This is an action for declaratory relief and specific performance with respect to the academic tenure of faculty members at Bloomfield College, a private institution of higher education licensed under the laws of the State of New Jersey. Plaintiff American Association of University Professors, Bloomfield College Chapter (hereinafter AAUP), is a labor organization within the meaning of the National Labor Relations Act, 29 U.S.C.A., § 152, and for the purposes of Article I, paragraph 19 of the 1947 New Jersey Constitution, which has been certified and recognized by the National Labor Relations Board as the exclusive representative for collective bargaining on behalf of the college faculty. The individual plaintiffs include faculty members who seek clarification of their claimed tenured status and those whose service has been terminated and seek reinstatement to their former positions. Their periods of accumulated service range from 8 to 22 years. In addition to Bloomfield College, also named as defendants are Merle F. Allshouse, president of the college, and the individual members of the college board of trustees.
The legal basis of plaintiffs' claim of tenure is to be found in the Faculty Handbook of the college under the heading of "Bloomfield College Policies on Employment and Tenure" (hereinafter "Policies"). This document forms an essential part of the contractual terms governing the relationship between the college and the faculty. Hillis v. Meister, 82 N.M. 474, 483 P. 2d 1314 (Ct. App. 1971); Greene v. Howard University, 134 U.S. App. D.C. 81, 412 F. 2d 1128 (1969); Mendez v. Trustees of Boston University, 285 N.E. 2d 446 (Mass. Sup. Jud. Ct. 1972). Under paragraph C thereof
Bloomfield College recognizes that tenure is a means to certain ends, specifically: (1) freedom of teaching and research and of extra-mural activities, and (2) a sufficient degree of economic security to make the profession attractive to men and women of ability. Freedom and security, hence tenure, are indispensable to the success of an institution in fulfilling its obligations to its students and to society.
Following a probationary period of seven years, which has been completed by all the individual plaintiffs, subparagraph C(3) provides:
Pertinent also is subparagraph C(6) of the "Policies" which provides:
Termination of continuous appointment because of financial exigency of the institution must be demonstrably bona fide. A situation which makes drastic retrenchment of this sort necessary precludes expansion of the staff at other points at the same time, except in extraordinary circumstances.
On June 21, 1973 the board of trustees adopted Resolution R-58 which in material part resolved:
That every faculty member be informed on or before June 30, 1973 that all 1973-74 contracts are one-year terminal contracts. The Board of Trustees through its Academic Affairs Committee will call together from among the remaining 54 members of the faculty an evaluation committee to determine what faculty members will remain at the College beyond June 30, 1974. This Committee to Define and Evaluate Personnel Needs will define personnel needs for the new academic program priorities which are set and the curricular revisions which are made, and will evaluate existing faculty members to determine their qualifications for meeting these needs. Their recommendations are to be made no later than November 30, 1973. All faculty members will be notified by December 15, 1973, as to their contract status for the 1974-75 academic year.
Acting thereunder, defendant Allshouse under date of June 29, 1973 notified 13 members of the faculty that it was his "unpleasant duty to inform you that the Board of Directors, at its meeting on June 21, 1973, took action to terminate your services as part of the reduction of the faculty size due to financial exigency." They were further advised:
Following the Board's action and in accordance with our prior oral conversation, this will serve to advise you formally that you have been relieved of all duties as a Bloomfield College faculty member; and, therefore, you will not be obliged to and will not perform any services for the College or participate in College governance after June 30, 1973.
The letter expresses the hope that the recipient
On the same date all the remaining members of the faculty, tenured and nontenured, were notified by letter memorandum that at the June 21 meeting the board of trustees "took action to the effect that every faculty member should be informed that all 1973-74 contracts are one-year terminal contracts." The letter continues:
The notice of termination does not necessarily imply that you will be terminated at the end of the 1973-74 academic year, but it provides a base from which each faculty member can negotiate a learning contract which meets both personal professional interests and College needs.
During the period between June 21, 1973 and the commencement of the school year in September 1973 the College engaged the services of 12 new and untenured teachers to serve on its faculty. Defendants assert that these were hired to replace others who were lost to the school over a
period of time as the result of "normal attrition," not those who were terminated under Resolution R-58.
Among the roster of plaintiffs are included (1) those faculty members who received termination notices and seek reinstatement to their former positions, and (2) those whose employment was continued, but subject to one-year terminal contracts. The latter ask declaratory judgment that their tenured status is unaffected by the action of the board of trustees in adopting Resolution R-58. As is clearly implied by the excerpted documents, defendants justify the resolution on the basis of "financial exigency." The issue projected is whether the action accomplished by Resolution R-58 in abrogating tenure and terminating the employment of tenured faculty members at Bloomfield College was "demonstrably bona fide" as having been taken "under extraordinary circumstances because of the financial exigency of the institution." Complementary thereto is the question as to whether the circumstances were further "extraordinary" so as to allow at the same time for the hiring of 12 new teachers.
Bloomfield College is a small commuter-type institution tracing its origins to an academy founded in 1807 by the Presbyterian Church. It was established as the German Theological School in 1868 and is affiliated with the New Jersey Synod of the United Presbyterian Church. It serves a student body which has been described as ethnically mixed, presenting a low academic profile and embracing a large minority group representation. Students are drawn mainly from the lower middle and upper lower economic strata and for the most part are enrolled in the school's business and nursing departments.
Present annual tuition is $2,000, up from $1,330 in 1969. Enrollment for the present year, 1973-74, is 867, down from 1,069 in 1972. The portent of these figures lies in the fact that three-fourths of the school's financial support is derived from enrollment income.
Enrollment projections testimonially offered by college officials for 1974-75 range betwen 450 and 638. These were given without factual foundation and are said to have been based upon unspecified "demographic studies." They are in curious contrast to the projected enrollment of 905 for the same period, gradually increasing to 1,030 during the school year 1978-79, which appears at page 17 of the Bloomfield College President's Report dated March 1974. The discrepancy is rationalized by President Allshouse's explanation in part that to publish the bleak truth in his report would have disserved the interest of public relations and been damaging to college morale. Although in final form, it has been decided to withhold the report from public distribution for reasons of economy, not because of any errors in its content.
Although the decreased enrollment for the 1973-74 year was accurately forecast in the spring of 1973, the previous year's projection fell short of the actual enrollment by 131 students. This miscalculation was never explained, and is noted with interest for the reason that the faculty reduction from 76 to 54 was deliberately brought about to achieve, supposedly, a 17 to 1 student-faculty ratio based upon anticipated enrollment for the 1973-74 school year. That this decision rested upon data of demonstrated unreliability is pertinent to a determination as to the college's good faith.
The reduction referred to was the combined result of discharging the 13 teachers, "normal attrition" to the extent of 21 teachers who left for various reasons between June 30, 1972 and August 31, 1973, and addition of the 12 newcomers between June 21 and September 30, 1973. Consideration was given to retaining the discharged faculty members instead of hiring new ones, but this alternative was rejected upon the belief, it is said, that the former would not fit in with proposed program innovations which were envisioned by the college as part of its overall rehabilitation. The changes were described in the evidence as "new directions,"
and were planned to set the college on a unique academic course. Their design was to reduce the number of majors and departments by bringing them all into 12 broad interdisciplinary areas in order to improve administration and curricular planning. The ultimate objective, so it was said, was to turn around the enrollment projections by (1) offering career oriented prospective students a firm liberal arts foundation, (2) enhancing the distinctiveness of attending Bloomfield for what it could offer as a small college, and (3) responding "very seriously" to the personal needs of the students.
Apart from the installation of a special freshman seminar and advisory program and greater emphasis on the development of evening and part-time enrollment of mature women and special groups, and possibly the improvement of administrative controls, the practical changes to be accomplished by the new directions were never clearly stated. Despite the references to interdisciplinary approaches, the basic disciplines still prevail, and whatever revisions may have been made are minor in nature. Notable also on the question of bona fides is the fact that the decision to install the new directions was not made until the fall of 1973, some months after the adoption of Resolution R-58 and after the institution of plaintiffs' suit. In any event, the results assertedly anticipated by the new programs are not now seen as attainable. Present projections forecast continued reductions in enrollment.
Turning to a consideration of the college's assets and liabilities, we note first that its budget for the 1972-73 school year was $3,652,000. For the year 1973-74 it is $3,397,000. The planned cash deficit for 1972 was $123,000 and for 1973 $191,000, with estimates that it will probably rise to $231,000 for the year. Between June 30, 1973 and March 31, 1974 it reached $145,000. By cash deficit is meant the amount by which the ...