Mehlville Local 1889 challenging proposed disability plan changes
July 06, 2005 - The Mehlville Fire Protection District Board of Directors will vigorously defend proposed changes to the district's disability plan that are being challenged in court by Local 1889 of the International Associ-ation of Fire Fighters.
"The board will defend this matter based on its authority provided by Missouri stat-utes and the relevant pension documents,'' Mathew Hoffman, the district's legal counsel, told the Call Saturday.
St. Louis County Circuit Judge Barbara Ann Crancer last week granted a temporary restraining order prohibiting enactment of the proposed changes to the district's disability plan until July 15 when a hearing will be conducted on the lawsuit filed by Local 1889.
The union's lawsuit seeks to prohibit the board from implementing a contract with Standard Insurance that was unanimously approved by the Board of Directors — Chairman Aaron Hilmer, Treasurer Bonnie Stegman and Secretary Dan Ottoline Sr. — on June 6.
"The Board of Directors voted unanimously to retain a private insurance company rather than self-insure the disability plan provided to the firefighters,'' Hoff-man said.
Since the board approved the separate disability benefit plan under Standard Insurance, employees have been covered by two disability plans.
Hilmer and Stegman have said at board meetings that the district was liable for the original disability benefits under the pension plan and they intended to eliminate that risk.
Two weeks later, the board voted 2-1 with Ottoline opposed to approve an amendment to remove disability benefits from the pension plan for injuries that occurred after July 1.
Under the amendment, disability benefits would be covered by Standard Insurance. Besides covering on-duty employees, the new plan would extend around-the-clock coverage to employees, but would reduce the maximum benefit payments by 15 percent.
In a June 16 letter, John Goffstein, an attorney representing Local 1889, warned board members that they may be sued by union employees if changes were made to the district's pension plan.
In the letter, Goffstein stated that eliminating the current disability program "will be detrimental to the plan participants and actually take away benefits to which the firefighters and paramedics would have otherwise been entitled should they attain disability."
The union's lawsuit, filed June 30, alleges that "by a 2-to-1 majority, the board has engaged in intentional wrongful misconduct and fiduciary breach through the misconduct of board members Stegman and Hilmer and has implemented the destruction of the firefighters and paramedic disability benefits unilaterally over the objection of the entire Pension Committee and in violation of the Missouri Meet-and-Confer statutory mandates.''
The six counts of the union's lawsuit also allege that board members:
• Violated the state's Open Meetings and Records Law, also called the Sunshine Law, by conducting business in private.
• Violated the Meet and Confer Act by refusing to meet and confer with union members about the Standard contract.
• Violated Missouri law by effecting a partial plan termination.
• Violated the Missouri Constitution's due-process clause by unlawfully depriving union members of vested and/or accrued pension and disability retirement benefits.
• Violated the due-process clause of the 14th Amendment of the U.S. Constitution by denying union members "life, liberty or property without due process of law by the unlawful termination of the pension plan and disability benefits.''
• Violated their fiduciary duties "to act only in the best interests of plan participants.''
The lawsuit contends that the Standard Insurance contract, "in fact, results in significant changes in, including the termination of, certain accrued and/or vested employee benefits ... The standard contract offers significantly less benefits to em-ployees than was provided under the terms of the Firefighters and Paramedics Pension and Disability Retirement Plan.''
The lawsuit alleges the Board of Direc-tors violated the Sunshine Law by conducting "private meetings related to the negotiation and acceptance of the (Stan-dard) contract, which meetings were not recorded or transcribed, subjected to public scrutiny or otherwise made public prior to their announcement ...''
The lawsuit further alleges the contract and amendment to remove the disability benefits from the pension plan were approved in violation of the Sunshine Law "in that the pension agenda item was changed to a board item without proper notice under the (Sunshine Law) and said notice was not provided to the public 24 hours in advance of same and an illegal vote was taken at the Pension Committee meeting because same was not a duly constituted public board meeting.''
Implementing the Standard Insurance contract violates the Age Discrimination in Employment Act, Local 1889's lawsuit contends, because it would have "a disparate impact on workers over the age of 40 and further violates the Americans With Disabilities Act ... in that implementation of the Standard contract has a disparate impact on disabled workers.
"If the illegally implemented contract is allowed to have or maintain any force or effect, members of the uniformed fire and EMS service will suffer immediate and irreparable injury in the form of a significant and immediate reduction in disability and pension benefits, which reduction in benefits will have been implemented in violation of the Missouri Sunshine (Law), the Meet-and-Confer laws of the state of Missouri and the Constitution of the State of Missouri ...
"Due to the substantive and procedural violations of law associated with this illegal act, there is a substantial likelihood that plaintiffs will prevail in this action,'' the lawsuit contends.
Under Missouri statutes, fire protection district boards of directors have the authority to provide for health, accident, disability and pension benefits for employees.
"... The type and amount of such benefits shall be determined by the board of directors of the fire protection district within the level of available revenues of the district ...,'' according to state statute 321.220 (15).
Furthermore, the district's pension plan states that the plan shall be administered by the Pension Committee in accordance with the plan and group annuity contract, "subject to the ultimate authority of the Board of Directors.''
The hearing on the lawsuit filed by Local 1889 will begin at 8:15 a.m. Friday, July 15, at the St. Louis County Courthouse in Clayton.