Martinez v. Public Employees' Retirement SystemAnnotate this Case
The Public Employees Retirement Law, Government Code section 21156, defines disability as being “incapacitated physically or mentally.” A governmental employee loses the right to claim disability benefits if terminated for cause. The Third Appellate District identified exceptions: under “Haywood,” a terminated-for-cause employee can qualify for disability retirement when the conduct which prompted the termination was the result of the disability; under “Smith,” a terminated employee may qualify for disability retirement if he had a “matured right” to a disability retirement before that conduct; Smith further recognized that “a court, applying principles of equity,” could deem an employee’s right to a disability retirement to be matured to survive a dismissal for cause. The Board of Administration of the California Public Employees Retirement System (CalPERS) adopted a precedential decision (Vandergoot) that an employee settling a pending termination for cause and agreeing not to seek reemployment is “tantamount to a dismissal,” precluding a disability retirement. Martinez, a former state employee, settled the termination for cause action against her and agreed to resign and not re-apply for employment. CalPERS denied her application for disability retirement. The trial court and court of appeal concluded that Haywood and Smith were binding as stare decisis and that “Vandergoot is a reasonable extension.” The courts rejected an argument that a 2008 enactment tacitly “superseded” Haywood and Smith.