This story originally published online at NC Policy Watch.

The U.S. Department of Education’s Office of Hearings and Appeals has ruled that Cardinal Charter Academy in Cary engaged in illegal, retaliatory actions when it fired a math teacher who made “protected disclosures,” claiming the school did not provide students with the special education services their Individual Education Plans required.

Terri Schmitz’s firing violated the National Defense Authorization Act, which addresses retaliation by a federal grant recipient for whistleblowing, Administrative Law Judge Robert G. Layton said in a Decision and Order address dated September 15.

Cardinal Charter’s activities are covered under the federal act because it received more than $446,000 in Individuals With Disabilities Education Act money from 2020 to 2023 in pass-throughs from the NC Department of Public Instruction (NCDPI).

Florida-based Charter Schools USA (a for-profit firm that manages more than 90 schools in five states, including Cardinal Charter and eight others in North Carolina) and Triangle Charter Education Association Board (one of several nonprofits with which Charters USA works to develop and outline the mission, vision, values and policies of various schools) were the named “grantees”—in effect, the defendants—in the proceeding.

“Complainant [Schmitz] has demonstrated that her protected disclosures were contributing factors to Cardinal’s decision to terminate her employment,” Layton ruled.

The judge also ruled that Cardinal Charter failed to demonstrate that it would have fired Schmitz even if she had not disclosed inadequacies in the school’s special education programs. Schmitz informed school principal April Goff, Triangle Charter Education Association board President Allen Taylor, and Charter Schools USA human resources officials. Goff and Taylor had the responsibility to investigate, discover and address reported misconduct under the NDAA.

The ruling did not, however, award Schmitz monetary damages.

A failure to provide federally mandated services

At the time of her non-renewal in June 2022, Schmitz had a child attending the school who has speech and visual impairments. NC Newsline documented Schmitz’s concerns about the school’s handling of special needs students in an August 2022 report.

She had filed a complaint with the state Department of Public Instruction alleging that her child and other “similarly situated” students attending the K-8 public charter school did not have a certified or licensed special education teacher in the classroom during the first month of school.

Cardinal Charter leaders acknowledged that “some special education services were missed due to staff shortages” and that the school provided “inconsistent delivery of special education services for all students with IEPs during the 2021-2022 school year.”

State investigators found Cardinal Charter violated state policies in five of the six issues it examined as a result of Schmitz’s complaint.

The school violated policy regarding teacher qualifications and it failed to properly implement the child’s IEP, state investigators ruled. Investigators also concluded that the school failed to provide the child’s teacher and Schmitz access to, and copies of, the child’s IEP. Cardinal also violated policies that require “periodic reports” on a child’s progress toward meeting annual goals outlined in the IEP.

Federal and state policies give little wiggle room when it comes to IEPs. The education plans ensure students with disabilities receive the specialized instruction and related services they require. Per state policy, IEPs must be “implemented as written at the beginning and throughout each school year.”

Schmitz complained about special education services on three occasions from September 2021 to June 2022 without Cardinal Charter taking “substantial” steps to correct the issues.

“Those complaints were found to be valid, and culminated in the North Carolina Department of Public Instruction confirming broad and systemic violations at Cardinal,” the court found. “North Carolina ordered multiple corrective actions, which required significant expenditure for Cardinal to accomplish. Those expenditures would reduce the annual profits of Cardinal’s parent corporation.”

A whistleblower complaint wins mixed results at first

Here’s what Schmitz wrote in the whistleblower complaint she filed with the U.S. Department of Education’s Office of the Inspector General:

“I submitted a formal grievance to the school board about special education students not receiving services according to their IEP’s under IDEA which violated IDEA. … The employer fired me on June 10, 2022 in the middle of the state complaint. I was not given a reason for why I was terminated. I have documentation of performance reviews that show I did my job, glowing reviews. I had also been employed by CSUSA for the last 4 and 1/2 years with never any deficiencies in my work or performance.”

“I was really surprised that I was not renewed,” Schmitz told NC Newsline in a recent interview. “I had pressed the issues throughout the year but I wasn’t hypercritical.”

Schmitz believed that she was walking a fine line of being vocal about concerns but respectful of the school’s leadership.

“It just got to a point where something had to be done because the kids weren’t getting services,” she said.

In its initial ruling, the Office of Inspector General found that Schmitz had proven that a reasonable person would find that Schmitz’s disclosures were a “contributing factor in the personnel action” taken by Cardinal Charter.

The ruling, however, threw Cardinal Charter a temporary lifeline, finding that Schmitz failed to substantiate her claim of whistleblower retaliation. She did not, the ruling concluded, prove that Cardinal Charter fired her because she made protected disclosures about the school’s special education programs.

For its part, Cardinal officials said that Schmitz’s firing was due to budgetary constraints that stemmed from a projected decrease in enrollment.

Prevailing on appeal

Schmitz, who represented herself, appealed the OIG ruling and was found by Judge Layton to have successfully refuted Cardinal’s claim.

She provided documents showing that 15 teachers, including herself, were not asked back for the 2022-23 school year, seven for budgetary reasons. Four of the seven, including Schmitz, were among 11 teachers who signed a letter alerting school officials to their concerns about the quality of services provided special needs students. Among 40 teachers who did not sign the letter, only three were not rehired.

Cardinal Charter school started the 2021-22 school year with 990 students but enrolled only 735 by March 2022. School officials used that projection to justify non-renewals for the following school year.

The large enrollment decrease never materialized, however, and school leaders later found themselves scrambling to fill vacancies.

Schmitz was told on June 10, 2022, that she would not be rehired due to budgetary concerns. But by that time, school leaders knew the projections were low and were preparing for 920 students as early as May.

“The only reasonable conclusion is that on May 3, 2022, Goff had knowledge on the enrollment trends for next year,” Judge Layton wrote. “Nonetheless, Cardinal provides no explanation on how these relevant facts’ affected Goff’s decision process used to meet next year’s staffing level requirements. Instead, Cardinal relies upon outdated data from February and March to justify a nonrenewal of Schmitz based on budget reasons knowing Goff expected to enrollment to climb from 730+ to 920.”

A court review of a July 21, 2022 Cardinal Charter board meeting shows that “Cardinal’s school board met and stated that it needed to add more staff due to increased enrollment numbers. Eleven days after that, on August 1, 2022, [April] Goff stated that she had 9 instructor positions to fill.”

“They [Cardinal’s leadership] didn’t tell the truth at all,” Schmitz said. “The judge saw through that.”

Court records show that Cardinal Charter posted on its Facebook page that it was hiring new teachers for middle school math and eighth-grade science. And in early August 2022, just weeks before the start of the new school year, Goff advised the board that the school had nine unfilled positions, including one for middle school math — they very subject that Schmitz taught.

“Cardinal fails to demonstrate how a budget and staffing decisions, premised on an enrollment of 732 and including 50 teaching positions (some vacant due to the nonrenewal letters from June 10, 2022, which were based on a 730 enrollment), support a conclusion that nonrenewal for S was budgetary,” Layton wrote. “This is especially true when the nonrenewal came on June 10, 2022, twenty-one days after [Schmitz] filed her complaint with North Carolina.”

Layton noted that Cardinal gave three other contradictory reasons for the decision not to rehire Schmitz, including “unsatisfactory work performance (despite her years of positive annual reviews, her positive feedback, and her lack of any disciplinary actions); Schmitz’s employment had simply “expired” and that Goff wanted to rebuild “culture and trust” (no elaboration was provided on what was meant by “culture and trust”).

A moral victory only

Despite ruling that she was in fact improperly dismissed as a whistleblower, Layton denied Schmitz’s request for $18,000 for three months’ pay and attorney fees because she did not provide evidence that she suffered losses. He ruled that Schmitz would not have been paid over the two months she was out for the summer even if she had been renewed. The fact that she also began a new job at the beginning of the new school year—thereby mitigating any economic loss—also factored into Layton’s decision.

Schmitz’s claims for $300,000 in damages for emotional distress and $300,000 in damages for loss of professional reputation were also denied. Colleagues at the school reportedly knew that Schmitz would be fired before it happened.

“In light of her commendable whistleblower activities, [Schmitz’s] reputation is in all likelihood stellar,” Layton wrote. “However, even if that were not the case, once again, in the absence of specific evidence and quantification, [Schmitz] cannot recover reputational damages.”

A request for punitive damages was also denied because the NDAA does not provide for them.

Instead, Layton awarded Schmitz “nominal damages not to exceed $1.”

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