settlement in a decision vacating its prior approval.
Among other provisions, the settlement agreement directed that Byrd would be
reinstated to a classification with a significantly higher salary, which she had never held,
and that she would receive compensation at the higher salary during the period that CSU,
with her assistance, would apply for medical retirement benefits. Byrd requested that the
trial court compel CalPERS to process her reinstatement at the higher salary level.
CalPERS maintained it was unable to do so because Government Code section 21198—
part of the statutory framework governing CalPERS's oversight of state pension funds—
only authorized Byrd's reinstatement to a job classification she previously held before her
termination.1 The trial court agreed with CalPERS and denied Byrd's petition.
On appeal, Byrd argues that section 21198 allows CalPERS to reinstate Byrd to
employment as a straightforward matter and does not require reinstatement to the same
specific classification or pay rate. She emphasizes that the bargained-for terms of the
settlement agreement contemplated a scenario in which Byrd would return to work, at
1 All statutory references are to the Government Code unless otherwise indicated.
2
least for a short period, while her application for medical retirement benefits was
processed.
In the typical case, section 21198 directs CalPERS to reinstate an employee who
was involuntarily terminated but then returned to that same classification as a result of an
administrative or judicial proceeding. The reinstatement thus allows CalPERS to
effectuate the purpose of this specific provision and recreate the status quo ante. There
may be atypical circumstances in which an individual can be properly reinstated
(following involuntary termination and pursuant to an administrative or judicial
proceeding) to a different classification. But if there are those instances, the statute
requires a nexus between the new classification and the underlying dispute. In the
absence of any such connection here, we find that section 21198 prevents CalPERS's
compliance with the settlement agreement. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKROUND
A. Byrd's Dismissal From San Diego State University
In September 2014, after 14 years of employment, Byrd received a Notice of
Pending Dismissal from her position as Administrative Analyst/Specialist at San Diego
State University (SDSU), part of the CSU system. On December 9, 2014, SDSU
provided Byrd with a Notice of Decision Regarding Disciplinary Action, which stated
that she was dismissed from her employment effective December 15, 2014. Byrd then
filed a Service Retirement Election Application with CalPERS, with a retirement date of
December 31, 2014. CALPERS accepted her application and proposed effective
retirement date.
3
B. Byrd's Appeal of Her Dismissal and Settlement with CSU
On December 16, 2014, Byrd filed an appeal with the State Personnel Board
(SPB) challenging her dismissal. An Administrative Law Judge for the SPB later
conducted a Prehearing Settlement Conference with the parties, which was successful.
Byrd and CSU entered into a stipulation for settlement conditioned on (1) Byrd's not
revoking the agreement within seven days and (2) the SPB's approval. Byrd declined to
revoke the agreement, and the SPB approved the settlement. The SPB found that the
settlement was "consistent with the interests protected by the State's merit civil service
system" but noted that, "in approving the settlement, the [SPB] expresses no opinion as to
whether the terms of the settlement are otherwise reasonable under all the circumstances
of the case."
1. Byrd's Obligations Under the Settlement Agreement
Byrd agreed to withdraw all complaints and grievances then-pending and to waive
and fully release CSU and related parties from any claims related to her employment.
She promised to cooperate with CalPERS regarding the application for medical
retirement that CSU was to file on her behalf, and agreed to bear sole responsibility for
any determination made by CalPERS with respect to any retirement application. If she
failed to fully cooperate, the settlement would be void and she would be deemed to have
resigned from her position effective July 1, 2015. If CalPERS denied the application, she
would be deemed to have resigned from her position with CSU, effective the date of
CalPERS's determination of the medical retirement application. In either case, the
settlement agreement would serve as her resignation and she would waive any and all
4
reinstatement rights. She further agreed to not apply for or accept other employment with
CSU.2
2. CSU's Obligations Under the Settlement Agreement
CSU agreed to withdraw its Notice of Dismissal and remove it and all supporting
documentation from Byrd's official personnel files. It also agreed to make several
changes related to her employment. It would "reinstate" Byrd to the classification of
Administrative Analyst/Specialist Exempt II, a classification she had not previously held,
effective July 1, 2014. It would pay all back pay and benefits at the maximum salary for
this new classification, $7,250 per month, with a deduction for salary already paid
between July 1 and December 15 of 2014. It would also place Byrd on paid
administrative leave from December 15, 2014, through June 30, 2015. It further agreed
to apply to CalPERS for medical retirement benefits on Byrd's behalf and ensure that
Byrd would be paid the maximum salary for her new classification during the entire
period that Byrd's medical retirement application was pending.3
C. CSU and Byrd's 2015 Efforts to Comply With the Settlement
In May 2015, CSU personnel met to determine the steps necessary to comply with
the settlement. Later that month, CSU raised Byrd's salary to $7,250 per month effective
2 Byrd also waived any rights she had under Civil Code section 1524, which allows for the satisfaction of an obligation following partial performance under certain circumstances.
3 CSU also agreed to provide her with four semesters of academic instruction at CSU pursuant to its fee waiver process (for eight years from the date of the settlement) and to forward all inquiries from prospective employers to its human resources office.
5
July 1, 2014, and placed her on administrative leave with pay effective from December
15, 2014 to June 30, 2015, at that same salary. In June 2015, CSU completed a CalPERS
Reinstatement From Service Retirement Application to assist Byrd in requesting
reinstatement from CalPERS, and it provided Byrd a check for about $18,000, the
difference in pay between her old and new classifications, for the period between July 1
and December 1, 2014. CSU was able to pay Byrd the back pay for the July to December
2015 period because she was employed and had yet to be dismissed, but it was unable to
do so for the December 2014 to June 2015 period because she was considered a retiree.
Byrd withdrew her grievance/unfair practice charge filed with the Public
Employment Relations Board and her complaint before the Equal Employment
Opportunity Commission. She also withdrew her appeal with the SPB.4 In late July
2015, CSU offered to advance Byrd about $5,000, but Byrd did not accept it because she
did not want to "operat[e] outside the terms of the SPB legally binding agreement and
accepting a pay-advance deviates from our contract."
D. CALPERS's Letters to Byrd and SDSU
In September 2015, CalPERS sent a letter to SDSU regarding its review of SPB's
approval of the settlement. CalPERS found that the "award does not comply with the
California Pubic Employees' Retirement Law" (PERL). To explain its rationale for the
noncompliance finding, CalPERS pointed to an enclosed letter to Byrd also sent in
4 The SPB, however, retained jurisdiction over the enforcement of the settlement agreement pursuant to its own terms.
6
September 2015. The Byrd letter addressed three issues: (1) the "back pay" from July 1
to December 15, 2014, (2) the "paid Administrative Time Off" from December 15, 2014
to June 30, 2015, and (3) its inability to comply with SPB rulings that revoke or modify
an adverse action in the absence of an employee returning to their position.
As to the back pay, CalPERS found that it met the definition of "Final Settlement
Pay" pursuant to section 20636, subdivision (g)(4)(G), and was therefore "specifically
excluded for the purposes of retirement." For the "paid Administrative Time Off,"
CalPERS found that it failed to meet the definition of "compensation earnable" pursuant
to section 20636 "as it was not for services rendered on a full time basis." CalPERS
further asserted that pursuant to section 19854, an SPB ruling "to revoke or modify an
adverse action and allow compensation to be reported is only applicable when the
employee returns to his or her position." On the basis of Byrd's employment history and
sections (II)(2)–(4) of the stipulated agreement, CalPERS found she would "not return to
the position [she was] requesting . . . Disability Retire[ment] from," and based on section
(II)(3), that she had waived any right to return to her previous position.
7
E. Byrd's Motion to Compel Compliance with the SPB Decision
In January 2016, Byrd filed a motion with the SPB to compel compliance with the
terms of the settlement. She described CSU's lack of compliance as well as CalPERS's
resistance as outlined in its correspondence, and she noted that even without CalPERS's
involvement, CSU was able to withdraw the Notice of Dismissal, reinstate her, and
provide her the back pay. CSU responded that "if it were to [withdraw the dismissal],
Byrd was at risk that CalPERS would not then re-retire Byrd under the terms the parties
agreed but that, under the terms of the Settlement, that is a risk Byrd would be
responsible for bearing." The next month, CSU rescinded Byrd's dismissal and processed
a Staff Transaction Form, changing the characterization from dismissal to retirement.
F. SPB's Decision Voiding Its Prior Approval of the Settlement
In December 2016, the SPB issued a decision voiding its prior approval of the
settlement between Byrd and CSU. The SPB deferred to CalPERS's legal conclusion—
that Byrd's reinstatement would be unlawful under PERL. It found the settlement
agreement illegal on those grounds, and therefore held the agreement void and
unenforceable. Furthermore, the SPB found that CalPERS's refusal to effectuate Byrd's
reinstatement "vitally affects" the settlement agreement, "reflects . . . the overall
agreement," and "cannot be severed." Under these circumstances, the SPB concluded
that the "appropriate action" was to "void the entire Decision [approving the settlement]
and put the parties in the position that they would have been had [SPB] not entered the
Decision."
8
G. Byrd's Petition in the Superior Court
In March 2016, Byrd filed a verified petition in the superior court seeking a writ of
mandate and declaratory relief, naming the SPB and CalPERS as respondents. Following
a meet and confer with SPB, she added CSU as a respondent in her First Amended
Verified Petition (FAP). Byrd asked the court to compel CalPERS to reinstate Byrd and
direct SPB and CSU to take all actions necessary to effectuate Byrd's reinstatement. She
also sought a judicial declaration as to the legality and enforceability of the settlement
agreement. Following the filing of respondents' answers, in which CSU admitted all
material allegations, Byrd moved for judgment.
The trial court issued a tentative decision denying Byrd's motion. Following a
hearing and additional briefing, the court issued its final Statement of Decision. It found
that the settlement agreement "did not actually require [Byrd] to return to work," and
therefore, that CalPERS rightly refused to reinstate her. According to the court's
interpretation of the agreement, "no matter what CalPERS determined with respect to
[Byrd's] anticipated Disability Retirement Application, [Byrd] was either to retire as
disabled or resign, never to return to work." Thus, because Byrd "was not truly being
reinstated pursuant to the [settlement agreement], CalPERS had no obligation to reinstate
[Byrd]."
DISCUSSION
A. Relevant Legal Standards
We review questions of statutory interpretation de novo. (Weatherford v. City of
San Rafael (2017) 2 Cal.5th 1241, 1247.) Where a question of law requires interpreting a
9
statute that governs CalPERS's responsibilities, " 'the court accords great weight to PERS
interpretation.' " (City of Pleasanton v. Board of Admin. (2012) 211 Cal.App.4th 522,
539.) We do so because "as the agency charged with administering PERL, PERS has
expertise and technical knowledge as well as ' " 'an intimate knowledge of the problems
dealt with in the statute and the various administrative consequences arising from
particular interpretations.' " ' " (Ibid., quoting Yamaha Corp. of America v. State Bd. of
We recognize that CalPERS's proffered statutory interpretation in this case did not
arise from any quasi-legislative authority. As a result, the appropriate degree of judicial
deference to the agency's interpretation is "fundamentally situational" (Yamaha Corp. of
America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 12 (Yamaha I)), lying
" 'somewhere along a continuum with nonreviewability at one end and independent
judgment at the other.' " (Western States Petroleum Assn. v. Superior Court (1995)
9 Cal.4th 559, 576, quoting Shapell Industries, Inc. v. Governing Board (1991)
1 Cal.App.4th 218, 232.) The parties understandably emphasize different factors in
arguing for more or less deference. On one hand, the CalPERS interpretation in this case
was not the product of a process that involved public notice and comment (Yamaha I,
supra, 19 Cal.4th at p. 13), nor was it of longstanding duration such that it generated
significant justifiable reliance by interested persons and entities (id. at p. 21 (conc. opn.
of Mosk, J.)). At the same time, the interpretation was not merely an ad hoc position
created by the agency to further its own interests in litigation. (Yamaha II, supra, 73
Cal.App.4th at p. 352.) CalPERS was not a party to the proceedings before the SPB at
10
the time it initially reviewed the parties' settlement agreement and opined that the
settlement was inconsistent with PERL. Indeed, when it did so it was acting in its
capacity as the administrator of CalPERS, with its attendant expertise, articulating what it
believed was the scope of its statutory authority.
We thus take the CalPERS interpretation into account and endeavor to make a
"commonsense assessment of [its] contextual merit." (Yamaha I, supra, 19 Cal.4th at
p. 14.) The weight we accord it, if any, "will depend upon the thoroughness evident in its
consideration, the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to persuade, if lacking power
to control." (Skidmore v. Swift & Co. (1944) 323 U.S. 134, 140.)
B. Section 21198 Prevents CalPERS From Reinstating Byrd to a Different Classification Without Any Connection to the Underlying Dispute.
The parties agree that Byrd's appeal turns on the proper interpretation of section
21198, and their positions on that question stand in stark contrast. Byrd claims the
statute's plain meaning does not require either the rendering of future services or
reinstatement to the same job classification or pay rate. CalPERS does not focus on the
rendering of future services, but it maintains the statute strictly requires that the
involuntarily terminated employee be reinstated to the same classification.
In attempting to resolve this question we begin with the text of the statute. Section
21198 reads in relevant part:
"A person who has been retired under this system for service following an involuntary termination of his or her employment, and who is subsequently reinstated to that employment pursuant to an
11
administrative or judicial proceeding, shall be reinstated from retirement." (§ 21198, italics added.)
The plain meaning of the verb "to reinstate" is to place an individual in a former state or
position. In the context of this statute, which relates to the reinstatement of a particular
employment, to reinstate means to place an individual in that former state or position of
employment. According to Black's Law Dictionary, to "reinstate" is defined "to place
again in a former state, condition, or office"; according to the Oxford English Dictionary
Online, "to reinstall or re-establish (a person or thing) in a former position, condition,
etc."; and according to Merriam-Webster Online Dictionary, "to place again (as in
possession or in a former position)."5 Because "reinstated" individuals are to be placed
in their "former" state or position, reinstatement is not simply a matter of toggling a
switch from not employed to employed, but instead necessarily implies they are returning
to the specific position or classification they previously held. A contrary interpretation
ignores the legislative direction that the terminated employee be reinstated not merely to
"employment" but rather to "that employment." Typically, and perhaps with limited
exceptions detailed below, a return to one's former state or position of employment would
be to the same job, or at least the same job classification, including the same title and pay
rate.
5 See Black's Law Dictionary (10th ed. 2014, p. 1477, col. 1); OED Online (3d ed. 2009) (<https://www.oed.com/view/Entry/161642?redirectedFrom=reinstate#eid [as of June 24, 2019], archived at <https://perma.cc/K7PC-GBVC>); Merriam-Webster Online Dictionary (2019) (<http://www.merriam-webster.com/dictionary/reinstate> [as of June 24, 2019], archived at <https://perma.cc/V9GF-KHEX>).
12
Interpreting the statute in this manner comports with the purpose for which it was
designed.6 (See Hassel v. Bird (2018) 5 Cal.5th 522, 540–544 [" 'our fundamental
task . . . is to determine the Legislature's intent so as to effectuate the law's purpose.' "],
quoting City of San Jose v. Superior Court (2017) 2 Cal.5th 608, 616–617.) Where an
employee has been involuntarily terminated and subsequently reinstated pursuant to an
administrative or judicial proceeding, section 21198 allows CalPERS to return the parties
to the status quo ante. It generally attempts to accomplish this purpose by reinstating
affected employees to their prior job classifications and ensuring that the pension benefits
are applied in the same manner as if the employees had not been involuntarily
terminated.7
Both sides seek support for their arguments from a prior decision of the Court of
Appeal involving CalPERS's compliance with settlement agreements containing specific
directives regarding retirement benefits. (See Molina v. Board of Administration (2011)
200 Cal.App.4th 53 (Molina).) But Molina is of little relevance here. As Byrd has aptly
noted, her appeal turns on the parameters of section 21198's reinstatement terms. Molina,
however, involved an issue that is related but not directly relevant—whether certain
6 We grant CalPERS's request for judicial notice as to Exhibits A–D, the excerpts related to the legislative history of section 21198, and deny its request as to all other exhibits.
7 We recognize that Byrd disclaims any intent to increase her retirement benefits by reference to the new job classification agreed to as part of the settlement. But whether the retirements benefits would be affected in this particular case does not control what the Legislature intended when it limited reinstatement "to that employment" in section 21198. 13
settlement proceeds can be utilized to increase an employee's final compensation for the
purposes of calculating pension benefits. (Id. at pp. 57–60.) The court briefly mentioned
section 21198 in recounting the procedural history, noting the trial court's analysis that
under the statute, "it is necessary that there be a reinstatement for a genuine period of
service, not a one-day reinstatement." (Id. at p. 60.) Later, the court rejected the
appellant's argument that section 21198 provided any support for his argument on appeal,
stating in a footnote that the statute "merely recognizes that pursuant to judicial
proceedings, an employee who is involuntarily terminated from his or her employment
may be reinstated and, as a result, CalPERS may be required to provide service credit for
the period of reinstatement." (Id. at p. 67, fn. 16.) The Molina court, however, had no
need to further address section 21198 in holding that statutory provisions in PERL
prevented the settlement agreement from dictating that certain proceeds be utilized to
increase final compensation for the purpose of calculating pension benefits. (Id. at 67.)
We do not mean to hold, as CalPERS appears to suggest, that there could never be
a circumstance in which reinstatement to a different classification at a higher salary
would nonetheless effectuate a return to an employee's former state consistent with
section 21198. It is unnecessary to precisely define those circumstances for purposes of
this case. To the extent they exist, the statute's plain meaning and purpose would require
that the different classification and higher salary have some connection to the underlying
dispute, such as in the case of an individual reinstated to a higher classification following
a proceeding regarding an alleged failure to promote. Here, however, Byrd has alleged
no such connection. The record instead suggests that Byrd's reinstatement to the different
14
classification was merely part of a package of benefits that CSU sought to exchange for
the promises it received from Byrd in the settlement agreement. Under these
circumstances, section 21198 prevents CalPERS from complying with the settlement
agreement's directive that Byrd be reinstated to a different job classification at a higher
salary that has no connection to the underlying dispute, and the SPB properly refused to
approve the settlement.8
We appreciate that the settlement was conditioned on the SPB's approval, and that
the SPB's decision to void its prior approval (which we effectively validate) leaves the
parties without an enforceable agreement. As the SPB noted in its decision withdrawing
approval of the settlement, the immediate effect of that ruling was to reinstate Byrd's
appeal challenging her termination. In light of intervening events, however, the parties
apparently dispute what recourse, if any, remains. It will ultimately be for the SPB to
determine whether and to what extent Byrd's termination claim survives and, if so, for the
parties to decide whether they can negotiate a new agreement that could be approved by
the SPB and implemented by CalPERS.
8 Because CalPERS properly refused to comply with the settlement agreement, we need not address the parties' additional arguments. 15
DISPOSITION
The judgment is affirmed. In the interests of justice, all parties shall bear their
own costs on this appeal.
DATO, J.
WE CONCUR:
AARON, Acting P. J.
GUERRERO, J.
16
AI Brief
AI-generated · verify before citing
Holding. The court held that Government Code section 21198 requires an involuntarily terminated employee to be reinstated to their former job classification, and that a settlement agreement attempting to reinstate an employee to a different, higher-paying classification without a nexus to the underlying dispute is unenforceable. Consequently, the State Personnel Board properly voided its approval of the settlement agreement.
Issues
Does Government Code section 21198 require that an involuntarily terminated employee be reinstated to the same job classification they previously held?
May an employee be reinstated to a different job classification under section 21198 if that classification lacks a connection to the underlying dispute?
Disposition. Affirmed
Quotations verified verbatim against the opinion
“The plain meaning of the verb "to reinstate" is to place an individual in a former state or position.”
“In the absence of any such connection here, we find that section 21198 prevents CalPERS's compliance with the settlement agreement.”
“section 21198 prevents CalPERS from complying with the settlement agreement's directive that Byrd be reinstated to a different job classification at a higher salary that has no connection to the underlying dispute”