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“Knowing the Territory”: Tenure and “Retreat Rights” As an Important Contractual Entitlement for University and College Presidents

“You gotta know the territory!!”

—- Meredith Willson’s The Music Man

Our executive employment law and compensation practice serves senior executives in a variety of both for-profit and not-for-profit settings, including finance, industry, media, foundations and private offices, as well as our special concentration in higher education.

In the world of higher education, we have advised senior administrators at the university, college and secondary school level and negotiated first-time and renewal contracts for presidents, deans, provosts and heads of school at institutions large and small, private and public. These are often meaningful legal engagements, since, knowing how demanding these jobs can be, we find it particularly gratifying to conclude a contract which gives a leader in higher education both adequate compensation as well as a number of necessary protections as they embark on the unusual challenges which confront them.

For each of our fields of concentration in the executive employment arena, it is vitally important that a lawyer “knows the territory.” If you represent a finance executive, an executive employment lawyer should know, among many other things, the characteristics of each type of financial services job; the difference between the “buy” side and the “sell” side; what a “carried interest” is; and which financial firms are “protocol” firms. Knowing the general Federal, state and local employment law is not enough.

Similarly, there are numerous specific aspects of contracts for college and university presidents which do not appear in other non-profit, let alone “for-profit”, executive employment situations. In fact, of all the areas in which we represent executives, the higher education field may have the most unique “wrinkles.”

To offer just one example, if you are an executive in publishing, television or on Wall Street, you and your lawyer do not need to concern yourselves with what are termed “retreat rights,” an entitlement common to the contracts of college and university presidents, and sometimes other senior administrators.

These particular rights derive from the specific characteristics involved in the employment of such college and university presidents and senior administrators, namely, that (1) most, if not all, of the candidates for these top jobs have Ph.D. degrees, and many of them currently have “tenure” — the legal promise, under most instances, of continued employment — at another institution of higher education; (2) most institutions of higher education in the United States require candidates for these top jobs to have a so-called terminal degree; and (3) candidates for these academic executive positions are routinely given tenure at the new school when hired (indeed, since, as a technical matter, it is customarily the faculty which awards tenure in the candidate’s field of academic expertise, a prospective president’s acceptance of a new position may well be conditioned on such an award of tenure by vote of the faculty).

What does this important feature of presidential contracts mean in practice?

It means that the new president, provost or dean, although they may not have the time or inclination to do any teaching or research while in their demanding administrative positions, can “retreat” to a tenured faculty position at the same school in his or her respective department if and when they decide to resign from their administrative roles or — and this is an important point — even if their employment is terminated by the board of trustees other than for Cause. Thus, if the board simply decides to find a new leader, the departing president has the option of staying at the school and “retreating” to a position on the faculty (which is why this particular contractual entitlement is called “retreat rights”).

Frequently Asked Questions

1.     Q:     “Why are these “retreat rights” important?”

A:     For several reasons. No candidate for the presidency should have to give up hard earned tenure at the institution they are leaving when they are taking an even more challenging job at the new school. It is also undeniable that the ability of an ex-president to stay on as a faculty member gives the board of trustees legitimate pause before deciding that they should change presidents other than for Cause. These are important protections and leverage points for anyone considering the perils as well as the rewards of an executive position in higher education.

2.     Q:     “How are these “retreat rights” the subject of negotiation in a presidential contract? Isn’t it true that they are either given or not?”

A:     Even if the new school is willing to award tenure, and hence “retreat rights,” there are still details to be negotiated. For instance, to what faculty does the “retreating” president return? And, when the president steps down and “retreats” to the faculty, how are they compensated? Often they receive a salary pegged to the highest paid faculty member, but sometimes they receive a portion of their presidential salary, at least for some period of time.

3.     Q:     “Are these “retreat rights” a protection in every presidential contract?”

A:     Many but not all. We have represented candidates who have decided not to take a presidential position because the new school either could or would not match the candidate’s current academic tenure entitlement. Additionally, public universities are frequently controlled by very specific state statutes which may make the grant of tenure difficult or impossible. These are the facts which experienced executive employment attorneys who “know the territory” draw out and consider in order to assist a presidential candidate in assessing the nuances of any contractual offer.

About the Author

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George Birnbaum

Since 1980, sophisticated business people have relied on George to apply the meticulous preparation, attention to detail, and devotion to his clients he learned from fabled trial lawyer Louis Nizer. A graduate of Harvard College and Harvard Law School, George has over 35 years of distinguished deal-making, litigation, mediation and arbitration experience which he has used to negotiate high-stakes agreements for senior executives and select business clients throughout the United States.