One would think that after the recent Supreme Court decision that the state owes interest on your overtime payment, that everything would be resolved. Such is not the case.
The decision stated that all plaintiffs were owed interest on the final overtime payment that they received in 2006 or 2007. Sadly the court stated that the interest is to be calculated from the date of the “original judgment” which the court defined as the final judgment that was entered in the case on January 23, 2003 as opposed to the previously entered “limited judgments” which were entered between March 2001 and November 2002 from which you were actually paid overtime which was calculated at the wrong rate.
It is our position that you are owed interest on the overtime that you were finally paid at the correct rate and interest on that amount until you are actually paid. The state disagrees that you are owed “interest on interest.” The state also disagrees with our position that all plaintiffs who terminated their employment with the state after the second payment of overtime are owed penalty pay because they were not paid the interest that they were due in a timely manner. We do agree with the state that the interest payment is not wages for purposes of PERS or income taxes, but it is income that must be reported on your taxes.
The state has created a spreadsheet calculating the interest that is due to each plaintiff as of the day of the judgment for the second overtime payment. For purposes of our ongoing negotiations, the state also calculated interest on that amount through the 31st of December 2009. That’s because after consultation with the representative plaintiffs in this case, I offered the state a resolution of the issue of “interest on interest” of stopping interest as of that date if the state would get the checks to us by the 1st of April 2010. Frankly, our office will need much of that time to contact each of you and get approval of the calculations for your case. The state has until the 21st of January to accept that offer. After that time, we will litigate whether the state owes “interest on interest.” We are confident that we will prevail on this issue, but cannot predict how long it will take to resolve it through the courts.
In any event, we have double checked the methodology that the state used in creating its spreadsheet which calculates the interest payments and agree that it is accurate. For interest to be calculated at the rate of 9% per annum, the state used the daily rate of 0.0002465, which gets one as close to 9% as is possible. We will be sending each of you letters with the critical amounts and dates for your calculations and the totals that are due to you for your approval.
As an attachment we are posting a redacted spreadsheet on our web page. However, because the state arranged it by judgment date as opposed to alphabetical it is very hard to find your calculations on it. David Young told me that it took him 20 minutes to find his name. Therefore, we are only posting the first page of it and have deleted the names of the Plaintiffs whose calculations are on it. Reviewing it does let you see the methodology that is being used to calculate what you are due.
We need all plaintiffs who left the state’s employment after receiving their final overtime payment to let us know so that we can seek penalty pay for them, which is 30 days of wages. The state opposes the payment of penalty pay because it had already paid all wages that were due. However, the penalty pay statue requires the prompt payment of wages and compensation that was due when an employee terminates. We are taking the position that interest for the late payment of wages is compensation. Given the unique history of this litigation, neither side can cite any previous court case that resolves this issue. If we are unable to settle this issue to the satisfaction of those eligible for penalty pay, then the issue will be litigated.
The state has tried to have us give up the penalty pay claim in return for accepting our offer on resolving the interest payments. That has been and will be rejected as we believe that it is unethical for us to settle the claims of some plaintiffs at the expense of others.
We had a status conference with the Circuit Court Judge, Judge Abernethy, who is now assigned the case since Judge Lipscomb has retired. We have a briefing schedule for these issues, if we cannot resolve them, with our final briefs due on February 23, 2010 and oral argument will take place on March 2nd if the Judge believes that it is necessary. My guess is that she will probably rule on these issues without needing us to make oral argument.
If we are able to settle these issues with the state, we will post an update as soon as possible. If there is no settlement, we will let you know when we get a ruling on them from the Judge.
Meanwhile we will be sending out individual calculations for you to approve. We will let you know when all have been sent out, as it will take us some time to check the state’s data for everyone. Luckily, we have excellent paralegals working for us, two of whom have been with us since the case started, and one who was with us for the last round of payments.