A Big Payout for a Fired President

The College of DuPage agreed to a $4 million settlement with its former president last week, finally relenting in a legal battle that began in 2015 when the Board of Trustees fired Robert Breuder and then refused to pay his contractually mandated severance of $763,000. That prompted Breuder to sue, ultimately triggering the massive payout.

Breuder was fired from the Illinois community college in 2015 amid scandals that included allegations of financial mismanagement. Board members argued they did not have to honor his severance agreement because it was made by their predecessors, who first granted Breuder a contract extension in 2009, mere months after he took the job.

The case has cost the College of DuPage’s insurer millions and spurred state legislators in Illinois to crack down on golden parachutes. But now that trustees have voted to drop counterclaims against him, Breuder is line for a major payday and a decisive legal victory.

Details of the $4 million dollar settlement remain confidential.

‘Let Him Sue Us’

When Breuder was fired in 2015, trustees voted to withhold his severance package. At the time he was fired, Breuder was planning to step down within a matter of months, according to court records.

Asked then about the possible legal consequences of withholding severance pay that had been outlined in his contract, one defiant trustee proclaimed, “Let him sue us.” Breuder did exactly that, immediately filing suit for wrongful termination. He alleged that the board had breached his contract, defamed him and denied him his due process rights in removing him from the presidency. (None of the trustees involved in his firing remain on the college’s elected board.)

Breuder’s lawsuit dragged on until the board countersued in 2018, alleging major financial missteps and seeking $25 million—a mix of compensatory and punitive damages as well as legal fees.

“Breuder oversaw an era of waste, fraud, and abuse at the College that caused real harm to the College and, in many cases, direct benefits to Breuder and those close to him,” lawyers for the college argued in court, alluding to administrative expenses and lucrative no-bid contracts awarded to businesses connected to members of the College of DuPage Foundation board.

Breuder was accused of racking up expensive tabs—alongside other administrators and trustees at the time—at a high-end campus restaurant he established, a money-losing operation seen as a boondoggle vanity project that has since been converted to a laboratory. Critics also voiced concerns about his misuse of other campus resources and questionable financial management practices, among other issues, which prompted the faculty to vote no confidence in Breuder in 2014.

Over the last several years, the lawsuits have racked up $9 million in costs paid by the college’s insurance company, according to court records. Now that the board’s counterclaim has been dropped, the payout will come from that same insurer—Illinois Community College Risk Management Consortium—bringing an expensive end to seven years of bitter litigation.

Trustees decided in a closed session last Thursday to drop their counterclaim. Board chair Maureen Dunne read a statement at the meeting explaining the board’s decision.

“As fiduciaries for College of DuPage, the Board of Trustees unanimously voted to approve mutual releases accompanying a settlement agreement between the Illinois Community College Risk Management Consortium (ICCRMC) and Robert Breuder, thus resolving all claims between Breuder and the College of DuPage,” Dunne said in her prepared remarks. “The Board’s vote brings closure to a case that began more than seven years ago, before any current trustee was a member of the board, and resolves all claims at no direct cost to the institution beyond the initial deductible incurred by the College, as all other legal costs were paid by ICCRMC.”

According to board documents, the lawsuit is being settled at the direction of the ICCRMC “to avoid further expense of litigation.” The board assumes no liability as part of the settlement.

Contacted via LinkedIn, Breuder did not respond to a request for comment. However, an attorney for the former president provided a statement to a local newspaper celebrating the end of the legal proceedings and claiming that his victory restored a reputation unfairly tarnished by trustees.

“The settlement marks the end of a yearslong saga that put an undeserving and unfounded blight on my reputation and achievements at the College of DuPage,” Breuder told the local Daily Herald via his attorney. “Despite the unjust turmoil this ordeal has caused to me and my family, I remain proud of my work and everything that was accomplished during my tenure as President of the College of DuPage. This settlement validates those accomplishments for me and enables me and the College of DuPage to move forward.”

Outrage over initial plans to pay out Breuder’s severance—before the board refused to do so—has also inspired legislation to rein in so-called golden parachutes like the one Breuder was promised in his contract. Illinois lawmakers approved legislation in 2018 that provided greater transparency and certain restrictions on such exit packages. The Legislature passed further restrictions in 2021 to limit the ability of public employees to transfer into other roles—such as moving to the faculty, for example—while receiving exorbitant salaries.

The Fallout

The lingering acrimony over Breuder’s time at the College of DuPage was visible at last week’s board meeting. David Goldberg, a political science professor and president of the College of DuPage Faculty Association, said faculty members had been “gaslit and ignored” for raising concerns about Breuder and suggested there was plenty of blame to go around.

“This institution was traumatized by Robert Breuder’s presidency. A climate of fear and intimidation, violation of public trust, misuse and mismanagement of taxpayer support,” Goldberg said, adding that Breuder was aided by “sycophants on the Board of Trustees and senior administrators.”

Trustees, however, remained tight-lipped after reaching the settlement, limiting their statements to Dunne’s prepared remarks. The college did not provide estimated total costs incurred through its insurer, which footed the legal expenses as well as the settlement.

Generous severance agreements are common in higher education, with ousted presidents often collecting big paychecks on their way out the door. What’s uncommon, observers say, is the refusal to pay out a severance agreement when there is a clear contractual obligation to do so.

Stephen Trachtenberg, president emeritus at George Washington University and a board member at the American Council of Trustees and Alumni, explained that college presidents have severance agreements for roughly the same reasons people sign prenuptial agreements.

“You try to hope for the best but anticipate the worst and plan for it,” Trachtenberg said.

How those severance agreements are shaped often depends on individual priorities, with some emphasizing money, long-term health care or a post as a tenured faculty member. Generally speaking, severance agreements are a positive way for all parties to move forward, he said.

“For the most part, if there is a good severance arrangement in place, that’s best for all parties. It’s quiet, the individual goes away and is compensated and the institution gets on with its life,” Trachtenberg said.

Stephanie Hamm, who works in employment law as a partner at Thompson & Horton LLP, said the legal strategy employed by the College of DuPage was risky and that the trustees’ refusal to pay money contractually owed was uncommon.

“One of the risks of taking a hard stance and an aggressive litigation strategy is that things could get unwieldy very quickly. And it sounds like that’s what happened in this case,” Hamm said.