I have worked in higher education myself as both an administrator and as a faculty member and can relate to the troubled situation you present. I see a couple of options here. You certainly could confront Jim in a private meeting (maybe offsite somewhere in a comfortable setting-i.e. coffee shop), revealing that you saw the email and have been troubled by it, along with Holly’s behavior, for some time. Let him know that you intent is to see if you can work this out together, but that things need to change and for the better. My hope is that since he essentially got caught with his hand in the cookie jar (you seeing the email), he will have an invested interest in correcting the problem.

The second option would be for you (and Jane if possible) to have a confidential meeting with Jim’s superior for the purpose of seeking guidance and advice on handling the situation. I wouldn’t suggest getting too specific or showing the email at this point, but merely seeking tutelage on how to best address the problem with Jim. Because Jim is the supervisor, it will be important to get him turned around and/or part of the solution as quickly as possible. Holly can be next but without Jim’s support, Holly may not see the importance of altering her behavior for you or the program. The key with the second option is not to expect Jim’s superior to address the situation. The key is to make him/her aware of it but to still take responsibility yourself in addressing the issue. You have an obligation to always take a concern about Jim to Jim first. That is why you are only seeking advice at this point from Jim’s superior.

Now, if Jim is non-receptive or unwilling to address your concern, then you need to let him know that you feel you need to escalate your concern to Jim’s superior. Make sure he hears you say that. You want to be up front about what you intend to do. And because you have already shared your concerns with Jim’s superior, you already have covered all your bases. My guess is that Jim won’t let it get to this point since it would not benefit him in any way.

I suggest going with the first option and talking directly to Jim in a private setting. If, for whatever reason, you don’t feel comfortable or safe in doing that, then go to the second option. Since Jane is leaving, make sure that you address your concerns about working with Holly and Jim and defining the relationship you want to have in the future with the both of them. Don’t spend a lot of time talking about Jane since that will keep you in the past and you need to focus on the future. Hope that helps a bit. I’ve been stung by the politics in higher ed and know how that can hurt. That is why you want to play this above board.