Doctors in court? Salary reduction litigation

Academe, Nov/Dec 1999 by Euben, Donna R

AN ACADEMIC MEDical centers reduce professors' guaranteed salaries? Some medical schools have an "cat what you kill" compensation system: basic science professors may have, say, 30 percent of their total compensation guaranteed by the school, with the remaining 70 percent to be raised by them from external sources. Limited judicial guidance suggests that, depending on institutional policies and practices, state contract law, and due process protections, administration efforts to cut unilaterally the guaranteed salaries of tenured faculty or of nontenured faculty midcontract, absent a condition of financial exigency, will face strong legal challenges.

The 1940 Statement on Academic Freedom and Tenure provides that " [t] enure is a means to certain ends, specifically... a sufficient degree of economic security to make the profession attractive to men and women of ability." Accordingly, the AAUP's 1995 report, Tenure in the Medical School, recommends that in medical schools, "all tenured and tenure-track faculty should be guaranteed an assured minimum salary adequate to the maintenance of support at a level appropriate to faculty members in the basic sciences." The challenge is to determine the extent of the economic security required to give tenure meaning.

Medical school faculty are challenging salary-reduction efforts, with mixed success, mainly by claiming violations of academic contracts and due process.

The employment relationship between colleges and universities and their faculty members is governed primarily by state law (including contract law), institutional policies, and, where applic. able, collective bargaining agreements.

In 1996, twenty-three tenured faculty members at the University of Southern California School of Medicine sued that administration, alleging that it breached the professors' contracts by unilaterally changing the employment terms. The professors asserted that the faculty handbook established twelve-month contracts renewable annually.The administration contended that tenure guaranteed salary for nine-month appointments only, and it reduced the salaries of all 108 members of the basic science faculty by 25 percent. The parties settled the suit. The administration awarded raises to professors in the lawsuit and agreed to review salaries of similarly situated professors to determine whether merit raises were warranted.

In 1999, twelve tenured faculty members in the Georgetown University Medical Center sued the administration for breach of contract for unilaterally imposing a compensation policy that would have required them to raise 70 percent of their salaries through grants. In 1998, a grievance panel recommended that the compensation plan be rescinded because it violated the professors' contracts. Panel members noted that "there can be no academic independence and freedom without financial security for tenured Medical Center faculty members." The panel found that the new compensation plan "sufficiently interfere[d] with such necessary financial security so as to be inconsistent with tenure principles." The suit was settled. That settlement required, in part, that the administration withdraw the policy, compensate faculty for lost income, and pay the professors' legal expenses.

While institutional policies at public and private institutions almost always include due process protections, faculty members at public institutions with tenure or during the terms of their appointments have the additional due process protections of the federal Constitution when a personnel decision deprives them of a property" or a "liberty" interest.

Yet in 1993, a federal appellate court ruled that Texas Tech University Health Sciences Center did not violate a professor's due process rights when it reduced his salary from $68,000 to $46,500. The administration allegedly reduced the professor's salary because he had not generated enough grant income. The professor contended that the administration should have provided a hearing before that decision was made. The court ruled that the professor received sufficient due process-he received six months' notice and the opportunity to seek additional funding-and that his interest in a specific salary did not outweigh the state's interest in administering its budget.

Basic science professors are the initial targets of these salary-reduction efforts, probably because of the financial pressures on medical schools and the professors' relatively high salaries. Yet these salary reductions may next affect other academics who rely on grant-based research. The entire academic community should watch carefully as the law in this area evolves.