Monaco v. N.Y. Univ.

• Decision Date: 22 February 2022
• Docket Number: Appeal No. 15034,Index No. 100738/14,Case No. 2021-00792
• Parties: Dr. Marie MONACO et al., Plaintiffs-Appellants, v. NEW YORK UNIVERSITY et al., Defendants-Respondents. Mark Barenberg, Isidor and Seville Sulzbacher Professors of Law, Columbia Law School, Helen Bender, Associate Professor of Law, Fordham University School of Law, Cynthia Grant Bowman, Dorothea S. Clarke Professor of Law, Cornell Law School, James Brudney, Joseph Crowley Chair in Labor and Employment Law, Fordham University School of Law, Matthew Dimick, Professor of Law, University at Buffalo School of Law, Cynthia Estlund, Catherine A. Rein Professor of Law, New York University Law, Philip Hamburger, Maurice & Hilda Friedman Professor of Law, Columbia Law School, Robert Hillman, Edwin H. Woodruff Professor of Law, Emeritus, Cornell Law School, Arthur Leonard, Robert F. Wagner Professor of Labor and Employment Law, New York Law School, Carlin Meyer, Professor of Law, Emerita, New York Law School, Liam Murphy, Herbert Peterfreund Professor of Law, New York University Law, Norman S. Poser, Professor of Law, Emeritus, Brooklyn Law School, Samuel Weinstein, Associate Professor of Law, Cardozo Law, Amici Curiae.
• Court: New York Supreme Court — Appellate Division

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164 N.Y.S.3d 87

Dr. Marie MONACO et al., Plaintiffs-Appellants,
v.
NEW YORK UNIVERSITY et al., Defendants-Respondents.

Mark Barenberg, Isidor and Seville Sulzbacher Professors of Law, Columbia Law School, Helen Bender, Associate Professor of Law, Fordham University School of Law, Cynthia Grant Bowman, Dorothea S. Clarke Professor of Law, Cornell Law School, James Brudney, Joseph Crowley Chair in Labor and Employment Law, Fordham University School of Law, Matthew Dimick, Professor of Law, University at Buffalo School of Law, Cynthia Estlund, Catherine A. Rein Professor of Law, New York University Law, Philip Hamburger, Maurice & Hilda Friedman Professor of Law, Columbia Law School, Robert Hillman, Edwin H. Woodruff Professor of Law, Emeritus, Cornell Law School, Arthur Leonard, Robert F. Wagner Professor of Labor and Employment Law, New York Law School, Carlin Meyer, Professor of Law, Emerita, New York Law School, Liam Murphy, Herbert Peterfreund Professor of Law, New York University Law, Norman S. Poser, Professor of Law, Emeritus, Brooklyn Law School, Samuel Weinstein, Associate Professor of Law, Cardozo Law, Amici Curiae.

Appeal No. 15034
Index No. 100738/14
Case No. 2021-00792

Supreme Court, Appellate Division, First Department, New York.

ENTERED February 22, 2022

Gladstein, Reif & Meginniss, LLP, New York (Katherine H. Hansen, Beth M. Margolis and Jessica E. Harris of counsel), for appellants.

Kelley Drye & Warren, LLP, New York (Barbara E. Hoey and Damon W. Suden of counsel), for respondents.

Bantle & Levy LLP, New York (Robert L. Levy of counsel), for amici curiae.

Judith J. Gische, J.P., Cynthia S. Kern, David Friedman, Jeffrey K. Oing, Anil C. Singh, JJ.

OING, J.

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We are asked to decide a novel issue – whether "economic security" guaranteed to tenured professors protects them from the imposition of a policy mandating a salary reduction if they fail to obtain sufficient grants to fulfill their extramural funding goals. The implication of our decision on the issue is clear – it would affect the meaning of and rights associated with academic tenure. The resolution of this issue involves a nationally and internationally leading academic and research institution – New York University (N.Y.U).

We begin our analysis with the concept of academic tenure, which has its genesis in a 1940 Statement of Principles on Academic Freedom and Tenure (1940 Statement), drafted jointly by the American Association of University Professors (AAUP)¹ and the Association of American Colleges (AAC). The 1940 Statement defines the rights and responsibilities associated with tenure, including the right to "permanent or continuous" employment and the right to "academic freedom" and "economic security". In 1948, NYU's Board of Trustees authorized the adoption of the 1940 Statement, incorporating it into the university's Faculty Handbook. As is relevant herein, Title I of the Faculty Handbook (issued April 2014), entitled "Statement in Regard to Academic Freedom and Tenure" (Academic Tenure Statement), provides, in relevant part:

"I. Authorization by the Board of Trustees [footnote omitted]

The Board of Trustees of New York University has authorized the following statement in regard to academic freedom and tenure at New York University. It reserves the right to amend this statement at its

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discretion, but no amendment shall take away a status of permanent or continuous tenure acquired before such amendment.

"II. The Case for Academic Freedom

Academic Freedom is essential to the free search for truth and its free expression. Freedom in research is fundamental

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to the advancement of truth. Freedom in teaching is fundamental for the protection of the rights of the teacher in teaching and of the student in learning. Academic freedom imposes distinct obligations on the teacher such as those mentioned hereinafter.

"III. The Case for Academic Tenure

Academic tenure is a means to certain ends, specifically: (1) freedom of teaching and research; and (2) a sufficient degree of economic security to make the profession of teaching attractive to men and women of ability."

Individual schools and colleges within NYU may promulgate their own policies; those may supplement but not supersede or replace the rights set forth in the Faculty Handbook.

Plaintiff Professor Herbert Samuels received his medical degree from defendant New York University School of Medicine in 1965.² NYU hired him in 1970 as an assistant professor of medicine, promoted him to associate professor in 1975, and awarded him tenure and promoted him to full professor in 1977. During his tenure at NYU, Professor Samuels has served in numerous high-level administrative positions, published extensively, served on journal editorial boards and as a grant reviewer for the National Institutes of Health (NIH), received many nationally and internationally recognized honors and awards, and was awarded millions of dollars in external grants.

Plaintiff Professor Marie Monaco received her Ph.D. in biochemistry from Columbia University. NYU hired her in 1980 as an assistant professor of physiology and biophysics, and awarded her tenure and promoted her to associate professor in 1987. Professor Monaco has published extensively, served as a grant reviewer for the NIH, the National Science Foundation, and the Department of Defense, led curriculum development,

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devoted many hours to service on faculty governance bodies, and was awarded millions of dollars in external grants. Professor Monaco has also served as Secretary and President of the NYU Chapter of the American Association of University Professors. Like that of other faculty members, Professors Samuels's and Monaco's employment at NYU has always been subject to the terms of the Faculty Handbook.

In May 2001, NYU offered Professor Samuels the position of Chairman of its Department of Pharmacology. The initial appointment letter provided no salary guarantee.³ Professor Samuels rejected it. NYU then provided Professor Samuels with another appointment letter.⁴ That

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letter set forth a "compensation package" indicating a specific salary and conditional benefits (final appointment letter). It was in contrast to the initial version, which merely proposed a salary tied to certain conditions. Neither letter contained a durational term. Professor Samuels agreed to the terms of the final appointment letter and accepted it. Although receiving two appointment letters and a tenure letter during her association with NYU, Professor Monaco never had letters of this kind, i.e., specifying a salary level or amount for an indefinite time.

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On November 3, 2009, NYU promulgated a new salary policy for its research faculty, known as the "Policy on Performance Expectations" or "Required Extramural Funding" policy (REF Policy), which took effect in 2010. The purpose of the policy was to define realistic expectations for research faculty productivity and teaching obligations. To that end, the policy provides a standardized approach to evaluating faculty for merit increases, salary adjustments, and incentive rewards. As to salary adjustments, the policy permits NYU School of Medicine to require faculty to secure extramural funding to cover 60% of their research salaries. A faculty member's failure to obtain at least 20% of his or her salary in grants for two years could result in a salary reduction of 20% each year. The policy allows for the gradual reduction of a faculty member's salary when the member has failed to meet the newly required performance expectations, but the salary cannot be reduced to a level below a base salary.

Sometime in 2012, NYU eliminated the Department of Pharmacology by merging the Departments of Biochemistry and Pharmacology into a new Department of Biochemistry and Molecular Pharmacology. As a result of this departmental restructuring, Professor Samuels's position as Chairman of the Pharmacology Department was eliminated. NYU offered him the position of Vice Chair of Education in the new department in an appointment letter that, by its terms, would "supersede and merge all prior proposals, understandings and other agreements, oral and written, relating to your employment." Critically, this new appointment letter would have subjected Professor Samuels to the REF Policy. Professor Samuels refused to sign it. Instead, he returned to his tenured faculty position and, pursuant to the terms of the final appointment letter, was paid a salary of $285,151 for the 2012–2013 academic year, which was equivalent to his pay in 2001, adjusted for inflation. His salary for 2013–2014 was nearly identical.

In November 2013, NYU informed Professor Samuels for the first time that he was subject to the REF Policy, and in around April 2014 informed him that, for the 2012–2013 academic year, he had secured grants amounting to only 0.4% of his salary – far less than the REF Policy's 60% requirement. Accordingly, effective September 1, 2014, NYU reduced his salary by $11,286. NYU reduced...