June 22, 2000 -- Congressman Robert A. Underwood has learned that an agreement has been reached in the class action lawsuits brought against the federal government by civil service employees who work in Cost-of-Living areas, which includes Guam.

"The Court has yet to approve the settlement, and a hearing has been requested for August 17 of this year, to accept written comments from affected and interested parties," the Congressman said. "In the meantime, public meetings will be conducted in the affected areas. The meeting for the Pacific Island areas has been tentatively set for sometime next month."

Past and present federal civil service and U.S. Postal Service employees who receive or received territorial COLA since October 1, 1990 may be entitled to backpay, should the settlement be approved. The United States will make a payment of $232.5 million, to be distributed according to the terms of the settlement. In return, the employees will waive any claims for additional past payments and future claims so long as the COLA rates are set and implemented according to the agreed upon methodology.

The lawsuits were filed against the federal government in the District Court of the Virgin Islands and elsewhere. They challenged the government’s administration of the COLA program since 1990, alleged that the rates applied in Alaska, Hawaii, Puerto Rico, the Virgin Islands, and Guam were set too low. Under the proposed settlement reached in the Virgin Islands, the government will change its methodology for setting COLA rates, establish interim rates until the new methodology is fully implemented, and make money available for back pay and interest to eligible current and former federal workers. If approved, the settlement resolves the other pending cases.

"We will continue to track this issue and to keep those affected workers in Guam as fully informed as possible," Congressman Underwood said, adding that additional information on the settlement can be found at http://www.colasettlement.com/.

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