Home Programs & ServicesPublishing The Presidency

Faculty Layoffs: Mitigating Dissatisfaction and Risk

By Ada Meloy

For most colleges and universities, personnel costs are one of the largest—if not the largest—annual expenditure. As such, institutions often respond to budgetary constraints by evaluating their personnel expenditures, and in today's environment, furloughs and layoffs are becoming more common, Although most institutions consider faculty layoffs to be a last resort, when they must take that step, colleges and universities need to handle layoffs with special care in order to manage their legal risks.

Faculty layoffs implicate a host of legal issues, including breach of employment contracts, violation of antidiscrimination laws, infringement of employee benefit rights, and, on campuses with faculty unions, breach of collective bargaining agreements. Faculty termination also raises special legal risk if it violates the faculty handbook, the initial appointment letter or hiring contract, or an oral agreement or understanding. Handbook provisions that can be particularly relevant to faculty layoffs include:

• Sequence of layoffs, that is, the order in which different types of faculty members are considered for layoff. A typical sequence eliminates adjunct and part-time appointments before full-time ones, and eliminates non-tenured appointments before tenured positions.
• Pre-termination rights. A faculty member selected for layoff may have opportunities for transfer or retraining and the right to a hearing.
• Post-termination rights. A faculty handbook could promise, for example, that a faculty member who has been laid off will be eligible for a similar position should one open within three years.
• Standard of financial distress. Institutional policies generally define the degree of financial difficulty that can trigger faculty layoffs. Financial exigency is one phrase used frequently.
• Standard for program discontinuance. Some institutions may eliminate academic departments as a method for alleviating financial difficulty, while others discontinue departments and programs primarily to address educational, not financial, needs.
• Locus of tenure. Institutional policy and practice generally address whether a faculty member has tenure in a department or, more commonly, in the institution.

When dismissing faculty, institutions must make efforts not to run afoul of various nondiscrimination laws. For instance, Title VII of the 1964 Civil Rights Act prohibits employment decisions made for reasons related to race, color, sex, religion, and national origin. The Americans with Disabilities Act and the Rehabilitation Act of 1973 protect employees from termination on the basis of a disability. And the Age Discrimination in Employment Act (ADEA) protects employees aged 40 and older from termination because of age.

Excerpted from the fall 2009 issue of The Presidency. To subscribe to the magazine, please call (301) 632-6757, or order online through ACE's bookstore.