Leadership disputes at colleges and universities can escalate quickly.

A disagreement between a president and board, a disputed performance evaluation, concerns about institutional direction, disagreements over governance, or a breakdown in trust can transform a successful academic career into an employment dispute.

For college presidents, provosts, deans, senior administrators, and other higher-education executives, these disputes present unusual risks. Compensation may be substantial. Professional reputation matters. Employment opportunities can be limited and highly visible. And the institution itself may have concerns about governance, continuity, public perception, and potential litigation.

When the relationship appears headed toward termination, however, neither side should assume that the only question is whether the institution has the right to end the employment relationship.

The employment agreement may significantly affect what happens next.

A Recent College President Dispute Illustrates the Issue

A recent dispute involving the president of Broward College provides a useful example.

According to published reports, the college's board was preparing to consider terminating its president without cause following disagreements concerning his performance and leadership. The president challenged aspects of their performance evaluation and raised other concerns regarding the board's conduct.

Before the board could vote on his termination, the president went to court and argued that their employment agreement required the parties to first attempt to resolve employment disputes through mediation. A judge agreed that the contractual procedure had to occur before the termination vote could proceed.

The dispute ultimately went to mediation and ended not with the originally contemplated termination, but with a negotiated separation agreement under which the president resigned and received approximately $430,000 in total consideration while withdrawing his legal claims and agreeing to other terms.

The circumstances involved Florida law and a particular employment agreement, so they should not be generalized to every higher-education dispute. But the situation illustrates an important point for institutions and senior academic leaders everywhere:

The right to terminate someone may be only one part of the analysis. The contract may also govern how the parties get there—and what leverage each side has along the way.

Start With the Employment Agreement

When a senior higher-education employment relationship begins to deteriorate, one of the first steps should be a careful review of the entire employment agreement.

Not just the provision labeled "Termination."

An executive agreement may address:

termination with or without cause
the contractual definition of "cause"
notice requirements
opportunities to cure alleged deficiencies
performance evaluation procedures
compensation and performance bonuses
severance
deferred compensation and benefits
accrued vacation or other leave
mediation or arbitration requirements
confidentiality
non-disparagement
restrictive covenants
indemnification
obligations that survive termination

These provisions can interact with one another.

A college or university may possess the contractual authority to terminate an administrator without cause, for example, while still being required to provide notice or follow a contractual dispute-resolution procedure.

Similarly, an executive may have limited ability to prevent an institution from ultimately ending the relationship but nevertheless have important contractual rights affecting compensation, procedure, timing, and the terms of departure.

Those distinctions can create negotiating leverage.

"Without Cause" Does Not Necessarily Mean "Without Options"

Executives sometimes hear that an institution intends to terminate them "without cause" and assume there is nothing left to discuss. That conclusion can be premature.

Termination without cause generally means that the institution is not relying upon contractual grounds permitting termination for misconduct or another defined form of cause. What the termination actually means financially and procedurally depends on the agreement.

The contract may provide severance following a without-cause termination. It may require advance notice. Other compensation may already have vested or been earned.

There may also be disputes concerning bonuses, deferred compensation, benefits, accrued leave, or other contractual rights.

And there may be separate legal or contractual issues beyond the institution's basic right to terminate.

The important question is therefore not simply: Can they terminate me?

It is also: If they do, what rights, obligations, claims, and negotiating opportunities does the contract create?

Performance Evaluations Can Become Contract Disputes

Performance reviews are particularly significant for senior academic leaders.

At the executive level, an evaluation may be more than an internal human-resources exercise. The employment agreement may establish how performance is measured, who performs the evaluation, when it occurs, what criteria apply, and whether the results affect compensation. That can become important when a deteriorating relationship is followed by a negative evaluation.

If compensation depends upon achieving particular performance criteria, a disputed evaluation can become a compensation dispute. If the agreement requires a specific evaluation procedure, disagreement may arise over whether that process was followed.

And when a poor evaluation immediately precedes an attempted termination, the sequence of events may become important to both the legal analysis and negotiation strategy. Institutions should, therefore, be careful to follow contractual evaluation procedures consistently.

Executives should understand those procedures before a dispute arises—and certainly before accepting an adverse evaluation as final.

Dispute-Resolution Provisions Can Matter Before Litigation Begins

Mediation and arbitration provisions are sometimes treated as boilerplate when an employment agreement is negotiated. They should not be. The Broward College dispute demonstrates why.

A contractual requirement to mediate did not necessarily prevent the board from ultimately ending its relationship with its president. But according to the court ruling, the institution had to comply with the agreed dispute-resolution process before proceeding with the contemplated termination vote. That changed the immediate dynamics of the dispute and created an opportunity for negotiation.

Businesses and executives should therefore examine whether an employment agreement requires:

informal dispute resolution
written notice of a dispute
an opportunity to cure
mediation
arbitration
or some other procedure before litigation or another employment action

Procedural provisions can sometimes be just as important as substantive ones.

Sometimes the Best Resolution is a Negotiated Exit

Not every employment dispute should become prolonged litigation.

For senior leaders, there may come a point when restoring the employment relationship is no longer realistic. That does not mean the remaining issues are unimportant. It means the focus may shift from whether the relationship will end to how it will end.

A negotiated separation can potentially address much more than severance. Depending upon the circumstances, negotiations may concern:

Compensation. Salary continuation, severance, bonuses, deferred compensation, benefits, accrued leave, and other amounts may need to be addressed.
Equity or other financial interests. In private institutions or related ventures, equity-linked compensation or other financial rights may be implicated.
The reason for departure. Whether the executive resigns, retires, is terminated without cause, or departs by mutual agreement can matter professionally.
Public communications. Senior academic departures can generate substantial internal and external attention. The parties may want clarity regarding announcements and what each side can say about the departure.
References and future employment. A senior administrator's next opportunity may depend heavily upon professional reputation and how the prior relationship ended.
Confidentiality and non-disparagement. Both sides may have legitimate interests in limiting future public conflict.
Legal claims and releases. Institutions commonly seek a release of potential claims as part of a negotiated separation. The scope and value of that release can become a significant part of the negotiation.

A well-negotiated departure, therefore, is not simply about obtaining the largest possible severance payment. It can involve protecting the executive's finances, professional reputation, and next career opportunity while giving the institution certainty and finality.

Higher-Education Leadership Disputes Have a Governance Dimension

Higher education presents another complication that does not exist in every executive employment dispute: governance.

College presidents and senior administrators may operate within complicated structures involving boards of trustees, faculty governance, accreditation requirements, institutional policies, donors, government oversight, and other constituencies.

Disagreement can develop over where oversight ends and operational authority begins. That can create a particularly difficult situation.

A board may believe it is appropriately exercising oversight. A president or administrator may believe trustees are interfering with authority assigned to institutional leadership. Both sides may believe they are acting in the institution's best interests.

Eventually, what began as a governance disagreement can become an employment dispute. At that point, the governing documents, employment agreement, institutional policies, and applicable law may all become relevant.

Timing Matters

One of the biggest mistakes in executive employment disputes is waiting too long to obtain advice.

An executive may wait until receiving a termination letter. An institution may wait until after deciding to terminate someone before carefully reviewing the executive's agreement. By then, important strategic decisions may already have been made.

For the executive, legal advice may be valuable when:

an unexpectedly negative performance review appears;
compensation or a bonus is withheld;
responsibilities or authority are materially reduced;
board or leadership relations deteriorate;
an investigation begins;
resignation is suggested;
a separation proposal is presented; or
termination appears likely.

For the institution, counsel should review the agreement and surrounding circumstances before the termination process begins.

The objective is not necessarily to create litigation. Often it is exactly the opposite.

Understanding the parties' rights early can identify potential problems, preserve leverage, and create opportunities to resolve the relationship before positions harden and a private employment disagreement becomes a public dispute.

The Contract Matters Most When the Relationship Matters Least

Employment agreements are usually negotiated when everyone expects the relationship to succeed. Their most important provisions often become relevant when it does not.

For college presidents, provosts, deans, senior administrators, executives, and other highly compensated professionals, the consequences of a leadership breakdown can extend far beyond the next paycheck. Compensation, contractual benefits, professional reputation, and future opportunities can all be affected.

Institutions face substantial risks as well. Leadership disruption can affect employees, students, donors, governance, recruiting, reputation, and institutional stability.

When the relationship begins to fail, both sides should understand the agreement before deciding what comes next.

Sometimes the contract provides rights that are not immediately obvious. Sometimes the institution clearly possesses the right to terminate, but substantial issues remain to be negotiated. And sometimes the best result is not winning a fight over whether the relationship continues.

It is negotiating the right exit.

The Glennon Law Firm represents executives, professionals, businesses, and institutions in sophisticated employment and contract disputes, including matters involving higher education, executive compensation, employment agreements, severance, and other exit-related issues.

With offices in Albany, Buffalo, Rochester, and New York City, we can help you across New York State. 

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This blog post is for informational purposes only and does not constitute legal advice. For specific legal counsel, please contact our office directly.  