Rakoff Skeptical CUNY Must Pay Staff In CARES Act Case

By Anne Cullen
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Law360 (August 7, 2020, 4:02 PM EDT) -- U.S. District Judge Jed Rakoff appeared disinclined Friday to force the City University of New York to reinstate thousands of faculty members it recently laid off, despite a union's claim that the school violated the CARES Act by handing out pink slips after taking relief funds.

The Manhattan federal judge is weighing an injunction bid by the Professional Staff Congress, a union that represents professional CUNY employees, which says the school illegally let go 2,800 adjunct faculty and staff members after accepting $251 million in federal coronavirus relief.

The bill mandates that the school pay employees "to the greatest extent practicable," which an attorney for the union argued means that if CUNY has the $30 million needed to do so, it must.

Though during Friday morning's hearing on the topic, Judge Rakoff didn't appear sold on that argument, repeatedly pointing out that the congressional directive regarding payroll is "vague" and "amorphous."

"I don't understand why, if your interpretation is right, Congress didn't draft the statute differently," the judge said to the union's attorney, Michael Del Piano of New York State United Teachers.

Two sections above, the judge had said the lawmakers issued "precise" orders to allocate at least half the money to student financial aid, but he emphasized that the employee-related section is open-ended.

"Why didn't Congress say that flat out, sort of as they said in the first clause, the 50% for students, as opposed to using this less clear cut language?" Judge Rakoff asked.

Del Piano responded that a directive to allocate funds to the student body needs to be definitive because it could apply to a broad spectrum of uses. For employees, it's obvious that sending money their way means salaries, he said.

"The reason why Congress has specified the way the student funds need to be spent is because there are a lot more alternatives as to how student funds can be spent in comparison to payment to employees," he said.

The lawyer also insisted that CUNY has the money to put those adjunct faculty members back on the roster, arguing that the $30 million they need accounts for only 1% of the school's budget.

"This is not going to have a demonstrable effect on CUNY's finances," Del Piano said, "but this is a lifeline for the survival of the affected adjuncts."

Clement Colucci of the New York Attorney General's Office told the judge that the school is "not in the business of giving employment to Ph.D.s," but rather "in the business of teaching students."

In that vein, he said CUNY plans to use the entire CARES Act package for emergency student aid. Even though it has only used $118 million so far, Colucci said the rest of the money would go the same way shortly.

Judge Rakoff asked how that squares with the payroll directive. "How do you justify that in light of the second clause that your adversaries are relying on?" he asked.

Colucci argued that the school had kept every full-time employee and the majority of adjuncts, cutting only those whose appointment terms ended on June 30.

"We can't keep everybody," Colucci said. "I don't think the statute is a statute that requires us to keep everybody."

Judge Rakoff said he would take the "interesting" and "complicated" matter under consideration and get a decision on the docket in a week. 

The union is represented by Hanan B. Kolko and Kate M. Swearengen of Cohen Weiss & Simon LLP; Peter L. Zwiebach of the Professional Staff Congress; and Michael J. Del Piano of New York State United Teachers.

CUNY is represented by Clement J. Colucci of the New York Attorney General's Office.

The case is Professional Staff Congress/CUNY v. The City University of New York, case number 1:20-cv-05060, in the U.S. District Court for the Southern District of New York.

— Additional reporting by Kevin Stawicki and Jon Steingart. Editing by Peter Rozovsky.

For a reprint of this article, please contact reprints@law360.com.

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