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Policies and Best Practices
1. According to AAUP-recommended standards, when can an administration terminate faculty appointments for financial reasons?
When a “demonstrably bona fide” condition of financial exigency exists (Recommended Institutional Regulations on Academic Freedom and Tenure 4c).
2. Where can I find the AAUP’s recommended policies and procedures on financial exigency?
Regulation 4c of the Recommended Institutional Regulations on Academic Freedom and Tenure (RIR) contains our recommended policies on financial exigency. Practical guidelines for implementing these policies can be found in On Institutional Problems Resulting from Financial Exigency: Some Operating Guidelines
3. What is the AAUP’s definition of financial exigency?
“A severe financial crisis that fundamentally compromises the academic integrity of the institution as a whole and that cannot be alleviated by less drastic means” than the termination of tenured faculty appointments (Recommended Institutional Regulations 4c).
4. What should be the faculty’s role in determining whether a condition of financial exigency exists?
A duly constituted faculty body should participate in reaching the determination that a condition of financial exigency exists or is about to exist and that all feasible alternatives to terminating appointments have been exhausted. The faculty should also play a primary role in determining, based on educational considerations, where appointments will be terminated and in developing the criteria for identifying whose appointments will be terminated (Recommended Institutional Regulations 4c[2]).
5. What further role should the faculty play before any proposals are made for discontinuing programs?
The faculty or an appropriate subset thereof will have the opportunity to render in writing an assessment of the institution's financial condition, aided by five years of financial statements; current and following year budgets; and detailed future-years cash-flow estimates, as well as by detailed program, department, and administrative-unit budgets.
6. How does the AAUP define "academic program"?
Under Recommended Institutional Regulation 4c(2), academic programs cannot be defined ad hoc following the declaration of financial exigency. “Program” should designate a related cluster of credit-bearing courses that constitute a coherent body of study within a discipline or set of related disciplines. When feasible, the term should designate a department.
7. To what extent will affected faculty members be informed of the proposed discontinuance of their programs?
Tenured, tenure-track, and contingent faculty members whose programs face potential closure will be informed promptly of the pending decision and will be given at least thirty days to respond to the proposal.
8. What due process protections does the AAUP recommend affording a faculty member whose position is being terminated because of financial exigency?
A faculty member whose position is identified for termination should be afforded an adjudicative hearing of record before a duly constituted faculty committee in which the following three issues may be contested:
- “The existence and extent of the condition of financial exigency,” with the burden of proof upon the administration.
- “The validity of the educational judgments and the criteria for identification for termination,” with the proviso that any faculty judgments in these matters are presumed valid.
- “Whether the criteria [for termination] are properly applied in the individual case” (Recommended Institutional Regulations 4c).
9. Is there an order in which appointments should be terminated after financial exigency has been declared?
According to the Recommended Institutional Regulations 4c(3), “The appointment of a faculty member with tenure will not be terminated in favor of retaining a faculty member without tenure, except in extraordinary circumstances where a serious distortion of the academic program would otherwise result.”
10. How much notice should an administration provide a faculty member whose appointment is being terminated for financial exigency?
Regulation 8 of the Recommended Institutional Regulations provides as follows:
If the appointment is terminated, the faculty member will receive salary or notice in accordance with the following schedule: at least three months, if the final decision is reached by March 1 (or three months prior to the expiration) of the first year of probationary service; at least six months [of salary or notice], if the decision is reached by December 15 of the second year (or after nine months but prior to eighteen months) of probationary service; at least one year, if the decision is reached after eighteen months of probationary service or if the faculty member has tenure. . . . On the recommendation of the faculty hearing committee or the president, the governing board, in determining what, if any, payments will be made beyond the effective date of [termination], may take into account the length and quality of service of the faculty member.
11. Does an administration have any other obligations toward a faculty member whose position is terminated because of financial exigency?
An administration should make “every effort” to find another suitable position within the institution for the affected faculty member (Recommended Institutional Regulations 4c[4]). The position of the affected faculty member “will not be filled by a replacement within a period of three years, unless the released faculty member has been offered reinstatement and a reasonable time in which to accept or decline it” (RIR 4c[6]). In the unfortunate event that the financial exigency is so severe as to require that the institution be closed, the administration "should make every effort in settling its affairs to assist those engaged in the academic process so that, with minimal injury, they can continue their work elsewhere" (On Institutional Problems Resulting from Financial Exigency: Some Operating Guidelines).
12. Can institutions terminate faculty appointments by eliminating programs and departments for reasons other than financial exigency?
According to Regulation 4d of the Recommended Institutional Regulations, “termination of an appointment with continuous tenure, or of a probationary or special appointment before the end of the specified term, may occur as a result of bona fide formal discontinuance of a program or department of instruction.” AAUP standards, however, distinguish between program discontinuance and program reduction. In the absence of financial exigency, our standards do not permit the termination of faculty appointments in order to reduce a program.
The decision to discontinue a program must be “based essentially on educational considerations.” Educational considerations are “determined primarily by the faculty as a whole or an appropriate committee thereof,” exclude “cyclical or temporary variations in enrollment,” and “must reflect long-range judgments that the educational mission of the institution as a whole will be enhanced by the discontinuance.”
A faculty member whose position is identified for termination because of program discontinuance should be afforded an adjudicative hearing of record before a duly constituted faculty committee in which the issues may include (a) whether the decision to discontinue the program was “based essentially on educational considerations” as defined primarily by the faculty, (b) whether the administration has made “every effort,” including retraining, to find the affected faculty member another suitable position within the institution, and (c) whether the amount of severance salary takes into account the length of the faculty member’s “past and potential service.” A determination by the faculty that a particular program or department should be discontinued is to be considered “presumptively valid.” The burden of proof otherwise rests with the administration.
Recommended Institutional Regulations 4d(2) specifies that severance pay for faculty members whose appointments have been terminated because of program discontinuance should be “equitably adjusted to the faculty member’s length of past and potential service.” The requirement that the administration make every effort to find an alternative position within the institution for the affected faculty member includes providing “financial and other support for a reasonable period of training” to help qualify the faculty member for another position (4d[2]).
13. Where can I find sample faculty handbook policies on financial exigency that comport with AAUP recommended standards?
Further Reading
The Role of the Faculty in Conditions of Financial Exigency. AAUP Policy Documents and Reports
On Institutional Problems Resulting from Financial Exigency: Some Operating Guidelines. AAUP Policy Documents and Reports
"Financial Exigency." By Ralph S. Brown, Jr. AAUP Bulletin Spring 1976. (.pdf)
"The Association’s Evolving Policy on Financial Exigency." By David Fellman. Academe May-June 1984.
"A Response to AASCU's Position on Financial Exigency. " By B. Robert Kreiser. Academe May-June 1985. (.pdf)
"Retrenching by the Book." By Larry White. AAUP Legal Office memo.
