[Code of Federal Regulations]
[Title 29, Volume 4]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR1625.11]

[Page 332-334]
 
                             TITLE 29--LABOR
 
          CHAPTER XIV--EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
 
PART 1625_AGE DISCRIMINATION IN EMPLOYMENT ACT--Table of Contents
 
                        Subpart A_Interpretations
 
Sec.  1625.11  Exemption for employees serving under a contract of unlimited tenure.

    (a)(1) Section 12(d) of the Act, added by the 1986 amendments, 
provides:

    Nothing in this Act shall be construed to prohibit compulsory 
retirement of any employee who has attained 70 years of age, and who is 
serving under a contract of unlimited tenure (or similar arrangement 
providing for unlimited tenure) at an institution of higher education 
(as defined by section 1201(a) of the Higher Education Act of 1965).


[[Page 333]]


    (2) This exemption from the Act's protection of covered individuals 
took effect on January 1, 1987, and is repealed on December 31, 1993 
(see section 6 of the Age Discrimination in Employment Act Amendments of 
1986, Pub. L. 99-592, 100 Stat. 3342). The Equal Employment Opportunity 
Commission is required to enter into an agreement with the National 
Academy of Sciences, for the conduct of a study to analyze the potential 
consequences of the elimination of mandatory retirement on institutions 
of higher education.
    (b) Since section 12(d) is an exemption from the nondiscrimination 
requirements of the Act, the burden is on the one seeking to invoke the 
exemption to show that every element has been clearly and unmistakably 
met. Moreover, as with other exemptions from the ADEA, this exemption 
must be narrowly construed.
    (c) Section 1201(a) of the Higher Education Act of 1965, as amended, 
and set forth in 20 U.S.C. 1141(a), provides in pertinent part:

    The term institution of higher education means an educational 
institution in any State which (1) admits as regular students only 
persons having a certificate of graduation from a school providing 
secondary education, or the recognized equivalent of such a certificate, 
(2) is legally authorized within such State to provide a program of 
education beyond secondary education, (3) provides an educational 
program for which it awards a bachelor's degree or provides not less 
than a two-year program which is acceptable for full credit toward such 
a degree, (4) is a public or other nonprofit institution, and (5) is 
accredited by a nationally recognized accrediting agency or association 
or, if not so accredited, (A) is an institution with respect to which 
the Commissioner has determined that there is satisfactory assurance, 
considering the resources available to the institution, the period of 
time, if any, during which it has operated, the effort it is making to 
meet accreditation standards, and the purpose for which this 
determination is being made, that the institution will meet the 
accreditation standards of such an agency or association within a 
reasonable time, or (B) is an institution whose credits are accepted, on 
transfer, by not less than three institutions which are so accredited, 
for credit on the same basis as if transferred from an institution so 
accredited.


The definition encompasses almost all public and private universities 
and two and four year colleges. The omitted portion of the text of 
section 1201(a) refers largely on one-year technical schools which 
generally do not grant tenure to employees but which, if they do, are 
also eligible to claim the exemption.
    (d)(1) Use of the term any employee indicates that application of 
the exemption is not limited to teachers, who are traditional recipients 
of tenure. The exemption may also be available with respect to other 
groups, such as academic deans, scientific researchers, professional 
librarians and counseling staff, who frequently have tenured status.
    (2) The Conference Committee Report on the 1978 amendments expressly 
states that the exemption does not apply to Federal employees covered by 
section 15 of the Act (H.R. Rept. No. 95-950, p. 10).
    (e)(1) The phrase unlimited tenure is not defined in the Act. 
However, the almost universally accepted definition of academic 
``tenure'' is an arrangement under which certain appointments in an 
institution of higher education are continued until retirement for age 
of physical disability, subject to dismissal for adequate cause or under 
extraordinary circumstances on account of financial exigency or change 
of institutional program. Adopting that definition, it is evident that 
the word unlimited refers to the duration of tenure. Therefore, a 
contract (or other similar arrangement) which is limited to a specific 
term (for example, one year or 10 years) will not meet the requirements 
of the exemption.
    (2) The legislative history shows that Congress intented the 
exemption to apply only where the minimum rights and privileges 
traditionally associated with tenure are guaranteed to an employee by 
contract or similar arrangement. While tenure policies and practices 
vary greatly from one institution to another, the minimum standards set 
forth in the 1940 Statement of Principles on Academic Freedom and 
Tenure, jointly developed by the Association of American Colleges and 
the American Association of University Professors, have enjoyed 
widespread adoption or endorsement. The 1940

[[Page 334]]

Statement of Principles on academic tenure provides as follows:

    (a) After the expiration of a probationary period, teachers or 
investigators should have permanent or continuous tenure, and their 
service should be terminated only for adequate cause, except in the case 
of retirement for age, or under extraordinary circumstances because of 
financial exigencies.
    In the interpretation of this principle it is understood that the 
following represents acceptable academic practice:
    (1) The precise terms and conditions of every appointment should be 
stated in writing and be in the possession of both institution and 
teacher before the appointment is consumated.
    (2) Beginning with appointment to the rank of full-time instructor 
or a higher rank, the probationary period should not exceed seven years, 
including within this period full-time service in all institutions of 
higher education; but subject to the proviso that when, after a term of 
probationary service of more than three years in one or more 
institutions, a teacher is called to another institution it may be 
agreed in writing that his new appointment is for a probationary period 
of not more than four years, even though thereby the person's total 
probationary period in the academic profession is extended beyond the 
normal maximum of seven years. Notice should be given at least one year 
prior to the expiration of the probationary period if the teacher is not 
to be continued in service after the expiration of that period.
    (3) During the probationary period a teacher should have the 
academic freedom that all other members of the faculty have.
    (4) Termination for cause of a continuous appointment, or the 
dismissal for cause of a teacher previous to the expiration of a term 
appointment, should, if possible, be considered by both a faculty 
committee and the governing board of the institution. In all cases where 
the facts are in dispute, the accused teacher should be informed before 
the hearing in writing of the charges against him and should have the 
opportunity to be heard in his own defense by all bodies that pass 
judgment upon his case. He should be permitted to have with him an 
advisor of his own choosing who may act as counsel. There should be a 
full stenographic record of the hearing available to the parties 
concerned. In the hearing of charges of incompetence the testimony 
should include that of teachers and other scholars, either from his own 
or from other institutions. Teachers on continuous appointment who are 
dismissed for reasons not involving moral turpitude should receive their 
salaries for at least a year from the date of notification of dismissal 
whether or not they are continued in their duties at the institution.
    (5) Termination of a continuous appointment because of financial 
exigency should be demonstrably bona fide.

    (3) A contract or similar arrangement which meets the standards in 
the 1940 Statement of Principles will satisfy the tenure requirements of 
the exemption. However, a tenure arrangement will not be deemed 
inadequate solely because it fails to meet these standards in every 
respect. For example, a tenure plan will not be deemed inadequate solely 
because it includes a probationary period somewhat longer than seven 
years. Of course, the greater the deviation from the standards in the 
1940 Statement of Principles, the less likely it is that the employee in 
question will be deemed subject to ``unlimited tenure'' within the 
meaning of the exemption. Whether or not a tenure arrangement is 
adequate to satisfy the requirements of the exemption must be determined 
on the basis of the facts of each case.
    (f) Employees who are not assured of a continuing appointment either 
by contract of unlimited tenure or other similar arrangement (such as a 
State statute) would not, of course, be exempted from the prohibitions 
against compulsory retirement, even if they perform functions identical 
to those performed by employees with appropriate tenure.
    (g) An employee within the exemption can lawfully be forced to 
retire on account of age at age 70 (see paragraph (a)(1) of this 
section). In addition, the employer is free to retain such employees, 
either in the same position or status or in a different position or 
status: Provided, That the employee voluntarily accepts this new 
position or status. For example, an employee who falls within the 
exemption may be offered a nontenured position or part-time employment. 
An employee who accepts a nontenured position or part-time employment, 
however, may not be treated any less favorably, on account of age, than 
any similarly situated younger employee (unless such less favorable 
treatment is excused by an exception to the Act).

[44 FR 66799, Nov. 21, 1979; 45 FR 43704, June 30, 1980, as amended at 
53 FR 5973, Feb. 29, 1988]

[[Page 335]]