Hogan Marren Attorneys Establish MWRD Employees Right To Accrued And Prospective Deferred Compensation

On January 25, 2012, in a case filed on behalf of twenty-seven employees of the Metropolitan Water Reclamation District of Greater Chicago (“MWRD”), Cook County Circuit Court Judge Richard J. Billik held that the employees had an enforceable contract right to deferred compensation that could not be retroactively eliminated by an action of the MWRD Board in November, 2010.

Patrick E. Deady, Edward M. Hogan, Limo T. Cherian and Evan J. Haim filed the lawsuit in December, 2010 as a potential class action and obtained a temporary restraining order on behalf of those named plaintiffs most severely impacted by the MWRD decision to eliminate these deferred benefits.  Prior to November, 2010, non-represented employees of the MWRD received up to 30 days of pay upon termination for twenty years of service and had the right to accumulate up to 120 days of sick leave, which would be paid out on a two-to-one basis upon retirement.  The MWRD Board’s November, 2010 action sought to eliminate these accrued benefits for any current employee who did not voluntarily resign by December 31, 2010, and provided that no MWRD employees would accrue any future termination or sick leave incentive pay after January 1 2011.

In his January 25, 2012 ruling, Judge Billik held as a matter of law that the policies, directives and the Employee Handbook of the MWRD established a contract with those plaintiffs who had worked and accrued the deferred benefits prior to the implementation of the new policy on January 1, 2011.  The Court also found that the District’s June, 2011 action 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 employment agreement.  The Court held these pre-1994 plaintiffs had an enforceable right to future accruals of these benefits until they agreed to a modification of the deferred compensation policy, in exchange for some monetary consideration.

For a copy of the Circuit Court’s January 25, 2012 Ruling, click here.