Article 22 Explainer

ARTICLE 22 EXPLAINER

PSU-AAUP, September 2025

Since the reduction (and eventual elimination) of the Intensive English Language Program (IELP) in 2021, “Article 22” has been part of PSU’s general vocabulary. The purpose of this explainer is to provide an overview of some of the key provisions in Article 22, but also to underscore the exceptional circumstances this article of the PSU-AAUP contract is meant to address. At the Financial Town Hall kicking off the 2025-2026 academic year, President Cudd acknowledged that she would probably need to invoke Article 22 to lay off members of the PSU-AAUP bargaining unit. Although she stated that she would not declare financial exigency—in contrast to Southern Oregon University—Article 22 does address this condition and it makes sense to start there.

What is Financial Exigency?

Financial exigency is a state of financial crisis faced by a college or university. It means that resources are insufficient to support the institution’s current operations and obligations and that extraordinary measures are required. This often means program reductions and eliminations, including layoffs, even of employees who otherwise enjoy job security, like faculty with indefinite tenure. Such measures are extraordinary because normal mechanisms of shared governance have been suspended to allow the university administrators to take action to restore financial sustainability unencumbered, or at least less encumbered, by deliberative processes involving faculty and other academic personnel. The process set in motion by a declaration of financial exigency is called retrenchment.

Financial exigency bears some resemblance to bankruptcy in that both are declared when an organization is in a state of financial crisis. But while bankruptcy is a legal process whereby an organization seeks relief from debts under the supervision of a court, usually through reorganization and/or the liquidation of assets, financial exigency is an internal process, governed by the university’s own bylaws, policies, and, where employees are unionized, collective bargaining agreements. However, like bankruptcy, the declaration of financial exigency can have serious repercussions for the university’s reputation, with implications for student enrollments, faculty and staff recruitment, the institution’s credit rating, and its effectiveness in securing grants and donations.

What’s in Article 22?

At colleges and universities where the faculty are unionized, their contracts usually contain provisions addressed to financial exigency and retrenchment, particularly the processes that must be followed if academic personnel are to be furloughed or laid off. At PSU, those provisions are found in Article 22 of our Collective Bargaining Agreement (CBA), entitled “Retrenchment.”

As stated in Article 22, the PSU President is responsible for declaring a condition of financial exigency. But before doing so, they must consult with the Board of Trustees and “appropriate faculty councils.” Section 3 describes what this prior consultation looks like. The sequence of events is triggered by the President’s finding that financial exigency “may become unavoidable.”

1. The President notifies PSU-AAUP and the members of the bargaining unit and University representatives offer to meet with PSU-AAUP representatives.

2. The President presents “a full description and analysis” of the University’s financial condition to the Faculty Senate.

3. After the meetings with PSU-AAUP and the Faculty Senate have been held, at least 30 days are allowed for comments and recommendations.

4. At PSU-AAUP’s request, the President meets with its representatives to discuss the union’s recommendations.

5. The Faculty Senate, at its discretion, may also provide a forum to hear the views of other individuals or organizations.

Only after this consultative process has run its course may the President declare a condition of financial exigency. That declaration then sets in motion these events, as described in Section 4 of Article 22:

1. The University announces a provisional plan for program reductions and eliminations.

2. PSU-AAUP and affected programs have at least 30 days to suggest alternatives to the provisional plan for addressing the financial exigency, as well as recommendations for the implementation of the provisional plan.

3. If members of targeted programs recommend fewer layoffs than does the provisional plan, the President meets with those members to discuss their recommendations.

Once this planning process has concluded, the President announces a final plan for retrenchment. The remainder of Article 22 (Section 5) details the order of layoffs and, if later warranted, recalls. It also requires that the Administration make a “good faith effort” to place members on “continuing appointment” in other positions within the University and a “reasonable effort” to assist them in finding employment elsewhere. If a member who is laid off as a result of this retrenchment procedure alleges that the decision was arbitrary or made in bad faith, that member may demand a hearing as described in Article 23 of the CBA.

Conditions Short of Financial Exigency

The scope of Article 22 is not limited to a condition of financial exigency. Section 2 states that the President may also declare that the financial condition of the university is such that a program must be reduced or eliminated to avoid “a serious distortion of the academic or other essential programs and services” elsewhere in the university. Although not universal, one commonly finds in faculty union contracts provisions like this alongside those addressing financial exigency.

The same exact consultative process accompanying a declaration of financial exigency applies to a declaration of this “serious distortion” condition short of financial exigency. In either case, if the University administration does not follow the prescribed process, it may give rise to a dispute subject to the dispute resolution procedures in the CBA. However, factual disputes regarding the existence of financial exigency or other financial conditions requiring program reduction or elimination are not subject to grievance or arbitration.

In the last round of contract negotiations, the union’s bargaining team managed to secure a Memorandum of Agreement providing for notices of termination, ranging from 3 months to 12 months, for members subject to layoff when Article 22 is invoked for a condition short of financial exigency. Such notice requirements had been absent for all but tenured faculty.

Potential Abuse of Article 22

Shared governance at PSU prescribes a process for program reduction and elimination that involves the Faculty Senate and its various committees (see Articles 3 and 4 of the Faculty Constitution and this graphic). Article 22 allows for the suspension of that process and limits the role of the Senate to providing a forum for the President to make a presentation on the financial conditions of the university and for others to offer their own assessments.

The declaration of financial exigency streamlines the process for eliminating academic and other programs, but the negative external repercussions of financial exigency—for enrollment, credit rating, faculty and staff recruitment, etc.—provide a strong deterrent to using this authority except under the most severe financial conditions. When using Article 22 to address circumstances short of financial exigency, those repercussions are much diminished or absent altogether. It is more tempting for the President to use this tool, especially if resistance on campus and in “appropriate faculty councils” is muted. When all is said and done, neither PSU-AAUP nor the Faculty Senate can stop retrenchment if the administration invokes Article 22 and follows the prescribed process.

The potential for abuse turns on the imprecise meaning of “serious distortion of the academic or other essential programs and services,” which the President must find if a program is to be targeted using Article 22. In 2021, PSU-AAUP objected to this characterization of the effects of IELP’s underperformance as presented by the President to the Faculty Senate, but there was (and is) no contractually obligated mechanism for litigating such a dispute.

Article 22 is not to be used when reductions or eliminations are necessitated “solely by changes in curricula or in the educational programs or mission of the University.” Normal shared governance procedures—involving the Faculty Senate’s curriculum, budget, and educational policy committees—allow for the reduction or elimination of academic units. At the same time, the mere fact of a program’s unprofitability should not necessarily trigger Article 22 and the suspension of normal shared governance procedures.