Kreeft v. City of Oakland
| Decision Date | 30 November 1998 |
| Docket Number | No. A079920,A079920 |
| Citation | 80 Cal.Rptr.2d 137,68 Cal.App.4th 46 |
| Parties | , 22 Employee Benefits Cas. 2478, 98 Cal. Daily Op. Serv. 8724, 98 Daily Journal D.A.R. 12,138 Robert KREEFT et al., Plaintiffs and Appellants, v. CITY OF OAKLAND et al., Defendants and Respondents. |
| Court | California Court of Appeals |
W. David Holsberry, Philip Paul Bowe, Davis, Cowell & Bowe, San Francisco, for Appellants.
Jayne W. Williams, City Attorney; Joyce M. Hicks, Assistant City Attorney; Wendy P. Rouder and Barbara J. Parker, Deputy City Attorneys, City of Oakland, for Respondents.
Plaintiffs are certified class representatives of firefighters who have retired under the Oakland Police and Fire Retirement System ("retirees"). Under the Oakland Police and Fire Retirement System (Fire Retirement System), a retiree's pension is a fixed percentage of the current compensation "attach[ed] to the ... rank" the retiree held upon retirement. Thus, as the salaries of active firefighters increase, so do the pensions Oakland (City) pays to its retired firefighters. This is a so-called "fluctuating" pension system. 1
The federal Fair Labor Standards Act of 1938 (FLSA) currently requires the City to pay firefighters time and one-half for every hour they work in excess of 204 hours per 27-day pay period. The City must pay this "overtime" premium even though the firefighters work more than 204 hours as part of their "normal" schedule. The primary question in this case is whether such federally mandated overtime pay is "attached to the rank" the retirees held at the time they retired, and must therefore be included in calculating their pensions. We agree with the trial court that such premium pay is not "attached to the rank" the retirees held at retirement, but is instead "attached" to the individuals within a rank. Consequently, we affirm the judgment.
The Fire Retirement System is a creature of the City Charter. (Charter, art. XXVI.) All sworn City firefighters hired on or before June 30, 1976 are members of the Fire Retirement System. Those hired after that date are members of the separate, state-created Public Employee Retirement System (PERS).
The City Charter specifies that, under the Fire Retirement System, a retiree's pension is a fixed percentage 2 of the "compensation attached to the average rank held" at the time of retirement. (Charter, § 2608.) The Charter defines the terms "compensation" and "compensation attached to the average rank held" as follows:
" 'Compensation' as distinguished from benefits under the Labor Code of the State of California, shall mean the monthly remuneration payable in cash, by the City, without deduction, for the time during which the individual receiving such remuneration is a member of the Police or Fire Department, but excluding remuneration paid for overtime and for special details or assignments as provided in Sections 91 and 97 of the Charter." (Charter, § 2607, fn. omitted.)
" 'Compensation attached to the average rank held' shall mean the compensation attached to the lowest rank held during the three years immediately preceding retirement plus one thirty-sixth (1/36) of the difference between it and the compensation attached to any higher rank held during that period of each month ... the higher rank was held." (Charter, § 2607.)
In 1985, the United States Supreme Court held that the FLSA (29 U.S.C. § 201 et seq.) applies to local governments. (Garcia v. San Antonio Metro. Transit Auth. (1985) 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016.) The FLSA requires the City to pay its fire protection employees at the "overtime" rate (one and one-half times their regular rate of pay) if they actually work more than 204 hours during a standard 27-day work period. 3 (29 U.S.C. §§ 207(a)(1), 207(k); 29 C.F.R. § 553.230(c).) Hours paid for vacation, illness, leave or similar reasons do not count toward the 204 hour maximum of hours actually worked. (29 U.S.C. § 207(e)(2); 29 C.F.R. § 553.221.)
The City normally schedules most firefighters 4 to work one 24-hour shift every third day. Thus, a firefighter may be scheduled to work nine 24-hour shifts in a 27-day work period. If a firefighter works this full schedule, he or she will work 216 hours (9 X 24) in the 27-day work period, and will be entitled to 12 hours of pay at time and one-half. However, as a practical matter, more often than not firefighters do not work nine full shifts in a 27-day period. This is because most pay periods include a mandatory day-off, vacation time, sick leave or some other event that brings the firefighter's number of total hours actually worked below the 204 hour maximum. Retirees' own analysis of the data the City provided shows that from 1992 to 1995 the average number of times a firefighter received FLSA premium pay--i.e. the average number of times a firefighter actually worked more than 204 hours in a 27-day pay period--ranged from a low of 2.21 times per year in 1995 to a high of 2.57 times in 1992. This is only a fraction of the 13.5 27-day pay periods during each year.
Moreover, the City's analysis of the 1992-1995 statistical data shows the amount and frequency of FLSA premium pay varied widely from individual to individual and from rank to rank. For example, among the lowest rank ("firefighter"), the percentage who received no FLSA premium pay at all ranged from a low of 7 percent in 1995 to a high of 21 percent in 1993; the average number of times an entry rank firefighter received premium pay ranged from 2.09 times per year to 2.40 times per year; and the number of actual premium hours individual entry rank firefighters worked in a given year ranged from a low of 0 to a high of 48.5 hours. Similarly, the percentage of engineers who received no premium pay ranged from a low of 8 percent in 1992 to a high of 27 percent in 1993; the average number of times an engineer received premium pay ranged from 1.75 times per year to 2.48 times per year; and the number of actual premium hours individual engineers worked each year ranged from a low of 0 to a high of 39.2 hours. With respect to the higher ranks, the percentage of lieutenants who received no FLSA premium pay ranged from a low of 9 percent in 1994 to a high of 25 percent in 1993; the average number of times a lieutenant received premium pay ranged from 1.19 to 1.83 times per year; and the number of premium hours individual lieutenants worked each year ranged from 0 to 30.6 hours. Finally, the percentage of captains who received no premium pay ranged from 13 percent in 1994 to 26 percent in 1992; the average number of times a captain received premium pay ranged from 1.93 to 2.16 times per year; and the number of premium hours individual captains worked each year ranged from 0 to 47.2 hours. 5
Because of the variability in the data, the City's economic expert, Jerald Udinsky, PhD., opined in a declaration that the "average" annual number of times all firefighters received FLSA premium pay from 1992 to 1995(2.5) was not a meaningful predictor of the experience of most firefighters. According to Dr. Udinsky:
Retirees filed a petition for writ of mandate (Code Civ. Proc. § 1085) seeking to force the City to include FLSA premium pay in calculating their pensions. After a hearing, the trial court issued a writ commanding the City to include 30 hours of FLSA overtime pay per year in determining the "compensation attached to the average rank held." This translated into an additional 15 hours of "straight" pay per year in calculating the compensation attached to each rank. 6
After the City lost at the first trial, it filed a motion for new trial. The new trial motion relied on the Udinsky declaration which highlighted the variability of FLSA premium pay from individual to individual and from rank to rank. The trial court granted the motion for new trial. The court stated a new trial was warranted because it was convinced "from its review of the entire record that it should have reached a different decision on the issue of whether [FLSA premium] pay is 'compensation attached to the rank.' " The court noted its original decision was "predicated on FLSA premium pay being dependent upon a person's rank" while the evidence showed such pay was dependent upon "hours actually worked by individuals."
Following a second hearing, the trial court issued its judgment denying the petition for writ of mandate. In its statement of decision the trial court concluded the City pays FLSA premium pay to firefighters for working their normal work schedule, and thus such pay is not "overtime" pay (which the City Charter expressly excludes from the definition of "compensation"). (Charter, § 2607; see City of Sacramento v. Public Employees Retirement System (1991) 229 Cal.App.3d 1470, 280 Cal.Rptr. 847 (City of Sacramento ).) However, the court found that although FLSA premium pay is compensation, it is not ...
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