But in the following months, the state-run Recovery School District won control of nearly all New Orleans schools from the local school board, as well as most of the board’s operating budget. The requested federal funds were directed to the recovery district.

In December 2005, the local school board, with few schools and little money in its control, passed a resolution firing 7,500 school employees, who at that time had been on “disaster leave without pay,” an employment status that Judge Julien found in her decision to be “fictional.” She concluded that the state was liable for rendering the local board unable to fulfill its contractual obligations to its workers.

Judge Julien found that state law required the board to show just cause, in writing, before firing a tenured teacher, and that fired employees are entitled to hearings. She also found that a special policy for force reductions at a time of economic crisis required the creation of a “recall list” — designed to refill the vacancies with those who had been laid off — and that even in that situation, employees who were dismissed were entitled to a hearing.

None of these were done, and vacancies that arose when schools began to open, most of them charter schools, were filled by outsiders.

The class action suit that led to Wednesday’s decision has made sluggish progress through the court system, starting as a petition in October 2005 by several employees denied an opportunity to work at new charter schools here. Only later did the suit reach its current form: a claim for damages by seven former employees, including teachers, administrators and a secretary. The case, or some aspect of it, has reached the State Supreme Court six times, said Willie M. Zanders, a lawyer for the plaintiffs.