Supreme Court: Not Yet Time to Examine “California Rule” On Pensions

Cal Fire Local 2881 et al. v. California Public Employees’ Retirement System et al. (State of California) (2019) Case No. S239958 (Issued on 3/4/19)

Today the California Supreme Court issued its long-awaited decision in the Cal Fire case. The issue was whether PEPRA unlawfully eliminated the opportunity for employees to purchase “air time” service credit. The Court held that because the Legislature did not intend to create a contractual right to the purchase of air time, there was no contractual impairment when that option was eliminated. Further, the Court held that air time was not a core pension right because it was not granted as deferred compensation for work performed.

However, all eyes were on this case to see whether the Court would take the opportunity to address the “California Rule” on pensions.  The Court declined the invitation:

The state and many amici curiae have urged us to use this decision as an occasion to re-examine the California Rule, the doctrine developed in our prior decisions defining the scope of constitutional protection afforded pension rights. … Underlying the California Rule is the constitutional contract clause, which prohibits state laws that impair contractual obligations. Because we conclude that California’s public employees have never had a contractual right to the continued availability of the opportunity to purchase ARS credit, the question of whether PEPRA worked an unconstitutional impairment of protected rights does not arise. … Our decision in this matter therefore expresses no opinion on the various issues raised by the state and amici curiae relating to the scope of the California Rule.

Comments:

  1. Based on the oral arguments, this holding was not unexpected. Indeed, the decision was unanimous (although Justice Kruger wrote a concurring opinion).
  2. Because the Court avoided addressing the California Rule, all eyes will now be on the Marin Ass’n of Public Employees v. Marin County Employees’ Retirement Ass’n case (Supreme Court Case No. S237460). That case has been on hold pending this case so there still needs to be briefing.
  3. To the extent one can “read into” this decision, I think it’s significant that the Court recognized the existence of a “California Rule” and even characterized the request of the State—made at the direction of Governor Brown—as seeking to modify or depart from the California Rule. Perhaps it is insignificant, but framing the issue as such potentially makes any change to the California Rule that much harder.

 

 

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Gov. Newsom Makes First Appointment to PERB

Lou Paulson at LA County Fire Department news conference in 2015

In one of his first acts, Governor Newsom has appointed Lou Paulson to the Board of the Public Employment Relations Board (PERB).  Mr. Paulson is the immediate past President of the California Professional Fire Fighters association, the officially chartered state council for the International Association of Fire Fighters. He has served on numerous state and national boards and committees, including the Executive Board of the California Federation of Labor and the Advisory Board for the University of California Labor Center.

Mr. Paulson joins the three other members of the Board at PERB: Eric Banks, Arthur Krantz, and Erich Shiners. A fifth board seat remains open.

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PERB: Employee Birthday Celebrations are “Non-Work” Activities

County of Orange (2018) PERB Dec. No. 2611-M (Issued on 12/19/18)

In this case three county employees, who were union representatives, spent 30 minutes distributing union surveys to employees at their work stations during working hours. They were later told by a county manager to stop distributing the union surveys to employees in work areas during work time. The ALJ found that the county’s directive interfered with protected rights because the County allowed other similar “non-work” activities. The Board affirmed. Continue reading

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A December to Forget for Employers

If you are a “PERB watcher” then you know that PERB issued a lot of decisions in December.  24 to be exact. PERB only issued 61 decisions in all of 2017-18, so 24 decisions in a month is undoubtedly a record. Many of the 24 decisions involve significant new legal pronouncements by PERB which I will continue to blog about in the coming weeks.

But the one thing that immediately jumped out at me about December was that it was not a good month for employers. Of the 24 decisions, 7 were reversals of proposed ALJ decisions. All 7 reversals went against the employer.

Historically, when a proposed decision by an ALJ is challenged, the affirmance rate is high. Here are the stats:

Board’s Affirmance Rate of ALJ Decisions:
2016-17: 90.9%
2015-16: 95.8%
2014-15: 76.9%
2013-14: 78.9%
2012-13: 85.7%

However, in December the affirmance rate was only 64.7%.  For fiscal year 2018-19 to date, the affirmance rate is 69.7% (23 out of 33 decisions).  Notably, of the 10 ALJ decisions PERB has overturned this fiscal year, all 10 have gone against employers. The one arguable exception is Los Angeles Unified School Dist. (2018) PERB Dec. No. 2588-E where there was a partial reversal in favor of the employer, but the overall finding of a violation was affirmed so I did not include this decision among the 10 reversals.

So if you’re an employer that lost a decision in December, you’re not alone….

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PERB Affirms Adoption of Johnnie’s Poultry

City of Commerce (2018) PERB Decision No. 2602-M (Issued on 12/11/18)

As part of a disciplinary arbitration, the attorney for the employer in this case interviewed two employees who were subpoenaed by the union. The union’s representative objected. However, the city’s attorney proceeded with the interviews and allowed both employees to bring a union representative. According to the decision, during the interviews the city’s attorney did not inform the employees that the interviews were voluntary and that if they chose to participate, the city would not impose any consequences based on their answers or on their refusal to answer any of the questions. The city’s attorney also asked one employee if he knew why the union was calling him as a witness. Continue reading

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