Cases

Hawaii and Alaska Locality Pay

MATSUO v. U.S.

LOCALITY PAY DISPARITY

(Hawaii and Alaska)

UPDATE

On June 21, 2010, the U.S. Supreme Court denied the appeal of the Ninth Circuit's decision dismissing the appeal of Judge Pro's decision. Accordingly , the case is now closed.

Current employees' COIA is being phased at by legislation. As employees' COIA is phased out, they will be eligible to receive locality pay. Legislation is being considered for retirees. We urge you to contact your representatives and senators to fix this retiremtn inequity.

BACKGROUND

On June 22, 2005, federal employees in Hawaii and Alaska filed a class action lawsuit in the U.S. District Court in Hawaii against the Federal Government challenging "locality pay" policies that unfairly and irrationally discriminate against Federal employees who work and reside in Hawaii and Alaska . The lawsuit seeks locality pay for federal employees who work in those jurisdictions. Lead counsel in the case are Greg McGillivary of Woodley & McGillivary, and Margery Bronster of the Honolulu law firm of Bronster, Crabtree & Hoshibata. The Honorable Chief Judge Philip M. Pro of the U.S. District Court of Nevada presided over the case.

Unfortunately, on January 30, 2008, the U.S. District Court in Hawaii denied plaintiffs' motion for summary judgment and granted the Government's motion to dismiss the case. To see the decision, please click here.

Of course, this case and the Government's classification scheme in which it denies federal locality pay benefits to employees based on the identity of their state, involve novel and unique constitutional issues. We are disappointed in the decision because the court failed to identify constitutional violations in such a classification scheme. Although the court ruled that the constitutional right to travel applies against the federal government as a legal standard, he found that the right applies only in situations in which newly arrived citizens to a state are treated differently from other citizens in that particular state. He did not find it applies, as we argued, when Congress applies penalties to individuals who travel from one state to another state such as occurs if an employee transfers from one of the 48 contiguous states to Hawaii or Alaska and loses locality pay.

The Court did find that the reasons for the denial of locality pay proffered by the Government would not be persuasive except under the most lenient legal standard of review, which unfortunately the court decided to apply. The court determined that Congress is always free to weigh the costs and benefits of compensation to federal employees and can rationally decide to withhold one benefit from one group of employees because it is providing those employees with some other benefit, even if the two types of benefits are wholly unrelated. Of course, under this relaxed standard, it is impossible for us to win because there is no analysis of the purposes of the benefits or their impact on employees. The court appeared to concede that if one peels back the surface of the locality pay and COLA statutes, and examines their purposes and effects, receipt of COLA can not be a legitimate reason to deny employees locality pay. Nonetheless, the court declined to apply this analysis. On February 29, 2008, we filed an appeal of Judge Pro's decision.