Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner , 2016 La. LEXIS 103 ( 2016 )

Supreme Court of Louisiana
FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #005
FROM: CLERK OF SUPREME COURT OF LOUISIANA
The Opinions handed down on the 27th day of January, 2016, are as follows:
BY CRICHTON, J.:
2015-C -1175 MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED PERSONS, KENNER
FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF v. CITY OF KENNER
(Parish of Jefferson)
For the reasons set forth herein, we find that the trial court
erred in granting Kenner’s motion for summary judgment on each of
the four types of compensation at issue – educational incentive
pay, seniority incentive pay, holiday pay, and acting pay – and
denying the Firefighters’ cross-motion for summary judgment. We
further hold that the court of appeal was correct to find no
genuine issues of material fact that the four payment types must
be included as "earnable compensation” and that the Firefighters
were entitled to judgment as a matter of law, and to its
rendering of summary judgment in favor of the Firefighters.
Accordingly, we affirm the judgment of the court of appeal.
AFFIRMED.
HUGHES, J., dissents in part with reasons.
01/27/2016
SUPREME COURT OF LOUISIANA
NO. 2015-C-1175
MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED
PERSONS, KENNER FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF
VERSUS
CITY OF KENNER
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,
FIFTH CIRCUIT, PARISH OF JEFFERSON
CRICHTON, J.
This case arises from a dispute between the City of Kenner (“Kenner”) and
Kenner’s firefighters concerning the computation of retirement benefits under La.
R.S. 11:233 and 11:2252. The dispute centers around four types of compensation
– educational incentive pay, seniority incentive pay, holiday pay, and acting pay –
and the res nova question presented to the Court is whether these types of
compensation should be considered “earnable compensation” for purposes of
calculating the firefighters’ pension contributions. For the reasons set forth below,
we affirm the court of appeal holding that no genuine issues of material fact remain
as to whether each of the four types of pay constitutes “earnable compensation”
under the requirements of the statutes.
BACKGROUND
In 1999, the Kenner merged its municipal retirement system for firefighters
with the statewide Firefighters’ Retirement System (“FRS”). Under the pre-1999
municipal retirement system, Kenner calculated firefighters’ pension contributions
based on base pay and supplemental pay, but did not include in the calculation
educational incentive pay, seniority incentive pay, holiday pay, and acting pay.
After the systems merged, Kenner made no changes in its method of calculating
pension contributions.
1
In May 2010, Michael Dunn, on his own behalf and on behalf of the class of
all similarly situated employees of the Fire Department, City of Kenner and of the
members of the Kenner Fire Fighters Association Local 1427 (“Firefighters”), filed
a lawsuit in the 24th Judicial District Court, Parish of Jefferson, against Kenner,
seeking retroactive adjustment to, and forward correction of, Kenner’s pension
contributions.1 The Firefighters later amended the petition to remove the class
allegations, adding individual firefighters and alleging that Local 1427 was suing
on behalf of its members. The Firefighters alleged that certain types of pay –
educational incentive pay, seniority incentive pay, holiday pay, and acting pay –
should be included in the definition of “earnable compensation” for the purpose of
calculating pension contributions pursuant to La. R.S. 11:233.2 In July 2010,
Kenner began remitting pension contributions on holiday and acting pay, but did
not make retroactive adjustments to holiday pay and acting pay or begin remitting
pension contributions on either educational incentive pay or seniority incentive
pay. 3
Kenner filed a motion for summary judgment in October 2013, arguing that
these four types of compensation were not “earned” during a “regular tour of
1
In 2002, Dunn on behalf of himself and a class of similarly situated firefighters filed an initial
suit against Kenner, alleging that Kenner miscalculated the employees’ longevity pay, overtime
pay, and holiday pay and intentionally concealed the miscalculations. The trial court dismissed
the petition on the grounds of abandonment in 2007, and the court of appeal reversed. This
Court then granted the writ, reversed the court of appeal, and reinstated the trial court’s decision.
09-1108 (La. 9/18/09), 17 So. 3d 400.
Pending the outcome of the first suit, the plaintiffs filed another lawsuit asserting miscalculation
of wages. Kenner filed an exception of lis pendens and prescription, which the trial court granted
and the court of appeal affirmed. 08-690 (La. App. 5 Cir. 4/28/09), 13 So. 3d 593.
2
The Firefighters also sought relief on wage issues, specifically retroactive and forward pay
adjustments on Kenner’s failure to include state supplemental pay in the calculation of longevity,
holiday, and overtime pay. The trial court granted Kenner’s peremptory exception of
prescription, which was reversed by the court of appeal. This Court denied Kenner’s application
for a supervisory writ. 10-786 (La. App. 5 Cir. 1/31/11), writ denied, 11-0372 (La. 4/25/11), 62
So. 3d 88. In April 2012, the Firefighters filed a motion for partial summary judgment on both
the wages and pension issues. The trial court denied the motion on the pensions, but granted the
motion on the wage issues. As a result, the only claims remaining are these pension claims.
3
A certified public accountant engaged by Kenner conducted an audit to determine the amounts
that Kenner would owe FRS regarding holiday and acting pay. The CPA determined that
Kenner’s obligation would be approximately $832,000 with regard to these types of payment.
The report did not address incentive pay.
2
duty,” and were instead either bonuses or other types of irregular, nonrecurring, or
deferred payments. The Firefighters then filed a cross-motion for summary
judgment on the same issues, claiming Kenner was liable for failing to pay pension
contributions on the four types of pay.
On December 17, 2013, after a hearing on both motions, the trial court
granted Kenner’s motion for summary judgment and denied the Firefighters’ cross-
motion for summary judgment. The trial court found that educational incentive
pay, seniority incentive pay, holiday pay, and acting pay “are not included as
earnable compensation pursuant to La. R.S. 11:233,” and therefore should not be
considered in calculating the Firefighters' pension contributions. The trial court
stated that it chose to interpret the statute in a “strict fashion,” noting that “[i]f the
statute doesn't say it, okay, I'm not inclined to include it, regardless of how any
public entity may feel about voluntarily contributing anything to any pension.”
The Court of Appeal, Fifth Circuit, heard the Firefighters’ appeal before a
three-judge panel. Before rendering a decision, the court of appeal, en banc,
requested and heard additional argument and subsequently reversed the trial court.
Dunn v. City of Kenner, 14-113 (La. App. 5 Cir. 5/14/15), 170 So. 3d 1065. The
court of appeal noted that none of the four types of compensation at issue in the
case are expressly included or excluded as earnable compensation in the language
of La. R.S. 11:233, and therefore found the statute to be “inherently ambiguous.”
The court of appeal then undertook a two-step analysis under the catch-all
provision of La. R.S. 11:233(B)(2)(g), which excludes from the definition of
earnable compensation “any other type of irregular or nonrecurring payment.”
First, the court of appeal analyzed whether each type of compensation is “earned,”
and second, the court of appeal analyzed whether each type of compensation was
“irregular or nonrecurring.” Under this analysis, the court of appeal found that
each of the four types of compensation is earned and regular or recurring. The
3
court of appeal reversed both the trial court’s grant of Kenner’s motion for
summary judgment and the trial court’s denial of the Firefighters’ motion for
summary judgment. The court of appeal expressly found no genuine issues of
material fact as to whether the four payment types must be included as “earnable
compensation,” found the Firefighters were entitled to judgment as a matter of law,
and rendered summary judgment in favor of the Firefighters. 4
We granted the writ to determine whether each of the four types of payment
at issue constitutes “earnable compensation” for purposes of pension contributions.
Dunn v. City of Kenner, 15-1175 (La. 10/2/15).
APPLICABLE LAW
Courts of this state have routinely recognized the remunerative nature of
retirement contributions, which represent “an increasingly important part of an
employee’s compensation for his services.” See Fishbein v. State ex rel. L.S.U.
Health Sciences Center, 04-2482 (La. 4/12/05), 898 So. 2d 1260 (quoting
Andrepont v. Lake Charles Harbor & Terminal Dist., 602 So. 2d 704, 708 (La.
1992)). We have described retirement contributions as “an inducement to
employees to remain in the service of the company to enjoy the benefits the plan
promised.” T.L. James & Co. v. Montgomery, 332 So. 2d 834, 841 (La. 1975). An
employer’s contribution to retirement is “not a purely gratuitous act, but it is in the
nature of additional remuneration to the employee who meets the conditions of the
plan.” Id. See also Born v. City of Slidell, 15-0136 (La. 10/14/15), -- So. 3d --,
2015 WL 5972534 (“[W]hen an employer promises a benefit to employees, and
employees accept that offer, or benefit, by their actions in meeting the conditions,
the result is not a mere gratuity . . . .”).
4
Judge Liljeberg concurred in part and dissented in part, agreeing with the majority’s decision
on educational incentive pay, acting pay, and holiday pay, but finding that seniority incentive
pay is not earnable compensation. 14-113 (La. App. 5 Cir. 5/14/15), 170 So. 3d 1065.
4
Article X, section 29(E) of the Louisiana Constitution recognizes the
importance of the state retirement systems, providing that “[t]he actuarial
soundness of state and statewide retirement systems shall be attained and
maintained and the legislature shall establish, by law, for each state or statewide
retirement system, the particular method of actuarial valuation to be employed for
purposes of this Section.” In the year following the adoption of La. Const. Art. X,
§ 29(E), the legislature enacted Title 11 of the Louisiana Revised Statutes. Title 11
was enacted “to consolidate public retirement law in order to effectively comply
with the mandate of Article X, §29(E) of the Constitution of Louisiana to maintain
public retirement systems on a sound actuarial basis.” La. R.S. 11:2. See, e.g.,
City of New Orleans v. La. Assessors’ Retirement and Relief Fund, 05-2548 (La.
10/1/07), 986 So. 2d 1 (generally discussing establishment of consolidated public
retirement systems).
To comply with the constitutional mandate, the legislature established
employee contribution rates. See La. R.S. 11:62. La. R.S. 11:233(B)(1) falls
within Chapter 4 of Title 11, titled “Provisions Affecting More Than One System,”
which specifically applies to FRS and other public retirement or pensions systems,
funds, and plans. La. R.S. 11:233(B)(1) obligates cities and public bodies to make
pension contributions on “earnings or earned or earnable compensation, or its
equivalent,” which “shall mean the full amount earned by an employee for a given
pay period.” La. R.S. 11:233(B)(2) then lists types of compensation specifically
excluded from the definition of “earnable compensation.” La. R.S. 11:233
provides, in pertinent part:
A. The provisions of this Section shall apply to the following public
retirement or pension systems, funds, and plans:
(1) Firefighters' Retirement System. . . .
5
B. (1) . . . [F]or purposes of calculation of the amount of contributions
payable by an employer and employee and for computation of average
compensation, earnings or earned or earnable compensation, or its
equivalent, shall mean the full amount earned by an employee for a
given pay period.
(2) Earnings or earned or earnable compensation shall not include:
(a) Overtime unless it is required to be worked in the employee's regular
tour of duty;
(b) Operating expenses;
(c) Use of automobile or motor vehicles;
(d) The cost of any insurance paid by the employer;
(e) Any allowance for expenses incurred as an incident of employment;
(f) Payments made in lieu of unused annual or sick leave; and
(g) Bonuses, terminal pay, severance pay, deferred salary, or any other
type of irregular or nonrecurring payment.
Id. (emphasis added).
La. R.S. 11:233 is not the only statute relevant to our interpretation of what
is included in a Firefighter’s “earned or earnable compensation.” In La. R.S.
11:2252, which falls under Chapter 9 of Title 11 and governs FRS specifically, the
legislature stated: “‘Earnable compensation’ shall mean the full amount of
compensation earned by an employee on a regular tour of duty, including
supplemental pay paid by the state of Louisiana, but shall not include overtime.”
La. R.S. 11:2252(9)(a). (emphasis added).
Kenner has sought review of the court of appeal’s ruling, arguing that none
of the types of compensation at issue in this case are “earnable compensation”
under La. R.S. 11:233. Specifically, Kenner argues that “earnable compensation”
does not include educational incentive pay, seniority incentive pay, holiday pay, or
acting pay, because these types of pay are gratuitous bonuses, irregular and/or
nonrecurring payments, and not earned during a regular tour of duty. The
Firefighters argue that the four types of compensation at issue in this case should
all be considered “earnable compensation” for purposes of calculating their
pension contributions under La. R.S. 11:233.
6
ANALYSIS
Legislation is the solemn expression of the legislative will; thus, the
interpretation of legislation is primarily the search for the legislative intent. Cat's
Meow, Inc. v. City of New Orleans, 98-0601, p.15 (La. 10/20/98), 720 So. 2d 1186,
1198; La. Safety Ass'n of Timbermen Self-Insurers Fund v. La. Ins. Guar. Ass'n,
09-0023, p.8 (La. 6/26/09), 17 So. 3d 350, 355-56. See also La. R.S. 24:177(B)(1)
(“The text of a law is the best evidence of legislative intent.”). When a law is clear
and unambiguous, and its application does not lead to absurd consequences, it shall
be applied as written, with no further interpretation made in search of the
legislative intent. La. R.S. 1:4. The starting point for interpretation of any statute
is the language of the statute itself. See, e.g., Cat's Meow, 98-0601, p. 15, 720 So.
2d at 1198; Timbermen, 09-0023, p.8, 17 So. 3d at 356. Pension statutes, like
those at issue here, are remedial in nature and must be liberally construed in favor
of the intended beneficiaries. Swift v. State, 342 So. 2d 191, 196 (La. 1977). Any
ambiguity in such statutes must be resolved in favor of the persons intended to be
benefited by those statutes. Id. Additionally, “all laws pertaining to the same
subject matter must be interpreted in pari materia, or in reference to each other.”
See, e.g., State v. Williams, 10-1514 (La. 3/15/11), 60 So. 3d 1189, 1191; La. C.C.
art. 13.
La. R.S. 11:233 and La. R.S. 11:2252(9) are to be read in pari materia,
because they both relate directly to calculation of pension benefit contributions for
firefighters. These statutes make clear that there are certain kinds of compensation
on which contributions are due, and certain kinds of compensation on which
contributions are not due. Compensation on which contributions are due must first
be “earnings or earned or earnable compensation,” which “shall mean the full
amount earned by an employee for a given pay period” (La. R.S. 11:233(B)(1))
and “the full amount of compensation earned by an employee on a regular tour of
7
duty, including supplemental pay paid by the state of Louisiana” (La. R.S.
2252(9)(a)). Additionally, under La. R.S. 11:233(B)(2), the “earnings or earned or
earnable compensation” must be something other than the categories excluded
from the calculation, including unused sick leave, deferred salary, overtime, a
bonus, or “any other type of irregular or nonrecurring payment.”
We first turn to the meaning of “earnable” compensation, which is defined in
the statutes themselves. As noted above, La. R.S. 11:233(B)(1) states that earnable
compensation “shall mean the full amount earned by an employee for a given pay
period.” Id. (emphasis added). Likewise, La. R.S. 11:2252(9)(a) defines earnable
compensation as “the full amount of compensation earned by an employee on a
regular tour of duty.” Id. (emphasis added). The phrase “full amount” is only
limited by the terms “for a given pay period” and “on a regular tour of duty,” and
by the expressly excluded categories set forth in La. R.S. 11:233(B)(2)(a)-(g).
This Court previously analyzed the term “earnable compensation” in the
context of the Teachers’ Retirement System, in a case in which the plaintiff sought
a declaratory judgment that her supplemental salary was a component of earnable
compensation for purposes of calculating retirement benefits. Fishbein, 898 So. 2d
at 1264 (interpreting La. R.S. 11:701(10)). In that case, the controlling pension
statute did not expressly include or exclude supplemental salary as earnable
compensation. Rather, the statute required that the salary be earned during the
member’s “full normal working time as a teacher.” La. R.S. 11:701(10). The
Fishbein Court held that the supplemental compensation was earned during the
plaintiff’s “full normal working time,” and paid to the plaintiff “based upon the
market conditions and the responsibilities she undertook.” See Fishbein, 04-2482,
p.18, 898 So. 2d at 1271. The Court also found that supplemental pay was “not
sufficiently analogous” to any of the items of pay expressly excluded in the statute.
898 So. 2d at 1272. Fishbein is instructive here insofar as it examines the
8
supplemental pay at issue both in connection with whether it is “earnable” and
whether it is “analogous” to the excluded types of pay listed in La. R.S.
11:233(B)(2)(g).
Though it is not defined in La. R.S. 11:233 or La. R.S. 11:2252, the term
“regular tour of duty” is defined in the federal context as “a firefighter’s official
work schedule, as established by the employing agency on a regular and recurring
basis . . . . The tour of duty may consist of a fixed number of hours each week or a
fixed recurring cycle of work schedules in which the number of hours per week
varies in a repeating pattern.” 5 C.F.R. 550.1302. The Kenner Firefighters work
212 hours over a 28-day period.5
The general pension statute also sets forth what items are not included in
earnable compensation. “Overtime” is not included “unless it is required to be
worked in the employee’s regular tour of duty.” La. R.S. 11:233(B)(2)(a).
Additionally, certain other categories are expressly excluded, as set forth in La.
R.S. 11:233(B)(2)(b)-(g). These include operating expenses, insurance paid by the
employer, payments made in lieu of unused annual or sick leave, and “bonuses,
terminal pay, severance pay, deferred salary, or any other type of irregular or
nonrecurring payment.” La. R.S. 11:233(B)(2) (emphasis added). The terms
“irregular” and “nonrecurring” are unambiguous. For purposes of statutory
interpretation, dictionaries are a valuable source for determining the “common and
approved usage of words.” Gregor v. Argenot Great Cent. Ins. Co., 02-1138, p.7
(La. 5/20/03), 851 So. 2d 959, 964. Merriam-Webster defines “irregular” as “not
normal or usual: not following the usual rules about what should be done,” and
“happening or done at different times that change often”; it defines
“nonrecurring” as “unlikely to happen again.” See “irregular” and “nonrecurring,”
5
Though we do not believe the term “regular tour of duty” is ambiguous, and no party has
argued that it is, we note that any ambiguity must be resolved in favor of the beneficiaries. See
Swift, 342 So. 2d at 196.
9
Merriam-Webster Online Dictionary 2015, available at http://www.merriam-
webster.com. These terms are capable of plain language interpretation.
A straightforward reading of the statutes in pari materia makes clear that to
qualify as compensation eligible for contribution calculation, the earnings are (1)
“earned or earnable compensation” – specifically, the earnings are the “full
amount” of compensation earned “for a given pay period” or “on a regular tour of
duty” – and (2) the earnings are not expressly excluded from the calculation by the
list in La. R.S. 11:233(B)(2)(a)-(g) or by the “catch all” provision of “irregular and
nonrecurring” in La. 11:233(B)(2)(g). We find that these statutes are clear and
unambiguous. The words in the statutes, and the statutes as a whole, can be
interpreted and understood according to their plain language. See Fishbein, 04-
2482, 898 So. 2d 1260 (finding no ambiguity in interpreting the term “earnable
compensation” in connection with the Teachers’ Retirement System). 6
The motions at issue here are motions for summary judgment, and we are
therefore cognizant of the standard of review for such motions. A motion for
summary judgment is a procedural device used when there is no genuine issue of
material fact for all or part of the relief prayed for by a litigant. It is reviewed on
appeal de novo, with the appellate court using the same criteria that govern the trial
court's determination of whether summary judgment is appropriate; i.e., whether
there is any genuine issue of material fact, and whether the movant is entitled to
judgment as a matter of law. Reynolds v. Bordelon, 14-2371 (La. 6/30/15), 172 So.
3d 607. We will now review each of the types of payment in turn.
6
Though the court of appeal in the instant case ultimately reached the correct result, we decline
to adopt certain of its findings. First, the court of appeal held that La. R.S. 11:233 is “inherently
ambiguous,” because the four types of compensation at issue are not expressly included or
excluded in the language of La. R.S. 11:233(B)(2). 14-113, p.8, 170 So. 3d at 1070. For the
reasons set forth above, we do not agree, and find the statute to be unambiguous. Second, the
court of appeal held that the terms “irregular and “nonrecurring” are “at the crux of this
analysis.” Id. But in making this finding, the court of appeal favored one factor over the others
and did not appropriately consider the meaning of “earnable” under La. R.S. 11:233(B)(1) and
La. R.S. 11:2252(9).
10
Educational Incentive Pay
Educational incentive pay is compensation paid to firefighters who complete
certain education requirements, including college degrees or other prerequisite
educational certifications determined by Kenner. See La. R.S. 33:2586
(authorizing establishment of “a plan for awarding incentive pay” and noting that
the pay “shall be in addition to any other salary the classified employee is entitled
to receive from the municipality, the state, or any other governmental entity”). The
pay is calculated annually and paid monthly, in 12 separate and equal installments,
to qualifying Firefighters. The court of appeal found that educational incentive pay
is “earned compensation” within the meaning of La. R.S. 11:233, and we agree.
First, educational incentive pay constitutes “earnings or earned or earnable
compensation.” Kenner claims that the word “incentive” itself demonstrates that
educational incentive pay is in the nature of a bonus, but we disagree. Accepting
this argument would conflict with a guiding principle of our statutory
interpretation: when a law is clear and unambiguous, and its application does not
lead to absurd consequences, it shall be applied as written. La. R.S. 1:4. Kenner’s
interpretation of “incentive” in this context would lead to absurd consequences,
because it would permit Kenner, at its own discretion, to label types of
compensation as a “bonus” in order to circumvent pension contributions.7
Here, as in Fishbein, the Firefighters “earned” the educational incentive pay,
because it is based on additional education of the Firefighters. In exchange for the
payments, the educational incentive pay plan provides Kenner with the benefits of
an enhanced fire protection and emergency response force. 8 The Firefighters
7
Indeed, though it is not directly analogous, in the employment law context, courts have
recognized the distinction between an incentive and a bonus. See Rick J. Norman, La. Prac.
Employment Law § 4:27 (updated Dec. 2015) (collecting cases) (noting that sums that are paid
“as part of an incentive plan to encourage longevity or production may be called ‘bonuses,’” but
such payments are not true bonuses and “have been considered wages”).
8
See, e.g., Morgan v. City of Shreveport, 46-362 (La. App. 2 Cir. 7/13/11), 71 So. 3d 1104,
1109-10 (noting that Shreveport’s educational incentive pay plan incentivizes firefighters to “be
11
“earn” this pay and receive it as part of the “full amount” of compensation earned
“for a given pay period” or “on a regular tour of duty.” See La. R.S. 11:233(B)(1);
La. R.S. 11:2252(9)(a). Kenner cannot change the nature of the payment simply
by giving it a name similar to a “bonus.”
Further, the educational incentive payments are not “irregular” and
“nonrecurring” such that they would fall under the catch-all provision of La. R.S.
11:233(B)(2)(g). The evidence submitted by the Firefighters in support of their
motion for summary judgment makes clear that the payments were submitted
monthly to qualifying Firefighters, in a routine manner that is scheduled to occur
for as long as the Firefighters qualify and funds are available.9 Kenner submitted
no contradictory evidence either in support of its motion for summary judgment or
in opposition to the Firefighters’ motion for summary judgment that would carry
its burden of demonstrating that the educational incentive pay program was
anything other than an earned, regular payment. Finally, as noted by the court of
appeal, the legislature’s decision not to specifically exclude educational incentive
pay from the definition of “earnable compensation” in the list of exclusions in La.
R.S. 11:233(B)(2) further supports the conclusion that it is included as earnable
compensation. See Fishbein, 898 So. 2d at 1272.
better trained for the lifesaving and property-protecting services they provide”), writ denied, 11-
1929 (La. 11/14/11), 75 So. 3d 944.
9
The evidence included:
A 1995 memorandum from Kenner's Fire Chief to all fire department personnel, which stated
that the educational incentive program was part of the effort to “try and increase benefits”
within the existing budget.
A 1997 internal communication from Kenner's Fire Chief to all fire personnel, which
discusses the requirements for the receipt of educational incentive pay and states that “[a]fter
the above has been completed, the fire suppression personnel will start to get credit for that
month on, until the end of the year.”
A 1998 memorandum from Kenner's Mayor to Kenner’s Firefighters, which states that the
Mayor was seeking to “increase the Educational Incentive Plan,” which “could translate to an
additional $50 per month for firefighters who are qualified, for a total of $100 per month.”
1998 memorandum from Kenner’s Fire Chief to all fire personnel describing “second level of
LSU Certifications,” which states that educational incentive pay would be paid monthly to
qualifying firefighters “as long as funds are available.”
12
Seniority Incentive Pay
Kenner developed and implemented the Seniority Incentive Pay Program in
1995 to incentivize experienced firefighters to remain with the fire service.
Seniority incentive pay is paid once a year in January to Firefighters who have
completed an additional 12 months of service.10 An employee who separates from
the fire service any time within the calendar year receives no seniority incentive
pay for that year.
Kenner asserts that seniority incentive pay is “not connected in any manner
whatsoever” to a Firefighter’s rank, the number of hours worked, or services
rendered, and therefore argues it is “obviously” in the nature of a bonus intended to
retain experienced employees and excluded from contribution calculations under
La. R.S. 11:233(B)(2)(g). As with educational incentive pay, this argument leads
to the absurd result that Kenner could label payment types with the intent of
excluding them from pension contributions. Also as with educational incentive
pay, we find that the seniority incentive pay is “earned compensation.” In order to
“earn” the payments, Firefighters are required to meet certain prerequisites, in the
form of years of service to Kenner. As with educational incentive pay and with the
supplemental pay discussed in Fishbein, seniority incentive pay is remunerative
because, in exchange for the payments, Kenner retains more experienced
firefighters. 11 Seniority incentive pay qualifies as a portion of the “full amount”
earned by a Firefighter on his tour of duty, because even though it is paid only
once a year, a Firefighter does not receive the payment unless he completes each of
his required tours of duty.
10
The present rate of seniority incentive pay is $48 for each full year of service. An employee
with one year (12 months) of service receives $48; an employee with two years (24 months) of
service receives $96; etc.
11
Kenner further argues that seniority incentive pay is a payment for “status, not services.” We
reject this interpretation; the payment is clearly intended to compensate Firefighters not merely
for “status,” but also for advanced skills and training experienced Firefighters provide to Kenner.
13
Further supporting the argument that this type of compensation is “earned,”
Kenner’s seniority incentive pay is similar to the state statutory longevity statute
described in La. R.S. 33:1992. Pursuant to this statute, after the third year of
service and for each additional year of service up to and including twenty years, a
firefighter receives an annual two percent increase in salary. La. R.S. 33:1992(B).
This statutory increase is included as earnable compensation, because the two
percent increase is part of the Firefighters’ “minimum salaries,” and is therefore
included in the “full amount” the Firefighters earn. And, as with educational
incentive pay, the legislature’s decision not to specifically exclude incentive pay
from the definition of “earnable compensation” in the list in La. R.S. 11:233(B)(2)
further supports its categorization as “earnable.”
Seniority incentive pay is not “irregular” or “nonrecurring” under La. R.S.
11:2252(9). Payments that Firefighters are promised, expect, and in fact receive
annually are not, by their plain language, “irregular” or “nonrecurring.” Evidence
attached to the Firefighters’ motion for summary judgment also makes clear that
the payments were regularly paid by Kenner and received by the Firefighters, and
is to continue as long as the funds are available. 12
Holiday Pay
Holiday pay is compensation mandated by statute for firefighters who are
required to work on holidays. La. R.S. 33:1999. 13 We agree with the court of
12
The evidence included:
A flyer, marked “FOR POSTING,” which describes an increase in “the monthly pay-out
factor” for firefighters who qualify for seniority incentive pay. The final sentence of the flyer
reads: “both of our incentive pay plans (the education and the SIP) will remain in affect [sic]
as long as we have the money to fund them.”
A flyer, marked “POSTED IN ALL FIRE STATIONS,” which describes an increase in the
educational incentive plan and the seniority incentive pay plan and states that the changes
“will remain in effect each future year as long as funds are available.”
13
La. R.S. 13:1999 states:
Firefighters in municipalities, parishes, and fire protection districts who are required to work
on holidays . . . shall receive in addition to the compensation to which such employee would
be entitled under laws and pay plans now in effect, compensation at the rate of one times his
usual salary, to be determined by reducing his average monthly salary to an hourly scale;
14
appeal that holiday pay qualifies as “earnable compensation,” because it is a
remunerative, non-gratuitous payment made to compensate and reward firefighters
who work during holidays – a plain language understanding of the term “earned.”
We first find that holiday pay was “earned.” It comprises the “full amount”
of the compensation a Firefighter receives as part of a regular tour of duty. In fact,
the Louisiana Attorney General has previously opined that holiday pay is “earned,”
describing it as a “collectively bargained for benefit” that is “part of the overall
compensation paid to firefighters as part of their earned compensation pursuant to
reciprocal contractual obligations under the respective [bargaining] agreements.”
La. Atty. Gen. Op. No. 07-0280 (Dec. 14, 2007) (emphasis added). 14 As the
Attorney General notes, there is a “public purpose” for the payments, and cities
receive “equivalent value in the form of fire protection throughout the year.” Id.We adopt the Attorney General’s rationale in this context and find that the
payments are earned by the Firefighters on a regular tour of duty and are part of the
“full amount” of earned compensation. 15
Second, holiday pay is not “irregular” or “nonrecurring.” Kenner argued
that it is by its nature irregular, because a Firefighter’s regular tour of duty rotates
over various shifts on a 28-day cycle, and a Firefighter may or may not be required
to work on a specific holiday in a given year. This argument fails, because it both
ignores both that these 28-day cycles are part of a Firefighter’s “regular tour of
duty,” and that La. R.S. 33:1999(B) provides that firefighters “shall be entitled to
provided that in lieu of additional compensation, governing authorities, at their option, may
grant fire department employees time off from work for which such additional compensation
would be due and payable to said employees.
14
Although attorney general opinions are merely advisory and not binding on this Court, we
have recognized their persuasive authority. City of New Orleans v. Bd. of Directors of La. State
Museum, 98-1170 (La. 3/2/99), 739 So. 2d 748, 753 n.11.
15
In Parker v. Garace, 354 So. 2d 1022 (La. 1978), the Court held that holiday pay is a “fringe
benefit of employment not ascribable to services performed on the holiday or the week of the
holiday or any other specific calendar period.” Id. at 1026. Parker related to unemployment
compensation, not pension laws, and dealt with the definition of “fringe benefits,” which were
expressly excluded from the calculation of “wages” for unemployment purposes. Id.15
not less than ten holidays per year,” which reveals some amount of regularity in the
scheduling of holidays among Firefighters. This is the case in practice as well, as
made clear in a study attached to the Firefighters’ motion for summary judgment.
The study reported that 56 out of 57 (98.2%) Firefighters over the course of a
three-year study received some type of holiday pay. See 14-113, p.18, 170 So. 2d
at 1075 (noting that “almost all firefighters included in the study worked on
holidays and, as mandated by statute, received holiday pay”). Finally, something
“irregular” is “not normal or usual,” and something “nonrecurring” is “unlikely to
happen again.” See supra at 9-10. Neither of these definitions applies to holiday
pay as presented in this case and, because holiday pay is not analogous to a
gratuitous bonus insofar as Kenner receives a reciprocal benefit, holiday pay is not
within the exclusions of La. R.S. 11:233(B)(2)(g). 16
Acting Pay
Every fire service employee has a permanent civil service classification. A
firefighter earns “acting pay” when he or she fills in for an absent colleague who
holds a higher civil service classification. The firefighter is then paid more in
accordance with that higher classification. In other words, during temporary and
permanent vacancies in positions, firefighters “act” in the absence of another
firefighter. See La. R.S. 33:2496(2) (mandating “acting” appointments over 30
days “shall, for the duration of the temporary employment, enjoy the class title and
be entitled and receive the rate of pay for the class and position in which he is
16
La. R.S. 11:2252(9)(b) provides that “any participating employer that defers the payment of
regularly scheduled holiday pay and then pays such compensation to its employees in the same
calendar year as its deferral in the form of a one-time annual payment shall include such deferred
compensation in the employees' earnable compensation for the purpose of calculating and paying
employee contributions to this system.” Kenner argues that it does not defer compensation, so
holiday pay is not included in La. R.S. 11:233(B)(1). As an initial matter, Kenner did not
provide any evidence in support of its motion for summary judgment to support this statement.
But we disagree with Kenner that this provision means any holiday payment not deferred must
thus be excluded from “earned compensation.” Indeed, the Firefighters argue that the discussion
of holiday pay at all implies that the legislature intended it to be included as part of La. R.S.
11:233. Because we find that the payments are regular, recurring, non-gratuitous and part of a
regular tour of duty, we do not reach the question of the implication of this particular provision.
16
employed”) (emphasis added). We agree with the court of appeal and find that
acting pay is part of the “full amount” a Firefighter earns on a regular tour of duty,
and is not irregular, nonrecurring, or otherwise part of the La. R.S.
11:2252(B)(2)(g) catch-all provision.
Acting pay is “earnable compensation” within the meaning of La. R.S.
11:233 and La. R.S. 11:2252(9). It meets all of the qualifications for “earnable
compensation,” including that it is part of the “full amount” of compensation a
Firefighter receives based on direct work he performs as part of a regular tour of
duty. These additional responsibilities are non-gratuitous and paid, and therefore
comprise the “full amount” of earned compensation.
Kenner focuses on the argument that acting pay is irregular and nonrecurring
under La. R.S. 11:233(B)(2)(g), because, according to Kenner, employees can
decline the temporary appointment, and there is no specific schedule and no
guarantee of an assignment to a higher classification. This argument is incorrect.
Even if “acting” pay is temporary and not guaranteed, the increased differential
rate of pay constitutes the “full amount of compensation earned” by a Firefighter
on a regular tour of duty during the time of the “acting” role. Moreover, evidence
attached to the Firefighters’ motion for summary judgment makes clear that this
type of pay is not “irregular” in any sense – it is not abnormal or unusual for a
Firefighter to receive acting pay. Nearly 90 percent of Firefighters earned acting
pay over a three-year period. Though the amount may vary by appointment, rank,
and time served in the “acting” role, the acting pay comprises the full amount of
compensation earned on a regular tour of duty. 17
17
Kenner provided no evidentiary support for the assertion that acting pay is by definition
irregular or nonrecurring in its motion for summary judgment, and provided no rebuttal evidence
to the Firefighters’ motion.
17
DECREE
For the reasons set forth herein, we find that the trial court erred in granting
Kenner’s motion for summary judgment on each of the four types of compensation
at issue – educational incentive pay, seniority incentive pay, holiday pay, and
acting pay – and denying the Firefighters’ cross-motion for summary judgment.
We further hold that the court of appeal was correct to find no genuine issues of
material fact that the four payment types must be included as “earnable
compensation” and that the Firefighters were entitled to judgment as a matter of
law, and to its rendering of summary judgment in favor of the Firefighters.
Accordingly, we affirm the judgment of the court of appeal.
AFFIRMED
18
01/27/2016
SUPREME COURT OF LOUISIANA
NO. 2015-C-1175
MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED
PERSONS, KENNER FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF
VERSUS
CITY OF KENNER
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,
FIFTH CIRCUIT, PARISH OF JEFFERSON
Hughes, J., dissenting in part.
I respectfully dissent in part. I believe that while holiday pay and acting pay
are properly included, educational incentive pay and seniority incentive pay should
not be included in the pension calculation.