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Articles on Law, Science, and Engineering

PART IV: University Faculties and Expert Consultants


Fiduciary Duties of University Faculties

The duties of college and university faculty members pose an interesting legal question: Does a faculty member's academic freedom supersede his fiduciary duty to his institution? While academic freedom is often invoked as if it provided a faculty member with carte blanche immunity, in reality, its protections are very limited.

As described in Part I of this series, faculty members are clearly agents of their institutions. This is because, by accepting employment, a faculty member agrees to act on behalf of his institution in conducting its business. This causes the faculty member to be a fiduciary to his institution, that is, a person having a duty created by his employment to act primarily for the benefit of his institution in all matters connected with his employment.

Furthermore, as discussed in Part III of this series, the fact that faculty members are highly skilled and function within a framework of "academic freedom" does not make them independent contractors. While it is true that college and university faculties are entitled to a certain amount of freedom in their research and teaching activities, faculty members are nevertheless in the traditional role of master and servant as employees of their institution. If the content of their teaching or the direction of their research strays too far from the administratively-recognized area of their competence, there is little or no justification remaining for traditional claims for academic freedom.

"Academic freedom" exists due to the beneficence of universities. However, the concept, which typically applies only to "teachers," arises from an elitist philosophy which is in tension with the more egalitarian philosophy of the law (See Charles Walter, Engineering and the Law Part VIII: The Pitfalls of Utilitarianism, 7(2) IEEE ENGINEERING IN MEDICINE AND BIOLOGY MAGAZINE 52 (1988)). The philosophy underlying the legal system in the United States encourages the concept of "freedom" by discouraging special freedoms for specific groups, including teachers, especially when such special freedoms infringe on others outside the privileged group.

Traditionally, universities have been operated by and for the convenience of their faculties and, to a lesser extent, the convenience of their students. Individual faculty members were (and still are) relatively free to exploit their positions for personal profit. This exploitation ranges from using student research assistants to work on a book whose copyright royalties inure to the faculty member's benefit, to private consulting and conducting other private business activities on university time, to the appropriation for private gain of new technology and other intellectual property developed at the university. These activities, unless done with the employer's permission, are all breaches of the employee-agent's fiduciary duty to his employer.

Universities and colleges have, and have always had, the right to demand that faculty members adhere to their fiduciary obligations and not profit at their institutions' expense. Until recently, many academic institutions have not chosen to enforce their right to expect fidelity from their employees. Many faculty members mistakenly believe that this lack of enforcement makes profiting at their universities' expense a part of their "academic freedom."

University and college policies relating to academic freedom vary from institution to institution. Typically, academic freedom means that a teacher is free to conduct qualified research and publish the results, discuss course material in the classroom, and speak and write as an ordinary citizen without institutional censorship or discipline. However, none of these freedoms exists without limit. Typically, a teacher's freedom in research and publication is subject to adequate performance of the teacher's other academic duties, with institutional permission usually required for any research conducted for pecuniary return. Typically, a teacher's freedom in the classroom does not extend to controversial material which has no direct relation to the subject. And teachers acting under the protection of academic freedom, because of their special position in the community, typically have special obligations to be accurate, exercise appropriate restraint, show respect for the opinion of others, and make every effort to indicate that they are not speaking for their institution.

The United States Supreme Court made it clear in University of Pennsylvania v. EEOC, 110 S. Ct. 577 (1990), that academic freedom is a very limited concept. It is limited to the protection of a faculty member's right of free speech, to the extent that such speech does not interfere with his professional responsibilities. (A professor who contracts to teach chemistry does not have the academic freedom to use his chemistry classes for political discussions.) It is not a shield for otherwise fraudulent business activities.

Nor is the fact that colleges and universities are "nonprofit organizations" sufficient to deny them protection from disloyal employees or unfair acts by ex-employees. Since no modern college or university can survive without public support, the duty of faculty members is especially strong because of the reliance of the public on its academic institutions.

In short, college and university faculties are sufficiently under the direction and control of the employing institution to be classified as servants. For the reasons outlined in Part III of this series, since faculty members are agents, it is clearly to their advantage to be servants rather than independent contractors.

The usual functions for which faculty members are employed include scholarly research, teaching and contributing to the community welfare. In addition, faculty members participate in the selection of faculty, promotion and tenure decisions, and other administrative matters. Accordingly, a faculty member has a fiduciary duty to his institution to act primarily for the benefit of the institution in all matters related to research, teaching, university administration and community welfare.

Nearly all of these employment functions can cause conflict between the interests of the institution and the personal interests of the faculty member. As described in Part I of this series, that is why the law establishes the relationship between the faculty member and his institution as a fiduciary one: to insure that in all instances the obligation is that the faculty member choose the interests of his institution over his own interests or the interests of any other. This requirement of loyalty and obedience to the institution is the price each faculty member pays for accepting his paycheck each month.

If the faculty member breaches this duty, he should no longer feel entitled to his benefits. Moralistic arguments that there is a greater good which the faculty member is somehow inspired to divine and which command his obedience and loyalty at a higher level are merely self-serving as long as he continues to accept employment. If he wants to serve these higher goals he should do so at his own expense, not that of a college or university.

For example, even though a faculty member might be free to publish the results of his research, he must consider the interests of his institution when deciding whether or not to do so. If the institution might be interested in patenting the subject matter of his research, publication must be delayed so as to not jeopardize its patentability. This consideration has become especially important as colleges and universities have shifted from nonproprietary research to proprietary research funded by commercial interests.

As the employer of the inventor or creator of this intellectual property, an institution has a substantial proprietary interest in the property. Since public disclosure of a discovery can deprive an institution of the opportunity of obtaining a patent, potentially patentable discoveries are now kept confidential, at least until ready for disclosure in the patent application, and often until made public in the issued patent. Today, institutions must protect the information and scientific expertise developed by their employees so that patents on discoveries and copyrights on books and computer software will inure to the benefit of the institution and its sponsors.

Similarly, a faculty member has a duty to support curricula that serve the interests of students, irrespective of whether the courses contain material related to his own specific interests. Faculty members should make administrative decisions according to the interests of the whole institution rather than the parochial interests of a single college or department.

Since all of the fiduciary duties described in Part II of this series apply fully to faculty members, the standard of behavior practiced when moving to a new institution should conform with these minimum standards of fairness required by law. Faculty members who negotiate research grants for their institution require permission to continue such negotiations after moving to another institution. Even where such grants would be tailored to support specific research to be conducted by the principal investigator, principles of the scientific method preclude the argument that the employer-institution's interest in having the research conducted runs with any specific individual employed to conduct the research.

Many faculty members have knowledge of confidential proprietary information that cannot be used or disclosed without permission from the institution that employed them during their research that generated the information. It doesn't matter that the faculty member himself thought up the ideas, experiments, theories, etc. used in his research: Unless agreed otherwise, the fruits of his labors belong to the institution that employed him to do the research. If a faculty member resigns and accepts new employment, including a position at a different institution, or to begin a new company that will commercially develop the research, secret information known to him from his employment at his previous institution cannot be used or disclosed. Both the new institution or business and the ex-faculty member who violate this rule may be sued by the previous employer. Further, the previous institution may establish claims to royalties or other income derived from patents or copyrights obtained as a result of the research.

Next - Fiduciary Duties of Expert Consultants


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