International Brotherhood of Electrical Workers v. City of Redding
210 Cal. App. 4th 1114
| Cal. Ct. App. | 2012Background
- IBEW petitions for writ of mandate after City of Redding unilaterally rolled back its promise to pay 50% of retirees' medical insurance premiums.
- Superior Court sustained City’s demurrer and dismissed petition, holding no vested right because benefits depend on bargaining and MOU expires.
- City argued no vested right for active employees’ future health benefits absent express legislative authorization and that MOU terms expire with the agreement.
- Retired Employees Ass’n v. County of Orange held that a vested right to health benefits can be implied from county ordinances or resolutions.
- Court applies Retired Employees to conclude the MOU ratified by the City Council created a contractual obligation to pay 50% of future retirees’ premiums, requiring reversal and remand for further proceedings.
- Record shows negotiations (2008–2010); City initially conceded vested benefit, later proposed a 2%/year scheme; MOU language promised benefits for each retiree in the future; judgment to be vacated and demurrer overruled with costs to IBEW.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MOU promises create vested rights to future retiree benefits | IBEW claims MOU language and council ratification vest benefits beyond term | City argues no vesting absent explicit legislative authorization and imprevised continuance | Yes; MOU language and ratification create vested future benefits |
| Application of Retired Employees to municipal MOUs | Retired Employees supports implied contract rights to health benefits | Retired Employees does not automatically apply to City MOUs without sufficient evidence | Retired Employees applicable; implied/express vesting supported by language and ratification |
| Effect of MOU expiration on vested rights | Vesting survives expiration when parties intend continued obligation | Vesting terminates with bargaining agreement unless explicitly continued | Vesting can survive expiration if intent to continue is clear in MOU language and ratification |
Key Cases Cited
- Retired Employees Ass'n v. County of Orange, 52 Cal.4th 1171 (Cal. 2011) (implied vested rights to retiree health benefits possible under certain circumstances)
- Litton Financial Printing Div. v. NLRB, 501 U.S. 190 (U.S. 1991) (vesting rules depend on the parties’ intent; contracts can survive termination)
- Orange County Emps. Ass’n v. County of Orange, 234 Cal.App.3d 833 (Cal. App. 1991) (extrinsic evidence and legislative actions inform vested rights in municipal contracts)
- National City Police Officers’ Ass’n v. City of National City, 87 Cal.App.4th 1274 (Cal. App. 2001) (interpretation of MOU language important to determine if benefits extend beyond term)