Thursday, January 11, 2018

Court of Appeal Issues Decision in Major Pension Case

On Monday, the First District Court of Appeal issued its opinion in a major pension reform case our office is litigating on behalf of the Alameda County Deputy Sheriffs’ Association (“ACDSA”).   While there are issues the Supreme Court will likely be asked to address on further appeal, the appellate court found in the employees/unions’ favor on several significant points.
On behalf of the ACDSA, David E. Mastagni and Isaac S. Stevens from our office sued the Alameda County Employees Retirement Association (“ACERA”) in December 2012, after it announced plans to begin excluding forms of leave cash out and other pay items from ACDSA members’ pension calculations pursuant to the Public Employees’ Pension Reform Act (“PEPRA”). The lawsuit alleged that, by excluding these pay items from members’ pension benefits, PEPRA infringed on members’ vested pension rights. The case was eventually consolidated with cases from Contra Costa County and Merced County asserting similar claims.  
The trial court largely ruled against employees and unions in the case. The trial court ruled there was no vested right to pension that included terminal pay, and found there was no basis for using the doctrine of promissory estoppel to require ACERA to continue including terminal pay in retirees’ pension benefits. We appealed that ruling.
Between when the trial court issued judgment and when the appellate court heard oral arguments in our appeal, the First District issued a decision in a case raising issues very similar to ours, filed by the Marin Association of Public Employees (“MAPE.”) The MAPE case also challenged the legality of excluding terminal pay from pension benefit calculations pursuant to PEPRA. In MAPE, the First District appellate court abandoned the long-standing requirement that any changes to a vested pension benefit be material to the theory of a pension and any detriment to the pensioner be offset by a corresponding new advantage. Specifically, the court found that a detriment did not need to be offset by a new advantage to survive scrutiny, so long as the impairment was reasonable.
Before oral arguments in our case, the appellate court told the parties to prepare to discuss MAPE’s impact on the issues in our case. We prepared arguments showing how the two cases differed, to ensure the court knew it could not simply apply the ruling from the MAPE case to the issues in our case. The parties attended oral arguments in early December, and addressed MAPE’s impact in depth with the appellate court.  
On Monday, the appellate court issued a lengthy ruling, finding the trial court failed to include a vested rights analysis, and its analysis of PEPRA’s impact on the pensions of legacy members was incorrect. The following is a list of the main issues the court decided:
1.  Leave cash outs before retirement (i.e. “in service cash outs.”) – the appellate court disagreed with the trial court. If an employee exercises a right to cash out vacation during his or her final compensation period, that pay must be included in the employees’ pensionable compensation – regardless of when the time was accrued.
2.  Leave cash outs at retirement (i.e. “terminal pay.”) – the appellate court agreed with the trial court’s ruling that CERL excluded terminal pay from pensionable compensation before PEPRA. According to the court, there was no vested right to have terminal pay included in pension benefits. As such, PEPRA could not impair any vested right to have terminal pay included.
3.  Pay outside normal working hours (e.g. standby and on call pay.) – the trial court ordered the retirement boards to continue including these pay items if they were previously included in pension calculations, they were earned and required of the employee during his/her final compensation period, they were “regularly applicable to the class of employees,” and were not designed to “enhance” the pension.
The appellate court found that these pay items were includable before PEPRA, and PEPRA was meant to exclude them. As a result, the appellate court found there was a vested right to on call pay being included in pensions, and the trial court should have analyzed whether changes to the definition of compensation earnable in Government Code section 31461 unlawfully impaired that right.
4.  PEPRA’s exclusion of compensation the retirement board determines was “paid to enhance a member’s retirement benefit.” – the appellate court found PEPRA added a new requirement in Government Code section 31461(b)(1), by excluding from pension benefits and compensation a retirement board determines is “compensation paid to enhance a member’s retirement benefit,” It further held the trial court erred in refusing to determine whether legacy members had a vested right to be free from the uncertainty posed by the new requirement. Because (b)(1) changed the prior CERL law, the appellate court ruled the trial court must subject it to a vested rights analysis.
5.  The proper analysis for vested rights impairment claims – the appellate court’s ruling was mixed for us. On one hand, the court found that MAPE’s elimination of the “corresponding new advantage” requirement was “not controversial.” On the other, it found that the MAPE court improperly hinged its analysis on what it believed a “reasonable pension” should be, as opposed to defining a “reasonable pension” as one subject only to “reasonable modification.” It also found that, while a modification could be lawful despite not being accompanied by a new offsetting advantage, any detrimental changes to legacy employees could only be justified by “compelling evidence” that the changes bear a material relation to the theory of a pension system and its successful operation. The court then found that the fact that the impact of changes to the definition of pensionable compensation for legacy members may seem modest when compared to the pension system as a whole may support a finding that the changes were unlawful – especially if the benefits at issue were already actuarially accounted for and treated as pensionable. This is good for us, because we can show ACERA has accounted for the inclusion of on call and standby pay in pension benefits over the years.
6.  Estoppel - the employees had argued that, even if they never had a legal right to receive terminal pay in their pension benefits before PEPRA, they should nonetheless have it included under the doctrine of promissory estoppel. Promissory estoppel is a legal doctrine used to grant relief when a person detrimentally relies on the promise of another person. It allows the injured party to enforce the promise. The trial court found that certain employees were not entitled to relief. The appellate court found that employees in all three affected counties – including Alameda – could use promissory estoppel to obtain relief. According to the court, “all legacy employees should be entitled to include terminal pay in compensation earnable to the limited extent such pay was designated as pensionable by their relevant post-Ventura settlement agreement.”
So what does this all mean for legacy employees in 37 Act retirement systems? It is a mixed result. There are parts of the judgment that will likely be appealed by both sides. If the ruling stands, the matter will go back to the trial court to determine whether PEPRA unconstitutionally impaired legacy members’ rights to a pension free of any uncertainty caused by PEPRA’s new requirement that pensionable income not include pay meant to enhance a member’s retirement benefit. In the meantime, there would be grounds for ACERA, MCERA, and CCCERA to continue including terminal pay in legacy members’ pension calculations. It is not clear at this time what the retirement boards plan to do. Alternatively, the ruling could be appealed to the California Supreme Court. We will keep you posted as the case goes forward.

Attorneys David E. Mastagni and Isaac S. Stevens from Mastagni Holstedt represented the Alameda County DSA in this case.

Wednesday, January 3, 2018

CSLEA Profiles Member Sal Martinez's Legal Defense Fund Victory

Sal Martinez is an ABC agent.  He is a member of the California State Law Enforcement Association and participates in CSLEA's Legal Defense Fund.  On February 1, 2016, Martinez was the victim of an off-duty, possible hit and run vehicle accident.  Despite acting as most peace officers would under the circumstances, he was charged with violating PC 245(a)(2) and 417(a)(2) (brandishing).  After a grueling 18 months, he was acquitted and won his job back.  Now, CSLEA's Legal Defense Fund is profiling his story in an in-depth hour-long video presentationMastagni Holstedt attorney Greg Thoming represented Martinez at trial.


Monday, December 18, 2017

Association for Los Angeles Deputy Sheriffs Victorious in Battle with Sheriff Jim McDonnell

In a recent decision, the Second District Court of Appeal (Second DCA) ruled that the names of peace officers with potential misconduct involving moral turpitude in their personnel files are confidential and not subject to disclosure absent a Pitchess motion.

LA County Sheriff Jim McDonnell wanted to disclose to the LA County District Attorney a department-created list of alleged "Brady" officers so that the District Attorney would know when to file Pitchess motions or inform defendants that a Pitchess motion may be necessary. The Association for Los Angeles Deputy Sheriffs (ALADS) brought an action for an injunction to prevent this from occurring. 

The trial court partially granted ALADS' request and ruled that the Sheriff could not disclose the names of officers unless the officer is a potential witness in a pending criminal prosecution. The Second DCA ruled that disclosing the officers' names would violate the Pitchess statutes, and stated that the Pitchess statutes protect not only personnel records but all "information obtained from these records." Thus, the court viewed the trial court's decision as a ruling that the Pitchess statutes were unconstitutional under Brady when it ruled that protected information could be disclosed without a Pitchess motion. 

The Second DCA found that it must follow the precedent established under Mooc and City of Los Angeles and ruled that the Pitchess statutes are constitutional and mere supplementary to the requirements established under Brady. This is because it has been ruled that a defendant who cannot meet the less stringent requirements of the Pitchess standard cannot meet the materiality standard set by Brady

It remains to be seen whether the California Supreme Court will take up an appeal in order to reconcile the Second DCA's ruling with the Supreme Court's previous ruling in Johnson

Wednesday, November 15, 2017

PERB: Sheriff's Department Violated Correctional POA's Rights

In a recent decision, the Public Employment Relations Board found the County of Santa Clara violated the MMBA when it banned the union president from trading shifts with other employees.  Like many employers in public safety, the Santa Clara County Sheriff's Department allows employees to trade shifts to get special days off.  The Santa Clara County Correctional Peace Officers Association president made use of the day trades in part to connect with members working different shifts.  Then, the Department banned the union president from doing so ostensibly because he did not repay a day.  But the Department's reasoning fell apart under scrutiny and the Board held the Department's conduct constituted unlawful interference. 

The Board also disapproved of prior decisions that said interference with a union's rights did not necessarily follow from discrimination against a labor leader.  The Board found prior cases, including, Novato Unified School District, are "contrary to the overwhelming weight of PERB case law on this issue."  Therefore, the Board found the Department's retaliatory conduct also violated the union's rights.

Mastagni Holstedt Senior Associate Jeffrey R. A. Edwards represented the Santa Clara County Correctional Peace Officers Association in the matter.

Thursday, November 9, 2017

New Bill Expected to Provide Peace Officers with Increased Coverage for Injuries

The tragic mass shooting in Las Vegas has affected lives across the country.  This includes over 200 California peace officers who were attending the concert.  Recently, four Orange County deputies filed workers’ comp claims after suffering injuries during the shooting.  According to Orange County officials, peace officers are entitled to benefits if injured while protecting life or property, regardless of whether on or off duty.  However, the benefits require the injury to have occurred while in the State of California.  Orange County denied the deputies’ claims because the injuries occurred in Nevada.

Tom Daley (D-Anaheim) and the Orange County deputies believe Orange County officials are not applying the law correctly, and argue the claims should be covered.  In order to prevent any further denials of claims, Assemblyman Daley is preparing legislation that would erase any ambiguity in the law.  His bill will guarantee coverage to police officers injured while protecting life or property, regardless of where the injury occurred. 

The bill is expected to be introduced in early 2018.  If the bill is successful police officers would receive the benefits of workers’ comp for injuries from engaging in the apprehension of law violators, protecting life or property, or preserving the peace.  Whether the injury occurred outside the State of California will no longer be cause to deny a claim.

Friday, November 3, 2017

Decision Limits Who May Represent Subject Officers During IAs

A recent decision limited a peace officer’s ability to challenge a department’s internal affairs process.  In Barcelona v. California Department of Justice, the court held an employee could not sue his department without showing they were harmed.  Additionally, the court held it was permissible for a department to prevent a witness from being the subject officer’s representative during the interview.

Alan Barcelona was employed by DOJ.  A citizen complaint led to an internal affairs investigation (IA) being opened.  The first person interviewed was the citizen.  During the interview the citizen told investigators that another person, Kasey Clark, witnessed the alleged misconduct.  Mr. Clark was subsequently interviewed as a witness.  Following Mr. Clark’s interview, Mr. Barcelona continued to desire Mr. Clark as his representative.

DOJ did not let Mr. Clark serve as Mr. Barcelona’s representative.  DOJ cited its notice, which said Mr. Barcelona could have any representative not involved in the investigation.  Mr. Barcelona went forward with the interview using a different representative.  Eventually the IA was completed without Mr. Barcelona being disciplined. 

Mr. Barcelona brought a lawsuit challenging DOJ’s policy.  The lawsuit alleged two separate violations.  First, the policy violated Mr. Barcelona’s First Amendment Rights by denying free association.  Second, the policy violated the Public Safety Officers Procedural Bill of Rights (POBR). Mr. Barcelona claimed POBR gave him the right to use Mr. Clark as his representative in the IA.

The court struck down Mr. Barcelona’s First Amendment claim.  According to the court, Mr. Barcelona failed to show an actual or imminent injury to a legally protected interest.  This was because Mr. Barcelona was not disciplined.  Had discipline occurred, he would have standing to challenge DOJ’s policy.  However, without standing the court would not look at the issue.

The court also denied Mr. Barcelona’s POBR claim.  POBR grants officers the right to have a legal representative during an IA, so long as the representative is not subject to the same investigation.  Mr. Barcelona argued that witnesses in an IA were not “subject to the same investigation.”  However, the court disagreed.  Persons “subject to the same investigation" include witnesses.  DOJ’s policy, preventing witnesses from serving as representatives, was allowed to continue.

Tuesday, October 24, 2017

Governor Brown Vetoes PORAC Endorsed Bill Allowing Peace Officers to File Unfair Practices with PERB

On October 14, 2017, the Governor vetoed A.B. 530, a Bill introduced by Jim Cooper to provide Penal Code 830.1 peace officers access to PERB.  Mastagni Holstedt assisted in the drafting of this PORAC supported this Bill and both David E. Mastagni and Kathleen Storm testified in favor of the Bill extending PERB's jurisdiction to all peace officers while preserving their ability to seek injunctive relief in court.

PERB possesses expertise in enforcing the MMBA and affords other local public employees access to a cost-effective administrative process to  enforce their bargaining and representational rights.  In light of the prohibition against peace officers engaging in certain job actions in response to unfair practices, A.B. 530 also authorized all peace officers to "seek injunctive relief or a writ of mandamus to preserve the status quo or prevent irreparable harm pending a final determination by the board on any issue upon which a court has not made a ruling."  Currently, non-830.1 peace officer unions may obtain similar injunctive relief, but only if PERB agrees to bring such an action.

Unfortunately, the Governor denied 830.1 peace officers access to PERB by vetoing the Bill.  He explained his veto as follows: "I am returning Assembly Bill 530 without my signature. This bill authorizes peace officers to bring unfair practice charges to the Public Employment Relations Board while preserving their existing right to directly petition a superior court for injunctive relief. No other group has both of these rights and I’m unconvinced that providing such a unique procedure is warranted."