U.S. District Court gives go-ahead for lawsuit against Academy of Art University

(KTSF by Susannah Lee)

Four former enrollment advisors of the Academy of Art University sued the school for calculating pay based on the number of students they enroll, which violates the Incentive Compensation Ban.

U.S. District Court Judge Phyllis Hamilton rejected the defendant’s motion to dismiss the case.

The plaintiffs filed the lawsuit as “relators” under the False Claims Act, representing the U.S. government.

“The plaintiffs’ salary could go up, up and up, sometimes by many many thousands of dollars a year. Conversely and more importantly, if they didn’t make their goal, the university would actually try to lower their salaries, take back money; we call that a claw back feature,” says
Stephen Jaffe, the lawyer representing the plaintiffs.

“We contend in reality they continue to do exactly what was forbidden which is to measure the compensation of the enrollment advisors solely by how many students they enrolled. That’s essentially the gist of the lawsuit.”

In response to the enquiry, the lawyer representing the Academy of Art University released a statement calling this lawsuit “frivolous with no merit, and that once the facts are reviewed and the legal process plays out, it will be clear that the Academy of Art University complied with existing regulations.”

(Copyright 2012 KTSF. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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