Paul L. Caron

Saturday, February 1, 2014

Tenured Faculty Layoffs Coming at Albany Law School?

Albany logoTax Prof Bridget Crawford (Pace) reports on the news that Albany Law School's "administration and governing board have announced that, because of serious financial difficulties, notifications of faculty layoffs will be issued shortly." 

Albany's bonds have been downgraded in recent months, and its 1L enrollment has declined 27% over the past five years:

2009:  255
2010:  236
2011:  235
2012:  196
2013:  187

The AAUP has pushed back, based on a detailed financial analysis:

The Chapter maintains that there is no showing of a bona fide institutional financial exigency or of individual faculty incompetence. Accordingly, no justification for faculty terminations exists. Since no faculty terminations are justified, the Chapter takes no position on what the order of layoffs would be if terminations were warranted under a state of financial exigency. In the absence of evidence of anything remotely resembling a bona fide financial exigency, firing any faculty member would depart from nationally accepted standards of law school governance.


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The publicly available financial documents make it clear that Albany Law is in excellent financial shape, which is likely why the ratings agencies found ALS to be “stable.” My understanding is that Albany tenured faculty – like almost all faculty at ABA accredited law schools – can only be dismissed for two reasons (a) adequate cause, following a faculty vote and due process or (b) a formal declaration of financial exigency by the school, following due process and faculty involvement in the process. Clearly there is no true financial exigency here, and it would likely be impossible to fire most or any faculty based on adequate cause (unless cause is manufactured somehow by the Administration).

The documents from the AAUP President, as well as those found on the Chapter website, suggest that Albany Law has not formally declared any exigency (indeed, with their strong endowment and unrestricted reserves it would be impossible for them to so declare!) but rather has threatened to fire faculty without process for unstated “financial reasons.” If the Admin and Board of Albany Law were to truly fire tenure-track or tenured faculty without a cause hearing or declaring financial exigency, the law school would be subject to immense liability and public backlash!

I would hope the Admin would not be so short-sighted and reckless, but then again this is the same Admin and Board that hired disgraced attorney Jill Dunn to run their Bar preparation and ethics program, even though they had full knowledge that she was censured for lying under oath to federal judges! Apparently Dunn obtained her job as a favor from the Board of Trustees for Albany Law, given that she was the family attorney for David Smith- who was partners with Timothy McGinn (whose wife Mary Ann McGinn Cody stepped down as Chair of the Board just last year). David Smith and Timothy McGinn were both recently sent to federal prison for stealing millions of dollars from investors in a Ponzi-like fraud scheme. Nonetheless, Dean Penny Andrews at Albany signed Dunn to a new contract this past summer! It looks like Dunn was let go somehow (she is no longer on the website) after news of her censure and the past federal investigation for lying became public in the local newspaper:

Posted by: anon | Feb 1, 2014 10:52:28 AM

This is a comment I just posted on the "Faculty Lounge" blog. Many of the comments posted on that blog are missing the point by focusing too narrowly on the pros and cons of tenure. This is a distraction. Many faculty members at law schools are non-tenured (either tenure track, or long term contract). The problem is that Albany Law School has threatened to fire faculty members (whether tenured or not) in violation of its own contractual commitments as contained in the faculty handbook and in individual contracts of employment - i.e. in contravention of contractual provisions that require that dismissals can only be for cause or for financial exigency. Even if one were to agree that breaching contracts makes good financial sense, it is still undeniably against the law. And a law school that has undertaken to uphold and promote the rule of law ought to be careful of the message it sends with its willingness to break the law as a cost of doing business.

I don't think anyone is arguing (and I am certainly not) that the law school DOES NOT have the ability to dismiss faculty members for cause or for financial exigency. It is essential to this conversation to underscore the point that Albany Law School, as an ABA accredited law school does not operate in an at-will context. In fact, in order to maintain ABA accreditation all law schools must offer security of position to their professors (either through tenure or through some form of security of position similar to tenure). A law school that treats its faculty as at-will employees runs afoul of ABA accreditation standards. In addition, ABA accreditation standards require law schools to ensure a significant faculty role in determining education policy and admissions and also requires faculty to play a primary role in "selection, retention, promotion, and tenure (or granting of security of position) of the faculty... " If a law school actively prevents faculty from participating in the governance of the law school and fires its professors at will (without cause, without financial exigency and/or without academic due process) then it runs afoul of ABA accreditation standards. So, whether one supports tenure or not, there are structural limits placed on a law school's ability to fire faculty members at will. These structural limits operate within the larger legal system that deems breaches of contract contrary to law.

So, the situation, as I understand it is this - The law school is currently in good financial condition. Enrollment numbers will go down either by design or because of circumstances. The law school faces some serious choices. It could choose to fire faculty, probably prematurely and contrary to the law, in anticipation of future financial downfalls (and remember, this particular law school has seen a more than 20+ percent reduction in faculty at the same time that it has seen a 20+ percent reduction in enrollment - figures that are not terribly disproportionate, I would argue). Or the law school could anticipate future financial shortfalls by doing what other law schools are doing and what I understand the Albany Law faculty has already proposed - that is, reducing salaries, health and retirement benefits, reducing or eliminating travel and research stipends, instituting rotating furloughs, unpaid leaves, etc. It appears that the faculty has been rather too receptive to the administration's claims of financial difficulties considering the only financial information available reveals that there is no financial crisis. In addition, hiring freezes and buyouts would seem to make sense if there were a bona fide financial exigency - something I understand the faculty already proposed, perhaps prematurely. So, this is not a matter that can be reduced to the rather simple proposition that law schools should be free to fire professors at will or whenever it has anticipated financial concerns. Good financial planning would take account of appropriate, available and effective alternatives to firing faculty. A law school should not break the law under any circumstances even if it makes financial sense to do so.

Posted by: Anonimity | Feb 1, 2014 4:13:18 PM

A law school that treats its faculty as at-will employees runs afoul of ABA accreditation standards.

IANAL, but this ABA accreditation scheme sure looks like a cartel to me and aren't cartels illegal? How many competing accreditation agencies can law schools apply to?

If ABA is a cartel with respect to law school accreditation then isn't it kind of rich to be making all these arguments appealing to the fine points of law?

the law school would be subject to immense liability and public backlash!

I can offer no informed opinion on the issue of immense liability but as a member of the public I think I'm on pretty solid ground in stating that I believe you'll be waiting until the sun goes nova before you find a public backlash against a university firing tenured professors. The public, especially the public that works in sectors where job security isn't iron-clad, don't have much love for ivory-tower folks crying about the hardships of being fired.

Posted by: bobby | Feb 1, 2014 7:02:02 PM

Just to add some fuel to the fire. Has the Law School already reduced the bloated administrative staff and salaries so common among universities today? Or are they planning to lay off faculty while protecting the Administrators?

''Gentlemen, we've got to protect our phony baloney jobs!''

Posted by: Nemo | Feb 1, 2014 8:42:45 PM

So, a loss of 27% of students, and corresponding income should not matter. As long as there are any assets left, the school should chew through those before even CONSIDERING laying off a tenured professor? Why, I can hear the harumphing from here! And of course they should lay off administrative bloat, but the professors are more important?

I have an idea - instead of the AAUP's silly non-financial analysis, where-in the AAUP decides what donations it is entitled to, how about setting up a new fund that alumni and others can donate to. 100% of the proceeds go directly to keeping tenured professors that have nothing to do since 25% of the enrollment is gone, employed.

Posted by: GobalTrvlr | Feb 2, 2014 6:41:55 AM

I am an attorney who has taught at 2 different law schools - at one of the Ivies, and at a smaller private school. I have a glimpse (albeit only a glimpse) into the legal academy. My impression is that in general, law faculties care deeply for their students and alumni. In my experience the connection between faculty, student and alumni was stronger at the small law school. I'm familiar with Albany Law School and I think it has many strengths that are not perhaps recognized in the ranking system. One of its strengths is the faculty's commitment to its students and its engagement with its alums. It appears to me that there is a mismatch between the faculty and administration in how they would deal with a decline in enrollment. I think both "sides" care for students.

The faculty seems to suggest that the school should implement changes that it believes will keep the place intact and that would require it to share in the costs of such changes - they have apparently already offered (again, I think prematurely) salary and benefit cuts, furloughs, unpaid leaves, etc. These are not insignificant if it is true that faculty salary and benefits account for only 1/3 of the budget to begin with. Unrestricted reserves might need to be tapped, but I don't think anyone would argue that they should be depleted.

There has already been a significant reduction in faculty positions that seem proportionate to the decline in enrollment. And there are more reductions that are certain to occur very soon (3 professors are retiring, and at least two, and probably more, are on their way out). For an already small faculty, these additional reductions will no doubt have a significant impact. Why resort to layoffs that will certainly lead to lawsuits when the school seems to be going in exactly the direction that many of these comments suggest is appropriate - i.e. there is a reduction in faculty positions that is in-line with the reduction in enrollment. None of the faculty's suggestions are unreasonable or harmful to students or the institution.

The administration on the other hand seems set on layoffs - certainly one way to reduce costs, but not the only way. I am not aware of any significant revenue generating activities, nor do I know whether the Dean has offered to pick up the slack by teaching a class or two or by offering reductions in administrative appointments or in salary or benefits. I would imagine that in response to the faculty's offers to cut their own salaries and benefits, she has already offered to reduce administrative expenses, and if she hasn't then she should.

The law school faces some hard choices, but it seems that currently the school is in good financial condition and is moving in the right direction.

Posted by: Anonimity | Feb 2, 2014 7:50:49 AM

"How did you go bankrupt?" Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly."

Posted by: terry malloy | Feb 3, 2014 6:05:56 AM

And academic freedom disappears the same way.

Posted by: beckett | Feb 3, 2014 5:32:16 PM