by Linda M. Ross
Linda Ross is a partner at Renne Public Law Group. Ms. Ross, an expert on pension reform, was named one of the “2019 Top 100 Women Lawyers” by the Daily Journal. Ms. Ross represents a Petitioner in this case and filed an amicus brief on behalf of the League of California Cities in 2018 regarding the Cal Fire case.
You heard it here. Today, the California Supreme Court heard arguments in another highly anticipated vested rights case: Alameda County Sheriffs Association v. Alameda County Employees Retirement System (S247095). The case involves the state legislature’s attempt to rein in pension “spiking,” in which public employees increased their pensions by padding their final year or years of compensation.
The Chief Justice will write the opinion, as she did in the last vested rights case before the Court, the Cal Fire decision.
Once again, as in Cal Fire, the Supreme Court will find that there was no vested right to the pay items at issue in the case. In Cal Fire, it was the purchase of “air-time” to increase pensions. In this case, it the use of “leave cash-outs,” “terminal pay” and “on call” pay to increase pensions.
As in Cal Fire, there were questions from the Justices about the contours of the so-called “California Rule,” but as in Cal Fire, those issues will not be decided in this case. Once the Court determines that there was no vested right to begin with, it will not decide the issue of when the state can modify a vested right.
But as in Cal Fire, the Court may give us some further insight into its view of the law on modification of vested rights. In Cal Fire, the Court clarified that vested rights are created only (1) when there was clear legislative intent to create a vested right, or (2) where employees had already earned a pension through deferred compensation. Here, in the Alameda case, the Court may further refine those standards in its discussion of the pay items at issue.
And we may get some bonus clarification on the vested rights doctrine, if the Court discusses whether there was only a “minimal’ modification of the benefits at issue (thus not impairing a vested right), or discusses whether the state legislature, acting in a regulatory capacity, has more leeway in changing the law.
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