Tag: Legal

ACLU warns districts not to display Ten Commandments amid legal battles
This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:
- Increasingly popular Ten Commandments laws and proposals in Republican-leaning states are being struck down in the federal court system, with multiple recent cases saying such statutes violate the separation of church and state.
- At least three states — Texas, Arkansas and Louisiana — have passed Ten Commandments laws requiring school districts to display them in classrooms, which have all been struck down in court in recent weeks. Several more states have introduced the laws in recent legislative sessions.
- Civil rights organizations, including the American Civil Liberties Union, are warning districts in all three states with Ten Commandment laws not to display the religious edicts.
Dive Insight:

Ten Commandments laws are sweeping many of the same states that also passed “Don’t Say Gay,” parental choice and “anti-critical race theory” laws in recent years.

However, this particular wave of legislation has elicited ire from judges as lawsuits in all three states make their way through the court system.

The laws are “part of a coordinated strategy among several states to inject Christian religious doctrine into public-school classrooms,” said one Arkansas judge in August when blocking that state’s version in four school districts.

“These states view the past decade of rulings by the [U.S.] Supreme Court on religious displays in public spaces as a signal that the Court would be open to revisiting its precedent on religious displays in the public-school context,” said U.S. District Court Judge Timothy Brooks of the U.S. District Court for the Western District of Arkansas in his order.

However, this issue was already addressed by the Supreme Court in the 1980s with Stone v. Graham. That decision said that a Kentucky statute requiring a copy of the Ten Commandments in every public school classroom — similar to the laws being introduced now — violated the Constitution.

However, since that decision, the Supreme Court bench and its approach to the separation of church and state has changed — including the legal theory underlying the Stone decision, according to Supreme Court case experts.

In the meantime, however, ACLU has warned districts to take a step back from the state laws as a result of Brooks’ and other judges’ decisions to block them.

“Even though your district is not a party to the ongoing lawsuit, all school districts have an independent obligation to respect students’ and families’ constitutional rights,” an Aug. 21 letter from ACLU to Texas districts read. Any district that displays the Ten Commandments, even if the court order doesn’t apply to them, “will be violating the First Amendment and could be inviting additional litigation,” ACLU said.
Source link
September 5, 2025
Indianapolis Public Schools to Transfer Two Closed School Buildings to Settle Legal Battle – The 74

Get stories like this delivered straight to your inbox. Sign up for The 74 Newsletter

Indianapolis Public Schools will put one closed school building up for lease or sale to charter schools for $1 and will sell another to a local nonprofit, the district announced Friday.

The transfer of the buildings that used to house Raymond Brandes School 65 and Francis Bellamy School 102 stems from an Indiana Court of Appeals ruling in a lengthy battle over the state’s so-called $1 law, which requires districts to transfer unused school buildings to charter schools for the sale or lease price of $1. The court ruled in May that IPS must sell School 65.

The announcement also comes as the Indianapolis Local Education Alliance ponders how to solve facility challenges for both IPS, which continues to lose students in its traditional schools every year, and charters, which frequently struggle to acquire school buildings.

The district said in a statement that Damar Charter Academy, a school for students with developmental and behavioral challenges in Decatur Township, had reached out to IPS to express interest in School 65 — which is located on the southeast side of IPS. The district does not have the power to pick which charter school it will sell a building to — if more than one charter school is interested, state law requires a committee to decide.

On Monday, Damar confirmed to Chalkbeat that it is interested in School 65.

In the statement, the district said it would prefer to “move forward with disposition” of School 65 through a collaborative community process.

“But, we respect the court’s decision and will proceed in full compliance with that order,” IPS Superintendent Aleesia Johnson said. “If the building is claimed by a charter school, we think Damar has a strong record of serving some of the most vulnerable and underserved students in our city and I have confidence that acquiring Raymond Brandes will allow them to expand their operations to serve even more students.”

Meanwhile, the district will sell School 102 to Voices, a nonprofit that works with youth, for $550,000. The district had already leased the school on the Far Eastside to Voices, which also shares the space with two other youth programs.

“Indianapolis Public Schools is committed to continuing to engage with our community on thoughtful re-use of our facilities and to being good stewards of our public assets,” Johnson said in a statement. “We are excited to move forward with our planned sale of the Francis Bellamy 102 building to VOICES and to see their impact in serving our community continue for many years into the future.”

This story was originally published on Chalkbeat. Chalkbeat is a nonprofit news site covering educational change in public schools.

Get stories like these delivered straight to your inbox. Sign up for The 74 Newsletter

Source link

August 31, 2025
The University of Kentucky suspended a professor for criticizing Israel. Now, FIRE’s Faculty Legal Defense Fund is stepping up to defend him.

LEXINGTON, K.Y., Aug. 7, 2025 — A University of Kentucky professor suspended for criticizing Israel’s conduct in the Gaza war now has legal representation thanks to the Foundation for Individual Rights and Expression.

Ramsi Woodcock had established a steady career as a law professor at UK, where he has taught for seven years. He earned tenure in 2022 and was promoted to full professor on July 1.

Less than two weeks later, the vice provost of the university informed the professor that the university received unspecified complaints about Woodcock’s criticisms of Israel outside the classroom on his personal website and at conferences.

The university failed to respond to Woodcock’s requests for copies of the complaints. On July 18, university officials removed Woodcock from teaching and banned him from campus. The university also sent a message to its campus condemning Woodcock’s views as “repugnant” and publicly announcing an investigation.

Specifically, the university took issue with a petition Woodcock circulated to other law professors across the country that called for military action against Israel because of its war in Gaza, as well as his arguments that Israel should cease to exist.

“This isn’t complicated,” said Graham Piro, FIRE’s Faculty Legal Defense Fund fellow. “Woodcock’s arguments about Israel are clearly protected speech on a matter of public concern, and as a faculty member at a public institution, he has the right to voice his ideas, regardless of whether others find them objectionable. And reprimanding a professor over one set of views opens the door to further restrictions on other opinions down the road.”

With the help of the FLDF, Woodcock is being represented by Joe F. Childers of Joe F. Childers & Associates. Childers will work to lift Woodcock’s suspension so he can return to teaching in the classroom and continue speaking freely outside of it.

“Punishing me for my views on Israel sends a terrifying message to students and colleagues: voice the ‘wrong’ opinion on a sensitive subject and face consequences from the university,” Woodcock said. “It’s not only my career that’s at stake — it’s about whether the University of Kentucky will continue to exist as an institution that encourages and permits free thought and expression.”

The Foundation for Individual Rights and Expression (FIRE) is a nonpartisan, nonprofit organization dedicated to defending and sustaining the individual rights of all Americans to free speech and free thought—the most essential qualities of liberty. FIRE recognizes that colleges and universities play a vital role in preserving free thought within a free society. To this end, we place a special emphasis on defending the individual rights of students and faculty members on our nation’s campuses, including freedom of speech, freedom of association, due process, legal equality, religious liberty, and sanctity of conscience.

CONTACT:

Karl de Vries, Director of Media Relations, FIRE: 215-717-3473; [email protected]

Source link

August 7, 2025
LAWSUIT: FIRE challenges unconstitutional provisions Rubio uses in crusade to deport legal immigrants over protected speech
- The First Amendment trumps the statutes that the government is abusing to deport people for speech alone
- This lawsuit seeks a landmark ruling that the First Amendment forbids the government from deporting lawfully present noncitizens for constitutionally protected speech
- FIRE attorney: ‘In a free country, you shouldn’t have to show your papers to voice your opinion’
SAN JOSE, Calif., Aug. 6, 2025 — Today, the Foundation for Individual Rights and Expression sued Secretary of State Marco Rubio, challenging two federal immigration law provisions that give him unchecked power to revoke legal immigrants’ visas and deport them for protected speech.

“In the United States of America, no one should fear a midnight knock on the door for voicing the wrong opinion,” said FIRE attorney Conor Fitzpatrick. “Free speech isn’t a privilege the government hands out. Under our Constitution it is the inalienable right of every man, woman, and child.”

But since March, Rubio and the Trump administration have waged an assault on free speech, targeting foreign university students for deportation based on bedrock protected speech like writing op-eds and attending protests. Their attack is casting a pall of fear over millions of noncitizens, who now worry that voicing the “wrong” opinion about America or Israel will result in deportation.

Noncitizens in the United States have First Amendment rights. Despite that, Rubio is wielding two provisions of the Immigration and Nationality Act to target lawfully present noncitizens for their opinions.
- The first allows the secretary of state to initiate deportation proceedings against any noncitizen for protected speech if the secretary “personally determines” the speech “compromises a compelling foreign policy interest.”
- The second enables the secretary of state to revoke the visa of any noncitizen “at any time” for any reason.
As FIRE’s lawsuit explains, the provisions are unconstitutional when used to revoke a visa or deport someone for speech the First Amendment protects.

The Trump administration is proudly using the provisions to revoke the visas of and deport lawfully present noncitizens for their speech if the government deems it anti-American or anti-Israel. Rubio used the first provision to target Columbia University student Mahmoud Khalil for protected pro-Palestinian speech and the second to target Tufts University student Rümeysa Öztürk for coauthoring an op-ed.

Rubio and the Trump administration claim — as all censors do — that this time is different. They claim that this political speech comes from noncitizens, which therefore warrants setting aside America’s protection of free speech.

That’s wrong. America’s founding principle is that liberty comes not from the government, but is an inherent right of every individual. Every person — whether they’re a U.S. citizen, are visiting for the week, or are here on a student visa — has free speech rights in this country.

“Two lawful residents of the United States holding the same sign at the same protest shouldn’t be treated differently just because one’s here on a visa,” said FIRE Legal Director Will Creeley. “The First Amendment bars the government from punishing protected speech — period. In our free country, you shouldn’t have to show your papers to speak your mind.”

Plaintiffs in FIRE’s lawsuit represent the wide range of groups and individuals whose speech is threatened by the continued assault on noncitizens’ protected speech:
- The Stanford Daily, the independent, student-run newspaper at Stanford University, where writers with student visas are declining assignments related to the conflict in the Middle East, worried that even reporting on the war will endanger their immigration status
- Jane Doe and John Doe, two legal noncitizens with no criminal record who engaged in pro-Palestinian speech and now fear deportation and visa revocation because of their expression
“There’s real fear on campus and it reaches into the newsroom,” said Greta Reich, editor-in-chief of The Stanford Daily. “I’ve had reporters turn down assignments, request the removal of some of their articles, and even quit the paper because they fear deportation for being associated with speaking on political topics, even in a journalistic capacity. The Daily is losing the voices of a significant portion of our student population.”

There’s also historical context that should give the government pause. Congress passed the Alien and Sedition Acts 225 years ago. One of those acts allowed President John Adams to deport noncitizens if he thought they posed a “danger” to the country. It was one of the most unconstitutional laws in our nation’s history and died a quick death two years later, after the acts contributed to Adams’ resounding loss in the 1800 presidential election to Thomas Jefferson.

FIRE aims to stop the government’s use of the two provisions that stand counter to our ideals as a nation: Provisions that — in their expansive scope and unchecked authority — are more at home in countries like China and Russia than in a free America. By defeating these provisions, no administration of any party will be able to weaponize them against individuals for expression disfavored by the government.

FIRE moved for a preliminary injunction to stop the government from abusing the visa provision while the case is ongoing.

Marc Van Der Hout, Johnny Sinodis, and Oona Cahill at Van Der Hout LLP are serving as local and advisory counsel on the case.

From today’s lawsuit: “Our First Amendment stands as a bulwark against the government infringing the inalienable human rights to think and speak for yourself.”

The Foundation for Individual Rights and Expression (FIRE) is a nonpartisan, nonprofit organization dedicated to defending and sustaining the individual rights of all Americans to free speech and free thought — the most essential qualities of liberty.

CONTACT:

Daniel Burnett, Senior Director of Communications, FIRE: 215-717-3473; [email protected]
Source link
August 6, 2025
America First Legal Urges DOJ to Investigate Hopkins for DEI

America First Legal has called on the U.S. Department of Justice to investigate the Johns Hopkins University School of Medicine for alleged racial discrimination, according to The Baltimore Banner.

In a 133-page complaint filed Thursday, the conservative legal group, run by President Trump’s deputy chief of staff, Stephen Miller, urged the DOJ to investigate Johns Hopkins “for its systemic, intentional, and ongoing discrimination within its School of Medicine on the basis of race, sex, ethnicity, national origin, and other impermissible, immutable characteristics under the pretext of ‘diversity, equity, and inclusion’ (‘DEI’) in open defiance” of civil rights laws, Supreme Court precedent and presidential executive orders.

“Johns Hopkins has not merely preserved its discriminatory DEI framework—it has entrenched, expanded, and openly celebrated it as a cornerstone of its institutional identity,” the complaint reads, adding that identity-based preferences are “embedded” in the medical school’s curriculum, admissions processes, clinical practices and administrative operations.

The America First Legal complaint singles out certain medical school divisions and programs for seeking to recruit a “diverse applicant pool,” including residency programs in gynecology and obstetrics, emergency medicine, dermatology, anesthesiology and critical care.

But the complaint leaves room for attacks beyond the medical school, noting that DEI practices “are part of a comprehensive, university-wide regime of racial engineering.”

Johns Hopkins has not responded to America First Legal’s complaint.

But the university has lately taken pains to address what critics have called a lack of viewpoint diversity on campus, engaging in civic education initiatives and partnering with the conservative American Enterprise Institute to “convey the importance of rooting teaching and research with implications for the nation’s common life in a broad range of points of view,” according to the university.

Source link

July 21, 2025
Trump Administration Freezes Education Funds to 23 States, Legal Challenges Follow

In a move that has sparked legal action from nearly half the country, the Trump administration has frozen more than $6 billion in education funds to 23 states and the District of Columbia. The decision, issued by the U.S. Department of Education in late June 2025, follows a broader pattern of halted federal support for state and local programs, many of which were previously protected by court rulings.

The funding pause is linked to the Trump administration’s January 2025 memorandum from the Office of Management and Budget (OMB Memo M-25-13), which directed federal agencies to withhold disbursements from thousands of grant and aid programs. The stated purpose was to align spending with the administration’s priorities, though the policy has been challenged as lacking legal authority. The memo was later rescinded, but its effects have continued through new administrative directives.

In this latest instance, the Department of Education cited a need to review Title II and Title IV programs under the Elementary and Secondary Education Act (ESEA), including programs for teacher development, after-school enrichment, and English language learners.

The decision disproportionately affected Democratic-led states, with California alone facing the loss of $939 million.

States impacted include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.

On June 30, attorneys general from those jurisdictions filed suit in Rhode Island, arguing that the Education Department lacks the authority to unilaterally withhold funds that Congress has already appropriated. They assert that the freeze violates both statutory obligations and constitutional principles, including the separation of powers. The lawsuit follows earlier court rulings from January and February in which judges issued temporary restraining orders and preliminary injunctions to stop the administration from freezing other categories of grants. Those cases were largely brought by Democracy Forward, a legal advocacy organization that has played a leading role in contesting the OMB memo.

Although the administration has defended the funding freeze as a necessary review of federal spending, courts have questioned the legality of such actions. In March, a federal court criticized the lack of statutory basis for the freezes, and Democracy Forward issued a detailed brief outlining the harm to nonprofit programs, environmental projects, and public services. That brief emphasized the breadth of affected programs and the legal overreach involved.

The broader legal battle continues. While some funding has been restored through court action, the Education Department’s freeze represents a new front in ongoing disputes between the Trump administration and state governments. Plaintiffs argue that withholding these funds sets a precedent that undermines established appropriations and legislative intent. More lawsuits are expected.

The Trump administration’s freeze on education funding to 23 states opens several legal and political paths, each with different implications depending on how courts and federal agencies proceed. Below are the most likely possibilities based on current legal precedent, federal authority, and political conditions:

Courts Overturn the Freeze, Funding Restored

The most immediate and probable outcome is that courts will order the Education Department to restore the frozen funds, as they did earlier this year with other parts of the federal grant freeze. Courts have already found that the administration lacked statutory authority to suspend programs that Congress explicitly funded. If this logic holds, the education freeze will likely be ruled unlawful and states will receive the funds—possibly with retroactive reimbursement for missed payments.

Partial Restoration, Continued Legal Conflict

The administration may attempt to restore only some of the funding—especially those programs that have garnered the most public or bipartisan support—while continuing to block others. In this scenario, the courts could issue narrow rulings or temporary injunctions that apply to specific funding streams. This would prolong litigation and administrative uncertainty, potentially pushing the issue into 2026 or the next presidential term.

Supreme Court Intervention

If the lower courts issue conflicting rulings or the Trump administration loses significant cases, the Justice Department may seek Supreme Court review. The Court could use this as an opportunity to clarify executive authority over grant disbursement. Depending on the composition of the Court and its interpretation of separation of powers, this could either curtail future executive control over federal spending—or affirm broader authority to “review” or condition funding.

Legislative Response

Congress, particularly if Democrats control at least one chamber in 2025-2026, could pass legislation to prohibit similar funding freezes in the future or require automatic disbursement of appropriated funds. However, any such legislation would likely face veto threats or require a veto-proof majority, making this a longer-term fix rather than a short-term remedy.

Further Administrative Retaliation or Expansion

If courts delay action or issue narrow rulings, the Trump administration could expand the use of funding freezes to other agencies or sectors, testing the limits of executive control. The precedent set by OMB Memo M-25-13 could be repurposed in other contexts—such as public health, housing, or infrastructure—creating broader instability in federal-state relations.

Political Mobilization and Fallout

States may respond by increasing pressure on Congress and federal courts while using the issue as a rallying point in the 2026 midterm elections. Public schools, educators, and parents may amplify the issue if it leads to job losses, school closures, or reduced services. The freeze could become a political liability for the Trump administration, especially in battleground states that rely heavily on federal education support.

In sum, the most likely near-term result is court-mandated restoration of the withheld funds. But depending on how aggressively the administration continues to test the boundaries of federal authority, the dispute could escalate into a broader constitutional and political conflict over the power to allocate and control federal funds.

Sources

Democracy Forward, “Initial Policy Memo on Federal Grant Freezes,” March 12, 2025.

CBS News, “Democratic states sue Trump administration over halted education funds,” July 1, 2025.

Reuters, “Trump asks US court to end judicial overreach, allow funding freezes,” February 11, 2025.

Wikipedia, “2025 United States federal government grant pause.”

The Daily Beast, “GOP Lawmakers Blast Trump Chief Russell Vought for Freezing Education Money,” July 2025.

The Guardian, “Nothing like this in American history: the crisis of Trump’s assault on the rule of law,” March 9, 2025.

Source link

July 18, 2025
Legal defense fund will seek to fill gap left by OCR reduction

This audio is auto-generated. Please let us know if you have feedback.

Education attorneys are set to launch a new organization by fall 2025 that would defend students’ civil rights in court and also track and report civil rights data. The effort, according to its founding nonprofit, aims to fill the gap left by the Trump administration’s dismantling of the U.S. Department of Education and its civil rights enforcement arm.

The Public Education Defense Fund will be launched by the National Center for Youth Law, which advocates for educational equity among other youth-related issues. It will contract with former Office for Civil Rights attorneys.

“At a time when civil rights protections for students are under unprecedented attack, preserving those rights is not negotiable — it’s vital,” said Johnathan Smith, chief of staff and general counsel at NCYL. “We can’t stand by while the federal government abandons its responsibility to uphold the basic rights of children and young people in this country.”

As part of the administration’s efforts to “end bureaucratic bloat” and send educational control to the states, U.S. Secretary of Education Linda McMahon laid off half of the Education Department’s staff as part of what she called the agency’s “final mission.” The move was followed by an executive order from President Donald Trump calling for the department to be shut down to “the maximum extent appropriate and permitted by law.”

The Education Department’s Office for Civil Rights took a major blow, with the department shuttering seven of the 12 regional offices that were in charge of more than half of the nation’s open civil rights cases. Over 200 OCR employees were laid off as part of the reduction in force.

Under the Biden administration, those employees carried a load of more than 40 cases per person. Attorneys fired as part of the reduction in force were in charge of investigating civil rights complaints related to discrimination and harassment in schools, as well as overseeing resolution agreements with school districts. These agreements guide the school systems involved in making policy changes to improve educational access, especially for historically marginalized students.

Prior to the announcement of the Public Education Defense Fund, NCYL filed a lawsuit against the Education Department in March to challenge the changes at the OCR. The lawsuit said the civil rights enforcement arm “stopped investigating complaints from the public based on race or sex discrimination, it cherry-picked and, on its own initiative, began targeted investigations into purported discrimination against white and cisgender students.”

Source link

May 27, 2025
US to expand powers to terminate students’ legal status

The expansion of government powers would hand Immigration and Customs Enforcement (ICE) the authority to cancel a student’s legal status if the visa they used to enter the US is revoked.

Previously, a visa revocation would only impact a person’s ability to return to the country but would not end their permission to stay in the US as a student.

The new guidelines were outlined in an ICE document shared in a court filing on April 28, according to Associated Press.

Attorneys for international students said in court the new reasons would allow for faster deportations and would justify many of the Trump administration’s terminations of thousands of students’ legal status on the database maintained by ICE.

“This just gave them carte blanche to have the State Department revoke a visa and then deport those students, even if they’ve done nothing wrong,” said immigration attorney Brad Banias, as reported in AP.

When approached for comment, a State Department spokesperson said it “will continue to work closely with the Department of Homeland Security to enforce zero tolerance for aliens in the United States who violate US laws, threaten public safety, or in other situations where warranted”.

The PIE is yet to hear back from ICE.

This just gave them carte blanche to have the State Department revoke a visa and then deport those students, even if they’ve done nothing wrong

Brad Banias, immigration attorney

Sector leaders welcomed last week’s news that the government was restoring students’ legal status while it developed a new framework for future terminations, though the proposed vastly expanded new powers come as another blow for international students and educators.

The court heard that the new policy went against “at least 15 years of SEVP guidance”, referring to the Student and Exchange Visitor Program managed by ICE.

However, NAFSA emphasised on May 2 that “the document cannot yet be regarded as ICE’s new official policy”.

The document offers two new reasons for termination; non-compliance with the terms of nonimmigrant status and visa revocation by the state department.

In the case of the former, it is not clear whether a SEVIS record termination would also result in the termination of nonimmigrant status, though it would strip students of status benefits including applying for OPT or returning to the US after travelling abroad.

According to immigration attorneys, the new guidance could also allow for revoking student status if their names appear in a criminal database regardless of whether they were ever charged with a crime.

Traditionally, student visa revocations have not been common, but recently the US government began terminating students’ status either in addition to or instead of revoking their visas.

The Student and Exchange Visitor Information System (SEVIS) database is maintained by ICE to monitor international students’ presence in the US.

In the absence of disaggregated counts of visa revocation and SEVIS record termination, it remains unclear how many students will lose their status because of the new termination framework.

Since mid-March, sudden visa revocations by the State Department and SEVIS record terminations by ICE and DHS have caused widespread fear and uncertainty across US campuses.

“Exacerbating the stress was the rationale provided by the government, which ranged from wholly absent, to conflicting, to shifting, to downright baseless,” said NAFSA.

In March, secretary of state Marco Rubio said that his department was revoking the visas of students who took part in pro-Palestinian protests and those with criminal charges.

However, many students who saw their status terminated said they did not fall under those categories and argued that they were denied due process. Others said they were not aware their status had been revoked until logging onto the SEVIS database.

Source link

May 2, 2025
This week in 5 numbers: 133 international students have legal status restored

We’re rounding up recent stories, from a legal victory for some noncitizen students to Harvard University's legal fight against the Trump administration.

Source link

April 25, 2025
Unclear legal duties can leave university trustees exposed when things go wrong
Not many university trustees or senior management teams have three hours spare at the moment. If they did, however, they would be well advised to watch last month’s Education Committee meeting of the Scottish Parliament regarding the University of Dundee.

Regardless of your views on select committees, it’s a timely reminder of how trustee boards and senior management teams need to communicate clearly and work with each other, especially, in circumstances where university finances and governance are also occupying Westminster select committee time, and making guest appearances on Radio 4’s Today programme.

I have written previously about the merits of a special administration for the higher education sector. I will not repeat those views, save in respect of trustee duties.

As outlined in the above, where a higher education provider is not incorporated as a company, the legal position on trustee duties and where the higher education provider is in financial difficulty is unclear.

In circumstances of financial distress, trustees could be facing potential personal liability, so a lack of clarity on legal duties is clearly wholly unsatisfactory in that situation.

Managing insolvency with special administration

One way to attempt to mitigate this situation is through a special administration regime. This could be along the lines of the further education process, would assist trustees of a provider in financial distress by making it clear that the Companies and Insolvency legislation would apply to all higher education providers, regardless of whether they are companies or not.

The trustees, like company directors, would then be aware of the rules of engagement, who should be given priority and how to mitigate the risks.

In addition, the position of students is not specifically protected in a financially distressed situation, above and beyond their status as creditors, in respect of any claims they might have, particularly if there is a market exit of a provider.

Special administration, again along the lines of the regime in the FE sector, would assist, by providing for a predominant duty to act in the best interest of students and would enable the trustees to put students at the forefront of their minds in a time of financial distress.

This supports trustees to focus on the interest of students in a financially distressed situation, and make it clear that acting in the best interests of creditors is secondary to avoiding or minimising disruption to the studies of existing students.

Protection as a charity

In a solvent situation, again, the companies legislation will not apply to a non-company, but, assuming that the HE provider is a charity, the charity legislation provides that the charity trustees have ultimate responsibility for the affairs of the charity.

They must also ensure that the charity is solvent and able to deliver its charitable purposes for the benefit of the public, which is where protection for students tends to come in, assuming that some or all of the charitable objects relate to students.

The duties of trustees come from the fiduciary nature of being a charity trustee, the legal and regulatory framework as well as the governing documents of the charity.

The Charity Commission sets out 6 key duties for charity trustees:
- Ensuring the charity carries out its purposes for the public benefit
- Comply with the charity’s governing document and the law
- Act in the best interest of the charity
- Manage the charity’s resources responsibly
- Act with reasonable care and skill
- Ensure the charity is accountable
The position is clearer where a charity HE provider is solvent, rather than in financial distress.

But whilst the lack of legal clarity for trustees is legally challenging, what the University of Dundee situation has demonstrated is the practical challenge of the management structures in higher education providers and charities.

Company vs charity

The structures of a charity are normally inverse to what you would have in a company. In a company, the board of directors would be both legally and practically responsible for the operations of the company, whether it was solvent or insolvent.

The board of directors would normally carve up management roles between them, or they may delegate some of those roles outside the board to employees, but they should, and generally do, ensure that non-directors report back to the board, with the directors making the final decisions.

With most higher education providers, the director equivalents are the trustees, who have ultimate responsibility for the actions of the HE providers, but are normally unpaid volunteers who see themselves more as non-executive directors. The trustees will usually delegate management responsibilities to a management team.

The fiduciary duty issue with that structure, is that the management team runs the risk of being the equivalent of de facto or shadow directors, to the extent that they are making the ultimate management decisions, with no substantive involvement from the trustees.

Under the Companies and Insolvency legislation, de facto and shadow directors can be equally liable, in both solvent and insolvent situations, as actual directors.

The management team members therefore need, to protect themselves from liability, to ensure that the executive decisions in respect of the higher education provider, are made by the trustees.

The trustees, on the other hand, need to ensure that they have proper oversight of the senior management team and, whilst enabling them to fulfil their roles, that they are aware of the executive decisions that the management team are proposing. Ultimately they are taking responsibility for those decisions so they can be accountable for them.

The problems arise, as was played out for all to see in glorious technicolour last month, when there is a breakdown of communication between the trustees and management team on the decisions being made and the consequences of those decisions.

Now, more than ever, trustees need to be completely up to speed on the decisions made so, in the very unlikely event that they appear in front of a select committee, they can fully explain and take responsibility for the decisions made and actions taken.
Source link
April 17, 2025