Milwaukee District Council 48 v. Milwaukee County

2001 WI 65, 627 N.W.2d 866, 244 Wis. 2d 333, 26 Employee Benefits Cas. (BNA) 1616, 2001 Wisc. LEXIS 402, 167 L.R.R.M. (BNA) 2705
CourtWisconsin Supreme Court
DecidedJune 15, 2001
Docket98-1126
StatusPublished
Cited by43 cases

This text of 2001 WI 65 (Milwaukee District Council 48 v. Milwaukee County) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milwaukee District Council 48 v. Milwaukee County, 2001 WI 65, 627 N.W.2d 866, 244 Wis. 2d 333, 26 Employee Benefits Cas. (BNA) 1616, 2001 Wisc. LEXIS 402, 167 L.R.R.M. (BNA) 2705 (Wis. 2001).

Opinion

DAVID T. PROSSER, J.

¶1. This is a review of an unpublished decision of the court of appeals, 1 reversing an order of the Circuit Court for Milwaukee County, Charles F. Kahn, Jr., Judge. The case involves Milwaukee County's procedure for denying pension benefits to employees who have been discharged for "cause."

¶ 2. Under the Milwaukee County ordinances, a Milwaukee County employee has a property interest in a deferred vested pension after ten years of creditable service unless the employee is terminated for "fault or delinquency." This contingency — termination for "fault or delinquency" — nullifies the employee's pension eligibility, irrespective of the length of the employee's service.

¶ 3. The principal issue in this case relates to procedure: May Milwaukee County deny a pension to an employee who has ten years of creditable service after terminating the employee for "cause" (following a due process hearing), without also holding a due process hearing to determine whether the employee was terminated for "fault or delinquency"? A secondary issue is whether a labor organization may seek a declaratory judgment to obtain an answer to the first issue in these circumstances.

¶ 4. Because the record before this court is sparse, we proceed with some reluctance, limiting our holding to acknowledged facts. On this basis, we *339 reverse the court of appeals and declare rights as set forth below.

¶ 5. We conclude that Milwaukee County may not deny a pension to an employee whose length of service with the county has satisfied the minimum requirement for a deferred vested pension without first affording the employee procedural due process, including a hearing to determine whether the employee is being or was terminated for "fault or delinquency," as provided in Milwaukee County Code of General Ordinances, County Employes' Retirement System § 201.24 (4.5) (1996).

BACKGROUND

¶ 6. Milwaukee County employs thousands of people in different capacities for public service work. Milwaukee District Council 48, American Federation of State, County & Municipal Employees (District Council 48 or the union), is the exclusive bargaining agent for approximately 6,000 of these public employees.

¶ 7. Most county employees, including nurses, deputy sheriffs, and the members of District Council 48's bargaining unit are "members" of the Milwaukee County Employes' Retirement System (retirement system or the system), which is the only county-operated retirement system in Wisconsin. Milwaukee County has maintained a retirement system for its employees since 1937. The enabling legislation for the system is Chapter 201, Laws of 1937. This nonstatutory session law has been amended many times since its enactment by the legislature, and today, its provisions, as amended, together with the county ordinances supplementing it, are contained in Chapter 201 of the *340 Milwaukee County Code of General Ordinances, entitled "County Employes' Retirement System."

¶ 8. Milwaukee County's retirement system is a defined benefit plan. In Association of State Prosecutors v. Milwaukee County, 199 Wis. 2d 549, 559 n.3, 544 N.W.2d 888 (1996), the court discussed the county's system and this plan, and it explained the nature of a defined benefit plan:

[A]n actuary projects the amount necessary to fund the future payment of benefits to retirees and then calculates a single appropriate sum to be contributed to the pension fund. Defined benefit schemes benefit "vested" employees only and vested employees must usually wait until retirement age to receive their benefits.

¶ 9. Chapter 201 of the county ordinances lays out the rules determining the size of an employee's pension and the date when the employee becomes eligible to receive the benefit. The chapter also establishes the rules on "vesting." A member who began work for the county after January 1,1971, but before January 1, 1982, "shall not be eligible for a deferred vested pension if his employment is terminated prior to his completion of six (6) years of service." Milwaukee County Code of General Ordinances, County Employes' Retirement System § 201.24 (4.5) (¶ 2) (1996). A member who began employment on or after January 1, 1982, is not eligible "if his employment is terminated prior to his completion of ten (10) years of service." Id.

¶ 10. Most employees understand the concept of ten year vesting. Until they have ten years of creditable service, these employees have no right to any county pension. District Council 48 alleges, however, that many county employees do not understand that, even *341 after they have established ten years of creditable service, they may lose their pensions if they are terminated for "fault or delinquency."

¶ 11. The controlling provision on this point comes out of the 1937 session law 2 and now reads as follows:

A member shall be eligible for a deferred vested pension if his employment is terminated for any cause, other than fault or delinquency on his part, provided that he elects not to withdraw any part of his membership account and that his pension at age sixty (60) is at least ten dollars ($10.00) per month.

Milwaukee County Code of General Ordinances, County Employes' Retirement System §201.24 (4.5) (¶ 1) (emphasis added).

¶ 12. The 1937 session law and the Milwaukee County Ordinance draw a distinction between "cause" and "fault or delinquency," the latter being a subset of the former.

¶ 13. The word "cause" also appears in Wis. Stat. § 63.10 (1997-98), 3 a section included in the chapter entitled "County and City Civil Service." Wisconsin Stat. § 63.10 details procedures for local governments to deal with employees who are allegedly incompetent to perform their duties or who otherwise merit demotion or dismissal. Wisconsin Stat. § 63.10(1) speaks of "cause." for discharge. 4 "At the termination of the hear *342 ing the [local personnel] commission shall determine whether or not the charge is well founded and shall take such action by way of suspension, demotion, discharge or reinstatement, as it may deem requisite and proper under the circumstances and as its rules may provide." Wis. Stat. § 63.10(2).

¶ 14. In Milwaukee County, a superior officer (supervisor), the director of human resources, or any citizen may file charges against a county employee seeking the employee's demotion or discharge. These charges must be based on "cause." The employee is given notice of the charges and a due process hearing before the Milwaukee County Personnel Review Board.

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Bluebook (online)
2001 WI 65, 627 N.W.2d 866, 244 Wis. 2d 333, 26 Employee Benefits Cas. (BNA) 1616, 2001 Wisc. LEXIS 402, 167 L.R.R.M. (BNA) 2705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milwaukee-district-council-48-v-milwaukee-county-wis-2001.