An independent arbitrator has ruled that Portland State University violated its collective-bargaining agreement by failing to involve faculty in budget-cut decisions, ordering reinstatement and back pay for 10 nontenure-track faculty laid off in June. The decision centers on contractual shared-governance procedures for curricular and programmatic changes. The AAUP chapter and faculty union framed the decision as a decisive rebuke of administrative overreach; the university said it strongly disagrees and is reviewing options. The ruling underscores that shared governance is legally enforceable, not merely aspirational, and signals risk for campus leaders who move quickly on retrenchment without documented faculty consultation. Administrators at other institutions facing fiscal retrenchment will likely watch Portland State’s outcome closely when designing layoffs, program eliminations and communications with faculty bodies.