COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Division of Administrative Law Appeals
J. Kenneth Dow,
v. Docket No. CR-06-319
Teachers' Retirement System,
Appearance for Petitioner:
David T. Gay, Esq.
Gay, Gay & Field, P.C.
73 Washington Street
P.O. Box 988
Taunton, MA 02780
Appearance for Respondent:
James C. O'Leary, Esq.
Teachers' Retirement Board
One Charles Park
Boston, MA 02142
Sarah H. Luick, Esq.
Pursuant to G.L. c. 32, §16(4), the Petitioner, J. Kenneth Dow, is appealing the May 17, 2006 decision of the Respondent, Teachers' Retirement System, excluding from his retirement calculation as regular compensation, payments he received for being the Director of Continuing Education. (Ex. 2) The appeal was timely filed. (Ex. 1) A hearing was held November 7, 2007, at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, 4th Floor, Boston, MA 02114, pursuant to G.L. c. 7, §4H.
Various documents are in evidence. (Exs. 1 - 16) The parties entered into some stipulations of fact. ("A") Administrative notice was taken of the regulations on regular compensation of the Public Employee Retirement Administration Commission (PERAC) and of the Teachers' Retirement System. ("B") One tape was used. The Petitioner testified. Both parties made arguments on the record. The record closed November 26, 2007.
FINDINGS OF FACT
1. J. Kenneth Dow, d.o.b. 1/11/45, began employment with the Tri-County Regional Vocational Technical High School (Tri-County) in Franklin, MA in October 1978. He did this with Teachers' Retirement System membership. He became an administrator at Tri-County in July 1988. He has always worked full time with continuous service at Tri-County. ("A". Ex. 3. Testimony)
2. Tri-County covers eleven towns and provides a combined vocational technical shop/trade and high school academic program to high school aged students. The academic courses lead to a high school diploma. During freshman year of high school the students also explore about fifteen different vocational and technical shop/trade areas. After that the students specialize in one shop/trade area. The academic program is very similar to that of a regular high school. The learning breaks down to 50% academic and 50% shop/trade during each day, which runs from 7:50 AM to 2:10 PM. The teachers of both the academic programs and the shop/trades courses are subject to collective bargaining agreements and they are members of the Teachers' Retirement System. The administrators are also members of the Teachers' Retirement System although they are not members of a union. They have written contracts with the Tri-County Superintendent and School Committee. About 35% of the students go on to a junior college or four year college. Upon graduating, they are able to go after their licenses/certificates in the shop/trade area they selected so that they can start employment in the trade. ("A". Ex. 10. Testimony)
3. In 1988, Mr. Dow became a Vocational Technical Coordinator at Tri-County. He administered and had oversight responsibility for a number of program areas, both academic and shop/trades. By 1989, he became the Vocational Technical Director with administration and oversight over all the program areas. By 1989, he stopped all teaching work. His duties now included making daily visits to the shop/trade classes, checking equipment and supply levels, checking for safety issues and code requirement issues, and checking to determine that required curriculums were being followed. ("A". Testimony)
4. From 1987, Mr. Dow was also assigned the work of Continuing Education Director. This program ran two nights a week. He developed a brochure for it. During the initial years he did this work it was intended to be a public relations effort to show off the school to the community, and to provide courses useful to the adult community. Mr. Dow was still a teacher when he first did this additional work. In time, the continuing education program offered courses toward securing licensure in some trades. There has always been a tuition charged, and the programs are not open to the high school students. The substance of the continuing education licensure courses mirrored the licensure courses taught to the high school students. The only overlap where both sets of students learned together was for special presentations. There was no overlap of shop or lab time for the two groups of students. In addition to doing recreational courses and doing the substantive licensure trades courses, the continuing education program would address specific needs of the adult community that arose. For example, in and around 1992 after the General Motors plant in the area closed, there were continuing education courses on adult career re-trainings. (Ex. 6. Testimony)
5. Starting in and around 1992, the continuing education program that Mr. Dow administered and supervised included daytime trades programs in cosmetology and licensed practical nursing. There was never a nighttime licensed practical nursing program, and in time, the cosmetology night program was stopped. The licensed practical nursing program has always required a high school diploma as a prerequisite, and upon starting it, Tri-County obtained Chapter 74 DOE approval of it. The cosmetology program does not require a high school diploma since it is not required for a state license in the trade. The minimum age to enter the continuing education program is 16 years old. Since this cosmetology program already had Chapter 74 DOE approval from starting it for the high school students, no additional approval was sought or necessary for Tri-County to provide the same program for the adult students. All the continuing education program courses have always been offered whether at night or during school day hours, within the Tri-County building. (Exs. 7, 15 & 16. Testimony)
6. Mr. Dow had to perform the same monitoring and oversight responsibilities with the teachers and course curriculum requirements of the continuing education program as he did for the high school teachers and their curriculum requirements. He had to evaluate each set of teachers the same way. He also had to handle both high school and continuing education student discipline, and perform oversight work the same way for both programs. He addressed various issues in regard to both programs during his day school hours. (Exs. 8, 9, 10 & 11. Testimony)
7. Mr. Dow was paid to be the Director of Continuing Education through an annual payment of a sum certain set forth in his annual contracts as Vocational Director. He received $9,488 for the 2003-2004 school year, $9,725 for the 2004-2005 school year, and $10,114 for the 2005-2006 school year. The wording of the provision in these annual contracts that would grant him the additional funds read:
The Vocational Director's regular compensation shall include an annual payment by the [Tri-County School] Committee of …[$________] for services performed as the Continuing Education Director. (Ex. 4)
8. Retirement deductions were taken from both the pay Mr. Dow received for his Director of Vocational Education and for his Director of Continuing Education work. (Ex. 5. Testimony)
9. The intent of the Tri-County School Committee for the school years 2003-2006, was to include the pay for being the Director of Continuing Education as part of Mr. Dow's overall salary for each of the years he performed this extra job assignment. (Exs. 8, 9, 10 & 11. Testimony). In order to clarify this situation for Mr. Dow, the Tri-County School Committee voted as follows:
It is moved that the intention of the Tri-County Regional School District Committee has been, and continues to be, that the compensation of J. Kenneth Dow include compensation for his responsibilities as Continuing Education Director and that this compensation is not separate from his regular compensation and reflects his daily responsibilities to the school district and its students. Notwithstanding the Superintendent's delineation of additional compensation for services as contained in Mr. Dow's contract, this change should have been reflected in Mr. Dow's contract effective September, 1992. (Ex. 12)
10. Mr. Dow's supervisor, John M. Jones, the Superintendent-Director of Tri-County, takes responsibility for what he sees as a mistake in highlighting in Mr. Dow's annual contracts, a lump sum annual extra payment for the assigned task of being the Director of Continuing Education. He views the vote of the Tri-County School Committee as showing that Mr. Dow performed the same functions with the high school students, teachers, and courses as he did with the continuing education students, teachers, and courses. He finds significant that as to licensure programs, both continuing education students and high school students took the same basic courses even if they did not learn together in the same classroom/shop. (Exs. 8, 9, 10, 11 & 12)
11. Mr. Dow filed for retirement in February 2006. He was retired effective June 30, 2006. ("A". Ex. 3)
12. In calculating his retirement allowance, the Teachers' Retirement System did not include the annual extra pay he received for work as the Director of Continuing Education, concluding that it was not regular compensation for retirement purposes. Mr. Dow filed a timely appeal. (Exs. 1 & 2)
13. Mr. Dow contacted the Teachers' Retirement Board after gathering information from his employer that supported his contention that the pay for being Director of Continuing Education should be regular compensation. The Teachers' Retirement Board by letter to Mr. Dow of August 1, 2007, explained the Board's position and how the Board was relying upon the decision in Varella v. Contributory Retirement Appeal Board, et al., 56 Mass. App. Ct. 384 (2002), that concerned payment received for performing additional work as a Director of Continuing Education. The Court found it was not regular compensation. (Ex. 13)
The pertinent standards for determining what is regular compensation for retirement purposes for a member retiring out of the Teachers' Retirement System, is contained in the G.L. c. 32, §1 definition of regular compensation as well as in the PERAC and Teachers' Retirement System regulations on regular compensation. ("B") Section 1 defines regular compensation in pertinent part to include:
[S]alary, wages or other compensation in whatever form, lawfully determined for the individual service of the employee by the employing authority, not including bonus, overtime, severance pay … early retirement incentives, … In the case of a teacher employed in a public day school who is a member of the teachers' retirement system, salary payable under the terms of an annual contract for additional services in such a school ….
840 CMR 15.03(1)(a) on Regular Compensation, the regulation promulgated by PERAC, states that regular compensation includes pay,
- … actually paid to or on behalf of a member;
- … made as remuneration for services actually rendered …
- … ordinary, normal, recurrent, repeated, and of indefinite duration;
- … made pursuant to an official written policy of the employer ….
Also included at Section 15.03(1)(c) are:
Lump-sum … payments which would have been regular compensation if paid in the period in which the services remunerated thereby were actually rendered …
And, Section 15.03(d) includes:
- a member's annual rate of compensation as provided in an approved salary schedule; ….
Section 15.03(2) excludes ad hoc or extraordinary payments including:
(a) any amounts paid for hours worked beyond the member's normal work schedule ….
The Teachers' Retirement System regulation at 807 CMR 6.01 makes clear that a school administrator's annual contract like Mr. Dow had, should include any payment that would be regular compensation. 807 CMR 6.02 (1) states in pertinent part:
The term regular compensation as defined by M.G.L. c. 32, s. 1 and further defined by 840 CMR 15.03 shall include:…
(b) Salary payable under the terms of an annual contract for additional services so long as:
- The additional services are set forth in the annual contract;
- The additional services are educational in nature;
- The remuneration for these services is provided in the annual contract;
- The additional services are performed during the school year.
807 CMR 6.02 (2) states in pertinent part;
… the term regular compensation as so defined shall not include:
(a) Any amounts paid for special projects involving tasks which are not part of the annual contract and which are not performed on a year to year basis;
(b) Any amounts paid for work performed during the summer months unless the member's position in which he/she is employed during the school year requires that he/she work for 11 or 12 months and the annual contract provides for same; ….
To determine whether Mr. Dow's work as the Continuing Education Director satisfies the above criteria, case law must be applied to his circumstances. In Varella v. CRAB and Teachers' Retirement Board, 56 Mass. App. Ct. 384 (2002), the Appeals Court addressed yearly stipends received by a public high school teacher as additional pay for performing the work of a co-director of an evening educational program held at the high school and open to the community with tuition charged to take the courses. This was not a vocational technical high school. With permission, certain high school students could also attend the evening education program. The courses included topics "such as typing, word processing, American sign language, flag making and pop piano." Id., at 385. Most of the courses were taught during evening hours after school. Mr. Varella did not teach in the evening program but supervised it and interviewed prospective teachers for it. Retirement deductions were taken from the pay he received as co-director. The pay he received was included in his collective bargaining agreement. These facts line up with Mr. Dow's circumstances.
The Varella, supra, Court noted how the G.L. c. 32, §1 definition of regular compensation when it addresses teachers recognizes "that teachers typically perform numerous functions, not all of which are easily subsumed within traditional notions of 'teaching,' and [that some] … functions shall generate compensation to be included in the retirement benefit calculation." Id., at 387.
The Court noted how the case of Evans v. CRAB, 46 Mass. App. Ct. 229 (1999), excluded a teacher's extra work teaching summer school, and the case of Hallett v. CRAB, 431 Mass. 66 (2000), excluded a high school teacher's extra work as Director of Drivers' Education because he was paid hourly wages and the work occurred after normal school hours. The Court concluded that Mr. Varella's work as co-director of the evening program, though administrative work, fell "within the scope of educational services." Id., at 388. This covers this same aspect of Mr. Dow's work as Director of Continuing Education. But, the Court would not find the stipend to be regular compensation because these services were not for additional work connected to the public day school program. The evening education program was not found to be "meaningfully related to the regular high school experience … was essentially an adult education or extension program." Id., at 389. The Court noted how high school students went to high school due "to legal requirements regarding compulsory education that were not applicable to the evening program … [which was] available to the community at large, its focus being quite different from that of a public high school attended by young people following a prescribed curriculum in pursuit of a high school diploma." Id., at 389 The Court went on to conclude "that it is the Legislature's intention that only compensation paid for services that affect the educational experiences of students enrolled in regular public school programs is to be included in the retirement benefit calculation." Id., at 390
The Varella, supra, Court's reasoning for not allowing Mr. Varella's additional pay as the evening program director also reaches Mr. Dow's circumstances. Even with an overlap of courses between the continuing education program and the high school program as to the licensure trades classes and course requirements, and even with both taught during school day hours in the same building, the continuing education program is not an adjunct or outgrowth of the high school program. The fact that the high school program covers vocational as well as academic education does not change this outcome. Therefore, the decision of the Teachers' Retirement Board is affirmed.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Sarah H. Luick, Esq.
DATED: March 21, 2008
This information is provided by the Division of Administrative Law Appeals.