California League of City Employee Associations v. Palos Verdes Library Dist.

• Decision Date: 07 December 1978
• Docket Number: P,AFL-CI
• Parties: CALIFORNIA LEAGUE OF CITY EMPLOYEE ASSOCIATIONS, a Division of Service Employees International Union, Local 660,laintiff and Respondent, v. PALOS VERDES LIBRARY DISTRICT, Board of Library Trustees, Defendant and Appellant. Civ. 51995.
• Court: California Court of Appeals Court of Appeals

Page 739

150 Cal.Rptr. 739

87 Cal.App.3d 135

CALIFORNIA LEAGUE OF CITY EMPLOYEE ASSOCIATIONS, a Division of Service Employees International Union, Local 660, AFL-CIO, Plaintiff and Respondent, v. PALOS VERDES LIBRARY DISTRICT, Board of Library Trustees, Defendant and Appellant.

Civ. 51995.

Court of Appeal, Second District, Division 5, California.

Dec. 7, 1978.

John H. Larson, County Counsel, Los Angeles, William F. Stewart, Division Chief, and Joe Ben Hudgens, Principal Deputy County Counsel, Los Angeles, for defendant and appellant.

Don P. Bonfa, City Atty., and James Georges, Deputy City Atty., as amicus curiae on behalf of appellant.

Lemaire, Faunce & Katznelson and Edward L. Faunce, Los Angeles, for plaintiff and respondent.

ASHBY, Associate Justice.

Plaintiff employee organization, on behalf of its member employees of defendant Palos Verdes Library District, petitioned the trial court for a writ of mandamus. The trial court granted judgment for plaintiff, compelling defendant to reinstate certain fringe benefits for long-term employees, which defendant had purported to eliminate by resolution of August 14, 1975. Defendant appeals.

The three benefits in question were: (1) a longevity salary increase, equal to 2 percent of base pay, awarded at the end of the 9th, 12th, 15th and 18th years of service; (2) a 5th week of vacation for full-time professional employees after 10 years of continuous service; and (3) a 4-month fully paid sabbatical for librarians at the end of each 6 years of full-time service.

These benefits were included in the library district's "Personnel Policies and Procedures" adopted by the board of library trustees on July 27, 1966, and have been implemented as a matter of practice for a long period of time. During "meet and confer" sessions (see Gov.Code, § 3505 et seq.) for the fiscal year 1975-1976, defendant offered the employees a 6 to 6.6 percent salary increase conditioned on the elimination of the 3 benefits in question. No memorandum of understanding between the parties was reached. On August 14, 1975, the defendant unilaterally adopted the 6 to 6.6 percent salary increases, together with the elimination of the benefits as to all employees who had not yet completed the specific conditions precedent to qualify for the benefits.

The trial court ruled that defendant did not have the power unilaterally to eliminate these benefits as to those employees who had been working towards them prior to August 14, 1975. In its memorandum opinion the trial court stated:

"Respondent has implemented these benefits as a matter of practice over a long period of time. The fact that it has included each of them in its official declaration of policy pertaining to employment compels the conclusion that they constitute significant incentives for respondent's employees. The provisions describing each benefit clearly exposes them as inducements to the employees to remain in the service of the Library District. Consequently these benefits are maturing emoluments for continued service.

"The longevity merit salary raises are awarded automatically, and without any attendant labor negotiations. Because the raise is implemented only on the condition that the employee serve a stipulated term, the raise is deferred compensation for past services satisfactorily performed.

"Vacation time is a common term of employment. Here, the 'fifth week' is earned for ten years of continuous professional service. From the employee's perspective, every day on the job prior to ten years is an investment towards the realization of the promised future compensation.

"The same conclusion is compelled with respect to the promised sabbatical however exotic that form of compensation may appear. As a matter of fact, the pertinent provisions dealing with the sabbatical leave in the respondent's Personnel Policies and Procedures provides that the employee is 'entitled' to it upon meeting the specified conditions. For the employee who has invested substantial time towards this promised benefit the withdrawal of it constitutes a denial of expected compensation. In fact, an outright termination of any one of these benefits penalizes the employee who has contributed continuous service in anticipation of receiving the promised compensation, and allows the respondent to reap the advantage of continued earned service that it intended to induce, without ever fulfilling its declared and implicit obligation."

The trial court therefore granted a writ of mandate compelling defendant to reinstate the benefits for employees who had performed service prior to August 14, 1975.

Defendant contends (1) "The Longevity Benefits in Question do not Constitute Fundamental Vested Rights of Employees of Appellant District" and (2) "Even if the Longevity Benefits in Question were Fundamental Vested Rights, they were Adequately Offset by the Salary Increase Approved by Appellant Board for Fiscal Year 1975-76." We hold these contentions to be without merit.

DISCUSSION

Defendant's basic argument is that the terms and conditions relating to employment by a public agency are strictly controlled by statute or ordinance rather than by ordinary contract standards. (Markman v. County of Los Angeles, 35 Cal.App.3d 132, 134-135, 110 Cal.Rptr. 610.) ¹

Nevertheless, the cases also recognize that "(a)lthough there may be no right to tenure, public employment gives rise to certain obligations which are protected by the contract clause of the Constitution, including the right to the payment of salary which has been earned." (Kern v. City of Long Beach, 29 Cal.2d 848, 852-853, 179 P.2d 799, 802.)

The courts have recognized, for instance, that an employee begins earning pension rights from the day he starts employment. "While payment of these benefits is deferred, and is subject to the condition that the employee continue to serve for the period required by the statute, the mere fact that performance is in whole or in part dependent upon certain contingencies does not prevent a contract from arising, and the employing governmental body may not deny or impair the contingent liability any more than it can refuse to make the salary payments which are immediately due." (Id., at p. 855, 179 P.2d at p. 803; see In re Marriage of Brown, 15 Cal.3d 838, 846-847, 126 Cal.Rptr. 633, 544 P.2d 561; see also Waite v. Waite, 6 Cal.3d 461, 472-473, 99 Cal.Rptr. 325, 492 P.2d 13.)

This principle is not limited simply to pension cases. (See Youngman v. Nevada Irrigation Dist., 70 Cal.2d 240, 248, 74 Cal.Rptr. 398, 449 P.2d 462 (practice of granting annual wage increases); Frates v. Burnett, 9 Cal.App.3d 63, 69, 87 Cal.Rptr. 731 (rules and regulations adopted by Board of Education are a part of a teacher's employment contract); Ivens v. Simon, 212 Cal.App.2d 177, 182, 27 Cal.Rptr. 801 (...