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Court cuts $42.4 million state back pay award

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The Indiana Court of Appeals today significantly slashed a $42.4 million damages award against the state, cutting the period from which employees can recover back pay from 20 years to about two months.

In its ruling in Richmond State Hospital, et al. v. Paula Brattain, et. al., No. 49A02-0908-CV-718, a three-judge appellate panel found that thousands of past and present state workers can still recover money they should have earned on the job. But the judges reversed one part of a Marion Superior judge’s decision from last year that some of those employees could recover back pay for a period from 1973 to 1993.

Instead, the appellate court held that certain employees shouldn’t be able to recover for that two-decade period but instead only for a time limited to 10 days before the class-action suit was filed July 29, 1993, to when the state courts abolished the split class system in September 1993.

While attorneys are studying the 54-page decision, initial estimates gleaned from the ruling are that it reduces the damages for merit-based employees from $23.5 million to an estimated couple million dollars. The remaining $18.6 million awarded to non-merit employees would not be affected by this change and the appellate court affirmed that aspect.

This appeal by the Indiana Attorney General’s Office follows a July 2009 decision by Marion Superior Judge John Hanley, which awarded a total of $42.4 million to as many as 15,000 or more past and present state workers who’d fought to recover back pay for unequal wages earned during those two decades. The trial judge found that by requiring plaintiffs and others to work 40 hours a week in “split classes” during those years, the state violated the “equal pay for comparable work” regulation and breached its employment contracts.

In total, the judge’s analysis of the four classes translated to: $20.9 million for overtime-eligible merit employees, $2.7 million for overtime-exempt merit employees, $16.7 million for overtime-eligible non-merit employees, and $1.9 million for overtime-exempt non-merit workers.

On the merit employee aspect, the state AG’s Office had argued for the limited liability period rather than 20 years based on an Indiana Supreme Court decision made almost a decade ago: State Employees’ Appeals Commission .v Bishop, 741 N.E. 2d 1229 (Ind. 2001), (Bishop II), which was a consolidation of Indiana State Employees’ Appeals Commission v. Greene, 716 N.E. 2d 54, 57-58 (Ind. Ct. App. 1999), and Indiana State Employees’ Appeals Commission v. Bishop (Bishop I), 721 N.E. 2d 881, 884-85 (Ind. Ct. App. 1999). In those cases, the Court of Appeals found employees were entitled to back pay for only a limited period starting 10 days before the respective complaints were filed. The Supreme Court upheld that finding.

Reaching its conclusion, the panel noted that Indiana Code Section 4-15-2-35 and former 31 Indiana Administrative Code 2-13-1 apply only to merit employees and that Greene, Bishop I, and Bishop II are dispositive.

“However, we recognize that the effect creates an apparent anomaly. Indiana Code Section 4-15-2-35 and former Indiana Administrative Code 2-13-1 do not apply to non-merit employees and cannot be considered part of their contractual relationship with the State, so their back pay is not limited by the ten-day rule,” the court wrote. “Nevertheless, we are constrained to follow our supreme court’s pronouncement in Bishop II. The enterprise of creating law is outside our sphere of authority. Although our supreme court has the ability to revisit the issue and redefine the law, until that time, we are obliged to apply it as it currently exists.”

This panel – made up of authoring Judge Terry Crone with Chief Judge John Baker and Judge Michael Barnes concurring – instructs the Marion Superior Court to recalculate the merit-employees’ award based on the limited time period in 1993. Exactly when that ending period date should be is something the trial court will also have to examine because the Greene, Bishop I, and Bishop II rulings aren’t clear on whether the split class system was abolished on Sept. 19, 1993, or Sept. 12, 1993.

In addition to the liability period and damages aspects, the Court of Appeals found that statutory requirements for class certification were met; the trial judge didn’t err in finding that merit employees were excused from exhausting administrative remedies because to do so would have been futile; the trial court correctly determined which class the employees belonged in; there weren't any errors in admitting certain evidence; and that the state failed to establish all the elements of laches to bar the employees’ claims.

The state AG’s office was reviewing the ruling and not able to comment by early afternoon, while Indianapolis attorney John Kautzman for the plaintiffs said this is a mixed ruling that can be seen both as a victory and a defeat for the state employees.

“We’re seeing it as a resounding success that the court affirmed the state’s liability and that we got a victory on the non-merit employees, but that’s tempered by the merit employees’ (damages) being substantially reduced.”

Kautzman and his legal team are reviewing what comes next, but he said one step may be to ask the Court of Appeals for a rehearing to offer a clarification on its methodology in order to determine when the state actually received notice of the issue – 1988 or the time the suit was filed in 1993.

“We believe that there’s evidence showing the state was put on notice prior to that date, and so that’s when it should start,” he said. “Even if we’re using this Greene and Bishop methodology and the 10 days applies, we would extend the period from 1988 to 1993 and put a good amount of the money back on the table.”
 

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  1. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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