Hoyt & Blewett Obtains $2.1 Million Settlement For Mental Health Employees In Retirement Benefits Dispute

By Anders Blewett

The State of Montana and the Center for Mental Health have agreed to pay $2,100,000 to settle claims brought by 16 former members of the Montana Public Employee Retirement System (MPERS). In the settlement, the State of Montana paid $700,000 and the Center’s insurers paid $1,400,000. The lawsuit Baker et. al vs. State of Montana, CDV-11-0801 filed in Great Falls, Montana, in Cascade County State District Court involved 16 former members of the MPERS who claimed that both the State and the Center misrepresented to them their eligibility for membership in the MPERS when each applied for employment at the Center.

Prior to 1999, all full-time employees of the non-profit Center were eligible to participate in the MPERS. However, a change in the law enacted by the 1999 Montana Legislature removed the eligibility for membership in the MPERS of any employees hired at the Center after June 30, 1999.

Each of the 16 plaintiffs worked in government jobs before applying at the Center where they were established members of the MPERS system and each was hired at the Center after the 1999 change in the law. Despite the enactment of the new legislation, when they pursued employment at the Center each Plaintiff was induced to believe, if hired, they would be eligible for continued membership in the MPERS.

After being hired, the Center issued each Plaintiff a MPERS membership card to fill out for MPERS enrollment and the State continued to provide the Center with MPERS membership cards for the Center’s new hires. Funds were also withheld from the Plaintiffs’ paychecks and were submitted to the MPERS as plaintiff’s contribution to the MPERS, along with a matching contribution by the Center.

According to the plaintiffs’ attorney, Joe Cosgrove of Hoyt and Blewett law firm in Great Falls, Montana:

“Our clients worked hard and planned their futures around obtaining these benefits only to have them taken away, some of them after they had already retired. They were induced to leave jobs where they had established MPERS membership and accept jobs at the Center where they were informed they could continue that membership. These misrepresentations went on for over a decade resulting in a terrible injustice.”

The State, which was responsible for initiating the 1999 change in the law, contended that it notified the Center that the law changed and eliminated eligibility of all of the Center’s new hires after June 30, 1999. The Center, in turn, contended that the State advised it that despite the change in the law, any new hires at the Center who already had MPERS membership were still eligible for MPERS enrollment at the Center.