California HR, Employment Law

Retirement: The Unique Status of California’s Largest Employer

In a recent case, the court of appeal agreed with a public university, which also happens to be one of California’s largest employer, that certain laws regulating the retirement status and rights of peace officers do not apply to the university under its own retirement plan—even after the university reversed its own practice of complying with those laws.retirement

University Reverses Course

“Alanis” and “Connor,” who were both employed as peace officers by the University of California (UC), were injured on the job before they reached the age of retirement under the University of California Retirement Plan (UCRP). Alanis was an officer at UC Berkeley from 2001 through 2013. She was injured on duty in 2010, when she was in her 30s, and received a medical separation from employment in 2013. Connor was a police sergeant at UC Santa Barbara from 1980 through 1998. He was injured on duty in 1997.

The UCRP has three categories of members: those who are “retired,” those who are “disabled,” and those who are “duty disabled.” University peace officers who are injured on the job are eligible for duty-disabled status.

Duty disability has several attractive benefits, including “duty-disability income,” which amounts to the equivalent of 50% of the member’s highest average UCRP compensation until the member is either no longer disabled or “elects to retire.” The duty-disabled member also receives and accrues service credits, which increase the ultimate retirement benefit if he later elects to retire and reduces his required monetary contribution toward medical and other benefits.

For example, although Alanis had about 10 years of service credit at the time she became disabled in the line of duty, she could anticipate accruing an additional 11 years of service credit while on duty disability under the UCRP. When she reaches retirement age, she can elect to retire or continue collecting duty-disability income for the rest of her life.

Under the UCRP, Alanis and Connor were entitled to elect duty-disability benefits for life even if they had previously separated from employment with UC. As the court of appeal put it: Under the UCRP, duty-disabled members are not retired and do not receive retirement income, and although they can elect to retire when they are eligible, they are never required to do so.

Despite those plan provisions, for many years UC would, upon request, issue a “retired” identification card and an endorsement to carry a concealed weapon to any duty-disabled member. The university appears to have issued the ID cards and endorsements based on its interpretation of certain statutes that address peace officers who are on “disability retirement.”

Under those laws, an honorably retired peace officer is entitled to receive an identification certificate from the law enforcement agency from which he retired and, unless there are exceptional circumstances, an endorsement to carry a concealed firearm. The statutes define an “honorably retired” peace officer as “any peace officer who has qualified for, and has accepted a service (emplasis added). UC for many years equated “disability retirement” under the statutes with “duty-disability retirement” under its own plan.

In 2013, the university reversed course, concluding that “duty disability” under its plan wasn’t the equivalent of “disability retirement”—or any retirement. As a result, it denied Alanis’ new and Connor’s renewed requests for retired ID cards and concealed-carry endorsements. The two duty-disabled members then filed a special petition in the Superior Court in Los Angeles, seeking to enforce the disability retirement statute against UC and obtain the requested ID cards and concealed-carry endorsements.

The trial court agreed with UC, however: Duty disability under the plan isn’t the same as disability retirement under the statutes. As a result, the university wasn’t obliged to issue the requested cards and endorsements. Alanis and Connor then filed an appeal.

A Simple Matter of Interpretation

The court of appeal agreed that even though it had reversed its prior practice of issuing cards and endorsements to its duty-disabled members, UC wasn’t in violation of any law. The court’s legal analysis is fairly simple: The UCRP doesn’t mention “disability retirement” anywhere; ergo, the disability retirement statute doesn’t apply to the UCRP, and UC isn’t—and has never been—required to issue the requested cards and endorsements to duty-disabled members like Alanis and Connor.

Alanis and Connor made several interrelated arguments in support of their desired result: how to interpret the language of the disability retirement statute itself; how to interpret the statute in the context of similar statutes; how to interpret the statute to avoid putting them in a “bureaucratic bind”; how their situation compared to the fact pattern of a recent case involving a different plan that had apparently prompted UC to revise its interpretation of its own plan; and how to enforce the statute against the university based on its long-standing past practice. The court methodically denied each argument.

As the court explained, it has no role in redrafting statutes but is restricted to interpreting them as they are written. The disability retirement statute is sufficiently clear—nowhere does it address “duty-disability” status—and it does not need to be interpreted or harmonized with other statutes.

The court didn’t sympathize with Alanis and Connor’s claim that they were in a “bureaucratic bind” because of UC’s reversal of its prior practice. They were “seeking a benefit,” the court held, “to which they were never entitled as a matter of law.” (The court also appeared to dispute that there would be any bureaucratic bind for them because they are still entitled under other laws to apply to sheriffs and chiefs of police for concealed weapons permits.)

The court rejected the argument that analogized the plan to a contract between the parties that, in theory, would allow the court to examine UC’s prior practice in order to interpret the plan. However, not only was there no claim for breach of contract in this case, the UCRP simply doesn’t have the “disability retirement” category mentioned in the disability retirement statute.

An Exercise in Judicial Deference

Throughout its opinion, the court of appeal recognized UC’s unique status under the California Constitution. Unlike other state agencies that are regulated by the legislature, UC possesses broad powers to regulate itself (with certain exceptions). The court repeatedly paid deference to UC’s broad power to regulate its internal affairs. It may be, the court explained, that the legislature intended to give peace officers on disability retirement a concealed weapons endorsement, but it doesn’t follow that UC is required to offer disability retirement.

Rather, the university has the option to provide for a disability retirement that would trigger the statute. Instead, it chose to offer “duty disability,” which provides certain special benefits without being disability retirement. Jacobs v. The Regents of the University of California (California Court of Appeal, 2nd Appellate District, 6/27/17).

Bottom Line

As the court observed, the position of UC’s “duty-disabled” members had “always been based on analogy.” But because UC has broad powers to regulate its own internal affairs, a simple analogy to other public employers and statutes may not be enough for a university employee to win the day.

This decision also illustrates a long-standing legal rule that applies equally to employers and employees: The fact that the employer previously engaged in one practice doesn’t mean that the law ever required that practice or that the employer could be held liable for changing course. In the view of the courts, the law is the law—even before any court issues a decision interpreting it.

Katharine Essick is a contributor of the California Employment Law Letter. She can be reached at Sedgwick LLP in San Francisco, at katharine.essick@sedgwicklaw.com.