A decade-long court battle that has pitted the state against thousands of substitute and part-time teachers who say the Hawaii Department of Education underpaid them for years could end up costing taxpayers as much as $75 million, according to the teachers’ lead attorney, Paul Alston.
After a series of rulings and appeals, the state last year agreed to pay 9,000 substitutes roughly $15 million in back pay, taxes and benefits — wages that the state circuit court ruled they should’ve been paid between 2000 and 2005.
But it’s likely that $15 million is just scraping the surface of what the state will end up paying the teachers when the litigation’s final kinks are ironed out, according to Alston. The payout could swell to as much as $45 million if the court rules that the state owes the teachers interest, attorneys’ fees and other charges — litigation that could take another year or so, he said.
And then there’s the separate complaint involving 15,000 or so part-time teachers, some of whom are also substitutes, who claim that they were also underpaid. That lawsuit, which still has to undergo another round of appeals and might take another year and a half before it’s settled, could yield another $16 million plus other fees, Alston said.
“It’s been made more difficult by the passage of time,” Alston said, and blames former Hawaii schools superintendent Pat Hamamoto and her administration. “If they (the department) had acted honestly and honorably we could’ve solved this a long time ago.”
The dispute traces back to a well-known class-action lawsuit filed in 2002 alleging that the DOE violated state law by failing to pay substitutes the same rates as certain teachers. A separate but similar lawsuit was filed on behalf of another set of substitutes a few years later. Both cases alleged that the department had been underpaying the teachers since 1996 — when the law requiring equal pay went into effect — but claims prior to 2000 were barred by the statute of limitations.
The circuit court ultimately ruled in the substitute teachers’ favor — a decision that the state appealed. When the appeals court affirmed the circuit court’s ruling, the state attempted to appeal it in the Hawaii Supreme Court. But the Supreme Court in 2010 rejected that appeal.
It wasn’t until last year that the Attorney General and plaintiffs’ attorneys agreed in a partial settlement to lost wages and other charges amounting to more than $15 million, including $14 million in back pay.
The teachers have yet to receive that settlement, and it’s still unclear exactly when they will. But the state hopes to start cutting checks some time this year, said Special Assistant to the AG Anne Lopez, adding that the AG still needs to figure out how to execute the payments and secure funding for the payouts from the Legislature through House Bill 775.
Still, disagreement and uncertainty over the total tally prevails.
Though the state has agreed to pay the initial back pay, it remains to be seen how much it’ll owe the teachers in the end. Lopez disagreed with Alston’s total estimate, emphasizing that she doesn’t know how he arrived at that calculation.
The total payout would amount to $75 million, Alston said, if the court sides with the teachers every step of the way, including in the part-time teachers’ lawsuit. The court also has to determine the state liable for interest and all the attorneys’ fees, according to Alston.
The substitutes claim that the state owes them nearly $9 million for interest that accrued on the back pay. But whether the state is actually liable for that $9 million is still in question, Lopez said.
The Intermediate Court of Appeals had previously concluded that the state isn’t responsible for prejudgment interest. But then a circuit court determined that it is.
The state is still deciding whether it’ll appeal that ruling, Lopez said.
If the state is found liable for that interest, the total owed is increasing by $2,000 each day, AG testimony shows.
Alston also said the substitutes are planning to ask for attorneys’ fees amounting to 25 percent of the total damages — a request that he plans to file this week.
“Given how long and how hard-fought it was and that it was a complete victory, we think it’s appropriate,” Alston said.
When asked why the lawsuit has taken so long to settle, Lopez pointed to the drawn-out appeals process.
“Complex litigation takes time to resolve,” she said, adding that the court took three years before it decided on the state’s appeal.
But inconsistent and faulty record-keeping also prolonged the litigation, Alston said, adding that the department had to go through nearly a million pay records.
“They have to process the checks manually for reasons only the DOE can possibly explain,” Alston said. “It’s taken a very long time to calculate all these people and calculate who is owed how much.”
The department is required to pay qualified subs the same daily rate as that earned by Class II teachers — teachers with a bachelor’s degree.
Alston speculated that the department intentionally underpaid the substitutes and part-timers.
“We got declaration from the superintendent who was in place when they passed the statute that set the rates — they clearly knew what they were supposed to pay,” Alston said. “But the substitutes aren’t unionized. There’s nobody looking out for their interest.”
Lopez, on the other hand, attributed the underpayment to “a very complex statutory scheme.” The department believed it was paying the substitute teachers the proper rates, Lopez said.
Still, Alston criticized the DOE for not owning up to its mistakes.
“It’s painful because these people worked in good faith,” said Alston, pointing out that one in 10 teachers is absent on any given school day. “They really depend on having loyal, dedicated substitutes to fill in. To stall and delay the payments is shameful.”
The DOE currently employs roughly 4,600 substitute teachers, according to department spokeswoman Donalyn Dela Cruz. The department this year used an average of 1,092 substitute teachers per day. Most make about $147 per day, Dela Cruz said.