Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner
187 So. 3d 404
La.2016Background
- Kenner merged its municipal firefighters’ retirement system into the statewide Firefighters’ Retirement System (FRS) in 1999 but continued its prior practice of excluding educational incentive, seniority incentive, holiday, and acting pay from pension-contribution calculations.
- Michael Dunn and other Kenner firefighters sued in 2010 seeking retroactive and prospective inclusion of those four pay types as “earnable compensation” under La. R.S. 11:233 and La. R.S. 11:2252.
- Kenner began paying contributions on holiday and acting pay in July 2010 but refused to (retroactively) include those or to include educational or seniority incentive pay.
- Cross-motions for summary judgment were filed. The trial court granted Kenner’s motion, excluding all four pay types from earnable compensation. The court of appeal reversed, holding each pay type is earned and not irregular/nonrecurring, and rendered summary judgment for the firefighters.
- The Louisiana Supreme Court granted review to decide whether each of the four categories constitutes “earnable compensation” for pension-contribution purposes.
- The Supreme Court affirmed the court of appeal: educational incentive pay, seniority incentive pay, holiday pay, and acting pay are all earnable compensation and not excluded as irregular or nonrecurring payments.
Issues
| Issue | Plaintiff's Argument (Dunn) | Defendant's Argument (Kenner) | Held |
|---|---|---|---|
| Whether educational incentive pay is "earnable compensation" | Payments are earned for additional education, paid regularly, and part of full compensation | Label "incentive" shows it is a bonus/gratuitous and thus excluded as irregular/nonrecurring | Included: earned, paid monthly, not irregular; must be included in contributions |
| Whether seniority incentive pay is "earnable compensation" | Paid for completing service milestones; compensates for retained experience and is part of full compensation | Is a retention/status bonus unconnected to services and thus excluded | Included: earned by meeting service prerequisites, regularly paid annually, not irregular |
| Whether holiday pay is "earnable compensation" | Statutorily mandated compensation for working holidays; constitutes earned, recurring pay on a regular tour of duty | Irregular because whether a particular firefighter works a holiday varies by rotating schedule | Included: statutory, recurring, non-gratuitous, part of full compensation on regular tour of duty |
| Whether acting pay is "earnable compensation" | Pay for performing duties at a higher classification; part of full compensation for the work performed | Irregular/temporary and optional appointments make it an excluded nonrecurring payment | Included: compensates actual work on regular tour of duty; common and recurring in practice; not excluded |
Key Cases Cited
- Fishbein v. State ex rel. LSU Health Sciences Ctr., 898 So.2d 1260 (La. 2005) (interpreting "earnable compensation" for retirement calculations and finding supplemental pay could be earnable)
- T.L. James & Co. v. Montgomery, 332 So.2d 834 (La. 1976) (employer retirement contributions characterized as additional remuneration, not mere gratuity)
- Swift v. State, 342 So.2d 191 (La. 1977) (pension statutes remedial and must be liberally construed for beneficiaries)
- Cat's Meow, Inc. v. City of New Orleans, 720 So.2d 1186 (La. 1998) (text of a law is the best evidence of legislative intent)
- City of New Orleans v. La. Assessors' Retirement & Relief Fund, 986 So.2d 1 (La. 2007) (discussion of consolidated public retirement systems)
- Born v. City of Slidell, 180 So.3d 1227 (La. 2015) (when employer promises benefits and employee meets conditions, result is not mere gratuity)
- Reynolds v. Bordelon, 172 So.3d 607 (La. 2015) (standard of review for summary judgment)