Paul L. Caron

Monday, April 16, 2018

Can Tenured Faculty Contracts Be Terminated In A College's Bankruptcy?

Matthew A. Bruckner (Howard), Terminating Tenure: Rejecting Tenure Contracts in Bankruptcy, 92 Am. Bankr. Inst. L. Rev. 255 (2018):

Many institutions of higher education are in dire financial straits and will close, merge, or file for bankruptcy in the near future. This Article considers the effect of bankruptcy laws on the ability of higher education institutions to restructure their workforces and, in particular, the impact that a bankruptcy filing may have on tenured professors.

It analyzes whether tenure is an executory contract, concluding that the answer is surprisingly unclear and depends heavily on whether courts adopt the Countryman definition of executory contracts. It also addresses how some tenured professors may be able to complicate their employer’s reorganization to their own strategic advantage by arguing, among other things, that tenure is a protected property right under the Fifth Amendment Takings Clause.

Legal Education, Scholarship | Permalink


Trollbot, in an almost decent post on the hardships of adjuncts (who along with other NTT profs comprise a large majority of their profession in the US), cannot help but lament that tenured law professors, who usually have 2-1 teaching loads, no billables, no clients, and very little stress, don't get paid like equity partners. Which is an amusing complaint as most law profs didn't last more than a year or two in private practice. Do business professors complain that they don't get the stock options of Warren Buffet? Do music professors complain that they don't get the royalties of Taylor Swift? Spare me the pity party; you have plum sinecures that most law partners would swap with in a second, wages be damned.

Maybe look at it this way: law professors have less education, lower teaching loads, and yet considerably higher salaries than virtually every other professor in the university. Plus student review instead of peer review. Count yourself lucky.

Posted by: Unemployed Northeastern | Apr 19, 2018 8:04:45 AM

There are some good answers on Quora:

Tenured Professors have proven themselves, and so are rarely fired--but they can be. Around 2% of tenured professors apparently lose their jobs every year--around the same as the percent of lawyers who are unemployed, according to the BLS.

Posted by: Tenure | Apr 17, 2018 4:04:44 PM

Hey Trollbot--

Very few professors are tenured and they work extremely hard (~60 hour work weeks) for extremely low wages (relative to their peers in the private sector) to get there. But tenured professors can and do lose their jobs for financial exigency when their department or school shuts down.

Do you know who else can't lose their livelihoods? The owners of businesses, unless the business goes under.

Tenured faculty are the university equivalent of law firm partners. Except that law firm partners make 10 to 20 times as much and have real security--money in the bank.

Posted by: Trollbot | Apr 17, 2018 3:40:26 PM

It's amazing how much some blog commenters have a death grip on ignorance. It must be nice to talk with absolute certainty without bothering with the facts. Imagine going to any developed country in the world, almost all of which say that workers cannot be fired without a valid business reason--very similar to tenure. Shoot, tell lawyers in those countries how little job protection US workers have and see how quickly they perish from stopped hearts caused by the horror at what they heard.

Posted by: Employment Lawyer | Apr 17, 2018 6:03:13 AM

Thanks for your comment, Sean. One of the reasons I wrote the article was to highlight the gap between popular understandings of tenure (a job-for-life) and the precarious reality.

Posted by: Matthew Bruckner | Apr 17, 2018 4:31:18 AM

Is this any different than manufacturing workers losing their pensions after their employer goes bankrupt? (Isn't this why pension plans are regulated?) Or "guaranteed" annuities which are only as guaranteed as the company that backs them?

Posted by: ruralcounsel | Apr 17, 2018 4:30:45 AM

It's amazing how much the educational industry has a death grip on tenure. It must be nice to have absolute certainty that as long as you don't get involved in the #metoo movement (or similar transgression) that there is no getting rid of a professor. Imagine telling other professions that they could never be fired, for almost any reason. Shoot, tell that to other lawyers and see how quickly they perish from ruptured kidneys caused by too much laughing.

Posted by: Sean | Apr 16, 2018 11:22:02 AM