Court Finds Potential Breach Of Contract For College’s Failure To Provide Retirement Benefits To Outgoing President

DATE: Apr 25, 2024

On July 1, 2011, Herbert Swender entered into an Employment Agreement with Garden City Community College whereby Swender would serve as the College’s next president.  The Employment Agreement outlined Swender’s various job duties and responsibilities, as well as his annual salary and benefits.

On April 10, 2018, some female students attended a Board of Trustees’ meeting to voice complaints of experiencing sexual harassment on campus.  In deciding how to react, Swender consulted his chief of security, human resources director, and an attorney.  All three individuals advised Swender to serve the students with an indefinite “No Trespass Order,” which would prohibit those students from frequenting campus.  The attorney drafted the No Trespass Order and told Swender it was “good and valid.”  The No Trespass Order did not specify a termination date or detail if the students could appeal it for review.

Shortly after serving the students with the No Trespass Order, the students obtained counsel to investigate the College’s policies and procedures.  After a few months of discussion with the students’ attorneys, the College lifted the No Trespass Orders.  These events also ultimately resulted in an agreement for Swender’s resignation.

On August 6, 2018, the College and Swender entered into a Separation Agreement, which stated that Swender’s employment with the College would immediately terminate, but the College would retain him as an independent consultant through the end of the year.  The Separation Agreement also stated that Swender would receive his normal salary and benefits through January 1, 2019, and would not be subject to any reduction or setoff.

Under Swender’s Employment Agreement, one of his benefits was coverage under the Kansas Public Employees Retirement System (KPERS).  This program invests a portion of the contributor’s paycheck into a retirement system, so that when the contributor retires, KPERS will pay a lifetime monthly benefit.  Under the terms of the Separation Agreement, Swender thought he would retain this benefit through January 1, 2019.  On the other hand, the College believed Swender was no longer an employee as of August 7, 2018, and the College notified KPERS that it no longer employed Swender as a full-time public employee.

Then, in February 2020, the students sued the College and numerous school administrators, including Swender.  The students settled their claims in February 2023.  Although Swender was a party to the settlement agreement, he did not participate financially and paid no money to the students.

Swender filed suit against the College alleging breach of contract, among other claims.

The College asked the Court to dismiss the breach of contract claims.  The Court found that Swender and the College willingly entered into two contracts:  The Employment Agreement and the Separation Agreement.

Swender argued that parts of the Separation Agreement were necessarily incorporated and relied upon parts of the Employment Agreement—namely, the parts that detailed his annual salary and benefits.  Swender argued that he agreed to step down as president in exchange for the continuation of salary and benefits.  Although the Separation Agreement did not explicitly list Swender’s present salary and benefits, the Employment Agreement did, and in fact, listed KPERS coverage among the benefits.  Swender argued that the College breached the agreement when it reported Swender’s last day of employment as August 7, 2018, and subsequently lost out on those benefits.

The College argued that the breach of contract claim was barred because of the release clause in the Separation Agreement.

Here, the Court concluded that Swender signed the Separation Agreement on August 6, 2018, releasing all claims that he had at the time of signing.  The release did not cover actions taken after signing the Separation Agreement, and Swender claimed that the College breached the agreement on August 7, 2018, when they notified KPERS of the change in employment status.

The Court denied the College’s motion to dismiss the breach of contract claim.  The remainder of Swender’s claims were dismissed due to the statute of limitations tolling.

Note: This case serves as an important reminder that the terms of a separation agreement (or any contract) may reference another document, and schools need to ensure they are in compliance with both. 

Swender v. Garden City Cmty. Coll. (D.Kan. Mar. 29, 2024) 2024 U.S.Dist.LEXIS 57767.

View More News

Private Education Matters
Arbitration Agreement Not Binding Where Employee Resigned And Then Returned To Job Without Signing New Arbitration Agreement
Private Education Matters
Family Must Pay Full Tuition Amount For Withdrawing Children After Enrollment Agreement Cancellation Date