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What’s the Matter with Kansas? The University of Kansas Breaks an 80 Year Deal on Faculty Tenure

February 3, 2021 by in "Two Minute Takeaway"

On January 21, 2021 the Board of Regents of the University of Kansas blew up the national consensus on academic tenure that has existed since 1940.  

Facing significant Covid-related deficits, UK’s Regents announced that for two years, until December 31, 2022, Kansas’s six public universities may terminate tenured faculty members without declaring “a financial exigency.” This sounds somewhat esoteric, but it sent a shock wave through academia.  This post discusses why UK acted as it did and why other institutions may do the same.

“Financial Exigency”

The cryptic phrase “financial exigency” plays an outsize role providing job security to tenured faculty at American colleges and universities.  Other than terminating tenured faculty for “cause”, generally the only basis upon which a college or university may terminate tenured faculty is if the institution declares a “financial exigency.”  This arrangement has its origins in a landmark 1940 agreement between the American Association of University Professors (AAUP) and the Association of American Colleges and Universities (AACU). 

In 1940, the AAUP and AACU jointly issued the “Statement of Principles on Academic Freedom and Tenure” which prohibited institutions from terminating tenured faculty except in cases of “demonstrably bona fide financial exigency.”  Financial exigency was defined as “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.”  The concept continues to define tenured appointments at most academic institutions today.

The University of Kansas Adopts the 1940 Principles

Like hundreds of institutions, UK incorporates the 1940 Principles into its Faculty Handbook and governing documents.  The UK Faculty Handbook states that the “Kansas Board of Regents and the University have adopted the American Association of University Professors Statement of Academic Freedom and Tenure” which statement embodies the 1940 Principles.  UK’s Handbook also incorporates UK Faculty Senate Rules & Regulations stating “tenured members may be dismissed only for adequate cause, in cases of program discontinuance, or under extraordinary circumstances caused by financial exigency.” 

Regardless of the Regents’ recent announcement, UK therefore has made a commitment to tenured faculty not to terminate their appointments unless there is a bona fide financial exigency at the University.  Why would UK’s Regents blatantly breach that commitment and permit termination of tenured faculty without a declaration of financial exigency?

The Catch-22 of Financial Exigency

Financial exigency creates a catch-22 for academic institutions because it requires them to establish their financial weakness at the very time they need to assure constituents of their financial strength.  The 1940 Principles describe financial exigency as a “severe financial crisis” and the AAUP contends that financial exigency exists only if an institution is on the brink of failure and has exhausted all other cost-cutting measures.  Terminated faculty frequently sue institutions contending that terminations are not warranted by a bona fide financial exigency.  Courts then carefully review institutions’ finances to determine if they are sufficiently compromised to constitute financial exigency.

This dynamic presents an untenable choice for institutions. When dark financial clouds loom, institutions want to act early to fortify their finances.  But acting proactively in terminating tenured faculty inevitably leads to a legal challenge that a bona fide financial exigency did not yet exist. 

Further, institutions facing financial challenges want to assure students, donors, prospective hires, and other stakeholders that the situation is under control and the future of the institution is sound.  A declaration of financial exigency contradicts such a reassuring message.  In order to lay off tenured faculty during an economic downturn, an institution must incur the self-inflicted damage of advocating for its own financial exigency at the very time that the institution is trying to assure constituents that the institution is sound.  In today’s competitive market for students, donors, and talent, no challenged institution wants to compound its problems by publicly declaring financial exigency.

Given this catch-22, UK appears to have made a controversial but rational choice.  UK would rather deal with litigation from terminating tenured faculty without declaring financial exigency than deal with the significant reputational harm that will result from declaring financial exigency and suggesting that the University is on the brink of failure.

Alternatives to Financial Exigency

Colleges and universities have been financially devastated by the COVID pandemic.  UK, for example, now projects an approximate $75 million budget shortfall for fiscal year 2022.  UK’s repudiation of the financial exigency rubric during the very type of financial calamity for which the framework was ostensibly designed, exposes the weakness of modern tenure and its financial exigency bulwark.   

Three characteristics make the current tenure arrangement unwieldy for dealing with financial challenges: (1) tenure is an exceedingly long, typically lifetime, commitment; (2) financial exigency is highly subjective and poorly defined; and (3) establishing financial exigency potentially increases the financial challenges faced by an institution.  No private company would enter such a long term, poorly defined, and potentially deleterious arrangement. 

As conceived by the 1940 Principles, academic tenure is intended to ensure academic freedom.  Job security is merely a means of ensuring independence in academic research and pedagogy, not an end in itself.  There are myriad other ways to ensure academic freedom that provide greater budgetary freedom than the current system.  Long-term contracts, long advance notice of non-renewal of appointments, and/or generous severance provisions, can be fashioned to provide significant job security and concomitant academic freedom while also allowing institutions greater budgetary freedom.  Alternatively, objectively defined financial tripwires relating to institutional revenues, deficits, enrollments, or other factors can be adopted in place of the vague and self-destructive concept of financial exigency prevailing today.

UK’s actions show that when push comes to shove institutions may simply abandon the financial exigency model of tenure as more trouble than it is worth.  In that case, the academic freedom provided by the system may be illusory.  Academia therefore may need to develop new approaches to tenure that ensure academic freedom while also providing institutions more budgetary freedom in trying economic times.