K12 Settles Lawsuit, “DC Flex Was Denied”

A court case involving the for-profit education company K12 is closer to an end this week.

“Today, K12 Inc. was pleased to announce the resolution of a series of legal actions against our company,” Executive Chairman Nate Davis said in an open letter on March 3.

K12 has agreed to pay $6.75 million to plaintiffs while continuing to deny any claims of wrongdoing.

A report on the court case appears on Education Week’s K-12 Marketplace blog (no direct relation to the corporation).

Davis’ letter continues:

Ending the litigation on these terms is a powerful vindication of K12 and a pragmatic resolution for the company. The plaintiff is representing before a court of law what K12 has always maintained: that the claims in this lawsuit regarding our academic standards, student-teacher ratios, grading and attendance policies — allegations unfairly echoed in the media and other forums — could not be supported on the merits.

Additional claims regarding enrollment and retention at K12’s managed schools will be dismissed as part of the proposed settlement.

K12 operates 49 virtual schools across the country. The company posted $596 million in revenue in 2012, netting $23 million. Its income is based on sales of its programs — including the K12, Aventa, A+ and Middlebury on-line programs — to schools and on direct funding from school districts in 32 states and in the District of Columbia. (More on K12 and Flex DC)

The company’s newer “blended learning” model combines traditional schools with on-line learning. The blended learning model was adopted by K12 after educational researchers pointed out how few of K12’s virtual schools achieve AYP nationwide and how many have lower graduation rates than other schools in the same states. In December 2011, a New York Times front page story declared “Online schools score better on Wall Street than in classrooms.”

In early 2012 investors filed a class action suit, with David Hoppaugh of the Arkansas Retired Teachers Association as lead plaintiff. Investors said they were misled by the company’s representation of academic performance and its business practices. (K12 Lawsuit materials)

The company headquarters is in Herndon, VA, and the U.S. District Court in Alexandria, VA, must give final approval to the settlement.

Meanwhile, the DC Public Charter School Board recently denied K12 a charter for a proposed Flex DC Academy, a blended learning high school. Application came through the “fast-track” process for “experienced operators” and was proposed to open this fall.

NOTE: No minutes for 2013 board meetings have yet been posted, and the entire explanation in the March 1 news release is “DC Flex was denied.” Details will be posted as available.

–Virginia Spatz, reporting for The Education Town Hall on We Act Radio

Also on the March 7 show, Sandra Moscoso volunteer schools data hacker, and Michael A. Brown, candidate for the at-large Council seat.

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