Portland Public Schools and its custodians on Monday announced a tentative $14.5 million settlement of claims arising out of the 2002 decision by PPS to contract out custodial services to Portland Habilitation Center ("PHC") and the resulting loss of jobs by its custodial work force.
The $14.5 million settlement fund will offer 280 custodians compensation for the loss of their jobs and will also cover their attorneys’ fees and the costs of administering the fund. The attorneys for both sides believe the settlement is a fair compromise of this long-running dispute.
"After so many years, we are pleased that the end to the legal battle is in sight and the custodians can be compensated for their losses," said Mark E. Griffin, an attorney representing the custodians.
"This settlement is fair to our custodial employees, to our constituents, and to the taxpayers," said Jollee Patterson, General Counsel for PPS. "We will work with the custodians and their attorneys to move this settlement forward and to put this dispute behind us."
The Portland School Board Monday evening voted to move forward with the settlement, under which PPS will fund a $14.5 million settlement to pay the custodians' claims for compensation for lost pay, medical benefits, and other damages. The agreement is subject to federal court approval as a class-action settlement at a fairness hearing. Notices will be sent out to a class comprised of 280 custodians who lost their jobs in the summer of 2002 as a result of the decision by PPS to contract out custodial services. Individual custodians will have the right to opt out of the settlement class if they so choose. In return for funding the settlement, PPS will receive from members of the settlement class a release of claims related to the loss of their jobs in 2002.
In 2002, PPS was faced with a $36 million budget deficit due to reduced state funding. The Employment Relations Board ruled on June 7, 2002, that PPS could legally contract out custodial services. Following that ruling, Portland Public Schools (PPS) entered into a contract with PHC for custodial services and the PPS-employed custodians lost their jobs.
Several lawsuits were filed by and on behalf of the custodians challenging the actions of PPS and seeking compensation for the loss of jobs. On October 13, 2005, the Oregon Supreme Court reversed the decision by ERB; a petition for reconsideration was denied on April 26, 2006. The Court held that custodial services had to be performed by PPS-employed custodians and, therefore, the school district could not contract out for those services.
In August 2006, PPS offered to re-employ the custodians who had lost their jobs in the summer of 2002 by reason of the decision to contract out. Approximately 125 individuals decided to accept re-employment with PPS. This re-employment process did not resolve the lawsuits the custodians had filed seeking compensation for the loss of their jobs.
The proposed settlement would resolve claims of individual custodians for compensation. It is the result of months of information exchanges, negotiations, and two full days of mediation under the guidance and with the assistance of The Honorable Edward Leavy, Circuit Court Judge for the Ninth Circuit Court of Appeals.
Custodial Litigation Background, Timeline