Saturday, April 17, 2010

Covenants not to Compete for Law Professors

Everyone reading this knows that most employment contracts are terminable at will. For the most part this favors employers who can fire someone for any reason or no reason. It is true that employees also can quit for any or no reason but the rule in practice benefits employers far more.

Have you heard of this rule? The contract is terminable at will by the employee but not by the employer. In fact, the employer cannot only terminate for cause but those causes are very narrowly defined. Pretty crazy, right? Maybe, but that is the contract that all tenured law professors have with their schools.

It gets stranger especially when you realize that public schools are spending the money of others. Say a school hires a new teacher. The teacher likely gets a reduced teaching load and summers off with pay in order to write and basically learn how to be a law teacher. If the new teacher prefers, new courses will be created. And, as a teacher becomes more senior he or she can insist on a new Center or a new L.L.M. program because that is more consistent with what strikes his or her fancy at the time. This drives hiring and other investments. These are all investments a School makes in a professor.

You might think of the professor as having gone through an apprenticeship program. Plus, and I know you will think this is petty, but it is not to law professors, the professor racks of tens of thousands of frequent flier miles at the School's expense which then are used for pleasure.

After all this investment the employee/professor can terminate at will and be off to a new school taking all the human capital the old school paid for and leaving the old school holding the bag as far as the courses and programs created to accommodate the newly departed. (There is one place were schools are unwilling to play the role of the dupe. In most instances a professor taking a sabbatical is required to come back for a limited period of time or pay up.)

Sounds like just the place for a covenant not to compete. You say "but law professors do not compete." Hogwash. If a chef moves to a new restaurant, does she compete with the old one? If you do not think there is competition, take a look at US News and World Report and the machinations schools go through to increase their rankings.

So why no covenants not to compete? Maybe they would not be enforceable. If so, why not contracts that bind professors to schools for some period of time with liquidated damages? Please don't say because the professors have all the leverage. For every law professor I think there are ten people at least who could be as effective who are rejected. And if hiring committees would get over their irrational obsession with Harvard and Yale the number would balloon as would the work ethic of those hired.

I'd like to say I know why Schools allow themselves to be robbed like this but I do not. I think what I have describe is true at both public and private schools so it cannot be the lack of accountability that comes for spending money in the public sector.


Anonymous said...

In some schools, housing bonuses and the like come with liquidated damages (you have to repay the entire bonus) if a professor leaves within a certain number of years of receiving the money. Not quite the same as what you are suggesting, of course, but in a similar spirit.

Jeffrey Harrison said...

Yes, it's pretty crazy. If a private sector business were run this way it would fold.

Anonymous said...

The problem with this idea is the perverse way in which faculty (productive faculty who deserve it) have to go about securing increases in compensation. In every public higher education institution I have come into contact with, the main way to increase one's compensation (and often the ONLY way) is to secure an offer from another school. If one is bound by a multi-year agreement, then one will effectively also be bound to a multi-year salary freeze.

Jeffrey Harrison said...

Good point. At my school it is not quite that bad but almost. Negotiation about the initial contract is a two way street. If the school wants a covenant not to compete just demand a higher starting salary.If they do not want that then tell them no covenant.