Calculating Offsets Against Back Pay

Written on 10/08/2022
Will Aitchison

Fabian Butler was a firefighter for the City of Big Spring, Texas. Butler was wrongfully suspended from May 1, 2015 to September 23, 2019. Between his suspension and his reinstatement, he found alter­native employment that resulted in total gross earnings exceeding those of his former employment. His pay fluctuated, and during some pay periods, Butler’s compensation from his replacement job was more than his firefighter earnings, while in others it exceeded his prior earnings.

After being reinstated as a fire­fighter, Butler filed a lawsuit seeking backpay from the City. When a trial court ruled that Butler was not enti­tled to backpay because the sum total of interim earnings exceeded what he would have earned as a firefighter, the matter wound up in the Texas Court of Appeals. Butler contended that the interim earnings analysis had to be on a pay period by pay period basis, and that the “excess” interim earnings in any one pay period could not be used to offset lower interim earnings in other pay periods.

The debate involved Chapter 143 of the Texas Local Government Code, which allows a firefighter or police officer who has been suspended to appeal a suspension to the Firefight­ers’ and Police Officers’ Civil Service Commission (the Commission). When the Commission finds, as it did in Butler’s case, that the period of suspension should be reduced, it can order a reduction in the period of suspension and restore the person to their former position or class of service.

Under Chapter 143, when the employee is restored to his former position or class, the employee is entitled to “full compensation for the actual time lost as a result of the suspension at the rate of pay provided for the position or class of service from which the person was suspended.” The statute does not define the terms “full compensation” or “actual time.”

The Court found that “clearly, in the case of firefighters or police officers being restored to their status prior to any suspension, the legislature intended that they be fully compensat­ed for any time lost, including pay and additional benefits. The chapter does not discuss whether such compensa­tion should be reduced if the employee mitigates damages, nor does it include instructions on how to calculate such a reduction, if appropriate.

“The City argues that while Butler was suspended, his total earnings for the four years combined exceeded his regular pay and that thereforethe City now owes Butler nothing in terms of lost compensation. But the statute requires ‘full compensation for the actual time lost as a result of the suspension.’ Instead of a lump sum calculation of wages during the entire period, the statute directs us to consider full compensation for the actual time lost, as it existed or occurred at the time the compensa­tion should have been provided. For example, a suspension of four years may include periods of reduced or no income at all before an employee is able to secure employment that either equals or exceeds the wages he earned from his prior employment. It may include multiple jobs of varying work, hours required, income, and skills implemented per pay period.

“We interpret the term ‘for the actual time lost’ to mean during the actual time period that wages were due and were lost. Any other interpre­tation can lead to absurd results. To faithfully adhere to both the doctrine of mitigation and the language of the Texas statute, it is most appropriate to calculate an award of full compen­sation by a review of earnings and a loss of earnings per pay period.

“Here, Butler is entitled to an award of backpay to be calculated per regular pay period. In any pay period where the wages earned during sus­pension were less than what he would have earned in his position with the City, Butler is entitled to the deficit. There is no offset statutorily autho­rized from any other pay period.”

Butler v. City of Big Spring, 2022 WL 2975948 (Tex. App. 2022).

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