Teachers and the school board in Brattleboro are deadlocked over health care costs and teacher pay.
Teachers in the Windham Southeast Supervisory Union and the school board have been negotiating since October.
The two sides met with a mediator for nearly five hours yesterday but failed to reach agreement.
The current four-year contract runs out at the end of June.
Since the two sides disagree, the mediator now will work out a settlement offer for the school district. That suggestion is expected by the end of July.