To settle the question of whether canine-care pay was overtime in the strictest, not-included-in-retirement sense, Conger called Kyle Elser, payroll manager for the City of San Diego’s auditor’s office, to the witness stand and had him explain the Earnings Codes Document referred to in the San Diego Municipal Code, section 24.0103. Conger looked at the document as he said, “There is in bold caps at the beginning the explanation: ‘The add-on earnings codes listed below are classified as “negotiated specialty add-ons” and are included in retirement based compensations because all employees performing that class of work during their ordinary work hours on a consistent basis earn them at the same rate of pay.’ Do you see that?”
Conger: “If you go two more pages down…there’s a list that says, ‘1K9A, canine-care pay,’ correct?”
Conger: “Canine-care pay is actually in the…Earnings Codes Document explicitly listed as included in base retirement earnings compensation, correct?”
Conger went on to point out that the document had been signed by the City’s personnel director, Rich Snapper, and the city manager, Lamont Ewell, and a handful of other city officials and ratified by the city council and that this had happened eight years running.
Stiffler, faced with this damning evidence, stuck to his argument that if it’s paid at the overtime rate, it’s overtime, and overtime is not included in retirement compensation. Therefore, it was an “error” that the code for canine care was on that list. He was backed in that conclusion by Elser, who said, “My plan is to remove [canine-care pay] altogether, because that code has never been used. So my plan is — I will note it in the memo that this code was entered in error, never been used.”
Reached by phone recently, Conger says he argued that it couldn’t be an error if “five different people over eight different years — so that is 40 different times — all made the same mistake [by signing the Earnings Codes Document]. That just doesn’t seem logical.”
Judge Judith Hayes found for the plaintiffs. “The court finds,” she wrote in her decision, “that canine care pay is not overtime and should be included in the determination of final compensation. Canine care pay is not overtime pay in the classic sense. Each K-9 officer receives the same fixed pay for canine care, regardless of how many off duty hours are spent attending to the animal in question. This pay doesn’t vary on the basis of whether or not the officer is called in to work overtime with the K-9. This compensation is more akin to a part of the regular periodic compensation received by the officers for their work as K-9 handlers.”
Instead of accepting defeat, the City appealed the ruling and hired international law firm Latham and Watkins to manage the appeal for them. “We didn’t think the ruling was correct,” City Attorney Mike Aguirre says. “And we’ve had a lot of success using Latham to handle appeals. We’ve also had a lot of success with them on the Police Officer’s Association cases. We felt strongly that the City should not have to pay any judgment, and we didn’t want to see this established as a precedent.”
But the appeal was to no avail. The appellate ruling, which was filed January 29 of this year, declared the City’s contention that canine-care pay never should have been included in retirement pay to be “based on a faulty reading of the ordinance. The second paragraph of section 24.0103 does not exclude all overtime payments from the definition of base compensation.”
The appellate opinion continued, “The City next contends this court should reverse the judgment because after the judgment a City auditor prepared a revised earnings codes document that now expressly excludes canine care pay from Base Compensation, and provides that the prior inclusion of canine care pay was a ‘mistake.’ The City requests that we take judicial notice of this Earnings Codes Document, which was created after the June 28, 2006 judgment, and expressly applies only to earnings after July 1, 2006. The City also requests that we take judicial notice of several documents entitled ‘Acknowledgement of Earnings Code’ signed by various City officials on January 25, 2007, four days before the City filed its opening appellate brief in this case. This evidence is not properly before us. It is a fundamental principle of appellate law that our review of the trial court’s decision must be based on the evidence before the court at the time it rendered its decision” (italics theirs).
The appellate court’s final word on the matter is that the City “will have to include canine care in base compensation for the purposes of calculating retirement benefits. This order applies only to canine care pay earned after July 1, 2000, and earned at a time when canine care pay was identified in an Earnings Codes Document within the definition of Base Compensation. As so modified, the judgment is affirmed. Appellant [the City] to bear respondents’ [Sloan’s, Mills’s, and Hubka’s] costs on appeal.”
Conger says the pension money involved in the case amounts to “about a couple thousand dollars per officer per year. So if it’s all completely added together, we are talking in the tens of thousands, or possibly $100,000 for everybody.”
The City could have settled, Conger believes, “for less money than they paid Latham and Watkins just to do the appeal.”
And how much did the City pay Latham and Watkins? Aguirre declined to say. Conger says, “I’ve done a public records request for Latham’s bills, and I can’t get them. I’ve been after them for four months. But it’s my belief that Latham has charged the City over $300,000.”
But the costs don’t stop there. The San Diego Police Department’s motorcycle officers, who receive extra pay for the at-home care of their bikes, filed suit to have their motorcycle-care pay included in their pension calculations. Mike Conger represented them. The case was settled.