t just disappear with Dallemand. If commitments made in the board’s name are determined to be unlawful, some involved in securing millions of borrowed dollars based on those commitments remain at legal risk.

Oedel teaches constitutional and contract law at Mercer Law School.

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