Tenured faculty can be dismissed for reasons of financial exigency. If the employment contract provides a specific definition of fiscal exigency and the processes to be used in effecting retrenchment, then those terms govern in lieu of constitutional due process. In the absence of such guidance, courts are willing to allow dismissal for reasons of financial exigency within certain limits. The institution as a whole need not be in an exigent condition to justify dismissal of some faculty, nor must the exigency extend to the endowment or real property of the institution. The institution has the burdens of proving not only financial exigency, but also that dismissal was motivated by the exigent condition. The institution must also show that its selection process was not arbitrary, capricious, or discriminatory. Tenured faculty who are to be dismissed for reasons of financial exigency must be notified and have an opportunity for a hearing before dismissal. Beyond these requirements, faculty have no constitutional right to participate in the retrenchment process. Dismissed faculty, if they are qualified, have the right to available positions in the institution, but in the absence of contract language they have no right to positions held by others and no right to retraining for available positions if they are not qualified at the time of dismissal. Thirty-six court cases are described and discussed in this monograph, and recommendations are made for adoption of legally acceptable policies and procedures for teacher dismissal at educational institutions. (JD)