California public sector workers who win reinstatement and a make-whole order, new bill addresses their entitlement to CalPERS Service Credit and Contributions (AB 2028)

AB 2028 is important for Unions that win a public sector CalPERS-participating member’s job back through arbitration, the State Personnel Board or other disciplinary proceeding, and want to ensure the member is truly made whole.

By the author’s estimate, beginning a few years ago, CalPERS began refusing to grant service credit or accept retirement contributions (from either the employer or employee) for the employee’s period of unjust termination, even after an arbitrator or a personnel board ordered the employee reinstated and made whole.  It is the author’s opinion that the position of CalPERS is not supported by law, and is vulnerable to a writ of mandate.

Labor Unions, namely the California School Employees Association, led the charge to correct this recent CalPERS practice through the legislature.  AB 2028 is a modest legislative fix—perhaps intentionally, so that both CalPERS and the Governor would support the bill.

This bill has significant limitations.  Namely, AB 2028 only fixes the problem for reinstated employees who are terminated on or after January 1, 2017.  For CalPERS-participating employees who are wrongfully fired prior to that date, and who are thereafter ordered reinstated, litigation would be necessary to ensure they receive a full restoration of benefits.

Also, this bill does not apply to wrongfully terminated employees who are reinstated, not by an arbitrator or personnel board, but through a settlement agreement. By not including employees who are reinstated through settlement, the new law may compel employees to pursue litigation before an arbitrator or personnel board, rather than pursue a settlement of their employment dispute.

Please contact Kerianne Steele if you have questions.

By Kerianne Steele | October 4, 2016

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