Vallejo Police Officers Assn. v. City of Vallejo
A144987
| Cal. Ct. App. | Sep 21, 2017Background
- Vallejo faced severe post-2008 fiscal distress and entered Chapter 9; while negotiating replacements to existing MOUs the City and VPOA executed a January 2009 supplemental agreement (2009 Agreement) that capped City PEMHCA contributions for active employees at the Kaiser Bay Area/Sacramento rate and tied retiree contributions to the City’s PEMHCA contribution for active employees.
- The 2009 Agreement treated employees hired before Feb. 1, 2009 differently from later hires (later hires required 10 years’ service to vest any benefit above the statutory minimum).
- Beginning in 2012 the City sought across-the-board retiree-premium reductions to $300/month; negotiations with VPOA over replacing the 2009 Agreement ran from 2012 into 2013, with repeated proposals and factfinding.
- The City declared impasse in Sept. 2013, issued a last, best, and final offer, and in Dec. 2013 the City Council unilaterally imposed terms that reduced retiree PEMHCA contributions (generally to $300/month for retirees), prompting VPOA to seek writ relief alleging vested-benefit impairment, promissory estoppel, and MMBA bad-faith bargaining.
- The superior court denied the petition, finding VPOA failed to make the required “clear showing” that the 2009 Agreement created a vested right to full Kaiser-rate retiree premiums and that the City did not bargain in bad faith; the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument (VPOA) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Whether the 2009 Agreement created a vested retiree medical right to full Kaiser-rate premiums | 2009 Agreement (and extrinsic history) shows a vested, surviving right to retiree premiums up to the Kaiser rate | Agreement ties retiree PEMHCA contribution to active-employee PEMHCA contribution and did not clearly create a perpetually vested Kaiser-rate benefit | No vested right to full Kaiser-rate retiree premiums; VPOA failed the required “clear showing” burden |
| Whether extrinsic evidence (prior MOUs, bargaining history, city resolutions, conduct) proves vesting | Historic practice and bargaining history show intent to preserve full retiree coverage | Prior practice and resolutions do not clearly demonstrate intent to create an enforceable, perpetual vested right; 2009 Agreement modified prior benefits | Substantial evidence supports trial court: extrinsic evidence does not establish the required clear/convincing intent |
| Whether promissory estoppel bars the City from reducing benefits | City made clear promises on which employees relied, creating an enforceable expectation | No clear promise by a City decisionmaker that benefits would remain forever; estoppel fails | Promissory estoppel fails because VPOA did not establish a sufficiently clear promise |
| Whether City violated the MMBA by surface bargaining, rushing to impasse, or bargaining in bad faith | City predetermined to reduce retiree benefits, declared impasse prematurely, and engaged in surface bargaining | City engaged in hard bargaining with rational fiscal justification, negotiated for over a year, and impasse was justified | Substantial evidence supports that City did not bargain in bad faith; no MMBA violation |
Key Cases Cited
- Retired Employees Assn. of Orange County, Inc. v. County of Orange, 52 Cal.4th 1171 (Cal. 2011) (sets “clear showing” standard for implying vested retiree benefits from MOUs)
- Litton Financial Printing Div. v. N.L.R.B., 501 U.S. 190 (U.S. 1991) (collective-bargaining agreements ordinarily do not create post-expiration obligations absent clear intent)
- M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (U.S. 2015) (courts should not infer lifetime vesting of retiree benefits from contractual silence)
- International Brotherhood of Electrical Workers v. City of Redding, 210 Cal.App.4th 1114 (Cal. Ct. App. 2012) (contract language promising benefits “for each retiree in the future” supported a surviving obligation in that case)
- Placentia Fire Fighters v. City of Placentia, 57 Cal.App.3d 9 (Cal. Ct. App. 1976) (explains difference between hard bargaining and bad-faith/surface bargaining)
- Kreeft v. City of Oakland, 68 Cal.App.4th 46 (Cal. Ct. App. 1998) (mandate review standards; substantial-evidence review of factual findings)