Grading is Academic Freedom?
Why do we consider grading policy a component of academic freedom? It's fundamental to our job, or it should be, to fairly and competently judge the work of our students, but I don't see how academic freedom plays into it. Quite the opposite, actually: this is an area where informal norms already sharply limit instructors and in which formal norms often do exist.
Generally speaking, the definition of assignments is up to the instructor, yes. Though there are exceptions: many schools, for example, have"writing intensive" definitions in which a course must meet certain minimum standards to qualify and which students must take a certain number of to graduate; there are departments which require certain kinds of assignments; and less formal systems of expectations, as well, which serve to keep faculty from over- or under-working their students too egregiously. The rubrics under which grading is done should be under their control -- as long as they do not politicize or otherwise distort the process with non-performance factors -- and most schools (I think) have at least an informal system by which grades may be questioned or challenged. But there are exceptions to that control as well: departments sometimes set standards for grades and assignments in multi-section courses, and the use of outside readers on projects like theses (and much more extensively in the British system) suggests that grading is supposed to conform to some general norm.
I'm not convinced, from my own experience, that faculty really are free with regard to grading. Nor that they are really free with regard to curricular and pedagogical matters: there is a range of acceptable activities, within which we are free, but there is also a substantial range of unacceptable ones. Grading is a professional obligation, not a right.
I'm not going to defend Benedict college, but I think that we need to clarify what we mean by academic freedom, as well as reconsidering the idea that grading belongs firmly within that category.