On Monday, June 8, the Rutgers administration sent notifications to nearly all of the 19 unions in our coalition that a fiscal emergency now exists, and it is exercising its power to break certain provisions of our contract. The university is required to give us 21 days’ notice of the specific actions it intends to take upon declaring a fiscal emergency. Management has indicated that it intends to “withhold” our raises—due on July 1—that were negotiated in the last Rutgers AAUP-AFT contract.
We expected this action from the university, even though the Coalition of Rutgers Unions developed a detailed proposal to show how the university could continue to honor all our contracts, avoid layoffs, and protect the vulnerable in our community. With this declaration, the administration is disregarding our proposals and taking its preferred actions unilaterally. We intend to fight this declaration on multiple fronts, throughout the spring, summer, and fall if necessary.
This page is intended to answer your questions about what the administration’s action means, what it doesn’t mean, and what we intend to do about it. If you don’t see the question you have, please email [email protected] and ask—we will do our best to keep this list of questions and answers updated.
Why did Rutgers declare a fiscal emergency?
The administration’s June 8 letter invoked a clause in our contract that allows it to break selected economic obligations, exclusively about salary issues, when it declares that the university is facing a fiscal emergency. The administration is obligated to give detailed information about why it has declared a fiscal emergency and notify us of specific actions it intends to take. The June 8 letter states Rutgers’ intention to withhold our raises due July 1.
The declaration of a fiscal emergency triggers a 21-day period in which the university is obligated to provide additional information and negotiate with unions that request it. We and all the other unions that received notifications will make those formal requests. If we are unable to reach a resolution with management, our unions have the right to submit our case to arbitration. The arbitrator would be required to reach a decision on whether a fiscal emergency truly exists within 90 days of any actions taken by the university. Nothing the university has done gives us faith that we will reach a resolution. We anticipate taking our case to arbitration in July and August, with a decision due by October 1.
What will the arbitrator decide?
In this situation, the arbitrator will be deciding only whether a fiscal emergency exists. The arbitrator doesn’t have the authority to reallocate funds available to the university or decide that withholding our raises isn’t appropriate. The arbitrator’s sole jurisdiction is to determine whether there is a fiscal emergency. The university’s obligation will be to present evidence to support its declaration. We will argue that the university has disregarded opportunities to make up for lost revenue and that the administration could honor all its union contracts by tapping its “rainy day” reserves and sacrificing at the top.
Is Rutgers really facing an emergency?
You can judge for yourself whether the administration’s June 8 letter meets its burden of proving that a fiscal emergency exists. The “evidence” spelled out in that letter and other supporting documents is, at best, superficial and speculative.
The scant financial information we received on June 8 indicates that Rutgers now anticipates a “negative change in funds” of $58 million for the fiscal year ending on June 30. Remember, only a month ago, President Barchi projected a $203 million budget shortfall for this fiscal year. Turned out he was crying wolf. Now the administration projects a “negative change” of $204 million for the 2021 fiscal year starting July 1. Should we believe that? Like the first one, this projection may prove to be a wild exaggeration. Initial enrollment numbers for the fall show only a very modest decline from previous years. Revenues from Rutgers health care facilities that declined during the stay-at-home order are picking back up.
Plus, the university has never responded to our proposals to spend just one-third of its nearly $600 million in unrestricted reserves—money, accumulated through tuition hikes and annual surpluses, that administrators explicitly described as a “rainy day” fund. Much of the administration’s claim of a fiscal emergency is built around reduced appropriations from the state government, but it has ignored other revenue it can rely on, such as federal stimulus funds and licensing fees for its COVID-19 saliva test. We don’t even know how the university justifies withholding the raises of faculty whose positions are funded by grants or other revenue streams.
And that’s not to mention the tens of millions of dollars that could be saved if the administration took a hard look at cherished priorities like the multimillion-dollar subsidy to Rutgers Athletics or the bloat within its own highly paid ranks.
So will we win in arbitration?
We have to recognize that this will not be an easy case. An arbitrator faced with determining only whether the university faces a fiscal emergency will come to the case knowing that the United States faces a very serious economic crisis. The arbitrator will not be immune to the fact that there are furloughs, raise deferrals, and layoffs taking place throughout the public sector, including in higher education.
However, we think we are well positioned to challenge the university’s actions and achieve a reasonable settlement.
Why is Rutgers doing this? Didn’t we propose the work-sharing program to find enough savings for the university so layoffs and financial cutbacks wouldn’t be necessary?
Neither is necessary. The administration is rejecting the proposals that unions developed over several months, including the work-sharing furlough program through July that could have saved Rutgers over $100 million if it hadn’t dragged its feet.
We believe the administration is refusing to embrace our people-centered approach because doing so would acknowledge the power and moral authority of our union coalition. It is a telling contrast that Rutgers is relying on the country’s most notorious union-busting law firm, Jackson Lewis, for advice. We know that the university has paid Jackson Lewis close to $2 million so far; that’s half the amount the university will “save” from not rehiring hundreds of adjunct faculty—some of our most experienced teachers—for the fall semester.
The layoffs that have already taken place or been threatened are concentrated among the lowest-paid, most vulnerable workers, disproportionately people of color. The “savings” from these layoffs are a fraction of what Rutgers could get from embracing our work-sharing program. This shows the administration’s strategy is not about money—it’s about balancing the budget on the backs of the most vulnerable, simply because they can.
We have to look at the declaration of a fiscal emergency not only in financial terms, but in political and social terms—that is the only way to explain it. The fiscal emergency is a tool being used by the university to achieve objectives that date from long before the COVID crisis—above all to maintain management’s authority over its workforce. We shouldn’t think of the fiscal emergency as an inevitable response to a crisis that is beyond their control to confront. We can challenge it on not only legal and financial terms but conceptual and moral ones.
Is the administration trying to cancel our raises for good?
Management has specifically said that it will “withhold” our raises—but that could mean deferring them or canceling them permanently. Our contention is that the university doesn’t have the right to permanently cancel our raises. It may be able to withhold them if the arbitrator judges that a fiscal emergency does exist, but the question then becomes: for how long?
I’m getting a raise based on a promotion. Can they take away that raise, too?
No. The June 8 letter does not notify us that the university may rescind raises based on promotions or achieving tenure, so those raises must be honored.
Can the administration use the fiscal emergency provision to lay me off?
No. This particular action by the university is connected only to one specific part of our contract that allows the university to breach its obligations on certain salary issues. In the weeks and months of negotiation and arbitration about the fiscal emergency, we are fighting the university’s attempt to take our raises.
That doesn’t, of course, mean that the university won’t try to carry out layoffs. Rutgers has already laid off or threatened to lay off hundreds of staff in URA-AFT, AFSCME, and other unions. More than 600 dining hall workers have lost the guarantee that they will be rehired in September. One-fifth to one-quarter of PTLs have been told they won’t be rehired this fall (with a further impact on all faculty who will be expected to fill the gap). And for grad workers, losing funding is pretty much the same thing as a layoff. Our union remains committed to fighting with our coalition partners to stop all layoffs and cuts.
At this point, there has been no indication that the university is preparing to lay off full-time faculty—and they can’t do this on the pretext of declaring a fiscal emergency. It is worth pointing out a source of confusion: other university administrations are declaring a “financial exigency” in order to try to lay off tenured faculty. That is not what Rutgers has done. The two terms are confusingly similar, but a “financial emergency” means something very different in this context than a “financial exigency.”
I have a non–tenure track contract for a three-year appointment. Can they use the financial emergency declaration to take a year off that appointment?
The fiscal emergency language in our contract very clearly applies only to raises and minimum salary increases, so this action has no direct bearing on the length of appointments for non–tenure track faculty. Contracts remain in effect.
But again, management is using this crisis generally as an opportunity to push through cutbacks, and we need to be prepared if the university tries to challenge reappointments for non–tenure track faculty. That’s why we see our response to the fiscal emergency declaration as part of an overall strategy to stop layoffs and cuts. We will fight to protect NTTs and PTLs, who provide some of the most important work across the university.
What about teaching assistants or graduate assistants? Can the administration rescind a new appointment for 2020–21? Can they reduce the salary for those appointments?
If someone has received an appointment letter for a TA/GA position, that’s an enforceable contract. The declaration of a fiscal emergency doesn’t give the administration the right to rescind that letter, and the salary set forth in that letter is the salary that Rutgers will be contractually obligated to pay. The university has the right to offer additional compensation for TAs and GAs, and our position will be that any offer made in a letter of appointment is the salary they are going to have to pay.
Can management use the fiscal emergency to take away our benefits, such as health insurance?
The declaration of a fiscal emergency does not give the administration the right to take away benefits or otherwise break the terms of our contracts beyond a narrow range of salary issues. If, for example, a TA/GA has an appointment under a contract offering health insurance, the university is contractually obligated to abide by the terms of that agreement.
We don’t know what the administration will try to get away with, but they will be violating our contract if they attempt to apply the fiscal emergency provision to benefits, including health care.
What about our Equity Security Dignity campaign that won equity raises in the last contract? We fought hard for something many people said couldn’t be done, and we won. Will they be able to reverse that program?
The administration is required in its declaration of a fiscal emergency to list the specific actions it intends to take, and its June 8 letter didn’t address the pay equity provision of our contract. We will fight any attempt to take away pay equity raises under the guise of the fiscal emergency, but they haven’t signaled that.
That doesn’t mean management will enthusiastically or completely honor the original terms of our contract. The administration wants to have it both ways: they claim they’re committed to the pay equity program as part of the core values of the university, but they’ve dragged their feet on implementing it since it was won. They are now out of compliance with the deadlines in our contract—we have numerous members who have been waiting since September to see those raises. We will be holding the university’s feet to the fire, and we have a strategy that will include grievances and other actions over the summer and fall. We will vigorously defend the pay equity program and the right of our members to be paid equitably.
Is there a precedent for other universities declaring a fiscal emergency and trying to break union contracts as Rutgers has?
The fiscal emergency clause in our contract is pretty much unique to Rutgers and doesn’t really exist anywhere else. It’s the product of the union fighting previous contracts that left loopholes for the university to take away our raises without a process to fight them. Some of you remember when the university withheld pay increases in the past by invoking the controversial “subject to” language in our contract. There isn’t really precedent to anticipate the outcome of negotiations or arbitration on this issue, so we’re working hard to build a strong case against taking away our raises.
What is taking place across the country is other universities declaring a “fiscal exigency,” which is what schools do when they are in financial danger and want to lay off tenured faculty. As we said earlier, the two terms sound similar but have very different meanings in the current context. We will challenge all layoffs in any of our unions.
Will the new president change this when he takes office in July?
We’ve been in dialogue with the incoming president, Jonathan Holloway, and we believe he intends to have a very different relationship to our unions. We know that we need to hold him accountable for the decisions being made in the weeks before he takes office. What Bob Barchi and the administration do now will have a huge impact on President Holloway’s ability to run this university, and he can’t look away from the malfeasance that has taken place this spring.
AFSCME announced an agreement on furloughs and layoffs for hundreds of its members last week. Does that have anything to do with the fiscal emergency?
Not directly, but obviously the administration’s layoff threats against some of the most vulnerable workers on campus—and disproportionately people of color—is connected to their overall drive to make all workers pay for the crisis.
Both AFSCME local unions at Rutgers, with advance notice to our coalition, met with the administration to reach an agreement similar to the unions’ work-sharing proposal to avoid over 400 members being laid off, keep our staff colleagues and their families on health benefits, and keep their children enrolled as our students through continued tuition remission benefits. These are critically important values of our coalition work, and we’re glad we were able to support our union sisters and brothers in AFSCME at this difficult time through our collective pressure on the university to take a people-centered approach.
Still, nearly 1,000 full-time Rutgers employees remain under threat of layoff and losing their benefits, hundreds of PTLs have lost fall courses, and hundreds of grad workers have lost funding as a result of their PhD research being interrupted, which means the same thing as a layoff. We are demanding the university rescind all of these layoffs and cuts. Our union coalition, including AFSCME, is united and committed to fighting for all of our members in the best traditions of solidarity.