Structuring Voluntary Resignation Incentive Options For Tenured Faculty Members - Higher Education Law Report

July 31, 2017

By Thaddeus J. Lewkowicz

Many universities and colleges across the country have been struggling with the issue of how best to incentivize certain tenured faculty members to resign and relinquish their tenure. If a university or college decides to offer a voluntary resignation incentive option to some or all of its tenured faculty members, steps it should take when deciding how to structure and implement that option include the following:

  • design decisions will need to be made in order to select the voluntary resignation incentive option that will best meet the needs of the university or college;
  • the voluntary resignation incentive option that will be offered should be structured in a manner that will satisfy the applicable legal requirements, including employee benefit, tax, and employment law requirements; and
  • several administrative steps should be taken in order to properly implement the voluntary resignation incentive option.

What Are Some of the More Important Design Decisions That Should Be Made When Deciding What Voluntary Resignation Incentive Option To Offer?

Voluntary resignation incentive options for tenured faculty members can be designed in a variety of ways. The options used by universities and colleges that we work with include group programs that are generally available to all eligible tenured faculty members throughout the applicable university or college, more limited programs that are only offered to certain groups of tenured faculty members (e.g., eligible tenured faculty members in a particular department), and "ad hoc" individual agreements with certain tenured faculty members that are negotiated separately and vary depending upon the unique facts and circumstances of each faculty member.

Among the more important design decisions that should be considered when deciding what voluntary resignation incentive option(s) to offer to tenured faculty members are the following:

  • Determining the Goals To Be Accomplished – Before offering a voluntary resignation incentive option to tenured faculty members, a university or college should clearly identify the goals it is trying to accomplish through such an offer. Examples of such goals include: (1) saving money; (2) reducing the number of tenured faculty members in a particular school or department (e.g., because the school or department no longer has sufficient enrollment to justify the current staffing levels); (3) providing an incentive for tenured faculty members who no longer have the necessary skills to leave (e.g., a tenured faculty member who no longer has the technological skills needed for his or her position); and (4) reallocating faculty resources to better meet the current needs of the university or college. A university or college also will need to decide whether to make retirement incentives available through a group program, individual "ad hoc" agreements, or both, and that decision will vary depending upon, among other things, how strongly the university or college feels that (a) the same benefits package should be offered to all eligible tenured faculty members, or (b) flexible benefits packages will be needed in order to achieve the desired number of faculty retirements.
  • Deciding Which Tenured Faculty Members Should Be Eligible – Once the goals to be accomplished by offering a voluntary resignation incentive option have been identified, a university or college should identify which tenured faculty members should be eligible for the option selected in order to best achieve those goals. A university or college generally will have flexibility when deciding which tenured faculty members should be eligible for the option (e.g., deciding whether the option should be offered on an institution-wide basis, to selected schools or departments, or to selected tenured faculty members), as long as the selection does not discriminate on the basis of one of the "protected" employment law classifications (e.g., age, race, sex, color, disability, religion, national origin, marital status, etc.).
  • Determining What Benefits Should Be Provided – A determination will need to be made as to what benefits are most likely to provide the necessary incentive to encourage the eligible tenured faculty members to retire. Most voluntary resignation incentive options provide cash in one form or another, and many also provide health coverage. Some universities and colleges also provide certain other benefits in addition to cash and health coverage.
  • Deciding the Amount of Funds That Will Be Available – A decision will need to be made about the amount of funds that will be available for a voluntary resignation incentive option, as that amount could affect the size of payments and types of benefits that can be provided. A decision also will need to be made regarding what source of university or college funds will be used to pay for the voluntary retirement incentive option.
  • Determining How Much Coordination There Should Be With Any Existing Retirement Incentives – If a university or college already has an existing retirement incentive (e.g., a phased retirement program), it should consider to what extent (if any) the new voluntary resignation incentive option will be coordinated with the existing program.
  • Considering How To Handle Employee Relations Issues – Providing retirement incentive payments to certain tenured faculty members could create expectations among other tenured faculty members that they also will receive such payments when they retire. Consideration should be given on how to handle such expectations.

What Are Some of the More Important Legal Requirements That Should Be Considered When Designing a Voluntary Resignation Incentive Option?

Among the more important legal requirements that should be considered when designing a voluntary resignation incentive option are the following:

  • Employee Benefit Requirements – Private universities and colleges that are subject to the employee benefit requirements of the Employee Retirement Income Security Act ("ERISA") will want to consider any applicable ERISA requirements early in the design process, as those requirements often play a major role in how a voluntary resignation incentive option will need to be structured. Such universities and colleges will need to determine, with respect to each payment or benefit under the voluntary resignation incentive option, whether such payment or benefit will have to comply with some or all of ERISA’s benefit requirements or whether it can be structured to be exempt from ERISA.
  • Tax Requirements – The voluntary resignation incentive option will need to be structured to either comply with the deferred compensation requirements in Sections 457(f) and 409A of the Internal Revenue Code ("Code"), or to be exempt from those requirements. In addition, certain types of benefits are subject to nondiscrimination requirements under the Code (e.g., self-insured health benefits under Section 105(h) of the Code, dependent tuition benefits under Section 117(d)(3) of the Code, and tax-sheltered annuity benefits under Section 403(b)(12) of the Code), and if any such benefits are offered as part of a voluntary resignation incentive option those nondiscrimination requirements should be reviewed to ensure they are satisfied. In certain circumstances, it may also be necessary to comply with the "reasonable compensation" requirements of Section 4958 of the Code.
  • Employment Law Requirements – The employment law requirements and issues that should be considered when designing a voluntary resignation incentive option include the following: (1) verifying that the voluntary resignation incentive option is not being provided in a way that will discriminate against a tenured faculty member on the basis of one of the "protected" employment law classifications (this is especially important if individual "ad hoc" agreements are used); (2) deciding whether to require an eligible tenured faculty member to sign a release in order to participate in the voluntary resignation incentive option (most universities and colleges will require a release to be signed), and verifying that the applicable requirements for an effective release have been satisfied; and (3) taking steps to help ensure that each eligible tenured faculty member’s decision on whether or not to accept the voluntary resignation incentive option is truly a voluntary decision.

What Are Some of the More Frequent Voluntary Resignation Incentive Options Used By Universities and Colleges For Tenured Faculty Members?

The universities and colleges we work with have used a variety of options to incentivize tenured faculty members to resign, including the following:

  • "Fort Halifax" Programs – "Fort Halifax" programs are separation incentive programs that generally are available for a limited period of time, generally provide for a lump sum payment upon termination of employment (in addition to a lump sum payment, some courts have held that a "Fort Halifax" program can provide for payments over a relatively short period of time), do not create a need for an ongoing administrative program for processing claims and paying benefits, and generally do not require the exercise of managerial discretion. These programs are based on a 1987 United States Supreme Court decision, Fort Halifax Packing Co. v. Coyne, and have been held to be completely exempt from the employee benefit requirements of ERISA. There have been numerous court decisions since 1987 that have applied this exemption, but the cases have not always been consistent or clear. In light of the case law uncertainty regarding the applicable "Fort Halifax" standards, it is best to be careful when designing a voluntary resignation incentive option to be a "Fort Halifax" program. The consequences of not qualifying for the Fort Halifax exemption could be expensive, as there are numerous ERISA requirements that would have to be satisfied by a private university or college. However, when a voluntary resignation incentive option has been properly structured to satisfy the "Fort Halifax" exemption, a private university or college can avoid the need to comply with the extra administrative steps to comply with ERISA’s employee benefit requirements.
  • "Ad Hoc" Individual Resignation Incentive Arrangements – "Ad hoc" individual resignation incentive arrangements are individual resignation incentive arrangements negotiated with each applicable tenured faculty member based on the facts and circumstances that are unique to that faculty member ("Ad Hoc Arrangements"). Ad Hoc Arrangements generally will vary from tenured faculty member to tenured faculty member, as different compensation and other resignation terms may be needed in order to get each tenured faculty member to agree to resign. Although Ad Hoc Arrangements can be more flexible than other types of voluntary resignation incentive options with respect to meeting the needs of an individual tenured faculty member, they need to be closely monitored to ensure that (1) the variation in eligibility, compensation, and/or benefit terms among tenured faculty members does not discriminate on the basis of one of the "protected" employment law classifications (e.g., it should not discriminate on the basis of age, sex, race, color, religion, national origin, disability, marital status, sexual orientation, etc.), and (2) the applicable employee benefit requirements, tax requirements and other applicable employment law requirements are satisfied with respect to each Ad Hoc Arrangement.
  • Phased Retirement Programs – Many universities and colleges have established phased retirement programs for eligible tenured faculty members. These programs often will include enhanced compensation rights and reduced work schedules over a period of time in return for an irrevocable commitment to retire by a certain date. The enhanced compensation must be properly structured to either be exempt from the Code’s deferred compensation requirements, or to comply with those requirements. If any enhanced benefit rights are provided pursuant to a phased retirement program, it is important to verify that (1) the enhanced benefits do not violate any of the Code’s benefit nondiscrimination requirements (those requirements generally preclude certain benefits being provided in a way that discriminates in favor of highly compensated employees or highly compensated individuals), and (2) the enhanced benefits are allowed to be provided under the terms of the applicable benefit plan.
  • Severance Plans – If a voluntary resignation incentive option will include people who are not yet eligible to retire, it may be possible to structure that option to be a severance plan. The severance plan will need to be carefully structured so that it is either exempt from the deferred compensation requirements, or it complies with those requirements. In addition, private universities and colleges will need to make sure the severance plan satisfies ERISA’s severance pay plan requirements. The severance plan option often will not be used by private universities and colleges when designing a voluntary resignation incentive option for tenured faculty members, because many universities and colleges want to limit that option to tenured faculty members who are eligible for retirement.
  • Early Retirement "Window" Programs Offered Pursuant to a Qualified Defined Benefit Pension Plan – If a university or college has a qualified defined benefit pension plan, it could offer an early retirement "window" program that would be offered as part of the qualified defined benefit pension plan and could be paid for with assets of that pension plan ("Qualified Plan Window Program"). An example of a Qualified Plan Window Program would be to allow pension plan participants who are age 60 and who have ten years of service to elect to retire within a year in return for enhanced pension plan benefits. Many universities and colleges do not have qualified defined benefit pension plans, and thus are unable to take advantage of this option. A Qualified Plan Window Program must also satisfy numerous requirements under the Code, including nondiscrimination requirements that preclude offering a Qualified Plan Window Program in a manner that discriminates in favor of highly compensated employees.

What Are Some of the Other Administrative Steps That Will Need To Be Taken In Order To Properly Implement a Voluntary Resignation Incentive Option?

Among the other administrative steps that will need to be taken in order to properly implement a voluntary resignation incentive option for tenured faculty members are the following:

  • Review Any Agreements, Plans, or Other Documents That Could Affect the Voluntary Resignation Incentive Option – Before a voluntary resignation incentive option is implemented, a review should be made of any documents that could have an impact on the voluntary resignation incentive option (e.g., existing agreements with eligible tenured faculty members, faculty manuals or handbooks, and severance plans).
  • Review a List of the Current or Recently Retired Tenured Faculty Members Who Are Not Eligible For the Voluntary Resignation Incentive Option – Before implementing a voluntary resignation incentive option, a university or college should review a list of its current or recently retired tenured faculty members, and assess whether any of them are likely to complain about being excluded from eligibility for the voluntary resignation incentive option. That list should include tenured faculty members who are on sabbatical, are currently disabled, are on a leave of absence, or who retired on or after the date the university or college first seriously considered offering the voluntary resignation incentive option. After reviewing that list, the university or college should then decide whether any adjustment of the eligibility requirements for the voluntary resignation incentive option would be appropriate.
  • Prepare a Properly Drafted Agreement To Participate in the Voluntary Resignation Incentive Option – If an eligible tenured faculty member decides to participate in a voluntary resignation incentive option, he or she should be required to sign a properly drafted agreement that accurately reflects the terms of such participation. Such agreements usually will provide that such decision to participate is irrevocable, and will include any applicable release requirements. If a release is required, it generally should be structured in a way that will satisfy the requirements for a valid release of age discrimination claims under the Age Discrimination in Employment Act.
  • Check Whether Any Eligibility Provisions In Applicable Benefit Plans Need To Be Revised – To the extent employee benefits will be provided during a "retirement incentive," the eligibility provisions of each applicable benefit plan should be reviewed to determine if any changes will be needed to help ensure that a retiring tenured faculty member will be eligible for that benefit.

Establish a Timetable for the Voluntary Resignation Incentive Option – A timetable for the Voluntary Resignation Incentive Option should be established that will include, among other things, the date when it will be first announced, the date when participation agreements will have to be submitted, the deadlines for returning and revoking any applicable release, and the period during which retirement must occur.

If you have any questions about this memorandum, please contact Ted Lewkowicz, any other member of our Higher Education Practice Group or Employee Benefits and Executive Compensation Practice Group, or the attorney in our firm with whom you are regularly in contact.

Travel Ban Tweaked Again: U.S. District Court for the District of Hawaii Expands Definition of Close Familial Relationship to Include Grandparents and Others - July 2017

July 13, 2017

By Joanna L. Silver

As a result of an order issued by the U.S. District Court for the District of Hawaii last night, foreign nationals from Iran, Libya, Somalia, Sudan, Syria and Yemen are now considered exempt from President Trump’s travel ban if they are coming to the U.S. to visit with grandparents, grandchildren, brothers-in-law, sisters-in-law, aunts, uncles, nieces, nephews and cousins. In addition, the court held that the travel ban cannot be enforced against refugees from the six countries who have formal assurance from a resettlement agency in the U.S. for placement.

The District of Hawaii’s order greatly expands the number of people who are exempt from the travel ban which, as we reported earlier, was partially reinstated by the U.S. Supreme Court in a per curiam decision issued at the close of its term late last month.  Previously, under the Supreme Court’s decision and implementing FAQs issued by the U.S. Departments of Homeland Security and State, foreign nationals from the six banned countries could only travel to the U.S. to visit with parents, spouses, siblings, fiancés, children, sons-in-law and daughters-in-law.

We will continue to report on any additional developments as they unfold.

Further Breaking News for New York State Institutions: State Provides Clarification on Article 129-B Audit

July 7, 2017

By Shelley Sanders Kehl, Monica C. Barrett, E. Katherine Hajjar, Philip J. Zaccheo, and Laura H. Harshbarger

On Friday, July 7, 2017, the Office of Campus Safety clarified its Notice of Audit, specifically stating that it is “not requesting submission of personally identifiable information of any individual” and emphasizing that colleges and universities should “not submit individual case records” in response to the audit.  The original Notice of Audit, dated June 26, 2017, and the July 7, 2017 email clarification can both be found here.

Although the most recent clarification mentions only requests 9 and 10, we have been advising our clients that responses to requests 4a and 6a may also be provided in summary form in light of the Office of Campus Safety’s notice that it is not requesting personally identifiable information.

We advise campuses to submit summary information wherever possible so as to avoid any inadvertent disclosure of personally identifiable information. For responses to requests 4a and 6a, however, if campuses find it easier to redact documents rather than develop a spreadsheet for the summary information, those documents should be carefully reviewed so that any information that might identify individuals, including dormitory names and room numbers, is omitted.

For our earlier analysis of the Notice of Audit, please see our postings here and here.

If you have questions please contact a member of our Higher Education Group.

Breaking News for New York Institutions: State to Narrow Scope of Article 129-B Audit

July 5, 2017

By Shelley Sanders Kehl, Monica C. Barrett, E. Katherine Hajjar, Philip J. Zaccheo, and Laura H. Harshbarger

In light of the serious concerns institutions and advocates have expressed about FERPA and other privacy laws, we have recently been informed that the Office of Campus Safety will likely revise its Notice of Audit, dated June 26, 2017. More information about these concerns is covered in our earlier posting, which can be found here.

We understand that the Office of Campus Safety intends to revise requests 9 and 10 so that the information requested will be limited to summary information, rather than requests for individual case files containing student data. It is possible that there may be further revisions to other requests within the Notice of Audit that ask for specific information about students, such as requests 4 and 6.

We expect that the Office of Campus Safety will communicate with presidents of colleges and universities within the next few days on these issues.

In the meantime, if institutions have not done so already, we advise you to request an extension of time to respond to the Notice of Audit. We further recommend that institutions not submit documents containing personally identifiable information, either directly or indirectly, about students.

If you have questions please contact a member of our Higher Education Group.

N.Y. Education Law Article 129-B Notice of Audit Issued to New York Colleges and Universities

June 29, 2017

By Shelley Sanders Kehl, Monica C. Barrett, E. Katherine Hajjar, Philip J. Zaccheo, and Laura H. Harshbarger

Many institutions are reporting receipt of a letter dated June 26, 2017 from the New York Office of Campus Safety with an attached Notice of Audit (“Notice”) pursuant to New York Education Law Article 129-B (N.Y. Educ. Law §§ 6439–6449). The Notice seeks data submissions relating to the provision of Article 129-B and it includes 23 separate requests for information and documentation.  The response to the Notice must be postmarked no later than July 7, 2017.

This audit comes at a time when key institutional personnel, including student affairs professionals, are away from the office on vacation and some institutions are closed. In addition, the short turnaround requested (fewer than 10 calendar days over a major holiday weekend) gives very little time to gather the responsive materials, let alone review and redact them if necessary. The time period is far less than what is required to respond to a discovery demand under the New York Civil Practice Law and Rules.

We believe that it is unclear whether FERPA permits the release of personally identifiable student information to the New York Office of Campus Safety, which is an office of the New York Division of Criminal Justice Services and not an office of an education agency.

The Audit Request

The statute at § 6449 provides only for the collection of aggregate data, consistent with the statute’s emphasis on confidentiality and respect for the privacy of those involved in the process. Section 6449(3) emphasizes that, even when collecting aggregate information “the department shall not release the information, as provided for in this section, if it would compromise the confidentiality of reporting individuals or any other party….”

Eleven of the 13 requests in the Notice contain statutory references to the applicable section of Article 129-B as authority for the requested data. Two of the requests, numbers 9 and 10, contain no reference to the statute and there does not appear to be any specific section of the statute that supports the sensitive nature of the data sought in requests 9 and 10. Additionally, request number 4 seeks copies of all “no contact orders” issued by the institution, although there does not appear to be a statutory basis for such a request. Number 6(a) seeks data on all students subject to interim suspension, although that request also appears to be beyond the scope of the referenced statutory section.

Compliance Next Steps

Notwithstanding the unrealistic time frame to respond to the audit requests and credible questions about the statutory basis for specific requests, institutions must begin to prepare a response. 

Request an Extension

We encourage institutions that do not anticipate that they will be able to comply with the aforementioned deadline to contact Deputy Director Stacey Hamilton by telephone to request an extension and follow up with a written request and/or confirmation.

Prepare Materials for Submission 

Institutions should plan to submit easily accessible data such as policies, blank forms, website material by July 7, 2017, or the extended deadline, and include a cover letter indicating that, where applicable, additional materials will follow as soon as possible. In that cover letter, the institution may articulate the factors, if applicable, that make it difficult to respond within the narrow time frame allotted. One of those factors may be that the materials have to be carefully reviewed in order to redact confidential information in accordance with the privacy considerations emphasized in Article 129-B and other privacy laws.

We suggest that with regard to request numbers 1, 2, 3, 5, 6(b), 7, 8, 11, 12 and 13, institutions collect the documents and data developed over the past academic year (Fall 2016 to Spring 2017). Note that for request number 12 regarding campus climate assessments, institutions should exercise care when preparing a response to prevent the identification of any particular student.

Concerns with Respect to Disclosure

Request number 4 asks for information and documents regarding each request for a “no contact order” received by the institution. Institutions may decide to provide a copy of the institution’s template “no contact order” language, rather than specific orders, together with data on the number of orders issued and the number of orders that were changed. Although the New York State Office of Campus Safety appears to be seeking copies of specific “no contact orders” that include the names of the students, it is unclear that they have the right to this personally identifiable information under FERPA.

Similar consideration applies to request number 6(a). It may be acceptable in the initial response to provide aggregate data on interim suspensions and not data that could identify a specific student. In light of the statute’s emphasis on confidentiality and privacy, and the fact that the statute refers to aggregate data, the Office of Campus Safety may not have the authority to receive personally identifiable information.

A separate issue is the scope of request numbers 9 and 10, which seek an academic year’s worth of records relating to all reports of incidents covered by Article 129-B and all records involving misconduct hearings covered by Article 129-B. These requests are overly broad, are seriously inconsistent with the statute’s emphasis on confidentiality and privacy, and are not in accord with the statute’s authorization to collect aggregate data. Institutions should be consistent in the documentation provided for each case and should make sure information does not contain personally identifiable information about students while this issue remains unresolved.

In a letter to the Office of Campus Safety dated June 29, 2017, the Commission on Independent Colleges & Universities in New York (CICU) has raised the question of redacting personal information pertaining to students.

If you have questions please contact a member of our Higher Education Group.

The United States Supreme Court Temporarily Approves Part of Trump's Travel Ban - June 2017

June 25, 2017

By Caroline M. Westover

On June 26, 2017, the final day of its judicial term before summer recess, the United States Supreme Court addressed the Trump Administration’s hotly contested travel ban. The Supreme Court issued a per curiam decision on June 26, 2017 allowing the federal government to implement a portion of the travel ban set forth in Executive Order 13780 (Protect­ing the Nation From Foreign Terrorist Entry Into the United States), which was signed on March 6, 2017.  Recall, EO 13780 called for the suspension on the admission of all refugees for 120 days and also sought to impose a 90-day “temporary pause” on the admission of foreign nationals from six countries – Iran, Libya, Somalia, Sudan, Syria and Yemen.

The Supreme Court’s June 26th decision marks the latest move in the game of legal ping pong regarding the Trump Administration’s stated efforts to protect Americans and safeguard the nation’s security interests.  The Supreme Court will fully consider the legal arguments at stake when the fall session begins in October 2017.  For now, the Supreme Court’s decision will allow the Trump Administration to exclude foreign nationals from each of the six countries of concern, provided they have no “credible claim of a bona fide relationship with a person or entity in the United States”.  Stated differently, if a foreign national can establish the existence of a “close familial relationship” with someone already in the United States or a formal, documented relationship with an American entity, the travel ban will not apply.  It is expected that enforcement of this limited travel ban will begin on June 29, 2017, just as the nation’s peak summer travel season gets underway.

Not surprisingly, the Supreme Court’s decision leaves a number of unanswered questions regarding the meaning of the “bona fide relationshipstandard.  In an effort to shed some light on this issue, the Supreme Court provided several examples of the circumstances that would satisfy the “bona fide relationship” standard:

  • Individuals seeking to come to the United States to live or visit a family member (i.e., spouse, mother-in-law), though it remains to be seen just how far the federal government will go to recognize a “close” familial relationships (e.g., cousins, aunts, uncles, nieces, nephews, etc.);
  • Students who have been admitted to an educational institution in the United States;
  • Foreign nationals who have been extended, and have accepted, an offer of employment with a corporate entity in the United States;
  • Foreign nationals who have been invited to temporarily address an American audience as lecturers; and
  • Refugees who have family connections in the United States or who have connections with refugee resettlement agencies.

While the examples provided by the Supreme Court are helpful to a certain degree, they do not address all scenarios that may arise for foreign nationals seeking to enter into the United States in the immediate future. Nevertheless, it appears that individuals who currently hold valid immigrant and/or non-immigrant visas will not be subject to the travel ban.

In response to the Supreme Court’s decision, the Department of Homeland Security issued a statement on June 27, 2017 noting that DHS’ implementation of EO 13780 will be “done professionally, with clear and sufficient public notice, particularly to potentially affected travelers, and in coordination with partners in the travel industry”.

We will continue to apprise clients regarding any developments as they unfold.

New York Institutions: Annual Certificates of Compliance With Education Law Articles 129-A and 129-B Due at NYSED by July 1

June 22, 2017

By Joanna L. Silver

It’s that time of year again! Just a friendly reminder that New York colleges and universities must file their Article 129-A and Article 129-B of the Education Law Certification of Compliance with the New York State Education Department (NYSED) on or before July 1, 2017.  By signing and submitting the Certification of Compliance with NYSED, each institution confirms that it is in compliance with Article 129-A of the Education Law, which relates to the regulation of conduct on campuses and other college property used for educational purposes, and Article 129-B, which relates to the implementation by colleges and universities of sexual assault, dating violence and stalking prevention and response policies and procedures.  Unlike last year, institutions do not have to submit their related policies and procedures to NYSED with their Certifications of Compliance.

To file the Certification of Compliance with NYSED, institutions must use the electronic filing system established by NYSED. The Certification of Compliance form, instructions on submitting the same to NYSED and a link to the filing system can be found at  http://www.highered.nysed.gov/ocue/Article129ABcert.html.

Please note that the annual aggregate data reports mandated by §6449 of the Education Law are not required to be submitted to NYSED at this time.  According to NYSED, information about how and when to submit the aggregate data reports will be provided to institutions as soon as it is available.

If you have any questions or need assistance with meeting the fast approaching July 1 deadline, do not hesitate to contact us.

Federal Appeals Court Rules That Transgender Student Can Use Restroom of Choice

May 30, 2017

By Howard M. Miller

Transgender-300x300Perhaps lost in the media stories about the so-called “bathroom wars” is the emotional toll that they have taken on individuals whose lives are directly impacted by the controversy. While both sides have fiercely advocated the social and emotional import at the core of the dispute, courts have struggled to find a uniform answer to: “What is the law here?” The federal guidance document that was the subject of a Fourth Circuit ruling has been rescinded by the Trump administration and the court’s decision itself vacated by the Supreme Court and remanded back to the Fourth Circuit.   Some states, like New York, have filled in the gap with legislation that requires public school districts to allow transgender students to use the bathroom corresponding to their gender identity.  But, what about states that don’t have such a law?  Yesterday, in Whitaker v. Kenosha Unified School District No. 1 Bd. of Educ. (7th Cir. May 30, 2017), the Seventh Circuit answered that question.  In what could be a landmark ruling, the Court held that under Title IX and the Equal Protection Clause of the Constitution, a transgender high school student could not be barred from choosing to use the bathroom that corresponded with the student’s gender identity.  Prior to this ruling no court had directly held that Title IX offered specific protection to transgender students on the grounds of “sex stereotyping” and “gender noncomformance,” terms that are more frequently seen in employment cases under Title VII. The Whitaker court addressed the Title IX issue head on, holding: “By definition, a transgender individual does not conform to the sex?based stereotypes of the sex that he or she was assigned at birth.” In affirming the district court’s grant of a preliminary injunction in favor of the student, the Court clearly expressed its edict:

…[The student] can demonstrate a likelihood of success on the merits of his claim because he has alleged that the School District has denied him access to the boys’ restroom because he is transgender. A policy that requires an individual to use a bathroom that does not conform with his or her gender identity punishes that individual for his or her gender non?conformance, which in turn violates Title IX.

The school district argued that its decision to deny the student access was reasonable in light of the privacy rights of other students.   That argument, which has been a focal point of grassroots discussions and legal briefs, was given short shrift by the Seventh Circuit:

A transgender student’s presence in the restroom provides no more of a risk to other students’ privacy rights than the presence of an overly curious student of the same biological sex who decides to sneak glances at his or her classmates performing their bodily functions. Or for that matter, any other student who uses the bathroom at the same time. Common sense tells us that the communal restroom is a place where individuals act in a discreet manner to protect their privacy and those who have true privacy concerns are able to utilize a stall.

At some point the Supreme Court will take on this issue. Until then, even in states where there are controlling statutes, school districts and postsecondary institutions should carefully review with counsel the implications of the Whitaker decision.  Some state laws, like the Dignity Act in New York, do not provide a private right of action that allows students to sue the school institution for money damages.  In contrast, under the Whitaker decision, if followed by other courts, there could now be federal claims for damages.  

New York Institutions: Governor Reportedly to Order Comprehensive “Enough is Enough” Compliance Audit

May 16, 2017

By Philip J. Zaccheo

universityApparently prompted by allegations from students and advocates, New York Governor Andrew Cuomo is reportedly directing an audit, to be conducted by representatives from the New York State Department of Education, Department of Health, Office of Victim Services and State Police, of institutions’ compliance with Education Law Article 129-B, the so-called “Enough is Enough” campus sexual violence legislation. According to published reports, between now and September 1, the audit would review institutional policies and websites to determine compliance with, among other things, the statutory requirements for adoption of policies and disclosures to students.  A second phase would then examine institutions’ handling of individual cases. The precise details of these reviews are as yet unknown, but the second phase has the potential to equal or exceed, in scope and depth, reviews conducted by the Office for Civil Rights of the United States Department of Education under Title IX. OCR reviews are, of course, typically prompted by individual complaints.  By contrast, the Governor’s audit program, if it proceeds as reported, would apparently target all colleges and universities in New York State, essentially subjecting them to a similar process even in the absence of particular concerns or complaints. Pursuant to Education Law Section 6440(3), the Education Department had previously indicated its intent to conduct “random audits, at any time after September 1, 2016” to monitor compliance with the statutory requirements.  This initiative, however, appears to be more comprehensive in terms of its coverage of institutions throughout the State, seemingly in conflict with the statutory dictate that audits be conducted “by random selection.” Needless to say, the roll-out and implementation of this initiative bear watching.

NLRB Region Five Rules that Resident Advisors at George Washington University are Employees Who May Unionize - April 2017

April 24, 2017

By Subhash Viswanathan

On April 21, 2017, the Acting Regional Director of Region Five of the National Labor Relations Board (“NLRB”) issued a Decision and Direction of Election holding that Resident Advisors (“RAs”) at George Washington University are employees under the National Labor Relations Act (“NLRA”) who are entitled to vote in a union representation election.  This decision comes on the heels of the NLRB’s recent decision in Columbia University, holding that graduate and undergraduate student assistants are employees who are also entitled to unionize.  This ruling by NLRB Region Five could potentially open the door for unions to organize RAs at other private institutions of higher education. The representation petition at George Washington was filed by Local 500 of the Service Employees International Union (“SEIU”).  SEIU sought to represent a bargaining unit of all full-time and regular part-time RAs at George Washington, which consisted of approximately 110 individuals.  As a condition of becoming an RA, an individual must be a full-time undergraduate student enrolled in a degree-granting program, and must have completed his or her first year of studies.  RAs at George Washington are expected to be in good academic and judicial standing.  George Washington argued that RAs should not be considered “employees” under the NLRA for two principal reasons:  (1) its requirement for RAs to be undergraduate students is necessary for the RAs to develop a “peer-to-peer mentoring relationship” with their assigned residents; and (2) RAs are an important part of George Washington’s residence life program, which is an extension of its academic program. The Acting Regional Director of NLRB Region Five rejected George Washington’s arguments after a hearing on these issues, finding that the RAs have an employment relationship with the University.  The Acting Regional Director determined that RAs perform services for the University, are subject to the University’s control, and perform their services in exchange for payment.  The RAs at George Washington receive a stipend of $2,500 for the academic year, less applicable tax withholdings, as well as free on-campus housing valued at $12,665 per year.  The RA position description at George Washington sets forth four main categories of job duties, along with a list of particular expectations for each category of job duties.  The Acting Regional Director also found that RAs are subject to discipline, up to termination, if they fail to comply with George Washington’s policies or if they fail to remain in good academic or judicial standing.  One particular piece of evidence that the Acting Regional Director found to be significant was that RAs at George Washington are required to sign a four-page document entitled “Resident Advisor Employment Agreement,” which describes the University’s “expectations and employment terms” for RAs. According to the Acting Regional Director, the mere fact that being an RA might be part of the educational experience of an undergraduate student at George Washington does not preclude a determination that the relationship is principally an economic relationship.  The Acting Regional Director wrote:  “Employment experiences can simultaneously be educational or part of one’s personal development, yet they nonetheless retain an indispensable economic core.” A representation election will be scheduled in the coming weeks for the RAs at George Washington to determine if they wish to be represented by SEIU for purposes of collective bargaining.  George Washington has the right to seek review by the NLRB and potentially by a federal appellate court if SEIU wins the election.  At this point, two of the three occupied seats on the NLRB are filled by Democratic appointees who are pro-union.  There are also two vacancies on the NLRB.  When those vacancies are filled by President Trump, it is expected that the NLRB will have its first Republican majority in approximately nine years.  Therefore, this ruling by NLRB Region Five may not be the last word on this important issue for institutions of higher education.

Regional Accreditor Poised to Ban Incentive Compensation to Recruiters of International Students

April 6, 2017

By Philip J. Zaccheo

The Middle States Commission on Higher Education has proposed the adoption of a policy that would prohibit Middle States-accredited colleges and universities from providing “incentive payment” (e.g., tuition sharing or per capita payments) to recruiters “based on [their] success in securing student enrollment….” If approved, the policy would apply to the recruitment of prospective students in the United States and internationally. As to prospective applicants in the United States, the policy would not result in significant change as a practical matter, as the United States Department of Education’s Title IV program integrity rules already prohibit payment of such compensation in connection with the recruitment of prospective students eligible for Title IV aid. Historically, however, institutions have been able to pay incentive compensation for the recruitment of foreign students residing outside the United States who are not eligible to participate in Title IV programs.  (In 2013 and 2014, the National Association for College Admission Counseling (NACAC) approved an amended Statement of Principles of Good Practice that allows institutions to use commissioned agents to recruit students outside the United States, while encouraging the implementation of protections designed to protect applicants and their families against potential conflicts of interest resulting from the practice.) If adopted, the proposed policy would pose challenges for Middle States-accredited institutions (in Delaware, the District of Columbia, Maryland, New Jersey, New York, Pennsylvania, Puerto Rico and the Virgin Islands) that compete for international enrollments with peer institutions accredited by other regional accreditors, who would not be similarly restricted absent adoption of corresponding prohibitions by their respective regional accreditors. Middle States is accepting public comments on its proposed policy through April 17, 2017. Unless the proposed policy is withdrawn following closure of the comment period, the policy (including any revisions based on comments received) will likely be submitted for approval by vote of the Chief Executive Officers of Middle States’ member institutions sometime this summer.

Strike Two: Trump’s New Travel Ban Halted By The U.S. District Court in Hawaii

March 19, 2017

By Joanna L. Silver

Passport-Gavel-300x199Late Wednesday, March 15, just hours before President Trump’s new travel ban was scheduled to take effect, the U.S. District Court for the District of Hawaii granted a temporary restraining order that prevents the implementation of Executive Order 13780.  Recall, President Trump issued Executive Order 13780, entitled, “Protecting the Nation from Foreign Terrorist Entry into the United States” (“EO 13780”), on March 6, 2017.  The temporary restraining order issued by the U.S. District Court in Hawaii prohibits the federal government from enforcing EO 13780 on a nationwide basis. As you know from our March 7, 2017 blog post, EO 13780 sought to suspend the entry of non-immigrants from Iran, Libya, Somalia, Sudan, Syria and Yemen for an initial 90-day period if they were not physically present in the U.S. on March 16, 2017, did not have a valid visa at 5:00 pm EST on January 27, 2017, and did not have a valid visa on March 16, 2017.  EO 13780 also sought to suspend the entire refugee admission program for 120 days and to cap the admission of refugees to no more than 50,000 for fiscal year 2017.  As a result of the decision of the U.S. District Court in Hawaii on March 15, foreign nationals hailing from any of the restricted countries may continue to travel to the U.S. until further notice. At a rally in Nashville, Tennessee on Wednesday evening, President Trump criticized the ruling issued by the U.S. District Court in Hawaii and further declared that his administration will fight to uphold EO 13780, including the travel ban, all the way to the Supreme Court, if necessary.  Given the fluidity of this situation, we continue to advise that individuals from the restricted countries who are presently in the U.S. forego any unnecessary international travel at this time.