Weaver v. State Employees' Ret. Bd.

• Decision Date: 23 October 2015
• Docket Number: No. 124 C.D. 2015,124 C.D. 2015
• Citation: Weaver v. State Employees' Ret. Bd., 129 A.3d 585 (Pa. Commw. Ct. 2015)
• Parties: Sean R. WEAVER, Petitioner v. STATE EMPLOYEES' RETIREMENT BOARD, Respondent.
• Court: Pennsylvania Commonwealth Court

129 A.3d 585

Sean R. WEAVER, Petitioner

v.STATE EMPLOYEES' RETIREMENT BOARD, Respondent.

No. 124 C.D. 2015

Commonwealth Court of Pennsylvania.

Argued Sept. 14, 2015.

Decided Oct. 23, 2015.

Sean T. Welby, Harrisburg, for petitioner.

Salvatore A. Darigo, Jr., Harrisburg, for respondent.

BEFORE: BERNARD L. McGINLEY, Judge, and ROBERT SIMPSON, Judge, and PATRICIA A. McCULLOUGH, Judge.

OPINION BY Judge SIMPSON.

This case presents an issue of first impression as to eligibility for credited service under the State Employees' Retirement Code, 71 Pa.C.S. §§ 5101 –5957 (Retirement Code), during a lapse in salaried status when an employee was on unpaid disciplinary suspension, and during which no contributions were made.

Sean R. Weaver (Weaver) petitions for review from a decision of the State Employees' Retirement Board (Board) refusing to grant him credit for the three and-one-half years that elapsed between his termination and the conclusion of a grievance arbitration that converted the termination to an unpaid disciplinary suspension. The arbitrator reinstated Weaver to his position as a Liquor Control Officer for the Pennsylvania State Police (PSP). The award stated there would be no loss of service credit, but no back pay. The State Employees' Retirement System (SERS) refused to credit the period of his suspension, a decision ultimately upheld by the Board.

Weaver contends crediting services for an unpaid suspension does not violate the Retirement Code, provided contributions are paid. Thus, SERS should credit service here to give full effect to the arbitrator's award. Discerning no error below, we affirm.

I. Background

Weaver became a member of SERS effective May 13, 1991, through his employment by PSP. The current dispute began when SERS repeatedly refused to adjust Weaver's service for the period between November 7, 1997, and July 9, 2001, to reflect credited service. During that three-and-one-half year period (Suspension), Weaver did not render service to the PSP, he did not receive a salary and, until the result of the grievance arbitration, his employment status was uncertain.

A. Arbitrations

Weaver was terminated in November 1997 based on bad conduct¹ at a licensed facility while off duty. He filed a grievance that proceeded to arbitration. After a hearing, an arbitrator issued an award in 2001 sustaining the grievance in part, and denying it in part. His discharge was modified to a suspension "with no loss of seniority but with no back pay." Reproduced Record (R.R.) at 97a (Award). Upon request of counsel, the arbitrator clarified the Award to state: "with no loss of seniority or loss of service credit but with no back pay." Id. at 99a (emphasis added) (Supplemental Award) (collectively with Award, 2001 Award).

PSP appealed the arbitrator's award to this Court, arguing it required credit for more than three years when Weaver was not salaried. PSP asserted requiring a credit when an employee performed no services violated 71 Pa.C.S. § 5302 as to crediting services. PSP also alleged the 2001 Award contravened 71 Pa.C.S. § 5955, which prohibits arbitration awards from altering pension rights.

In a 2002 memorandum opinion, PSP v. Fraternal Order of Police–LCB Lodges (LEO Sean Weaver) (Pa.Cmwlth., No. 2236 C.D. 2001, filed June 11, 2002) (PSP v. Weaver) , (unreported), R.R. at 104a–12a, this Court affirmed the arbitrator's award, stating it did not violate the Retirement Code. SERS was not involved in the proceedings. PSP requested reargument, which this Court denied. PSP then petitioned for allowance of appeal to the Supreme Court, which was initially granted. Subsequently, the Supreme Court dismissed the appeal as improvidently granted.

PSP refused to award Weaver pension credit for his Suspension. Thus, Weaver filed another grievance. Relevant here, the arbitrator directed PSP to "formally petition [the Board] to make an adjustment to [Weaver's] pension service credit in accordance with" the 2001 Award. R.R. at 179a (2009 Award).

In November 2009, the Director of PSP's Bureau of Human Resources wrote to SERS requesting an adjustment to Weaver's service credit. When Weaver requested information from SERS as to his service credit in July 2010, SERS finally responded to PSP's 2009 letter. SERS determined that the arbitrator exceeded his authority in permitting a service credit in the Supplemental Award, and refused to honor it. PSP was thus unable to give full effect to the 2001 Award.

Through able counsel, Weaver appealed this determination to the SERS Appeals Committee, which denied it. Weaver appealed that decision to the Board.

B. Board Proceeding

Before the Board, the parties stipulated to certain facts. R.R. at 272a–75a. An administrative hearing was held before a hearing examiner, John Henderson, on June 18, 2013. Both Weaver and SERS appeared, represented by counsel. Then, on May 7, 2014, a different hearing examiner, Deb Wallet, issued a proposed adjudication.

The hearing examiner recommended that Weaver's appeal be denied, stating he was not entitled to receive retirement service credit for the period of time he was on unpaid disciplinary suspension. She reasoned the Retirement Code did not provide for a means of calculating service credit when an employee did not receive a salary or back pay from which contributions could be taken. Weaver then filed exceptions.

In response to Weaver's exceptions, the Board issued an opinion and order adopting the hearing examiner's proposed adjudication that denied Weaver's request for service credit. The Board wrote separately emphasizing that Weaver cited no "legal authority to support his position that SERS should unilaterally create and award retirement service credit when the Retirement Code provides no basis for granting such service credit." Bd. Op., 1/8/15, at 3. The Board adopted the hearing examiner's findings as supported by competent evidence, and it adopted her conclusions as consistent with case law and provisions of the Retirement Code.

Weaver filed a petition for review of the Board's order to this Court.

II. Discussion

On appeal,² Weaver argues the Board erred in refusing to grant a service credit for the period in which he was on an unpaid suspension because the granting of a credited service does not violate the Retirement Code. As this presents a matter of first impression, the Board did not have the benefit of prior experience in handling this situation where reinstatement did not include a provision for back pay. Without back pay, the Board claims, there is no means of obtaining the contributions and determining the credited service due.

A. Statutory Framework

As the agency charged with execution and application of the Retirement Code, the Board is entitled to considerable deference in its construction of the statute and the regulations promulgated thereunder. Harrisburg Area Cmty. Coll. v. State Emps.' Ret. Sys., 821 A.2d 1255, 1258 (Pa.Cmwlth.2003) (citing Burris v. State Emps.' Ret. Bd., 745 A.2d 704 (Pa.Cmwlth.2000) ). Consequently, the Board's interpretation of the Retirement Code may not be overturned unless it is clearly erroneous. Id.

SERS is a creation of the legislature. Accordingly, its members have only those rights granted by the Retirement Code. McCormack v. State Emps.' Ret. Bd., 844 A.2d 619 (Pa.Cmwlth.2004). Although SERS must liberally administer the retirement system in favor of its members, "a liberal administration of the retirement system does not permit the [B]oard to circumvent the express language of the [Retirement] Code ...." Marinucci v. State Emps.' Ret. Sys., 863 A.2d 43, 47 (Pa.Cmwlth.2004) (quoting Dowler v. Pub. Sch. Emps.' Ret. Bd., 153 Pa.Cmwlth. 109, 620 A.2d 639, 644 (1993) ).

The Board has no authority to grant equitable relief contrary to the mandates of the Retirement Code. Rowan v. State Emps.' Ret. Bd., 685 A.2d 238 (Pa.Cmwlth.1996). Moreover, "[t]he Retirement Code cannot be revised by the courts to achieve equitable results." Mager v. State Emps.' Ret. Bd., 849 A.2d 287, 292–93 (Pa.Cmwlth.2004) (citing Jones v. State Emps.' Ret. Bd., 830 A.2d 607 (Pa.Cmwlth.2003), appeal denied, 577 Pa. 728, 847 A.2d 1289 (2004) ).

The Retirement Code defines credited service as "state or nonstate service for which the required contributions have been made ... or for which salary deductions or lump sum payments have been agreed upon in writing. " 71 Pa.C.S. § 5102 (emphasis added). The amount of "credited service" that a state employee is deemed to have determines his eligibility for vesting and the amount of benefits he receives at retirement age. Pa. Ass'n of State Mental Hosp. Physicians v. State Emps.' Ret. Bd., 87 Pa.Cmwlth. 108, 483 A.2d 1003, 1004–05 (1984).

B. Alleged Violations of Retirement Code

Weaver seeks credited service for the three-and-one-half year period classified as unpaid disciplinary suspension by the arbitrator to give effect to the credited service provision in the 2001 Award. As the party seeking additional service credit from the Board, Weaver has the burden of establishing he was a state employee during the Suspension.McCormack.

The material facts are undisputed. During Weaver's Suspension, he did not receive a salary. He did not perform any services for PSP or other approved types of nonstate service. Although he offered to make contributions after receiving the 2001 Award, Weaver did not make any contributions towards his retirement during this period. Also, PSP did not make any employer contributions during the Suspension. The 2001 Award stated there would be no loss in credited service, but with no back pay so as not to penalize PSP. PSP appealed the 2001 Award to this Court, which held the 2001 Award did not cause PSP to violate an express provision in the Retirement Code in PSP v. Weaver.

Ultimately, this appeal involves a matter of statutory construction. This Court must determine whether credited service can be awarded during the Suspension. To that end, we consider the legality of the 2001 Award, the claimed...