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School district files suit against employees to return overpayment

By Jeffrey Obser Daily Planet staff
Saturday September 29, 2001

The Berkeley Unified School District filed suit in Alameda County Superior this week to recoup money mistakenly paid to dozens of service employees. 

In March, 552 non-instructional employees – maintenance, accounting, and secretarial personnel, among others – received overpayments in their monthly paychecks. Most consented to pay the money back through deductions to two later paychecks, but some, claiming hardships, have fought to return the money more gradually. 

“It’s awful to be in a position where in order to recover a significant amount of funds, you have to sue your employees,” said Shirley Issel, vice president of the Berkeley Unified School Board. 

“If they aren’t going to (reschedule the payments) voluntarily, I’m going to get a judge to get them to do it,” said Stephanie Allan, representative for the union that went to court to prevent the district from taking back the money by reducing the May and June paychecks. 

In March, due to computer and clerical errors, 552 monthly paychecks were printed with twice the bonus due under a new contract that had raised those employees’ pay by 6 percent, retroactive to July 2000. 

The district discovered the problem after direct deposits and some paper checks had already gone out, said Tina Breyer, the district’s director of classified personnel, so the rest were sent as well, with a letter noting the problem. 

The Public Employees Union Local 1, which holds the contract with the district to represent the employees affected by the overpayment agreed to let the district recoup the money in two deductions so long as individuals could claim hardship exceptions to work out a repayment timetable separately with the district.  

“April is not a good month to take money back, so we negotiated with district to take it out in two payments,” said Rick Spaid, who represents Local 1 in the district office’s technical business unit.  

“The district was very forthcoming to help us.” 

However, the mistake caused many employees serious cash-flow problems. It increased paychecks by well over $1,000 in many cases, pushing some employees into tax brackets as high as 43 percent, Allan said, and brought oversized one-time IRS deductions and increases in other garnishments such as child support and alimony. 

“We’re not making a whole lot of money, and when those deductions are added up, they add up,” said Rickey Brantley, the school safety officer at Willard Middle School, who said Friday morning he expected a process server to show up in the schoolyard at any time. “I’m really perturbed because during the time that all this happened, my mama passed away, so I didn’t know anything about the overpayment until I got back from Louisiana,” Brantley said. 

Further complicating the question, the Stationary Engineers Local 39, bidding to represent the district employees, had unsuccessfully petitioned the Public Employment Relations Board on March 14 to decertify Local 1. Amidst the overpayment fracas, it rounded up 67 affected employees, offering to help them win a more gradual repayment schedule. 

“I’m standing on the sidelines saying to the district, ‘you can’t do this, this violates the law,” Allan said. “You can’t take that much money, not in one check, not in one deduction, not in two deductions.” 

Allan said the 67 had already signed documents to switch unions, but Spaid said Local 39 “definitely gave people the impression they would not have to pay this money back.” 

Local 39 sought an injunction in county court against the May deduction, but it was denied and the deduction went ahead. Allan said this left one food service worker with $80 in her monthly check. 

Local 39 returned to court and on June 20 won an injunction based on state statutes regarding wages and garnishment. Allan said the law limits employer deductions in cases of error to no more than 30 percent of a single paycheck, and less if the remainder leaves employees with less than they need to meet their average monthly expenses. 

Meanwhile, according Spaid, the district lagged on the hardship requests. “We found out last month that the district never answered the hardship letters, so Local 1 raised a little stink and said you need to answer these things,” he said. 

Michele Lawrence, the district superintendent, said she had granted five hardship exceptions out of about 54 among the Local 39 group who had requested them, allowing those people to repay on extended schedules. She said the district had a contract solely with Local 1 and had no legal authority to reach separate agreements with Local 39. 

“The school district was very reluctant to file this suit,” said Lawrence, “but after seven and a half months of conversation, we can no longer negotiate separately with this group of people when in fact our other employees, through their representative group, have already paid back their money.” 

Allan maintains that the agreement with Local 1 to draw the money back in two payments “violates the law, and you can’t stick to an illegal agreement.” 

“The judge is going to tell (Lawrence) to work out agreements with these people,” Allan said. “None of this is necessary. This is, ‘You’re going to work this out our way or you’re going to pay a price.’” 

Spaid also criticized the district – “their idea of communicating,” he said, was to serve them with a lawsuit – but he reserved his harshest criticism for the competing union. 

“They basically have put these 54 people in the position where they’ve told them to tell the district, ‘If you want your money back, you have to sue me,’” he said, adding that if the court rules against them, it may affect their credit ratings. 

“At this point, that’s where it is,” he said. “It’s now between the district and these individuals.” 

According to Breyer, about $25,000 is still not paid back, and as of Friday all but 44 people in the dissenting group had agreed to repay the district in order to be dismissed from its lawsuit.