Michael Terry (from left), JasonCarter, Roy Barnes and John Salter.

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A group of DeKalb County School District employees have settledtheir class action lawsuit against the Board of Education overpension contributions for $117.5 million, to be paid over the nextfive years, representatives for both sides said Thursday.

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The agreement ends a decade of litigation for teachers and otherschool employees who alleged the DeKalb County Board of Educationillegally ended contributions to their retirement funds.

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The agreement is subject to approval by DeKalb County SuperiorCourt Judge Gregory A. Adams. The most most recentdevelopment came when Adams flipped his earlier positionand granted a motion for class certification with an order signedMarch 26. The judge named teachers to serve as representatives inthe lawsuit going forward. The lead plaintiff is Elaine Gold.

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More than 10,000 teachers and other employees contend—"and theappellate courts have established"—that the school district"breached their contract by improperly reducing certain retirementbenefits," Adams said. "If ever there was a question that ought tobe resolved once and for all, it is whether this school districtshortchanged these teachers unlawfully." This is the same judge whohad previously thrown out the lawsuit.

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The Georgia Court of Appeals reversed Adams and remanded thecase to him for reconsideration. Judge John Ellington wrote thereversal opinion on June 1, 2018, agreeing with the teachers thatthey had "an enforceable 'governmental promise' that required twoyears' notice before reducing or suspending funding." Ellingtonwrote for a panel that included Judge Charlie Bethel and SeniorJudge Herbert Phipps. The school district appealed to the GeorgiaSupreme Court, which unanimously affirmed the panel's ruling inNovember 2019. (Both Ellington and Bethel had moved up to the highcourt by then.)

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The DeKalb teachers' pension program was created like those ofother school districts that opted during the 1970s to create analternative to Social Security retirement benefits. The disputedates to 2009 and the Great Recession, when then-Gov. Sonny Perdueannounced a 3% reduction in state funding for all Georgia schoolsystems, Ellington explained.

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"In an effort to manage the expected loss of up to $20 millionin state funding and the resulting budget deficit, the boarddecided to suspend contributions" to the teachers retirement plan,Ellington said. "Although the board notified employees that fundingof the [retirement] plan would be suspended, it did not give twoyears' notice prior to suspending funding."

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Ellington pointed to "evidence in the record from which afact-finder could infer" that the school board was aware thatsuspending funding to the retirement plan without the requiredtwo-year notice violated its own policies.

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Furthermore, Ellington said, "There is no evidence in the recordthat the district has restored any funding." He said that, in June2010, the school board "amended its by-laws and policies to removethe two-year notice provision."

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The board disputed the two-year notice requirement, but theteachers argued that failing to meet it made the budget cutsillegal. The $20 million on the line for the year the contributionswere cut, multiplied by the 10 years of budgets since, could havemeant $200 million or more is at stake in the case—plusinterest.

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The school district defense attorneys are AllegraLawrence-Hardy, Thomas Bundy III, Lisa Haldar and Leslie Bryan ofLawrence & Bundy.

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The Barnes Law Group represents lead plaintiff Elaine Gold andothers. The team includes former Gov. Roy Barnes and John SalterJr. They were joined by Michael Terry and Jason Carter ofBondurant, Mixson & Elmore.

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The settlement will go to the teachers in the form of checks.About a third—approximately $38 million—will go to attorney feesand costs, according to the lawyers.

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"Ten years of litigation, four appeals, completely lost it twiceand had to reverse it," Terry said Thursday. "If there was ever acase where we had to earn our money, this was it."

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The school district responded to an inquiry from the DailyReport on Thursday with an emailed statement.

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"After extensive negotiations, we are pleased to have achieved amutually agreeable resolution of the Gold case, which involvesdisputed claims relating to the Board TSA (tax-sheltered annuity)plan. This class-wide settlement represents a fair resolution forthe District's employees while giving the District flexibility inpayment with the hope of minimal budgetary disruption.

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"Both sides believe this settlement turns the page on thislongstanding dispute, ending almost a decade of litigation andfurther demonstrating the District's commitment to its most valuedresource: classroom educators and employees. The parties hope thisresolution allows for our collective focus to be on the criticalmission of educating the wonderful children of DeKalb CountySchools. The settlement is subject to approval by the Court, andthe parties are preparing papers to submit to the Court forpreliminary approval. If approved, more information will beprovided for those who may qualify as members of the class."

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Katheryn Hayes Tucker is an Atlanta-basedreporter covering legal news for the Daily Report and other ALMpublications.

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