Firefighters’ union files appeal notice in pension case after new trial denied

Union attorney Goffstein urging both sides to work toward a settlement

By MIKE ANTHONY

Four days after a judge denied their motion for a new trial, Mehlville Fire Protection District union employees filed a notice of appeal seeking to overturn an August ruling that upheld the Board of Directors’ authority to make changes to the district’s pension plan.

Union employees’ request for a permanent injunction prohibiting the Board of Directors from changing the fire district’s pension plan to a defined-contribution plan from a defined-benefit plan was denied Aug. 27 by St. Louis County Circuit Court Judge Thea A. Sherry.

On Dec. 24, Sherry denied union employees’ motion for a new trial, but granted their motion for an injunction pending appeal that prohibits the board from making any changes to the district’s pension plan. However, Sherry’s injunction excludes district employees hired after March 31, 2006.

Her judgment states, “This injunction shall remain in full force and effect as to all employees … with the sole exception of any newly hired employees of the fire district who have never participated in the defined-benefit plan. As such, these newly hired employees may participate in the defined-contribution plan as set forth by the Mehlville Fire Protection District.”

Board Chairman Aaron Hilmer hailed Sherry’s ruling as “a great Christmas present for everybody who’s for fiscal responsibility” while union attorney John Goffstein said he was encouraged by the granting of the injunction pending appeal.

In granting the injunction, Sherry wrote, “The court hereby finds that the current defined-benefit plan participants would suffer irreparable harm if the defined-contribution plan were allowed to take effect during the pendency of the appeal …”

Of Sherry’s ruling, MFPD attorney Mathew Hoffman told the Call, “I am pleased the judge denied plaintiffs’ motion for a new trial and that this matter is now concluded at the trial-court level. Now we have the opportunity to move forward and hopefully quickly address these issues with the Court of Appeals.”

Local 1889 of the International Association of Fire Fighters filed the lawsuit in March 2006, just days after the Board of Directors voted on March 16, 2006, to adopt an amendment and two resolutions changing the district’s pension plan from a defined-benefit plan to a defined-contribution plan. Hilmer and Treasurer Bonnie Stegman voted in favor of the change while then-board Secretary Dan Ottoline Sr. was opposed.

On March 30, 2006, Sherry issued a ruling granting a temporary restraining order prohibiting the board from taking any action to change the pension plan.

The defined-benefit plan was to end March 31, 2006, and the defined-contribution plan was to begin April 1, 2006, as a result of approval of Amendment 5 and the two resolutions. However, the temporary restraining order granted by Sherry stated that the board “shall maintain the current retirement and disability plan in full force and effect, without modification, as relates to the defined-benefit plan, while this temporary restraining order remains in effect or until such further time as designated by the court in granting further temporary, preliminary or permanent injunctive relief.”

On May 25, 2006, Sherry granted Local 1889’s request for a preliminary injunction, prohibiting the board from making any changes to the pension plan.

Goffstein told the Call Friday that he was not surprised Sherry denied the motion for a new trial and encouraged union leadership and board members to work toward a settlement.

“Motions for new trial are rarely granted by courts, but what it does is set out the areas of error, if you will, for appellate purposes. So it makes the record for appeal …

“We didn’t have any great expectations that the motion for new trial would be granted because they’re only granted on the rarest of occasions,” he said. “On the other hand … I think the district’s lawyers were correct when they told the judge that she should not grant our motion for injunction pending the outcome of the appeal unless there was a substantial likelihood that we would be successful in the appeal. That’s what they told her and we agreed with that and she still entered the injunction. So it kind of speaks for itself, don’t you think?

“… I’m hoping that if this order does nothing else, I’m hopeful that it puts the parties in the same room and gives them the opportunity to resolve this matter without any further appeals because it’s certainly within their power to do so,” Goffstein said.

He continued, “Certainly the parties can keep talking (and) work their way through it, and I know attorneys on both sides have urged them to do that. We should put this behind us once and for all if we can …

“Suffice to say, the parties have it well within their parameters to make an agreement and I’m certain that attorneys on both sides would like them to do that. We think it’s in everybody’s best interest. But if they could do it without anybody trying to get a leg up on the other … Just try and do what’s right and fair, I’m sure they can find their way through it. In fairness to the union, they’ve been trying to do this for months and months now to no avail. Maybe the district was waiting until this order came before they made a determination if they should go forward with settlement negotiations or not, and I can understand that point of view. But now that the order is in there, this the perfect time to do it.

“Settlement is good public policy and if they can find a way to do it, I think it’s very much within their respective mutual best interests. At the very least, they should give it a very serious good-faith effort, both sides,” Goffstein added.

In regard to working toward a settlement, Hilmer said, “I’ll just repeat what Mrs. Stegman has said all along: ‘Bring us a proposal in open session and we will talk about it.”’

Regarding the exclusion of new employees from the injunction, Goffstein said, “… Both parties had stipulated that the new employees had no rights in regard to the defined-benefit plan and so the district was free to start a defined-contribution plan on their behalf …”

For those employees hired after March 31, 2006, Hilmer said, “We plan on making a one-time contribution to them of between 14 and 19 percent based on their ’07 earnings because we’re focused on taking things forward …”

Noting that Sherry’s judgment made her Aug. 27 ruling final, Hilmer said, “It was interesting — Dec. 24, her order became final and I think that’s a great Christmas present for everybody who’s for fiscal responsibility. We were the first public entity in the state to be challenged on such a change and now to have a final order that affirms the power of a board to make that change, I think it’s huge.”

As for the notice of appeal being filed, he said, “We’ve seen this show before. We went through it on the disability and we’re prepared to go through it on this one also. And ultimately on the disability, we prevailed.”

Hilmer was referring to a lawsuit filed by Local 1889 in June 2005 that sought to prohibit the board from implementing a disability-benefit contract with Standard Insurance and eliminating disability benefits from the district’s pension plan.

On Feb. 24, 2006, St. Louis County Circuit Judge Barbara Crancer granted the board’s motion for summary judgment, dissolving a preliminary injunction and dismissing Local 1889’s suit. In January, a three-judge panel of the Eastern District of the Missouri Court of Appeals issued an order affirming Crancer’s dismissal of Local 1889’s lawsuit. In May, the Missouri Supreme Court declined to hear the lawsuit.

Regarding the current appeal, Hilmer said Local 1889 will face “a much harsher standard of review” from the appellate court than it did for the disability case, which involved a motion for summary judgment.