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A Severance Pay Clause in a Contract Between an Educational Service Center and a Treasurer Can Violate Ohio Public Policy

In the case Lawless v. Bd. of Educ. Educ. Serv. Ctr., 4th Dist. Lawrence No. 18CA25, 2020-Ohio-117, an Ohio appellate court held that a severance clause compensating a treasurer after being terminated under R.C. 3319.16 for duties not completed violates Ohio public policy.

In this case, an educational service center terminated its treasurer under R.C. 3319.16 when an audit uncovered financial misconduct. The contract contained a severance clause that provided for compensation to the treasurer in the event of termination for uncompleted duties. The educational service center challenged the severance clause as unenforceable because the severance clause violated Ohio public policy.

The Ohio appellate court held that the severance clause violated public policy violated because R.C. 3316.02(A) provides that the preservation of fiscal integrity is Ohio public policy and that compensating a treasurer who is terminated under R.C. 3319.16 violates that public policy.

To read more about this case, click here.

Authors: Matthew John Markling and the McGown & Markling Team.

Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always changing like the Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.

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