By Bill Turque
Washington Post Staff Writer
Saturday, April 24, 2010; B01
A D.C. Superior Court judge raised questions Friday about Schools Chancellor Michelle A. Rhee's justification for laying off 266 teachers in October and refused to dismiss a lawsuit filed by the Washington Teachers' Union that is challenging the job cuts.
Judge Judith Bartnoff's ruling came 10 days after Rhee disclosed that District finance officials had discovered a $34 million surplus in the 2010 schools budget. That finding came three months after Rhee had cited a budget shortfall as the reason for the layoffs, which sparked bitter student and teacher protests.
Rhee had said she intended to use the extra money to help pay for increases in the proposed new labor contract, but the sum was declared nonexistent by D.C. Chief Financial Officer Natwar M. Gandhi.
Bartnoff, speaking to union attorney Lee Jackson, acknowledged Jackson's concerns about the legitimacy of the layoffs and said she shared them.
Bartnoff's action breathes new life into the union's legal challenge.
In November, the judge denied the union's bid for a preliminary injunction that would have restored the teachers' jobs. She said the labor group had failed to prove the core of its case: that Rhee went on an unauthorized hiring binge in the spring and summer last year, packing the system with new teachers to create a sham budget crisis that allowed her to conduct an illegal mass firing of older instructors.
But Bartnoff said Friday that the case was "morphing" because of recent events.
"The issue is now whether it was reasonable for the chancellor to believe last fall that there was a budget shortfall to justify" the layoffs, she said. She deferred a motion by District lawyers to dismiss the case and granted the union "limited discovery" to explore the financial information that was available to Rhee at the time of the layoffs. Another hearing is set for June 18.
In a sworn declaration filed this week, Rhee affirmed an earlier sworn document that said she faced a bona fide $44 million budget gap last summer. It consisted of $21 million in reductions ordered by the D.C. Council, $20 million to retain teaching and non-teaching staff whose spots at schools were lost when enrollment declined, and $3 million in severance costs. She said she had "no knowledge" of the surplus when she authorized the layoffs.
Robert C. Utiger, a lawyer for the D.C. attorney general's office, called the discovery authority given to the union a potential "fishing expedition." He also said that even if financial projections were wrong, Rhee was not accountable, because the data were supplied by Gandhi's office.
"She isn't the one who crunches the numbers," Utiger said. "She gets them from someone else." He said the union was not entitled "to delve into whether or not the chancellor should have second-guessed the CFO."
In response to a question from Bartnoff, Utiger said there is little the District can do for the laid-off teachers, even if a budget surplus is authenticated. The most they would receive is "priority consideration" in the event that jobs open up that match their skills.
As part of Friday's action, District and union attorneys agreed to postpone arbitration hearings involving laid-off teachers who have filed grievances contesting the job cuts. Bartnoff said she does not think the union can seek arbitration in cases that arise from layoffs.