Legal Watch: Judicial Forays into Merit Pay

By Donna R. Euben

In 2000 a federal appellate court found that Portland State University violated the First Amendment rights of Michael Hollister, a tenured professor of English, when it denied him merit pay increases. The professor asserted that he was denied such increases because he spoke out publicly against feminist criticism of male writers in American literature and against feminist courses in the English department. The court found that the professor's speaking out on educational policy was protected speech, and that to deny him merit increases in retaliation for that speech was unconstitutional.

In 1997 another federal appellate court allowed a case to proceed to trial on whether Vincennes University, a two-year public institution in Indiana, violated the First Amendment rights of three professors by awarding them low merit increases. The faculty members asserted that they were awarded merit increases of only $400, compared with an average increase of $1,000, because they were outspoken on issues of faculty salaries. The professors sought a judicial injunction commanding the university to raise their base salaries to reflect the merit increases they would otherwise have been awarded. The university "concede[d] that these so-called 'merit' raises were actually used to reward faculty who were combating 'dissension' and 'divisiveness,'" according to the court, which observed that the lower merit increase "not only reduced the fringe benefits [the professors] would have received had they gotten a higher raise, but will reduce their future salaries; for by being added to the base salary the amount of the merit raise will be paid in all future years to those faculty who were granted it." In allowing the case to proceed to trial, the court concluded that it could not say "that denying a raise of several hundred dollars as punishment for speaking out is unlikely to deter the exercise of free speech."

In 1997 another federal appellate court considered whether a merit pay plan in the law school of Texas Southern University, a public, historically black institution, violated the legal rights of three tenured white professors. The professors claimed that they received lower than expected merit increases in retaliation for exercising their free speech rights, which included writing to various university officials seeking the dismissal of a law school dean, participating in a "no confidence" vote to remove the dean, and complaining to the American Bar Association about the university's refusal to dismiss the dean.

On the one hand, the court rejected the professors' First Amendment retaliation claim, finding the case merely a "dispute over the quantum of pay increases." The court noted, however, that "i[f] Plaintiffs had received no merit pay increase at all or if the amount of such increase were so small as to be simply a token increase which was out of proportion to the merit pay increases granted to others, we might reach a different conclusion."

On the other hand, the court accepted the law professors' argument that their low merit increases constituted race discrimination, because the faculty members presented evidence that the administration "failed to give white professors equal credit and consideration" for their work, which caused "black professors to receive higher merit pay increases than those received by their white counterparts."

Merit pay plans may also trigger gender bias concerns. Dorothy Kovacevich, a special education professor, sued Kent State University, claiming salary discri-mination based on her gender. A jury agreed, and on appeal, the federal appellate court upheld in 2000 that "her lower salary was a result of gender discrimination." The university argued that any differences in salary between Kovacevich and her male colleagues were "due to the school's merit system and across-the-board percentage increases." Kovacevich's evidence, however, persuaded the appellate court that gender discrimination was imbedded in KSU's merit-pay system. The court noted that "rather than a neutral system of merit based on anonymous peer evaluations, the merit award system was driven largely by an opaque decision-making process at the administrative level [that] did not necessarily reflect peers' assessment of applicants' performances, and rewarded men disproportionately to women." In addition, the court cited a faculty report, which stated that "it is extremely difficult to demonstrate the connection between peers' professional judgments of meritorious performance and the size of the merit awards."

If merit pay plans are adopted, we must all work to make them more transparent. Such transparency will be achieved by ensuring that salary enhancement programs have clear objectives, that criteria are applied consistently and fairly, and that they are not used to squelch the speech of faculty.

Donna Euben is AAUP counsel.

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