Handbook
Section M
FACULTY
REDUCTION DUE TO FINANCIAL EXIGENCY
1. Termination of faculty contracts by the institution
before the end of their specified term may only be made for adequate
cause (as explained
in the section on tenure), financial exigency, or discontinuation
or reduction of a program or a department. These circumstances also
apply to termination or reduction of employment of a person on part-time
appointment or fractional salary.
2. Faculty reduction in times of financial exigency
should be consistent with the College’s commitments to academic
excellence, and Earlham policies relating to equal opportunity employment
and affirmative action. Before faculty reductions are made by early
termination of contractual obligations, other procedures should be
attempted to the extent that they are consistent with the integrity
of educational program; these procedures include natural attrition,
voluntary early retirement, and voluntary leaves of absence. In the
event that Earlham should consider early termination of contractual
obligations for reasons of financial exigency, Earlham will use the
following determination that a state of financial exigency exists.
Earlham does not consider itself bound by other definitions and determinations
used by other institutions or academic associations.
The President of Earlham, and the Board of Trustees
shall make the determination that a state of financial exigency exists
or is imminent. The President shall have consulted with the Budget
Committee, for their advice in making that determination. The following
criteria, any one of which will be sufficient, will inform that decision.
a. A decline in total student enrollment totaling
20% or more over a period of three years;
b. A current operating deficit, as defined by
the Budget Committee, in excess of 3% of the College budget for
three consecutive years, or 10% in a single year;
c. A reduction in the market value of the assets
available to Earlham to deal with financial difficulty to 25%
of the College operating (“Green Book”) budget for
the current fiscal year. These assets in order of availability
are (1) unrestricted Current Fund balances and any reserves specifically
designated by the Board for the support of the College, (2) the
Earlham and White River Farms, and (3) College quasi-Endowment,
primarily resulting from the reinvestments of cash flow in excess
of the 4% spending limitation.
The President is not obligated to declare a state
of financial exigency if any or all of these conditions obtain.
3. If the President (having sought advice in consultation
with the Budget Committee) and the Board of Trustees, decide that
a condition of financial exigency exists or is imminent, public notice
shall be given of this. The Curricular Policy Committee and the Faculty
Affairs Committee then are responsible for recommending specific discontinuance
or reduction of a program or a department, and the Faculty Affairs
Committee is responsible for recommending specific personnel decisions.
Two weeks before these committees forward their recommendations to
the President, the faculty directly involved in the reductions shall
be informed and given the opportunity to speak before the appropriate
committee. Final action will be taken by the President in consultation
with the Academic Dean, and approved by the Board of Trustees.
4. Before terminating a faculty contract for reason
of financial exigency earlier
than the time of expiration of the contract, the College will make reasonable
efforts to place the person in a position for which he/she is qualified. A
position so opened will not be filled with a replacement within a period of
three years, unless the released faculty member has been offered re-employment
with at least his/her previous rank, and has been given at least one month
within which to accept or decline.
5. Written notice that employment is to be terminated
because of financial exigency shall be as follows:
a. For all untenured faculty, not later than December
31; or if the appointment terminates during the academic year,
at least six months in advance of its termination.
b. For tenured faculty at least 15 months. Earlham
shall have the option of substituting equivalent severance salary
and benefits for the 15 months. The institution will have the
right to discontinue severance salary and benefits whenever the
faculty member assumes anther position of comparable rank and
salary.
6. Appeal Process
a. A faculty member wishing to appeal a termination
or non-voluntary reduction in employment due to financial exigency
may make a written request to the President that an Appeal Committee
be established. This request must be made within two weeks of
the date of the notice to terminate or reduce employment. The
Appeal Committee will consist of three teaching faculty acceptable
to both the President and the faculty person.
b. All relevant material will be submitted to
the Appeal Committee in writing. These must include:
(1) The reasons for termination, with any supporting
documents the administration may wish to submit;
(2) The reasons for appeal, with any supporting
documents from the faculty member.
c. The only basis for appeal is that the process
of decision-making defined in this Handbook has been violated.
d. The Appeal Committee may recommend either of
two things:
(1) The appeal is not sustained and no further
College action is recommended;
(2) The decision-making process ought to be
repeated because of a violation of the decision-making process.
A copy of the recommendation, in writing, will be sent to the
President and to the faculty member.
e. The official record of the Appeal Committee,
to be kept in the President’s Office will consist of the
following:
(1) All written materials received from the
administration, the faculty member, and any other parties seen
to be appropriate by the committee;
(2) A copy of the Committee’s recommendation;
(3) A log of the Committee’s actions, including
times of meeting, documents received, and a record of parties
with whom the Committee or its members conversed.
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