Can Tenure Be Denied Based on Financial Considerations?

It’s not a secret that some colleges and universities out there are really struggling. At Lake Superior State University in Michigan, where enrollment has been declining, two professors were recently denied tenure, as Josh Logue reported for InsideHigherEd. As required by the faculty association’s agreement with the university, the denials set forth the reason tenure had been denied, and the reason given was the need for the university to reduce staffing in the face of the declining enrollment. The professors took issue with this reason for denial, however, because the agreement contained the following clause: 

Recommendations for tenure shall be based on:

a) Careful review of the Tenure Application File [letters of support, CV, and evaluations].

b) Consideration of the faculty member’s collegiality in their relation to faculty, students, staff, and administration.

The professors are saying that that doesn’t allow for denial of tenure based on another consideration, such as financial. 

It’s unclear whether there was a communication with the candidates beforehand that institutional need might impact the tenure decision. The contract doesn’t seem to ever mention financial considerations impacting the faculty, or institutional need, or indeed any kind of catch-all, at first glance. It does, however, provide for an appeal of a tenure decision, so I’m curious if the denied candidates will take advantage of this, and what the eventual outcome will be.