A decade ago, thanks to a class-action lawsuit, Microsoft learned the hard way that it could not treat "independent contractors" exactly like employees, only without the salaries and benefits. In recent years, a public defender has been trying to teach that same lesson to King County, alarming state legislators and leading to a much-debated bill that recently passed the House.
It all started when Kevin Dolan, a veteran lawyer with the Associated Counsel for the Accused (ACA), one of four nonprofits that provides public-defense services to the county, looked around the courtroom one day some five years ago. "I realized that every single person there, except the defendants and myself, was covered by PERS (the state-run Public Employee Retirement System)," says Dolan. "The judge, the prosecutor, the bailiff, the court reporter—everyone."
The government is one of the few employers left in the country that offers an actual pension—one that today looks astoundingly generous, to boot. Those hired between 1977 and 2002, by either the state or one of the local jurisdictions that offer state benefits, can retire after 30 years with an annual payout equal to 60 percent of their highest income. (Newer hires don't receive quite as much.)
In many counties, public defenders also receive such benefits, since they are part of government agencies. But King County has a long history of independent nonprofit public-defense agencies. And so, like many of us, the poor schlubs at ACA are left to spend their golden years with whatever they've managed to put into individual retirement accounts. Or, as Dolan sees it: "You get to work until you die."
"So I went and started a lawsuit," he says, on behalf of all public defenders who served the county within three years of the suit's 2006 filing. His counsel was none other than the firm that handled the contractors' suit against Microsoft: Bendich, Stobaugh and Strong.
Dolan won at the trial level, in Pierce County Superior Court, and also at the appeals level, heard directly by the state Supreme Court. Issuing a decision last August, the Supremes ruled that King County's public defenders are, for all intents and purposes, "employees." The county, judges noted, has over several decades exerted "more and more control" over defender organizations, so that the agencies can't even rent office space or spend money on equipment without its approval.
Therefore, opined the Supremes, the defenders were entitled to the same retirement benefits as other county employees. The precise amount owed these defenders, including retroactive benefits, is still to be decided back in Pierce County Superior Court.
Meanwhile, state legislators who've done nothing but slash budgets for the past few years started to panic over the ruling's ramifications. "If you play that out," says Rep. Ross Hunter, chair of the House's powerful Ways and Means Committee, "you could wind up with possibly a lot of similar cases."
All kinds of government contractors—Hunter gives the example of construction workers carrying out state transportation projects—could lay claim to government retirement benefits, says the state rep. "It's too much risk." So a bill initiated in his committee, passed recently in the House and now being considered by the Senate, "clarifies" that government contractors cannot receive state retirement benefits. It exempts the class of public defenders named in the Dolan suit.
But that doesn't satisfy Dolan, who says that every public defender hired from 2006 on, and thus not covered by the suit, still faces the same situation. He also warns that the bill could serve as an impetus for government agencies to outsource more and more.
"There's a lot of concern about that," Hunter acknowledges, speaking about outsourcing. "We spent several days talking about that issue." Labor groups weighed in. At the end of the day, he says legislators in the House had to balance that concern with their fiscal responsibility.
As for new public-defender hires in King County, Hunter does not imagine the benefits inequity will go on for long. Given the Supremes' ruling, the county has to "fix" its relationship with its defenders, he says, possibly by bringing them "in-house." That would be an interesting development given the feisty nature of some defenders, like those working for The Defender Association. It runs a racial-disparity project that is critical of what it considers selective drug enforcement by police and county prosecutors.
King County Deputy Executive Fred Jarrett tells SW that officials have discussed various options, including taking the defenders in-house or, alternatively, shaking up the way contracts are written. He says, however: "We have not decided yet exactly what we are going to do."