CalPERS Changes Eligibility Rules for Industrial Disability Retirement

The California Public Employees’ Retirement System (CalPERS) posted Circular Letter 200-018-17 on March 30, 2017. Among other things, this Letter addresses changes to the eligibility determinations for certain local safety members applying for industrial disability retirement. 


In the past, CalPERS relied on the employer’s recommendation to verify eligibility of any member for industrial disability retirement. However, CalPERS will now independently evaluate whether certain members are eligible. The employer must obtain CalPERS’ determination of a member’s eligibility to apply for disability retirement before the employer starts the process of a disability determination for any of the following circumstances:

• Disciplinary process underway prior to the member’s separation from employment.

• The member was terminated for cause.

• The member resigned in lieu of termination.

• The member signed an agreement to waive his or her reinstatement right as part of a legal settlement (i.e., Employment Reinstatement Waiver).

• The member has been convicted of or is being investigated for a work-related felony.

The Letter also imposes a requirement for local agencies to re-evaluate eligibility determinations for disability retirees under the voluntary service retirement age. The purpose is to verify whether the recipient remains physically or mentally disabled from the position which they disability retired for the condition(s) that they were approved for.

The Letter requires employers to provide all relevant personnel documents and medical records to CalPERS. This information will be used to conduct the second evaluation of a member’s medical incapacity and employment status.  However, providing such information to CalPERS creates a conflict for safety employers. For example, Penal Code section 832.7 prohibits employers from disclosing peace officer personnel records without the peace officer’s written consent or a Pitchess motion. Employers are also prohibited from disclosing medical information without written authorization from the employee.

Disability Retirement to Avoid Termination Qualifies as “Honorably Retired” for CCWs

A Riverside police officer who took disability retirement to avoid termination was “honorably retired,” according to the California Court of Appeal.  In Bonome v. City of Riverside, the court said the City must either grant the officer’s request for his retirement identification badge with a CCW endorsement, or provide a good cause hearing.

In June of 2012 an internal affairs investigation was opened with Officer Bonome as the subject officer.  On October 10, 2012 Officer Bonome suffered an on-duty back injury.  In May of 2013 the internal affairs investigation sustained allegations for failure to investigate and prepare a police report.  The Chief reviewed the report and declared his intention to terminate Officer Bonome.

The officer’s attorney was able to set out the Skelly hearing.  This allowed Officer Bonome to complete his application for industrial disability retirement.  The termination proceedings were suspended when the retirement became official.

Shortly after, the Assistant Chief sent notice to Officer Bonome’s attorney saying the Department would not issue a CCW endorsement.  Additionally, the Department would not offer a good cause hearing.  According to the Chief, Officer Bonome was not “honorably retired.”  The officer brought suit seeking to compel the Chief to issue the retirement badge with a CCW endorsement, or provide a good cause hearing.

The case centered on the correct definition of an honorably retired peace officer.  Penal Code §16690 says an honorably retired peace officer is any officer who has qualified for, and had accepted a service or disability retirement.  However, this does not include officers who agreed to a service retirement in lieu of termination.  According to the City, the Legislature must have meant to exclude all officers who retired to avoid termination.  The Court was not persuaded.

Officer Bonome argued, and the Court agreed, he was an honorably retired peace officer.  The statute only excludes peace officers who take a service retirement in lieu of termination.  According to the Court, an officer cannot choose to take a disability retirement to avoid termination.  Either an officer is disabled, and unable to perform his or her duties, or not.  Officer Bonome was evaluated after sustaining an on-duty injury to his back, and the evaluation recommended a disability retirement.  The Chief’s intent to terminate was irrelevant.

The Court noted, the City does not have to grant the CCW endorsement.  Penal Code §25920 says CCW permits for honorably retired officers can be denied or revoked.  However, to do this the City must show good cause as to why. 

Third Appellate District Upholds Award of Penalties for Late Advance Disability Pension Payments

In the recently decided Gage v. Workers Compensation Appeals Board, (CA3, Nov. 22, 2016 No. C081618)  the Court upheld the ability for employees to receive penalties for late advance disability pension payments. In this case, a Sacramento County Sheriff’s Deputy, represented by Greg Gomez of Mastagni Holstedt, APC, sustained a job-related injury and applied for an industrial disability retirement. In cases like these involving peace officers, the injured party can also apply for advance disability pension payments in order to cover living expenses while the disability retirement application is being decided.

Here, Gage petitioned for these advance payments and applied for industrial disability retirement on March 6, 2015. When payments did not arrive, Gage petitioned for late payment penalties against the County on June 2. The County claimed not to have received the application until June 11. The County also asserted that the Workers Compensation Appeal Board (WCAB) did not have authority over advance payments of pension because that would fall under another a different law (County Employees Retirement Law of 1937), and thus it could not apply penalties.

While this issue was being decided, the County continued to stall payments due to some additional technicalities (legal joinder). On June 29, it finally approved payment of benefits. Gage filed a petition for penalties because the benefit check wouldn’t arrive until July 2, almost 4 months after her initial request.

A workers compensation judge initially agreed with Gage that disability pension payments were considered compensation, and thus were subject to penalties for late payment. The County appealed arguing that advance pension disability payments were an obligation of the retirement system, and thus not subject to the penalty. On appeal, the WCAB overturned the workers compensation judge’s initial decision.

When the case was finally appealed to the Third Appellate District, the Court explained that the workers compensation law was intended to be liberally construed for the purpose of extending benefits to those injured in the course of employment. This includes making sure that those in law enforcement are given all the rights attendant to the workers compensation law. The advance disability pension payments are specifically provided to help officers who would otherwise have difficulty making the monthly bills if they had no income due to being injured. In fact, the payment of such benefits was made mandatory in 2002.

The Court also discredited the County’s argument that under the applicable code section, the repayment of retirement benefits was outside of WCAB’s jurisdiction. The Court stated that while the repayment of retirement benefits once disability retirement was approved was outside the scope of the WCAB’s jurisdiction, that did not bar it from asserting penalties on late payments, because such payments are considered compensation and therefore fall under WCAB’s jurisdiction. While the court remanded the case to determine if the delay in this case was sufficiently unreasonable such that penalties were required, this case still stands as a big win for employees seeking disability retirement. Mastagni Holstedt, APC is requesting that this case be published so that it has precedential value.

Mastagni Holstedt, APC is privileged to have represented the Sacramento Deputy Sheriffs Association and Ms. Gage in obtaining this important result. Greg Gomez of Mastagni Holstedt, APC represented Ms. Gage in this matter.

Peace Officer's Employer May Not Condition Reinstatement From Disability Retirement

A peace officer who recovers from the injury that led to their industrial disability retirement is entitled to reinstatement without any conditions, according to the recent court ruling in Department of Justice v. CalPERS.

Angelita Resendez was employed by the California Department of Justice as a peace officer until her industrial disability retirement in December 2008. She developed a spine condition as a result of several on-the-job injuries. But in September 2009 she applied to CalPERS for reinstatement. Based on a medical evaluation of Resendez, CalPERS notified her in 2010 that she was eligible for reinstatement. DOJ then offered Resendez reinstatement on the condition that she complete medical and psychological exams and submit to a background check. Resendez rejected DOJ’s offer.

Next, DOJ made multiple appeals to overturn CalPERS' determination about Resendez. But these appeals were denied. The Superior Court also ordered DOJ to provide Resendez backpay to 2010 when CalPERS determined she was eligible for reinstatement. DOJ then appealed to the Court of Appeal.

On October 13, 2015, the Court of Appeal ruled in favor of CalPERS and Resendez. CalPERS was correct to limit its analysis to whether Resendez had recovered from the injury that caused her disability. The law requires CalPERS to order a medical exam and then determine if the employee is fit to return to duty. And Government Code section 1031 sets the minimum standards for peace officers. But CalPERS is not authorized to identify new conditions that might disqualify the employee; it must stick to the original disability.

The court also ruled that Government Code section 21193 creates a two-step process for reinstatement. First, CalPERS must determine the employee is fit to return to duty. Second, the employee's former employer must offer reinstatement.

Here, CalPERS properly determined Resendez was fit to return to duty. So DOJ had a mandatory duty to offer Resendez reinstatement. It had no authority to condition her reinstatement on medical exams and background checks. However, once DOJ has reinstated Resendez it may terminate, demote, or transfer her for failing to meet the minimum standards set by Government Code section 1031.

This ruling provides strong protections for peace officers who have been forced into disability retirement by on-the-job injuries. Once a peace officer recovers from such an injury they are entitled to reinstatement with their former employer. An employer has a mandatory duty to offer reinstatement and may not put conditions on the offer.

Mastagni Holstedt Ranked #1 Litigation Firm By Sacramento Business Journal

The Sacramento Business Journal ranked Mastagni Holstedt the #1 litigation law firm.  The list ranks the top twenty-five law firms in Sacramento metro by number of litigators.

According to Mastagni Holstedt Founder, David P. Mastagni, "We are very pleased to have the growth and success of our litigation practices recognized in this way.  As the firm grows in Southern California, it is important to us to remain the leader in Sacramento litigating on behalf of employees, public safety labor associations, and individual plaintiffs, as well as class and mass actions."

Court of Appeal Re-Affirms Standard for Public Safety Officers’ Industrial Disability Retirement

Public safety officers face the threat of work-related injury every day. Many officers are forced to seek industrial disability retirement if work-related injuries prevent them from performing the required tasks of their positions. Recently, the Court of Appeal recently re-affirmed the legal standard used to determine qualification for industrial disability retirement in Beckley v. Board of Administration of California Public Employees’ Retirement System (CalPERS).

In Beckley, CalPERS deviated from the legal standard when it denied California Highway Patrol Officer Perry Beckley’s application for industrial disability retirement. CalPERS measured Beckley’s application for disability retirement against his usual duties as a Public Affairs Officer, rather than the “14 critical tasks” required of all CHP officers. But the Court of Appeal held an officer’s application for disability retirement must be measured against the officer’s job classification, not the officer’s last job assignment.

CHP has “14 critical tasks” an officer must be able to carry out to perform his or her duties. In 2006, doctors concluded Beckley's injuries prevented him performing the “14 critical tasks”. These tasks include safely extracting a 200-pound victim from a vehicle and lift, carry, and drag the victim 50 feet; physically subdue and handcuff a combative subject; change a flat tire; drive for extended periods of time; and run up and down stairs. Beckley applied for industrial disability retirement, but CalPERS denied his application. CalPERS measured Beckley’s application against his usual duties as a Public Affairs Officer, rather than against the “14 critical tasks”. 

The Court of Appeal found CalPERS applied the wrong standard for two reasons. First, the Court said “[t]ying an applicant’s entitlement to disability retirement to his last specific assignment would tend to lead to highly inconsistent results for persons in identical job categories who suffer from identical disabilities.” Second, California law requires a CHP officer to be able to perform the full range of duties of the position, and does not allow permanent limited duty positions. Thus, the Court ruled CalPERS had to honor the officer's disability retirement application.