Faculty Issues in Tough Times (2001)

By Donna R. Euben, AAUP Counsel
October 2001

I. The Status of Faculty

"There are three professions which are entitled to wear the gown: the judge, the priest, and the scholar. This garment stands for its bearer's maturity of mind, his independence of judgment, and his direct responsibility to his conscience and his god. It signifies the inner sovereignty of those three interrelated professions: they should be the very last to allow themselves to act under duress and yield to pressure . . .[T]he judges are the court, the ministers together with the faithful are the church, and the professors together with students are the university . . . they are those institutions themselves, and therefore have prerogative rights to and within their institution which ushers, sextons and beadles, and janitors do not have." E.K. Kantorowicz (quoted in Henry Rosovsky, The University: An Owner's Manual 164-65 (1990)).

Many faculty members have a role in the governance of an academic institution. Faculty members often have primary responsibility for aspects of the educational process, such as curriculum and methods of instruction. See NLRB v. Yeshiva University, 444 U.S. 672 (1980) (finding that professors at that particular university were managerial and therefore not covered by the National Labor Relations Act, and explaining that "the business of a university is education, and its vitality ultimately must depend on academic policies that largely are formulated and generally are implemented by faculty governance decisions"); see also AAUP, Statement on Government of Colleges and Universities, AAUP POLICY DOCUMENTS & REPORTS 217 (2001 ed.) (hereafter "Redbook") ("The faculty has primary responsibility for such fundamental areas as curriculum, subject matter and methods of instructions, research, faculty status, and those aspects of student life which relate to the educational process.").

Unlike most other employees, professors tend not to be "employees at will," a term which denotes an employment relationship that lacks specific duration or protection from arbitrary dismissal. The appointment of an employee at will can be terminated for "bad reason, good reason, or no reason at all," so long as the reason is not illegal.

Faculty with Term Contracts. Some faculty members have "term contracts," which are generally for one semester or one year. Faculty members who have term contracts can include individuals on the tenure-track; visiting faculty; and adjunct, temporary, and part-time instructors. Under AAUP policy, an administration may break a term contract before the end of its stated term for a limited set of reasons only, such as financial exigency and program discontinuance. AAUP, 1940 Statement of Principles on Academic Freedom and Tenure, Redbook at 3; 1958 Statement on Procedural Standards in Faculty Dismissal Proceedings, Redbook at 11, and Regulations 4 & 5, Redbook at 23-27.

Tenured Faculty. Their appointments are generally ongoing and extend beyond the period in the annual salary letter. Tenure is a presumption of competence and continuing service that can be overcome only if specified conditions are met. Tenured faculty generally receive annual letters that state their salaries for the coming year.

Faculty Handbooks. Faculty handbooks are sometimes considered binding, enforceable contracts, depending on state law. See AAUP, The Legal Status of College and University Faculty Handbooks (2001-02 ed.). Recently there have been some rather rancorous faculty handbook cases.

University of Dubuque v. Faculty Assembly, No. EQCV090784 (Iowa Dist. Ct., Dubuque County, 1999). In 1998 the board of trustees sued 46 faculty members, seeking judgment from state court on whether the institution's faculty handbook was an enforceable contract. The trustees claimed that the handbook was only a "policy guidepost," and not binding. The professors contended that the handbook was a contract that could not be changed without "consensual agreement" of faculty and administration. The court concluded that the faculty handbook was an enforceable contract. At the same time, however, the court found that due to a conflict in handbook provisions, the trustees could modify the text without faculty approval.

II. Financial Exigency

AAUP defines financial exigency as more than a temporary cash crunch or a passing budget deficit. Rather, it is a severe crisis threatening the survival of the institution as a whole and which cannot be ameliorated by less drastic means than the termination of faculty appointments. Tenure is "not generally understood to preclude demonstrably bona fide dismissal for financial reasons." Krotkoff v. Goucher College, 585 F.2d 675, 679 (4th Cir. 1978).

A. AAUP Guidelines on Financial Exigency

The AAUP's policy on the termination of faculty appointments under conditions of financial exigency can be found in Regulation 4(c) of the AAUP's Recommended Institutional Regulations on Academic Freedom and Tenure. Redbook at 23-24. The key provisions of Regulation 4(c) are as follows:

1. Definition of Financial Exigency is Quite Rigorous.

Termination of faculty appointments "may occur under extraordinary circumstances because of a demonstrably bona fide financial emergency, i.e. an imminent financial crisis which threatens the survival of the institution as a whole and which cannot be alleviated by less drastic means."

2. Faculty Plays Active Role in Determining Condition of Financial Exigency.

Regulation 4(c)(1) calls for a faculty body to participate in making the decision that a financial crisis exists or is imminent, and that all feasible alternatives to the termination of appointments have been pursued. The faculty body should have primary responsibility in deciding where within the academic program terminations will occur, and for choosing the criteria under which a faculty appointment will be terminated. The responsibility for identifying individual faculty members whose appointments are to be terminated should be given to a person or group approved by the faculty.

3. Opportunity for Pre-Termination Hearing Necessary.

Under regulation 4(c)(2), affected faculty should be afforded an opportunity for an on-the-record, adjudicative hearing after notice has been given but before the effective date of termination. In the hearing, the institution bears the burden of proving the existence and the extent of the financial exigency. Other issues in the hearing might include whether or not the criteria for termination were valid, and whether the criteria are being properly applied in the current case.

4. New Appointments Will Not Be Made and Generally Tenured Faculty Will Not Go First.

In case of terminations for financial exigency, Regulation 4(c)(3) mandates that new appointments will not be made, and that the appointments of tenured faculty will not be terminated while non-tenured faculty are retained, except "in extraordinary circumstances where a serious distortion in the academic program would otherwise result."

5. Suitable Position Must Be Sought for Dismissed Faculty Member.

Regulation 4(c)(4) requires the institution to "make every effort to place the faculty member concerned in another suitable position within the institution" before terminating the appointment.

6. Proper Notice and Severance Pay Is Required.

The faculty member concerned should be given notice or severance salary not less than prescribed in Regulation 8, which is at least one year for those with tenure.

7. The Place of the Terminated Faculty Member Cannot Be Filled Within Three Years

B. Some Judicial Considerations in Determining Whether a Bona Fide Financial Exigency Exists

Courts look to a number of factors in determining whether a bona fide financial exigency exists at a particular institution. Such factors may include:

• Ongoing budget deficits of the college. See, e.g., Krotkoff, 585 F.2d at 681 ("the existence of financial exigency should be determined by the adequacy of a college's operating funds rather than its capital assets," observing annual budget shortfalls ranging from $330,000 to $1,500,000); Board of Community College Trustees v. Adams, 701 A.2d 1113 (Md. App. 1996) (noting that the financial exigency declaration "is a last step procedure when insufficient funds exist to pay the bills").
• Revenue cutbacks, sometimes coupled with declining student enrollments. See, e.g., Polishook v. City University of New York, 234 A.D.2d 165 (N.Y. App. Div. 1996) (upholding downsizing decision due to legislative cutback of funds); AAUP v. Bloomfield College, 322 A.2d 846 (N.J. Super. 1974), aff'd, 346 A.2d 615 (App. Div. 1975) (reinstating thirteen tenured professors because rising enrollments indicated bad faith on part of administration in terminating their appointments for reasons of financial exigency).
• Reasonable efforts to find alternative employment for dismissed professor in the same school. See, e.g., Krotkoff, 585 F.2d at 682-83 (finding German professor unqualified to teach in the Economics department because of "the time and expense of retraining").
• Evidence of other cost-cutting measures, such as reductions in nontenured faculty and elimination of nonessential programs and travel. See e.g., Klein v. Board of Higher Education of City of New York, 434 F. Supp. 1113, 1117-18 (S.D.N.Y. 1977) (noting expense reductions in supplies, equipment, and personnel (administrative and buildings and grounds staff)).

C. Some Recent Cases

In challenging terminations allegedly based on financial exigency, professors at public colleges and universities often assert due process claims, while professors at private institutions tend to claim breach of contract.

Katz v. Georgetown University, 246 F.3d 685 (D.C. Cir. 2001): Professor Katz sued the university, claiming that his contract was breached because he was not provided the proper one-year notice of his termination. The university responded that he was properly terminated due to financial exigency and, therefore, he was not entitled to one-year's notice in advance of dismissal. In June 2000 the professor grieved his termination, and a three-member faculty panel and then the full faculty grievance committee upheld the professor's claim. The president rejected the faculty findings. In October 2000 the professor sued the university, and the court ultimately ruled in favor of the university on the notice issue only. The court reasoned that the faculty handbook clearly provided that a faculty member's appointment may be terminated "for grave economic stringency on the part of the University," and that "no one-year notice requirement . . . limits this provision." Moreover, the university had offered the professor a "severance buy-out" of $750,000, which was $250,000 more than his $500,000 salary at the university. The court concluded: "The Faculty Handbook is unambiguously clear that a tenured faculty person may be terminated for 'just cause' without one-year's notice."

Chao v. Bennington College: In June 1994 the governing board of Bennington College advised the faculty that: (1) six months earlier in January the board had determined that a condition of financial exigency existed at the college; (2) in April the board had adopted a plan to restructure programs; (3) the appointments of 27 faculty members were being terminated; and (4) that all existing governance practices and procedures were being suspended and "presumptive tenure" for faculty would be eliminated for all subsequent appointments. AAUP conducted a formal investigation, published a report, and imposed censure on the college's administration. "Academic Freedom and Tenure: Bennington College," Academe: Bulletin of the American Association of University Professors 91-103 (March-April 1995). In June 1996 nineteen current and former professors sued the college for breach of contract and related torts. The professors claimed, in part, that no connection existed between their terminations and financial exigency because the college replaced all the terminated faculty. After five years of litigation, the parties settled.

III. Program Discontinuance

Tenured appointments, and probationary appointments before the end of their specified term, may be terminated because of the bona fide formal discontinuance of a program or a department.

A. AAUP Regulations on Program Discontinuance

The AAUP's policy on program discontinuance can be found in Regulation 4(d) of AAUP's Redbook. The policy provides:

• The decision to discontinue the program or department should be based "essentially upon educational considerations," as determined "primarily by the faculty." Such educational considerations would not include, say, "cyclical or temporary variations in enrollment." (In some cases program discontinuance may be needed for reasons of financial exigency; in such situations, AAUP Regulation 4(c), not Regulation 4(d), should control.).
• The administration should endeavor to identify alternative positions within the institution for faculty members whose appointments may be terminated. If feasible, retraining should be provided.
• The affected individual may appeal the relocation or termination to a faculty committee, which should hold an on-the-record adjudicative hearing. A faculty determination to discontinue a program should be considered presumptively valid, but the administration bears the burden of proof on other issues.
• If appointments are terminated, severance salary should reflect the length of past and potential service.
  

B. Some Cases

Jimenez v. Almodovar, 650 F.2d 363 (1st Cir. 1981): The University of Puerto Rico eliminated the positions of two professors in a pilot program in physical education and recreation. The professors sued the institution, alleging that the administration violated their due process rights in implementing the terminations. The federal appellate court ruled that unless a state statute or university regulation provided otherwise, the professors' contracts were to be "interpreted as giving the University of Puerto Rico an implied right of bona fide unavoidable termination on the ground of change of academic program." The court concluded that "an institution of higher education has an implied contractual right to make in good faith an unavoidable termination of right to the employment of a tenured member of the faculty when his position is being eliminated as part of a change in academic program."

Texas Faculty Association v. University of Texas at Dallas, 946 F.2d 379 (5th Cir. 1991): The deans of the education and natural sciences schools eliminated two programs because they wanted to reallocate resources from those programs. The administration notified the tenured faculty members of the termination of their appointments. The tenured faculty members sued, claiming denial of their due process regarding the closure decision and their terminations. The court ruled in favor of the university on the type of due process afforded them regarding the program disclosure, finding that "only the lowest procedural protections of notice and an opportunity to be heard need be afforded the individual faculty member." The court found that due process protections involving the program closure had been afforded the professors because they had almost two years' notice and the dean had invited them to discuss the matter on several occasions. At the same time, the court found that the university had failed to provide adequate due process regarding the "individual termination decisions": "Because UTD faculty are tenured to the institution, each appellant was entitled to a meaningful opportunity to demonstrate that, even if his or her program was to be discontinued and the number of faculty positions associated with that program eliminated, he or she should nevertheless be retained to teach in a field in which he or she is qualified." The court continued: "The 'hearing' offered need only be an opportunity for the aggrieved faculty member to meet with the ultimate decision maker, to present his or her case orally, and to explore with the decision maker the possible alternatives to termination." The professors also had a right to present evidence and to receive written documentation of the hearing officer's findings.

IV. Financial Exigency or Program Discontinuance as an Impermissible Pretext for Dismissal

Courts carefully examine the motives for dismissal when there is a suggestion that the dismissal is based not on financial exigency or program discontinuance, but on unconstitutional (say, free speech) or otherwise illegal (for example, age or gender discrimination) grounds.

Brine v. University of Iowa, 90 F.3d 271 (8th Cir. 1996), cert. denied, 519 U.S. 1149 (1997): The administration eliminated the dental hygiene program at the university and the governing board ultimately upheld the administration's decision to close the program. The four tenured professors in that department were moved into another program within the College of Dentistry. Soon after, three female tenured professors in the former dental hygiene program sued the administration, alleging sex discrimination. Specifically, the professors claimed that they were adversely affected, based on their gender, in the following ways: they were excluded from the various committees reviewing the recommendation to close the program; the program was abolished before the last dental hygiene student was graduated; and one of the professor's titles changed from "chair" of the department to "coordinator" of the program. After thorough review, the court found no evidence to support the professors' allegation of sex discrimination.

V. Some Resources on Financial Exigency and Program Discontinuance

Corinne A. Haupt, Academic Program Closures: A Legal Compendium (NACUA, 1991).

Robert Charles Ludolph, "Termination of Faculty Tenure Rights Due to Financial Exigency and Program Discontinuance," 63 Univ. of Detroit L. Rev. 609 (1986).

VI. Mergers & Acquisitions

The merger or acquisition of higher education institutions is increasingly common. For example, New York's Marymount College is being consolidated into Fordham University. Beth McMurtrie and Jennifer Jacobson, "Mergers Will Unite 2 Catholic Colleges in New York and 2 in Illinois," The Chronicle of Higher Education (January 5, 2001). DePaul University will soon absorb Barat College, which will become the university's ninth college. The university has agreed to hire all 40 Barat college faculty members. Martin Van Der Werf, "More Colleges Are Seeing the Virtues of Merging," The Chronicle of Higher Education (March 23, 2001). Drexel University is currently managing MCP Hahnemann, and George Washington University now owns Mount Vernon College.

A legal employment issue raised in such transactions is whether a professor's tenure rights continue when the tenuring (or "home") institution is compelled (usually for financial reasons) to affiliate or merge with another institution.

A. AAUP Policy

"When, in the context of financial exigency, one institution merges with another, or purchases its assets, the negotiations leading to merger or purchase should include every effort to recognize the terms of appointment of all faculty members involved. When a faculty member who has held tenure can be offered only a term appointment following a merger or purchase, the faculty member should have the alternative of resigning and receiving at least a year of severance salary." AAUP, On Institutional Problems Resulting From Financial Exigency: Some Operating Guidelines, Redbook at 230. Requiring an acquiring college to honor another college's tenure may be counterproductive because such a requirement might hamper negotiations and discourage affiliation, which, although harming a few, might be necessary to save the majority of faculty positions.

B. Some Recent Cases

Heppel v. George Washington University and Mt. Vernon College, Civ. No. 98-9566 (D.C. Sup. Ct., May 17, 2000): In 1996 Mt. Vernon College (MVC) entered into an "affiliation" agreement with George Washington University (GWU). In December 1998 twelve former faculty members at MVC—nine tenured and three nontenured—sued MVC for a number of claims, including breach of their employment contracts. The professors also sued GWU, alleging a number of claims, including breach of contract. The court declined to dismiss the professors' breach-of-contract claim against MVC. One of the issues was whether the transaction between the two entities was an acquisition, whereby MVC no longer existed, or a merger, whereby MVC remained a corporate entity. The court ruled that the transaction was not a merger because of a "lack of continuity" between the former MVC and the current MVC campus of GWU. The parties settled the dispute in May 2001. "GW, MVC, and Former MVC Faculty Settle Litigation," GWU University Relations (May 4, 2001) <www.gwu.edu>; see also Scott Smallwood, "A Small College is Rescued, and Its Professors End Up Unemployed," The Chronicle of Higher Education (March 21, 2001); Joyce Mercent, "Mount Vernon College to End Professors' Jobs as It Merges," The Chronicle of Higher Education (March 27, 1998).

MCP Hahnemann School of Medicine (Pennsylvania): AAUP investigated the termination of the appointments of more than a dozen tenured members of the basic-science faculty of the MCP Hahnemann School of Medicine, then a component of the Allegheny University of the Health Sciences (AUHS), now MCP Hahnemann University. The terminations were in response to a declaration of financial exigency occasioned by a filing for bankruptcy by the health-care conglomerate of which the university then was a part. The AAUP committee found that the university was in a state of exigency in the fall of 1998, when the administration decided to release tenured faculty members in the school of medicine. Despite well-established channels within the medical school for participation by faculty bodies in addressing compelling problems of faculty status, and several requests to be involved, the committee found that no such participation was permitted. No faculty body had an opportunity to contribute to decisions on whether terminations of tenured appointments were warranted, where within the overall academic program terminations should occur, or which criteria should be used to identify particular individuals for release. The investigating committee also concluded that the AUHS administration, in designating some tenured basic-science faculty members for release while at the same time retaining nontenured faculty colleagues in the same department, failed to demonstrate the basis or the necessity for the release of the former or the retention of the latter.

In November 1998 the administration of Drexel University assumed the management of AUHS and its medical school as part of an arrangement to resolve the health-care conglomerate's bankruptcy situation. The AAUP committee found that, by all major academic indicators, save for its administration and control structure, the institution was a continuation of the former AUHS. The committee concluded that the Drexel administration, in assuming its managerial role and in agreeing to accept substantial financial compensation for doing so, should have respected the tenure rights of the released faculty members. Drexel did not offer them other suitable work at the medical school for which they were potentially qualified or reinstate them to their positions when vacancies were advertised in their specialties; those vacancies were filled in most cases by new appointees. The released faculty were also denied the severance salary called for by AAUP policy, even after MCP Hahnemann's financial picture had dramatically improved.

The administration of Drexel University eventually reached settlements with the faculty members whose services it had identified for termination. The administration had earlier reinstated several, but not all, of the tenured faculty members whose appointments the bankruptcy court had identified for termination. The AAUP did not recommend the imposition of censure, given that the actions taken by the administration, along with the reiteration of its previously stated commitment to academic tenure, addressed the concerns that the Association had conveyed. "Termination of Tenured Appointments: MCP Hahnemann School of Medicine (Pennsylvania)," Academe 42 (May-June 2000).

Gray v. Mundelein College, 695 N.E.2d 1379 (Ill. App. Ct. 1998): This case began in 1991 when Loyola University agreed to purchase Mundelin College. Of the college's 40 tenured professors, the university agreed to recognize the tenure of at least 26 and to offer, at a minimum, 11 faculty members five-year appointments. The original plaintiffs were two of the college's tenured professors who were not offered university positions, and the third was a professor who had a five-year contract at the university, but argued she should have tenure instead. They claimed that the college never officially terminated their tenured appointments and, therefore, their tenure contracts were breached when they lost their positions. The court found that no merger existed because, in part, the college did not dissolve and it continued to exist as a corporate entity. At one stage of judicial consideration, the state appellate court found the college's faculty manual "silent" on whether tenure survives an exigency affiliation or merger. In the end, the state appellate court found that, because financial exigency had to be declared to extinguish plaintiffs' tenure rights, which was never done, the administration had breached the professors' contracts.

For more information on mergers and acquisitions, see James Martin et al., Merging Colleges For Mutual Growth (Johns Hopkins University Press, 1993).

VII. Some Medical School Experiences with Cost-Cutting Efforts

The financial pressures facing many higher education institutions have been especially acute in medical schools. Billy Goodman, "Fiscal Constraints Threaten Tenure at Medical Schools," The Scientist, May 11, 1998. Those financial pressures have triggered cost-cutting efforts that have led to litigation by professors against administrations. The medical school experience is a helpful context in which to examine litigation resulting from some cost-cutting efforts, such as reducing salaries, shortening annual contracts, and increasing pressure to garner research monies.

A. Tenure and Economic Security

Tenure helps attract the most capable individuals into faculty positions, which may offer lower salaries than comparable positions in business or government. It is a reasonable arrangement to induce people to undergo long periods of training in highly specialized fields. The result is a system that is economically efficient both for the individual and for the institution. Michael S. McPherson and Gordon C. Winston, "The Economics of Academic Tenure: A Relational Perspective," in Paying The Piper: Productivity, Incentives, And Financing In U.S. Higher Education (1993). The AAUP maintains that "all tenured and tenure-track faculty [at medical schools] should be guaranteed an assured minimum salary adequate to the maintenance of support at a level appropriate to faculty members in the basic sciences, and not merely a token stipend, on a formula to be determined by the administration and board of trustees after consultation with a representative body of the faculty." AAUP, Tenure in the Medical School, Redbook at 103. In addition, non-tenure-track faculty, such as clinicians, "should have a contractually enforceable expectation of a stipulated salary which cannot be unilaterally or arbitrarily abridged during the appointment period." Id.

For a helpful overview of policy and legal issues in medical schools, see Lawrence White, "Academic Tenure: Its Historical and Legal Meanings in the United States and Its Relationship to the Compensation of Medical School Faculty Members," 44 St. Louis Univ. L.J. 51 (2000); see also Donna R. Euben, "Doctors in Court? Salary Reduction Litigation," Academe 87 (Nov.-Dec. 1999).

B. Some Recent Cases

Glazer v. Georgetown University, CA No. 0000321-99 (D.C. Sup. Ct., Nov. 14, 1999). In 1997 the medical school issued a new policy for medical school faculty, tying compensation to "income generating" activities and grant money that, apparently, would have required researchers to raise 70 percent of their salaries through grants. In December 1997 eighteen tenured faculty members filed a grievance against the medical school. One faculty panel opined:

"Although always welcome by the university, research grant funds never, by themselves, determined how much salary the university would pay basic science faculty members. This is an important consideration under tenure principles, which in the last analysis, permit a faculty member to put aside any thought or worry about the security of his salary to devote his full efforts to teaching and scholarship."

The administration rejected the findings of two faculty panels, which both found for the professors.

In 1999 a group of twelve medical school faculty filed litigation against the university in D.C. Superior Court. The professors asserted a number of claims, including breach of their tenure contracts. According to the professors' press release, the new compensation policy "abrogated the core principles of tenure at the University and overturned 200 years of tradition in the treatment of Georgetown faculty." In May 1999 the parties settled the lawsuit and, according to the media, the settlement agreement provided for the withdrawal of the proposed compensation policy, payment of the professors' lawyers fees, and compensation for two professors' lost income. "Georgetown U. Settles Medical Professors' Lawsuit Over Compensation," The Chronicle of Higher Education (July 9, 1999). According to the lead plaintiff, Professor Glazer, the settlement allows the professors "to bypass the grievance process and go straight to court" if there is a "reincarnation" of the compensation policy. "Science Scope," Science, Vol. 284 (June 11, 1999).

MCP Hahnemann University: In 1995 Hahnemann University "backed off" a compensation policy that would have required professors to provide up to 100 percent of their salaries through grant money. According to newspaper accounts, "[t]he University abandoned the requirement after 40 faculty members filed a grievance with the university." Katherine Mangan, "Hahnemann U. Backs Off Controversial Requirement," The Chronicle of Higher Education A16 (Jan. 13, 1995); Katherine S. Mangan, "Hahnemann U. Angers Faculty With Threat to Fire Those Who Don't Attract Grant Money," The Chronicle of Higher Education (Oct. 5, 1994).

Kirschenbaum v. Northwestern University, 728 N.E.2d 752 (Ill. App. Ct. 2000): A tenured medical faculty member on a "soft-money" appointment challenged the administration's decision to eliminate his salary. The parties agreed that Professor Kirschenbaum was tenured. The court upheld Northwestern University's right not to pay the tenured professor based on the university's faculty handbook for medical school faculty, which specifically provided for "zero-based" salaries for tenured professors.

Albrecht v. University of Southern California, No. BC160860 (Cal. Super. Ct., July 20, 1998): In 1995 the USC medical school sent its basic science faculty a letter notifying them of its plan to shorten their contracts from 12 to 9 months, with a corresponding 25 percent reduction in salary, and reduction in other benefits, due to a "structural deficit." The administration then switched all 108 faculty members to the new compensation plan. In response, 23 professors sued the university for a number of claims, including breach of contract. See "Suit by 23 Tenured Faculty Members Against USC Illustrates Changes in Biomedical Research Culture," The Scientist, Vol. 11, No. 3 (Feb. 3, 1997). The parties eventually settled the suit.

Williams v. Texas Tech University Health Sciences Center, 6 F.3d 290 (5th Cir. 1993), cert. denied, 510 U.S. 1194 (1994): The medical school reduced the compensation of a tenured professor at the medical school from $68,000 to $46,500 because he failed to generate as much grant money as had been expected. The professor sued, claiming that he should have been provided a hearing before that decision was made. The court rejected his claim, finding that the professor's interest in a specific salary level did not outweigh the administration's interest in making budget decisions for educational programs. The court also noted that the professor had received six months' notice and the opportunity to seek additional funding.

VIII. Some Practical Suggestions

• Administration and faculty should work together to develop clear, written policies governing how to handle financial exigency, program discontinuance, and mergers and acquisitions.
• Whether or not the institution's documents mandate faculty participation, a wise administration will conform with principles of shared governance and involve faculty early in the process of making decisions regarding financial concerns. In so doing, the faculty should be provided adequate information to participate meaningfully in such discussions.
• Explore the creation of early retirement programs.
• When moving to terminate faculty appointments, apply policies in a consistent and non-discriminatory fashion, and observe all notice and severance pay requirements.
• Follow institutional policies carefully to ensure the provision of adequate due process protections to faculty members designated for release.

 Updated 8/06