Published by MoASBO, May 2015

Recently, Betsey Helfrich and I had the privilege of presenting at the annual MoASBO Conference in Lake Ozark, Missouri at The Resort at Port Arrowhead regarding issues associated with transportation-related matters. As part of our presentation, we discussed contractual language which, in our opinion, should be inserted into transportation agreements between school districts and contracted transportation service providers. In preparing for our presentation, we discovered that many school districts simply accept the contractual language provided by the transportation service provider without modification. As one would imagine, these agreements are largely service provider friendly. As such, I have selected language from a portion of our presentation and provided that language below. It should be noted that the language discussed is not necessarily limited to transportation agreements and can be inserted in most, if not all, vendor agreements when appropriate.

Indemnification Language

In preparing for our presentation, I noticed that many transportation agreements contained standard indemnification language whereby the contractor agreed to defend the school district from every claim or demand made in relation to the contractor’s acts of neglect, their default or their omissions. One might assume this language adequately protects a school district and would serve to impose liability upon the contractor for their actions. In my opinion, this standard language is deficient. Indeed, as stated directly above, the language only requires the contractor to defend the school district for its acts of neglect, its default or its omissions. The standard language fails to include intentional or criminal acts and, thus, does not adequately protect the school district. Additionally, it fails to include language regarding the contractor’s responsibility to defend the actions of its employees or agents. Thus, in my opinion, language should be included which expressly notes the contractor will be responsible for the individuals they have employed. Below, you will find the modified indemnification language I have recommended be inserted into transportation agreements in the past.

Contractor shall defend the District against and hold the District, its Board, its agents and employees harmless and does hereby indemnify the Board, its agents and employees from and against every claim or demand which may be made by any person, firm or corporation, or other entity arising from or caused by an intentional act, criminal act, or act of neglect, default or omission of Contractor or Contractor’s employees or agents in the performance of this Agreement, except to the extent that such claim or demand arises from or is caused by the negligence or willful misconduct of the District or its agents or employees.

Termination Language

In addition to discussing the indemnification language provided above, Betsey and I also discussed adding termination language to the agreement. Most agreements contain termination language which states the agreement may be terminated for cause after a stated period of time, generally ninety (90) days, should the contractor fail to adequately remedy a problem in the service. Betsey and I do not have an issue with this standard language. However, we feel that additional language must be inserted along with the standard language discussed. Transportation agreements generally provide a term of three (3) to five (5) years. As a practical matter, we understand the need to enter into these agreements for extended periods of time to save funds as most transportation service providers will charge a lesser rate if they know they will be serving a school district for an extended period of time. However, school districts should also be mindful that much can change over a 3 or 5 year period, especially with regard to the school district’s funding sources. School districts receive funding from Federal, State and Local coffers. What happens if funding from these coffers is reduced due to budgetary shortfalls? If funding has disappeared, school districts must still honor the agreement should the transportation service provider fail to renegotiate the terms of the agreement. However, to avoid being held hostage to an agreement, I have provided language below which will aid school districts in exiting the agreement without fear of reprisal from the service provider should funding be reduced.

In addition to the termination for cause language above, Contractor acknowledges that District receives funding from Federal, State and Local government sources for its operations, from which the District pays some or all of the transportation services provided hereunder. If said funding is terminated or decreased, the District shall be entitled, at its sole discretion: 1) to terminate this Agreement as of the date of the funding termination or decrease or 2) reduce the number of vehicles being utilized to fall below the minimum set forth in this Agreement. Any such termination of this Agreement or reduction in services shall be effected by the District giving Contractor thirty days written notice thereof. Termination of this agreement or reduction in services for the reasons and in the manner set forth in this Paragraph shall not constitute breach of the Agreement, provided, however, that any termination of funding shall not relieve the District of its obligation to pay in full all sums due to Contractor for services rendered prior to the day of termination of this Agreement.

Right to Reject Personnel

Should a school district contract out its transportation services and said transportation provider hire the personnel who are to transport the district’s students, school districts must be mindful to insert language in the transportation agreement which allows the district, in its sole discretion, to require the transportation service provider to reassign the employee to other duties if the district feels the employee is not suitable to provide transportation services. I have provided language below which will grant school districts the authority to require the service provider to adhere to the district’s directives regarding who may drive for the school district.

Contractor shall be responsible for hiring and discharging personnel employed by Contractor to perform its obligations hereunder; provided, however, that District shall have the right to require Contractor to reassign any employee who, in the District’s sole discretion, is deemed unsuitable for the performance of transportation services for the District; and provided further that the District shall make such request in writing; state the reasons therefore; and that such request does not violate applicable laws against discrimination.

Cameras

Recently, our law firm has litigated several different matters where, as part of the lawsuit, it was alleged by Plaintiffs, among other things, that they suffered harm as a result of misconduct (e.g., bullying, assault/battery) by fellow district students or district personnel while riding the school bus. During the discovery phase of litigation, each Plaintiff requested the video footage taken on the school bus by the onboard video camera. In one such suit, the onboard camera did not work properly and, thus, the district did not have the sought after footage. Plaintiffs in that case, after having received word of the lack of footage due to the inoperative nature of the camera, claimed that this was additional evidence of negligence on the part of the school district and attempted to use said evidence against the district to prove up their overall claims. In researching the matter, it was determined that no protocol was in place that required either the district or the service provider to perform regular service checks of the onboard bus cameras. With this in mind, I have provided language below which places the burden on the service provider to conduct these regular service checks.

The Contractor shall provide a digital camera system under this Agreement. All buses shall have live cameras for the purpose of recording while the buses are transporting students. Upon written request, the Contractor shall provide video to the District for the purposes of reviewing student/driver behavior on a bus. The District and Contractor will work together to develop policies and procedures regarding how the video and audio will be utilized. Contractor will review cameras every thirty (30) days to ensure said cameras are fully functioning.

As discussed above, the language provided herein is meant to provide school districts with more protection and more control in their transportation agreements. Some of the language discussed herein can, and should, be inserted into other vendor agreements when appropriate. Should you have any questions regarding the language provided above, please do not hesitate to contact the law office of Mickes Goldman O’Toole, LLC.