After a drawn-out labor dispute, Portland State University says it plans to restore the jobs formerly held by 10 non-tenure-track faculty.

PSU announced late Tuesday afternoon that it will fully comply with a recent arbitration decision that ordered the university to reinstate the positions and “make whole” the affected faculty members.

In November, an independent arbitrator found that Portland State had violated its labor contract with the local chapter of the American Association of University Professors when it terminated the faculty last school year. The faculty cuts were part of a university plan to make up a multimillion-dollar budget deficit largely caused by years of declining enrollment and rising personnel costs.

Although PSU is adhering to the mediator’s decision, school leaders maintain they have done nothing wrong.

“We believe that the reductions were necessary and appropriate, and were implemented in good-faith and in compliance with our collective bargaining agreement,” PSU President Ann Cudd said in a statement on the settlement.

“Nonetheless, we’ve decided the best step forward for our campus at this time is to comply with the arbitrator’s order and reinstate the affected faculty members,” Cudd said.

This latest action from the university reverses PSU’s previous stance on the issue.

Last month, the faculty who were expecting to get their jobs back learned that the university would provide lost wages to them, but that PSU was considering ways to sidestep reinstatement. Arbitration decisions and their awards are binding and considered final. It is extremely unusual for either party to ignore an arbitrator’s outcome.

Legal counsel with the university believe that reinstatement is not within the arbitrator’s power.

“That’s the institution’s interpretation of the contract, but it’s false and it’s a bad faith interpretation,” said PSU-AAUP President Bill Knight. “They’re simply taking a position that allows them to undermine the rights of tenure and continuous appointment.”

PSU’s previous attempts to get around the reinstatements prompted swift backlash. Some state and national labor leaders said the university’s refusal to comply broke the law and would undermine union contracts.

Those concerns and more were echoed in an open letter, signed by more than 200 PSU faculty and staff, sent to Portland State leaders Tuesday. The letter called on the university to follow the mediator’s decision, commit to honor future arbitration decisions and reaffirm job protections laid out in collective bargaining agreements.

The laid-off faculty were part of a controversial $18 million budget cut effort undertaken by Portland State last school year. PSU-AAUP has been fighting the layoffs since university administrators first announced them in 2024.

Even though these 10 jobs will be restored, it could still be a short-term remedy.

Portland State, along with many of the state’s other public universities, is facing more budget shortfalls this school year. Last fall, PSU announced a plan to cut $35 million from its operating budget by the end of the 2026-27 school year.

A recent state report found that declining enrollment, increasing personnel costs and stagnant state support are pinching universities’ budgets. The report recommended universities find cost efficiencies beyond staff cuts, including through possible institutional mergers.

From the university’s perspective, more layoffs are all but inevitable. But it doesn’t have to be that way, said Knight. He argued that with collaboration among PSU’s administration and faculty, the university could not only meet, but also exceed future enrollment goals.

“We want to see the institution poised to grow in the most robust way possible,” Knight said. “We’re hopeful that PSU will turn to being a positive partner in the future of this institution and that we can come out of this in a better way than their plan proposes.”

News Source : https://www.opb.org/article/2026/01/15/portland-state-university-reinstate-laid-off-faculty/