Legal Win for Indiana Faculty Who Aren't Renewed

June 23, 2008

If a university declined to renew a non-tenure-track professor's fixed-term teaching contract, is the professor then voluntarily unemployed? According to the Indiana Supreme Court last week, the answer is no, a decision that would make the former employee eligible for unemployment benefits -- just as if he had been terminated through no fault of his own.

The decision raises questions about whether its interpretation of unemployment law could apply in other states, especially to adjunct professors on limited-term contracts.

The original legal dispute pitted marketing professor William LaFief against his former employer, Indiana State University, which first hired him in 2004 for a one-year, renewable basis. Although his employment contract was continued for the 2005-2006 academic year following an annual review, the university declined to keep LaFief on for a third year.

After LaFief filed for unemployment, an administrative law judge rejected his request on the grounds that he was not "discharged" but that, instead, his contract had come to an end. The Review Board of the Indiana Department of Workforce Development reversed the decision, arguing that not renewing the contract was effectively equivalent to a discharge, but an appeals court subsequently found otherwise -- that not being reappointed was the foreseeable outcome of a voluntary contract that ended on terms LaFief initially agreed to -- leaving the final word to the state's high court, which upheld the review board's initial finding.

John R. Maley, one of LaFief's lawyers and an "occasional adjunct lecturer" himself, said that the decision on unemployment benefits wouldn't necessarily affect other states, which have their own laws and interpretations. "This issue, the way it was resolved in Indiana, does not necessarily mean ... it would be resolved that way in other states," he said.

Although Maley couldn't say for sure, he added that adjuncts in Indiana "likely do not meet" the criteria for unemployment benefits, because of how the law defines eligibility. (Nationally, some advocates for adjunct faculty members have been encouraging them to check on the rights they have under state unemployment laws.)

Still, since it was a "divided decision" -- 3-2 -- he noted that there was still disagreement on the issue. "Universities may well seek legislative amendment to clarify and correct this issue, and I believe there are some efforts underway in that regard," Maley said.

The court's reasoning stems directly from the text of the relevant state law. "The [Unemployment Compensation] Act does not contain a requirement that the employee be 'discharged' from employment to be eligible for benefits, although 'discharge for just cause' is a disqualification from benefits. For example, employees can be eligible for benefits if they leave their employment with good cause," the majority wrote. "Accordingly, in evaluating whether an individual is eligible for unemployment benefits, the question is not whether he was 'discharged' from employment but whether he met the eligibility requirements set forth in" the law.

The majority continued: "The fact that LaFief had warning that his employment could terminate upon the contract’s expiration does not change the fact that at the end of the year he became unemployed. The termination of his employment was no more voluntary than the termination of employment of an employee at will, who is presumably on notice that his employment could terminate at any time."

Two state justices dissented. "I believe it is mistaken to thus suggest that the discharge from at will employment is volitionally equivalent to the foreseeable unemployment that follows the conclusion of a consensual fixed-term employment contract," wrote Justice Brent E. Dickson. "Because I conclude that Professor LaFief had no employment to leave or from which to be discharged, and further that he is personally accountable and responsible for the natural consequences of his agreement to the fixed-term contract, I would reverse the decision of the Review Board."

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