MARGARET WARNER: And, finally tonight, we close out our weeklong series on the high-profile campaign to change the public school system in the nation's capital.
This week, we have been revisiting key developments in this story, as told by the "NewsHour"'s special correspondent for education, John Merrow.
Tonight, we go back to November to look at how Chancellor Michelle Rhee and the schools are faring in her third year.
JOHN MERROW: On a Thursday morning in October, six weeks into the school year, members of Washington, D.C.'s, teachers union gathered to send a message.
GEORGE PARKER, president, Washington Teachers Union: We will not let anyone intimidate us in our schools. We will not be controlled by fear.
JOHN MERROW: Their message was for D.C. Schools Chancellor Michelle Rhee, who had unexpectedly laid off 229 teachers to close a budget shortfall.
WOMAN: We have been totally disrespected. We have been treated like we don't matter.
PROTESTERS: Can't take no more. Can't take no more.
EVE MCCAREY: I was laid off on Friday. On Saturday, I look online on the newspaper, Washington Post, and it's all about, oh, well, it's good thing we got rid of the incompetent, lazy teachers who don't plan lessons.
PROTESTERS: Fired up! Fired up! Fired up!
JOHN MERROW: The city council took up the issue weeks later, alleging that Rhee overstepped her authority in making the layoffs, and engineered the budget shortfall in order to get rid of teachers she didn't want.
HARRY THOMAS JR., Council of the District of Columbia: By your own admission, you have stated on the record that you made an administrative decision, regardless of the law and the process that is in front of you to follow.
MICHELLE RHEE, chancellor, District of Columbia Public Schools: My understanding is that I do have the authority, as the agency head, to make the decisions about moving budget from one place to another.
VINCENT GRAY, Council of the District of Columbia: These people sitting out here lost their jobs, because that's the decision you made.
MICHELLE RHEE: Correct.
VINCENT GRAY: So, what is the council supposed to do at that point?
MICHELLE RHEE: My understanding is that I do have the authority.
VINCENT GRAY: Well, before you move to your understanding, I am just talking about the law.
JOHN MERROW: Michelle Rhee has been no stranger to controversy since she took control of D.C.'s public schools over two years ago. She's closed 25 schools, replaced almost half her principals, and battled the teachers union over a new contract. But some believe Rhee's latest actions pose a threat to her larger reform effort.
Even as teachers across the country were losing jobs, Rhee hired 934 new teachers between spring and fall. That's double the number D.C. usually adds. But, by fall, the picture had changed. In October, Rhee declared a budget shortfall of nearly $44 million, with nearly half coming from mid-summer cuts by the city council. Then came the layoffs, called a reduction in force, or RIF, followed by an explosion of accusations.
GEORGE PARKER: I think that, the way this RIF was conducted, there are going to be many lawsuits.
JOHN MERROW: George Parker is president of the teachers union.
GEORGE PARKER: I think, to some degree, there might have been an intentional effort to target some teachers to get rid of them. And the way you do that is that you go out and you hire additional teachers, because, somewhere down the line, you intend to use those teachers to replace certain targeted teachers.
JOHN MERROW: Fueling Parker's suspicions are public comments by Rhee and her team. Early last year, her head of professional development spoke with us about Washington's teachers.
CHERYL KREHBIEL, District of Columbia Public Schools: Fifty percent don't have the right mind-set, and there's a possibility that more of them don't have the content knowledge to do their job.
JOHN MERROW: And Rhee has been open about her operating style since our first interview two years ago.
Are you a rule-breaker?
MICHELLE RHEE: I think what I am is somebody who is focused on the end result that I think needs to happen. So, if there are rules standing in the way of that, I will question those rules. I will bend those rules.
JOHN MERROW: At an education conference two weeks after the layoffs, I asked Rhee and her boss, Mayor Adrian Fenty, about the controversy.
They're saying, because you overhired, you have a surplus, and then you can, since you're not doing seniority, the principals can go and they can say, aha, we have to RIF some people I have always wanted to get rid of.
MICHELLE RHEE: In D.C., we actually cannot do that. By law, we can only move a personnel action form forward if there is a vacancy at a school level, and then there is a budget to support that...
JOHN MERROW: Why are you RIFing then? You're RIFing for budget reasons?
MICHELLE RHEE: Yes. These are terminations that were a result of a budget reduction that we had to take.
JOHN MERROW: Because Rhee tied the layoffs to budget pressures, she was not bound by the existing teachers contract. To make the reduction in force, principals used a formula devised by Rhee, in which seniority counted for just 5 percent.
MICHELLE RHEE: What typically happens in a school district is, you know that 250 people have to go. It's last in, first out, right? And that's just the way that it goes. But that's not the way that it should go.
ADRIAN FENTY, mayor, Washington, D.C.: The model we are pushing towards is a model wherein, you know, the principal has the autonomy that you find in a charter school or a private school.
JOHN MERROW: In order to change the system permanently, to alter the way principals hire and fire teachers, Rhee needs a new teachers contract. The union is now suing to overturn the layoffs. Despite the standstill, Rhee has some backing on the city council, which has oversight of the schools.
JACK EVANS, Council of the District of Columbia: I don't believe she over-hired, with the intent then of firing teachers that she didn't want there. I don't think that's what happened. And, even if it did, so what? You know, Michelle Rhee is in charge of the schools.
JOHN MERROW: But even supporters, like Jack Evans, are worried.
JACK EVANS: And, yet, we are sitting in a chamber where the tensions couldn't be higher. We cannot continue to have this kind of craziness.
MICHAEL A. BROWN, Council of the District of Columbia: You clearly don't trust a lot of the stakeholders. It's obvious the stakeholders don't trust your office. So, how do we repair this?
MICHELLE RHEE: I will fully do my part, to the extent that people have suggestions about how we move forward. Some of the difficult decisions that we make will indeed cause some people to be unhappy. But we know we have to push forward on those decisions because they are right for schools and kids.
JOHN MERROW: Rhee remains confident that, in the long run, results will prove her right.