In a 2-1 split decision, the Georgia Court of Appeals ruled against the Hall County employees who claimed their pension benefits were unlawfully frozen 25 years ago.
The class action lawsuit concerns an estimated $75 million and a group of roughly 100 current and former Hall County employees. Filed in Hall County more than six years ago, the case has pinballed between its home jurisdiction and the appellate courts.
Following the Court of Appeals ruling, the employees’ attorneys said they will ask the Supreme Court of Georgia to review the case.
Before both sides argued before the Court of Appeals in October, the most recent ruling was Judge Martha Christian granting summary judgment in April 2022 for the second time in favor of the county government.
Court of Appeals Judge Benjamin A. Land wrote the majority opinion March 13 joined by Judge Elizabeth Gobeil ruling that the summary judgment previously granted to the county government was correct.
The crux of the case involves the frozen accrued benefits for employees under the defined benefit plan in July 1998. The county adopted a “defined contribution plan” and stopped making contributions to the defined benefit plan.
The employees argued that freezing the benefits was akin to a termination of their defined benefit plan, meaning that they were owed notice and a hearing.
The appeals court majority wrote that there were two fatal problems with the employees’ argument. The first was that the notice and hearing requirement was not part of the defined benefit plan prior to the 1998 freeze, and the judges also ruled that it wasn’t a plan termination.
“The (defined benefit plan) has been altered in that benefits have been frozen and no further contributions are being made to it, but the accrued benefits are still being held and administered for the affected employees,” according to the majority opinion.
Presiding Judge Christopher J. McFadden authored a dissenting opinion, writing that the county’s actions did constitute a termination of the plan and would require the notice and a hearing.
“The notice and hearing provision is triggered when the ‘employer,’ here the county, decides either to terminate its defined benefit plan or to withdraw from the trust created under that plan,” McFadden wrote. “The parties to this case dispute whether the county’s act of ‘freezing’ the defined benefit plan was a ‘termination’ invoking those requirements. I would hold that it was.”
McFadden agreed that there was not a full termination of the defined benefit plan.
“As the majority notes, the plan continues to be administered,” McFadden wrote. “But the county’s acts of ceasing its contributions into the defined benefit plan and freezing the accrual of benefits under that plan effectively ended the ability of some participants to obtain the full extent of benefits provided for under the plan. So it amounted to a partial termination of the plan.”
Plaintiffs’ attorney Michael Kramer and co-counsel Ed Buckley sent a statement to The Times saying they “always expected this case to go to the Georgia Supreme Court.”
“It’s a hard fought case for the pension rights of Hall County government employees who have been denied their rightful pensions promised them by Hall County,” the plaintiffs’ attorneys said.
“The Georgia Court of Appeals 2-1 majority decision has in our view misstated the law and the facts. Judge McFadden in his dissent stated he would rule for our plaintiffs because he found the employees’ pensions had been unlawfully terminated. His analysis contained common-sense and concise factual and legal analysis. The Georgia Supreme Court has seven judges that would hear and decide the case if they accept it for review. We will be applying for Georgia Supreme Court review. We like our odds and we’ll continue to fight for our clients."
Attorney Ben Mathis, part of the team of attorneys representing the county, deferred comment on the ruling to the county government.
“We respect the court’s decision and have no further comment,” Hall County spokeswoman Sarah Crowe wrote in an email.