Five years ago, Caton discovered that the city, in fact, consistently had violated a 1979 ordinance guaranteeing pay parity among the ranks of its firefighters and police officers. In 1994, Caton and 823 fellow firefighters filed suit against the city demanding back pay with interest. Three more suits, encompassing almost every firefighter and police officer in the city, subsequently were filed.
According to sources close to the case, Collin County state District Judge Robert Dry Jr. will make a decision in the first suit within days. Lawyers for the firefighters say they feel confident the judge will rule in their favor--a decision that could translate into as much as $150 million in damages when all four suits are concluded.
Attorneys for the law firm of Haynes and Boone, which is representing the city, would not comment on the suit. The law firm has received more than $900,000 in fees from the city.
"This is a giant lawsuit," Caton says. "The city would never sit down and talk with us. They thought we were going to go away. We wouldn't. All we wanted was to be treated fairly."
The seeds of this lawsuit were planted in 1979, when the city's firefighters and police officers thought they deserved significant raises. With no collective bargaining, the only legal avenue available for them to force a pay increase was to take it to the voters. On January 20, 1979, the city called a special election concerning two pay issues.
Voters gave firefighters and police officers 15 percent across-the-board raises. In addition, they passed a proposition, later approved and adopted by the city council, that requires the city to maintain the same percentage differential between the salaries for all ranks that existed when the ordinance became effective.
For example, in 1979, Fire Chief Dodd Miller's base salary was 60 percent higher than the entry-level salary for the rank of "second driver" held by Tom Caton. By law, Miller's salary should still be 60 percent higher today, meaning that as his salary rose, the lower ranks' pay should have increased proportionally. It didn't. Today, Chief Miller makes about 160 percent more money than Tom Caton, who maintains the rank of second driver. The lawsuits contend that Caton and others like him, who received less than the formula provided for, are owed money.
What the firefighters' lawsuit ultimately revealed was that the pay differentials among the eight ranks within the fire department were never maintained, nor were they ever maintained among the ranks in the police department. The city knew it was out of compliance as early as 1988, but did nothing about it, according to documents uncovered in the suit.
In 1988, retiring Deputy Fire Chief Bobby Moore discovered that he and his fellow deputy fire chiefs had not been compensated fairly according to the 1979 ordinance. In 1979, deputy chiefs were paid 16.2 percent more than battalion chiefs, the rank just below deputy chief. The summer before he retired, Moore learned that the pay differential between the two ranks was less than 16.2 percent. Moore informed the city that he thought he and his fellow deputy chiefs should get more money. The city agreed.
According to Moore's deposition, he attended a meeting in the summer of 1988 with First Assistant City Manager Jan Hart, City Attorney Analeslie Muncy, and Dianna Sword, who was the city's director of personnel. At the meeting, Muncy stated that the 1979 ordinance guaranteeing a consistent pay differential applied to all ranks. Hart stated the city would increase the pay of deputy chiefs. A memorandum from Hart shows that the deputy chiefs' pay rate was adjusted retroactively for six months.
"The city wrote the deputy chiefs a check and shut them up," says John Stooksberry, a lawyer for the first group of firefighters to file suit. "Maybe they didn't think anyone would find out that everything was out of whack. It's easier to help a handful of deputy chiefs and keep them happy than thousands of the lower ranks."
For many years, no one did find out. In 1992, Tom Caton and other firefighters who held the rank of second driver complained to the city that they were not getting the same percentage pay increases as other ranks. Their grievances, however, fell on deaf ears. "If they had just talked to us, this lawsuit would have never come up," Caton says.
At the time, about 240 second drivers hired the McKinney-based law firm of Boyd, Veigel, which researched the city's pay structure. Stooksberry discovered that not only had the second drivers not been compensated fairly, but neither had any other rank within the department.
"From the lowest rank to the highest, none of the percentage pay differentials were the same as they were when the ordinance was passed in 1979," Stooksberry says. "The chief's percentage increase was a lot greater than the lower ranks. The assistant and deputy chiefs were greater too."
In the summer of 1993, City Manager Ted Benavides, then an assistant city manager, denied the second drivers' salary grievance. The firefighters filed suit in early 1994, requesting back pay plus interest for the previous four years, the allowable time period under the statute of limitations. "If the city had just treated the second drivers fairly, I don't think anyone would have known all the percentages were out of line," Stooksberry says.
Stooksberry's clients called a meeting of the other ranks and asked them whether they wanted to join their suit. In the end, they wound up with almost half the city's firefighters. The other half would eventually hire another law firm and file suit in Dallas County. Boyd, Veigel also filed another suit on behalf of Dallas police officers. A second group of police officers filed suit in Rockwall.
"Instead of fixing the problem, they ignored the problem and denied there was a problem," says Ray Herrington, a Dallas police officer. "I'm afraid they're going to make us look like the bad guys. But at the beginning, if they had just addressed the problem, we would have settled for a couple of hundred dollars and a change in the pay scale."
Today the city is looking at paying individual firefighters anywhere from about $100,000 to $200,000 apiece in back pay plus interest, according to pay loss calculations prepared by the plaintiffs for a sampling of firefighters in the eight ranks of uniformed officers between July 1990 and May 1998.
Despite the potential magnitude of the suit, the media has produced nary a word about it. City council members say they have received a few cursory briefings from the attorneys in executive session. Yet there has been little doubt about the city's liability.
In 1995 and again in 1997, state District Judge John Roach, who first presided over the case before being promoted to appellate judge, ruled that the city had not maintained the percentage pay differentials between the grades in the sworn ranks of firefighters as required by the ordinance. In 1997, he further ruled that the city is obligated to resolve the effects of its past failure and bring itself into compliance for the future. He then abated the case to allow the city a reasonable opportunity to take action.
The city did nothing. Six months later, the plaintiffs successfully got the abatement lifted. In May 1998, the city tried to fix the mess by passing a resolution that revised salary schedules for the police and fire departments and attempted to make them retroactive to 1990. They added lower-paid entry-level steps to most of the ranks, including chief, to show--on paper--that the pay percentage differentials were in keeping with the 1979 ordinance.
"They created this retroactive pay scale in a way we think was fictitious," Stooksberry says. "The judge saw through it in a minute. He recognized that retroactive effect of the resolution was forbidden by the state constitution."
In December, the judge declared the retroactive provisions of the resolution invalid.
In March, the plaintiffs filed a motion for partial summary judgment awarding damages for 16 plaintiffs, two from each rank. Using pay loss calculations figured by the former head of the math department at the University of Texas-Dallas, the total just for these 16 firefighters comes to about $1.5 million. The calculations were figured by taking the percentage pay increase received by Chief Miller over the past nine years and increasing the plaintiffs' pay by the same percentage. Theoretically, that is what the ordinance says should have happened all along.
If the judge concludes that the formula the plaintiffs used is correct, it could translate into as much as $150 million for thousands of police officers and firefighters in all four suits.
If the firefighters win this ruling, Stooksberry says, everything else falls into place, and it's just a question of applying the formula to all the plaintiffs. Of course, the city could appeal, which means a final resolution could still be as much as five years down the line. In the end, if the city loses, there will be that much more back pay and interest to shell out.
"We don't know if the council has been fully informed," says Stooksberry. "If they were, you would think they would have solved this problem a long time ago."
Bill Boyd, Stooksberry's partner, agrees. "The interest has been accruing at a rate of $800,000 a month, according to our theory," Boyd says. "If the council has been informed, then it comes pretty close to political malpractice."
Council member Donna Blumer says that city staff encouraged the council not to do anything until it got clear direction from the court. "This is just one more interesting wrinkle over here," Blumer says. "No one should be surprised if it explodes on us. But the numbers are mind-boggling. I hope the city does the right thing and doesn't gut the budget to do it."
The council has not been briefed about the case in more than a year, council member Lois Finkelman says. "Since then, there's been no attention paid to it," she says. "Whatever the bottom-line number turns out to be, it will be a significant number, and there is nothing budgeted for it. It is a mind-boggling problem.
"It's almost as though each council and city manager has either ignored it or fought it, in the hopes of pushing it off for the next group, hoping it will be somebody else's problem. At some point we will have to deal with it.
