In problems pertaining to faculty dismissal, public higher education institutions are subject to both constitutional and contractual constraints, whereas private schools are subject almost solely to self-imposed contractual limitations. In public institutions, teachers alleging termination for protected free speech bear the burden of establishing that fact. However, when the faculty member alleges protected free speech activity prior to the institution's decision for termination, the institution must prove that the faculty member would not have been renewed in any event, according to "Mt. Healthy City Board of Education v. Doyle" (1974). In a recent noneducation case, "Connick v. Meyers" (1983), the Supreme Court significantly restricted the First Amendment protected rights of speech of public employees only to matters of public concern. Courts have consistently refused to find state action in nonpublic schools. In private institutions, the written contract, other institutional documents, and previous practices govern the rights of faculty. In cases of financial exigency, public universities are responsible for adherence to constitutional requirements as well as contractual agreements defined through state legislative actions and materials such as catalogs and faculty handbooks. Private colleges and universities are held responsible for matters of contract and relevant state legislation. Procedures are suggested for both public and private institutions to follow in the event of faculty dismissal for financial exigency or other causes. (MLF)