WRAL Investigates

Retired state DOT worker fights double-dipping laws with suit

Posted December 10, 2012

— After retiring from the North Carolina Department of Transportation in 2004, Jack Petty returned to the working world for a private company that contracts with the DOT. That decision caught Petty in the state’s double-dipping laws, forcing him give back part of his retirement benefits. He is fighting back with a high-powered lawyer and possible class-action lawsuit.

Petty owes the state nearly $61,000, which is taken out of his retirement checks at a rate of $1,000 a month.

“It was just a shock. It just shocked me that I could not work for a private entity that has nothing to do with the DOT retirement, state retirement,” said Petty, who retired after working as a DOT surveyor in the western part of the state for 37 years. “As long as I stayed healthy, I wanted to keep working until I was 66, 67 or at least 65.”

Because Petty works for a contractor, the state Treasurer's Office wrote him a letter last year and said he was only allowed to receive half his DOT salary and that he'd have to pay some money back.

“I’m absolutely convinced that the state has no right to do this,” said Gene Boyce, Petty’s attorney. “It’s a question of unequal treatment, because there are a lot of other people in Jack’s position who are not being penalized, but he is.”

Boyce has filed a lawsuit on Petty's behalf and points to a state statute that says double-dipping laws only apply to employers who participate in state retirement plans, which Petty's current employer does not. Boyce says many state retirees are working in the same capacity.

In letters to Petty, the state Treasurer’s Office says he should have known he would get in trouble because he was sent brochures and rules when he retired. State Treasurer Janet Cowell declined to comment on the lawsuit or double-dipping laws because of the pending legal matter.

Retired state DOT worker fights double-dipping laws with suit Retired state DOT worker fights double-dipping laws with suit

The WRAL Investigates team spoke with a Raleigh attorney, who is not involved in the case, about how the law is written.

“The law was intended to prevent state employees from going to another state agency and double dipping,” said attorney Woody Webb. “They’re basically doubling their salary, and that’s what they are trying to prevent.”

Since retirees often leave at the top of the pay grade, the state could hire someone new for less. Boyce said he believes Petty’s case could affect others.

“It could be a class-action if there’s 10, 15, 100 people that are being penalized and having their pay docked,” he said.

Boyce has won big cases before. In the 1990s he fought the state for making retirees pay income tax on retirement benefits and won a $799 million settlement.

As for Petty, he is still working for a private contractor, but he works part-time in order to keep his retirement pay and health benefits. He says his case needs a closer look.

“For 37.5 years, I paid into our retirement system. Six percent of my salary every pay day, I paid into this retirement system,” Petty said.

The State Employees Association of North Carolina released a statement, saying the lawsuit "raises an important legal issue."

"Since we have no knowledge of the exact facts of this case, SEANC has no current opinion on the merits of this case. However, SEANC will watch it closely as it proceeds through the courts, and we will likely seek to weigh in if the case reaches the N.C. Court of Appeals," SEANC's statement continued.


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  • pbjbeach Dec 20, 2012

    state employee wer however around in 1968 when ii statrted to work with the ncdot.an i am being blacklisted from being allowed to obatin new employment with in any private industry anywhere as that have attempted to be a whislteblower as it relates to false claims issues on a highway contract project. what ever happen to the subshine laws in this state. it is time to let the sunshine in on all of the wronmg doing thatare currently being allowed within state government but most especially so within the ncdot an more especially so within the materials an test unit a that they have allowed for bad non-specefications materials to be utlized within an incoporated into highway construction projects thorughout this state just becasseu some one somewhere is getting some form of campaign contribution form some contracting enity somewhere thank you

  • pbjbeach Dec 20, 2012

    it would definetly appear tome that if a state employee retires an so chose to work somewhere else in the private sector in order to have gainful an meaningful employment to be able to generat additional income that that would be an indivsuals choice an personal freedoms under the u.s constituion. so what buisines is it of a former employer to be allowed have infulence into their personal; lives an decisions after they have retired from state government. as to the indivsual that you have listed below they are fomer politican an th4y are an feel thay are better than the generall public at large an they are entitled to as they so please with any form of regards for the laws,policy's or what everyopu know the upper crust in this state as they view themselve that they make the laws but the are immuned from the laws themselves so they get to do what ever the hell they want to it is only us peion that have to abide by the states laws an not them . they are the chosen ones a

  • chrisbrown397 Dec 12, 2012

    Further research shows four retired State Judges, Justices, Attorney Generals, Governors Legal Counsel now work for large law firms that do a lot of contract work with and even for the State.
    Is their state retitrement income being cut? NOPE.

  • chrisbrown397 Dec 12, 2012

    Read the Complaint. The legal issue is what does the law mean. It says benefits can be cut when the retiree goes to work with an "employer that participates in the retirement system." The key word to be defined by the Court is "participates." It is a simple case. A resolution helps not just Mr. Petty but all state employees who began their job and kept their job under a clear employment contract that says they can work after retirement but not with "an employer that participates in the retirement system."

    Employee handbooks are not "the law." That is a not an valid or educated remark from Chapel Hill. And the handbooks were not around when the employment contract between Mr. Petty and the State was begun in the mid-1970's. No employer or party to a contract can change a contract without expressly reserving the legal right to do so. It's called "unconstitutional impairment of contract."

    Opinions of State Staff lawyers are not "the law." The Legislature enacts "the Law." The Court

  • pbjbeach Dec 12, 2012

    it appears to be no end too the crewing over of state retires an state employee in general just let state employee continue to support these darn repulican party members in this state an they will not have seen anything yet as to what is to come with the current newly elected incomming governor of this state an.i peridict that state employees will continue to get screwed over as long as the repbulcian party controls the governor office an both state houses of government over issues such as denial of promontional oppurnitys raises benefits or whatever that relates to state employee for the repbulcian party are seeking to destroy the woking middle class in this state once an for all an they will continue to give the copoate instrest all of the coporate welfare thatthey can give to them in the form of incentives an give aways to the special instrest groups that suppport the repbulcian instrest an the coporate instrest an the chamber of commerce in this state thank you

  • pbjbeach Dec 12, 2012

    you only get the states matching funds added into your retirement salary after you have officaly submitted yur retirement paper work to the state an teacher retirement system then an only then do you receive the state matching funding dollars as thatthis is part of the originaly promises that were indicated when you first started to work for state government as a contractual agreeement between yourself an state government thatupon retirement thatyou would receive a pension based upon your highest four years of salary over the life time of your employment within state government thank you

  • davidk_at_unc Dec 12, 2012

    Sorry, these did not come out clearly in my last posting.

    Teachers and State Employees / Local Governmental Employees / Legislative / Firemen and Rescue Squad Workers / Consolidated Judicial / State Law Enforcement Officers / Local Law Enforcement Officers

  • pbjbeach Dec 12, 2012

    the state of north carolina is out to destory allof their employee work place right just as is taking place with in the state of michigan at this time. they have allowed for contracting enitys in this state to have undue influence as it relates to state employees being allowed to do an carry out their offical jobs dutys an responsiblitys as state in the state own personnel manual there is on going fraud with the ncdot an the allowance of overpayments on contracts for highway construction projects. i paid into the states retirement at a rate of 6.0 % of my salary for a time period of forty years ani nevr got to the top of my salary range either. ther salary ranges have been set up to insure that state employees will never get to the top of the salary range. i feel like that there are quite possibly civil an constitutional right issues thta surround these particular issues of them being able to deny any ones rights to employement from anywhere of their personaly choseing where ever th

  • davidk_at_unc Dec 12, 2012

    "There are different rules for different state jobs... NC State Employees, Teaching Employees, Local Government Employees, etc. The rules you keep posting are for only one of those." -- methinks

    Your statement is correct, but only partially, and the part that IS correct is irrelevant to this discussion.

    There ARE different rules for different groups within state government. Here is a list of the handbooks for the seven groups:

    Teachers and State Employees
    Local Governmental Employees
    Firemen and Rescue Squad Workers
    Consolidated Judicial
    State Law Enforcement Officers
    Local Law Enforcement Officers

    Note that teachers and generic state employees are covered by the same policies. The person in question worked for the DOT, putting him in the first category. These ARE the rules I've been presenting and they DO apply to him. If you think anything I've posted is incorrect, please send me a link to support your position. Otherwise, I am done with this discussion!

  • methinks Dec 11, 2012

    There are different rules for different "state" jobs. There are NC State Employees, Teaching Employees, Local Government Employees, etc. The rules you keep posting are for only one of those.