Arbitration Insight No. 21

MICHAEL D. MARCUS’S ARBITRATION INSIGHT NO. 21

RETIREMENT DOES NOT WAIVE ARBITRATION CLAIM

The question whether a disciplined employee’s contractual claim for relief at arbitration survives despite his/her retirement was answered in Service Employees International Union, Local 1021 v. County of San Joaquin (2011) 202 Cal.App.4th 449. In that matter, San Joaquin County terminated the employee because he had stolen $250 worth of County-owned recyclables. The disciplined employee, who had the right, pursuant to a MOU, to appeal the finding to the Civil Service Commission or an arbitrator, chose arbitration. He then retired one month after requesting arbitration. The trial court accepted the County’s argument that the employee had waived his arbitration rights by retiring before the arbitration had begun and, thus, denied the employee’s petition to compel arbitration.

On appeal, the County contended that the employee’s future employment was no longer an issue because his receipt of retirement benefits was a waiver of his election to arbitrate the propriety of his termination. The Appellate Court disagreed, finding that the employee had not taken steps inconsistent with an intent to invoke arbitration. (Id. at pp. 459-460.) “Although he did draw upon his vested right to retirement benefits … that right was independent of his interest in continued employment for the County.” (Id. at p. 460.)

The Appellate Court distinguished County of Los Angeles Dept. of Health Services v. Civil Service Com. of County of Los Angeles (2009) 180 Cal.App.4th 391 (retirement is a voluntary resignation that automatically divests a civil service commission of jurisdiction to decide a disciplinary action) and Hall-Villareal v. City of Fresno (2011) 196 Cal.App.4th 24 (receipt of retirement benefits does not preclude an employee from appealing her termination to the Civil Service Commission) because neither case involved a request for arbitration, which is a matter of contract. (Id. at pp. 461-462.)

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, January 2012

Please visit my website at www.marcusmediation.com for information about my mediation and arbitration background and experience. Copies of my previous Mediation Messages and Arbitration Insights are available by going to the articles link on the website.

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