Michael Dunn and the Class of Similarly Situated Persons, Kenner Fire Fighters Association Local 1427 Iaff v. City of Kenner

Supreme Court of Louisiana

FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #005

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 27th day of January, 2016, are as follows:

BY CRICHTON, J.:

2015-C -1175 MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED PERSONS, KENNER

FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF v. CITY OF KENNER

(Parish of Jefferson)

For the reasons set forth herein, we find that the trial court

erred in granting Kenner’s motion for summary judgment on each of

the four types of compensation at issue – educational incentive

pay, seniority incentive pay, holiday pay, and acting pay – and

denying the Firefighters’ cross-motion for summary judgment. We

further hold that the court of appeal was correct to find no

genuine issues of material fact that the four payment types must

be included as "earnable compensation” and that the Firefighters

were entitled to judgment as a matter of law, and to its

rendering of summary judgment in favor of the Firefighters.

Accordingly, we affirm the judgment of the court of appeal.

AFFIRMED.

HUGHES, J., dissents in part with reasons.

01/27/2016

SUPREME COURT OF LOUISIANA

NO. 2015-C-1175

MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED

PERSONS, KENNER FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF

VERSUS

CITY OF KENNER

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,

FIFTH CIRCUIT, PARISH OF JEFFERSON

CRICHTON, J.

This case arises from a dispute between the City of Kenner (“Kenner”) and

Kenner’s firefighters concerning the computation of retirement benefits under La.

R.S. 11:233 and 11:2252. The dispute centers around four types of compensation

– educational incentive pay, seniority incentive pay, holiday pay, and acting pay –

and the res nova question presented to the Court is whether these types of

compensation should be considered “earnable compensation” for purposes of

calculating the firefighters’ pension contributions. For the reasons set forth below,

we affirm the court of appeal holding that no genuine issues of material fact remain

as to whether each of the four types of pay constitutes “earnable compensation”

under the requirements of the statutes.

BACKGROUND

In 1999, the Kenner merged its municipal retirement system for firefighters

with the statewide Firefighters’ Retirement System (“FRS”). Under the pre-1999

municipal retirement system, Kenner calculated firefighters’ pension contributions

based on base pay and supplemental pay, but did not include in the calculation

educational incentive pay, seniority incentive pay, holiday pay, and acting pay.

After the systems merged, Kenner made no changes in its method of calculating

pension contributions.

1

In May 2010, Michael Dunn, on his own behalf and on behalf of the class of

all similarly situated employees of the Fire Department, City of Kenner and of the

members of the Kenner Fire Fighters Association Local 1427 (“Firefighters”), filed

a lawsuit in the 24th Judicial District Court, Parish of Jefferson, against Kenner,

seeking retroactive adjustment to, and forward correction of, Kenner’s pension

contributions.1 The Firefighters later amended the petition to remove the class

allegations, adding individual firefighters and alleging that Local 1427 was suing

on behalf of its members. The Firefighters alleged that certain types of pay –

educational incentive pay, seniority incentive pay, holiday pay, and acting pay –

should be included in the definition of “earnable compensation” for the purpose of

calculating pension contributions pursuant to La. R.S. 11:233.2 In July 2010,

Kenner began remitting pension contributions on holiday and acting pay, but did

not make retroactive adjustments to holiday pay and acting pay or begin remitting

pension contributions on either educational incentive pay or seniority incentive

pay. 3

Kenner filed a motion for summary judgment in October 2013, arguing that

these four types of compensation were not “earned” during a “regular tour of

1

In 2002, Dunn on behalf of himself and a class of similarly situated firefighters filed an initial

suit against Kenner, alleging that Kenner miscalculated the employees’ longevity pay, overtime

pay, and holiday pay and intentionally concealed the miscalculations. The trial court dismissed

the petition on the grounds of abandonment in 2007, and the court of appeal reversed. This

Court then granted the writ, reversed the court of appeal, and reinstated the trial court’s decision.

09-1108 (La. 9/18/09), 17 So. 3d 400.

Pending the outcome of the first suit, the plaintiffs filed another lawsuit asserting miscalculation

of wages. Kenner filed an exception of lis pendens and prescription, which the trial court granted

and the court of appeal affirmed. 08-690 (La. App. 5 Cir. 4/28/09), 13 So. 3d 593.

2

The Firefighters also sought relief on wage issues, specifically retroactive and forward pay

adjustments on Kenner’s failure to include state supplemental pay in the calculation of longevity,

holiday, and overtime pay. The trial court granted Kenner’s peremptory exception of

prescription, which was reversed by the court of appeal. This Court denied Kenner’s application

for a supervisory writ. 10-786 (La. App. 5 Cir. 1/31/11), writ denied, 11-0372 (La. 4/25/11), 62

So. 3d 88. In April 2012, the Firefighters filed a motion for partial summary judgment on both

the wages and pension issues. The trial court denied the motion on the pensions, but granted the

motion on the wage issues. As a result, the only claims remaining are these pension claims.

3

A certified public accountant engaged by Kenner conducted an audit to determine the amounts

that Kenner would owe FRS regarding holiday and acting pay. The CPA determined that

Kenner’s obligation would be approximately $832,000 with regard to these types of payment.

The report did not address incentive pay.

2

duty,” and were instead either bonuses or other types of irregular, nonrecurring, or

deferred payments. The Firefighters then filed a cross-motion for summary

judgment on the same issues, claiming Kenner was liable for failing to pay pension

contributions on the four types of pay.

On December 17, 2013, after a hearing on both motions, the trial court

granted Kenner’s motion for summary judgment and denied the Firefighters’ cross-

motion for summary judgment. The trial court found that educational incentive

pay, seniority incentive pay, holiday pay, and acting pay “are not included as

earnable compensation pursuant to La. R.S. 11:233,” and therefore should not be

considered in calculating the Firefighters' pension contributions. The trial court

stated that it chose to interpret the statute in a “strict fashion,” noting that “[i]f the

statute doesn't say it, okay, I'm not inclined to include it, regardless of how any

public entity may feel about voluntarily contributing anything to any pension.”

The Court of Appeal, Fifth Circuit, heard the Firefighters’ appeal before a

three-judge panel. Before rendering a decision, the court of appeal, en banc,

requested and heard additional argument and subsequently reversed the trial court.

Dunn v. City of Kenner, 14-113 (La. App. 5 Cir. 5/14/15), 170 So. 3d 1065. The

court of appeal noted that none of the four types of compensation at issue in the

case are expressly included or excluded as earnable compensation in the language

of La. R.S. 11:233, and therefore found the statute to be “inherently ambiguous.”

The court of appeal then undertook a two-step analysis under the catch-all

provision of La. R.S. 11:233(B)(2)(g), which excludes from the definition of

earnable compensation “any other type of irregular or nonrecurring payment.”

First, the court of appeal analyzed whether each type of compensation is “earned,”

and second, the court of appeal analyzed whether each type of compensation was

“irregular or nonrecurring.” Under this analysis, the court of appeal found that

each of the four types of compensation is earned and regular or recurring. The

3

court of appeal reversed both the trial court’s grant of Kenner’s motion for

summary judgment and the trial court’s denial of the Firefighters’ motion for

summary judgment. The court of appeal expressly found no genuine issues of

material fact as to whether the four payment types must be included as “earnable

compensation,” found the Firefighters were entitled to judgment as a matter of law,

and rendered summary judgment in favor of the Firefighters. 4

We granted the writ to determine whether each of the four types of payment

at issue constitutes “earnable compensation” for purposes of pension contributions.

Dunn v. City of Kenner, 15-1175 (La. 10/2/15).

APPLICABLE LAW

Courts of this state have routinely recognized the remunerative nature of

retirement contributions, which represent “an increasingly important part of an

employee’s compensation for his services.” See Fishbein v. State ex rel. L.S.U.

Health Sciences Center, 04-2482 (La. 4/12/05), 898 So. 2d 1260 (quoting

Andrepont v. Lake Charles Harbor & Terminal Dist., 602 So. 2d 704, 708 (La.

1992)). We have described retirement contributions as “an inducement to

employees to remain in the service of the company to enjoy the benefits the plan

promised.” T.L. James & Co. v. Montgomery, 332 So. 2d 834, 841 (La. 1975). An

employer’s contribution to retirement is “not a purely gratuitous act, but it is in the

nature of additional remuneration to the employee who meets the conditions of the

plan.” Id. See also Born v. City of Slidell, 15-0136 (La. 10/14/15), -- So. 3d --,

2015 WL 5972534 (“[W]hen an employer promises a benefit to employees, and

employees accept that offer, or benefit, by their actions in meeting the conditions,

the result is not a mere gratuity . . . .”).

4

Judge Liljeberg concurred in part and dissented in part, agreeing with the majority’s decision

on educational incentive pay, acting pay, and holiday pay, but finding that seniority incentive

pay is not earnable compensation. 14-113 (La. App. 5 Cir. 5/14/15), 170 So. 3d 1065.

4

Article X, section 29(E) of the Louisiana Constitution recognizes the

importance of the state retirement systems, providing that “[t]he actuarial

soundness of state and statewide retirement systems shall be attained and

maintained and the legislature shall establish, by law, for each state or statewide

retirement system, the particular method of actuarial valuation to be employed for

purposes of this Section.” In the year following the adoption of La. Const. Art. X,

§ 29(E), the legislature enacted Title 11 of the Louisiana Revised Statutes. Title 11

was enacted “to consolidate public retirement law in order to effectively comply

with the mandate of Article X, §29(E) of the Constitution of Louisiana to maintain

public retirement systems on a sound actuarial basis.” La. R.S. 11:2. See, e.g.,

City of New Orleans v. La. Assessors’ Retirement and Relief Fund, 05-2548 (La.

10/1/07), 986 So. 2d 1 (generally discussing establishment of consolidated public

retirement systems).

To comply with the constitutional mandate, the legislature established

employee contribution rates. See La. R.S. 11:62. La. R.S. 11:233(B)(1) falls

within Chapter 4 of Title 11, titled “Provisions Affecting More Than One System,”

which specifically applies to FRS and other public retirement or pensions systems,

funds, and plans. La. R.S. 11:233(B)(1) obligates cities and public bodies to make

pension contributions on “earnings or earned or earnable compensation, or its

equivalent,” which “shall mean the full amount earned by an employee for a given

pay period.” La. R.S. 11:233(B)(2) then lists types of compensation specifically

excluded from the definition of “earnable compensation.” La. R.S. 11:233

provides, in pertinent part:

A. The provisions of this Section shall apply to the following public

retirement or pension systems, funds, and plans:

(1) Firefighters' Retirement System. . . .

5

B. (1) . . . [F]or purposes of calculation of the amount of contributions

payable by an employer and employee and for computation of average

compensation, earnings or earned or earnable compensation, or its

equivalent, shall mean the full amount earned by an employee for a

given pay period.

(2) Earnings or earned or earnable compensation shall not include:

(a) Overtime unless it is required to be worked in the employee's regular

tour of duty;

(b) Operating expenses;

(c) Use of automobile or motor vehicles;

(d) The cost of any insurance paid by the employer;

(e) Any allowance for expenses incurred as an incident of employment;

(f) Payments made in lieu of unused annual or sick leave; and

(g) Bonuses, terminal pay, severance pay, deferred salary, or any other

type of irregular or nonrecurring payment.

Id. (emphasis added).

La. R.S. 11:233 is not the only statute relevant to our interpretation of what

is included in a Firefighter’s “earned or earnable compensation.” In La. R.S.

11:2252, which falls under Chapter 9 of Title 11 and governs FRS specifically, the

legislature stated: “‘Earnable compensation’ shall mean the full amount of

compensation earned by an employee on a regular tour of duty, including

supplemental pay paid by the state of Louisiana, but shall not include overtime.”

La. R.S. 11:2252(9)(a). (emphasis added).

Kenner has sought review of the court of appeal’s ruling, arguing that none

of the types of compensation at issue in this case are “earnable compensation”

under La. R.S. 11:233. Specifically, Kenner argues that “earnable compensation”

does not include educational incentive pay, seniority incentive pay, holiday pay, or

acting pay, because these types of pay are gratuitous bonuses, irregular and/or

nonrecurring payments, and not earned during a regular tour of duty. The

Firefighters argue that the four types of compensation at issue in this case should

all be considered “earnable compensation” for purposes of calculating their

pension contributions under La. R.S. 11:233.

6

ANALYSIS

Legislation is the solemn expression of the legislative will; thus, the

interpretation of legislation is primarily the search for the legislative intent. Cat's

Meow, Inc. v. City of New Orleans, 98-0601, p.15 (La. 10/20/98), 720 So. 2d 1186,

1198; La. Safety Ass'n of Timbermen Self-Insurers Fund v. La. Ins. Guar. Ass'n,

09-0023, p.8 (La. 6/26/09), 17 So. 3d 350, 355-56. See also La. R.S. 24:177(B)(1)

(“The text of a law is the best evidence of legislative intent.”). When a law is clear

and unambiguous, and its application does not lead to absurd consequences, it shall

be applied as written, with no further interpretation made in search of the

legislative intent. La. R.S. 1:4. The starting point for interpretation of any statute

is the language of the statute itself. See, e.g., Cat's Meow, 98-0601, p. 15, 720 So.

2d at 1198; Timbermen, 09-0023, p.8, 17 So. 3d at 356. Pension statutes, like

those at issue here, are remedial in nature and must be liberally construed in favor

of the intended beneficiaries. Swift v. State, 342 So. 2d 191, 196 (La. 1977). Any

ambiguity in such statutes must be resolved in favor of the persons intended to be

benefited by those statutes. Id. Additionally, “all laws pertaining to the same

subject matter must be interpreted in pari materia, or in reference to each other.”

See, e.g., State v. Williams, 10-1514 (La. 3/15/11), 60 So. 3d 1189, 1191; La. C.C.

art. 13.

La. R.S. 11:233 and La. R.S. 11:2252(9) are to be read in pari materia,

because they both relate directly to calculation of pension benefit contributions for

firefighters. These statutes make clear that there are certain kinds of compensation

on which contributions are due, and certain kinds of compensation on which

contributions are not due. Compensation on which contributions are due must first

be “earnings or earned or earnable compensation,” which “shall mean the full

amount earned by an employee for a given pay period” (La. R.S. 11:233(B)(1))

and “the full amount of compensation earned by an employee on a regular tour of

7

duty, including supplemental pay paid by the state of Louisiana” (La. R.S.

2252(9)(a)). Additionally, under La. R.S. 11:233(B)(2), the “earnings or earned or

earnable compensation” must be something other than the categories excluded

from the calculation, including unused sick leave, deferred salary, overtime, a

bonus, or “any other type of irregular or nonrecurring payment.”

We first turn to the meaning of “earnable” compensation, which is defined in

the statutes themselves. As noted above, La. R.S. 11:233(B)(1) states that earnable

compensation “shall mean the full amount earned by an employee for a given pay

period.” Id. (emphasis added). Likewise, La. R.S. 11:2252(9)(a) defines earnable

compensation as “the full amount of compensation earned by an employee on a

regular tour of duty.” Id. (emphasis added). The phrase “full amount” is only

limited by the terms “for a given pay period” and “on a regular tour of duty,” and

by the expressly excluded categories set forth in La. R.S. 11:233(B)(2)(a)-(g).

This Court previously analyzed the term “earnable compensation” in the

context of the Teachers’ Retirement System, in a case in which the plaintiff sought

a declaratory judgment that her supplemental salary was a component of earnable

compensation for purposes of calculating retirement benefits. Fishbein, 898 So. 2d

at 1264 (interpreting La. R.S. 11:701(10)). In that case, the controlling pension

statute did not expressly include or exclude supplemental salary as earnable

compensation. Rather, the statute required that the salary be earned during the

member’s “full normal working time as a teacher.” La. R.S. 11:701(10). The

Fishbein Court held that the supplemental compensation was earned during the

plaintiff’s “full normal working time,” and paid to the plaintiff “based upon the

market conditions and the responsibilities she undertook.” See Fishbein, 04-2482,

p.18, 898 So. 2d at 1271. The Court also found that supplemental pay was “not

sufficiently analogous” to any of the items of pay expressly excluded in the statute.

898 So. 2d at 1272. Fishbein is instructive here insofar as it examines the

8

supplemental pay at issue both in connection with whether it is “earnable” and

whether it is “analogous” to the excluded types of pay listed in La. R.S.

11:233(B)(2)(g).

Though it is not defined in La. R.S. 11:233 or La. R.S. 11:2252, the term

“regular tour of duty” is defined in the federal context as “a firefighter’s official

work schedule, as established by the employing agency on a regular and recurring

basis . . . . The tour of duty may consist of a fixed number of hours each week or a

fixed recurring cycle of work schedules in which the number of hours per week

varies in a repeating pattern.” 5 C.F.R. 550.1302. The Kenner Firefighters work

212 hours over a 28-day period.5

The general pension statute also sets forth what items are not included in

earnable compensation. “Overtime” is not included “unless it is required to be

worked in the employee’s regular tour of duty.” La. R.S. 11:233(B)(2)(a).

Additionally, certain other categories are expressly excluded, as set forth in La.

R.S. 11:233(B)(2)(b)-(g). These include operating expenses, insurance paid by the

employer, payments made in lieu of unused annual or sick leave, and “bonuses,

terminal pay, severance pay, deferred salary, or any other type of irregular or

nonrecurring payment.” La. R.S. 11:233(B)(2) (emphasis added). The terms

“irregular” and “nonrecurring” are unambiguous. For purposes of statutory

interpretation, dictionaries are a valuable source for determining the “common and

approved usage of words.” Gregor v. Argenot Great Cent. Ins. Co., 02-1138, p.7

(La. 5/20/03), 851 So. 2d 959, 964. Merriam-Webster defines “irregular” as “not

normal or usual: not following the usual rules about what should be done,” and

“happening or done at different times that change often”; it defines

“nonrecurring” as “unlikely to happen again.” See “irregular” and “nonrecurring,”

5

Though we do not believe the term “regular tour of duty” is ambiguous, and no party has

argued that it is, we note that any ambiguity must be resolved in favor of the beneficiaries. See

Swift, 342 So. 2d at 196.

9

Merriam-Webster Online Dictionary 2015, available at http://www.merriam-

webster.com. These terms are capable of plain language interpretation.

A straightforward reading of the statutes in pari materia makes clear that to

qualify as compensation eligible for contribution calculation, the earnings are (1)

“earned or earnable compensation” – specifically, the earnings are the “full

amount” of compensation earned “for a given pay period” or “on a regular tour of

duty” – and (2) the earnings are not expressly excluded from the calculation by the

list in La. R.S. 11:233(B)(2)(a)-(g) or by the “catch all” provision of “irregular and

nonrecurring” in La. 11:233(B)(2)(g). We find that these statutes are clear and

unambiguous. The words in the statutes, and the statutes as a whole, can be

interpreted and understood according to their plain language. See Fishbein, 04-

2482, 898 So. 2d 1260 (finding no ambiguity in interpreting the term “earnable

compensation” in connection with the Teachers’ Retirement System). 6

The motions at issue here are motions for summary judgment, and we are

therefore cognizant of the standard of review for such motions. A motion for

summary judgment is a procedural device used when there is no genuine issue of

material fact for all or part of the relief prayed for by a litigant. It is reviewed on

appeal de novo, with the appellate court using the same criteria that govern the trial

court's determination of whether summary judgment is appropriate; i.e., whether

there is any genuine issue of material fact, and whether the movant is entitled to

judgment as a matter of law. Reynolds v. Bordelon, 14-2371 (La. 6/30/15), 172 So.

3d 607. We will now review each of the types of payment in turn.

6

Though the court of appeal in the instant case ultimately reached the correct result, we decline

to adopt certain of its findings. First, the court of appeal held that La. R.S. 11:233 is “inherently

ambiguous,” because the four types of compensation at issue are not expressly included or

excluded in the language of La. R.S. 11:233(B)(2). 14-113, p.8, 170 So. 3d at 1070. For the

reasons set forth above, we do not agree, and find the statute to be unambiguous. Second, the

court of appeal held that the terms “irregular and “nonrecurring” are “at the crux of this

analysis.” Id. But in making this finding, the court of appeal favored one factor over the others

and did not appropriately consider the meaning of “earnable” under La. R.S. 11:233(B)(1) and

La. R.S. 11:2252(9).

10

Educational Incentive Pay

Educational incentive pay is compensation paid to firefighters who complete

certain education requirements, including college degrees or other prerequisite

educational certifications determined by Kenner. See La. R.S. 33:2586

(authorizing establishment of “a plan for awarding incentive pay” and noting that

the pay “shall be in addition to any other salary the classified employee is entitled

to receive from the municipality, the state, or any other governmental entity”). The

pay is calculated annually and paid monthly, in 12 separate and equal installments,

to qualifying Firefighters. The court of appeal found that educational incentive pay

is “earned compensation” within the meaning of La. R.S. 11:233, and we agree.

First, educational incentive pay constitutes “earnings or earned or earnable

compensation.” Kenner claims that the word “incentive” itself demonstrates that

educational incentive pay is in the nature of a bonus, but we disagree. Accepting

this argument would conflict with a guiding principle of our statutory

interpretation: when a law is clear and unambiguous, and its application does not

lead to absurd consequences, it shall be applied as written. La. R.S. 1:4. Kenner’s

interpretation of “incentive” in this context would lead to absurd consequences,

because it would permit Kenner, at its own discretion, to label types of

compensation as a “bonus” in order to circumvent pension contributions.7

Here, as in Fishbein, the Firefighters “earned” the educational incentive pay,

because it is based on additional education of the Firefighters. In exchange for the

payments, the educational incentive pay plan provides Kenner with the benefits of

an enhanced fire protection and emergency response force. 8 The Firefighters

7

Indeed, though it is not directly analogous, in the employment law context, courts have

recognized the distinction between an incentive and a bonus. See Rick J. Norman, La. Prac.

Employment Law § 4:27 (updated Dec. 2015) (collecting cases) (noting that sums that are paid

“as part of an incentive plan to encourage longevity or production may be called ‘bonuses,’” but

such payments are not true bonuses and “have been considered wages”).

8

See, e.g., Morgan v. City of Shreveport, 46-362 (La. App. 2 Cir. 7/13/11), 71 So. 3d 1104,

1109-10 (noting that Shreveport’s educational incentive pay plan incentivizes firefighters to “be

11

“earn” this pay and receive it as part of the “full amount” of compensation earned

“for a given pay period” or “on a regular tour of duty.” See La. R.S. 11:233(B)(1);

La. R.S. 11:2252(9)(a). Kenner cannot change the nature of the payment simply

by giving it a name similar to a “bonus.”

Further, the educational incentive payments are not “irregular” and

“nonrecurring” such that they would fall under the catch-all provision of La. R.S.

11:233(B)(2)(g). The evidence submitted by the Firefighters in support of their

motion for summary judgment makes clear that the payments were submitted

monthly to qualifying Firefighters, in a routine manner that is scheduled to occur

for as long as the Firefighters qualify and funds are available.9 Kenner submitted

no contradictory evidence either in support of its motion for summary judgment or

in opposition to the Firefighters’ motion for summary judgment that would carry

its burden of demonstrating that the educational incentive pay program was

anything other than an earned, regular payment. Finally, as noted by the court of

appeal, the legislature’s decision not to specifically exclude educational incentive

pay from the definition of “earnable compensation” in the list of exclusions in La.

R.S. 11:233(B)(2) further supports the conclusion that it is included as earnable

compensation. See Fishbein, 898 So. 2d at 1272.

better trained for the lifesaving and property-protecting services they provide”), writ denied, 11-

1929 (La. 11/14/11), 75 So. 3d 944.

9

The evidence included:

A 1995 memorandum from Kenner's Fire Chief to all fire department personnel, which stated

that the educational incentive program was part of the effort to “try and increase benefits”

within the existing budget.

A 1997 internal communication from Kenner's Fire Chief to all fire personnel, which

discusses the requirements for the receipt of educational incentive pay and states that “[a]fter

the above has been completed, the fire suppression personnel will start to get credit for that

month on, until the end of the year.”

A 1998 memorandum from Kenner's Mayor to Kenner’s Firefighters, which states that the

Mayor was seeking to “increase the Educational Incentive Plan,” which “could translate to an

additional $50 per month for firefighters who are qualified, for a total of $100 per month.”

1998 memorandum from Kenner’s Fire Chief to all fire personnel describing “second level of

LSU Certifications,” which states that educational incentive pay would be paid monthly to

qualifying firefighters “as long as funds are available.”

12

Seniority Incentive Pay

Kenner developed and implemented the Seniority Incentive Pay Program in

1995 to incentivize experienced firefighters to remain with the fire service.

Seniority incentive pay is paid once a year in January to Firefighters who have

completed an additional 12 months of service.10 An employee who separates from

the fire service any time within the calendar year receives no seniority incentive

pay for that year.

Kenner asserts that seniority incentive pay is “not connected in any manner

whatsoever” to a Firefighter’s rank, the number of hours worked, or services

rendered, and therefore argues it is “obviously” in the nature of a bonus intended to

retain experienced employees and excluded from contribution calculations under

La. R.S. 11:233(B)(2)(g). As with educational incentive pay, this argument leads

to the absurd result that Kenner could label payment types with the intent of

excluding them from pension contributions. Also as with educational incentive

pay, we find that the seniority incentive pay is “earned compensation.” In order to

“earn” the payments, Firefighters are required to meet certain prerequisites, in the

form of years of service to Kenner. As with educational incentive pay and with the

supplemental pay discussed in Fishbein, seniority incentive pay is remunerative

because, in exchange for the payments, Kenner retains more experienced

firefighters. 11 Seniority incentive pay qualifies as a portion of the “full amount”

earned by a Firefighter on his tour of duty, because even though it is paid only

once a year, a Firefighter does not receive the payment unless he completes each of

his required tours of duty.

10

The present rate of seniority incentive pay is $48 for each full year of service. An employee

with one year (12 months) of service receives $48; an employee with two years (24 months) of

service receives $96; etc.

11

Kenner further argues that seniority incentive pay is a payment for “status, not services.” We

reject this interpretation; the payment is clearly intended to compensate Firefighters not merely

for “status,” but also for advanced skills and training experienced Firefighters provide to Kenner.

13

Further supporting the argument that this type of compensation is “earned,”

Kenner’s seniority incentive pay is similar to the state statutory longevity statute

described in La. R.S. 33:1992. Pursuant to this statute, after the third year of

service and for each additional year of service up to and including twenty years, a

firefighter receives an annual two percent increase in salary. La. R.S. 33:1992(B).

This statutory increase is included as earnable compensation, because the two

percent increase is part of the Firefighters’ “minimum salaries,” and is therefore

included in the “full amount” the Firefighters earn. And, as with educational

incentive pay, the legislature’s decision not to specifically exclude incentive pay

from the definition of “earnable compensation” in the list in La. R.S. 11:233(B)(2)

further supports its categorization as “earnable.”

Seniority incentive pay is not “irregular” or “nonrecurring” under La. R.S.

11:2252(9). Payments that Firefighters are promised, expect, and in fact receive

annually are not, by their plain language, “irregular” or “nonrecurring.” Evidence

attached to the Firefighters’ motion for summary judgment also makes clear that

the payments were regularly paid by Kenner and received by the Firefighters, and

is to continue as long as the funds are available. 12

Holiday Pay

Holiday pay is compensation mandated by statute for firefighters who are

required to work on holidays. La. R.S. 33:1999. 13 We agree with the court of

12

The evidence included:

A flyer, marked “FOR POSTING,” which describes an increase in “the monthly pay-out

factor” for firefighters who qualify for seniority incentive pay. The final sentence of the flyer

reads: “both of our incentive pay plans (the education and the SIP) will remain in affect [sic]

as long as we have the money to fund them.”

A flyer, marked “POSTED IN ALL FIRE STATIONS,” which describes an increase in the

educational incentive plan and the seniority incentive pay plan and states that the changes

“will remain in effect each future year as long as funds are available.”

13

La. R.S. 13:1999 states:

Firefighters in municipalities, parishes, and fire protection districts who are required to work

on holidays . . . shall receive in addition to the compensation to which such employee would

be entitled under laws and pay plans now in effect, compensation at the rate of one times his

usual salary, to be determined by reducing his average monthly salary to an hourly scale;

14

appeal that holiday pay qualifies as “earnable compensation,” because it is a

remunerative, non-gratuitous payment made to compensate and reward firefighters

who work during holidays – a plain language understanding of the term “earned.”

We first find that holiday pay was “earned.” It comprises the “full amount”

of the compensation a Firefighter receives as part of a regular tour of duty. In fact,

the Louisiana Attorney General has previously opined that holiday pay is “earned,”

describing it as a “collectively bargained for benefit” that is “part of the overall

compensation paid to firefighters as part of their earned compensation pursuant to

reciprocal contractual obligations under the respective [bargaining] agreements.”

La. Atty. Gen. Op. No. 07-0280 (Dec. 14, 2007) (emphasis added). 14 As the

Attorney General notes, there is a “public purpose” for the payments, and cities

receive “equivalent value in the form of fire protection throughout the year.” Id.

We adopt the Attorney General’s rationale in this context and find that the

payments are earned by the Firefighters on a regular tour of duty and are part of the

“full amount” of earned compensation. 15

Second, holiday pay is not “irregular” or “nonrecurring.” Kenner argued

that it is by its nature irregular, because a Firefighter’s regular tour of duty rotates

over various shifts on a 28-day cycle, and a Firefighter may or may not be required

to work on a specific holiday in a given year. This argument fails, because it both

ignores both that these 28-day cycles are part of a Firefighter’s “regular tour of

duty,” and that La. R.S. 33:1999(B) provides that firefighters “shall be entitled to

provided that in lieu of additional compensation, governing authorities, at their option, may

grant fire department employees time off from work for which such additional compensation

would be due and payable to said employees.

14

Although attorney general opinions are merely advisory and not binding on this Court, we

have recognized their persuasive authority. City of New Orleans v. Bd. of Directors of La. State

Museum, 98-1170 (La. 3/2/99), 739 So. 2d 748, 753 n.11.

15

In Parker v. Garace, 354 So. 2d 1022 (La. 1978), the Court held that holiday pay is a “fringe

benefit of employment not ascribable to services performed on the holiday or the week of the

holiday or any other specific calendar period.” Id. at 1026. Parker related to unemployment

compensation, not pension laws, and dealt with the definition of “fringe benefits,” which were

expressly excluded from the calculation of “wages” for unemployment purposes. Id.

15

not less than ten holidays per year,” which reveals some amount of regularity in the

scheduling of holidays among Firefighters. This is the case in practice as well, as

made clear in a study attached to the Firefighters’ motion for summary judgment.

The study reported that 56 out of 57 (98.2%) Firefighters over the course of a

three-year study received some type of holiday pay. See 14-113, p.18, 170 So. 2d

at 1075 (noting that “almost all firefighters included in the study worked on

holidays and, as mandated by statute, received holiday pay”). Finally, something

“irregular” is “not normal or usual,” and something “nonrecurring” is “unlikely to

happen again.” See supra at 9-10. Neither of these definitions applies to holiday

pay as presented in this case and, because holiday pay is not analogous to a

gratuitous bonus insofar as Kenner receives a reciprocal benefit, holiday pay is not

within the exclusions of La. R.S. 11:233(B)(2)(g). 16

Acting Pay

Every fire service employee has a permanent civil service classification. A

firefighter earns “acting pay” when he or she fills in for an absent colleague who

holds a higher civil service classification. The firefighter is then paid more in

accordance with that higher classification. In other words, during temporary and

permanent vacancies in positions, firefighters “act” in the absence of another

firefighter. See La. R.S. 33:2496(2) (mandating “acting” appointments over 30

days “shall, for the duration of the temporary employment, enjoy the class title and

be entitled and receive the rate of pay for the class and position in which he is

16

La. R.S. 11:2252(9)(b) provides that “any participating employer that defers the payment of

regularly scheduled holiday pay and then pays such compensation to its employees in the same

calendar year as its deferral in the form of a one-time annual payment shall include such deferred

compensation in the employees' earnable compensation for the purpose of calculating and paying

employee contributions to this system.” Kenner argues that it does not defer compensation, so

holiday pay is not included in La. R.S. 11:233(B)(1). As an initial matter, Kenner did not

provide any evidence in support of its motion for summary judgment to support this statement.

But we disagree with Kenner that this provision means any holiday payment not deferred must

thus be excluded from “earned compensation.” Indeed, the Firefighters argue that the discussion

of holiday pay at all implies that the legislature intended it to be included as part of La. R.S.

11:233. Because we find that the payments are regular, recurring, non-gratuitous and part of a

regular tour of duty, we do not reach the question of the implication of this particular provision.

16

employed”) (emphasis added). We agree with the court of appeal and find that

acting pay is part of the “full amount” a Firefighter earns on a regular tour of duty,

and is not irregular, nonrecurring, or otherwise part of the La. R.S.

11:2252(B)(2)(g) catch-all provision.

Acting pay is “earnable compensation” within the meaning of La. R.S.

11:233 and La. R.S. 11:2252(9). It meets all of the qualifications for “earnable

compensation,” including that it is part of the “full amount” of compensation a

Firefighter receives based on direct work he performs as part of a regular tour of

duty. These additional responsibilities are non-gratuitous and paid, and therefore

comprise the “full amount” of earned compensation.

Kenner focuses on the argument that acting pay is irregular and nonrecurring

under La. R.S. 11:233(B)(2)(g), because, according to Kenner, employees can

decline the temporary appointment, and there is no specific schedule and no

guarantee of an assignment to a higher classification. This argument is incorrect.

Even if “acting” pay is temporary and not guaranteed, the increased differential

rate of pay constitutes the “full amount of compensation earned” by a Firefighter

on a regular tour of duty during the time of the “acting” role. Moreover, evidence

attached to the Firefighters’ motion for summary judgment makes clear that this

type of pay is not “irregular” in any sense – it is not abnormal or unusual for a

Firefighter to receive acting pay. Nearly 90 percent of Firefighters earned acting

pay over a three-year period. Though the amount may vary by appointment, rank,

and time served in the “acting” role, the acting pay comprises the full amount of

compensation earned on a regular tour of duty. 17

17

Kenner provided no evidentiary support for the assertion that acting pay is by definition

irregular or nonrecurring in its motion for summary judgment, and provided no rebuttal evidence

to the Firefighters’ motion.

17

DECREE

For the reasons set forth herein, we find that the trial court erred in granting

Kenner’s motion for summary judgment on each of the four types of compensation

at issue – educational incentive pay, seniority incentive pay, holiday pay, and

acting pay – and denying the Firefighters’ cross-motion for summary judgment.

We further hold that the court of appeal was correct to find no genuine issues of

material fact that the four payment types must be included as “earnable

compensation” and that the Firefighters were entitled to judgment as a matter of

law, and to its rendering of summary judgment in favor of the Firefighters.

Accordingly, we affirm the judgment of the court of appeal.

AFFIRMED

18

01/27/2016

SUPREME COURT OF LOUISIANA

NO. 2015-C-1175

MICHAEL DUNN AND THE CLASS OF SIMILARLY SITUATED

PERSONS, KENNER FIRE FIGHTERS ASSOCIATION LOCAL 1427 IAFF

VERSUS

CITY OF KENNER

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL,

FIFTH CIRCUIT, PARISH OF JEFFERSON

Hughes, J., dissenting in part.

I respectfully dissent in part. I believe that while holiday pay and acting pay

are properly included, educational incentive pay and seniority incentive pay should

not be included in the pension calculation.