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Justices consider state back-pay suit

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Indiana Lawyer Rehearing

Almost a year after the Indiana Court of Appeals significantly slashed a $42.4 million damages award against the state, the Indiana Supreme Court heard arguments Sept. 8 on whether past and present employees can recover back pay and how much should be awarded.

Justices heard arguments in the case of Richmond State Hospital, et al. v. Paula Brattain, et. al., No. 49A02-0908-CV-718. This appeal by the Indiana attorney general’s office follows a July 2009 decision by Marion Superior Judge John Hanley, which awarded $42,422,788 million to 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.

But in October 2010, the Court of Appeals cut the period from which employees can recover back pay from 20 years to about two months. The judges 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 lawsuit was filed July 29, 1993, to when the state courts abolished the split-class system in September 1993.

In total, the judge’s analysis of the four classes translated to: $20,979,490 for overtime-eligible merit employees, $2,696,812 for overtime-exempt merit employees, $16,762,773 million for overtime-eligible non-merit employees, and $1,983,713 for overtime-exempt non-merit workers.

The justices granted transfer earlier this year, and during arguments asked questions delving into the various classes of employees and whether Indiana Code Section 4-15-2-35 and former 31 Indiana Administrative Code 2-13-1 apply only to merit employees. Questions also focused on the application and interpretation of previous caselaw – 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.

Attorneys discussed why they believe or do not think that evidence shows the state was put on notice in 1988 rather than before the filing in 1993, and when the liability period begins using the methodology from precedent.•
 

Rehearing "Appeals court pares back-pay award" IL Oct. 13-26, 2010

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