Georgia’s Supreme Court Rules against DCSD for their breach in retirement payment to employees

The Supreme Court of Georgia ruled in favor of DeKalb County School District (DCSD) teachers and employees who sued DCSD and their board for not providing two years’ advance notice prior to suspending contributions to retirement funds─ an agreement previously made.

“Although we would have liked to see a different outcome, we will move forward with the next phase of this process,” said former DCSD Superintendent R. Stephen Green. “We value the hard work of all DeKalb County School District employees. Despite the disposition of this case, we remain committed to our teachers and employees.”

In 2011, Elaine Gold, Amy Shaye, and two other “current or former” DCSD employees sued the district and DCSD board for breaching the agreement to provide two years’ advance notice prior to reducing funding for their Tax Shelter Annuity (TSA) accounts. DCSD cited a budget shortfall for the halted contributions, resulting from former Georgia Gov. Sonny Perdue’s statewide funding cuts that created a nearly $20 million budget deficit for the district.

In a hearing before the Court of Appeals, the employees said DCSD’s promise to provide two years’ notice “was adopted as board policy; it became part of the employees’ employment contracts, protected by Georgia’s prohibition on retroactive laws and impairment of contracts.”

“Our school board takes issues regarding retirement benefits very seriously. We will continue to work with legal counsel to determine the next steps in this matter,” said Chair of the DeKalb County Board of Education Michael Erwin.

The district had annually contributed 6% of a participating employee's salary. If they are found to be liable for that much for each year since the 2009-2010 school year, the district could be responsible for more than $250 million, which is almost 20% of its 2019-2020 operating budget. Other employees may soon be able to join the lawsuit as a class action.

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