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California court narrows window for state departments to dismiss new employees

Sacramento Bee logo Sacramento Bee 5/12/2022 Wes Venteicher, The Sacramento Bee
The California Public Employees’ Retirement System, or CalPERS, headquarters buildings are photographed Thursday, Sept. 16, 2021, in downtown Sacramento. © Xavier Mascareñas/The Sacramento Bee/TNS The California Public Employees’ Retirement System, or CalPERS, headquarters buildings are photographed Thursday, Sept. 16, 2021, in downtown Sacramento.

California state managers will have a narrower window to fire or demote employees in new jobs under a recent court ruling.

The state Court of Appeals for the Third Appellate District ruled in March that a former employee’s appointment started the day she accepted her position, rather than on her start date.

Most California state appointments have yearlong periods during which a hire or promotion may be voided. Before the court’s ruling, the date an employee started work was typically considered the beginning of an appointment.

The State Personnel Board notified managers of the change in an April 22 memo, instructing them to use employees’ acceptance dates, rather than start dates, when voiding civil service appointments.

The ruling resulted from a dispute over a CalPERS employee’s promotion six years ago.

Nancy Michaels, who had worked for CalPERS since 1980, was offered and accepted a job as a data processing manager II on May 3, 2016, according to the ruling. Her official start date was May 5.

Months later, an unidentified coworker complained Michaels didn’t meet the minimum qualifications for the job. The State Personnel Board started an investigation.

On May 2, 2017, an SPB compliance officer called someone at CalPERS and told them Michaels didn’t have the minimum experience for the position, according to the ruling. Her appointment needed to be voided.

But the next day, May 3, Michaels received a positive performance report congratulating her on passing her final probation for the position.

On May 4, CalPERS voided the appointment in a letter.

Michaels appealed to the State Personnel Board in June. Two years later, the board rejected the appeal, determining CalPERS acted “narrowly within the one-year requirement” on May 4, 2017, one day before the anniversary of her official start date.

Michaels challenged the decision in Sacramento County Superior Court, noting she had accepted the job on May 3. The Superior Court ruled in her favor in June 2019.

CalPERS appealed to the appellate court, which issued its ruling in Michaels’ favor on March 21 of this year.

Job qualifications

Both courts relied on the “plain language” in state law regarding appointments, according to the appellate ruling. The law defines a civil service appointment as “the offer to and acceptance by a person of a position in the State civil service.”

CalPERS attorneys argued that the Superior Court’s interpretation led to an “absurd result,” since the point of a probationary period is to give an employer a chance to evaluate a new hire’s performance, which can’t be done before an employee starts the job.

Appellate court judges rejected the argument, saying it’s up to the Legislature to change the language of the law.

The State Personnel Board, in its April memo to managers, said the SPB is “considering a legislative change,” but that the court’s ruling holds until further notice.

“The appellate court came down very clearly and very strongly; she’s been right,” said Michaels’ attorney, Patricia Kramer, of Folsom-based firm Neasham and Kramer.

Kramer said Michaels had the requisite management experience for the promotion, but that she opted to pursue her court case based on the law’s definition of an appointment.

Kramer said the employee who submitted the complaint about Michaels’ qualifications illegally accessed her personal information on a work computer on a Sunday.

Michaels has sued that employee and CalPERS in Sacramento County Superior Court. Michaels alleged the employee was retaliating against her for cooperating in investigations of the employee, but dismissed the lawsuit against the employee. The suit against CalPERS was stayed until the appellate court issued a ruling.

CalPERS refused to reinstate Michaels to her former position, and the episode made it difficult for her to seek another state job, Kramer said.

Michaels resigned from CalPERS in 2019, and is seeking damages from CalPERS in the Superior Court lawsuit, including back pay, lost wages and adjustments to her retirement benefits.

“Nancy Michaels has suffered all type of damage, including but not limited to … anger, frustration, worry, anxiety, professional and personal embarrassment, humiliation, fear, loss of sleep, depression, mental anguish, angst, uncertainty, nervousness, shock and damage to her nervous system, loss of emotional tranquility, physical sickness, related mental and physical injuries and mental/emotional distress and other pain and suffering,” the complaint states.

©2022 The Sacramento Bee. Visit sacbee.com. Distributed by Tribune Content Agency, LLC.

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