GEORGE THE BARTENDER’S DISPATCHES FROM OFFLINE HAPPY HOUR – A BRIEF BUT THOROUGH HISTORY OF THE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM AND POST-RETIREMENT TEMPORARY DISABILITY BENEFITS
FROM MY BAR AT HOME:
The usual crowd had gathered for an end-of-summer block party near the home of the infamous applicant’s attorney Holly Hustler. The festivities and fun were plentiful, and the party was ready to enjoy the bounty of fireworks that Holly brought to celebrate the event.
However, as the night progressed it was obvious that Holly was not her customarily jovial self. I approached Holly with my martini in a red Solo cup in tow and a cold can of White Claw for her, looking to break the ice with the offer of some refreshment.
I broke Holly’s train of thought with, “Quite the party, huh?” offering her the can of White Claw.
“Oh, hello. Yes, great party, but I’ll pass on the drink. I have to duck out early and may not even get to enjoy most of those fireworks. I’ve got to prepare for a tough trial taking place tomorrow.”
“What’s the issue?” I asked, now unsure of what to do with the can.
“Well, my client is a police officer that is claiming post-retirement temporary disability benefits. The disability is clearly related to their work, as they were off work then subsequently underwent industrial surgery and are still recovering.”
Holly continued, adding, “I do not believe I can get them temporary disability benefits post retirement, so I am digging deep trying to come up with something, anything to eke out a win.”
I pondered the question and after a few moments replied, “Is this officer’s retirement plan covered under the Public Employees’ Retirement System (PERS) or perhaps the County Employees’ Retirement Law of 1937 (CERL)?”
Holly, looking hopeful, hustled back toward her home with a quick, “Great question. Let me check.”
Some contemplative moments passed where the fireworks and mood created the end of summer reverie in which I found myself rapt. After a few minutes lost in my thoughts, Holly reappeared and promptly noted, “My client is covered under PERS!”
Being a student of the history of the wonderful world of workers’ comp, I recalled for Holly a loquacious California Court of Appeal decision from 1979 – State Compensation Insurance Fund v. Workers’ Compensation Appeals Board (Slotten) 88 Cal.app.3d 43, 60 (1979).1 The defendant in Slotten contended that California Labor Code §139.5 didn’t apply to public employees, in this case a police officer for the city of Santa Monica. The Workers’ Compensation Appeals Board (WCAB) ruled in favor of the applicant, and so the defendant appealed to the California Court of Appeal.
In Slotten, the Court of Appeal noted two important pieces of legislation from 1974 related to vocational rehab and PERS. One was an amendment to Labor Code §139.5 that made vocational rehab a right for qualified injured workers, which they believed applied to all workers, public and private. The second piece of legislation was the Berryhill Total Compensation Act, which added Chapter 3.5 to Division 5, Title 2 of the Government Code, and provided industrial disability leave in lieu of workers’ compensation benefits to all state employees. The Court of Appeal agreed with the WCAB and held:
Since the workers’ compensation law extends to all employees, public and private, in the absence of any provision in section 139.5 indicating that the benefits thereunder are to be withheld from public employees, the section must be construed as extending its benefits to public as well as private employees.
Holly was elated, however, I told her that our historical expedition through this subject was not yet complete.
“There is a case known from 1982, Gorman v. Workers’ Comp. Appeals Bd., 1982 Cal. App. LEXIS 1826, that unfortunately holds a PERS retiree cannot collect post-retirement temporary disability. Gorman relies on Labor Code§4853, which specifically mentions retirees under PERS.”2
I reminded Holly that California Labor Code §4853 reads as follows (emphasis added):
Whenever such disability of any such officer or employee continues for a period beyond one year, such a member shall thereafter be subject as to disability indemnity to the provisions of this division other than section 4850 during the remainder of the period of said disability or until the effective date of his retirement under the Public Employees’ Retirement Act, and the leave of absence shall continue.
I explained to Holly that in Gorman a police officer was denied reconsideration by the Workers’ Compensation Appeals Board (WCAB) after a Workers’ Compensation Judge (WCJ) ordered they were not entitled to Labor Code §139.5 continued temporary disability payments for a rehabilitation program after retiring for disability. The WCAB agreed with the WCJ and that left the applicant to seek resolution by the Court of Appeal.
Regrettably for the applicant, the WCJ, the WCAB and the Court of Appeal all reached the same conclusion. They found that the PERS retiree was compensated by the collection of retirement disability benefits, which were essentially duplicative with temporary disability benefits. The collection of temporary disability benefits after a PERS disability retirement was found to be in violation of Labor Code §4853, even though the period of temporary disability was clearly related to applicant’s industrial injury.
Holly’s elation faded fast, but she indicated that a fellow applicant attorney told her that he had obtained post-retirement temporary disability benefits from the County, but did not articulate if that applied to a PERS retiree. Holly’s sharp legal mind went further, as she acknowledged the likely defeat and immediately pivoted to the next logical inquiry.
“Well, it looks like that ship has sailed. But what if my client was covered under the CERL of 1937 as opposed to PERS?”
“Thought you would never ask, Holly.”
The case of Burns v Workers’ Compensation Appeals Board (1987) 190 Cal. App. 3d 759, distinguishes the treatment of PERS retirees versus CERL retirees, pursuant to Labor Code §4853.3 The Court of Appeal found in Burns that a public safety worker was not precluded from simultaneously obtaining temporary disability benefits under a CERL disability pension, while concurrently receiving PERS retirement benefits from a different employer.
In reaching their judgement, the Court of Appeal relied on another of their own decisions from 1971, Pennington v. Workmen’s Comp. Appeals Bd. (County of Los Angeles) (1971) 20 Cal.App.3d 55, quoting from the decision as follows:4
[Under] P.E.R.S., an amount equal to [workers’] compensation benefits paid is deducted from benefits payable under the system (Gov. Code, § 21027). No similar provision is now found in C.E.R.L. Former sections 32080- 32082 required that retirement benefits would be reduced by the amount of any [workers’] compensation received. But those sections were repealed in 1959.
In view of this difference, it is hardly surprising to find that the [workers’] compensation law contains some provisions which apply differently to the two classes of retirees.
I further illuminated Holly by noting in Pennington the Court of Appeal addressed whether a former sheriff’s deputy was entitled to temporary disability benefits between the time of their CERL disability retirement and the time they were found to be permanent and stationary. The WCAB didn’t think so, and found that the defendant was owed a credit for money paid.
The applicant then filed for appeal. The Court of Appeal noted that the original opinion of the WCAB found:
. . . no reason why a deputy sheriff who is a member of the Public Employees’ Retirement System should be treated any differently from a deputy sheriff who is subject to the County Employees’ Retirement Law of 1937.
The Court of Appeal disagreed with the WCAB decision providing the analysis that the Court would later quote in Burns above, adding that:
Preliminarily it is necessary to observe that the Legislature has created two distinct kinds of retirement systems, each of which may include deputy sheriffs among its members: the system now known as Public Employees’ Retirement System (P.E.R.S.), formerly known as State Employees’ Retirement System (S.E.R.S.), which is governed by its own statute (Gov. Code, § 20000 et seq.); and county systems governed by the County Employees Retirement Law of 1937 (C.E.R.L.) (Gov. Code, § 31450 et seq.).
The Court of Appeal went on to interpret that:
The literal reading of section 4853 is that “such officer” shall receive the benefits “of this division” (i.e., temporary disability payments), following the first year (which is covered by § 4850) and until his retirement under P.E.R.S. Whatever this may mean as to an officer retiring under P.E.R.S., it cannot be read as cutting off the benefits of an officer who retires under some other system.
The acts of the legislature have treated PERS members differently from CERL members and we must assume it intended the distinctions which appear in the compensation statute.
I concluded by telling Holly that the Court of Appeal found in Pennington that since there was no corresponding statute for CERL retirees precluding them from collecting post-retirement temporary disability benefits, such as for PERS employees under Labor Code §4853, then the legislature must have inherently meant to keep those benefits intact for CERL retirees. The absence of any applicable statute regarding CERL employees, distinguishing these employees from PERS employees, did not entitle the former to be denied temporary disability benefits post retirement based on analogy to Labor Code §4853.
Holly, seemingly in better spirits despite the somewhat bad news, to my surprise grabbed the can of White Claw from my hand and cracked it open.
“Not heading in early after all?” I inquired.
Taking a sip, Holly smiled and said, “Well, no need to prep for tomorrow after that history lesson. More time to enjoy the festivities and friends tonight!”
“Not worried about the bad news with your case then?” I said returning the smile.
“Well. Silver lining, I actually have two other clients who are covered under CERL and are seeking post-retirement temporary disability…… and a lot more is at stake in both cases too.”
Politely nodding and raising my cup, I could not help but think that the defense attorneys and adjusters who had these two cases coming their way probably needed a drink too. This one’s for them.
All characters at my block party are fictional and the storyline is simply a product of my lively imagination.
The addition of PERS and CERL to the alphabet soup of workers’ compensation can leave even the best amongst us scratching our heads in an attempt to make heads or tails of a case, which is where a skilled defense attorney can come in handy.
It is noted in Burns that Labor Code §4850 and §4853 give additional compensation benefits to injured peace officers such as petitioner in the case. Under the operation of these two sections, a city police officer who is a PERS member is entitled to a leave of absence without loss of salary, in lieu of temporary disability or maintenance allowance, for one year or until retirement on a disability pension.
In the presence of ambiguity as to whether PERS and CERL retirees are treated equally regarding post-retirement temporary disability, the Court of Appeal has indicated that if it were the intent of the legislator to preclude CERL retirees for obtaining post-retirement temporary disability benefits, that this would have been precluded through legislation
Joe Truce, formerly a managing shareholder at our firm and creator of George the Bartender, would draw our attention to California Evidence Code §452(d), which provides that judicial notice may be taken of “Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.”
We are safely enjoying more time away from the home bar and good times with good friends. Bottoms up and keep washing your hands.
1 Coming in at 13 pages with a robust 21 footnotes, deep on the history of the workers’ compensation history of the mid 1960’s and 1970’s, a copy of Slotten can be obtained via email request. Also fairly wordy, you can read the text of Labor Code §139.5 here.
2 A copy of Gorman can be obtained via email request.
3 A copy of Burns can be obtained via email request.
4 A copy of Pennington can be obtained via email request.