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Concealing what's critical in buyouts

08 Mar 2024 9:56 AM | Jim New (Administrator)

During a congressional hearing several years ago, former chair of the U.S. Federal Reserve Bank, Alan Greenspan, likened statistics to skimpy swimwear. "What they reveal is interesting," Greenspan said, "but what they conceal is critical." In the case of the annual employee buyouts report presented to the Board of Regents earlier this month, NSHE delivered the documentary equivalence of a bell diver suit, revealing almost nothing. While the Board of Regents set transparency and accountability as a strategic goal, the staff of the System Administration appear intent on moving in the opposite direction.

The annual reports are the result of a policy passed by the Regents in early 2019. It requires NSHE to share information regarding employee buyouts and settlements following the revelation in November 2018 that approximately $8.8 million had been spent by NSHE institutions in the previous biennium on employee-related buyouts. As previously reported in Missing Buyouts in NSHE Buyouts Report, the Regents received the first detailed report in March 2020, another in March 2021, and a third in March 2022. Those multi-page reports, however, gave way to a single page report with virtually no details in March 2023, and again this year.

NSHE institutions frequently use settlement buyouts and termination agreements to avoid negative publicity about its employment practices. The detailed reports provided a much-needed glimpse into the extent of these practices. 

A review of the early reports reveals that individual institutions interpreted the policy language differently from one another, resulting in some inconsistent reporting. The drastic change in the March 2023 report, however, did not result from a change of policy. Instead, we can attribute the change in reporting to a new general counsel at NSHE, James Martines, and his interpretation of the policy language.

NSHE Chief General Counsel James MartinesThe briefing paper prepared by Martines for the 2022 report indicated that only payments directly associated with terminations and notices of non-reappointment are included. Amounts paid out to settle actual or anticipated litigation are no longer reported, and apparently, any payment made to an employee who agrees to resign to avoid termination is omitted as well. NFA is aware of at least one such case where a substantial payout under these terms was not reported.

Unfortunately, no Regents appeared to have noticed this dramatic change in the reports. It is clear from the minutes of the November 16, 2018 Board meeting that Regents at that time did intend for the report to include settlements.

NFA urges the Board of Regents to correct Chief Counsel Martines' misinterpretation of this policy and provide a full accounting of all independent payments made to employees associated with their separation from employment with any NSHE institution.

Read Missing Buyouts in NSHE Buyouts Report >>

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