The Brainerd School District is one of 300 Minnesota school districts that asked a court Wednesday for shelter from the U.S. Equal Employment Opportunity Commission, which wants them to compensate employees who accepted less money for retiring at an older age.
In a lawsuit filed in U.S. District Court in Minneapolis, the Minnesota School Boards Association claims that districts are immune because the 11th Amendment protects states and agents of the state from such actions.
The lawsuit attempts to head off litigation that hundreds of districts may face if they don't agree to give back pay and interest to some teachers and other staff. They forfeited some benefits because they worked beyond age 55, the optimum age under early retirement clauses in their contracts. The EEOC says the clauses are discriminatory.
"I think it would be beneficial for us to have this settled in court," said Jerry Walseth, superintendent at Brainerd. "We need clarifications on this so the district is protected."
Brian Wallace, a representative of the Brainerd United Educators, said the district did not push the litigation and that both parties signed the contract. The union and the district have been working on changing the contract for teachers, who are getting ready to retire, but have not come up with an agreement.
"This probably will wind up in court," he said.
There are 19 Brainerd teachers, who retired between 1998 and 2000, who will be affected by this claim. The school district could be out of about $300,000.
The association knows of at least 300 Minnesota school districts that have been contacted about their retirement plans. Some have been asked to pay some retirees, who received reduced severance or health benefits, double the amount they lost plus interest.
The money at stake is difficult to pin down. Only recent retirees would be eligible for compensation and the amount they would be entitled to depends on the age at which they retired. But officials have said some individual districts may be on the line for hundreds of thousands of dollars.
Bob Lowe, associate director of management services, said the association is unaware of any district that has settled with the EEOC. Lowe's organization considers the retirement plans legal, citing two court cases that upheld the design.
The most recent was in 1995, when the Minnesota Supreme Court ruled that a White Bear Lake early retirement plan was acceptable under state law. The EEOC argues that the so-called declining-scale retirement benefits violate federal law.
Short of stopping the EEOC, the school boards association wants teachers unions to share potential liability because they agreed to the early retirement clauses during negotiations. The lawsuit names Education Minnesota as a defendant.
Harley Ogata, an attorney for the teachers union, Minnesota's largest, said the school boards association lawsuit is premature because the EEOC hasn't finished its investigation. Regardless, Ogata said the union believes the districts carry sole liability.
"To us, what we're hopeful for is working these things out with the EEOC and avoiding litigation," Ogata said.
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