Professors Band Together in Employment Lawsuit

Seven former business professors are suing Midway College in Kentucky for laying them off amid an enrollment decline and budget troubles.

Their lawsuit, pending in Kentucky state circuit court, is an unusual example of professors banding together to sue their former employer. The case also raises issues coming up at other colleges, including allegations that administrators are laying off some faculty to clear the deck so they can hire less expensive instructors.

Midway is a small private women’s college near Lexington (it allows male students into its evening and online classes and graduate programs). Last fall, following an 18 percent enrollment decline, officials laid off 14 of its 54 faculty members, along with some staff, and stopped matching employee contributions to the college retirement program. This fall, enrollment declined 16 percent to 1,139 students, the college said Thursday. Of those, 294 students are enrolled in the traditional women's college, an increase of two students since last year. The declines came in nontraditional programs.

The college is down to 34 full-time faculty. According to the college, only three of Midway's professors have "continuous appointments," a bit like tenure; other professors, including the ones who have been laid off, are or were untenured and not on a tenure track.

The seven professors, including the former head of the college’s M.B.A. program, claim the college breached its contract with them and let them go in order to hire younger people to fill their jobs.

The professors also assert the college had reserve funds that could have been used to pay their salaries. They argue that college President John Marsden, who took office in February 2013, either knew or should have known whether he could pay the professors for doing the jobs he offered them.

The lawsuit contends the college either "misrepresented its financial status" in the spring or "misrepresented its lack of available funding" in the fall when it said it would terminate the professors.

The university is fighting the allegations.

Midway admits, in its legal response to the professors' complaint, that Marsden had "some information regarding the college's financial state when he was hired," but he did not have "full knowledge." Further, the college argues, it really had no money that fall to fulfill the contracts it had signed with the professors.

“Before I arrived in February 2013, I was incorrectly told there would be a balanced budget," Marsden said in a press release Thursday meant to highlight a "year of recovery" at Midway. "On campus discovery revealed significant budget issues and we immediately took action to remedy this trend.”

He said there was a $1.8 million deficit in the budget that was already adopted when he arrived on campus. But his first budget as president was balanced.

All the former professors in the lawsuit, which was filed this spring, are in their 50s or 60s. In court filings, they said they had been given contracts by Midway in May 2013 that appointed them to teaching positions for the school year that started that fall.

Then, on September 20 – a month after the start of classes at Midway – their contracts were terminated. According to college spokeswoman Ellen Gregory, they finished teaching the classes they had started earlier that semester, but did not continue into the spring.

The lawsuit claims other instructors were then assigned or hired to fill their spots. According to the lawsuit, these new instructors were “substantially younger” and “less qualified.”

Gregory, the college spokeswoman, said the percentage of faculty over 40 years of age did not change after the layoffs.

The seven professors’ lawyer, Debra Doss, declined to comment on the case, as did the university on the merits of the case. Professors involved in the lawsuit, as well as a few other former professors, declined to comment or did not respond to requests for comment. Midway’s current faculty senate president did not respond in detail and referred questions to the university’s spokeswoman.

Midway is among the privates that have struggled to balance its books amid enrollment shifts. Its enrollment for this semester is not yet available, Gregory said.

Marsden, the president, said during an inaugural address last year that the college may try to become a "university," expand internationally and add graduate programs in order to grow. In his statement Thursday, he saw signs of optimism. Among them, an increase in donations to the college and a partnership to bring Panamanian students to Kentucky for a college readiness program that has already generated "significant revenue."

Midway, in Kentucky horse country, merged some of its existing programs to create a School of Business, Equine and Sport Studies. Gregory said there is crossover among the programs because equine studies traditionally included some knowledge of business, as did sports management.

The university is also betting on online programs, as well as new degrees. For instance, it ended its traditional classroom-based sports management program and put that whole program online to “reach a much broader audience,” Gregory said. She said more and more programs will go online, including some that were already taught partially online and partially in the classroom.