Downtown-based Education Management Corp. has filed a muscularly written defense of the recruiter compensation practices for which it has been sued by the federal government and several states, in an effort to get that lawsuit dismissed.
In part, it argues that a new rule that forced changes in pay practices at some colleges proves that EDMC's practices were previously legal.
Federal laws have long barred pay plans for college recruiters "based solely on the number of students recruited." Two whistleblowers, the Department of Justice, five states and the District of Columbia have said that EDMC broke that law. They want for-profit EDMC, with 106 facilities and around 150,000 students nationwide, to pay back billions of dollars in government aid for students.
EDMC in its brief filed late Friday reiterated that its compensation system was based only partly on the number of new students that a recruiter enrolled, so it didn't violate rules against pay plans based "solely" on enrollments. The system also took into account recruiter qualities including "professionalism, customer service, and business practices and ethics," EDMC wrote.
In a new wrinkle in its defense, EDMC noted that last year the Department of Education banned any consideration of enrollments in recruiter pay, thus "explicitly acknowledging in the process that the regulation in this case allowed salaries bases in part on enrollment success."
In essence, EDMC argues that by banning any consideration of enrollments in setting pay, the federal government was confirming that its practices were, prior to the ban, OK.
"If the rules that currently exist had been interpreted the way [the plaintiffs] say, there wouldn't have been any reason to change them at all," said Bonnie J. Campbell, a former Iowa attorney general and former Department of Justice official.
"But now you're coming back and saying that the rules that are [in effect] post-July of last year applied from 1992 to 2000, the period that is being covered" in the lawsuit, she said.
The Department of Education has argued in briefs in other cases that the law was changed last year to stop "unscrupulous actors" who were using the law's language to circumvent Congress's intent.
The case is before U.S. District Judge Terrence F. McVerry. It is unclear if the parties will be allowed to file more briefs before he decides whether to dismiss the case or allow it to proceed.
Rich Lord: email@example.com or 412-263-1542