SC Charter Institute at Erskine accused of interfering with school operator’s business
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A Florida-based education management company claims in a lawsuit that the Charter Institute at Erskine does more than just provide oversight and accountability to the schools it sponsors.
It also sells them management services, alleges Charter Schools USA, one of the nation’s leading for-profit education management firms.
Charter Schools USA, which manages four schools in South Carolina, filed a federal lawsuit Friday accusing the Charter Institute of intentionally interfering with the company’s business and engaging in unfair and deceptive business practices “as part of its ongoing effort to unlawfully compete with CSUSA and to interfere with CSUSA’s contractual relations.”
Charter Schools USA claims Charter Institute officials urged the Berkeley Charter Education Association — a nonprofit board that holds the charter for two of the company’s South Carolina schools — to breach its contracts with the company and instead purchase services from the Charter Institute in exchange for additional fees.
The management company alleges the Charter Institute poached one of its employees and tried to use him to persuade the board to cut ties with Charter Schools USA and seek the Charter Institute’s services instead. As a result, the lawsuit claims, the Berkeley charter association’s board dropped its plans to use the company at a new school it was opening and has “repeatedly breached and sought to wrongfully terminate” contracts at its two other schools.
The complaint, which names both the Charter Institute at Erskine and the Berkeley Charter Education Association as defendants, marks the third time in recent years that a for-profit management company has sued the Charter Institute for allegedly interfering with its operations.
In its filing, Charter Schools USA attempted to tie together all three interference allegations and present them as a cohesive narrative to depict the taxpayer-funded Charter Institute as a private management company masquerading as a sponsor.
“Although (Charter Institute at Erskine) purports to serve as a charter school ‘Sponsor’ that is authorized to issue charters, CIE is, in fact, a market participant that seeks to sell management services to the charter schools it is supposed to oversee,” the company’s lawsuit alleges. “CIE has now misused its position to target and seek to eliminate numerous management companies as competitors for the services it hopes to sell schools by disseminating misinformation and threatening to close schools or withhold funds if schools do not succumb to its unlawful demands.”
Both Charter Schools USA and Reason & Republic, another for-profit management company suing the district for alleged interference, claim the Charter Institute urged its schools’ boards to drop their management companies and purchase services from Teach Right USA, a related nonprofit the Charter Institute formed and has funded.
While South Carolina’s charter schools law permits sponsors to sell services to the schools they oversee, critics point to the potential issues that could arise when a sponsor enters into a business relationship with a school it is responsible for regulating and has the power to close.
Concerned about the Charter Institute’s financial entanglements, state lawmakers last year asked an independent oversight agency to investigate the district’s relationships with school vendors and the for-profit management companies that operate many of the schools it sponsors. The investigation, which Charter Institute leaders have welcomed and believe will vindicate their actions, is ongoing.
Suit claims Charter Institute ‘not a valid sponsor’
In its lawsuit, Charter Schools USA argues that the Charter Institute, an affiliate of Erskine College that oversees 26 charter schools throughout the state, is not a valid charter school sponsor and that any actions it has taken as a sponsor, including its approval of schools, should be voided.
To make its case, the company argues that because the Charter Institute has a “separate corporate existence and a separate board of directors” from Erskine College, it is not an “independent institution of higher learning” and thus legally prohibited from serving as a charter school sponsor.
Under state law, only local public school districts, the South Carolina Public Charter School District and public or private institutions of higher learning may serve as charter school sponsors.
Historically, however, the private South Carolina colleges that sponsor charter schools — Erskine College, Limestone College and Voorhees University — have formed nonprofit institutes that are affiliated but separate from them to handle their sponsorship duties.
Charter Schools USA’s lawsuit seeks to upend that practice and further requests that the three Berkeley Charter Education Association schools the Charter Institute currently sponsors be transferred to a “valid” sponsor.
A Charter Institute spokeswoman declined comment on the suit, calling it “a dispute between an independent public charter school board and their vendor.”
“This dispute does not involve the Institute,” spokeswoman Ashley Epperson wrote in an emailed statement. “Accordingly, the Institute will be asking the court to remove it from the case.”
Stewart Weinberg, president of the Berkeley Charter Education Association, denied the management company’s claims and said Charter Schools USA’s lawsuit was merely an attempt to bully the board.
“This board will not be bullied by a company that has demonstrated that their real intent is to make money rather than do what’s best for the children they’re supposed to serve,” he said.
Charter Schools USA’s allegations come on the heels of a lawsuit the Berkeley Charter Education Association filed last month against one of the company’s affiliates, Red Apple Development, which owns two of the association’s schools.
The nonprofit board, which oversees Mevers School of Excellence in Goose Creek, Berkeley Preparatory Academy in Summerville and Willie Jeffries School of Excellence in Orangeburg, claimed in a lawsuit filed Feb. 11 that Red Apple breached the parties’ development and lease agreements for Mevers and Berkeley Prep, resulting in higher annual rents that will cost it $40 million in the years ahead.
The two Charter Schools USA-run schools, which are funded by taxpayers, are paying a combined $3.1 million in rent this year, and will see rents increase 2% each year for the lifetime of their respective decades-long rental agreements, documents show.
The Berkeley Charter Education Association claims in its suit against Red Apple that when it made good faith offers to buy the school facilities, the company responded with “unfair counteroffers” and “insisted on oppressive, non-market terms” designed to ensure Charter Schools USA would remain the schools’ operator in perpetuity.
In January, the Berkeley Charter Education Association sent Charter Schools USA a letter notifying the company it would terminate the management agreements for Mevers and Berkeley Prep, effective June 30, if the company did not cooperate and conform with a board policy adopted last August that requires the schools’ principals to be employed by the board rather than the management company.
Charter Schools USA refused to incorporate the board’s new policy into the parties’ management agreements and asserts the Berkeley Charter Education Association cannot unilaterally amend the contracts and deny the company the benefits of the terms it previously negotiated.
The board, which meets Tuesday night, is set to discuss the issue in executive session and may later take action on it, according to an agenda posted on its website.
This story was originally published March 18, 2025 at 12:49 PM.
