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Dallas has agreed to settle four of six back-pay lawsuits filed in the 1990s by police officers and firefighters. But liability in the two remaining cases, which are class actions, could dwarf the $62 million the city set aside to settle the first four.
The class actions have about 8,600 participants, and that number edges up as new recruits join the police and fire departments. This compares with roughly 1,670 police officers, firefighters, and survivors who are plaintiffs in the four lawsuits the city settled.
“Every new police and fire recruit is added to the class,” Ted Lyon, the lead attorney in the class actions, told Bloomberg Law Dec. 1. New recruits “won’t get the same kind of money” as longtime class action participants, but the longer the city waits to end the case, the more it will pay, he said.
The six lawsuits, filed in 1994 and 1995, stem from a dispute over a 1979 referendum. City voters approved an ordinance stating that the Dallas police and fire departments had to adjust all police and fire department salaries by the same percentage.
Plaintiffs in the four settled lawsuits and participants in the pending class actions allege that the city failed to abide by the referendum, instead giving higher salary increases to higher-ranked employees than to lower-ranked employees. The city says the referendum only required a one-time adjustment.
The most recent action in the two class actions is a request filed by the city for the Supreme Court of Texas to review the cases. The city wants the court to throw out the lawsuits.
Briefs haven’t been filed yet in response to that petition, but Lyon said he expects a ruling from the court “pretty soon” that would shut down the city’s arguments.
“From there, we expect to go to trial next year,” said Lyon, whose firm is based in Mesquite, Texas. As of now, the city hasn’t made an offer to settle the class actions, he said.
The city didn’t respond to requests for comment from Bloomberg Law on either the settlement or the class actions.
The $62 million set aside by the city council in a unanimous vote Nov. 14 is to settle four back-pay cases filed by roughly 1,670 workers, Mike Gallagher, the lead attorney for the vast majority of them, told Bloomberg Law.
Details of the proposed settlement are being worked out now that the city has set aside the funds, he said. Payouts will be based on each worker’s years of service and rank, Gallagher said.
“The substance of everything is agreed upon,” he said. A court-appointed or independently retained “special master” ultimately will be responsible for approving a formula for distributing the funds, Gallagher said.
Boyd Smith, also an attorney at the Gallagher Law Firm in Houston, told Bloomberg Law that about 890 firefighters and 780 police officers, or their survivors or heirs, are part of the four back-pay cases. Payouts could occur as early as the first quarter of calendar year 2018, he said.
“We will have more detailed data going forward” on the exact number of plaintiffs as the firm is still working to track down all of those who are eligible to receive money under the settlement, Smith said.
Dallas Mayor Mike Rawlings (D) has said the city “did nothing wrong” and was settling because it made financial sense to do so.
“This has been going on for more than 20 years now, and no one’s had a jury trial,” Lyon told Bloomberg Law. “It’s definitely the oldest case in Texas. One of the bad things about Texas law is that you can appeal almost anything a judge decides.”
Many of the class action participants are the surviving spouses or heirs of police officers and firefighters who joined the lawsuits, Lyon said. “It’s sad that someone can appeal a case for 24 years,” he said.
The proposed settlement of the four lawsuits, if approved, would be one of the largest wage-and-hour settlements of 2017, Gerald Maatman, a management-side attorney with Seyfarth Shaw in Chicago, told Bloomberg Law Nov. 30.
The $62 million settlement shows the “risks of pay practices that may be challenged as inconsistent with contractual obligations or applicable statutory laws,” Maatman said in an email. “By settling, the Defendant secured certainty in terms of its exposure, and avoided a costly and lengthy trial where the outcome was less than predictable and potential exposure could far exceed the cost of settling.”
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