State Employees' Ass'n of New Hampshire, Inc. v. Belknap County

• Citation: 448 A.2d 969,122 N.H. 614
• Decision Date: 07 July 1982
• Docket Number: No. 81-296,81-296
• Parties: The STATE EMPLOYEES' ASSOCIATION OF NEW HAMPSHIRE, INC. et al. v. BELKNAP COUNTY et al.
• Court: Supreme Court of New Hampshire

Page 969

448 A.2d 969

122 N.H. 614

The STATE EMPLOYEES' ASSOCIATION OF NEW HAMPSHIRE, INC. et al. v. BELKNAP COUNTY et al.

No. 81-296.

Supreme Court of New Hampshire.

July 7, 1982.

Cleveland, Waters & Bass, Concord (Robert T. Clark, Concord, on brief and orally), for plaintiffs.

Upton, Sanders & Smith, Concord (John Gilbert Upton, Concord, on brief and orally), for defendant Belknap County.

Gregory H. Smith, Atty. Gen. (Loretta S. Platt, Concord, on brief and orally), for defendant State of New Hampshire.

BOIS, Justice.

These are cross-appeals from a Superior Court (Temple, J.) decision requiring Belknap County to enroll certain of its employees in the New Hampshire Retirement System. The principal defendants, Belknap County and the retirement system, challenge the trial court's denial of their respective motions to dismiss as well as the court's certification of the underlying action as a class action. The State Employees' Association, the representative of the plaintiff class of employees, claims that the trial court defined the members of the class too narrowly and provided an inadequate remedy. We affirm the denial of the defendants' motions to dismiss and the granting of class action status. We remand, however, for further proceedings with respect to the size of the plaintiff class and the adequacy of the remedy ordered.

In view of the factual setting of this case, a preliminary discussion of the framework of the New Hampshire Retirement System will be instructive. In 1945, the State legislature enacted a comprehensive bill establishing the State Employees' Retirement System. See Laws 1945, ch. 201 (current version at RSA ch. 100-A). The system, which is administered by a board of trustees, RSA 100-A:14 (Supp.1981), provides various retirement benefits for State and local governmental employees. See RSA 100-A:5 (Supp.1981), :6 (Supp.1981), :8, :9 (Supp.1981), :10 (Supp.1981).

Under the statutory scheme, "[t]he governing board of any county, city, town ... or other political subdivision of the state may ... elect to have its officers and employees become eligible to participate in the retirement system." RSA 100-A:20 I (Supp.1981). Upon the affirmative decision of any local government to enroll its officers and employees in the system, the board of trustees of the retirement system must set a date for the commencement of the officers' and employees' participation in the system. Id. Although membership in the system is optional for those officers and employees hired prior to the effective date of participation, membership is compulsory for those individuals who begin their employment after the effective date of participation. RSA 100-A:22. The system is funded through the contributions of the participating officers and employees and the respective governmental entities employing them. RSA 100-A:24.

Having discussed the general framework of the State retirement system, we now turn to the particular facts of this case. In March 1946, the defendant Belknap County adopted a resolution which provided for the inclusion of its officers and employees in the State retirement system. The board of trustees of the retirement system established July 1, 1946, as the effective date of participation for the officers and employees of the defendant county. Notwithstanding its obligation under the retirement system statute to include all of its new employees in the system, the county enrolled only a handful of employees.

In 1970, Mr. Harry M. Descoteau, the assistant State treasurer, informed the secretary to the Belknap County commissioners that the county's failure to enroll all employees hired since 1946 was in violation of the State retirement system statute. Although Mr. Descoteau instructed the county as to the necessity of enrolling these employees as members of the system, the county disregarded this instruction.

Seven years later, as a result of the county's continued failure to act, Mr. Descoteau ordered the county to enroll all qualifying full-time employees immediately and to offer each employee credit for the extent of any service between 1946 and the effective date of enrollment. Once again, the county failed to comply with the order in a satisfactory manner. Instead of enrolling all full-time employees hired after 1946, and offering them credit for past service, the county advised its then current employees that they could choose, but were not required, to join the retirement system. While approximately fifty percent of the employees decided to join the system, they received no credit for their past service. After July 1977, however, all new employees automatically became members of the system.

The State Employees' Association was certified as the bargaining agent for various Belknap County employees in late 1977. Shortly thereafter, the association learned of the county's failure to comply fully with Mr. Descoteau's outstanding order. The association requested that the county provide all of its employees with full credit for their past service, but the county did not heed this request.

In 1980, the State Employees' Association and three employees of Belknap County filed a petition in the superior court for a declaratory judgment. The petition essentially sought three determinations by the court: first, that the plaintiffs could maintain the action as a class action, with the appropriate class consisting of all employees of Belknap County who were hired after 1946 and who were not enrolled as members of the retirement system; next, that the State retirement system and its trustees were obligated to ensure that the county enroll all members of the stated class and give each member full credit for any past service; and finally, that the county be required to pay both its share and the employees' share of the respective contributions which should have been made during the period of non-compliance.

The defendant county filed two motions to dismiss and a demurrer, claiming that sovereign immunity, laches, and the expiration of the statute of limitations barred the action. In the alternative, the county claimed that the case was not suitable for class action status and that the employees should have been required to bring suit in their individual capacities. The defendant New Hampshire Retirement System also filed a motion to dismiss. It contended that it was immune from suit and that it lacked the authority to compel the county to implement the retirement plan.

The trial court rejected the defendants' contentions and denied the motions to dismiss as well as the demurrer. Although the court permitted the employees' association to maintain a class action, it limited membership in the class to only those employees of Belknap County who were in service at the time the petition was filed in 1980, and who were otherwise eligible to join the retirement system. The court ruled that the State Employees' Association and the three named plaintiffs were the proper class representatives.

In addition, the court ordered the county to permit the members of the employee class to "buy-back" all prior years of creditable service. Under this provision of the order, the county was required to pay its share of the accrued unfunded liability for the members' past years of service, while the employees who elected to "buy-back" their years of creditable service were required to pay an amount equal to the amount of the contributions that they would have provided during the period of the county's noncompliance. Finally, the court ordered the State retirement system and its trustees to ensure that the county properly enroll the members of the employee class.

On this appeal, the defendants first argue that the trial court erred in rejecting their claims concerning sovereign immunity, laches, and the running of the statute of limitations.

Sovereign immunity remains an operative doctrine in this State. See Dunaisky v. State, 122 N.H. 280, ---, 444 A.2d 532, 534 (1982); RSA 99-D:1 (Supp.1981). Nevertheless, we have recognized that the State may waive its immunity. Dunaisky v. State, 122 N.H. at ---, 444 A.2d at 534; Sousa v. State, 115 N.H. 340, 344, 341 A.2d 282, 285 (1975). In Chasse v. Banas, 119 N.H. 93, 399 A.2d 608 (1979), we stated that "[a] waiver will exist 'if the legislature has provided for it by statute either expressly or by reasonable implication.' " Id. at 96, 399 A.2d at 610 (quoting Public Service Co. v. State, 102 N.H. 54, 56, 149 A.2d 874, 876 (1959)). We held in Chasse that a statute establishing rights for certain mentally ill patients impliedly permitted such individuals to sue the State for any infringement of their rights. 119 N.H. at 97, 399 A.2d at 610.

The statute at issue in the instant case, RSA ch. 100-A, clearly entitles certain governmental employees to receive retirement and other related benefits. See RSA 100-A:23 (Supp.1981). These benefits constitute a substantial part of an employee's compensation and become vested upon the commencement of permanent employee status. Jeannont v. N.H. Personnel Comm'n, 118 N.H. 597, 602, 392 A.2d 1193, 1196 (1978); see RSA 100-A:3 (state employees obtain permanent employee status after six months service). See generally Fowler v. Fowler, 116 N.H. 446, 448, 362 A.2d 204, 205 (1976). Designed to attract competent individuals into government service, the benefits are essentially created for the protection of the employee and his family. Id., 362 A.2d at 205.

After considering the unqualified provisions for the payment of benefits as well as the significant nature of such benefits, we conclude that RSA ch. 100-A provides all eligible governmental employees with an enforceable right to benefits. Because the existence of a right to receive retirement benefits implies the existence of an appropriate remedy for recovering these benefits, Chasse v. Banas, 119 N.H. at 96, 399 A.2d at 610, we hold that the trial court properly ruled that the retirement...