City of Pleasanton v. Board of Administration of Public Employees' Retirement System

211 Cal. App. 4th 522, 149 Cal. Rptr. 3d 729, 2012 WL 5984074, 2012 Cal. App. LEXIS 1220
CourtCalifornia Court of Appeal
DecidedNovember 29, 2012
DocketNo. A132586
StatusPublished
Cited by41 cases

This text of 211 Cal. App. 4th 522 (City of Pleasanton v. Board of Administration of Public Employees' Retirement System) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Pleasanton v. Board of Administration of Public Employees' Retirement System, 211 Cal. App. 4th 522, 149 Cal. Rptr. 3d 729, 2012 WL 5984074, 2012 Cal. App. LEXIS 1220 (Cal. Ct. App. 2012).

Opinion

Opinion

MARGULIES, J.

The City of Pleasanton (Pleasanton) and a retired Pleasanton employee, James Linhart, petitioned for a writ of mandate to compel California’s Public Employees’ Retirement System (PERS) and its Board of Administration (board) to retroactively increase Linhart’s monthly retirement allowance. Linhart contended the board erred in determining a portion of his compensation as a division chief for the Livermore-Pleasanton Fire Department was not pensionable. The trial court agreed and entered a judgment directing PERS to increase Linhart’s monthly pension allowance retroactively from the date of his retirement in 2006. We reverse the judgment and remand the matter back to the trial court for entry of a new judgment denying the petition.

L FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

Linhart joined the Pleasanton Fire Department in 1984. Due to his employment he became a local safety member of PERS. After being promoted to fire captain in 1992, Linhart became a division chief in 1998, when the Pleasanton and Livermore fire departments merged. Linhart retired at the rank of division chief in 2006, after 22 years of service, and began receiving a retirement [526]*526allowance from PERS. The central issue in this case is whether a portion of Linhart’s compensation as division chief, denominated “standby pay” in his labor agreement, should be considered part of his pensionable earnings for purposes of calculating his monthly PERS retirement allowance.

As a fire captain in Pleasanton before the merger, Linhart worked a 56-hour workweek: 24 hours on followed by 24 hours off, two times, followed by 24 hours on and four days off. Linhart and others on the 56-hour workweek received an additional 7.5 percent of salary as “in lieu” holiday pay to compensate them for the fact their shift pattern required them to work on holidays. Until 1994, battalion chiefs worked the same 56-hour workweek and, like line personnel, received an additional 7.5 percent of salary as “in lieu” holiday pay. However, in that year, battalion chiefs were moved from the 56-hour workweek to a normal 40-hour workweek, 8:00 a.m. to 5:00 p.m., Monday through Friday. As a result of this change in schedule, battalion chiefs were no longer paid in lieu holiday pay. To avoid a reduction in their pay, Pleasanton chose to raise battalion chief salaries by 7.5 percent.

At the time of the merger in 1998, the Livermore Fire Department included a management classification of division chief. A division chief worked a modified 56-hour workweek. In general, the division chief worked the same schedule as his platoon but, when his platoon was at the station after 5:00 p.m., the division chief was allowed to go home and remain on call. Division chiefs in the Livermore Fire Department received in lieu holiday pay, like their management counterparts in the Pleasanton Fire Department had received prior to 1994.

The Livermore-Pleasanton Fire Department was formed in 1998, or shortly before. Pleasanton’s battalion chiefs became division chiefs in the merged department. Linhart was promoted to division chief and given the position of training division chief, which he held until his retirement. The new department adopted an “Interim Compensation Plan” under which “Operations Division Chiefs”—division chiefs who supervised and managed an operations division—were assigned a modified 56-hour workweek like that worked by Livermore division chiefs before the merger.

Under the Interim Compensation Plan, Linhart was not assigned a modified 56-hour workweek. He worked a 40-hour workweek, 8:00 a.m. to 5:00 p.m., Monday through Friday, and was off work on the city’s 12 annual observed holidays. However, he was assigned to a “back-up schedule” which required [527]*527him to be available to report for emergencies, as necessary, during certain times. Linhart’s backup schedule applied only to him and to the chief and deputy chief of the department. He occasionally filled in for operations division chiefs when they were ill, injured, or on vacation, in which case he would work the modified 56-hour schedule of the officer for whom he was filling in. On those occasions, or when he was required to respond to emergencies on the backup schedule, he would sometimes work on holidays. When required by the press of work, Linhart worked additional hours beyond his 40-hour workweek.

Section 5.1 of the Interim Compensation Plan, entitled “Standby Pay,” provided in relevant part as follows; “Division Chiefs assigned to a standby schedule shall be compensated in an amount equal to seven and one-half percent (7.5%) of the Division Chief control point listed in Appendix A.1 Standby pay shall be paid biweekly.” The standby pay provision remained in effect through revised compensation plans and Linhart continued to receive standby pay under it until his retirement in 2006.

Under the Public Employees’ Retirement Law, Government Code2 section 20000 et seq. (PERL) and PERS regulations, a PERS member’s benefits are determined according to a statutory formula that takes into account the member’s base salary and certain items of special compensation received during the year in which the member’s compensation is highest. Not all items of compensation paid in addition to the member’s base salary count as pensionable special compensation. To qualify as special compensation, the payment must be received (1) “for special skills, knowledge, abilities, work assignment, workdays or hours, or other work conditions”; (2) “pursuant to a labor policy or agreement” applicable to a group or class of similarly situated employees; (3) “for services rendered during normal working hours.” (§ 20636, subd. (c)(1), (2), (3).) Further, pensionable special compensation includes only payments the PERS board has “affirmatively determined to be special compensation,” as reflected in board regulations promulgated for that purpose. (§ 20636, subd. (c)(6), (7); Cal. Code Regs., tit. 2, § 571, subds. (a), (d) (Regulation 571).) An item of special compensation not listed in subdivision (a) of Regulation 571 cannot be used in determining a member’s final compensation for pension purposes. (Reg. 571, subd. (d).)

From 1998 to 2006, Pleasanton made PERS contributions on behalf of six public safety employees, including Linhart, calculated by including standby pay they received as pensionable special compensation. Pleasanton and the employees believed the employees’ retirement benefits would, in part, be [528]*528based on standby pay. PERS itself never made any representation to that effect to them. Although PERS has a procedure for alerting contracting public agencies when there are discrepancies in the member earnings and retirement contributions reported to PERS, no such report was generated in this case.3

PERS first became aware standby pay was included in Linhart’s reported base pay in July 2006. On July 24, 2006, PERS’s payroll processing unit informed Pleasanton standby pay was not reportable compensation for retirement purposes and that payroll reporting for Linhart had to be corrected to exclude it. Although the estimate Pleasanton provided Linhart of his retirement allowance in 2006 included standby pay as part of his pensionable final compensation, there is no evidence PERS ever represented to Linhart that his pension benefit would be calculated by including standby pay as part of his final compensation.

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Cite This Page — Counsel Stack

Bluebook (online)
211 Cal. App. 4th 522, 149 Cal. Rptr. 3d 729, 2012 WL 5984074, 2012 Cal. App. LEXIS 1220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-pleasanton-v-board-of-administration-of-public-employees-calctapp-2012.