Effective May 25, 2018, the European General Data Protection Regulation (“GDPR”) imposes new obligations on persons or entities that are “controllers” or “processors” of “personal data”1 about people in the European Union (“EU”). Unlike U.S. or even existing European privacy laws, the GDPR (i) can apply to entities that are located entirely outside of the EU, and (ii) applies to “personal data” about anyone in the EU, regardless of whether they are a citizen or permanent resident of a country in the EU (each country is a “Member”2).

Institutions in violation of the GDPR could face significant fines. Depending on the nature of the violation, an institution in violation of the GDPR could be fined up to €20,000,000 (which amounts to over US $24,000,000) or up to 4 percent of a company’s global revenue, whichever is higher. There is some uncertainty with regard to the methodology that will be used to calculate global revenue for U.S. colleges and universities, but it is unlikely that substantive further guidance will be available on the subject before the GDPR becomes effective in May 2018.

Read More >> Is Your Institution in Control of “GDPR” Compliance? - Higher Education Law Report

Two federal judges have blocked President Trump’s third try at implementing a nationwide travel ban.

The first ruling blocking the administration from enforcing the September 24^th Presidential Proclamation, which restricts travel into the U.S. by foreign nationals from eight countries, came from the U.S. District Court for the District of Hawaii on Tuesday, October 17, 2017, just hours before the travel ban was scheduled to go into effect. The Hawaii District Court issued a temporary restraining order (“TRO”), basing its decision on the same analysis used by the Ninth Circuit Court of Appeals when it set aside the earlier version of the travel ban – that is, that President Trump exceeded his authority under statutory federal immigration law. As a result of the TRO, nationals from Chad, Iran, Libya, Somalia, Syria and Yemen are exempt from the travel ban, but nationals from North Korea and Venezuela remain subject to the travel restrictions set forth in the Presidential Proclamation.

In his decision, Judge Watson noted that the latest travel ban is being challenged in part because the original travel ban, issued back in January of this year, was an attempt to create a “Muslim Ban”, and President Trump “has never renounced or repudiated his calls for a ban on Muslim immigration.” He wrote that the third iteration of the ban “suffers from precisely the same maladies as its predecessor”, and that it “plainly discriminates based on nationality” in a way that is opposed to federal law.

The second ruling, issuing a preliminary injunction blocking the ban from being enforced, came from the U.S. District Court for the District of Maryland on Wednesday, October 18, 2017. In a narrower decision, Judge Chuang blocked the administration only from enforcing the travel ban against travelers from Iran, Libya, Somalia, Syria, Yemen and Chad with a “bona fide relationship” with people or institutions in the U.S. Judge Chuang found that the Presidential Proclamation violated the First Amendment’s establishment clause since it is aimed at Muslims.

In response to the injunctions, the Justice Department has stated that it plans to appeal the Hawaii District Court’s ruling. We anticipate that the Maryland District Court ruling will also be appealed. In the meantime, the TRO and preliminary injunction are intended to maintain the status quo.

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

In a move that was foreshadowed by statements from the new administration, by letter dated September 22, 2017, the U.S. Education Department, Office for Civil Rights (“OCR”) announced the withdrawal of the April 4, 2011 Dear Colleague Letter (“DCL”) on sexual misconduct as well as the April 29, 2014 Questions and Answers on Title IX and Sexual Violence. OCR will no longer rely on these documents in the enforcement of Title IX cases.  As reasons for this action, the Education Department cited concerns that the 2011 and 2014 guidance documents led to “deprivation of rights” for students and that the Department had not followed a formal public notice and comment process before issuing the 2011 and 2014 guidance documents.

New September 2017 Question & Answer Document Issued

In place of the April 4, 2011 Dear Colleague Letter (“DCL”) on sexual misconduct as well as the April 29, 2014 Questions and Answers on Title IX and Sexual Violence, the Department issued a new question and answer document – the September 2017 Q&A on Campus Sexual Misconduct  – to guide institutions while the Department conducts an official rulemaking process to promulgate new Title IX regulations. This new Q&A relies in large part on the 2001 Revised Sexual Harassment Guidance and the January 25, 2006 Dear Colleague Letter on Sexual Harassment.

The most notable changes reflected in the newly-issued 2017 Q&A on Campus Sexual Misconduct include:

• The Department has withdrawn its expectation that investigations will be completed within 60 days. Investigations must be “prompt,” but there is no specific expected timeframe for completion. See Question 5.
• The Department has retracted its position that only a “preponderance of evidence” standard may be used in sexual harassment and sexual violence cases. Instead, the standard of proof for finding a violation in sexual misconduct cases should be consistent with the standard the institution uses in other types of student misconduct cases, which may be either a “preponderance of evidence” standard or a “clear and convincing evidence” standard. See Question 8, fn. 19.
• The Department emphasizes the importance of impartiality, saying that “institutional interests” must not interfere with the impartiality of investigations.  Investigators are to be “trained” and “free of actual or reasonably perceived conflicts of interest and biases for or against any party.” See Question 6. If institutions do not already provide an opportunity for parties to raise objections to investigators or other decision-makers, it may be advisable to include such an opportunity.
• In withdrawing the 2014 Q&A, the Department has retracted its previous list of topics on which investigators and adjudicators must be trained. In its place, the Department cautions against “training materials or investigative techniques and approaches that apply sex stereotypes or generalizations.” See Question 6. Similarly, the Department announces that decision-makers must approach cases “objectively and impartially” and may not employ or rely on “sex stereotypes or generalizations.” See Question 8. Institutions should review training provided to investigators and adjudicators to ensure compliance with this aspect of the guidance.
• The Department retracted its prohibition on mediation in sexual violence cases. The Department’s newly announced position is that mediation and other forms of informal resolution may be used to resolve any Title IX complaint if both parties voluntarily agree to participate. See Question 7.
• The Department discourages any restriction on the ability of either party to discuss an investigation, stating that such a restriction is likely inequitable and may impede parties’ ability to gather and present evidence. See Question 6.
• The Department has announced that the investigation should result in a written report summarizing both “the relevant exculpatory and inculpatory evidence”, that the parties should be provided “equal access” to this information, and that they should have the opportunity to respond to the report in writing and/or at a hearing prior to a determination of responsibility.  See Question 6.
• In determining interim measures, a school “may not rely on fixed rules or operating assumptions that favor one party over another.” However, the Department also notes that, in cases of sexual assault, dating violence, domestic violence and stalking, colleges and universities continue to have obligations under the Clery Act to provide reasonably available interim measures to a reporting party who requests such measures. See Question 3.
• The Department has reversed its previous position that, if an opportunity for appeal is afforded to one party, it must be provided to both parties. Now, institutions may restrict the right to appeal to responding parties only. See Question 11.

What this Means for Institutions 

It is doubtful that the Department’s change of position will require institutions to wholly revamp their Title IX policies and procedures. For the most past, the new guidance does not disallow institutions from continuing  current practices if the institution wishes to do so, and in fact some of those practices and procedures continue to be required by the Violence Against Women’s Act amendments to the Clery Act.

One notable exception is the standard of evidence. If an institution uses the higher standard of clear and convincing evidence in other student misconduct cases, the institution will need to consider the need to either change the standard of evidence in those other cases to a preponderance of evidence standard or change the standard applicable to sexual harassment and sexual assault cases.  Also, if institutions do not currently allow parties access to the investigative file, they will need to ensure that this access is incorporated into their procedures going forward.  Relatedly, the requirement that the parties have an opportunity to respond to a written investigative report prior to a determination of responsibility may necessitate refinements to some processes that utilize an “investigator model” for determinations of responsibility, as well as processes that use a formal hearing to consider evidence other than in “report” form.

More generally, the new guidance places a renewed focus on impartiality. All institutions would do well to review their policies, procedures and personnel involved in the process with an eye on this issue. 

State Law Requirements

In addition to the federal requirements impacted by OCR’s new guidance, some states have enacted laws on the topic of response to sexual violence. For instance, New York State’s “Enough is Enough” Law imposes a fairly full panoply of institutional requirements with respect to sexual assault, dating violence, domestic violence and stalking, and New York colleges and universities must continue to comply with this state law despite the U.S. Department of Education’s lessening of its regulatory requirements.  Generally, New York State’s requirements are not in conflict with the Department’s newly-issued positions as articulated in the 2017 Q&A on Campus Sexual Misconduct.  Perhaps the most notable potential exception is with respect to interim measures.  New York State law seems to require a formulaic no-contact order that imposes on the responding party the obligation to “leave the area immediately” if in a public place with the reporting party, whereas the Department’s newly announced position is that interim measures “may not rely on fixed rules or operating assumptions that favor one party over another.” Whether and how these two directives can be reconciled will require further consideration and analysis.

The Department’s announcement makes clear that this is not necessarily the last change it will make with respect to schools and their Title IX obligations.

If you have questions about how the September 22, 2017 DCL or Q&A on Campus Sexual Misconduct impacts your current policies and procedures please reach out to our Higher Education Practice group.

In remarks today, United States Secretary of Education Betsy DeVos announced that the Department of Education plans to initiate a public comment period to begin the process of adopting new regulations on campus sexual violence and harassment prevention and response. The new regulations would supplant existing Department subregulatory guidance (most notably the April 4, 2011 “Dear Colleague Letter” and the 2014 “Questions and Answers on Title IX and Sexual Violence” issued by the Office for Civil Rights).  The timing of the Department’s rescission of the existing guidance is not entirely clear.  Initially it appeared that, contrary to expectations in some quarters, the existing guidance would remain in effect pending completion of the rulemaking process (and that institutions could and should continue to follow it in the interim). However, following Secretary DeVos’s remarks, the Department indicated that it would issue  new “information” about how institutions should comply with their Title IX obligations pending completion of the rulemaking process.

The content and significance of any regulations that might ultimately be issued is, of course, difficult to predict and will depend at least in part on the nature of public comments that the Department receives. However, based upon recent statements by Secretary DeVos and Acting Assistant Secretary for Civil Rights Candice Jackson, institutions can likely expect any new regulations to address, among other things, the rights of students accused under campus disciplinary processes (potentially in a manner akin to some of the respondents’ rights provisions of New York State’s so-called “Enough is Enough” legislation of 2015).

The new regulations will add to the existing patchwork quilt of legal and regulatory requirements to which institutions are subject in this area. Notably, certain federal requirements with respect to campus sexual violence policies and procedures (e.g., the requirement that students be permitted the assistance of an “advisor of choice” in connection with campus disciplinary proceedings) arise not from the Department’s subregulatory guidance, but from the 2014 Violence Against Women Act (VAWA) amendments to the Clery Act.  These requirements would be unaffected by any regulations the Department may adopt.  In addition, institutions in states such as New York, California and Illinois will also need to assess and resolve potential conflicts between the federal regulations and state law sexual violence statutes.

Needless to say, today’s announcement makes the future course of sexual violence prevention and response on college and university campuses an unpredictable proposition. One thing is certain, however: institutions can expect, yet again, the need to review and revise their policies and procedures as they have done so many times before based on a seemingly never-ending succession of legislative and regulatory pronouncements.

On September 5, 2017, Attorney General Jeff Sessions announced the Trump administration’s formal plan to end the Deferred Action for Childhood Arrivals (“DACA”) program. The rescission of DACA and the benefits afforded by the program will affect individuals employed by and enrolled in colleges and universities across the country.

DACA, implemented in 2012 through an executive order by former President Barack Obama, allows illegal immigrants who entered the U.S. as minors to receive a renewable two-year period of deferred action. In addition, DACA recipients are eligible to receive an employment authorization document (“EAD”), which allows them to work legally in the U.S., and advance parole, which allows them to re-enter the U.S. following a trip abroad.  Currently, about 800,000 individuals are participating in the DACA program.  The Trump administration’s decision to phase out the DACA program will end the work authorization and advance parole of DACA beneficiaries and potentially open the doors for their deportation.

The DACA program is scheduled to end in six months, on March 5, 2018. As of September 5, 2017, the Department of Homeland Security (“DHS”) no longer accepts new EAD or advance parole applications from DACA beneficiaries.  In addition, any pending advance parole applications are going to be closed by DHS and returned to the respective DACA applicants.  Individuals whose EADs expire prior to March 5, 2018 may apply for a two-year renewal, but their applications must be received by the DHS on or before October 5, 2017.

Institutions’ human resources offices may wish to identify those individuals who are employed pursuant to DACA by reviewing the I-9 forms and copies of the I-9 documents (if any) already on file. DACA beneficiaries will have EADs with a “C33” category and will remain employment authorized until the expiration date on their EADs. The employment authorization of these individuals must be reverified by completing Section 3 of Form I-9 no later than the expiration dates on the EADs.  Individuals who are unable to provide evidence of their continued employment authorization can no longer be employed at the college or university.  With respect to those DACA employees whose EADs expire prior to March 5, 2018, colleges and universities may choose to provide a gentle reminder that renewal applications for a two-year extension must be filed and received by the DHS on or before October 5, 2017.

With respect to DACA students, faculty or staff who were planning to study abroad or attend a conference or other event outside the U.S., colleges and universities may choose to advise these individuals to change their plans and remain in the U.S., even if they have advance parole that has not yet expired since USCIS retains the authority to revoke or terminate an advance parole document at any time.

As expected, the Trump administration’s decision to phase out the DACA program is already facing challenges in courts. On September 6, fifteen states and the District of Columbia filed a lawsuit in the federal court for the Eastern District of New York opposing DACA’s termination.  There also is the possibility that Congress will pass a bill to either reinstate the DACA program or replace it with a similar program. We will provide you with updates regarding the status of the DACA program as they become available.

Last week, a spokesperson for the U.S. Citizenship and Immigration Services (USCIS) confirmed that in-person interviews will now be required for employment-based nonimmigrant visa holders (e.g., H-1B, O-1, etc.) applying to adjust their status to permanent residents (“green card” holders).  Information currently available from the USCIS indicates that this interview requirement is expected to take effect on October 1, 2017.  This mandate appears to be a result of the Trump administration’s plan to apply “extreme vetting” to immigrants and visitors traveling to the U.S.

Traditionally, employment-based adjustment of status applicants have not been interviewed as part of the process, unless deemed necessary by the government. The interview mandate will most likely lengthen the processing times for green card applications as approximately 130,000 employment-based applications are filed annually with the USCIS.  Currently, the USCIS is taking more than 6 months to process employment-based green card applications at its various service centers throughout the United States.

There is no word on where the USCIS intends to conduct interviews pursuant to this mandate. We will provide updates as additional information becomes available.

On July 19, 2017, the New York State Workers’ Compensation Board (WCB) published its final regulations implementing the New York Paid Family Leave Law (PFL). For those that may be less familiar with the particulars of this new law, beginning on January 1, 2018, virtually every private employer in New York State will be obligated to provide eligible employees with paid leave for certain qualifying family circumstances:

(1) for the birth, adoption, or placement of a new child;
(2) to care for a family member with a serious health condition; or
(3) for a qualifying exigency arising from a family member’s military service.

PFL will be phased-in over the next four years and can be funded through employee payroll deductions. In 2018, for example, eligible employees will be entitled to take up to 8 weeks of paid leave for a qualifying reason.  Significantly, and unlike federal Family and Medical Leave and state disability benefits, PFL is not intended to cover an employee’s own serious health condition.  Instead, PFL is intended to complement New York’s existing state disability insurance program.  Some additional PFL fundamentals can be found on Bond’s Labor & Employment Law Blog – “New York Labor and Employment Law Report” at https://www.bsk.com/new-york-labor-and-employment-law-report.

Our focus today is on several frequently asked questions regarding PFL that we have received from our higher education clients.

Question:  Are private colleges and universities covered by PFL?

Answer:  Yes.  Private colleges and universities are deemed to be covered employers under PFL. However, as not-for-profit organizations, they may have some employees who are not covered by PFL.  Specifically, employees engaged in a “professional” or teaching capacity for nonprofit educational institutions are excluded from the definition of “employee” under the law.  Institutions can extend coverage to these exempt classes of individuals if they choose to do so, but this is not required.

Question:  Are public institutions covered by PFL?

Answer:  No, to the extent that such institutions fall within the definition of a “public employer”, which includes the state, a political subdivision of the state, a public authority, or any other governmental agency or instrumentality.

Question:  Can public institutions voluntarily choose to provide benefits under the PFL law?

Answer:  Yes.  Public employers are permitted to opt-in to PFL. The process for opting-in is slightly different for unionized and non-unionized employers.  If a public employer chooses to cover its non-unionized workers, it must provide 90 days’ advance notice of its decision to opt-in to not only the WCB, but to all employees who will be required to make PFL contributions. In order for a public employer to cover/opt-in its unionized employees, the public employer must engage in collective bargaining and reach consensus / agreement with the applicable union.  Once an agreement is reached, the employer must notify the WCB that an agreement has been reached and provide certain information to the WCB.

Question:  Are higher education institutions who currently provide voluntary state disability insurance coverage (DBL) to their employees also required to provide PFL?

Answer:  No.  However, if these institutions currently provide voluntary DBL coverage to their employees, they must notify both the employees and the WCB whether they will also provide voluntarily PFL coverage. Notification must be made by no later than December 1, 2017.

Question:  Are student employees entitled to PFL?

Answer:  Yes, provided they satisfy the requisite eligibility criteria. Student employees are treated in the same manner as any other employee.  If the student employee is regularly scheduled to work at least 20 hours per week, he/she is eligible to take PFL after he/she has been employed for 26 weeks.  If the student employee is regularly scheduled to work less than 20 hours per week, he/she is eligible to take PFL after working 175 days.

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For more information and continued updates on PFL, please visit the New York Labor and Employment Law Report at https://www.bsk.com/new-york-labor-and-employment-law-report.

If you have any questions about PFL, please contact the authors of this post, any of the attorneys in our Labor and Employment Law Practice, or the Bond attorney with whom you regularly work.

According to published reports, the Trump administration appears poised to direct the Department of Justice to begin investigating, and potentially litigating against, institutions over what it characterizes as “intentional race-based discrimination in college and university admissions.” This initiative, first reported by the New York Times, is purportedly reflected in an internal DoJ communication obtained by the Times seeking Department staff attorneys to volunteer to work on the investigations and/or litigation.  At this point, it is not clear whether institutions will be targeted on a random basis or (perhaps more likely) based on complaints received by the Department.

This initiative, of course, comes in the aftermath of the Supreme Court’s rulings with respect to the University of Texas’s affirmative action admissions programs in the Fisher decisions.  Those decisions recognized the creation of a diverse student body as a compelling educational interest, but also emphasized that an institution must not make race the defining feature of a candidate’s application for admission, and must be able to demonstrate that it has seriously considered race-neutral alternatives and that no workable race-neutral alternatives would produce the educational benefits of diversity “about as well and at tolerable administrative expense.” Although this may not require institutions to implement race-neutral alternatives and demonstrate their failure, as we have previously advised, institutions should ensure that they are able to document evaluation of such alternatives in order to defend challenges to their admissions programs.  The apparent advent of the reported Department of Justice initiative may quickly render this consideration more important than ever, and the prospect of challenges more than theoretical.

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.

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.

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.

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.