Wilson v. Clark Atlanta Univ., Inc.

Decision Date17 November 2016
Docket NumberA16A0997,A16A0996
Citation794 S.E.2d 422,339 Ga.App. 814
Parties Wilson et al. v. Clark Atlanta University, Inc. Clark Atlanta University, Inc. v. Wilson, et al.
CourtGeorgia Court of Appeals

Mitchell Douglas Benjamin, Charles Ronald Bridgers, Atlanta, for Appellant in A16A0996.

Matthew Rudolph Simpson, Burton F. Dodd, Atlanta, for Appellee in A16A0996.

Matthew Rudolph Simpson, Burton F. Dodd, Leah Ward Sears, Atlanta, for Appellant in A16A0997.

Mitchell Douglas Benjamin, Charles Ronald Bridgers, Atlanta, for Appellee in A16A0997.

Boggs, Judge.

This case relates to a decision by Clark Atlanta University, Inc. ("the university") to declare an enrollment emergency before laying off 54 faculty members, including those with tenure. Five of the laid off professors filed the complaint at issue here against the university.1 Following a jury trial, the professors were awarded damages for breach of contract and bad faith damages under OCGA § 13–6–11.2 In Case No. A16A0996, the professors assert that the trial court erred by limiting their award of contract damages to the severance pay amounts they would have received if the university had declared a "financial exigency" rather than an "enrollment emergency." In Case No. A16A0997, the university contends that the trial court erred in failing to grant its motion for judgment notwithstanding the verdict ("JNOV") on the professors' breach of contract claims and bad faith damages under OCGA § 13–6–11, as well as awarding the cost of medical insurance and prejudgment interest to the plaintiffs.3 For the reasons explained below, we affirm in part, vacate in part, and remand these cases for a new trial on the issue of damages for breach of contract and attorney fees under OCGA § 13–6–11.

Contract Between the Parties

The evidence presented at trial shows that the university employed each professor pursuant to a nine-month contract for the 2008-2009 academic year. With regard to four of the professors, each contract stated, "I am pleased to confirm your rank as tenured Assistant Professor ... for the 2008-09 academic year." (Emphasis in original.) The fifth professor's contract stated, "I am pleased to offer you a tenure-track appointment as Assistant Professor ... for the 2008-2009 academic year." (Emphasis in original.) While none of the contracts defined the term "tenured" or "tenure-track," each contract stated: "As a member of the faculty, you are subject to and shall abide by the provisions of The Clark Atlanta University Faculty Handbook and any approved revisions thereof, departmental, school and University policies, and the By-Laws of the Board of Trustees."

Faculty Handbook

The 152-page faculty handbook states in its introduction that it "is a document composed of University polices, practices, and procedures that are most directly related to faculty members' carrying out their responsibilities. It is intended to serve as a general guideline or statement of operating principles for conduct by faculty members of the University and by the University as a whole." Section 2.0 of the handbook provides:

This part contains the approved policies and procedures of the university. The administration and faculty shall be subject to and will abide by the policies, practices and procedures outlined in the Faculty Handbook. The Handbook, however, shall not be construed as a legally binding contract. Where the terms and provisions of an individual contract of a faculty member are inconsistent with the general policies contained herein, the provisions of the individual contract shall govern.

According to the handbook, a tenured professor is entitled to annual contract renewal unless certain conditions occur. The handbook provides, in part:

2.2.3 Continuous/Tenure Contracts
Continuous contract rights at Clark Atlanta University are given to ranked faculty members who have attained tenured status as provided for in Section 2.7 of this Handbook. Faculty members employed under continuous contract are entitled to the terms and conditions of employment that exist at the time of each annual renewal by Clark Atlanta University unless separated pursuant to the terms of Section 2.8 of this Handbook.
2.7.1 Definition of Probationary and Tenured Status
...
Conferral of tenure means that a faculty member with the rank of Associate Professor or higher is entitled to annual contract renewal by Clark Atlanta University until retirement or resignation as defined in Sections 2.8.1 and 2.8.2 unless there is proof of adequate cause (see Section 2.8.6, Dismissal for Cause), prolonged mental or physical illness (see Section 2.8.4), financial or enrollment emergency (as defined in Sections 2.8.5.2 and 2.8.5.3) or changes in the educational program (as defined in Section 2.8.5.1).
2.8 Separation
At times Clark Atlanta University or individual faculty members may find it necessary to sever their contractual relationship. To protect the interests of both parties, categories of separation are herein defined, and the policies and procedures related to each are set forth.
Types of Separation:
A. Resignation (2.8.1)
B. Retirement (2.8.2)
C. Nonreappointment (2.8.3)
D. Prolonged mental or physical illness (2.8.4)
E. Layoff/termination (2.8.5)
F. Dismissal for cause (2.8.6)
G. Action short of dismissal (2.8.7)
H. Progressive discipline of faculty members (2.8.8)
2.8.5 Layoff Before Expiration of Current Contract
Layoff is a severance action by which the university terminates the services of a ranked faculty member before the expiration of the current contract, without prejudice as to performance. ...
Reasons for layoff include, but are not limited to the following :
A. Major changes in curricular requirements, academic Programs or Departments.
B. Enrollment emergency.
C. Financial exigency.

(Emphasis supplied.)

2.8.5.2 Enrollment Emergency
Enrollment emergency shall be defined as either a sudden or unplanned progressive decline in student enrollment the detrimental financial effects of which are too great or too rapid to be offset by normal procedures outlined in the Handbook.
The number of FTE [full-time enrolled] students is calculated by the Registrar's Office and is used in determining an enrollment emergency.
The president, after consultation with the University Senate Executive Committee and the Executive Committee of the Board of Trustees, will make the policy declaration of a state of enrollment emergency to the university.
2.8.5.3 Financial Exigency
Financial exigency is a rare and serious institutional crisis which is defined as the critical, urgent need of the university to reorder its current fund monetary expenditures in such a way as to remedy and relieve its inability to meet the projected annual monetary expenditures with sufficient revenue.
The Board of Trustees, upon recommendation of the President, who will have consulted with the University Senate, decides a) whether a financial crisis meets the criteria; and b) whether a financial exigency should be declared. The University Senate participates in the decision that financial exigency exists through its Executive Committee and other committees deemed appropriate by the University Senate, which advises the president.
Subsequently, the faculty shall be represented in administrative processes relating to program reorganization or the curtailment or termination of instructional programs because of financial exigency through the Academic Council's Curriculum Committee, and the Academic Council. Faculty, however, shall not necessarily be represented in individual personnel decisions; the president and the Board of Trustees shall have final authority in all matters related to financial exigency.

The handbook also included very specific procedures for the layoff of faculty members within particular departments.

Declaration of Enrollment Emergency

The evidence presented at trial shows that from 1997 to 2005, enrollment at the university declined from 5,740 to 4,469 enrolled students. During this time, the university voluntarily phased out 13 programs.4 In 2006, after a new vice-principal in charge of enrollment, Darrin Rankin, was hired, enrollment went up. But in 2007, enrollment fell five percent to 4,271 and in the fall of 2008, enrollment fell by almost another five percent to 4,068.

A budget prepared earlier in the spring of 2008 was premised upon a projected "goal of 4,300 students." In order to attain needed revenue, the university needed approximately 4,000 students. In October 2008, the university revised its annual operating budget downward almost $4 million based upon 200 fewer students enrolling in the fall of 2008 than had been projected. At that time, the university implemented cost-cutting measures such as a hiring freeze, restricting travel expenses, layoff of staff, and reduced operating budgets. Although the revised budget predicted a savings of close to $4 million from the measures, the president testified that they saved "about a million, 2 million, somewhere in that range."

The president of the university presented the idea of an enrollment emergency and layoff to the Board of Trustees in December 2008, following the start of the Great Recession. At the time, he was "very certain" that the recession would seriously harm enrollment numbers, and he predicted that there would be only 3,400 students in the spring semester.

Rankin disagreed with the president's projection and testified that he predicted an enrollment in the spring of 2009 closer to 4,000 students. In his view, the president was being "overly pessimistic" and he "had no idea what he was basing this 3,400 number on. It seemed to come out of the air." He explained that his own "projections were based on data, based on trends, based on experience." He testified that neither the president nor the Board of Trustees sought his advice about the existence of an enrollment emergency. In his view, "a 6 to 15 percent drop [in students] from the fall to spring" was not an enrollment emergency...

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