When Alexander County Schools adopted a differentiated pay plan under the 1989 School Improvement and Accountability Act, did that decision trigger the 'hold harmless' provision in G.S. 115C-363.11(c) for teachers who had earned Career I or Career II status under the discontinued Career Development Pilot Program?

Plain-English summary

In 1985, the NC General Assembly established the Career Development Pilot Program (CDPP) and selected sixteen public school systems to participate. Teachers who attained Career I or Career II status under the Pilot earned enhanced salaries under G.S. 115C-363.11(b). Alexander County Schools was one of the sixteen systems. Many Alexander County teachers attained Career I or II status during the Pilot.

In 1989, the General Assembly enacted the School Improvement and Accountability Act (G.S. 115C-238.1 et seq.), which created a permanent (though optional) framework for school improvement plans and differentiated pay plans. The differentiated pay options included continuing the Career Development Pilot Program's structure as a permanent differentiated pay plan. Alexander County adopted a differentiated pay plan beginning with the 1990-91 school year, selecting the CDPP structure for that purpose.

Superintendent Robert Austin asked the Attorney General whether teachers who had earned Career I or II status under the original CDPP were entitled to the "hold harmless" protection in G.S. 115C-363.11(c) once the program was discontinued.

Senior Deputy Attorney General Edwin M. Speas, Jr. and Special Deputy Attorney General Thomas J. Ziko walked through several pieces of legislation. The bottom line:

The 1989-90 conversion did trigger the hold harmless. When Alexander County adopted its differentiated pay plan in 1990-91 using the CDPP structure, that decision had the effect of "discontinuing" the CDPP as a pilot program in Alexander County and converting it into a permanent program. That triggered the hold-harmless provision.

Only pre-conversion teachers qualified. Only teachers who had earned Career I or Career II status before the end of the 1989-90 school year qualified for the hold harmless. Teachers who attained that status under the post-conversion permanent differentiated pay plan earned the status under G.S. 115C-238.4, not under the original CDPP, and so were not within the hold harmless.

The protection was capped. The hold harmless protected only the difference between the teacher's 1989-90 salary under the enhanced CDPP schedule and the salary the teacher actually earned in subsequent school years. Presumably across-the-board salary increases pushed subsequent salaries above the 1989-90 baseline, in which case no top-up was owed.

The 1992 Current Appropriations Act language was not an independent hold harmless. A separate provision in 1991 N.C. Sess. Laws ch. 900, § 71(e) (effective for the 1993-94 fiscal year) referred to legislative intent regarding salary levels in former pilot units. The AG read this provision as legislative confirmation that the appropriations for that fiscal year were sufficient to carry out the G.S. 115C-363.11(c) hold harmless, not as a new and broader hold harmless that would extend protection independently of the original statute.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The 1989 School Improvement and Accountability Act framework was substantially reworked in later sessions, including the 1996 ABCs of Public Education Program and subsequent reform initiatives. The Career Development Pilot Program structure itself has been replaced by various performance-pay frameworks. Any current question about teacher pay protection in NC should be evaluated under current law, not under this 1994 snapshot of a transitional framework.

Common questions

Q: What were Career I and Career II teachers?
A: Under the original CDPP, teachers could earn promotion to Career I status (typically after several years of successful teaching and additional development activities) and then to Career II status (after further years and more development). Each level carried a salary supplement. The CDPP was an early NC experiment with performance-tied teacher pay.

Q: Why did the General Assembly write a hold-harmless provision?
A: To give teachers an incentive to invest in the development required for Career I and II promotion. Without a hold harmless, teachers might fear that the legislature could discontinue the Pilot, leaving them stuck with the development costs but no continued enhanced pay. The hold harmless was a promise that earned status would carry forward even if the program ended.

Q: What does "discontinuation" mean for a pilot program?
A: The AG identified four ways the original Pilot could end in a given school system: (1) the system withdraws from the Pilot, (2) the General Assembly converts the Pilot to a permanent program system-wide, (3) the General Assembly authorizes systems to convert and the system chooses to convert, or (4) the General Assembly repeals the Pilot. Alexander County's conversion under the 1989 Act was option (3).

Q: Why didn't post-conversion Career I/II earners qualify for hold harmless?
A: Because they earned their status under a different statutory authority (G.S. 115C-238.4) than the original CDPP (G.S. 115C-363 et seq.). The hold harmless in G.S. 115C-363.11(c) by its terms protects salary increments earned "pursuant to the Career Development Plan" of the original Pilot. Post-conversion earners earned increments pursuant to the new differentiated pay plan, not the original Plan.

Q: How much salary protection did the hold harmless actually provide?
A: Limited. The AG concluded the protection was only the difference between (a) the protected teacher's salary in 1989-90 under the enhanced CDPP schedule, and (b) the salary the teacher actually earned in each later year. If across-the-board legislative raises kept the teacher's salary above the 1989-90 baseline, no protection was actually owed in that year. The hold harmless was a floor, not an ongoing salary enhancement.

Q: What about the additional state increments and cost-of-living increments?
A: G.S. 115C-363.11(c) said the protected teacher "shall not receive any additional state annual increment, cost of living increment, or other salary increment unless the employee's salary would otherwise be less than the salary applicable to him on the base salary schedule." So the protected teacher's salary was effectively frozen at the 1989-90 CDPP level until the base salary schedule caught up.

Q: Why was the 1992 Current Appropriations Act provision read narrowly?
A: The AG offered two possible readings. One: it was a new and independent guarantee of salary levels in former pilot units. Two: it was a legislative declaration that the appropriations were sufficient to fund the existing G.S. 115C-363.11(c) hold harmless for the 1993-94 fiscal year. The text said "with regard to the amount of State funds appropriated," which the AG read as fiscal-housekeeping language rather than a new substantive guarantee. So the narrow reading prevailed.

Background and statutory framework

NC's experiments with teacher career ladders and differentiated pay began in the mid-1980s with the Career Development Pilot Program (CDPP), G.S. 115C-363 et seq. Sixteen school systems were selected to participate. The Program's central feature was a structured career ladder (Career I, Career II) with enhanced salary supplements for advanced teachers.

The 1989 School Improvement and Accountability Act (1989 N.C. Sess. Laws ch. 778) created a permanent (though optional) framework, G.S. 115C-238.1 et seq. Among its features: school systems could develop school improvement plans (G.S. 115C-238.3), and could establish differentiated pay plans for teachers (G.S. 115C-238.4). Differentiated pay options included continuing the CDPP structure. So a CDPP system that wanted to keep the structure could do so under the new permanent framework rather than as a pilot.

Alexander County chose this path beginning in 1990-91. The AG concluded that this conversion discontinued the CDPP in Alexander County as a pilot and triggered the G.S. 115C-363.11(c) hold harmless. The hold harmless's scope (limited to pre-conversion earners and to the 1989-90 salary baseline) reflected the legislative purpose: protect teachers who took the CDPP gamble before the conversion, not to perpetuate the salary structure for future earners.

The 1992 Current Appropriations Act and the 1993 session laws layered additional language about state appropriations and pilot-system funding. The AG's narrow reading of those provisions preserved the original 1985 hold harmless's scope rather than expanding it through later appropriations-bill language.

Citations

• N.C.G.S. § 115C-238.1 et seq. (School Improvement and Accountability Act framework)
• N.C.G.S. § 115C-238.4 (authorization for local differentiated pay plans, including CDPP structure)
• N.C.G.S. § 115C-363 et seq. (Career Development Pilot Program)
• N.C.G.S. § 115C-363.11(b) (enhanced salary schedule for Career I and Career II)
• N.C.G.S. § 115C-363.11(c) (hold harmless on discontinuation)
• 1989 N.C. Sess. Laws ch. 778 (School Improvement and Accountability Act of 1989)
• 1991 N.C. Sess. Laws ch. 900, § 71(e) (1992 Current Appropriations Act; legislative intent on former pilot unit funding)
• 1993 N.C. Sess. Laws chs. 263 and 321

Source

• Landing page: https://ncdoj.gov/opinions/public-schools-teachers-career-development-pilot-program-2/

Original opinion text

June 27, 1994

Robert Austin, Superintendent Alexander County Schools

P. O. Box 128 Taylorsville, NC 28681

Re: Advisory Opinion; Public Schools; Teachers; Career Development Pilot Program; G.S. 115C-238.1 et seq.; G.S. 115C-363.1 et seq.; 1991 Sess. Laws ch. 900 (1992); 1993 Sess. Laws chs. 263 and 321.

Dear Mr. Austin:

The Alexander County School System was one of the 16 public school systems selected to participate in the Career Development Pilot Program established by the General Assembly in 1985. G.S. 115C-363 et seq. Many of the teachers in the Alexander County System attained Career I or Career II status under that Pilot Program and received the enhanced salaries provided for by G.S. 115C-363.11(b). Questions have been raised by some of these teachers regarding their right to be "held harmless" with regard to the enhanced pay they received for earning Career I or Career II status under the Career Development Pilot Program. As superintendent for the Alexander County Schools you have asked for our opinion.

This is a complex question requiring an analysis of several acts of the General Assembly. First among these acts is G.S. 115C-363.11(c). It provides:

If the pilot programs established pursuant to the provisions of G.S. 115C-363 are discontinued, any employee who has received a salary increment pursuant to the Career Development Plan shall continue to be paid the salary increment; however, the employee shall not receive any additional state annual increment, cost of living increment, or other salary increment unless the employee's salary would otherwise be less than the salary applicable to him on the base salary schedule. (emphasis added)

The obvious intent of the General Assembly in enacting this section was to provide an incentive to teachers to participate in this pilot program by assuring them that discontinuation of the pilot program would not result in the loss of the enhanced pay they had earned by achieving Career I or Career II status. Consistent with this intent, discontinuation of the Career Development Program as a pilot program is the event that triggers the rights of teachers who have earned Career I or Career II status to be held harmless. At the time the Pilot Program was enacted there were several events which would have resulted in the Program's discontinuation in some or all of the participating school systems. These include: (1) a decision by a participating system to withdraw from the Pilot Program; (2) a decision by the General Assembly to convert the Pilot Program to a permanent program; (3) a decision by the General Assembly to allow participating school systems to convert from the Pilot Program to a permanent program and a subsequent decision by a participating system to make that conversion; and (4) a decision by the General Assembly to repeal the Pilot Program.

On August 12, 1989, the General Assembly enacted the "School Improvement and Accountability Act of 1989". 1989 Sess. Laws ch. 778, codified as G.S. 115C-238.1 et seq. That Act established a permanent, though optional, program. It authorized, but did not require, local school systems to develop school improvement plans, G.S. 115C-238.3, and provided for certain benefits for school systems deciding to develop such plans. See G.S. 115C-238.2. Significantly, that Act also authorized, but did not require, local school systems to establish a differentiated pay plan for teachers, including a differentiated pay plan based on "The Career Development Pilot Program, G.S. 115C-363 et seq." G.S. 115C-238.4. We understand that the Alexander County School System elected to adopt a differentiated pay plan beginning with the 1990-91 school year and subsequent years, and that it selected the Career Development Pilot Program as the method for providing differentiated pay for teachers. In our opinion, that decision had the effect of discontinuing the Career Development Pilot Program in Alexander County, as a pilot program, and of converting it into a permanent, though optional, program. That decision in turn had the effect of triggering the "hold harmless" provision of G.S. 115C-363.11(c) in Alexander County. Thus, the scope of the "hold harmless" provision must be examined.

This "hold harmless" provision is not open-ended. By the plain words of G.S. 115C-363.11(c), the only teachers entitled to its benefit are those who had earned Career I or Career II status prior to the time the Pilot Program was "discontinued" as a pilot program in Alexander County. Teachers who subsequently earned Career I or Career II status did not earn that status under the Career Development Pilot Program; they earned it under the differentiated pay provision of G.S. 115C-238.4. Thus, the only teachers in Alexander County entitled to the benefit of G.S. 115C-363.11(c) are those who had earned Career I or II status before the end of the 1989-90 school year. Moreover, the "hold harmless" provision in G.S. 115C-363.11(c) does not provide these teachers with the benefit of their enhanced salaries in perpetuity. It is limited to the difference, if any, between the 1989-90 salary earned by a Career I or Career II teacher in Alexander County under the enhanced salary schedule established by G.S. 115C-363.11(b) and the salary earned by those teachers for subsequent school years. Presumably, the salaries of these teachers were as high as or higher in subsequent years than their 1989-90 salaries as a consequence of across-the-board salary increases provided by the General Assembly.

Another possible "hold harmless" provision appears in the 1992 Current Appropriations Act and apparently applies to the 1993-94 fiscal year. It provides:

With regard to the amount of State funds appropriated in subsequent fiscal years for local school administrative units that were career development pilot units, it is the intent of the General Assembly that any reductions in appropriations not result in teachers receiving less in salary and State-funded bonuses, than they received on a monthly basis during the prior fiscal year so long as the teachers qualify for bonuses under the local differentiated pay plan. 1991 Sess. Laws ch. 900, § 71(e)(1992).

This section is ambiguous. On the one hand, it can be read as a new or independent guarantee that teachers in former career pilot units not receive a lower total salary in the 1993-94 fiscal year than they received in the 1992-93 fiscal year so long as they meet the requirements for a bonus under the differentiated pay plan in effect for the 1993-94 fiscal year. On the other hand, it can be read as simply a legislative declaration that the General Assembly believed that the level of State appropriations was sufficient to carry out the "hold harmless" provisions of G.S. 115C-363.11(c) in the former career development pilot systems for the 1993-94 fiscal year. The latter interpretation, in our opinion, is the most plausible. The intent of the legislature is "with regard to the amount of State funds appropriated". No intent is directly stated with respect to any salary guarantee independent of G.S. 115C-363.11(c). Thus, we do not read this section as a new or independent "hold harmless" provision. Instead, it should be read simply as a legislative declaration that the funds it was appropriating were sufficient to carry out G.S. 115C-363.11(c) for the 1993-94 fiscal year.

Edwin M. Speas, Jr.

Senior Deputy Attorney General

Thomas J. Ziko

Special Deputy Attorney General