A state judge ruled Tuesday that Proposition B, which raised Missouri's minimum wage, does not apply to fire district, county or city employees.
Voters approved Proposition B in 2006. In January 2007, the Missouri Municipal League, along with a small group of city and county governments and fire districts, sued Missouri's Department of Labor and Industrial Relations.
Cape Girardeau was not a party to the lawsuit, but city officials had maintained the state law did not apply to municipalities.
The suit challenged Proposition B, particularly its effect on overtime for emergency responders, said Paul Martin, partner at Curtis, Heinz, Garrett and O'Keefe of Clayton, Mo., which represented the group suing the state.
Overtime for emergency workers is calculated according to federal guidelines. Firefighters, for example, get paid overtime for working more than 212 hours in 28 days. If Proposition B rules were applied, firefighters and police officers would have to be paid overtime based on a seven-day, 40-hour workweek.
"For our particular clients in the suits, the projected liability was almost $4 million in 2007," Martin said.
On Tuesday, 19th Circuit Court Judge Richard G. Callahan concluded that Proposition B does not apply to local governments. The decision hinged on the interpretation of the phrase "any person acting as an employer" and whether local governments fit that description. State statutes list categories of the "person" designation, including the word "corporation." The state argued that municipalities are corporations.
They aren't, Callahan said.
"Missouri courts have been remarkably consistent on this point, always finding that the statutory term 'corporation' does not encompass municipal corporations," Callahan wrote in his decision.
Cape Girardeau city manager Doug Leslie said, "We feel real good about this. It's going to save the city many thousands of dollars as well as allow those employees to keep their schedules."
While Cape Girardeau officials initially balked at paying a higher minimum wage, they quickly relented. According to Leslie, the change cost the city $65,000 in 2007. Ninety percent of those affected work for the city's parks and recreation department or are seasonally employed, he said.
Wages will continue to rise as required by current federal regulations, Leslie said.
Richard Sheets, the Missouri Municipal League's deputy director, said the organization typically does not join suits. This one, however, "was extremely important for cities ... particularly for cities that have full-time firefighters, this was going to be a budget buster."
Eric Cunningham, city attorney for Cape Girardeau, learned about the ruling late Tuesday afternoon but had not yet read the opinion.
"It's nice to see the court come down with a decision that, as far as our city is concerned, is the right one," he said.
Whether Tuesday's decision will be appealed is unclear.
"We are reviewing the decision at this point," said Scott Holste, spokesman for the state attorney general's office, Tuesday evening.
Sheets said the Missouri Municipal League would "urge them not to appeal."
Asked how much overtime he and other lawyers spent on the case, Martin said, "hours and hours ... the amount of legal time spent on this case is staggering."
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