Judge Certifies $200M Class Action Over Teacher Pensions
"If ever there was a question that ought to be resolved once and for all, it is whether this school district shortchanged these teachers unlawfully," DeKalb County Superior Court Judge Gregory A. Adams said.
March 30, 2020 at 04:09 PM
4 minute read
With an order that means potentially hundreds of millions of dollars to thousands of teachers, a judge has flipped his own earlier position and ruled that a group of DeKalb County School District employees have the right to proceed together with their lawsuit accusing the Board of Education of illegally ending contributions to their retirement fund.
DeKalb County Superior Court Judge Gregory A. Adams granted a motion for class certification and named teachers to serve as representatives in the lawsuit going forward with an order signed March 26.
More than 10,000 teachers and other employees contend—"and the appellate courts have established"—that the school district "breached their contract by improperly reducing certain retirement benefits," Adams said. "If ever there was a question that ought to be resolved once and for all, it is whether this school district shortchanged these teachers unlawfully."
This is the same judge who had previously thrown out the lawsuit.
The Georgia Court of Appeals reversed Adams and remanded the case to him for reconsideration. Judge John Ellington wrote the reversal opinion on June 1, 2018, agreeing with the teachers that they had "an enforceable 'governmental promise' that required two years' notice before reducing or suspending funding." Ellington wrote for a panel that included Judge Charlie Bethel and Senior Judge Herbert Phipps. The school district appealed to the Georgia Supreme Court, which unanimously affirmed the panel's ruling in November 2019. (Both Ellington and Bethel had moved up to the high court by then.)
The DeKalb teachers' pension program was created like those of other school districts that opted during the 1970s to create an alternative to Social Security retirement benefits. The dispute dates to 2009 and the Great Recession, when then-Gov. Sonny Perdue announced a 3% reduction in state funding for all Georgia school systems, Ellington explained.
"In an effort to manage the expected loss of up to $20 million in state funding and the resulting budget deficit, the board decided to suspend contributions" to the teachers retirement plan, Ellington said. "Although the board notified employees that funding of the [retirement] plan would be suspended, it did not give two years' notice prior to suspending funding."
Ellington pointed to "evidence in the record from which a fact-finder could infer" that the school board was aware that suspending funding to the retirement plan without the required two-year notice violated its own policies.
Furthermore, Ellington said, "There is no evidence in the record that the district has restored any funding." He said that, in June 2010, the school board "amended its by-laws and policies to remove the two-year notice provision."
The board disputed the two-year notice requirement, but the teachers argued that failing to meet it made the budget cuts illegal. The $20 million on the line for the year the contributions were cut, multiplied by the 10 years of budgets since, could mean $200 million or more is at stake in the case—plus interest.
The school district defense attorneys are Allegra Lawrence-Hardy, Thomas Bundy III, Lisa Haldar and Leslie Bryan of Lawrence & Bundy. The district's response was only that it is reviewing the ruling and "determining our future course of action."
The Barnes Law Group represents lead plaintiff Elaine Gold and others. The team includes former Gov. Roy Barnes and John Salter Jr. They were joined by Michael Terry and Jason Carter of Bondurant, Mixson & Elmore.
"For ten years, the district and board have been trying to get a court to say they can break promises, cheat their employees, and still be beyond the law," Salter said Friday evening. "It's been my privilege to represent a handful of educators who stood up for their coworkers and never quit. They are overjoyed because the class certification order promises justice for all, not just the few."
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