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Stephen Diamond Article: “The Myth of Financial Exigency at Albany Law School”

Stephen Diamond, a Professor of Law at Santa Clara Law School, recently published a very thoughtful post on his blog concerning the “Myth of Financial Exigency at Albany Law School.” Reviewing publicly available financial information, Professor Diamond concludes that Albany Law School is in strong financial condition and that the standard for “financial exigency” cannot be satisfied. The same conclusions were made not only by the financial expert Howard Bunsis (see infra on this site), but by Albany Law School’s own Budget Committee (which examined not only public 990 returns, but audited financial statements and other financial documents). Professor Diamond states that threatened faculty layoffs, without an actual financial exigency, “suggests the Dean and Board of Trustees of the School may be attempting to engineer a reform agenda while using the temporary financial problems of all law schools as an excuse.”

Here is the link to the article: http://stephen-diamond.com/?p=5212

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ALS-AAUP: Feb. 3, 2014 Letter

AAUP February 3 2014 letter

The Albany Law School chapter of the AAUP is pleased to report that Albany Law School is in good financial condition and is committed to continuing to provide the sound legal education that our students deserve. The faculty is actively engaged in developing curricular innovations, introducing bar passage initiatives, identifying learning competencies, structuring our extensive experiential opportunities, expanding student employment opportunities and leveraging our unique relationship with government as the only law school in the capital of New York State.

Preliminary figures from the LSAC suggest that law school enrollment will drop across the country. Albany Law School is well positioned to address a potential decline without any adverse effect on the quality of the education we offer. Like other law schools, Albany Law School has adjusted its class size in response to fluctuations in applications. With recent reductions in enrollment has come a proportionate reduction in teaching staff. Although our Board of Trustees had planned for faculty layoffs, we are hopeful that given projected faculty attrition proportionate to potential reductions in enrollment, the Board will conclude as we have that the law school is moving in the right direction and that layoffs are unwarranted.

As faculty members, we have always focused on teaching and providing an intimate and nurturing educational environment. We take pride in our intensive and meaningful connection with students, graduates and colleagues. These characteristics place Albany Law in a good position to weather the storm facing all law schools.

Advisory Letter re Albany Law School from AAUP President Rudy Fichtenbaum

November 19, 2013

VIA ELECTRONIC MAIL AND USPS

Professor Donna E. Young, President

Albany Law School AAUP chapter

Albany Law School

80 New Scotland Avenue

Albany, New York 12208–3494

Dear Professor Young:

In your capacity as president of the Albany Law School chapter of the American Association of University Professors, you have asked us to advise you regarding AAUP-recommended principles and procedural standards related to termination of faculty appointments for financial reasons. We understand that the law school’s administration and governing board have announced that, because of serious financial difficulties, notifications of faculty layoffs will be issued shortly.

Fundamental tenets of academic freedom and their relation to a system of academic tenure are set forth in the enclosed 1940

Statement of Principles on Academic Freedom and Tenure, jointly formulated by the AAUP and the Association of American Colleges and Universities and endorsed by more than 210 scholarly societies and higher-education organizations, including the Association of American Law Schools, whose endorsement of the document dates back to 1946.

The 1940

Statement declares that “[i]nstitutions of higher education are conducted for the common good and not to further the interest of either the individual teacher or the institution as a whole. The common good depends upon the free search for truth and its free exposition.”

The statement goes on to assert that “[a]cademic freedom is essential to these purposes and applies to both teaching and research. Freedom in research is fundamental to the advancement of truth.” Freedom in teaching “is fundamental for the protection of the rights of the teacher in teaching and of the student to freedom in learning.”

These freedoms are secured by an indefinite appointment—”permanent or continuous tenure”—which is granted to faculty members “after the expiration of a probationary period.” The statement specifies that a tenured appointment “should be terminated only for adequate cause . . . or under extraordinary circumstances because of financial exigencies.” Page 2 of 4

Derivative procedural standards governing the termination of appointments for reasons other than adequate cause are set forth in Regulation 4c of the Association’s

Recommended Institutional Regulations on Academic Freedom and Tenure (also enclosed). The AAUP’s Committee A on Academic Freedom and Tenure this past year revised Regulation 4c to take into account recent developments in higher education, and I would commend to your attention the enclosed Committee A subcommittee report, The Role of the Faculty in Conditions of Financial Exigency, for a detailed rationale for the changes.

Under Regulation 4c, an institution may terminate an appointment with continuous tenure or an appointment for a specific term prior to its expiration “under extraordinary circumstances because of a demonstrably bona fide financial exigency,” 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.”

“An elected faculty governance body” will participate from the beginning in discussions that lead to a determination that such a condition exists or “is imminent.” Such a body will also participate in determining whether “all feasible alternatives to termination of appointments have been pursued, including expenditure of one-time money or reserves as bridge funding, furloughs, pay cuts, deferred compensation plans, early-retirement packages, deferral of nonessential capital expenditures, and cuts to non-educational programs and services, including expenses for administration.”

In addition, “[b]efore any proposals for program discontinuance on grounds of financial exigency are made,” an appropriate faculty body “will have opportunity to render an assessment of the institution’s financial condition.” In order to do so, it will have access to “five years of audited financial statements, current and following-year budgets, and detailed cash-flow estimates for future years” and “detailed program, department, and administrative budgets.” Faculty members in programs whose discontinuance is proposed “will promptly be informed of this activity and provided at least thirty days in which to respond.”

In addition to having access to five years of audited financial statements, it is important as well that the appropriate faculty body have the opportunity to consult with experts who can advise them about the financial condition of the institution. It is our understanding that some financial data have been shared with faculty although you have been told that this data is confidential and that this data is not to be shared with anyone outside the University. Preventing faculty from seeking expert advice on the financial condition of the institution is also a violation of academic freedom and inconsistent with the principles of shared governance.

Consistent with widely observed standards of academic governance, which entrust primarily the faculty with considerations of educational policy, a faculty body will not only participate but also have “primary responsibility” for “determining where within the overall academic program termination of appointments may occur” and for “determining the criteria for identifying the Page 3 of 4

individuals whose appointments are to be terminated,” criteria which will include “length of service.”

Similarly, “[t]he responsibility for identifying individuals whose appointments are to be terminated should be committed to a person or group designated or approved by the faculty.”

Under Regulation 4c(3), those faculty members notified of the proposed termination of their appointments will be afforded the right to an on-the-record adjudicative hearing before a faculty committee. In such a hearing, the faculty member may contest the following: (a) “[t]he existence and extent of the condition of financial exigency,” although the “findings of a faculty committee in a previous proceeding involving the same issue may be introduced,” (b) [t]he validity of the educational judgments and the criteria for identification for termination,” although “the recommendations of a faculty body on these matters will be considered presumptively valid,” and (c) [w]hether the criteria are being properly applied in the individual case.”

In order for a faculty member to have a fair hearing before a faculty committee, he or she needs access to all of the relevant data used to establish a case for financial exigency. Thus, any individual faculty member who may be terminated should have unfettered access to financial data and the ability to consult financial experts. Access to this data also includes the right to share this data with experts who can help a faculty member understand the data. While the recommendations of a faculty body with respect to educational judgments and the criteria for termination are considered to be presumptively valid, there is no such presumption regarding the existence or the extent of the alleged condition of financial exigency.

Under Regulation 4c(4), if an institution terminates appointments because of financial exigency, no new appointments will be made “except in extraordinary circumstances where a serious distortion in the academic program would otherwise result.” Nor, with the same exception, will the appointment of a tenured faculty member “be terminated in favor of retaining a faculty member without tenure.”

Regulation 4c(5) provides that the institution “will make every effort” to relocate affected faculty members “in another suitable position within the institution.”

Regulation 4c(6) specifies that faculty members whose appointments will be terminated because of financial exigency will be afforded at least one year of notice or severance salary.

And Regulation 4c(7) requires that no position vacated through termination for reasons of financial exigency will be filled “within a period of three years, unless the released faculty member has been offered reinstatement and at least thirty days in which to accept or decline it.”The AAUP recognizes that financial emergencies can occur and that institutions may have to make hard choices to avoid compromising their academic integrity—or going out of existence. The Association, however is concerned that such an emergency might serve as a pretext for Page 4 of 4

terminating faculty appointments based on considerations that violate principles of academic freedom and tenure or run afoul of anti-discrimination laws. The above-cited due-process standards are intended to prevent such an occurrence.

We must point out, however, that our analysis indicates that no such financial emergency exists. In fact, based on Albany Law School’s federal tax submissions (IRS form 990) through fiscal 2012, it would appear that Albany Law School is in strong financial condition. This conclusion is based on solid reserves, low debt, and strong cash flows. It is possible the situation changed in 2013, and we may wish to reconsider our conclusion if the administration is willing to provide us with audited financial statements for all years from June, 2008 through June 30, 2013.

I hope you find these comments and the enclosed documents helpful. Please do not hesitate to contact us again if you and your colleagues have any further questions. And please keep us informed of developments so that we can continue to monitor the situation.

Sincerely,

Rudy Fichtenbaum

President

Enclosures (by electronic mail only)

Cc: Professor Thomas Policano, Executive Director, New York Conference AAUP

Professor Risa Lieberwitz, Cornell University

Announcement of Chapter Formation

aaup

AMERICAN ASSOCIATION OF                                                                                       

ALBANY LAW SCHOOL CHAPTER

UNIVERSITY PROFESSORS                                                                                                               alsaaup@gmail.com

 

                             

To:      Penny Andrews, President and Dean, Albany Law School

Dan Nolan, Chair, Albany Law School Board of Trustees

Cc:       Faculty and Staff, Albany Law School

Members of the Albany Law School Board of Trustees

Jules L. Smith, Blitman and King LLP

 

From:   Albany Law School Chapter of the AAUP

 

Date:    November 26, 2013

 

 

With great enthusiasm, we are writing to announce the formation of the Albany Law School Chapter of the American Association of University Professors (AAUP). Like other members of the Albany Law School community, we share a strong commitment to our students and alumni, and we have great affection for and pride in the school.  Our expectation is that with the resources made available to us through the national AAUP, we can use our accumulated expertise in legal education to ensure the continued success of the law school.  We hope that all members of the Albany Law School community will work together so that the law school can continue to deliver a comprehensive and innovative legal education that prepares its students to thrive in a rapidly evolving legal environment. The Chapter is comprised of both tenured and untenured faculty members who have gathered together to protect and improve their terms and conditions of employment, including those outlined in the Albany Law School Faculty Handbook, the ABA and AALS standards, and the principles and procedures of the AAUP; these interests are also protected under the laws of the United States and the State of New York. We encourage those of our colleagues who are not yet members of the AAUP to join and become active members of our chapter. www.aaup.org/membership/join.

 

The faculty and staff of the law school have a rich history of providing rigorous and supportive academic training that has nurtured students and produced successful alumni.  We feel fortunate to have been a part of this educational mission. We believe, however, that proposals currently being considered by the administration and Board of Trustees pose a potential threat not only to the school’s ability to deliver the indispensable components of a sound legal education, but also adversely affect the terms and conditions of employment of the faculty.  We have been told that these proposals include termination of positions, which we believe will result in a reduction in the educational opportunities and a diminishment of the quality of legal education that our students deserve. Such terminations, of course, adversely affect our terms and conditions of employment.

 

Financial concerns are cited among the reasons for this departure from Albany Law School’s long-standing commitment to retaining employees who support the law school through their loyal service. As members of the law school community who collectively share hundreds of years of dedication to Albany Law School, members of the AAUP Chapter care about its financial health, which we recognize as essential to its stability and the furtherance of its mission.  Consequently, we are gratified that the AAUP’s independent analysis of the latest public information concerning our finances shows that Albany Law School is currently in sound financial condition.  If the Board disagrees with this assessment, it should invite the faculty, through its elected representatives on the Long-Range Planning Committee and/or the Budget Committee (or another committee chosen by the faculty for this purpose), to participate in all deliberations concerning the law school’s financial condition. We believe that the faculty is entitled to so participate according to the faculty handbook as adopted by the Board.

 

The faculty is ready and willing to work with the Board and administration to develop a reasonable plan to address any legitimate financial questions without resorting to terminations. There has already been substantial attrition of the faculty and staff and more can be expected. At a time when our bar-passage rate is a matter of real concern, weakening our faculty-student ratio and reducing our curricular options simply do not make sense.  We look forward to working collaboratively with the Board and administration to address our challenges and preserve our proud history.

 

We are enclosing a copy of the advisory letter from AAUP President Fichtenbaum regarding the academic freedom, tenure, contract rights, and governance issues raised by the Board’s and administration’s plans to terminate faculty appointments for financial reasons. These provisions must be read in light of ABA accreditation standards defining the rights of tenured, tenure-track, and long-term contract faculty members. Attached is a copy of the advisory letter with supporting documents. Inquiries may be directed to alsaaup@gmail.com.

 

Professor Donna Young, President

Professor Dale Moore, Vice President

Professor Nancy Ota, Secretary 

Professor Emeritus Harold Dubroff, Treasurer

Professor Pamela Armstrong, Executive Board Member

Professor Anthony Farley, Executive Board Member

Professor Stephen Gottlieb, Executive Board Member

Professor Mary Lynch, Executive Board Member

Professor Danshera Cords, Executive Board Member