Texas Senate Bill 37 creates substantial new legal work for law firms serving higher education clients, primarily in the areas of governance restructuring, compliance counseling, employment disputes, and potential litigation defense against the state Attorney General. Signed into law by Governor Greg Abbott on June 20, 2025, and effective September 1, 2025, SB-37 fundamentally reshapes the relationship between Texas public universities and state oversight bodies, introducing an enforcement mechanism with real teeth: an ombudsman with subpoena power, mandatory investigation timelines, and the authority to refer noncompliant institutions to the Attorney General for lawsuits or funding freezes. For law firms that represent universities, faculty unions, or individual educators, this legislation opens multiple practice areas simultaneously.
A university facing an ombudsman investigation has only 30 days to resolve compliance issues before referral to the Attorney General, meaning legal counsel must respond rapidly and decisively. Employment attorneys will find new work in tenure disputes arising from governing boards’ expanded authority to approve or deny tenured faculty postings. And litigators should prepare for constitutional challenges, as critics including the NAACP Legal Defense Fund have raised serious due process concerns about the bill’s limited procedural protections. This article examines the specific mechanisms of SB-37 that generate legal exposure, the types of matters law firms should anticipate, and the strategic considerations for representing clients on either side of these disputes.
Table of Contents
- How Does SB-37 Change University Governance and Create Legal Exposure?
- What Enforcement Powers Does the Ombudsman Hold Under SB-37?
- What Litigation Risks Does the Attorney General Referral Create?
- How Will SB-37 Affect Employment Law and Faculty Tenure?
- What Constitutional and Civil Rights Challenges May Arise?
- What Should Law Firms Advise University Clients About Compliance?
- What Is the Outlook for SB-37 Litigation and Legislative Activity?
- Conclusion
How Does SB-37 Change University Governance and Create Legal Exposure?
The core of SB-37 involves a power transfer from faculty councils to governing boards. Under the new law, governing boards gain authority to approve or deny tenured faculty postings and can overturn hiring decisions for provosts and deans. Faculty councils, previously wielding shared governance authority, are reclassified as advisory-only bodies. Councils that fail to meet newly established criteria face automatic dissolution. This restructuring creates immediate legal exposure on multiple fronts.
Universities must review existing bylaws, faculty handbooks, and employment contracts to ensure alignment with the new governance framework. Many institutions have contractual language promising faculty a voice in governance decisions; reconciling those commitments with SB-37’s advisory-only mandate will require careful legal navigation. For example, a tenured professor whose contract references faculty senate approval processes may have grounds to argue that unilateral elimination of that body constitutes a breach. The bill also establishes a core curriculum advisory committee tasked with simplifying course offerings statewide by 2027, and it permits elimination of low-enrollment minor programs. Law firms advising universities should anticipate disputes over program cuts, particularly where faculty positions are tied to discontinued minors or where students claim they were promised completion of programs that no longer exist.
What Enforcement Powers Does the Ombudsman Hold Under SB-37?
The Office of the Ombudsman, established within the Texas Higher Education Coordinating Board, represents the enforcement backbone of SB-37. This office possesses investigative authority and, critically, subpoena power to compel universities to produce information during compliance investigations. Any person can file a complaint, provided they supply sufficient information, meaning universities face an open-ended exposure to investigations triggered by students, faculty, staff, legislators, or members of the public. Once a complaint is filed, the ombudsman must launch an investigation within 30 days. If the university fails to resolve the identified noncompliance within an additional 30-day window, the matter is referred to the Texas Attorney General.
This compressed timeline is significant: universities cannot wait out investigations or engage in prolonged negotiations. Legal counsel must be prepared to respond immediately, gather relevant documentation, and either demonstrate compliance or implement corrective measures within roughly 60 days from initial complaint. However, if a university believes a complaint is frivolous or politically motivated, the bill offers limited procedural recourse. Critics have warned of a potential “tsunami of meritless complaints” targeting individual faculty members, particularly those whose research or teaching touches controversial subjects. Law firms representing universities may need to develop strategies for efficiently triaging complaints and protecting faculty from harassment while still meeting compliance obligations.
What Litigation Risks Does the Attorney General Referral Create?
When the ombudsman refers a noncompliance matter to the Attorney General, the stakes escalate considerably. The Attorney General can sue universities to compel compliance or recommend that state lawmakers withhold state funding. For context, state funding represents approximately 10 percent of the University of Texas’s budget, a substantial sum that no institution can afford to lose. This creates a two-track threat. Litigation itself is costly and reputationally damaging, particularly for public institutions that depend on legislative goodwill.
But the funding recommendation may prove even more consequential: once the Attorney General recommends a freeze, the matter becomes political as well as legal, subjecting university leadership to pressure from multiple directions. Law firms defending universities in these actions will need expertise in both administrative law and higher education policy. The underlying legal questions, regarding whether a university has complied with SB-37’s requirements, may be straightforward, but the procedural posture and political context add complexity. For instance, a university might technically comply with governance restructuring requirements but face an Attorney General suit based on disputed interpretations of what constitutes an “advisory-only” faculty council. Litigators should prepare to argue both statutory interpretation and constitutional issues, including whether the enforcement mechanism provides adequate due process.
How Will SB-37 Affect Employment Law and Faculty Tenure?
The employment law implications of SB-37 are substantial. By granting governing boards authority to approve or deny tenured faculty postings and overturn hiring decisions for provosts and deans, the bill inserts political oversight into what were previously academic or administrative decisions. Faculty members denied tenure or removed from positions may challenge these decisions on various grounds, including breach of contract, violation of academic freedom principles, or denial of due process. Texas AAUP-AFT reports that more than 40 faculty members have already left Texas due to what the organization describes as legislative attacks on higher education.
This exodus may accelerate after SB-37 takes effect, generating both retention issues for universities and potential wrongful termination or constructive discharge claims. A faculty member who resigns after a governing board vetoes their tenure recommendation, for example, might argue that the board’s action constituted a termination in all but name. Law firms representing faculty should note that SB-37 applies specifically to public universities, meaning private institutions are not directly affected. However, private universities may face indirect pressure to conform to similar governance models, particularly if they receive state research funding or participate in state higher education coordination efforts. Employment attorneys should track how public university precedents might migrate to private institution policies.
What Constitutional and Civil Rights Challenges May Arise?
The NAACP Legal Defense Fund has strongly opposed SB-37, citing disproportionate harm to Black students and educators. This opposition signals potential civil rights litigation challenging the bill’s implementation. If governing boards use their new authority in ways that disproportionately affect faculty of color, whether through denial of tenure, overturning hiring decisions, or dissolution of diversity-focused programs, affected individuals or advocacy organizations may bring discrimination claims. Critics have also described SB-37 as “the first law of its kind in the nation” regarding state control over higher education. This novel status means there is no existing body of case law interpreting similar statutes, creating both opportunity and risk for litigators.
Early cases will establish precedents that shape enforcement for years to come. Law firms with appellate expertise should consider the strategic value of representing clients in these foundational disputes. The limited due process provisions in SB-37 represent another constitutional vulnerability. The 30-day resolution window, the open complaint system, and the absence of clear procedural protections for accused faculty members may invite challenges under the Due Process Clause of the Fourteenth Amendment. A faculty member targeted by a complaint, subjected to investigation, and ultimately terminated has strong arguments that the process afforded was constitutionally inadequate, particularly if they received no meaningful opportunity to respond before adverse action.
What Should Law Firms Advise University Clients About Compliance?
For law firms advising university clients, the immediate priority is a comprehensive compliance audit before the September 1, 2025, effective date. This audit should examine governance documents, faculty council structures, hiring and tenure procedures, and curriculum planning processes. Universities that identify gaps can address them proactively rather than responding to ombudsman investigations.
The comparison between proactive compliance and reactive defense is stark. A university that restructures its faculty council voluntarily, with appropriate legal guidance and faculty consultation, can minimize disruption and preserve institutional relationships. A university that waits for an ombudsman complaint faces compressed timelines, public scrutiny, and the adversarial posture of a state investigation. The approximately $1.57 million fiscal impact to General Revenue funds over the 2026-2027 biennium suggests the state intends to resource the ombudsman’s office adequately, meaning universities should not assume investigations will be perfunctory.
What Is the Outlook for SB-37 Litigation and Legislative Activity?
Looking forward, SB-37 is likely to generate significant litigation within its first two years of implementation. The combination of broad enforcement authority, compressed timelines, open complaint access, and limited due process creates multiple pressure points where legal challenges can emerge. Law firms should monitor early ombudsman investigations and Attorney General referrals for patterns that may indicate how aggressively the state intends to enforce the new framework. Legislative activity is also worth tracking.
SB-37 was authored by State Sen. Brandon Creighton (R-Conroe) and passed with sufficient support to survive a gubernatorial veto, suggesting a legislative majority committed to the bill’s objectives. However, if implementation proves chaotic or litigation outcomes favor universities, subsequent legislative sessions may produce amendments or clarifications. Law firms advising higher education clients should maintain relationships with legislative staff and track proposed changes that could affect ongoing compliance efforts.
Conclusion
Texas Senate Bill 37 represents a fundamental shift in higher education governance that will generate substantial legal work across multiple practice areas. From compliance counseling and governance restructuring to employment disputes, investigation defense, and constitutional litigation, law firms serving universities, faculty, and advocacy organizations will find new matters arising from this legislation.
The compressed enforcement timelines, open complaint system, and Attorney General referral mechanism create urgency that most higher education legal work has historically lacked. Law firms that develop expertise in SB-37’s specific requirements and enforcement mechanisms will be well-positioned to serve clients navigating this new landscape. Those representing faculty or civil rights organizations should prepare for constitutional challenges that may shape the boundaries of state authority over public higher education for decades to come.