Retirement-Sign.jpgMore than 2/3 of the discrimination claims filed in California allege disability as the protected category at issue.  California’s complex disability laws are compounded for public agencies by constitutional due process requirements and PERS and ’37 Act requirements which are triggered when the public agency is contemplating separating the employee based on an inability to accommodate.

When a public agency has exhausted the interactive process and reached the conclusion that it cannot accommodate an employee’s medical restrictions, the agency must find out whether the employee agrees that separation is the next step.  If the employee does not agree, then the employee’s due process rights kick in.   As we’ve previously discussed, under Bostean v. Los Angeles Unified School District (1998) 63 Cal.App.4th 95, an employer must provide Skelly-like due process rights before placing a property interest employee on unpaid leave or separating the employee.

In addition, if the employee has enough service credit to be eligible for a PERS or a ’37 Act retirement system disability retirement, separation is more difficult, if not impossible.  The agency is required to apply for a disability retirement on the employee’s behalf.   Government Code sections 21153 and 31721 require PERS agencies and ’37 Act agencies, respectively, to apply for a disability retirement if the employee is “believed to be disabled” and the employer cannot accommodate the employee’s medical/psychological restrictions while maintaining the employee in the same classification with the same salary, benefits, and real promotional opportunities.  Both statutes prohibit separating the employee because of the disability.

The public agency’s obligation to apply for a disability retirement is well established.  The murkier issue is the employee’s pay status while the disability retirement application is pending.  For ’37 Act employers, the employer must keep the employee “on the books” and can allow the employee to use accrued leave balances.  Under Stephens v. County of Tulare, if the employee exhausts his/her leave balances, the employer is not required to keep the employee on a paid status pending resolution of the retirement application.

PERS agencies, on the other hand, must reckon with the California Court of Appeal decision in Riverside Sheriffs’ Assoc. (Sanchez) v. County of Riverside.  In the Riverside case, the Court found that the PERS employer’s placement of the employee on unpaid leave pending resolution of a disability retirement application was a “disciplinary action” because it denied the employee wages and benefits.  The employee consequently had the right to appeal the unpaid leave decision.  In light of this case, before forcibly placing employees on unpaid leave, PERS agencies should consider the risks which may arise by stopping the employee’s pay – and this includes even allowing the employee to exhaust his/her own accrued leave balances.

Ultimately, there is no simple way to handle disability or disability retirement issues, and there are no short cuts.  Each employee, each medical/psychological issue, and each agency is unique.   Public agencies should examine each situation separately and ensure compliance with each of the interweaving laws.