## Facts

- The University of Tennessee Center for the Health Sciences (UTCHS) maintained, since 1958, a policy limiting outside income of full-time medical faculty to ensure full-time devotion to teaching and institutional duties.
- UTCHS required full-time faculty who wished to maintain a private practice to sign a Medical Practice Income Agreement (MPIA), administered through a faculty medical practice corporation structure approved by faculty governance.
- Dr. Charles W. Gross (a tenured professor and department chair) and Dr. James A. Grant (a tenured professor) refused to sign the MPIA.
- In early 1977, UTCHS suspended both professors for refusing to sign; Gross was also removed as department chair mid-academic year.
- After a full hearing, a seven-member faculty committee found “adequate cause,” as defined in the faculty handbook, for termination.
- The Board of Trustees sustained the terminations for cause and upheld Gross’s removal as chair.
- The professors brought a federal civil-rights and antitrust action against the University and the Dean of the College of Medicine, Charles B. McCall.

## Issues

1. Whether the University, as a state university, is a “person” subject to damages liability under 42 U.S.C. § 1983.
2. Whether requiring tenured, full-time medical faculty to sign an income-limiting private-practice agreement violates substantive due process.
3. Whether UTCHS provided tenured faculty adequate procedural due process before termination for cause.
4. Whether alleged unequal enforcement of the MPIA requirement violated equal protection.
5. Whether the MPIA and related faculty practice arrangements stated a viable federal antitrust claim.
6. Whether the professors were contractually entitled to twelve months’ notice despite a finding of “adequate cause.”

## Decision

- The court granted defendants’ motion for summary judgment on all claims.
- The University was not a “person” for § 1983 damages purposes.
- The MPIA requirement and income-limitation policy did not violate substantive due process.
- The hearing process and Board review satisfied procedural due process for tenured faculty terminations for cause.
- The equal protection claim failed for lack of evidence of disparate treatment.
- The antitrust claims were rejected because the challenged conduct was treated as internal employment/practice governance, not actionable market restraint on the presented theory.
- The professors were not entitled to twelve months’ notice given termination for “adequate cause” under the governing employment framework.

## Legal Principles

- A state university, as an arm of the state, is not a “person” subject to damages liability under 42 U.S.C. § 1983.
- Public employers may condition full-time employment on restrictions tied to legitimate institutional objectives; there is no constitutional entitlement to unlimited outside professional practice while holding full-time public employment.
- Procedural due process for tenured public faculty is satisfied where the employee receives a meaningful hearing under institutional rules and an opportunity for administrative appeal before final termination.
- Equal protection challenges to generally applicable employment policies fail absent proof of disparate enforcement or irrational classification.
- Antitrust law generally does not reach internal employer control over employee professional activity where the alleged restraint arises from the employment relationship rather than a combination among independent economic actors.
- Contractual notice provisions may be displaced by “for cause” termination procedures when the governing handbook or contract authorizes termination upon a finding of adequate cause.

## Conclusion

The court upheld UTCHS’s termination of tenured medical faculty who refused to sign a mandatory income-limitation practice agreement, finding no actionable § 1983 damages claim against the University and no constitutional or antitrust violation where the policy served legitimate institutional aims and termination followed adequate internal process for cause.


Gross v. University of Tenn., 448 F. Supp. 245 (W.D. Tenn. 1978)