Krotkoff v. Goucher College

Hertha Krotkoff (plaintiff) was a tenured professor in the German section of the Modern Language Department at Goucher College (Goucher) (defendant), a private liberal arts college for women. In 1967, upon receiving tenure, Krotkoff received a letter that defined tenure as the right to continued service unless good cause was shown for termination. Krotkoff’s contract did not contemplate Goucher experiencing a financial exigency. Goucher’s bylaws also made no mention of financial exigency. By 1976 Goucher had accumulated an annual deficit aggregating more than $1,500,000 and was seeing a steady decline in enrollment. That year, Goucher made a number of changes in an effort to increase revenue and reduce its budget deficit. As part of this restructuring, Goucher did not renew the contracts of four tenured professors, including Krotkoff. The decision of which professors to retain was based on curriculum changes that Goucher intended to make and was reviewed by a committee. The German section of the Modern Language Department was eliminated. Krotkoff filed a suit in federal district court, alleging breach of contract. Krotkoff’s argument was twofold: (1) Goucher did not reasonably believe that a financial crisis existed; and (2) even if Goucher’s efforts were reasonable, it did not have the right under her contract to terminate her for reason of financial exigency. After a jury found in favor of Krotkoff and awarded her damages, a trial court entered judgment notwithstanding the verdict in favor of Goucher, finding that Goucher had a right as a matter of law to terminate Krotkoff for financial exigency and that it reasonably believed it was experiencing financial exigency. Krotkoff appealed.