                                         OFFICE oftheATTORNEY GENERAL
                                                           GREG         ABBOTT




                                                          February 3,2003



The Honorable Allan Ritter                                               Opinion No. GA-001 8
Chair, Pensions and Investments              Committee
Texas House of Representatives                                           Re: Whether certain statutory provisions relating
P.O. Box 2910                                                            to revocation of retirement benefits and immunity
Austin, Texas 78768-2910                                                 from liability apply to a retired teacher employed
                                                                         on a temporary basis by a third party that provides
                                                                         contractual staff services to a school district
                                                                         (RQ-0584-JC)

Dear Representative     Ritter:

         Your predecessor as Chair of the Pensions and Investments Committee asked this office a
series of questions related to the practice of contracting with commercial enterprises that employ
retired teachers and supply them to the school districts on a temporary basis.’ As we understand the
situation giving rise to this request, certain commercial enterprises enter into contracts with retired
educators to secure their employment with school districts and enter into contracts with school
districts to provide those districts with the services of those educators.       As the contracts are
structured, the retired educators are employees of the third-party commercial enterprise and provide
services on a temporary basis to the school districts. Your predecessor asked whether, under such
an arrangement, provisions for loss of retirement benefits, such as those found in Government Code
sections 824.005(b) and 824.601, are triggered; whether a retired educator employed under such an
arrangement is a “professional employee of a school district” for the purpose of section 22.05 1 of
the Education Code’s grant of limited immunity for personal liability of such employees; and
whether a third-party employer of this sort is subject to the provisions of chapter 91 of the Labor
Code concerning staff leasing services. See Request Letter, supra note 1; see also TEX. GOV’T CODE
ANN. $8 824.005(b) (V emon Supp. 2003), 824.601 (Vernon 1994); TEX. EDUC. CODE ANN. 5 22.05 1
(Vernon 1996); TEX. LAB. CODE ANN. $0 91.001-91.063 (Vernon 1996 & Supp. 2003).

        Government     Code section 824.005(b), the subject of the first question, reads:

                          A person who has retired under the retirement system revokes
                 that retirement if the person becomes employed in any position in a


          ‘See Letter from Honorable Dale Tillery, Chair, Pensions and Investments Committee, Texas House of
Representatives, to Honorable John Comyn, Texas Attorney General (Aug. 2,2002) (on file with Opinion Committee)
[hereinafter Request Letter].




                                  An Equal   Employment   Opportunity   Employer   Printed   on Recycled   Paper
The Honorable Allan Ritter - Page 2                 (GA-001 8)




                  public school during the first month following that person’s effective
                  date of retirement, or during the first two months following an
                  effective date of retirement established by reliance on section
                  824.002(d), and must return any retirement benefits received under
                  the original retirement.

TEX. GOV’T CODE       ANN. 0 824.005(b) (Vernon Supp. 2003) (emphasis added).

         A similar penalty provision is to be found at section 824.601, which provides in pertinent
part:

                         Except as provided by Section 824.602, a retiree is not
                 entitled to service or disability retirement benefit payments, as
                 applicable, for any month in which the retiree is employed in any
                 position by a Texas public educational institution.

Id. 9 824.601 (Vernon 1994) (emphasis added). As the emphasized language in these provisions
makes clear, whether the revocation of benefits under them is triggered by the kind of employment
at issue here depends upon whether, within the meaning of these provisions, the retired educator is
“employed in any position” by the school district.

         We note at the outset that we are not considering the application of the provisions to any
particular individual. Determining the employment status of particular individuals would require
the examination of factual matters of a sort we cannot undertake in the opinion process.* We are
therefore concerned solely with the meaning of “employed in any position” in the two statutes as a
matter of law.

        The question of who is an employee of an employer such as a school district covered by the
Teachers Retirement System of Texas (the “TRS” or “retirement system”), moreover, is in the first
instance a matter for TRS. Section 82 1.001(6) of the Government Code defines “[elmployee” as “a
person who is employed, as determined by the retirement system, on other than a temporary basis
by an employer for at least one-half time at a regular rate of pay comparable to that of other persons
employed in similar positions.” Id. 4 821.001(6) (Vernon Supp. 2003).

          TRS’s position on this question, as detailed in a letter brief to this office, is that “[i]f the facts
support a finding that the third party is a private entity, TRS agrees that the employer is not a public
school employer covered by TRS.“3 In support of this view, the TRS brief notes that pursuant to
section 11.157 of the Education Code “[t]he board of trustees of an independent school district is
authorized to contract with a private entity for that entity to provide educational services for the
district.” TRS Brief, supra note 3, at 4; see also TEX. EDUC. CODE ANN. 8 11.157 (Vernon 1996).


        2See Tex. Att’y Gen. Op. Nos. GA-0003 (2002) at 1; M-l 87 (1968) at 3.

          3Brief from Conni H. Brennan, General Counsel, Teacher Retirement System of Texas, to Susan Denmon
Gusky, Chair, Opinion Committee, Office of Attorney General at 4 (Sept. 16,2002) (on file with Opinion Committee)
[hereinafter TRS Briefl.
The Honorable Allan Ritter - Page 3                  (GA-001 8)




         On the other hand, a brief submitted on behalf of the Texas Federation of Teachers (the
“TFT”) argues that the retired educators may more properly be characterized as employees of the
school district and that a court would look not solely at the assertion that the educator was an
employee of the third-party contractor, but “at the actual relationship, with the most important factor
being the right of contro1.“4 TFT’s brief argues that section 11.157 of the Education Code cannot
be interpreted to permit such an arrangement as the one at issue here, relying on the reasoning in
Attorney General Opinion DM-335 (1995), which took the view that the provision was not intended
“to provide a mechanism for school districts to bypass compliance with statutory requirements by
contracting with other entities.” Tex. Att’y Gen. Op. No. DM-335 (1995) at 3; TFT Brief, supra
note 4, at 3-4.

        Attorney General Opinion DM-335 noted that what is now section 7.056 of the Education
Code, adopted as part of the same measure as section 11.157 and permitting a school district to seek
a waiver from the commissioner of education of certain legal requirements, did not permit “an
exception [to] be made for a state law relating to ‘educational employee and educational support
employee rights and benefits.“’ Id. The TFT brief argues, on the basis of this sentence in DM-335,
that reading section 11.157 to permit third-party contracts of the type at issue here would in effect
permit such an exception to laws involving employee rights and benefits. See TFT Brief, supra
note 4, at 3-4.

          The law does not support TFT’s position that as a matter of law the contracts at issue here
were designed to evade requirements such as those in chapter 824 of the Government Code. TRS
regards contracts such as those at issue here as contracts for the provision of temporary services by
a third party, and therefore, as not triggering the penalty provisions about which your predecessor
asked. In so doing, it is entitled to deference because the legislature has explicitly given TRS the
authority to make determinations as to who is an employee whose employment by a school system
will cause a loss of benefits. “The construction of a statute by an agency charged with its execution
is entitled to serious consideration so long as the construction is reasonable and does not contradict
the plain language of the statute.” Simplex Elec. Corp. v. Holcomb, 949 S .W .2d 446, 447 (Tex.
App.-Austin 1997, pet. denied) (citations omitted). Accordingly, we conclude in answer to the first
two questions that the provisions of Government Code sections 824.005(b) and 824.601 are not
applicable as a matter of law if a retired educator is employed by a third-party contractor to provide
temporary educational services to a public school.

         The next question is whether a retired teacher who provides temporary educational services
in a public school under the kind of contractual arrangement at issue here is “a professional
employee of a school district” for the purposes of the limited grant of immunity from personal
liability provided by section 22.05 1 of the Education Code. Section 22.05 1 provides, in relevant
part:




         4Brief from Martha P. Owen, Wiseman, Durst, Owen & Colvin, to Honorable John Comyn, Texas Attorney
General at 5 (Oct. 4, 2002) (citing Wirtz v. Lone Star Steel Co., 405 F.2d 668 (5th Cir. 1968) and Broussard v. L.H.
Bossier, Inc., 789 F.2d 1158, 1160 (5th Cir. 1986)) (on file with Opinion Committee) [hereinafter TFT Brief).
The Honorable    Allan Ritter - Page 4           (GA-001 8)




                         (a) A professional employee of a school district is not
                personally liable for any act that is incident to or within the scope of
                the duties of the employee’s position of employment and that
                involves the exercise of judgment or discretion on the part of the
                employee, except in circumstances in which a professional employee
                uses excessive force in the discipline of students or negligence
                resulting in bodily injury to students.




                         (c) In this section, “professional   employee” includes:

                               (1) a superintendent, principal, teacher, supervisor,
                social worker, counselor, nurse, and teacher’s aide; [and]




                                  (4) any other person whose employment         requires
                certification   and the exercise of discretion.

TEX. EDUC. CODE ANN.       5 22.051 (Vernon 1996) (emphasis added).

         While teachers generally are professional employees under section 22.05 l(c) of the Education
Code, the question remains whether a retired educator working temporarily in the school district in
this kind of contractual arrangement is a professional employee of the district. We have determined
in answer to the first question that a retired educator employed under such a contract as those at issue
is, as such contracts assert, an employee of the third party. There is no basis to distinguish our
conclusion to that question here, and accordingly we conclude that the retired educator is not an
employee of the district within the plain language of section 22.05 l(c) of the Education Code.

        The final question is whether an entity providing the kind of services at issue here must be
licensed under chapter 9 1 of the Labor Code, which concerns staff leasing services. See TEX. LAB.
CODE ANN. $0 91.001-91.063 (Vernon 1996 & Supp. 2003). Section 91.001(14) defines “[sltaff
leasing services” as

                an arrangement by which employees of a license holder are assigned
                to work at a client company and in which employment responsibilities
                are in fact shared by the license holder and the client company, the
                employee’s assignment is intended to be of a long-term or continuing
                nature, rather than temporary or seasonal in nature, and a majority
                of the workforce at a client company worksite or a specialized group
                within that workforce consists of assigned employees of the license
                holder.
The Honorable Allan Ritter - Page 5           (GA-001 8)




Id. 8 91.001(14) (Vernon Supp. 2003) (emphasis added). As this office does not find facts in the
opinion process, we cannot determine whether any particular business entity of this type is engaged
in providing staff leasing services? However, unless the employment arrangements were in fact of
a long-term or continuing nature and the majority of a given work force either at a particular school
or in the school district were assigned employees of the third-party contractor, chapter 91 of the
Labor Code would not be implicated by this situation.




       ‘See supra note 2.
The Honorable Allan Ritter - Page 6           (GA-0018)




                                        SUMMARY

                        Former teachers who accept temporary employment with
               third-party contractors who provide educational services to school
               districts do not thereby forfeit retirement benefits as a matter of law.
               Such teachers are not “professional employee[s] of a school district”
               for the purposes of the Education Code’s limited grant of immunity
               for personal liability. See TEX. EDUC. CODE ANN. 8 22.05 1 (Vernon
               1996). Third-party contractors who provide such employment and
               educational services are not staff leasing services regulated by chapter
               91 of the Labor Code unless they are in fact providing long-term or
               continuing employees, and such employees constitute a majority of
               theworkforce.     S~~TEX.LAB.CODEANN.~~~~.OO~-~~.O~~(V~~~~
               1996 & Supp. 2003).

                                               Very truly yours,




BARRY R. MCBEE
First Assistant Attorney General

NANCY S. FULLER
Deputy Attorney General - General Counsel

RICK GILPIN
Deputy Chair, Opinion Committee

James E. Tourtelott
Assistant Attorney General, Opinion Committee
