For-profit schools sued for fudging employment data, lying to students

May 2, 2012

School BusinessInstitutions of higher education haven’t been getting the greatest exposure lately, especially with the relatively high unemployment rate and the cost of tuition skyrocketing in recent years.

If the allegations in two recent lawsuits have any truth to them, things aren’t going to get better anytime soon for higher education – particularly for-profit institutions.

Two former employees of the Minnesota-based for-profit education consortium Minnesota School of Business (which includes both MSB and Globe University) are suing the joint owner in two separate whistleblower suits.

The first suit is being brought by Jeanne St. Claire.

St. Claire was originally hired as a business instructor, but was promoted to Business Program Chair within six weeks of being hired, until she was again promoted to Network Dean of Business several months thereafter.

According to her complaint, in several meetings from late 2010 until she was fired in October of 2011, St. Claire voiced opposition to Globe’s practice of “greatly exaggerating its rate of job placement” to its students and potential students, as well as to its accreditation agency.

After St. Claire reported this and other questionable practices to Globe’s accreditation agency (after being told by her superiors not to), she was fired.

The second suit, brought by Heidi Weber, is a bit more detailed.

Weber, like St. Claire, was hired as an instructor and was subsequently promoted to dean, but was a part of the medical assistant program, rather than the business one.

First, Weber’s complaint details how MSB/Globe changed the Medical Assistant Program’s accreditation agency, because, according to the complaint, Globe was unlikely to continue to meet the former agency’s more stringent accreditation standards.

According to the complaint, a major downside to this accreditation switch was Allina Health Systems, previously one of MSB/Globe’s largest employers of its medical assistant program graduates, notifying the school that it would no longer accept students for externship placement because of the change.

In addition, Allina stopped considering MSB/Globe graduates for employment for the same reason (and the school didn’t inform its students of these changes).

This exacerbated the existing shortage of medical assistant externships, and, apparently, having such a shortage violates the accreditation requirements.

Of course, this little tidbit – along with several other facts – were either omitted or misrepresented in MSB/Globe’s reports to the accreditation agency.

Weber repeatedly voiced concerns over these issues to her superiors at MSB/Globe, who, according to the complaint, told her to stay out of it.

Weber didn’t, even though, according to the complaint, she was threatened with termination if she did not.

And so, Weber was fired.

Unfortunately, this wasn’t the worst of it for Weber.

According to the complaint, shortly after she was fired, MSB/Globe sent a letter to Allina blaming “the mistakes made in the changing accreditation process” and “the negative reactions of employers that followed” on Weber.

Because of this letter, she has been unable to secure employment in the area, and the complaint cites one specific interview wherein Weber was informed that she “was the most qualified candidate, but nonetheless she could not be offered employment based on her ‘history.’”

Of course, if Weber truly was responsible for these “mistakes,” it seems unlikely that she would file a lawsuit claiming that she was fired for fighting against them, especially when a defamation claim is a part of the complaint.

Instead of allowing any of its potential dirty laundry to get aired, it’s likely that MSB/Globe will settle this case.

However, the emergence of more suits like these in the future shouldn’t surprise anyone.

Civil suits are the necessary result of a lack of government regulatory enforcement.

Despite some attention by Congress to for-profit schools in the summer of 2010, they’ve fallen off of the radar since.

Unless government regulators start paying attention again, for-profits won’t be “scared straight” and will continue to create legal liabilities for themselves that are easily exploited in such suits as these.