In the era of No Child Left Behind, principals are increasingly held accountable for student performance. But are teacher labor agreements giving them enough flexibility to manage effectively? This study answers this question and others. It examines how much flexibility school leaders enjoy on key dimensions of management in America's fifty largest school districts. Among the main findings: (1) Thirty, or more than half, of the 50 districts have labor agreements that are ambiguous--The collective bargaining agreements and the formal board policies in these districts appear to grant leaders substantial leeway to manage assertively, should they so choose; (2) Fifteen of the 50 districts are home to Restrictive or Highly Restrictive labor agreements--Nearly 10 percent of the nation's African-American K-12 students population attend school in the 15 lowest-scoring districts-making these contracts major barriers to more equal educational opportunity; (3) The study also found that districts with high concentrations of poor and minority students tend to have more restrictive contracts than other districts-another alarming indication of inequity along racial and class lines; (4) The study also found that districts with high concentrations of poor and minority students tend to have more restrictive contracts than other districts-another alarming indication of inequity along racial and class lines; (5) The labor agreements of the nation's 50 largest districts are particularly restrictive when it comes to work rules; and (6) Most of these agreements are also quite restrictive when it comes to rewarding teachers for service in hard-to-staff subject areas such as math and science, with 31 actually prohibiting districts from doing so. The lesson that thoughtful reformers should take from these findings is not that they need to author new, inflexible state plans governing hard-to-staff schools or develop new performance-based pay schemes. Rather, there is a need to move on multiple fronts to promote flexibility for district and school leaders--and to ensure that leaders are prepared for their roles and held accountable for using authority appropriately and effectively. Concluding this report are several recommendations. (Contains 6 tables and 53 notes.) [This study was produced by the Thomas B. Fordham Institute, Washington, DC, an affiliate of the Thomas B. Fordham Foundation. Foreword by Chester E. Finn, Jr. and Michael J. Petrilli.]