While University of Louisville executive vice president David Dunn remains under federal investigation, his employment contract at U of L has expired.
But Dunn continues drawing his $809,000 salary.
The executive vice president for health affairs has been on paid administrative leave since December, and his five-year contract ended July 1. But a U of L spokesman said he remains an employee on the same terms.
The FBI is investigating whether Dunn and Priscilla Hancock, U of L’s chief information officer, used federal money for private purposes. University officials have said Dunn has been under investigation since 2014.
Payroll records show he was paid $1.1 million by U of L and its related foundations in 2015. That total included more than $300,000 in “x-pay,” defined by the university as compensation for additional job duties.
In an email, U of L spokesman John Karman said Dunn “remains an employee of the university. The terms of his employment are unchanged.”
University officials are not in a position to comment further while the investigation is ongoing, Karman said. FBI spokesman David Habich said the FBI does not confirm or deny the existence or nonexistence of an investigation.
So why would the university continue to keep him employed? Although he’s not under contract, it might make more strategic sense to keep him on the payroll, said J.J. Prescott, a professor at University of Michigan Law School who specializes in employment law.
A number of factors would go into a decision like that beyond the contract’s expiration date, Prescott said: Does the university usually keep people on paid leave until an investigation is concluded? Do they tend to keep administrators on “at-will” at the same terms even if they don’t sign a new contract extension?
And, most importantly, would Dunn have grounds to sue U of L if the paychecks stop and he is eventually cleared of wrongdoing?
There’s no slam dunk answer, so paying him might be the wisest choice, Prescott said.
“Right now, on administrative leave for which he’s getting paid, he doesn’t have a really attractive lawsuit because there aren’t a lot of damages he can claim,” Prescott said. “As soon as they stop paying him, he can find a lawyer to file suit.”
Dunn’s contract also describes a “lump sum payment” of a negotiated percentage of Dunn’s administrative supplement, or 25 percent of his salary, if he’s terminated without cause.
Too many questions remain to speculate about how the university would negotiate Dunn’s exit, Prescott said.
Kate Howard can be reached at email@example.com and (502) 814.6546.