Non-Renewal of Contract or Termination?

Employers often think that not renewing an employee’s contract is somehow qualitatively different from a termination of employment.  In some cases, and in certain limited circumstances, that may be true.  It is not true, however, with regard to statutory retaliation claims (e.g., my contract was not renewed because I engaged in activity protected by Title VII, the ADA, the FLSA, or some other statute containing anti-retaliation provisions).  In these cases, the issue is not whether the employer was under an obligation to renew an employment contract, but why the employer chose not to renew.  Lipshultz v. Holy Family University, a recent case from the Eastern District of Pennsylvania, illustrates this point, as well as the difficulties associated with settling a claim of employment discrimination by offering reinstatement.

Harriett Lipshultz, age sixty-eight, was an adjunct Spanish professor at Holy Family University (the “University”).  She was employed in that capacity for approximately ten years, between 2002 and 2012, during which she taught multiple courses each semester and generally received positive reviews for her teaching.  Like other adjunct faculty, Lipshultz was hired on a semester-to-semester basis.  In March 2012, Lipshultz was informed that her services would no longer be needed following the spring 2012 semester.  The University explained that it had expanded its roster of part-time faculty, and it was rotating teaching opportunities to all those involved to ensure high quality and diverse instruction.

Lipshultz filed an age discrimination lawsuit against the University.  The lawsuit was settled in June 2014.  In exchange for dismissal of the claim, the University made a small monetary payment, and it agreed that Lipshultz would be assigned to teach two introductory Spanish courses for the fall 2014 semester.  The settlement agreement provided that these teaching assignments would be made pursuant to the “University’s standard appointment letter, and [t]his appointment … shall not be construed to constitute an offer, promise, or guarantee of further or continuing assignments other than those offered.”

Lipshultz taught two classes during the fall 2014 semester, but she was not offered a contract for the spring 2015 semester.  When the University told Lipshultz of its decision, it identified several areas of concern with her job performance, including: (a) an issue with Lipshultz’s syllabus, which the University said was missing key components; (b) teaching flaws revealed by an in-class observation of her Spanish 101 class; and (c) the fact that Lipshultz met with a student in the student lounge and commenting on the student’s classroom performance in front of other students.  The University considered this last area of concern a potential violation of the Federal Educational Rights and Privacy Act.  According to Lipshultz, when she asked if this decision meant she could never return to the University as a professor, she was told, “after all, you came back here under something like unusual circumstances.”

Lipshultz filed a claim for retaliation under the Age Discrimination in Employment Act (ADEA).  The claim was based on the previously settled lawsuit.  The University argued that it did not retaliate against Lipshultz for the prior lawsuit, because it had not taken adverse action against her.  It contended that its decision not to renew Lipshultz’s contract was different from terminating her employment.  The court flatly rejected the argument, finding that the ADEA’s anti-retaliation protections apply whether someone is discharged or simply not selected for contract renewal.  Essentially, a decision not to renew is treated as the equivalent of a decision not to hire, and the anti-retaliation language of the ADEA protects not only employees, but applicants for employment.

The Court rejected the University’s other arguments for summary judgment, because viewing the evidence in the light most favorable to Lipshultz, the Court was satisfied that a jury needed to evaluate issues of witness credibility and to determine whether the University’s reasons for not offering Lipshultz’s another adjunct contract were the real reasons for its decision or just a pretext for retaliation.

Be careful when an employer someone says it is not terminating an employee, but simply choosing not to renew her contract.  There may not be as big a difference as you think.

Lipschultz v. Holy Family Univ., No. 15-5760, (E.D. Pa. Feb. 17, 2017).

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