News & Insight

Hogan Marren Attorneys Certify A Class Action Lawsuit of 1,150 MWRD Employees Challenging The MWRD’s Illegal Elimination of $38 Million In Deferred Compensation

On August 8, 2012, Cook County Circuit Court Judge Richard J. Billik, Jr. certified a class action on behalf of all 1,150 non-union employees of the Metropolitan Water Reclamation District of Greater Chicago (“MWRD”), a case first brought by twenty-seven employees to restore these employees’ contractual rights to deferred compensation illegally eliminated by the MWRD Board of Commissioners in November, 2010.

Patrick E. DeadyEdward M. Hogan, Limo T. Cherian and Evan J. Haim filed the potential class action lawsuit in December, 2010 on behalf of the twenty-seven named plaintiffs and successfully enjoined the MWRD from implementing a new employment policy that eliminated all accrued deferred benefits effective January 1, 2011 for all non-union employees.  Prior to a November, 2010 action by the MWRD Board of Commissioners, all non-union employees earned up to 30 days of pay upon termination after twenty years of service and had the right to accrue up to 120 days of sick leave which would be paid out on a two-to-one basis upon separation.  The Board’s November, 2010 action eliminated these accrued benefits for all current employees who did not voluntarily resign by December 31, 2010 and provided that after January 1, 2011, no MWRD non-union employees would accrue no termination pay or any sick leave pay in excess of 15 days.

On January 25, 2012, Judge Billik held as a matter of law that the policy directives and Employee Handbook of the MWRD established a contract with those named plaintiffs who had worked and accrued the deferred benefits prior to the adoption of their new policy effective January 1, 2011.  The court also found on January 25, 2012 that the District’s actions eliminating the right to future accrual of these deferred compensation benefits was ineffective for any of the plaintiffs hired prior to November 2, 1994, the date the District first adopted and promulgated an Employee Handbook containing a specific disclaimer that the employment policies did not create a binding contract.  For a copy of the Circuit Court’s January 25, 2012 ruling, click herepdf button

The Court’s August 8, 2012 ruling presents an opportunity to extend the January 25, 2012 ruling to the entire class of non-union employees.  Hogan Marren estimates that the 1,150 non-union employees had accrued over $25 million in deferred compensation through December 31, 2012 and that the approximately 400 employees hired prior to November 2, 1994 had the right to the future accrual of termination and sick leave pay with the value of an additional $13 million in deferred compensation.  For a copy of the Circuit Court’s August 8, 2012 ruling, click herepdf button

  Aug 8, 2012  |  By    |   On Firm News