Washington Public Employment Relations

 

 

HOME

SAMPLES

SUBSCRIBE

EDITORS

LINKS

The Washington appeals court ruled that vacation waivers cannot be considered part of basic salary for the purpose of LEOFF I and II.

The City of Aberdeen courted several police and fire chiefs to leave their bargaining units and become part of its management staff. It promised each chief an increase in his base salary in exchange for waiving vacation hours and adopted an ordinance to make it official:

Police Chiefs and Fire Chiefs who ... irrevocably in writing waive all rights up to 8 hours of vacation leave a month shall receive a like number of additional hours of pay as part of their base salary in exchange for the vacation leave waived.

When the chiefs retired, however, the DRS refused to include this "vacation reimbursement" in base salary for the purpose of calculating pensions despite the employer's declaration that such pay was part of basic salary.

Division II of the court of appeals explained that retiring LEOFF members are entitled to pensions calculated from their basic salary. The relevant statute defines "basic salary" as the basic monthly rate of salary or wages, including longevity pay but not including overtime or special salary or wages. The court looked to dictionary definitions of "basic" and "special" and to the opinion of the Department of Retirement Security (DRS) in arriving at its interpretation of the somewhat ambiguous statute. The court noted that the DRS "has long interpreted 'basic salary' to be salary 'attached to position or rank,' meaning payments received for duties performed, not compensation for other personal characteristics and achievements." The court agreed with the state that vacation compensation pay was an elective, a payment unique to the individual and therefore not dependent on rank or performance of duties. As such, it falls into the category of "special wages."

The appeals court found vacation conversion analogous to overtime pay (which is specifically excluded from basic salary) in that both types are compensation for hours not normally worked. Seen another way, vacation conversion is essentially a "cash-out" payment for unused vacation given a little at a time instead of all at once.

City Ordinance Exceeds Its Authority

The appeals court declared the employer's ordinance legally void. Although the employer's intent may have been to clarify that it considered vacation conversion pay part of basic salary, "the parties to a contract may not decide for themselves the meaning of terms used by the Legislature."

Chancellor et al. v. Dept. of Retirement Systems, No. 25058-6-II (Wa. App., November 9, 2000)

LEOFF I DISABILITY/PENSION DISTINCTION DEEMED CRUCIAL

The issue before the Division II concerned a LEOFF I member's eligibility for a disability retirement allowance at age 50. The claimant became a LEOFF I employee with the Clark County Sheriff in 1972 and during his employment he contributed nearly $39,000 to the LEOFF I fund. In 1989, he was terminated for misconduct. Several months later, because of on-going depression, he began receiving a disability leave allowance that became a disability retirement allowance after six months. He received a little less than $6000 until the allowance was canceled because of his recovery. He demanded that the Sheriff restore him to duty, but the Sheriff refused. Six years later, when he turned 50, he petitioned the Department of Retirement Systems (DRS) for a service retirement allowance. The DRS refused, contending that he was no longer eligible because he withdrew his LEOFF I contributions when he took a disability retirement allowance and because he neither returned to work nor retired from service after cancellation of his disability retirement allowance.

Addressing his claim, the appeals court noted that the LEOFF I statute allows any member with five service credit years to receive a service retirement allowance at age 50. Thus, the pension right vests after five years, regardless of the member's age at the time. The member, however, has the option of divesting by withdrawing his or her contributions in lieu of a pension. Addressing the DRS's contention that the claimant exercised this withdrawal option when he received disability retirement benefits, the court noted that he never asked to withdraw his LEOFF contributions, and the DRS never returned the balance (about $33,000) of his contribution to him.

The court disagreed with the DRS's reliance on RCW 41.26.140(5), a provision stating that when a disability retirement allowance is canceled, the LEOFF I member must be repaid the excess contributions, unless the member returns to or retires from service. The court concluded that this statute does not state that the claimant withdrew his contributions merely by receiving a disability retirement allowance. The statute "provides only for a partial refund of contributions under certain circumstances." It does not divest the LEOFF I member.

The court concluded that the legislature chose not to state the effect this provision has on the LEOFF I member's vested right. It cited a number of reasons why it believed that the Legislature did not intend the statute to affect a LEOFF I member's previously vested right. Among other reasons, "the legislature generally intended disability provisions to affect disability benefits, and service provisions to affect service benefits." The court also noted that "the whole concept of a 'vested right' is that it endures despite the member leaving, and not returning to, his or her employment."

The court ruled that the claimant's right to a service retirement allowance vested in January 1977 and it:

was not divested because he was fired; because he drew a disability retirement allowance; or because, after cancellation of his disability retirement allowance, he did not return to work or retire for service.

The retirement allowance must be paid because the claimant had turned 50, the court ruled.

Shurtliff v. Department of Retirement Systems, 24819-1-II (Wa. App., December 21, 2000)

LEOFF IS EXCESS DAMAGE PROVISION EXAMINED IN EVERETT CASE

Bruce Hansen, a firefighter employed by the City of Everett, was injured when he fell down a flight of stairs on city property. The facts showed that both the city and Hansen were partially at fault. Under state statute (RCW 41.26.281), Hansen was entitled to damages in excess of benefits received from LEOFF in the case of the City's negligence. However, the "comparative fault" statute (RCW 4.22) states that damages based on fault must be reduced proportionately by the amount of fault attributed to the claimant. Hansen appealed a lower court ruling that 1) the comparative fault statute applies to his case, and 2) that his total damages are reduced by the percentage of his fault before amounts payable by LEOFF are taken into account. The appeals court agreed with the city that the comparative fault statute applies. It rejected the lower court's method of calculating Hansen's recovery.

Regarding the comparative fault statute, the appellate court held that the "plain language" of the LEOFF statute and the comparative fault statute requires the percentage of comparative fault attributable to the plaintiff to be deducted from recoverable damages. The court, in a ruling favorable to Hansen, found the methodology for calculating those damages in the LEOFF statute itself. The trier of fact first must calculate the total amount payable, then deduct the amounts payable under LEOFF to determine the amount of excess damages. The percentage of comparative fault attributable to the plaintiff, if any, is apportioned and the recoverable damages are accordingly reduced.

Hansen v. City of Everett, No. 40471-7-I (February 8, 1999)

AIRPORT TECHNICIANS NOT ELIGIBLE FOR LEOFF

Division II of the Court of Appeals ruled that airport operation technicians are not considered full-time firefighters and therefore are not eligible for inclusion in LEOFF (Law Enforcement Officers' and Fire Fighters' Retirement System). Airport technicians working at the Bellingham International Airport spend about 40% of their time in firefighting duties and the rest of the time conducting other airport operations. They argued that they are firefighters under the definition of the statute because the largest portion of their time is spent firefighting.

The statute distinguishes between firefighters that have taken a civil service exam and those that have not. The airport technicians fall into the latter category; as such, to qualify as firefighters, they have to be actively employed as a full-time firefighter by a fire department. The appeals court considered this verbiage ambiguous because it does not define "fire department." The court thus deferred to the definition of firefighter advanced by the Department of Retirement Systems, the agency that originally heard the case. The department's definition provides that as long as an employee's primary duty is firefighting, incidental activities such as housekeeping, lecturing and equipment maintenance are allowed. The appeals court concluded that although airport technicians spend more time in firefighting duties than anywhere else, firefighting is only one of their many airport maintenance functions and they cannot be considered firefighters within the meaning of the statute.

International Association of Fire Fighters, Local 3266 v. Department of Retirement Systems, No. 23782-2-II (Wn. App., October 22, 1999)