Louisiana Supreme Court Rules in Favor of Firefighters in Pension Battle

Firefighters in Kenner, Louisiana have prevailed at the state Supreme Court on whether certain types of compensation should be included in their pension compensation.

The suit was filed in 2010 by Michael Dunn as a class action. The complaint was later amended eliminating the class action, adding individual named firefighters as plaintiffs and positioning IAFF Local 1427, Kenner Fire Fighters Association as representing the interests of its members.

At issue was whether educational incentive pay, seniority incentive pay, holiday pay, and acting pay should be considered “earnable compensation” for the purpose of calculating pension contributions pursuant to La. R.S. 11:233.

In December, 2013, the trial judge granted the city summary judgment finding “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 Louisiana Court of Appeal, Fifth Circuit, reversed the trial court in 2015, and the city appealed to the Louisiana Supreme Court. Here are some of the highlights of the LA Supreme Court’s decision:

• 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.”
• 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.”
• 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.”
• 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.”
• 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.
• 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.

Local officials have estimated the cost of the ruling at about $800,000.

Here is a copy of the ruling: Dunn v Kenner