SOMERSET, Ky. -- A legal victory for the City of Somerset scored Friday may prove to be a landmark decision across the Commonwealth of Kentucky.
An administrative law judge has determined that Somerset does not owe close to half a million dollars in unpaid overtime and other benefits to its city firefighters.
Somerset was one of a handful of cities and counties across Kentucky involved in a lawsuit against the Department of Workplace Standards and Kentucky Labor Cabinet, which in October of 2009 charged the City of Somerset with violations of Kentucky Revised Statute policy in regards to overtime pay.
This followed on the heels of a 2007 case in which the Kentucky Court of Appeals ruled that the City of Louisville had to pay overtime based on a 40-hour work week, in contrast to previous directions by the Kentucky Department of Labor.
Somerset City Attorney Carrie Wiese said that this case had been a "long fight" but stressed that it was not between the City of Somerset and local firefighters, but rather between the city and a government agency.
"The reason we fought so hard over it is that the labor department themselves told us how to calculate the (overtime pay) and now they tell us we've been doing it wrong and 'Now we want you to pay five or six years back on all these guys'," said Wiese. "It was frustrating because we were doing what we were told to do by an agency that was supposed to know what they were talking about."
Unfortunately, Somerset firefighters "were dragged into the middle of" the issue, noted Wiese.
"I'm sure most were hoping to get a check out of it like any of us would, but it was not (between them and us)," she said. "The fire department has been very, very gracious, and not pushed us. I think they kind of understood that it was a legal argument between a city government and a state agency."
The lawsuit was filed in Franklin County Circuit Court and ultimately made its way to the Kentucky Supreme Court, which ruled against the cities last year.
However, Somerset could also appeal the cabinet's findings in administrative law court. A hearing was held involving counsel for the Department of Workplace Standards, Division of Employment Standards, Apprenticeship, and Mediation, and Kentucky Labor Cabinet, and Douglas McSwain and Derrick Wright as counsel for the City of Somerset. Michael Head, Assistant Attorney General, conducted the hearing.
That was in July of 2010. As such, it had been a two-year wait until Head offered his recommendation on the case yesterday, which was that the charges against Somerset be dismissed. This means that the city wouldn't have to pay a dime of the money ordered by the Labor Cabinet.
That number would have included approximately $350,000 in unpaid wages, plus retirement benefits paid to the retirement board, bringing the grand total Somerset avoided to about $500,000.
"Regarding prior practices, two facts or circumstances mitigate in favor of the City of Somerset arguments," wrote Head in his decision. "The acquiescence of the firefighters from 2000 to at least 2005 to the City of Somerset's method of calculation; and the change in the firefighters' salary in 2000 to account for the new method of calculation instituted in 2000.
"Based on the findings and conclusions, the parties agreed the state incentive pay included overtime pay for the firefighters' scheduled overtime hours," he continued. "Thus, for all the foregoing reasons, the City of Somerset has not violated the wage and hour laws concerning the payment of overtime, and the charges against the City should be dismissed."
Wiese noted that this outcome will have a "big impact on how" similar cases are handled, and whether or not to accept this ruling will be a "tough decision" for the cabinet. She noted that there's a chance that the Labor commissioner could agree with Head's decision, "and that's the end of the story." If not, the either party -- the Cabinet or the City of Somerset -- could appeal, and the case could drag on further.
"The commissioner, the top (individual) appointed by the governor, has to stamp off on this opinion," said Wiese. "If he says no, then the City will be in a position to appeal it to Franklin Circuit Court."
Some counties and cities have gone ahead and paid the overtime as instructed by the cabinet in the wake of the Louisville case; others haven't yet, noted Wiese, perhaps because they didn't have the money. Thus, this decision will have ramifications for numerous Kentucky municipalities.
Wiese added that the difference opinion is now between two state agencies: The Labor Cabinet and the Attorney General's office.
"It's very significant stuff," she said, "and this opinion is going to be a very powerful piece of the puzzle if it goes on into the courts and the Cabinet tries to continue to collect from the city."
Copyright 2012 - Commonwealth Journal, Somerset, Ky.
McClatchy-Tribune News Service
